Joy Manufacturing Co. v. Brooks, 62-C.

• Decision Date: 12 June 1963
• Docket Number: No. 62-C.,62-C.
• Citation: 224 F. Supp. 537
• Parties: JOY MANUFACTURING CO. v. Walter S. BROOKS, Trustee. In re BRUNS COAL COMPANY, Inc., Bankrupt. Joy Manufacturing Company, Petitioner.
• Court: U.S. District Court — Southern District of West Virginia

224 F. Supp. 537

JOY MANUFACTURING CO. v.Walter S. BROOKS, TrusteeIn re BRUNS COAL COMPANY, Inc., BankruptJoy Manufacturing Company, Petitioner.

No. 62-C.

United States District Court S. D. West Virginia.

June 12, 1963.

James K. Brown, F. Paul Chambers, Charleston, W. Va., for petitioner, Joy Mfg. Co.

Robert J. Ashworth, Beckley, W. Va., for trustee in bankruptcy.

FIELD, Chief Judge.

The petitioner, Joy Manufacturing Co., seeks a review of the order of the Referee filed on the 29th day of November, 1962, which denied Joy's petition for reclamation.The Referee's order was entered pursuant to his written findings of fact and conclusions of law dated October 8, 1962, which are incorporated in the order by reference.

The facts in this case may be very briefly stated as follows: Joy, a Pennsylvania corporation, sold to the bankrupt, Bruns Coal Co., Inc., an Ohio corporation, a number of items of mining equipment under six conditional sales contracts, the details of which will not be set forth in this opinion as they may be ascertained from the Referee's findings of fact.These contracts were executed during the period from December, 1958, to August, 1961.The contracts are silent as to the place of delivery of the mining machinery but it appears from the evidence that the machinery was delivered to common carriers at Joy's plants in Pennsylvania and Ohio and was shipped f. o. b. shipping point, with freight allowed to the bankrupt's mine in West Virginia.

Three of these contracts provide that the equipment "is to be kept at the mine of the Buyer at or near Bolt, in the County of Raleigh, and State of West Virginia"; the three remaining contracts provide that the property "is to be kept in the County of Raleigh, and State of West Virginia."The contracts further provide that the equipment may not be removed from "the county and State aforesaid" without the written consent of Joy.Joy caused the six conditional sales contracts to be filed in the Raleigh County Clerk's Office within ten days after the date of each contract, respectively.

Up to this point in the factual statement there is no dispute, but beyond this point therein lies one of the issues in this petition.The Referee summed up the issue:

"Whether, as a matter of evidence, the property subject to the conditional sales contracts aforesaid was first kept for use in Wyoming County, West Virginia, rather than Raleigh County, West Virginia, * * *."

Considerable evidence was taken at the hearing before the Referee as to the location of the boundary line between Raleigh and Wyoming County with reference to the coal lands upon which the equipment was used.Evidence was also taken with respect to the point of delivery of the equipment when it came into West Virginia.

The Referee found that the equipment described in the six conditional sales contracts first came to rest in Wyoming County, West Virginia, and that it was first kept for use in the same county.He also found that the equipment had not been located in any other county except that the continuous miner was temporarily located in Raleigh County for a period of some seven to ten days in late summer 1959, while on the Harvey tract.The Referee also found that Joy at all times until the first meeting of creditors in this proceeding on April 26, 1962, was under the impression that this equipment was shipped to, unloaded at, first kept for use in, and continuously thereafter remained in Raleigh County, West Virginia; and also within ten days following the first meeting of creditors in this proceeding, Joy caused each of the six conditional sales contracts to be filed in the Wyoming County Clerk's Office.None of these contracts have been filed or recorded at any time in any other public office.In all of these findings, I am in agreement with the Referee.

In this review, it is incumbent upon the Court to sustain the Referee's findings as to the facts unless they are clearly erroneous.General Order 47, 11 U.S.C.A.following§ 53.The courts have uniformly held that unless the findings of the Referee are clearly erroneous or are not supported by substantial evidence such findings should be adopted by the Court.SeeIn re Lurie Bros., Inc., 267 F.2d 33(7th Cir.1959);In re Slumberland Bedding Co., Inc., 115 F.Supp. 39(D.Md.1953);In re Philpott, 37 F. Supp. 43(S.D.W.Va.1940).Joy has raised questions in relation to the evidence as to whether it was of sufficient weight to prove certain facts and as to the manner in which the Referee resolved conflicts in the evidence.It is these matters upon which the Court must look to the Referee.The Referee, rather than this Court, heard the testimony and observed the witnesses and he was in a much more favorable position to pass on the facts in this case.It is my opinion, after reviewing the record, that there is substantial evidence upon which the Referee could determine the facts as he did, and I therefore sustain his findings and incorporate his written findings of fact dated October 8, 1962, as a part of this opinion.

The second issue in the case was stated by the Referee:

"Whether, as a matter of law, Joy Manufacturing Company caused these conditional sales contracts to be filed timely in the office of the Clerk of the County Court of Wyoming County, West Virginia, so that the same are valid as security instruments as against the trustee in bankruptcy herein."

Unquestionably, West Virginia law should apply to these conditional sales contracts inasmuch as five of the six contracts contained this language: "It is mutually agreed between the Buyer and Seller that this contract is made and intended to comply with all of the provisions of the Uniform Conditional Sales Act."At all times herein pertinent the Uniform Conditional Sales Act was in effect in West Virginia, W.Va.Code ch. 40, art. 3, §§ 1-32(Michie 1961).In this regard the Supreme Court of West Virginia has observed: "That law (Uniform Conditional Sales Act) establishes a policy respecting creditors and purchasers for value and without notice, and, in so far as a contract made in another state and to be performed in this state, would affect the rights of such persons, it would govern the construction."State v. Hall, 91 W.Va. 648, 653, 114 S.E. 250, 252(1922).

Section 5 of the Uniform Conditional Sales Act, W.Va.Code ch. 40, art. 3, § 5(Michie 1961) provides in part as follows:

"Every provision in a conditional sale contract reserving an interest in the seller shall be void as to any purchaser from or creditor of the buyer, who, without notice of such provision, purchases the goods or acquires by attachment or levy or otherwise a lien upon them, before the contract or a copy thereof shall be filed as hereinafter provided, unless such contract or copy is so filed within ten days after the making of the conditional sale: * *."

The controversy between the parties in this petition centers on the place of filing required by the Uniform Conditional Sales Act.The trustee asserted, and the Referee found in accordance with his view, that the contracts should have been filed initially and solely in Wyoming County under the provisions of Section 6 of the Uniform Conditional Sales Act, W.Va.Code ch. 40, art. 3, § 6(Michie 1961).Joy, on the other hand, asserted before the Referee and still asserts in this petition that its lien was protected by...