Dennes v. Butts

• Decision Date: 07 June 1937
• Docket Number: No. 8359.,8359.
• Citation: 90 F.2d 522
• Parties: DENNES v. BUTTS.
• Court: U.S. Court of Appeals — Ninth Circuit

90 F.2d 522 (1937)

DENNES v. BUTTS.

No. 8359.

Circuit Court of Appeals, Ninth Circuit.

June 7, 1937.

Lounibos, McGoldrick & Lounibos, of Petaluma, Cal., for appellant.

H. W. A. Weske and J. N. DeMeo, both of Santa Rosa, Cal., for appellee.

Before WILBUR, GARRECHT, and MATHEWS, Circuit Judges.

WILBUR, Circuit Judge.

Robert A. Schieffer filed a petition in voluntary bankruptcy on April 15, 1935, and on that day was adjudicated a bankrupt. The appellant was appointed trustee on April 30, 1935, and took possession of certain personal property which need not be described in detail. Thereafter appellee filed a petition alleging that certain personal property described in the petition had been taken into possession by the trustee in bankruptcy, that he was the owner thereof and entitled to possession thereof, and praying that it be delivered to him. He alleged that a portion of said personal property described as a bean sprayer outfit had been sold by him under a lease contract to the bankrupt for the sum of $300; that it had been attached under a writ of attachment issued by the superior court in and for the county of Sonoma, but had been ordered returned to the petitioner by that court. Petitioner alleged that the other tools and implements described in the petition had been sold by him to the bankrupt under a lease contract, hereinafter referred to as Exhibit A, for the sum of $765, payable in two installments (one of $365 and one of $400), with interest at 7 per cent.; that the bankrupt had failed to make the payments provided in the latter lease; and that by the terms of the lease the petitioner was entitled to the ownership and possession of the property. The petition was heard by the referee in bankruptcy and granted as to the property covered by Exhibit A, and upon petition for review the order was affirmed by the District Court. The trustee in bankruptcy has appealed from the turnover order.

The evidence taken before the referee is not in the record, but it is claimed by the appellant that the applicable facts are covered by his findings of fact and conclusions of law. Briefly stated, the referee found that prior to July 6, 1933, the bankrupt had purchased from the Crown Machine Works under a conditional sales contract all property involved and more particularly described in Exhibit A; that under this agreement with the Crown Machine Works the title to the property remained in it until the property was paid for in full. The referee also found that on July 6, 1933, in consideration of the execution of the agreement contained in Exhibit A, a check for $765 was delivered to the bankrupt. Exhibit A, made a part of the findings, is an agreement in the form of a conditional sales contract whereby the appellee purports to "lease" the property covered by the agreement to the bankrupt. It provides that in the event payment is made in full the title of appellee shall cease "and the whole title shall vest in said Robert A. Schieffer bankrupt as owner, but upon any breach of the provisions of this lease, especially upon failure by said Robert A. Schieffer to pay the said sums as they become due and payable, then this lease, and any and all claim or right on the part of said lessee * * * shall be hereby terminated," etc. This agreement was signed by the bankrupt, but not by the appellee. The referee found that at the time of the execution of the agreement (Exhibit A) "the said parties had a conversation to the effect that said T. V. Butts would then be considered the owner of the property." The referee found that after Exhibit A was signed and executed by the bankrupt the latter paid the Crown Machine Works the amount due it with the proceeds received from the appellee's check for $765 and thereupon the bankrupt's conditional sales contract with the Crown Machine Works was indorsed "paid in full July 7, 1935." The findings further state: "At which time according to the terms of the contract, title to the articles contained in the said inventory referred to in Exhibit `A,' vested in the said bankrupt." The referee found that at the time of the execution of Exhibit A, the bankrupt had possession of the property in question and that neither prior to nor after the execution of Exhibit A did the property come into the possession of the appellee; that there was no delivery of possession to appellee at the time of the execution of Exhibit A and no notice or notices were recorded in the office of the county recorder notifying creditors of the bankrupt of any intended transfer.

From this record the conclusion seems inescapable that the transaction between the petitioner and the bankrupt was a loan from petitioner to the bankrupt of $765 at 7 per cent. interest secured by the property described in Exhibit A. The referee does not specifically find whether or not the transaction was a loan or that Exhibit A was executed to secure...