Cable Co. of Alabama v. Stewart

• Decision Date: 05 December 1911
• Docket Number: 2,290.
• Parties: CABLE CO. OF ALABAMA v. STEWART.
• Court: U.S. Court of Appeals — Fifth Circuit

191 F. 699

CABLE CO. OF ALABAMA v. STEWART.

No. 2,290.

United States Court of Appeals, Fifth Circuit.

December 5, 1911

Robert E. Smith, for petitioner.

D. D Trimble, for respondent.

Before PARDEE and SHELBY, Circuit Judges.

SHELBY Circuit Judge.

The subject of controversy in this suit is a piano. It is claimed by the Cable Company, and it is also claimed by W. T Stewart, as the trustee in bankruptcy of B. B. Bazemore. There is no dispute as to the facts, which are as follows The Cable Company sold the piano to Bazemore by a written contract of conditional sale in these words:

'Boyles, Ala., 9-15, 1908.

'State of Alabama, County of Jefferson.

'This witnesseth, that I have this day purchased of the Cable Company of Alabama, one Conover Piano, Style L.M., No. 104,614, with extras as follows: Stool, bench, and scarf, for which I agree to pay to its order the sum of $500.00. Cash payment special service, Trade $50.00. Balance $450.00, as follows: $25.00 Oct. 15, 1908, then $15.00 on the 15th day of each month thereafter until paid, with interest from date at the rate of 4 per cent. per annum, as evidenced by contract note of even date herewith. Title to said property to remain in the Cable Company, Birmingham, Ala., or its assigns, until said obligation is fully satisfied.

B. B. Bazemore. (L.S.)

'Witness: E. G. Lawley.' The contract was proved, as shown by the following indorsement on it:

'State of Alabama, County of Jefferson.

'Personally appeared before the undersigned notary public E. G. Lawley, who after being duly sworn, deposes and says that he saw B. B. Bazemore sign, seal and deliver the within agreement for the purposes herein set forth, and that he subscribed the same as witness.

E. G. Lawley.

'Sworn to and subscribed before me, this 4th day of November, 1908.

'J. Willay, Notary Public.'

The contract was duly filed in the office of the probate judge of Jefferson county, Ala., on November 5, 1908, and was there recorded on November 23, 1908. The 'contract note' referred to in the contract of sale was made on the same date, on a separate sheet of paper, and is as follows:

'State of Alabama, County of Jefferson.

'The Cable Company of Alabama, at Birmingham, Alabama, have this day agreed to sell to B. B. Bazemore, a certain piano described as follows: One Conover, Style L.M., No. 104,614, with extras as follows: stool, bench and scarf, for the total price of five hundred dollars ($500.00), on which B. B. Bazemore has this day paid . . . dollars, and in trade, viz.: Services rendered valued at $50.00. The balance of four hundred fifty dollars to be paid as follows: Twenty-five dollars Oct. 15, 1908, then $15.00 on the 15th of each month thereafter until paid. Said balance to draw interest at four per cent. per annum from date. Said payments to be made at the Cable Piano Company office, Birmingham, Ala., or to be forwarded by postal money order, draft, registered letter, or express prepaid.

'The said B. B. Bazemore agrees to keep said instrument at his residence, on Fifth street in Boyles, to take good care of same and not to remove said instrument therefrom, nor to part with the possession thereof, without the written consent of the Cable Company of Alabama, or its assigns, indorsed on this agreement. It is agreed that the title to and ownership of said instrument shall remain in said the Cable Company of Alabama until the whole of the purchase money is paid.

