Berry Bros. v. Snowdon

• Decision Date: 25 November 1913
• Docket Number: 2,286.
• Citation: 209 F. 336
• Parties: BERRY BROS. v. SNOWDON et al. In re GRAVES et al.
• Court: U.S. Court of Appeals — Ninth Circuit

209 F. 336

BERRY BROS. v. SNOWDON et al.

In re GRAVES et al.

No. 2,286.

United States Court of Appeals, Ninth Circuit.

November 25, 1913

Frank E. Green, of Seattle, Wash., for appellant.

Cassius E. Gates, Gates & Emery, McClure & McClure, and Walter A McClure, all of Seattle, Wash., for appellees.

Before GILBERT, ROSS, and MORROW, Circuit Judges.

ROSS Circuit Judge.

The appeal in this case is from the judgment of the District Court confirming an order made by the referee in bankruptcy rejecting and expunging a claim made by the appellant against the bankrupts. The appellant is a corporation of the state of Michigan, and the bankrupts were at the time of their adjudication in bankruptcy doing business in the city of Seattle, state of Washington, having a warehouse for the storage of goods, and at a separate and distinct place in the same city a salesroom in and from which they sold goods. The agreed statement of the respective parties shows that, while the bankrupts were so carrying on their business, the appellant shipped them certain goods and merchandise of the aggregate value of about $5,000 under and pursuant to this written agreement:

'March 18, 1912.

'Agreement between Berry Brothers, Limited, of Detroit, Michigan party of the first part, and Graves & La Belle, of Seattle, Washington, party of the second part:

'The party of the second part hereby agree to store such goods that the party of the first part may ship on consignment to the party of the second part for the purpose of sale by said Graves & La Belle.

'The party of the second part agree to report on the first of each month the amount of goods sold by them from said stock for which party of the first part will render an invoice at the regular terms and prices of such goods according to the quantity sold.

'The party of the first part agree to pay the party of the second part the cost of cartage in Seattle from the car to their warehouse of each consignment signment of goods, and 3¢ per case per month for storage based on the stock on hand at the first of each month.

'The party of the first part will carry and pay for such insurance as they deem necessary for the goods on consignment.

'The party of the first part will render a memo invoice to the party of the second part of all goods shipped on consignment, and will credit to such consignment account the amount of goods that are sold each month from said stock, and the party of the second part agree to pay for such goods sold by them, or taken from consigned goods while in their possession on the terms which they are billed by the party of the first part on their regular invoice.

'It is also agreed that this contract can be terminated at any time upon thirty days' written notice from either party.

'Berry Brothers, Limited,

'Jas. S. Stevens, Asst. Genl. Mngr.

'Graves & La Belle,

'By G. E. La Belle.'

It was further stipulated by the parties that Berry Bros. paid the freight on the goods, the cartage thereon from the cars to the warehouse of Graves & La Belle; that the goods were thereupon placed in the said warehouse, in which were also goods, wares, and merchandise belonging to the said Graves & La Belle, and that Berry Bros., also paid the insurance and storage on the goods so shipped by them during the entire time those goods remained in the said warehouse; that Berry Bros., at the time of their said shipments, delivered to Graves & La Belle 'detailed statements' covering the same, and that they (Berry Bros.) at various times thereafter withdrew parts of the goods so consigned by them and stored as aforesaid and sold the same on their own account, independent of, but with the knowledge of and without objection by, the said Graves & La Belle; that, whenever Graves & La Belle withdrew any portion of the said consigned goods from their warehouse, report of such withdrawal was made by them to Berry Bros., and 'monthly statements were rendered by said Berry Bros. to said Graves & La Belle of the amount of stock so withdrawn during the preceding month'; that on or about November 16, 1912, 'said Berry Bros., with knowledge of the financial condition of said Graves & La Belle, and with knowledge that bankruptcy proceedings might be instituted within a short time after said date, withdrew from said Graves & La Belle the goods, wares, and merchandise theretofore delivered by Berry Bros. then remaining in said warehouse of the value of about $3,000; that some of the creditors of said bankrupts interposed objections to the return of said goods, but that in order to avoid litigation said objections were waived and Berry Bros. were allowed to retake said stock upon condition that they would, in case of bankruptcy proceedings within four months of said date, permit the question of their right to the possession of said goods (to) be submitted to the bankruptcy court of this district,' the written agreement to that effect being inserted in the record.

The order of the referee confirmed by the court below, which disallowed and expunged the claim of Berry Bros. for $1,861.50 against the bankrupts, was based upon the grounds:

'(1) That proper credits have not been allowed for payments made on said account.

'(2) That, subsequent to the first day...