67 F.2d 201 (7th Cir. 1933), 4907, In re Wayside Furniture Co.

Docket Nº:4907.
Citation:67 F.2d 201
Case Date:September 23, 1933
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

Page 201

67 F.2d 201 (7th Cir. 1933)





No. 4907.

United States Court of Appeals, Seventh Circuit.

September 23, 1933

I. A. Fish, G. R. Hoffman, J. H. Marshutz, and E. H. Hallows, all of Milwaukee, Wis., for appellant.

I. E. Goldberg, of Milwaukee, Wis., for appellee.

Before ALSCHULER and SPARKS, Circuit Judges, and WILKERSON, District judge.

WILKERSON, District Judge.

The appeal is from an order denying appellant's petition for reclamation of certain furniture from appellee. The right to reclaim is asserted under a contract set out below. 1

Page 202

The Wayside Stores, party to the contract of June 12, 1930, was a partnership. Bankrupt, which was incorporated on June 30, 1930, continued to receive furniture shipped under the contract. The contract was not filed for record until October 7, 1932, and the petition in bankruptcy was filed on October 22, 1932.

Appellant claims that the contract is one of consignment. The referee held that the contract was one of conditional sale not filed as required by the law of Wisconsin, and that it was not an agreement between the bankrupt and the appellant. The District Court sustained the referee.

In considering this contract, the language of this court In re Leflys, 229 F. 695, 696, is pertinent. The court said: 'The contract under consideration is one not easy to classify. It indicates an intention to secure the advantages and avoid the disadvantages of a conditional sale. In arriving at a proper construction of it, little weight can be given to the frequent allusions therein to the claim that the relation of the parties is that of principal and agent, as against the effect of its terms.'

In the contract now before the court there is no provision for the segregation and marking of the goods. It is not required that the Wayside Furniture Company shall be held out as the agent of the appellant. There is no reservation of title in the proceeds and no provision against commingling of the proceeds. The Wayside Company could sell the furniture at any price and on such terms as it saw fit to do. Its only obligation was to pay to the Union Company within thirty days after sales made by second party the amount at which the furniture was invoiced. The provision that the Wayside Company shall have 'the privilege of purchasing such furniture or any part thereof upon such terms as may be specifically agreed to by the parties thereto' is meaningless unless it is read in connection with the right of the Wayside Company to sell the furniture and convey title thereto upon payment of the invoice price within thirty days. Taking the instrument as a whole, it appears that the consignee is at liberty to sell at a price and on terms fixed by itself, being answerable to the consignor for a fixed price. The contract, in our opinion, cannot be regarded as one of consignment. In re Leflys, supra; Flanders Motor Co. v. Reed (C.C.A.) 220 F. 642, 644; In re Garcewich (C.C.A.) 115 F. 87; In re United States Electrical Supply Co. (D.C.) 2 F. (2d) 378, 380.

The distinction between a contract such as the one now before us and contracts like the ones involved in Ludvigh v. American Woolen Company, 231 U.S. 522, 34 S.Ct. 161, 58 L.Ed. 345, and similar cases, is pointed out in...

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