In re Metropolitan Offset Printers, Inc., 16746.

• Decision Date: 25 March 1968
• Docket Number: No. 16746.,16746.
• Citation: 391 F.2d 770
• Parties: In the Matter of METROPOLITAN OFFSET PRINTERS, INC. and H. M. L. Shoppers, Inc., Garden State News; Union Sun Publishing Co.; Leader Publishing Co.; Springfield Sun Publishing Co.; Echo Publishing Co.; Berkeley Heights Beacon, Inc.; Fanwood Independent; Scotch Plains Times; Homemakers Digest, Inc. (related and affiliated corporations), Joseph J. Clarick, as Trustee, Appellant.
• Court: U.S. Court of Appeals — Third Circuit

391 F.2d 770 (1968)

In the Matter of METROPOLITAN OFFSET PRINTERS, INC. and H. M. L. Shoppers, Inc., Garden State News; Union Sun Publishing Co.; Leader Publishing Co.; Springfield Sun Publishing Co.; Echo Publishing Co.; Berkeley Heights Beacon, Inc.; Fanwood Independent; Scotch Plains Times; Homemakers Digest, Inc. (related and affiliated corporations), Joseph J. Clarick, as Trustee, Appellant.

No. 16746.

United States Court of Appeals Third Circuit.

Argued January 18, 1968.

Decided March 25, 1968.

Allan L. Tumarkin, Newark, N. J., (Kleinberg, Moroney & Masterson, Joseph J. Clarick, Trustee, Newark, N. J., on the brief), for appellant.

John J. McLaughlin, Newark, N. J., for appellee.

Before HASTIE, Chief Judge, and GANEY, Circuit Judge, and WEINER, District Judge.

OPINION OF THE COURT

HASTIE, Chief Judge.

In a bankruptcy proceeding, American Guaranty Corporation filed a reclamation petition for a Vanguard Web Offset Press and other printing equipment which was in the possession of Metropolitan Offset Printers, Inc. when Metropolitan became bankrupt. Metropolitan's trustee resisted this claim and the referee sustained his position as to the Vanguard press, treating American Guaranty's title as an unrecorded security interest. American Guaranty appealed from that determination and the district court, reversing the referee's decision, held that the press was reclaimable as property of American Guaranty in possession of the bankrupt as a bailee. This appeal followed.

The history of the chattel in suit begins with a letter of October 14, 1960, written on behalf of Publication Offset Printers, Inc., not a party to this litigation, to American Guaranty expressing a desire to lease a described type of Vanguard press to be delivered February 1, 1961. American Guaranty then ordered such a press from a manufacturer, Cottrell, who then sent to American Guaranty for signature a conditional sale contract covering the proposed purchase. American Guaranty altered the caption of the instrument by typing "Publication Offset Printers, Inc. * * * and/or" above the name of American Guaranty as "purchaser". Both American Guaranty and Publication also signed the contract as "purchaser". Publication also signed a prospective "lease" of the press from American Guaranty. Only after all of this was done did American Guaranty return the signed conditional sale contract to Cottrell. The press was not delivered by the manufacturer to Publication until July, 1961.

On August 10, 1961, American Guaranty completed payment to Cottrell of the full amount of the purchase price as set out in the conditional sale contract. A week later American Guaranty, as lessor, signed the lease which had been executed several months earlier by Publication as lessee.

Publication paid the monthly rental reserved under the lease until May, 1963, and shortly thereafter was adjudicated a bankrupt. It does not appear that Publication's trustee made any claim to the press or that it was listed as an asset of Publication in bankruptcy.

At this juncture, Metropolitan Offset Printers, a new corporation not owned by Publication's stockholders, acquired possession of the premises recently occupied by Publication and undertook to conduct a printing business there. American Guaranty did not undertake to remove the Vanguard press, a heavy piece of equipment that had been cemented to the floor. Instead, it entered into negotiations with Metropolitan with a view to leasing the press to that new concern and, in the meantime, permitted Metropolitan to use the press.

The negotiations were more protracted than had been anticipated, continuing from the summer of 1963 until February, 1964. The district court properly pointed out that the "early negotiations were directed toward an assumption of Publication's lease" by Metropolitan. During that period question arose about compensation to American Guaranty for the interim use of the press and American Guaranty insisted that for interim use Metropolitan should pay $2600 monthly, the amount of rent previously paid by Publication. In a letter dated October 16, 1963, counsel for American Guaranty advised Metropolitan that "the deal will be considered off" unless Metropolitan should within five days execute "assumption leases" and pay "two months back rental". At that time Metropolitan had paid nothing for the use of the press....