General Elec. Co. v. Brower

• Decision Date: 08 February 1915
• Docket Number: 2449.
• Parties: GENERAL ELECTRIC CO. v. BROWER.
• Court: U.S. Court of Appeals — Ninth Circuit

221 F. 597

GENERAL ELECTRIC CO. v. BROWER.

No. 2449.

United States Court of Appeals, Ninth Circuit.

February 8, 1915

On July 8, 1912, the appellant entered into a contract with the Andrus-Cushing Lighting Fixture Company, a corporation, by which it agreed to consign incandescent lamps manufactured by it to the Andrus Company for sale on a commission basis. On August 14, 1913, the Andrus Company was adjudged a bankrupt. At that time it had in its possession lamps which had been consigned under the contract, and which had not been sold. Those lamps were subsequently taken by the trustee in bankruptcy, who claimed the right to hold them for the benefit of creditors. On October 8, 1913, the appellant filed a petition in the bankruptcy proceeding, claiming title to the lamps. On October 15, 1913, it filed objections to the confirmation of the sale of the lamps by the trustee. Both the petition and the objections came on for hearing before the referee. The trustee contended that, by the contract under which the lamps had been consigned, an actual sale was made, and that, if the sale was not absolute, it was conditional, and therefore void as to creditors because not recorded. The referee sustained the trustee's contention and the District Court affirmed the referee's decision. From the judgment of that court, the present appeal is taken.

The contract is as follows:

'Appointment of Agent. Incandescent Lamps.

'The General Electric Company, a New York corporation (hereinafter called the 'manufacturer'), hereby, through the general manager of its Banner Electric Works, at Youngstown, Ohio, appoints Andrus-Cushing Lighting Fixture Co., of Tacoma, Wash. (hereinafter called the 'agent'), an agent to sell for it its Banner incandescent lamps manufactured under United States letters patent, of the types and classes hereinafter specified, upon the terms and subject to the conditions herein set forth, and said agent hereby accepts the appointment, and agrees to comply with said terms and to perform all conditions hereof.

'(1) The agency hereby created shall continue for the period of one year from July 8, 1912, unless sooner terminated as herein provided.

'(2) The manufacturer agrees to maintain in the custody of the agent, to be disposed of as herein provided, a stock of its Banner Gem (metallized filament), Mazda (tungsten) and Tantalum patented incandescent lamps; all of the lamps in such consigned stock shall be and remain the property of the manufacturer until the lamps are sold, and the proceeds of all lamps sold shall be held for the benefit and for the account of the manufacturer until fully accounted for as hereinafter provided. The quantity of lamps and the length of time they shall remain in stock is to be at all times determined by the manufacturer; but its intent is to maintain the stock on an average basis of from 30 to 60 days' supply, as estimated by the agent. All lamps shipped hereunder by or on behalf of the manufacturer either to the agent or upon his request during the continuance of this agency, shall be subject to the same terms, conditions and agreements as if shipped to said stock, whether or not so specified. The agent shall return to the manufacturer, at any time when directed by it, all or any part of the said lamps that have not been sold, and any duly authorized representative of the manufacturer shall have access at all times during business hours to the place or places in which said lamps are stored.

'(3) The agent is hereby authorized (a) to sell to any one lamps from said stock in broken package quantities at broken package prices, and in standard package quantities at standard package prices, and (b) to sell lamps from said stock to any purchaser under standard forms of contract made by the manufacturer and under which the agent may be given, by the manufacturer, written authority to deliver lamps at the prices fixed in said contracts, and (c) to sell, at prices on the same basis as those in standard forms of contract, lamps from said stock to any purchaser, not under contract, for the purchaser's immediate use; but sales under this subdivision (c) may be made only on written permission from the manufacturer first obtained in each instance. All sales shall be made only at such prices and upon such terms as may be established by the manufacturer; the present prices and terms being contained in the schedules presented herewith, which are subject to change on written notice from the manufacturer from time to time.

'Upon all bills and invoices for lamps sold by the agent shall appear the words: 'Agent for Banner Incandescent Lamps of General Electric Company.' The agent has no authority to sell or transfer or in any way dispose of such lamps, except as herein expressly provided, and shall not control, or attempt to control, the prices at which any purchaser shall sell any of such lamps. The due payment to the manufacturer for all sales made hereunder by the agent shall be and hereby is guaranteed by said agent.

'The agent shall conform to the educational and engineering instructions of the manufacturer, and shall advise with and instruct prospective purchasers as to the classes and types of lamps best suited to their several requirements in order to secure a maximum illumination for a minimum expenditure, and shall conduct the business hereunder to the satisfaction of the manufacturer.

'(4) All of the agent's books and records relating to his transactions in connection with the sale and distribution of the manufacturer's lamps shall at all times during business hours be open to the inspection of any duly authorized representative of the manufacturer.

'(5) The agent shall pay all expenses in the storage, cartage, transportation, handling and sale of lamps hereunder, and all expense incident thereto and to the accounting and collection of accounts thus created. The agent shall be allowed, as compensation for the performance of all obligations hereunder, the difference between the amounts received from the sale of the lamps and their value on the basis of a discount of 29 per cent. from list prices as to the time fixed by the manufacturer. The manufacturer agrees that if the agent sells, during the period of this appointment, a quantity of lamps the value of which would entitle him to a higher basis of compensation, as shown in schedules presented herewith, the manufacturer will at once credit the agent with an amount equal to the difference between the compensation he has been receiving and the compensation he then becomes entitled to.

'(6) The agent shall render to the manufacturer, not later than the tenth of every month, a report, on forms provided by the manufacturer, covering his sales of the manufacturer's lamps during the preceding calendar month.

'The agent shall pay over to the manufacturer, not later than the tenth of every month, an amount equal to the total sales value of all lamps sold hereunder, less the compensation due the agent, for which collections have been made by the agent during the preceding calendar month, and a further amount equal to the total sales value, less the compensation due the agent, on all lamps sold by the agent to customers whose accounts covering such lamps are, on the first of the month past due,...