205 F. 364 | 2d Cir. | 1913
Lead Opinion
The agreement between L. Erstein & Bro., the bankers, and Livingston & Turk, the bankrupts, is clear and explicit. By its terms the bankrupts bargained, sold and assigned to the bankers the accounts and all their right, title and interest in and to the same and to the merchandise, the sale of which created the accounts, with full power to reclaim the merchandise. The agreement also provided that should the customers reject, return or refuse to accept any of the merchandise mentioned in the said accounts, that it should be optional with the bankers to surrender the merchandise refused or returned, upon receiving payment therefor in cash, or, if they so elect, to deduct from any balance they may have on hand the amount of said merchandise. The agreement, in brief, gives to the bankers, who have advanced on goods sold by the bankrupts, the accounts and the right to collect all sums due thereon and, if the bankrupts’ customer returns the goods so that the accounts are no longer security, then, and in that event, the bankers have a right to receive and dispose of said returned merchandise and apply the proceeds on
If the purchaser had paid for the goods and had rightfully returned a part thereof, it is plain that the bankrupts- would have been compelled to pay back the amount received for the returned goods.
The order is reversed.
Dissenting Opinion
I am unable to concur with the majority opinion, because it seems to me that the document relied on could not have conveyed' title to any of the goods to the bankers, since at the time it was executed the bankrupts had no title to convey. Title to the goods had already passed by sale and delivery to the bankrupts’ customers.
I therefore dissent.