Babcock & Wilcox Co. v. Spaulding

• Decision Date: 05 November 1936
• Docket Number: No. 3169.,3169.
• Citation: 86 F.2d 256
• Parties: BABCOCK & WILCOX CO. et al. v. SPAULDING et al. In re BROWN CO.
• Court: U.S. Court of Appeals — First Circuit

86 F.2d 256 (1936)

BABCOCK & WILCOX CO. et al. v. SPAULDING et al.

In re BROWN CO.

No. 3169.

Circuit Court of Appeals, First Circuit.

November 5, 1936.

Robert Hale, of Portland, Me. (Verrill, Hale, Booth & Ives, of Portland, Me., and John R. McLane and McLane, Davis & Carleton, all of Manchester, N. H., on the brief), for appellants.

Leonard A. Pierce, of Portland, Me. (Edward W. Atwood, Benjamin B. Sanderson, and Cook, Hutchinson, Pierce & Connell, all of Portland, Me., and Carl C. Jones, of Concord, N. H., on the brief), for appellees trustees of Brown Co.

Harold S. Davis, of Boston, Mass., for appellee Old Colony Trust Co., trustee.

Before BINGHAM, WILSON, and MORTON, Circuit Judges.

BINGHAM, Circuit Judge.

These are appeals under section 24a of the Bankruptcy Act, as amended (11 U.S. C.A. § 47(a), from decrees of the District Court for Maine, in one case denying the petition of the Cameron Machine Company, a New York corporation, to repossess itself of a paper winder, a slitter grinder, and their equipment, sold, under a conditional sale contract, to the Brown Company, a Maine corporation having its principal offices at Portland, Me.; and, in the other case, denying the petition of Babcock & Wilcox Company, a New Jersey corporation, to repossess itself of a certain pulverizing and burning equipment and attachments, also sold to the Brown Company under a conditional contract of sale.

The Brown Company had previously, on September 3, 1935, filed in the court below a petition for reorganization under section 77B of the Bankruptcy Act (11 U.S. C.A. § 207), which petition was duly approved.

It appears that the Brown Company, after its incorporation in the State of Maine, registered as a foreign corporation in New Hampshire where it had mills of a substantial value — the greater part of them being in Berlin where its principal New Hampshire offices were located. It also had mills in the adjoining town of Gorham, N. H., and owned timberlands in various towns of the State.

The conditional sale contract between the Cameron Company and the Brown Company was dated August 19, 1934, and the property sold was delivered to the latter company at Gorham, N. H., October 10, 1934, when its installation was begun in one of its mills there under the supervision of a representative of the Cameron Company. The purchase price was $11,347.50, of which there is still due $6,899.38. A memorandum of this conditional sale contract was recorded in the office of the city clerk in Berlin on October 5, 1934, but no record was made in the town clerk's office in Gorham, where the property was situated.

By a written contract dated May 27, 1935, between the Babcock Company and the Brown Company, the former agreed to install the property covered by that contract in the latter's mill at Berlin, the title to which was not to pass until full payment of the price. The installment of this property was completed on August 26, 1935. The price to be paid was $23,173, no part of which has been paid. No memorandum of this sale, as is required by the law of New Hampshire, was made and recorded in Berlin or elsewhere in New Hampshire. The Babcock Company had no residence in that State.

The trustees objected to the allowance of the petition of the Cameron Company on the ground that the memorandum of sale was not recorded in the clerk's office in Gorham where the property was situated; and to the allowance of the petition of the Babcock Company because no memorandum of sale, as required by the law of New Hampshire, was made and recorded in Berlin where the property was situated.

For these and other reasons not necessary to mention, the District Court entered decrees denying the petitions, from which these appeals were taken.

It is conceded that the questions here involved are governed by the law of New Hampshire. Sections 27, 28, and 30 of chapter 216 of the Public Laws of New Hampshire here applicable provide:

"27. Memorandum. No lien reserved on personal property sold conditionally and passing into the hands of the conditional purchaser, except a lien upon household goods created by a lease thereof, containing an option in favor of the lessee to purchase the same at a time specified, shall be valid against attaching creditors, or subsequent purchasers without notice, unless the vendor of such property takes a written memorandum, signed by the purchaser, witnessing the lien, the sum due thereon and containing an affidavit as provided in the following section, and causes such memorandum to be recorded in the town clerk's office of the town:

I. Where the purchaser resides, if within this state; or

II. Where the vendor resides, if within this state, and the purchaser does not reside in the state; or

III. Where the property is situated if neither purchaser nor vendor resides in the state."

"28. Affidavit. Each vendor and purchaser shall make and subscribe an affidavit in substance as follows: We severally swear that the foregoing memorandum is made for the purpose of witnessing the lien and the sum due thereon as specified in said memorandum, and for no other purpose whatever, and that said lien and the sum due thereon were not created for the purpose of enabling the purchaser to execute said memorandum, but said lien is a just lien, and the sum stated to be due thereon is honestly due thereon and owing from the purchaser to the vendor."

"30. Record. If the record required by section 27 is made within twenty days after the property is delivered the lien reserved shall be valid against all attaching creditors and purchasers; but if it is not made until after the expiration of twenty days it shall be valid against those attaching creditors and purchasers only who become such after the record."

(Italics, except the headings of the sections, supplied.)

Under these provisions of law the validity of the Cameron Company's lien depends upon whether the Brown Company resided in Berlin. If it did, the memorandum could be properly recorded there. If both the Brown Company and the Cameron Company resided out of the State, the memorandum should have been recorded in Gorham where the property was situated. It was not recorded in Gorham, but in Berlin, and was properly recorded there only in case the Brown Company had a residence in Berlin. Did the Brown Company, a corporation organized under the laws of Maine, have a residence in Berlin, N. H.?

Undoubtedly an individual domiciled in Maine can acquire a temporary residence in New...