Clark v. Grimes
| Decision Date | 15 April 1916 |
| Citation | 232 F. 190 |
| Parties | CLARK v. GRIMES. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Edward M. Hammond and Charles C. Wallace, both of Baltimore, Md for plaintiff.
Richard S. Culbreth, of Baltimore, Md., for defendant.
The plaintiff, who is trustee in bankruptcy, seeks to recover $1,040.22, the amount of a preference which he says defendant obtained. From defendant's plea it appears that in November, 1911, the bankrupt wanted to purchase a stock in trade. The defendant lent him $1,300 to be used in paying for one. This sum was to be repaid in one year, with legal interest. Its repayment was secured by a mortgage on the stock purchased, and also on the 'stock in trade, trade fixtures, and personal effects which shall or may at any time or times hereafter,' during the continuance of the mortgage, 'be brought into the said store or warehouse or other buildings connected therewith or attached thereto in any way, or be appropriated to the use of said business either in addition to or substitution of the stock in trade trade fixtures, and effects now being therein or belonging thereto.'
By the mortgage, power was given to the mortgagee, upon default, to enter upon the bankrupt's premises, and to take and carry away the mortgaged property, and to sell the same at public auction. It was especially stipulated that the right so to seize and sell was to include 'any and all goods that may have been brought into said store or appropriated to the use of said business, either in addition to or substitution for the said stock in trade, trade fixtures, and effects now being therein or belonging thereto, and therein or thereabout at the time of the seizure. ' Until default the bankrupt was to remain in possession, and was to be allowed, as agent for the defendant, to sell in the usual and regular course of business, at retail, such articles in the said store or buildings as customers might desire to buy, the bankrupt rendering to the defendant monthly accounts of the articles sold and the prices thereof, and paying to him, whenever required, all moneys received by him from such sales, to be applied to the payment of the indebtedness under the mortgage.
The mortgage was not paid at maturity, but up until the 17th of November, 1913, interest was. The monthly accounts provided for were never rendered nor demanded, nor were the proceeds of any sales ever turned over by the bankrupt to defendant. At the time the mortgage was made the bankrupt was solvent, but before the 11th day of September, 1914, the defendant had reason to believe that he had become insolvent. Practically all of the stock in the store at the time the mortgage was executed had been sold and replaced by other goods, and the new was so mingled with the old that it was impossible to separate or distinguish them. On the date last mentioned, defendant, acting, as he claimed, under the terms of the mortgage, took possession of everything in the store. He subsequently sold it and realized the amount of money which the plaintiff claims. On the 17th of September, 1914, the mortgagor was adjudicated an involuntary bankrupt.
To defendant's plea the plaintiff demurred. The legal question thus raised is whether,...
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In re Shapiro
...property by a mortgage of this kind. For analogous cases dealing with chattel mortgages on shifting stocks of merchandise see Clark v. Grimes, D.C.Md., 232 F. 190, affirmed, 4 Cir., 234 F. 604; Knapp v. Milwaukee Trust Co., 216 U.S. 545, 30 S.Ct. 412, 54 L.Ed. 610; In re First National Bank......
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In re Cook
...of Appeals for this circuit in Grimes v. Clark, 234 F. 604, rendered in 1916, affirming a decision of Judge Rose in the Maryland district (232 F. 190), to the effect that a chattel mortgage duly recorded covering a stock of goods, which expressly extended the mortgage lien to after-acquired......
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In re John Hoos Co.
...(1855); Rose & Gauss v. Bevan, 10 Md. 466 (1857); First National Bank, etc. v. Lindenstruth, 79 Md. 136, 28 A. 807 (1894); Clark v. Grimes, 232 F. 190 (D.C.Md.1916), aff'd. 234 F. 604 (4 Cir. 1916); Edelhoff v. Horner-Miller Mfg. Co., 86 Md. 595, 39 A. 314 (1898); Weiprecht v. Ripple, 217 M......
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In re Streeter
...a superior title to the proceeds of the sale. They are a part of the bankrupt's estate, to be distributed to the creditors. See Clark v. Grimes (D. C.) 232 F. 190. The order is that the trustee in bankruptcy retain the proceeds of the bankrupt's stock for distribution to the ...