Chesapeake Shoe Co. v. Seldner

• Decision Date: 05 May 1903
• Docket Number: 474.
• Parties: CHESAPEAKE SHOE CO. v. SELDNER.
• Court: U.S. Court of Appeals — Fourth Circuit

122 F. 593

CHESAPEAKE SHOE CO. v. SELDNER.

No. 474.

United States Court of Appeals, Fourth Circuit.

May 5, 1903

Edward R. Baird, Jr., for appellant.

P. A Agelasto, for appellee.

Before GOFF and SIMONTON, Circuit Judges, and McDOWELL, District judge.

McDOWELL District Judge.

On July 24, 1902, involuntary proceedings in bankruptcy were commenced by the creditors of one Small, a retail shoe dealer of Norfolk, Va., in the United States District Court for the Eastern District of Virginia, and Small was duly adjudicated a bankrupt. On July 31, 1902, the Chesapeake Shoe Company wholesale dealers in shoes, filed its petition setting up a claim of ownership to a lot of shoes, invoiced at something over $1,000, which had been in the possession of Small under a contract alleged to be a mere consignment contract, and which the bankrupt court had put into the possession of Seldner as receiver. Upon the filing of this petition, with which were filed as exhibits the contract between the shoe company and Small, and an invoice of the shoes, the matter was referred to the referee. The referee reported adversely to the claim of the shoe company. Exceptions to this report were filed, and on October 21, 1902, the judge of the District Court overruled the exceptions. Within 10 days thereafter the shoe company filed its petition for an appeal from the said order, an assignment of errors, and an appeal bond. On October 31, 1902, the appeal was granted and citation issued, returnable November 25, 1902. The record was filed in this court on November 24, 1902. On January 24 1903, the shoe company filed here a petition praying that its appeal be treated as a petition for revision under section 24b, Bankr. Act July 1, 1898, 30 Stat. 553, c. 541 (U.S Comp. St. 1901, p. 3432).

Consideration is first demanded of a motion made in behalf of the trustee and receiver that the appeal be dismissed. The ground of this motion is that the judgment appealed from is not appealable under the terms of the act. We think it unnecessary to discuss the much-disputed question as to meaning of the word 'claim' in the third clause of section 25a. See 1 Fed.Stat.Ann. 602, note. The appeal may, on authority and in reason, be treated as a petition for revision, without prejudice to the opposing party. A question of law alone is presente by the appeal. See In re Abraham, 35 C.C.A. 592, 93 F. 783; In re Worcester County, 42 C.C.A. 637, 102 F. 808; Fisher v. Cushman, 43 C.C.A. 381, 103 F. 860, 51 L.R.A. 292; Rodgers v. Ramseur (In re Whitener) 44 C.C.A. 434, 105 F. 187, 188; 1 Fed.Stat.Ann.,note p. 600.

The contract between t?he petitioner and Small reads as follows:

'This agreement between the Chesapeake Shoe Company of Baltimore, Md., party of the first part, and John F. Small, of Norfolk, Va., party of the second part, witnesseth:

'First. The party of the first part agrees to consign to the party of the second part a stock of its boots and shoes on the following terms and conditions:

'Second. The party of the second part shall keep the said consigned stock insured in the name of and for the benefit of the said party of the first part, to its full value, and shall forward the policy or policies of such insurance to the party of the first part.

'Third. The said party of the first part shall have the right to examine and inventory said consigned stock whenever it may elect so to do.

'Fourth. The said party of the second part agrees to keep separate and intact all moneys arising from the sales from said consigned stock, and shall render a statement on the Monday of each week, and shall remit with the said statement a check for the invoiced value of such portion of the said consigned stock which has been sold or otherwise disposed of.

'Fifth. It is hereby agreed and expressly understood that the entire compensation of the said party of the second part for its services in connection with the sale of such consigned goods shall be the net difference between the prices obtained from such sales from said stock and the prices as invoiced by the said party of the first part.

'Sixth. The said party of the first part agrees to replenish said consigned stock from time to time as may be deemed necessary or advisable by said party of the first part.

'Seventh. This agreement shall remain in force and effect until July 1st, 1902, or it may be terminated by either party hereto by giving a written notice to that effect thirty days prior to such termination, in which event said party of the second part agrees either to retain and pay cash for said consigned stock or ship same promptly, in good order and condition, freight prepaid, to the party of the first part.

'Eighth. The party of the first part reserves the right, in the event of the termination of this agreement, to reject any and all of such consigned goods as may be in the possession of the party of the second part at the time of the termination of this contract, which may be shop-worn or unsalable.

'In witness whereof the parties hereto have hereunto affixed their hands and seals this 28th day of February, 1902.'

The Virginia statutes bearing on this case are as follows:

Section 2462, c. 109, Code 1887, as amended by Acts 1893-94, p. 422, c. 362, reads in part:

'Every sale or contract for the sale of goods or chattels wherein the title is reserved until the same be paid for in whole or in part, or the transfer of title is made to depend on any condition, and possession be delivered to the vendee, shall, in respect to such reservation and condition be void as to creditors of * * * such vendee until such sales or contract be in writing * * * and a memorandum of said writing * * * be docketed,' etc.

Section 2472, c. 109, Code 1887, reads in part:

'The words 'creditor' * * * where used in any previous section of this chapter, shall not be restricted to the protection of the creditors of * * * the grantor, but shall extend to and embrace all creditors * * * who, but for the deed or writing would have had title to the property conveyed, or a right to subject it to their debts. * * * '

Section 2877, Code 1887, reads:

'If any person transact business as a trader with the addition of the words 'factor,' 'agent,' 'and company,' or 'and Co.,' and fail to disclose the name of his principal or partner, by a sign in letters easy to be read, placed conspicuously at the house wherein such business is transacted, and also by a notice published for two weeks in a newspaper (if any) printed in the city, town, or county wherein the same is transacted; or if any person transact such business in his own name, without any such addition; all the property, stock, and choses in action acquired or used in such business shall, as to the creditors of any such person, be liable for the debts of such person. This section shall not apply to a person transacting such business under a license to him as an auctioneer or commission merchant.'

The contract between the petitioner and Small was never docketed, and Small did business as a trader in his own name. He was not a licensed auctioneer or commission merchant. All of Small's creditors are unsecured creditors 'at large.' It was contended in argument that the contract here does not evidence a sale on condition, but that it is a mere consignment contract, leaving the title to the consigned shoes in the petitioner. We find it unnecessary to construe the contract in this respect, since under either construction the action of the court below in holding that the shoes passed to the trustee was right.

Treating the contract as an unrecorded conditional sale, it was argued that the sections of the Code quoted from chapter 109 do not nullify the condition except as to lien creditors. This contention is founded on the language used in section 2472-- 'a right to subject it to their debts. ' The Virginia authorities are not entirely agreed as to this question. 2 Minor, Insts. (3dEd.) 963 et seq.; McCandlish v Keen, 13 Grat. 637; Dulaney v. Willis, 95 Va. 609, 29 S.E. 324, 64 Am.St.Rep. 815. But, if it be conceded that the creditors in whose favor the statute makes void the condition in an unrecorded contract are only creditors in a position to subject the property, yet under the bankrupt act the filing of a petition in bankruptcy is in...