'In the event that any of the above payments shall not be made as they become due, the Cable Company of Alabama, or its agent or attorney, is hereby authorized to enter the premises where said instrument may be and remove the same without legal process, and in addition to the right of the Cable Company of Alabama to enter the premises where said instrument is and remove the same without legal process, it is agreed that said the Cable Company of Alabama, when any of the above payments become due and are not paid, if it chooses, may sue and recover judgment on the whole debt, notwithstanding some or all of said payments may not have all become due, together with 10 per cent. attorney's fees on said indebtedness, and that this judgment shall be a preferred debt and first lien on said instrument. It is further agreed that if said the Cable Company of Alabama, or its assigns, shall exercise its option to retake said instrument as above described, and rescind said contract, that all payments made by said bargainee to said the Cable Company of Alabama, or its assigns, under this contract shall be treated as liquidated damages for the use of and damages to said instrument, and shall be retained by said the Cable Company of Alabama, or its assigns, as liquidated damages. The maker or makers hereof hereby waive all rights to exemptions, as to real and personal property, secured to same and family or families, by the Constitution and laws of this or any other state and the United States, as against the payment of this debt. Loss in case of fire or accident to be borne by said bargainee. This contract is subject to the approval of the Cable Company of Alabama. It is expressly agreed that the Cable Company of Alabama is not to be bound by any provisions other than those contained in this contract.

'Witness our hands and seals this 15th day of September, 1908.

'B. B. Bazemore.

'Witness: E. G. Lawley.' This 'contract note' was never filed for record.

The sale was made in Jefferson county, Ala., and the piano was immediately delivered by the Cable Company to the purchaser, Bazemore, and he has remained in possession of it ever since. Bazemore never paid for the piano. Several hundred dollars of the purchase price remains unpaid.

Bazemore filed his voluntary petition in bankruptcy March 11, 1911; his schedule showing that he was indebted to the Cable Company in the sum of $450. On that day he was adjudicated a bankrupt. On March 27th the Cable Company filed its petition praying for an order requiring the bankrupt to surrender to it the piano. W. T. stewart, having been appointed trustee of the bankrupt, resisted the petition of the Cable Company, and, as trustee, claimed the piano. It does not appear that the bankrupt had any judgment creditors or creditors with liens.

The case being submitted to the referee on the foregoing facts, he held that the title of the trustee was superior to that of the Cable Company and entered an order to that effect, dismissing the company's petition. This order was confirmed by the District Court. The order of the District Court is assigned as error in the petition of the Cable Company filed in this court praying for its revision and reversal.

The two questions argued here and considered by the court below are: (1) Does the amendment to the bankruptcy act (hereinafter quoted) vest in the trustee the right of a judgment creditor without notice to hold the property sold as against the conditional vendor? (2) Was there a compliance with the Alabama statute requiring the registration of contracts of conditional sales?

If the record of the contract of conditional sale without the record of the 'contract note' was a sufficient compliance with section 3394 of the Code of Alabama (1907), the other question argued becomes immaterial so far as this case is concerned.

The material part of the section is that:

'Contracts for the conditional sale of personal property, by the terms of which the vendor retains the title until payment of the purchase money and the purchaser obtains possession of the property, * * * are, as to such condition, void against purchasers for a valuable consideration, mortgagees and judgment creditors without notice thereof, unless such contracts are in writing and recorded in the office of the judge of probate of the county in which the party so obtaining possession of the property resides, * * * and if, before the payment of the purchase money * * * the property is removed to another county, the contract must be again recorded, within three months from the time of such removal, in the county to which it is removed.'

By the letter of the statute, whether the contract is recorded or not, the condition remains valid between the parties and is void only against the classes named, including 'judgment creditors without notice thereof.' At the date of the conditional sale, which occurred in September, 1908, the record of the contract was not required to prevent the condition becoming void as against the purchaser's trustee in bankruptcy representing creditors without liens. Such condition, without record, was at that time certainly valid as against the trustee in bankruptcy. Stewart v. Platt, 101 U.S. 731, 25 L.Ed. 816; Crucible Steel Co. of America v. Holt, 174 F. 127, 98 C.C.A. 101. The contention of the trustee is that the amendment to the bankruptcy act passed June 25, 1910, vests him with the same right that a judgment creditor would have to hold the property as against the vendor. The amending act is here inserted; the change made being shown by italics:

'Sec. 8

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