John Deere Plow Co. v. Anderson

FOSTER, District Judge. In this matter it appears that one V. U. Burke purchased certain merchandise from the J ohn Deere Plow Company under a written contract of sale, which contained, among others, the following stipulation: “(7) It is also agreed that the title to and ownership of, and the right to immediate and exclusive possession upon demand, either oral or written, to all goods which may be shipped as herein provided or during the current season; shall remain in and their proceeds in case of sale shall he the property of -the John Deere Plow Company, and subject to their order until full payment shall' have been made for the same by the undersigned (V. L. Burke) from making payments as herein agreed.” Subsequently Burke was adjudicated a bankrupt, and the plow company intervened in the proceedings and claimed so much of the merchandise as still remained in his possession, and alleged it was worth less than the amount due under the contract of sale. The referee declined to allow the plow company’s claim, and on appeal to the District Court his finding was affirmed. The law of Georgia (Civ. Code Ga. 1895) provides as follows: Sec. 2776. “Whenever personal property is sold and delivered with the condition- affixed to the sale, that the title thereto is to remain in the vendor of such personal property until the purchase price shall have been paid, every -such conditional sale,, in order for the reservation of title to be valid as against third'parties, shall be evidenced in writing, and not otherwise. And the written contract of every such conditional sale shall be executed and attested in the same manner as mortgages on personal property; as between the parties themselves, the contract as made by them shall be valid, and may be enforced whether evidenced in writing or not.” ' Sec. 2777. “Conditional bills of sale must be recorded within thirty days from'théir date, and in other respects shall be governed by the laws relating to the registration' of mortgages.” The contract in this case was not recorded. It will be observed that'by the law of Georgia, cited above, a conditional sale, not recorded, is good as between the parties, but is not valid as against third parties,' We are not referred to any decision of the Supreme Court of Georgia holding that ordinary, unsecured creditors are to be deemed third parties within the meaning of the statute. The contrary view .seems to have been held in the case of Rhode Island Locomotive Works v. Empire Lumber Company, 91 Ga. 639, 17 S. E. 1012, where the possession of two locomotives was awarded the vendor in a con817 dilional sale as against the receiver of the lumber company. We therefore hold that third parties, within the meaning of the law of Georgia, as well as under the general law, are such creditors as have, in some, manner, secured a lien on the property conditionally sold, and not mere ordinary creditors. It is true the adjudication vests the title of the bankrupt’s property-in the trustee; but it does not operate as a judicial seizure to create a lien in favor of the ordinary creditors. The trustee has no greater right in property sold under a conditional sale contract than the bankrupt had. See York Manufacturing Company v. Cassell, 201 U. S. 344, 26 Sup. Ct. 481, 50 L. Ed. 782; Bryant v. Swofford Brothers, 214 U. S. 279, 29 Sup. Ct. 614, 53 L. Ed. 997. In this case the sale was undoubtedly valid as between the parties, and the plow company was therefore entitled to the property as against the trustee. In General Fire Extinguisher Company v. Lamar, affirmed in this court by per curiam opinion, saying, “We find no error in the disposition of this case in the Circuit Court, and the judgment is therefore affirmed” (see 141 Fed. 353, 72 C. C. A. 501), cited in the court below, it is to be noticed that the appellant in that case asserted a reserved lien, and that the property alleged to have been sold had been merged in and become part of the building and factory which had been sold under prior liens; the proceeds being in court for distribution. A per curiam affirmance of a decree on appéal, in the above-quoted words, means no more than that the decree on the facts proved in the record is correct, and nothing else is affirmed. The petition for revision is allowed, and the decree of the District Court in favor of the trustee against the John Deere Plow Company, rendered in the bankruptcy of V. L. Burke, is reversed, and the District Court is instructed to render judgment in accordance with the views herein expressed; the trustee to pay the costs hereof in due course of his administration.