Ommen v. Talcott

• Decision Date: 10 July 1911
• Docket Number: 234.
• Citation: 188 F. 401
• Parties: OMMEN v. TALCOTT.
• Court: U.S. Court of Appeals — Second Circuit

188 F. 401

OMMEN v. TALCOTT.

No. 234.

United States Court of Appeals, Second Circuit.

July 10, 1911

Fried &amp Czaki (F. M. Czaki, of counsel), for complainant.

Rounds Schurman & Dwight (G. W. Schurman & Augustus L. Richards, of counsel), for defendant.

Before LACOMBE, COXE, and NOYES, Circuit Judges.

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

Defendant claims that he was the factor of the bankrupt, having a factor's lien upon the goods which the bankrupt had purchased. Finding that failure was imminent, he removed such goods on December 15, 1902 (the day before petition was filed), from No. 394 Broadway, where the bankrupt had its place of business, to the premises or place of business of defendant at No. 110 Franklin street. The goods so removed were, concededly, the property of the bankrupt, and such removal was a transfer of that property, the effect of which if enforced would be to enable defendant to obtain a greater percentage of his demand than any other creditor of the same class. Concededly, too, at the time of removal defendant's agents had reasonable cause to believe that it would have such effect. The sole question to be determined is whether defendant had a lien upon the goods which warranted his taking them as stated and disposing of them to obtain the repayment of his advances. The suit is brought under sections 60a and 60b of the bankrupt act (Act July 1 1898, c. 541, 30 Stat. 562 (U.S. Comp. St. 1901, p. 3445)), and under the amendments of 1903 (Act Feb. 5, 1903, c. 487, 32 Stat. 797 (U.S. Comp. St. Supp. 1909, p. 1308)) the District Court had jurisdiction. This suit was not a 'bankruptcy case pending' when the amendments were passed, and therefore not affected by the exception in section 19 of the amending act.

The bankrupt is a corporation, which for about a year prior to December 6, 1901, had been engaged in the notion and small ware (dry goods) business at 114 Franklin street. Defendant has for many years been engaged in the dry goods business; his place of business during the period in question being at 108 and 110 Franklin street. Defendant and the bankrupt on December 6, 1901, entered into a written agreement, which contained the following provisions:

'The John A. Baker Notion Company herewith constitute and appoint James Talcott its sole factor, supervisor and selling agent and agree to consign to him during the continuance of this agreement, the entire stock of goods now or hereafter owned by them, or purchased by them, for sale upon commission. All sales of the consigned goods shall be in the name of James Talcott, and invoiced to the purchasers in the name of James Talcott, John A. Baker Notion Company Department.'

2. The Baker Company is to assign to defendant all its outstanding accounts and to notify customers of such assignment.

3. Talcott is to employ and pay a bookkeeper who shall keep the book of accounts at his main store, 108-110 Franklin street, Talcott is to 'attend to the collection of accounts and all questions as to credit shall be decided by him and he shall own and pay for all books of accounts used in the business of said agency.'

4. The Baker Company is to pay all other expenses incurred in the said business, including rent, salary of salesmen, or other employes, stationery, postage, telegrams, packing, cartage and storage, incidental expenses, and the premium of insurance; insurance to be in the name of and payable to Talcott.

6. Talcott 'shall have the exclusive possession and control of said consigned goods, together with the accounts arising from the sale thereof and all remittances, checks, bills payable and proceeds of sales, shall be the exclusive property of James Talcott.'

7. Talcott agrees to advance a certain percentage on the accounts assigned to him, with certain deductions.

8. He 'may advance in his discretion an amount which shall be satisfactory to him upon the merchandise which may be consigned from time to time. ' It is agreed that the consigned merchandise be held by him as additional security for his advances upon the outstanding accounts.

He is to receive certain specified commissions for his services.

The Baker Company agrees to assign to Talcott the lease of any premises occupied by them, and he 'shall have the exclusive control of said premises. ' Upon the expiration of the agreement by expiration of time or otherwise the Baker Company agrees to accept the reassignment of the lease for its unexpired term.

11. A sign is to be placed at the entrance of the building at which this business shall be conducted which shall read as follows: James Talcott, Annex John A. Baker Notion Company Department.

Talcott shall not guarantee the payment of sales and all the sales shall be made at the risk of the Baker Company.

The Baker Company, subject to the approval of Talcott, may designate the persons on and about the sale of the said goods and in and about the said agency. Talcott shall not be responsible for acts or omissions of persons so designated.

The agreement is to last for a year and to continue thereafter subject to termination by either party on 30 days' notice.

A selling agent, factor, or commission merchant is one who sells goods which another person has delivered to him for that purpose and receives compensation for his services by a commission or otherwise. Notwithstanding the statements contained in the agreement, we cannot find out that defendant ever sold a dollar's worth of the bankrupt's goods. All...