In re Chas. M. Ingersoll Co.

• Decision Date: 10 March 1954
• Docket Number: No. 70202.,70202.
• Citation: 119 F. Supp. 868
• Parties: In re CHAS. M. INGERSOLL CO.
• Court: U.S. District Court — Northern District of Ohio

119 F. Supp. 868

In re CHAS. M. INGERSOLL CO.

No. 70202.

United States District Court N. D. Ohio, E. D.

January 5, 1954.

Opinion March 10, 1954.

C. L. Corkwell, Columbus, Ohio, Gardner & Spilka, Cleveland, Ohio, for John Deere Plow Co.

Hugh Wells, Cleveland, Ohio, Wm. Roderick, Akron, Ohio, for Ralph H. Coleman, Trustee.

WOODS, Referee.

I, William B. Woods, Referee in Bankruptcy, in charge of the above proceedings, do hereby certify:

That in the course of the proceeding, Ralph H. Coleman, Receiver and later Trustee of bankrupt, filed his Petition to Sell all the assets of the Chas. M. Ingersoll Co., bankrupt; to this petition the John Deere Plow Co. of Columbus, Ohio, filed its answer and cross-petition claiming on two causes of action, on the 1952 contract there is a balance due of $15,577.24, on the 1953 contract there is a balance due of $7,515.40; and also claimed that its products were sold to bankrupt on said conditional sale contracts duly executed and recorded under Ohio law, and prayed for the immediate possession of the chattels remaining not sold by the bankrupt at bankruptcy and then in the possession of the Trustee.

The Trustee replied, claiming that no valid lien had been effected and that only ordinary sales had been made to bankrupt, and at best that only a sale on consignment had been attempted. Following the auction sale, the Deere Plow Co. elected to take the chattels claimed under its conditional sales contracts, which had been offered for sale at the auction, at the auction bid price of $15,895; and gave its bond to the Trustee of bankrupt estate in that amount to be paid if its lien was later found invalid by the Bankruptcy Court.

Upon hearing had on the issues raised, an order holding said lien valid was entered on November 23, 1953. Thereafter being aggrieved thereat, the Trustee filed his Petition for Review of the referee's order holding valid the lien of the conditional sales contracts.

Statement of the Case.

For answer to the Trustee's petition to sell, the Deere Plow Co. asks for immediate possession of the chattels not sold by the bankrupt, which were delivered to bankrupt on the two conditional sale contracts which were as follows:

1952 contract of John Deere Plow Co. with the bankrupt is for $106,379.28, Exhibit A, for goods sold to bankrupt by the Deere Plow Co., and to be delivered as called for, executed September 26-28, 1951, affidavit of amount due executed March 7, 1952, No. 500219 filed with the Recorder of Cuyahoga County, Ohio, March 10, 1952; and

1953 contract of John Deere Plow Co. with the bankrupt is for $73,666.08, Exhibit B, for goods sold to bankrupt by the Deere Plow Co., and to be delivered as called for, executed November 10-13, 1952, affidavit of amount due executed April 8, 1953, No. 597454 filed with the Recorder of Cuyahoga County, Ohio, April 13, 1953.

At the filing of the bankruptcy petition on May 2, 1953, the following is a summary of the account of Charles M. Ingersoll Co., bankrupt, with Deere Plow Co., which claims the two conditional contract sales of chattels, that is, for agricultural implements with bankrupt and shows the following:

                                   Machines Billed      Paid by      Bal. due
                                    and delivered       Bankrupt        Deere
                1952 Contract
                $106,379.28         $64,995.68         $49,321.13    $15,577.24
                1953 Contract
                $73,666.08          $11,687.67         $ 4,120.06    $ 7,515.40
                                                                     __________
                     Balance due Deere Co. in the two contracts      $23,092.64
                                    Sale price at auction
                               of chattels unsold by bankrupt
                                        $15,895.00
                

(The balance due Deere Plow Co. for both years is $23,092.65, for which amount there is an error of $149.49 in the testimony or computation; and as same is in favor of the Trustee, the error is disregarded with the consent of both parties.)

Chattels claimed on contract by Deere Plow Co., held by bankrupt, and described in said two contracts, contract price, $23,092.64; at auction a bid of $15,895 was received for said chattels; and Deere Plow Co. elected to take said unsold chattels at bid price, in event its claimed contracts of conditional sales and its liens are later found invalid by this court.

The two contracts, Exhibits A and B are in pamphlet form consisting of 24 pages for Exhibit A and 12 pages for Exhibit B, printed on bond paper with this language on the first page of both contracts: "John Deere 1953 (or 1952) Contract — The prices and terms applying to goods ordered herein or subsequently ordered hereunder shall be the prices and terms established by the Plow Company for its wholesale trade and in effect on the date of shipment."

