In re Harmony Theatre Co.

• Decision Date: 24 April 1924
• Docket Number: 5542.
• Citation: 298 F. 662
• Parties: In re HARMONY THEATRE CO. Petition of MARR & COLTON CO., Inc.
• Court: U.S. District Court — Eastern District of Michigan

298 F. 662

In re HARMONY THEATRE CO. Petition of MARR & COLTON CO., Inc.

No. 5542.

United States District Court, E.D. Michigan, Southern Division.

April 24, 1924

Warren Cady, Hill & Hamblen, of Detroit, Mich., for petitioner.

Walter I. McKenzie, of Detroit, Mich., for trustee in bankruptcy.

TUTTLE District Judge.

This is a petition to review an order of one of the referees in bankruptcy denying a petition for reclamation of a certain pipe organ delivered by petitioner to the bankrupt prior to bankruptcy under a certain so-called title-retaining contract. The sole question involved is whether such contract is one of conditional sale reserving title in the petitioner (the vendor) until payment of the purchase price, or is one of absolute sale by which such title passed to the bankrupt (the vendee) subject to a so-called reservation of title in petitioner, as security, in the nature of a chattel mortgage for the payment of such purchase price, as was held by the referee whose order is here sought to be reviewed. The contract, which was in writing, is in the following form and language:

'Agreement made this 27th day of April, 1921, by and between the Marr &amp Colton Company, Inc., of Warsaw, N.Y., hereinafter designated as the 'company,' and Harmony Theatre Co., Inc., of Detroit, Mich., hereinafter designated as the 'purchaser,' witnesseth:

'(1) For and in consideration of the sum of twelve thousand six hundred dollars ($12,600.00) to be paid to the company by the purchaser, as hereinafter specified, and for the further consideration named in paragraph (4), the company undertakes to build a concert organ in accordance with the attached specifications and to install it in the Harmony Theatre, Detroit, Mich., not later than August 15, 1921 tuned and finished ready for use as soon as consistent with good workmanship.

'(2) And the company hereby agrees upon reasonable notice in writing to make good any defect in material or workmanship that may develop in said organ during the one year next following its installation, provided no other organ builder be admitted to the interior of the organ without the company's consent. The company, however, shall not be held responsible for loss or damage resulting from improper use or care of said organ, or from fire, water, or force majeure, nor from the ravages of rats, mice, or other vermin, nor from the defects in the building in which the organ is installed.

'(3) The purchaser hereby orders the company to build and install said organ, and agrees to pay therefor to the order of the company in lawful money of the U.S.A. the above-mentioned sum of twelve thousand six hundred dollars ($12,600.00) in the following manner, to wit: One thousand two hundred sixty dollars ($1,260.00) on signing the contract, and two thousand five hundred twenty dollars ($2,520.00) upon delivery of the organ or the major portion thereof in the above-named building, and the remaining part, being eight thousand eight hundred twenty dollars ($8,820.00), with interest at the rate of 6 per cent. per annum upon completion of the organ ready for use, payable at the rate of four hundred ninety dollars ($490.00) per month, secured by notes or trade acceptances satisfactory to the company of equal amount, bearing interest at the rate of 6 per cent. per annum, for the entire unpaid balance, and in the event that notes or other evidences of indebtedness are taken as part of the purchase price, title to the organ is to remain in the company until such notes or other evidences of indebtedness are fully paid.

'(4) The purchaser further agrees that upon all programs or printed matter relating to the use of the organ, or to events in which it is to be used, the words 'Concert Organ, manufactured by the Marr & Colton Company, Inc., Warsaw, N.Y.,' shall prominently appear.

'(5) The purchaser further agrees at his own expense to have the

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