Delaware Trust Company v. Elder & Company

• Decision Date: 29 December 1920
• Court: Court of Chancery of Delaware
• Parties: DELAWARE TRUST COMPANY, v. ELDER AND COMPANY

112 A. 370

12 Del.Ch. 263

DELAWARE TRUST COMPANY, v. ELDER AND COMPANY

Court of Chancery of Delaware, New Castle

December 29, 1920

Proceeding by the Delaware Trust Company against Elder and Company, in which a receiver was appointed for the defendant. Hearing on petitions by Cummings Machine Company and others for leave to take legal action against the receiver respecting machinery and equipment sold to the defendant.

Order made allowing the several vendors to bring actions at law against the receiver to enforce their rights under their several and respective contracts.

Harry Emmons, for petitioners.

Robert Penington and George N. Davis, for receiver.

OPINION

THE CHANCELLOR

A receiver has been appointed for Elder and Company, an insolvent corporation, which had or has a plant consisting of machinery, implements, horses, carts and the like for building roads. Five petitions have been filed in the cause by those who sold to the company machinery and apparatus part of the plant, on conditional sales agreements whereby the title to the property remains in the seller until payment of the purchase price has been made, and they have each prayed that because of defaults of the buyer in not complying with the agreements the property so sold be returned by order of this Court, or that they each have permission to take such legal action against the receiver as may be necessary for the protection of their rights. The defaults consist in the failure to pay in one case any part of the price, and the others parts thereof.

To these petitions the receiver filed answers (1) that there is no allegation in the petition that chapter 192, volume 30 Laws of Delaware, has been complied with; and (2) that the receiver is not in possession of the property. The act referred to is the recent statute approved April 3, 1919 called the "Uniform Conditional Sales Act." By section 4 of the act reservation of title is valid as to all persons except those named in section 5. By section 5 such reservations are declared to be void "as to any purchaser from or creditor of the buyer, who, without notice of such provision, purchases the goods or acquires by attachment or levy a lien upon them," before the contract or copy is filed in the office of the recorder of deeds, as is required by section 10 of the act.

If, as was assumed in the argument, no creditor of the buyer had acquired by attachment or levy a lien upon the...