222 F. 1 | 6th Cir. | 1915
The District Court dismissed the intervening petition by which the John Deere Plow Company sought to reclaim from the bankruptcy trustee of Miller Bros. a spreader, a sulky, a silo filler, a hay loader, a side delivery rake, and about 50 plow points and shares. The whole controversy turns upon whether the contract between the Deere Company, manufacturer, and Miller Bros., retail dealers, was one of conditional sale, so that the title did not pass out of the manufacturer so long as the goods remained unsold by Miller Bros., or was one of absolute sale, whereby the title did pass, accompanied by a pledge or lien given back to the seller to secure the purchase price. If the former, the contract was not, by any applicable statute, required or permitted to be recorded, and the reservation of title is good as against the trustee; if the latter, the contract amounts to a chattel mortgage, and, under the June, 1910, amendment of section 47a of the Bankruptcy Act (Act July 1, 1898, c. 541, 30 Stat. 557, as amended Act June 25, 1910, c. 412, § 8, 36 Stat. 840 [Comp. St. 1913, § 9631]), it is invalid against the trustee, because not filed. The solution of the question depends so far upon the exact terms of the contract that all material parts are reproduced in the margin.
In Brewery Co. v. Merritt, 82 Mich. 198, 46 N. W. 379, 9 L. R. A. 270, and Pratt v. Burhans, 84 Mich. 487, 47 N. W. 1064, 22 Am. St. Rep. 703, stocks of goods had been placed by manufacturers with retail dealers for the purpose of retail sale, but a reservation of title had been declared. In both cases, the reservation was sustained. In neither case do the facts stated disclose anything inconsistent with what would be, in substantial effect, a consignment or an agency to resell — up to the time when the vendee became obliged to pay the price and take the title. In the Mishawaka Case, we gave this interpretation to these two cases.
Then came Choate v. Stevens, 116 Mich. 28, 74 N. W. 289, 43 L. R. A. 277, and Van Den Bosch v. Bouwman, 138 Mich. 624, 101 N. W. 832, 110 Am. St. Rep. 336. Each of these cases belonged in the class of articles not intended for resale; but in each an intent to pass title to the vendee was found with sufficient certainty to overcome the expressed declaration that title should not pass; and, of course, such cases become all the stronger against the passing of title when applied to instances of the other class, where the existing right of resale must be given due effect.
See, also, Coweta Co. v. Brown (C. C. A. 6) 163 Fed. 162, 165, 89 C. C. A. 612; Flanders v. Reed (C. C. A. 1) 220 Fed. 642, 136 C. C. A. 250.
Morenei, Mich., October 14, 1912.
John Deere How Company of Indianapolis, Indianapolis, Indiana:
Please enter my order for goods specified in the following list at the following prices and terms, and ship (see page 3) on or about 1/14 * * * for which we agree to pay according to prices and terms as stated in the list hereto attached.
The prices named herein apply to this order only, and are subject to change ■ without notice.
I expressly agree to give notes on receipt of invoice, or upon monthly balances, at your option, drawn with exchange on Chicago or New York, and with interest at the highest permissible rate after maturity, and all goods ordered hereafter for this season’s trade shall be subject to the same conditions as to time and manner of payment as indicated herein.
The notices and conditions of sale on pages 2, 3, 4, 5 and 6, are made a part of this contract, the same as if set out herein in full, and this order is given subject to the conditions mentioned therein, and “the undersigned” referred to on said pages means the purchaser.
Territory, Morenei and vicinity * * * on the classes of goods herein ordered. The law of the state of Indiana to govern the provisions of this contract. - O. II. Miller. •
Accepted subject to approval of John Deere Plow Company of Indianapolis.
Howard Seely.
Approved by John Deere Plow Company, at Indianapolis, Ind., February G, 1012.
Conditions of Sale.
It is understood and agreed between the parties hereto:
First. That no claim shall be made or allowed for breakage of hardened molds, shares, shovels or landsides.
Second. That no claim shall be made or allowed for alleged defective material or workmanship, unless the article is produced and the defect is plainly apparent.
Third. The John Deere Plow Company of Indianapolis shall not be held responsible for the performance of a plow after it has been heated or radically changed by any one away from the factory.
Fourth. If, in case of fire, labor troubles, strikes, inability to obtain cars, inability to secure sufficient amount of goods to fill all orders taken, John Deere Plow Company of Indianapolis are delayed in filling this order, or for
Fifth. That all implements hereby ordered are bought subject to the usual manufacturer’s warranty — “to do good work when properly operated” — and failing to do this after the undersigned has used his best efforts, lie will give ■immediate notice to John Deere Plow Company of Indianapolis, and allow tim,e .for instructions to be given, or, if necessary, the sending of a person to put it in order; failing then to make the implement work, it may be held subject to the order of John Deere Plow Company of Indianapolis; but under no circumstances will the undersigned return goods without direction from John Deere Plow Company of Indianapolis. In case the fault is with the purchaser, through his neglect to follow directions, or carelessness in using, the undersigned agrees to pay for the time and expenses of the person sent to put it in order.
Sixth. That no countermand of this order shall be made except on payment of twenty per cent, of the net amount of the goods purchased of John Deere Plow Company of Indianapolis as liquidated damages.
Seventh. It is further agreed that in the event of death, failure, insolvency, loss' by fire, or should the second party sell, dispose of or discontinue its business, then all obligations arising under this contract are .to become due and payable at once in cash.
Eighth. In consideration of one dollar in hand paid the undersigned by John Deere Plow Company of Indianapolis, the receipt whereof is hereby acknowledged, it is hereby further agreed that the title to and ownership of all the goods which may be shipped as herein provided or upon the terms, and during the life of this contract, and which shall embrace and include any and all goods that may hereafter be ordered shipped, shall remain in, and their proceeds, in case of sale, shall be in law and in equity the property and -moneys of said John Deere Plow Company of Indianapolis, and subject at all times to. their order until full payment in cash shall have been made to and -accepted by said John Deere Plow Company of Indianapolis for said goods. It is further stipulated and agreed that the taking of a note or notes of the undersigned or the taking of sale notes in settlement and the rendition of a judgment on such note or notes in favor of John Deere Plow Company of Indianapolis, shall in nowise be deemed or construed a waiver of title to the property. Nothing in this clause, however, is to release the undersigned from making payment as provided for in this contract, and this contract shall be construed as having been entered into in the state of Indiana, and construed and interpreted under the laws of said state, said state being the place of acceptance.
' Ninth. That party of the first part reserves to itself the right to revoke this contract, and all orders under same, at any time it may see fit, without any liabilities for loss or' damages.
Tenth. That all notes of the undersigned are to be secured by farmers’ notes, proceeds of sale, of an equal amount and * * * per cent in addition, as collateral security to his or their notes whenever so requested by John Deere Plow Company of Indianapolis. * * * No cash discounts allowed after dates named in contract