Exhibit A consists of 24 pages and Exhibit B consists of 12 pages printed in small type, the date and signatures of the parties being on page 8 with amount due on the contract in the affidavit by the credit manager of the Deere Plow Co. on page 9 of each contract, said affidavits containing the amounts due on each of said contracts ($106,379.28 and $73,666.08), the recording stamp of the Recorder of Cuyahoga County is attached to page 24 of Exhibit A and to page 12 of Exhibit B. Evidently the printed forms are designed to be used in any state requiring filing or recording to effect a lien in goods sold.

The contracts are each compact instruments in pamphlet form with two staples in the back of each holding the pages together. Attached to the last inside page of Exhibit A is the copy entitled "contract specifications" containing 4 pages, 8½ by 10½ inches of typewritten letter size pages containing itemization of the machines or chattels with complete description of each machine at the price for which the sale is made to buyer as per the contract. This is firmly attached to the printed part of the contract with 9 staples and scotch tape. Attached to the inside page of pamphlet Exhibit B, are also 4 pages with 8½ by 10½ inches of typewritten letter size containing an itemization of machines and chattels sold with complete description and prices and as in the case of Exhibit A. This exhibit is also attached by 8 staples and scotch tape and typewritten pages, in each instance, are fastened at the top with 2 staples at the left margin of the page of the printed contract; and the typewritten pages are folded in each contract so that it could not be said that the typewritten pages can be easily removed from the printed part of said contracts.

Finding of Facts

(1) That the Chas. M. Ingersoll Co. of Rocky River, Ohio, an Ohio corporation dealing in agricultural implements, filed its petition in bankruptcy on May 2, 1953, and Ralph H. Coleman is the duly elected, qualified, and acting Trustee of said bankrupt.

(2) That the John Deere Plow Co. of Columbus, Ohio, answering defendant and cross-petitioner, is and was at all times herein an Ohio corporation, engaged in selling farm equipment at wholesale to retail dealers.

(3) That for a number of years the defendant, John Deere Plow Co. of Columbus, and the bankrupt had annually executed a contract for the conditional sale and delivery to the bankrupt of the farm equipment required by the bankrupt for sale during the following year.

(4) That in the fall of 1951 the bankrupt and the defendant, John Deere Plow Co. of Columbus entered into a conditional sales contract known as the John Deere 1952 contract which has been introduced as John Deer's Exhibit "A" and under which the bankrupt contracted to buy and the defendant contracted to sell specified farm equipment in the amount of $106,379.28. Said contract was executed on September 26, 1951 and duly recorded March 10, 1952 with the Recorder of Cuyahoga County, being known as County Recorder's No. 500219; and that the affidavit which is part of this contract was duly executed on March 7, 1952, setting forth the amount due.

(5) That in the fall of 1952, the bankrupt and the defendant, John Deere Plow Co. of Columbus entered into a conditional sales contract known as the John Deere 1953 contract, which has been introduced as John Deere's Exhibit "B" and under which the bankrupt contracted to buy and the respondent contracted to sell specified farm equipment in the amount of $73,666.08; said contract was executed on the 13th day of November, 1952 and duly recorded April 13, 1953 with the Recorder of Cuyahoga County, being known as County Recorder's No. 597454; and that the affidavit which is part of this contract was duly executed on April 8, 1953, setting forth the amount due.

(6) That under each of these contracts the bankrupt was permitted to sell the farm equipment purchased by him from the defendant, John Deere Plow Co. of Columbus, but only to purchasers in the ordinary course of business, and was required to account for and hold the proceeds of such sales in trust for the respondent.

(7) That the practice established between the parties was for the defendant to call at the bankrupt's place of business each and every month to check his inventory and receive payment on all farm equipment that had been sold by the bankrupt at the time of the monthly inventory or which had become due and payable at that time; and that the last monthly inventory and payment received for farm equipment sold by the bankrupt was the middle of April, 1953, only a few weeks before bankruptcy.

(8) That after the check up by the defendant in April, 1953, the bankrupt did pay the defendant in full for all farm equipment sold to the date of the last check up.

(9) That the contracts entered into by and between the defendant, and the bankrupt are printed pamphlet forms. The 1952 conditional sales contract (J.D. Exhibit A), in addition to the outside covers, consisted of 12 pages, printed on bond paper. These contracts provided that title to all goods ordered therewith remained in the defendant until full payment had been made for them. Attached to the inside page of...