In re Flanders

134 F. 560 | 7th Cir. | 1905

JENKINS, Circuit Judge,

after stating the facts, delivered the opinion of the court.

We entertain no question of the correctness of the decree appealed from. The rule by which to distinguish between a bailment and a conditional sale we consider as decided in the case of In re Galt, 56 C. C. A. 470, 120 Fed. 64. We there held that, if the sender has a right to compel return of the thing sent, it is a bailment, and not a sale, and that in a sale there must be an agreement, express- or implied, to pay the purchase price of the thing sold. The cases of Chickering v. Bastress, 130 Ill. 206, 22 N. E. 542, 17 Am. St. Rep. 309, and Peoria Manufacturing Company v. Lyons, 153 Ill. 427, 38 N. E. 661, relied upon by the appellant, were considered by us in Re Galt,, and the distinction noted. In each of those cases the advances stipulated to be made by the supposed consignee were to the entire value of the goods shipped, and the court found that the transactions were sales, sought to be disguised under the cloak of bailment. We have no contention with those decisions. The cases of Lenz v.. Harrison, 148 Ill. 598, 36 N. E. 567, and Fleet v. Hertz, 201 Ill. 594, 66 N. E. 858, 94 Am. St. Rep. 192, fully accord with our ruling. The case of In re Rabenau (D. C.) 118 Fed. 471, is also easily distinguishable. There the supposed consignee was at liberty to self at any price and upon any terms that he pleased, and accounted at a fixed price and at a fixed time previously determined, and at his option was to pay for the goods remaining unsold. The facts here do not warrant the application of that decision to the case in hand. The avails of the goods, at whatever price they were sold, belonged to the consignor. Flanders was to receive his commissions and the return of advances. That advances were made in the form of notes does not change the character of the transaction, or indicate a sale. They point to the contrary. The advances were but 50 per cent, of the value of the goods — nc>t, as in the Illinois qjses referred to, the full amount of the value of the goods. The amount of the advances would not indicate a purpose to make an outright sale. The mode of advancement by note was for the mere convenience of both parties. For the notes so issued the consignee had a factor’s lien upon the goods in his possession, for which he could exact payment before surrender of the goods; but that does not change the nature of the transaction or convert the bailment into a sale. Penn v. Heilbronner, 108 N. Y. 443, 15 N. F. 701.

The objections that ordinary invoices accompanied the shipments, that such shipments were made direct to Flanders, that the leather was sold by him in his own name, that he allowed credit upon sales, that he guarantied sales, and that he insured in his own name, do not change the nature of the transaction. It is quite competent for a bailee by contract to enlarge his common-law liability, without converting the bailment into a sale. There is nothing in the evidence which indicates a pretentious agreement with a view to defraud creditors. The fact that Flanders for some years prior to this consignment had purchased goods of the bailee does not avail to prove such contention. It is possible — although it is not established by the evidence— that the consignor had become doubtful of the financial responsibility c<¥ Flanders and was unwilling further to extend him credit. The true reason probably lies in the statement of Mr. Flanders that they explained to him at the commencement of this consignment account that the leather company was not as strong financially as some of its competitors, and desired an arrangement by which they could have present advancement upon their goods, instead of selling upon a long term of credit. There does not seem to have been entertained by the leather company any question of financial responsibility on the part of Flanders, if, indeed, he was at that time in doubtful financial condition.

The decree is affirmed.