In re Nachman

• Decision Date: 12 March 1914
• Citation: 212 F. 460
• Parties: In re NACHMAN. Ex parte F.B.Q. CLOTHING CO.
• Court: U.S. Court of Appeals — Fourth Circuit

212 F. 460

In re NACHMAN. Ex parte F.B.Q. CLOTHING CO.

United States District Court, E.D. South Carolina.

March 12, 1914

McNeill & Oliver, of Florence, S.C., for F.B.Q. Clothing Co.

F. L Willcox, of Florence, S.C., for trustee.

SMITH District Judge.

This matter has come on to be heard upon a petition to review an order of the referee in bankruptcy made February 10, 1914 refusing the petition of the above-named petitioners.

The facts are not disputed. The petitioners shipped and delivered to the bankrupt whilst he was in business the articles claimed in the petition. The testimony is not very clear, but is appears that the petitioner shipped the bankrupt certain 'ends of cloth' for the purposes of 'display,' i.e., of exhibition to solicited customers to induce orders for suits corresponding to the 'ends' or samples displayed. These 'ends' were by the agreement not to be sold, but were shipped on consignment only, to remain the property of the petitioner subject to immediate return upon order, and to be used only for display or advertisement to procure orders. Whenever orders were procured on these samples, the bankrupt would send the orders in and they would be filled by the petitioner; the bankrupt receiving for his services 33 1/3 per cent. of the charge. In addition to this, the bankrupt seems to have ordered other goods and suits for which he was billed, but that was independent of these 'ends,' which he was to use for display only, and for orders based on which he was to receive the 33 1/3 per cent. The written agreement affecting these 'ends' was never recorded, and the question now made is that by reason of the failure to record this agreement under the terms of section 3740, Code of Laws of S.C. 1912, the 'ends' so consigned became in the hands of the trustee in bankruptcy the property of the bankrupt estate applicable to the claims of the general creditors of the bankrupt.

The language of that section is as follows:

'Every agreement between the vendor and vendee, bailor or bailee of personal property, whereby the vendor or bailor shall reserve to himself any interest in the same, shall be null and void as to subsequent creditors (whether lien creditors or simple contract creditors) or purchasers for valuable consideration without notice, unless the same be reduced to writing and recorded in the manner now provided by law for the recording of mortgages; but nothing herein

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