Chisholm v. Eagle Ore Sampling Co.

Decision Date07 March 1906
Docket Number2,260.
Citation144 F. 670
PartiesCHISHOLM v. EAGLE ORE SAMPLING CO.
CourtU.S. Court of Appeals — Eighth Circuit

This is an appeal by the trustee in bankruptcy from an order allowing as preferential a claim of the Eagle Ore Sampling Company against the estate of the General Metals Company, a bankrupt. The claim asserted and allowed was the result of transactions under a contract between the claimant and the Telluride Reduction Company. The bankrupt, Metals Company, acquired the business of the Telluride Company, and assumed its place in the contract, and thereafter the dealings were between the claimant and the bankrupt. The following abridgement of the contract sufficiently presents those features which require consideration; the claimant being therein referred to as the Sampler Company, and the predecessor of the bankrupt as the Mill Company: 'Said Sampler Company will deliver to said Mill Company * * * all of the gold ore which it receives from leasers and from mines not under contract to other reduction works, such ores are to be delivered upon the schedule of treatment rates specified below as Open Rates, which include freight to said mill, deliveries to be f.o.b. Cripple Creek District. * * * Settlement for all ores shipped by said Sampler Company to said Mill Company, whether from the leasers or upon regular time contracts, shall be based upon the said Mill Company's weights and samples, and said Mill Company is to supply the necessary control samples for umpire. In case of any disagreements during the first year of this agreement as to assay values of ore, the same are to be respectively submitted by both parties to one of the following firms or individuals for decision for settlement the party calling for such umpire to have the right to make the selection of one of such umpires.

* * * Payments for all gold ore delivered by said Sampler Company to said Mill Company shall be respectively made by said Mill Company promptly upon agreement as to assay values and shall be upon the basis of twenty dollars ($20) per ounce for gold less the treatment charges as set forth hereinbefore respectively.'

Under this contract, ore, other than that now involved, was delivered by the claimant to the bankrupt and paid for by the latter; but, at the time of the institution of the bankruptcy proceedings, there remained deliveries of ore of the value of $52,259.57, for which no payment had been made. The contention of the claimant, sustained by the trial court, is that the contract contemplated merely a bailment of ore for treatment, that the title thereto did not pass to the bankrupt, and that therefore its claim was of a preferential nature.

Daniel B. Ellis and Charles W. Waterman, for appellant.

Edward C. Stimson (Curtis Nye Smith, on the brief), for appellee.

Before HOOK, Circuit Judge, and POLLOCK and CARLAND, District Judges.

HOOK Circuit Judge, after stating the case as above, .

It is conceded that, if the transactions under the contract were by way of sale and not bailment, the claimant is a general creditor and is not entitled to a preference in payment over other creditors of its class. It will be well, in approaching this question, to first observe the settled distinction between a bailment and a sale.

In Powder Company v. Burkhardt, 97 U.S. 110, 24 L.Ed. 973 it was said:

'It is contended that the question of bailment or not is determined by the fact whether the identical article delivered to the manufacturer is to be returned to the party making the advance. Thus, where logs are delivered to be sawed into boards, or leather to be made into shoes, rags into paper, olives into oil, grapes into wine, wheat into flour, if the product of the identical articles delivered is to be returned to the original owner in a new form, it is said to be a bailment, and the title never vests in the manufacturer. If, on the other hand, the manufacturer is not bound to
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6 cases
  • Sitkin v. R-One Alloys, Inc., C.A. No. PB 04-0495 (RI 3/13/2006), C.A. No. PB 04-0495
    • United States
    • Rhode Island Supreme Court
    • March 13, 2006
    ...This transaction is substantially similar to another case which dealt with toll refining. In the case of Chisholm v. Eagle Ore Sampling Co., 144 F. 670 (8th Cir. 1906), the court there faced a similar set of facts. In Eagle Ore, a typical business transaction involved the delivery of ore by......
  • Sitkin v. R-One Alloys, Inc.
    • United States
    • Rhode Island Superior Court
    • March 13, 2006
    ...transaction is substantially similar to another case which dealt with toll refining. In the case of Chisholm v. Eagle Ore Sampling Co., 144 F. 670 (8th Cir. 1906), the court there faced a similar set of facts. In Eagle Ore, a typical business transaction involved the delivery of ore by rail......
  • Sitkin v. R-One Alloys, Inc.
    • United States
    • Rhode Island Superior Court
    • March 13, 2006
    ...transaction is substantially similar to another case which dealt with toll refining. In the case of Chisholm v. Eagle Ore Sampling Co., 144 F. 670 (8th Cir. 1906), the court there faced a similar set of facts. In Eagle Ore, a typical business transaction involved the delivery of ore by rail......
  • Sitkin v. R-One Alloys, Inc., PB04-0495
    • United States
    • Rhode Island Superior Court
    • March 13, 2006
    ...transaction is substantially similar to another case which dealt with toll refining. In the case of Chisholm v. Eagle Ore Sampling Co., 144 F. 670 (8th Cir. 1906), the court there faced a similar set of facts. In Eagle Ore, a typical business transaction involved the delivery of ore by rail......
  • Request a trial to view additional results

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