206 F. 726 | E.D. Pa. | 1913
It may be useful to preface the following opinion by a short outline of what has taken place in. the course of this particular dispute:
The Carpet Company was adjudged bankrupt on March 30, 1907, and within a week — on April 5 — Joseph Reichardt of New York, trading under the firm name of Reichardt Bros., filed a proof of claim in which the bankrupt was declared to owe the firm $11,212.11 for three lots of wool delivered in December, 1906, and January, 1907; The claim encountered no objection and was therefore allowed, arid a dividend of 25 per cent, was paid upon it in the following July.
Before taking up the two vital questions in the case, let me' say a few words about the findings and opinion of the learned referee. Naturally these are such as are thought to be pertinent from the point of view that he regarded as controlling. But I have found myself unable to agree that this point of view is decisive, and it has seemed best on the whole to make no effort either to reconstruct the findings or to take them up separately; it has rather appeared that confusion would
It cannot he denied that under such trust receipt contracts the bank advanced large sums of money to Reichardt Bros, to help that firm in carrying on the business of importing. It follows therefore that when the wool in question reached this country the bank was the owner of the legal title; and it continued to be the owner, for there is no evidence that its title was ever divested up to the time when the wool was shipped to the Carpet Company, and when the hank became the owner of the debt thereupon arising. Indeed, Reichardt Bros, distinctly recognized the bank as the owner both of the wool and of the debt, if such recognition were of decisive importance (as I do not understand it to be).
If I am right in my decision of this second question, it is not' important to add that in' any event the Assets Company would only have a right to be made whole; that is, to be protected against losing the 40 per cent, that was paid -for the claim. I need not dwell upon this, for the point does not arise if the company has not made out the charge of estoppel.
Before concluding this opinion I wish to acknowledge my debt to the unusually capable arguments of counsel, both oral and written. They left nothing to be desired, and if I have gone wrong it has not been for lack of intelligent guidance. One word about the form of the order that should be entered. In strictness the exact point now involved is the validity or invalidity of the bank’s claim, and in similar strictness the validity or invalidity of the Reichardt claim is not yet in issue, as no motion has been made to expunge it. But the contestants agree — as indeed they must agree — that in substance the two claims are inseparably interwoven; both cannot be valid at the same time; so that a decision concerning one necessarily carries with it a decision-concerning the other. It would be little less than folly to
The clerk is therefore directed to enter the following order on July 23, 1913, with any amendment of which he may be advised by the court:
The order of the referee entered on September 30, 1912, disallowing and expunging the claim of the Sovereign Bank of Canada, is reversed, and the claim is hereby allowed.