In re A.E. Richardson Co., Inc.

• Decision Date: 10 December 1923
• Docket Number: 97.
• Citation: 294 F. 451
• Parties: In re A. E. RICHARDSON CO., Inc. v. FULLER. PREMIER & POTTER PRINTING PRESS CO., Inc.,
• Court: U.S. Court of Appeals — Second Circuit

294 F. 451

In re A. E. RICHARDSON CO., Inc.

PREMIER & POTTER PRINTING PRESS CO., Inc., v. FULLER.

No. 97.

United States Court of Appeals, Second Circuit.

December 10, 1923

Appeal from an order confirming the report of a special commissioner and adjudging that the claim of Premier & Potter Printing Press Company, Inc. (hereinafter called Premier Company), for the payment of $4,817.92 out of the funds in the hands of the trustee in bankruptcy in priority to the claims of the general creditors of the bankrupt be disallowed, and that the Premier Company has no special lien or prior interest in the proceeds of the sale by the trustee of certain property.

On February 14, 1923, by his petition the trustee in bankruptcy of A. E. Richardson Company, Inc., applied for an order permitting him to accept an offer of $25,000 cash for certain printing press machinery, merchandise, and equipment contained in the premises formerly occupied by the bankrupt such sale to be free of liens. An order was duly entered March 6, 1923, authorizing the trustee to accept this offer directing the trustee to hold the $25,000, subject to the claims, liens, and demands of the alleged mortgagors lienors, and claimants mentioned in his petition, and referring the matter to a special commissioner to take proof of the validity and amount of the several liens or claims against the proceeds of the sale.

Premier Company claimed a lien upon certain presses and equipment sold by it to the bankrupt, and filed its claim for payment of $4,817.92 out of the proceeds of the sale. Under date of July 9, 1921, A. E. Richardson Printing Company, Inc., signed and sent to the Premier Company a written order for two Premier presses with equipment and accessories. The order was on a printed form supplied by Premier Company. It read:

'Please ship f.o.b. cars at your factory: * * *

Two (2) new 49x66 Premier presses, equipped with all usual accessories, for eighty-five hundred dollars each ................	$17,000.00
Two extension deliveries, to handle 44x64 sheet, fifteen hundred dollars each .......................................................	3,000.00
Motors, zinc, and timber as before furnished, eight hundred dollars each ...............................................................	1,600.00
	----------
	$21,600.00

--for the sum of twenty-ine thousand six hundred dollars ($21,600.00). * * *

It is hereby agreed that payment, in New York funds * * * shall be made by the undersigned purchaser to the vendor, The Premier & Potter Printing Press Company, Inc., or its order, as follows:

One thousand dollars, in cash, on signing of this agreement .........	$1,000.00
Four thousand four hundred dollars in cash, on the erection of the machinery ready for power connection ...............................	4,400.00
Sixteen thousand two hundred dollars in promissory notes, to be executed by the purchaser and turned over to the vendor on or before the date of the erection of the machinery ready for power
connection ........................................................	16,200.00
	----------
Amount payable .....................................................	$21,600.00

'Said notes shall be dated the day of the erection of the machinery ready for power connection, * * * and shall mature as follows: Twelve notes each in amount of $1,350.00 payable monthly consecutively. * * * ' Then follow the clauses which give rise to this controversy:

'(a) Said notes shall be secured by a chattel mortgage or instrument, whichever the vendor elects to submit to the purchaser, and the purchaser agrees to properly execute, acknowledge and deliver the same to the vendor on or before the date of the erection of the machinery, ready for power connection;' and

'(b) Said machinery shall remain the property of the vendor until the amount payable is paid in full.'

The written order was not signed by Premier Company. The machines were delivered to the Richardson Company during September, October, and November, 1921. The promissory notes of the Richardson Company were not executed and delivered in accordance with the terms expressed in the written order, but were for different amounts.

On or about April 27, 1922, a letter was sent to Richardson Company by Premier Company inclosing certain promissory notes for signature by the Richardson Company, and also inclosing a proposed chattel mortgage, with the request that the Richardson Company sign, acknowledge, and return said mortgage to Premier Company. The notes were to be given for the unpaid balance of the purchase price of the printing presses and equipment, and the mortgage was to be executed as security for the notes. On May 2, 1922, the mortgage was executed and acknowledged as requested and delivered to Premier Company and was by it filed in the office of the register of the county of Kings on October 23, 1922. The balance of the purchase price of the machinery was never paid by the Richardson Company, and the concern was adjudged a bankrupt in January, 1923.

Samuel Wasserman, of New York City (Henry B. Singer, of New York City, of counsel), for appellant.

Seymour K. Fuller, of New York City (Henry I. Fillman, of counsel), for appellee.

Before ROGERS, MANTON, and MAYER, Circuit Judges.

MAYER Circuit Judge (after stating the facts as above).

It is contended by Premier Company that the instrument was a conditional sales agreement, which created a lien in its favor under the Personal Property Law of the state of New York (Consol. Laws, c. 41) and that such lien was unaffected by the subsequent execution of the chattel mortgage. New York Personal Property Law, Sec. 62; Hewit v. Berlin Machine Works, 194 U.S. 296, 24 Sup.Ct. 690, 48 L.Ed. 986. The trustee relies upon Nordone v. Austin Drainage Excavator Co., 184 A.D. 309, 171 N.Y.Supp. 725, as authority for the proposition that the chattel mortgage upon its delivery to the vendor superseded the conditional sales agreement, and that the...