In re Leflys

• Decision Date: 04 January 1916
• Docket Number: 2254.
• Citation: 229 F. 695
• Parties: In re LEFLYS. v. WISCONSIN TRUST CO. STRAUSS BROS. CO.
• Court: U.S. Court of Appeals — Seventh Circuit

229 F. 695

In re LEFLYS.

STRAUSS BROS. CO. v. WISCONSIN TRUST CO.

No. 2254.

United States Court of Appeals, Seventh Circuit.

January 4, 1916

Bankrupt conducted a general department store at Milwaukee, Wis Appellant is engaged in the wholesale liquor business at Chicago, and agreed to stock bankrupt's liquor department with wines, beverages, etc., under the conditions set out in a contract entered into between the parties on March 19 1913. According to the terms of said contract, on the date of its execution appellant shipped to bankrupt a supply of liquors; the contract reciting that the same were shipped on consignment only, to be sold on behalf of appellant at retail at prices not less than the invoices thereof furnished bankrupt. After delivery on the dock at Milwaukee, bankrupt was to save appellant harmless from all loss, damage, etc to said merchandise, excepting damage by fire--appellant agreeing to insure the same against loss by fire-- and was also to pay all expenses whatsoever incident to the handling and sale of said goods, place the same in its store for sale for the account of appellant, and use its best efforts to sell the same. All money derived from sales was to be the property of appellant, title to all said goods remaining unsold was to remain in appellant, and such unsold goods were, upon demand by appellant, to be returned to it free of any charge or expense. Sales were to be at retail and for cash only; it being provided, however, that, in case any sales were made upon open accounts for credit, bankrupt would guarantee the collection of such accounts and be answerable to appellant for the amounts due. As full compensation for its part in the transaction, bankrupt was to have such sum as it might receive for the merchandise in excess of the invoice prices thereof. Any of said merchandise found to be unsalable, through no fault of bankrupt, might within one year be returned to appellant, bankrupt to pay freight, etc and thereafter be released from obligation to sell such returned goods. Bankrupt agreed to sell one-third of said liquors within one year, one-third within two years, and one-third within three years from the date of the contract, and, failing so to do, to purchase what remained at the expiration of such periods from appellant for cash at said invoice prices, title not to vest in bankrupt until the purchase price be actually paid to appellant; on the same terms and conditions, in the event bankrupt discontinued its liquor department within three years, it was to purchase all unsold liquors in its possession at the time of such discontinuance. Future shipments of liquors to bankrupt were to be received and handled by it on the same terms and conditions governing the original transaction, except as to the time within which said goods were to be sold; bankrupt agreeing to purchase all goods remaining in its possession unsold on the 10th day of the month following the date of shipment thereof by appellant. The contract further recited that nothing therein contained was to be construed as vesting title to any of said merchandise, covered either by the original or subsequent shipments, in bankrupt until cash therefor had been received by appellant, unless otherwise agreed in writing, and that no bill or invoice sent bankrupt, nor failure on the part of appellant to note on any such bill or invoice that the merchandise covered thereby was shipped on consignment, nor the absence in any such bill or invoice of reference to the contract, should be held to waive any of the provisions thereof. It was further provided that, in the event appellant should desire to cancel said contract, all merchandise then in bankrupt's possession which had not been sold, nor purchased and paid for in cash by bankrupt, should be returned to appellant upon demand by it, who thereupon might, at its election, terminate the contract, and, upon the refusal or neglect of bankrupt to so return said property, take possession of said property with or without process of law, and pursue and take the same from any place to which it might be removed and from any person into whose hands or possession it might be.

Leflys sold said property so alleged to be consigned and failed to account to claimant for $1,250.58 of the proceeds thereof. The record makes no further showing as to what became of said sum and no attempt was made to trace said proceeds into the trustee's hands. Leflys was thereafter declared a bankrupt, and claimant presented to the trustee its claim for said balance as for 'money converted by said Leflys belonging to claimant under the terms of...