IN RE R & B CONST. CO.

• Decision Date: 08 January 1934
• Docket Number: No. 14415.,14415.
• Citation: 7 F. Supp. 733
• Court: U.S. District Court — District of Connecticut
• Parties: In re R & B CONST. CO., Inc.

7 F. Supp. 733

In re R & B CONST. CO., Inc.

No. 14415.

District Court, D. Connecticut.

January 8, 1934.

Hubbard & Hall, of Bridgeport, Conn., for trustee.

D. H. Cotter, of Bridgeport, Conn., for vendors.

HINCKS, District Judge.

The bankrupt herein, upon its adjudication and long prior thereto, was in possession of two power shovels and one road roller, to which the Osgood Company and the Hercules Company (by assignment from the Frank Manning Equipment Company) claim title by virtue of contracts of conditional sale. The receiver, and later the trustee, petitioned for permission to sell these items free from lien; and the conditional vendors filed petitions in reclamation. The referee ordered that the petitions in reclamation be allowed and that the petition of the trustee to sell free from lien be dismissed. The trustee, by petition now before me, seeks a review of this order.

The referee's certificate discloses the following facts: That a Connecticut partnership known as R & B, General Contractors, on August 1, 1930, duly signed a paper addressed to the Osgood Company, stating as follows: "Please sell subject to delays from fire, strikes, accidents or other causes beyond your control, * * * 2 Osgood power shovels to the undersigned purchaser, in consideration whereof `the purchaser agrees to pay you for the said machine and machinery as is and where is Eighteen thousand sixty-two and 94/100 Dollars ($18,062.94), as follows: Cash with order $1212.94 Allowed on trade $6850.00 Balance $10,000.00 payable in' installments ranging over thirteen months. Title to the property `shall not vest in the purchaser until all notes, renewals thereof, * * * are paid in full. In case purchaser refuses or neglects to accept property at destination or otherwise, is or becomes insolvent, a bankrupt (voluntary or involuntary), makes or attempts any transfer, sale, conveyance or other disposition hereof or of said property or any part thereof; * * * or if any default or breach be made hereunder by purchaser; all sums then owing shall forthwith become due and payable * * * and you may retake all said property,' resell the same, etc. `You reserve the right to make, without notice, such changes in the design and construction of your machinery as will in your judgment improve it. * * * This order covers all agreements concerning this transaction between the parties and is not subject to modification, cancellation or assignment excepting with your written consent, but upon written acceptance by you signed by your President or Secretary, shall become a binding contract.'" Below the signature of the purchaser was written, "Accepted at Marion, Ohio, U. S. A. August 9, 1930, The Osgood Company, by M. McNeil, Secy."

The document shows that it was duly acknowledged by the partnership purchaser on August 4, 1930. It was not, however, acknowledged by the Osgood Company.

On August 9, 1930, both the Osgood Company and the partnership signed a conditional bill of sale, referring to and incorporating the "order contract dated August 1, 1930," described above. This bill of sale recites as additional consideration the mutual agreement that when the purchase price shall have been fully paid, the two power shovels "shall become the property of said conditional vendee and he shall be entitled to a bill of sale for the same on demand, and that until said sum shall have been fully paid as above stated the title to said personal property shall remain in said conditional vendor, and that if said conditional vendee shall fail to make any of the payments as above stated, or shall remove any of said property out of the City of Bridgeport or sell or put the same out of his possession under an attempt to sell the same, or any of said property shall be permanently removed out of his possession in any way, the said conditional vendor, his representatives or assigns, may, at their election, without notice, take possession of all said property. * * *"

The conditional bill of sale was dated at Marion, Ohio, August 9, 1930. It was signed by both parties, and the signature of the partnership vendee was acknowledged under date of August 4, 1930, and, without acknowledgment by the conditional vendor, was recorded in the town clerk's office at Bridgeport, on August 13, 1930.

On September 30, 1931, the partnership of R & B, General Contractors, signed a paper addressed to Frank Manning Equipment Company, saying, "Please enter for the undersigned (user) an order for * * * one complete Hercules road roller * * * Total price, $4800," payable $300 in cash, and the balance in notes. The remainder of this document, in so far as material for present purposes, follows the wording of the Osgood order set forth above, except that the wording of its final paragraph is as follows: "This order contract * * * is not subject to modification, cancellation or assignment without your written request." Unlike the Osgood contract, it did not specifically provide that it should become a binding contract upon the written acceptance of the vendor. Below the signature of the user, "R & B, General Contractors," is written, "Approved by Frank Manning Equipment Company, by Frank D. Manning, President." The signature of the partnership vendee was acknowledged on October 26, 1931, but the paper contained no acknowledgment of the signature of the vendor approving the order. The paper was recorded in the town clerk's office at Bridgeport on October 31, 1931. On October 17, 1932, or thereabouts, the vendor's interest in the contract was assigned to the Hercules Company by indorsement thereon.

On January 22, 1932, the corporation, R & B Construction Company, Inc., was organized, and to this corporation, which is the bankrupt herein, the partnership transferred all its assets, including its...