93 F.2d 989 | 3rd Cir. | 1938
In this bankruptcy case it appears the bankrupt, (hereafter called Factory Company) engaged in the manufacture and sale of furniture, entered into a written contract with the appellant company (hereafter called Panel Company) in reference to certain panel veneer which was to be furnished by Panel Company to Factory Company and by it used in the manufacture of furniture. The contract provided:
“Agreement.
“For value received, the Nypenn Furniture Co. of Warren, Pa., hereby sells, assigns and transfers to the Jamestown Panel Co., Inc., of Jamestown, N. Y., hereinafter styled assignees, present and future orders for the furniture listed in the third paragraph of this agreement, together with all materials and labor entering into the manufacture of said dining room furniture, from the time manufacture is commenced until same are completed; and also the accounts which now, or will hereafter evidence and represent such goods and merchandise then completed and ready for shipment; also completed bed room furniture ready for shipment but not shipped. * * *
“It is further agreed by the Nypenn Furniture Co. that six months after date of the ■completing shipment the full purchase price ■of all goods and materials furnished by the Jamestown Panel Co., Inc., plus interest at ■6% monthly balances starting 60 days aft•er date of completing shipment.
•“This sale, assignment and transfer is made, given and intended as a continuing and collateral security for the payment of .the purchase price of all goods and materials that may be furnished by the Jamestown Panel Co. Inc. and used in the manufacture •of the goods herein described to the extent as follows, plus 20% of selling price of each Article, for selling expenses in event that the Jamestown Panel Company is forced ■to take charge of the merchandise.”
Both companies so performed under this ■contract that at the date of Factory Company’s bankruptcy it owed Panel Company $7,000. At that date Factory Company had uncollected accounts against its debtors for some $1,490.05 for furniture made under this contract. These accounts were collected and segregated by the bankrupt’s trustee, and were claimed by Panel Company in a reclamation petition, which petition was denied by the court below by its approval of the referee’s report and forms the first item of Panel Company’s appeal.
In arriving at his conclusion the referee ' failed to observe the case of Greey v. Dockendorff, 231 U.S. 513, 34 S.Ct. 166, 167, 58 L.Ed. 339. Flere, as there, the goods of the Panel Company, would not have come into the possession of Factory Company had it not been for the agreement of the latter to assign. Here, as there, and as said by the Supreme Court, “the question here is whether successive assignments of accounts by way of security, in pursuance of a contract under which advances were made to enable the assignor to get the goods, on the faith of the undertaking that the accounts should be assigned, were bad because the contract embraced all accounts, although neither party contemplated any fraud. The rule of the English statutes as to reputed ownership may extend to debts growing due to the bankrupt in the course of his business, but we have no such statute. The advances were the means by which the bankrupt got the ownership of the goods. The contract of itself would operate as a conveyance as soon as the rights to which it applied were acquired. Field v. New York, 6 N.Y. 179, 57 Am.Dec. 435. * * * There was no active concealment and no attempt to mislead anyone interested to know the truth.” In principle and in decisive facts we regard the present case as on all fours with this Supreme Court case. We accordingly hold the assigned accounts outstanding at bankruptcy and thereafter collected' by the trustee be awarded to the Panel Company.
Having disposed of the assigned accounts, we next turn to the property on the premises at the time of the bankruptcy, which Panel Company now claims by virtue of the clause in the agreement which recites that to .Factory Company Panel Company “hereby sells, assigns and transfers * * * completed bed room furniture ready for shipment but not shipped.” These articles were sold by the trustee and the resultant fund was segregated. The claim of Panel Company was denied by the court, and it appealed therefrom.