Strauss Bros. v. Wisconsin Trust Co.

229 F. 695 | 7th Cir. | 1916

KOHLSAAT, Circuit Judge

(after stating the facts as above). The contract under consideration is one not easy to classify. It indicates an intention to secure the advantages and avoid the disadvantages of a conditional sale. In arriving at a proper construction of it, little weight can be given to the frequent allusions therein to the claim that the relation of the parties is that of principal and agent, as against the effect of its terms. The bankrupt was bound to' purchase all of the merchandise not returned as unsalable within one year. While it was provided that the goods and proceeds belonged to appellant, no provision for segregation of the proceeds was required, so that such moneys were permitted to go into the general funds of the bankrupt. There was no obligation upon the bankrupt to return any of the merchandise in kind provided the bankrupt paid the cash therefor. All expenses arising after loading were assumed by bankrupt, except the insurance. It might sell on credit, but must guarantee the amount of sales to appellant. Bankrupt’s compensation and expenses must be covered by the excess of sales price over purchase price. No salary or commission was provided for it. There was no price of sale by it agreed on, save that the contract price must be realized.

In Re Galt, 120 Fed. 64, 67, 56 C. C. A. 470, 473, this court said:

“The distinction between bailment and sale is not difficult of ascertainment, if due regard be had to the elements peculiar to each. In bailment the identical thing delivered is to be restored. In a sale there is an agreement, express or implied, to pay money or its equivalent for the thing delivered, and there is no obligation to return.”

And again, on page 68 of 120 Fed., on page 474 of 56 C. C. A.:

“The test would seem to be: Has the sender the right to compel a return of the thing sent, or has the receiver the option to pay for the thing in money V”

In that case the petitioner had reserved the right, upon failure to sell the wagons within a year, to require the bankrupt either to pay cash therefor, give his note, or store the wagons subject to petitioner’s order, at the petitioner’s option. The bankrupt had no choice. The transaction was held to- be a bailment.

In Lenz v. Harrison, 148 Ill. 598, 36 N. E. 567, it was provided that, if wagons were not sold within a year, Harrison might give his note for the balance unpaid, if so required. This provision was held to indicate that the transaction was a sale.

The Eighth Circuit Court of Appeals, in Deere Plow Co. v. McDavid, 137 Fed. 802, 70 C. C. A. 422, in dealing with a somewhat different contract, wherein the implement company was required to segregate the cash and note proceeds from the general fund of the business, held the transaction to be one in which the goods actually remaining in the dealer’s possession belonged to- the original seller, while the latter was not entitled to the proceeds of those sold which had gone into- the general fund.

In Newmark on Sales, § 23, this provision as to compensation is said to be inconsistent with the claim that the parties occupied the relation of principal and agent in the transaction. The same position was taken by Judge Philips, of the Eighth Circuit, in Re Rabenau (D. C.) 118 Fed. 471, citing Kellam v. Brown, 112 N. C. 451, 17 S. E. 416, Ex parte White, 6 Ch. App. 397, and Chickering v. Bastress, 130 Ill. 206, 22 N. E. 542, 17 Am. St. Rep. 309. In the last-named case the court says:

“The provisions [of the contract] authorizing Pelton & Co. to determine solely for themselves at what prices they would sell the pianos from their store is almost conclusive that in reality they were not acting as the agents or factors of the Chiekerings; hut that, with the further provision that they were to hear as their proper burden all the expenses of shipment, etc., the same, precisely, as purchasers, would leave no doubt that the contract was not one of bailment, or of principal and factor.”

To the same effect is Thompson v. Paret, 94 Pa. 275.

Talcing into consideration, further, the so-called insecurity clause of the contract, commonly used in chattel mortgages and conditional sale agreements, together with the general effect of all the other provisions of the contract, not specially dwelt on herein, we are of the opinion that the transaction effected was that of a conditional sale, and not a consignment, and within the terms of section 2317 of the Revised Statutes of Wisconsin, which provides that:

“No contract for the sale of personal property, by the terms of which the title is to remain in the vendor and the possession thereof in the vendee until the purchase price is paid or other conditions of sale are complied with, shall be valid as against any other person than the parties thereto and those having notice thereof unless such contract shall be in writing, subscribed by the parties, and the same or a copy thereof shall be filed in the office of the clerk of the town, city or village where the vendee resides.”

With this statute appellant failed, to comply. That being so, the claim for priority as against the trustee was properly denied.

The judgment of the District Court is affirmed.