120 F. 443 | N.D. Ill. | 1903
The Moline Plow Company files its intervening petition, asking that the trustee be directed to deliver to it certain agricultural implements; claiming title thereto under a written agreement made a part of said petition. The referee, on hearing had, denied the prayer of the petition, and found the title thereof to be in the trustee, and certified his actions in the premises up to the court.
The contract under which it is admitted the bankrupt held the goods at the date of the filing of his petition in bankruptcy provided, in substance, as follows: The plow company sells, and Galt buys, the following list of goods, to be shipped f. o. b. car, Sterling, at following prices and terms. Extras, except certain named articles, to be subject to an invariable discount of 25 per cent, from list prices. All payments to be made with express charges-, or in exchange on Chicago or New York. Accounts to draw interest at 7 per cent, after due. A further discount of 1 per cent, per month to be allowed on prepayments. All bills to be settled for by note on receipt of goods, or upon monthly balances, at Galt’s option. Galt to have exclusive sale of said goods for Sterling for season ending November 15, 1900. He
Under the bankruptcy act, the trustee takes title to property which prior to the filing of the petition he could by any means have trans-ferred, or which might have been levied upon and sold under judicial process against him. It thus becomes necessary to determine what title the bankrupt acquired to the implements sold and accepted under terms of the contract. It will be seen from an inspection of the contract above set out that the plow company sold and Galt bought the articles in question. It will further be seen that Galt was at liberty to sell at any price, at any time, and to anybody he might choose, and pocket the money. He was to settle all bills by notes on receipt of goods, or on' monthly balances, at his option, and pay interest at 7 per cent, on all accounts after maturity. He had the exclusive right to sell these goods in Sterling, and bound himself not to buy any other make of said goods while exercising said right. Galt was not required to pay for each article as sold, but to meet his notes and monthly balances when matured. So far, it was a plain transaction of selling and buying. Then the contract goes on to provide a qualification of the general character of the dealings between the parties. The title and ownership of all the articles so bought, and the proceeds thereof, were to remain in, and be the property of, the plow company, until paid for to the satisfaction of the plow company; and all accounts and notes for goods bought under said contract,, including renewals, in whose hands soever, should become due and payable in case of death, insolvency, etc., of Galt. Whatever accounts and notes were outstanding at the time of the filing of the petition herein, due from Galt to the plow company, therefore, became then due and payable. .
The main question here presented is, what was and is the effect of said last-named clause upon the previous terms of the contract, as against the title of the trustee ? Ordinarily, as against all persons except judgment creditors and innocent purchasers, under the Illinois decisions, a contract of sale, reserving title in seller until notes given for purchase money are paid, is valid between the parties, and is binding upon the assignee of an insolvent debtor. Hooven, Owens & Rentschler Co. v. Burdette, 153 Ill. 672, 39 N. E. 1107, and cases cited. Whether a trustee in bankruptcy takes any better title than an assignee would take, is not definitely settled. The various Circuit Courts of Appeals and District Courts have disagreed as to the exact extent of a trustee’s title. What the petition claims is that there was
The referee was right in his finding, and the same is confirmed.
