Central Acceptance Corporation v. Lynch
| Decision Date | 06 May 1932 |
| Docket Number | No. 5937.,5937. |
| Citation | 58 F.2d 915 |
| Parties | CENTRAL ACCEPTANCE CORPORATION v. LYNCH. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Ian B. Hart, of Canton, Ohio (Hart, Drukenbrod & McHenry, of Canton, Ohio, on the brief), for appellant.
Clarence A. Fisher and George N. Graham, both of Canton, Ohio, for appellee.
Before MOORMAN, HICKS, and HICKENLOOPER, Circuit Judges.
Unrecorded or unfiled trust receipts of the present day, if title to the goods had in fact previously vested in the recipient of the receipt, are invalid as against creditors of a bankrupt only if they operate as preferences under the Bankruptcy Act (section 60 11 USCA § 96), or contravene the provisions of state recording or filing statutes as construed by the highest court of the state in question. It is not urged that the question of invalidity is to be decided as a matter of public policy, although, doubtless, the enactment of statutes requiring the record or filing of chattel mortgages, conditional sales contracts, and the like, was dictated by views of public policy antagonistic to the creation of secret liens of all kinds.
In the present case we are dealing with the validity of commercial trust receipts under the Ohio recording statutes. Ohio General Code, §§ 8560, 8561 and 8568. Under these statutes it is now the settled law of Ohio that if the title conveyed to the holder of the trust receipt is only for security for the payment of a debt, the trust receipt must be characterized either as a chattel mortgage, as in Thorne v. First National Bank, 37 Ohio St. 254, or as a conditional sale, as in Re Bettman-Johnson Co., 250 F. 657 (C. C. A. 6). Compare, also, Martin v. Michigan Trust Co., 23 F.(2d) 609 (C. C. A. 6); Hyman v. Semmes, Trustee, 26 F.(2d) 10 (C. C. A. 6). In either event the receipt must be filed with the county recorder in order to prevail against the trustee in bankruptcy. Dale v. Pattison, 234 U. S. 399, 34 S. Ct. 785, 58 L. Ed. 1370, 52 L. R. A. (N. S.) 754, having to do with a pledge of warehouse receipts, does not hold otherwise.
We do not consider it necessary to discuss the numerous decisions construing the laws of other states as to the necessity of recording or filing trust receipts, the provisions of the statutes of such states, or the validity as against creditors, in the absence of filing and under the laws of Ohio, of a consignment of merchandise, or of a true bailment. The local law of each state must govern transactions within such state. See Hamilton National Bank v. McCallum, Trustee (C. C. A., Tenn.) 58 F.(2d) 912, and Commercial Investment Trust Corp. v. Wilson, Trustee (C. C. A. Ky.) 58 F.(2d) 910, this...
To continue reading
Request your trial
-
Chattanooga Discount Corporation v. West, Civ. A. No. 1272.
...Code, § 67-2501. See also Hamilton Nat'l Bank v. McCallum (Chattanooga Finance Co. v. McCallum), 6 Cir., 58 F.2d 912; Central Acceptance Co. v. Lynch, 6 Cir., 58 F.2d 915; and In re James, Inc., 2 Cir., 30 F.2d 5 Stemmons, Inc. v. Universal C.I.T. Corporation (Okl.), 301 P.2d 212. 6 When pr......
-
Hamilton Nat. Bank v. McCallum
... ... The bankrupt, Alday Motor Company, was a corporation dealing in automobiles. Appellants filed claims against the bankrupt's ... ...
-
McLeod-Nash Motors, Inc. v. Commercial Credit Trust
... ... acceptance by plaintiff of a time draft to defendant's ... order, was a chattel ... Bank v. McCallum (C.C.A.) 58 F.2d 912; and Central ... Acceptance Corp. v. Lynch (C.C.A.) 58 F.2d 915. In the ... McCallum ... Acceptance Corporation and the Bell Motor Company," the ... holder and the maker of the trust ... ...