In re Ford-Rennie Leather Co., 509.
Decision Date | 30 October 1924 |
Docket Number | No. 509.,509. |
Citation | 2 F.2d 750 |
Parties | In re FORD-RENNIE LEATHER CO. Petition of SCHMOLL FILS & CO., Inc., Petition of DOHERR GRIMM & CO., Inc. |
Court | U.S. District Court — District of Delaware |
William S. Hilles, of Wilmington, Del., for certain general creditors.
E. E. Berl (of Ward, Gray & Neary), of Wilmington, Del., for trustee.
James I. Boyce, of Wilmington, Del., for Schmoll, Fils & Co., Inc.
Caleb S. Layton (of Marvel, Marvel, Layton & Hughes), of Wilmington, Del., for Doherr, Grimm & Co., Inc.
Ford-Rennie Leather Company was adjudicated a bankrupt by this court on July 31, 1924. By separate petitions filed in the bankruptcy cause Schmoll Fils & Co., Inc., and Doherr, Grimm & Co., Inc., now seek to reclaim and obtain from the trustee in bankruptcy certain skins, or the proceeds thereof, delivered by the petitioners, respectively, to the bankrupt under terms and conditions set out in whole or in part in "trust receipts" delivered by the bankrupt to the petitioners. The trustee in opposing the petitions contends that the petitioners are without title to the skins, and that, if, in fact, they have title, they are not in a position successfully to maintain it against the trustee. In support of these ultimate contentions the trustee asserts: (1) That the right of the petitioners in, to, or against the skins is not that of legal ownership and title, but is that arising under an invalid and ineffective chattel mortgage; (2) that, if the petitioners have the legal title to the skins, their title, by reason of the provisions of the Bankruptcy Act and the doctrine of ostensible ownership, cannot prevail against the trustee; and (3) that, if under the terms of the contracts between the parties the title to the skins was reserved to the petitioners, the contracts were contracts of conditional sale, and the provisions therein reserving title are void as against the trustee in that as to Schmoll Fils & Co. the whole of the contract was not recorded, as required by chapter 192, volume 30, Laws of Delaware, and as to Doherr, Grimm & Co., no part of the contract was filed for record. The trustee has, however, urged but little the last-stated point. He has, on the contrary, stressed the contention that the proper field for use of the trust receipt is narrow; that it was not here employed in that field; and that when not so employed it is invalid as against a trustee in bankruptcy for the other reasons urged by him.
In the case at bar both petitioners were dealers in hides and skins. The bankrupt was a leather manufacturer. On December 5, 1923, Schmoll Fils & Co., whose petition will be first considered, was the owner of certain skins with the acquisition of which by the petitioner the bankrupt had been in no wise concerned. With respect to those skins the petitioner and the bankrupt entered into an arrangement as follows:
Three days later Schmoll Fils & Co. wrote the bankrupt thus:
On December 10 Schmoll Fils & Co. again wrote the bankrupt as follows:
The draft was accepted and the trust receipt signed by the bankrupt, and both were returned to Schmoll Fils & Co. The trust receipt is in the following language:
Dated: New York, December 11, 1923. "Ford-Rennie Leather Co., "James I. Ford, Treasurer."
Many of the skins came into the possession of the trustee in bankruptcy. Others were destroyed by fire before the adjudication in bankruptcy, and the bankrupt received the insurance money therefor. The draft was not paid in whole or in part by the bankrupt. The petitioner seeks to have the remaining skins returned to it and the insurance money received by the bankrupt for the burned skins paid to it. The trust receipt was recorded in the office designated by the statute of the state of Delaware for the recording of conditional sales contracts and chattel mortgages. The memorandum of December 5 was not recorded.
Is the title to the remaining skins in the petitioner or in the trustee in bankruptcy? One of the things essential to be considered in this connection is the legal nature and effect of a trust receipt. The most comprehensive discussion of the trust receipt that I have found or to which I have been referred is the monograph of Mr. Karl T. Frederick published in the issues of the Columbia Law Review for May and June, 1922. Mr. Frederick says that in the typical case the trust receipt is used when R., an importer, desiring to obtain from abroad merchandise for manufacture or sale in this country, requests his bank to issue a letter of credit authorizing A. B. & Co., from whom the goods are to be purchased abroad, to draw their drafts upon the bank for the cost of the goods to be supplied by them. The credit is...
To continue reading
Request your trial- Allington v. Shevlin-Hixon Co.
-
Wyatt v. Duncan
... ... merely general creditors. Great Western Stage Equipment ... Co. v. Iles, 10 Cir., 70 F.2d 197, and Kansas cases ... therein cited. In ... 377. In the case of In re Ford-Rennie Leather Co., ... D.C., 2 F.2d 750, it was said: "Had the petitioner ... ...
-
Empire State Chair Co., Inc. v. Beldock
... ... the Uniform Act that failure to record a part of an agreement is a fatal defect, In re Ford-Rennie Leather Co., D.C.Del., 2 F.2d 750, 756; Meier & Frank Co. v. Sabin, 9 Cir., 214 F. 231; and In re ... ...
-
In re Otasco, Inc.
... ... authorities, an opinion from this District, In re Tulsa Port Warehouse Co., Inc., 4 B.R. 801 (D.Ct.N.D.Okla. 1980) aff'd, 690 F.2d 809 (10th ... necessary implication in the" language of the Act, Matter of Ford-Rennie Leather Company, 2 F.2d 750, 756 (D.C. Del.1924); see generally, 4B ... ...