Vander Lei v. Blakely
| Decision Date | 07 November 1922 |
| Docket Number | 3681. |
| Citation | 284 F. 516 |
| Parties | VANDER LEI v. BLAKELY. In re TREAT. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Grant Sims, of Grand Rapids, Mich., for petitioner.
Glenwood C. Fuller, of Grand Rapids, Mich. (Wicks, Fuller & Starr, of Grand Rapids, Mich., on the brief), for respondent.
Before KNAPPEN, DENISON, and DONAHUE, Circuit Judges.
This is a petition to revise the action of the bankruptcy court in deciding that a certain conveyance from Vander Lei to the bankrupt was, in legal effect, not a conditional sale, but an absolute transfer with a reservation of title by way of security, and was therefore, for lack of record, invalid against the trustee. All aspects of the question involved are most carefully and completely presented by counsel; but we have so frequently and so recently considered different phases of the question that a brief statement of our conclusions and the reasons for them must be accepted as sufficient.
In our opinion in the National Cash Register Co. Case, 283 F. 742 filed October 3, 1922, we reviewed the Michigan decisions and our own, bearing on this matter. From them it appears that the question of intent, as shown by the language used in the instrument and perhaps with some aid from the circumstances, is the controlling consideration. If there is no agreement or necessary inference that the debt is to remain payable, even though the property may be reclaimed, then the reservation of title contained in the instrument may take full effect, in spite of the giving of a negotiable promissory note for the debt, and even though the instrument may speak of the title reservation as a 'security' for the debt; while if the contract is that the full debt must be paid even after reclamation, or if the parties have provided for a treatment of the instrument which the law contemplates only with reference to mortgage securities, the inference of intent to pass an absolute title and reserve a lien is unavoidable. The presence of one particular feature may be controlling; its absence is not.
In the present instrument we find three considerations, which by their joint effect compel the inference that it accomplished a passing of title, with security reserved, and even though there were no words of present conveyance.
The first is that the transfer was of the fixtures and the stock of merchandise. The unpaid purchase price of both constituted one...
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