426 F.2d 160 (5th Cir. 1970), 27558, In re American Southern Pub. Co.
|Citation:||426 F.2d 160|
|Party Name:||In the Matter of AMERICAN SOUTHERN PUBLISHING COMPANY, Bankrupt. v. George Lewis BAILES, Jr., the Trustee, Appellee. The FIRST NATIONAL BANK OF MOBILE, Appellant,|
|Case Date:||April 20, 1970|
|Court:||United States Courts of Appeals, Court of Appeals for the Fifth Circuit|
T. Massey Bedsole, Louis Braswell, Mobile, Ala., for appellant.
R. Clifford Fulford, Birmingham, Ala., for appellee.
Before BELL, AINSWORTH, and CARSWELL, Circuit Judges.
BELL, Circuit Judge:
This appeal arises out of a turn-over proceeding brought by a trustee in bankruptcy against The First National Bank of Mobile to recover funds derived from
the sale of certain books. The trustee and the bank had previously stipulated that the books would be sold and that the question whether the bankruptcy court had summary jurisdiction would be decided on the basis of the proceeds standing in lieu of the books.
The single issue to be resolved is whether the bankruptcy court correctly determined that the books were in the constructive possession of the bankrupt at the time of the initial petition in bankruptcy and, therefore, within that court's summary jurisdiction. The district court affirmed the ruling of the referee that summary jurisdiction was appropriate. We disagree.
The bankrupt, American Southern Publishing Company, a book publisher, entered into contracts with the State of Alabama to supply certain textbooks for the Alabama public schools. The books involved in the present case were held in an independent warehouse, Publishers' Warehouse Division of EBSCO Investment Services, in Birmingham pursuant to a depository contract between the bankrupt and the warehouse. Under that contract, the warehouse acted as bankrupt's agent in the distribution of the textbooks to the Alabama schools.
On June 24, 1966, at bankrupt's request, the warehouse prepared a certified inventory of bankrupt's books held by the warehouse. The bankrupt mailed this document to the bank on June 25, 1966, referring to it in a cover letter as 'Notarized official warehouse receipts from Publishers' Warehouse.'
On July 7, 1966, bankrupt wrote the warehouse that it had 'concluded a working agreement' with the bank for a loan, 'and as a form of collateral we made a consignment of our inventory now warehoused in the Publisher's Warehouse.' The bank wrote the warehouse on July 21, 1966, asking that the warehouse recognize the assignment of the inventory by the bankrupt. The warehouse responded on August 19, 1966, in a letter to the bank as follows: 'We hereby agree, to the extent we can legally do so, that we will not ship any more of said books from our warehouse without your consent.'
On July 19, 1966, the bankrupt made the bank a loss payee under the fire...
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