Case Name: CORBITT BUGGY CO. v. RICAUD
Court: United States Court of Appeals for the Fourth Circuit
Jurisdiction: United States
Decision Date: 1909-02-15
Citations: 169 F. 935
Docket Number: No. 859
Parties: CORBITT BUGGY CO. v. RICAUD.
Judges: Before PRITCHARD, Circuit Judge, and MORRIS and BRAWEEY, District Judges."
Reporter: Federal Reporter
Volume: 169
Pages: 935–938

Head Matter:
CORBITT BUGGY CO. v. RICAUD.
(Circuit Court of Appeals, Fourth Circuit.
February 15, 1909.)
No. 859.
1. Bankruptcy (§ 140 )—Contract—Construction—Distinguished from Conditional Sale.
A contract by which vehicles were furnished by petitioner to the bankrupt provided that the title should remain in petitioner, his successors and assigns, until the purchase price had been paid, and that any note or notes executed to petitioner should not be considered payment unless fully paid, but that the title to the goods covered by the notes should remain in petitioner, and, in case of a sale of any or all of the goods, the proceeds arising therefrom should be held in trust for petitioner as the money arising from the sale of goods belonging to it. Held, that the contract was not a conditional sale, but created a trust in favor of petitioner, which was enforceable as against the bankrupt and his trustee without being recorded.
[Ed. Note.—For other cases, see Bankruptcy, Dec. Dig. § 140.*]
2. Sales (§ 465*)—Conditional Sales—Registration.
Under the laws of North Carolina, a conditional sale is good between the parties without registration.
[Ed. Note.—For other cases, see Sales, Cent. Dig. § 1353; Dec. Dig. § 465.*]
Appeal from the District Court of the United States for the Eastern District of North Carolina, at Wilmington.
This is an appeal from a decision and judgment of the District Court in a proceeding in bankruptcy affirming the findings of fact and conclusions of law of George H. Howell, Esq., one of the referees in bankruptcy.
The controversy arises on a petition of the Corbitt Buggy Company against A. G. Ricaud, who had been duly appointed trustee of John L. James, bank rupt, seeking to recover from said trustee 22 buggies, or their proceeds, which had been delivered by the Corbitt Buggy Company to the bankrupt, John L. James, a few days prior to his making a voluntary assignment for the benefit of creditors, and under the contract hereinafter set out. The petition was referred to George H. Howell, Esq., who made the findings of fact set out in the record, and héld as a conclusion of law that the petitioner was not entitled to recover the buggies, or their proceeds, from the trustee in. bankruptcy, which decision was, as hereinbefore said, affirmed by the District Court upon exceptions filed by the petitioner to the decision of the referee and a petition to review the same. The controversy arises upon the proper construction of the contract between the Corbitt Buggy Company and the bankrupt, John L. James. The essential portions of that contract are as follows:
“It is expressly understood by and between the Corbitt Buggy Company and the undersigned that the title to the goods above described and ordered sent to the undersigned shall be and remain in the Corbitt Buggy Company, its successors and assigns, until purchase price has been fully paid. And any note or notes executed to the Corbitt Buggy Company shall not be considered as payment unless the same are fully paid; but the title to the goods covered by said notes shall remain in said company. In case of sale of any or all of said goods, the proceeds arising therefrom shall be considered and held in trust for said company as money arising from the sale of goods belonging to the company.”
George Rountree (Herbert McClammy and Rountree & Carr, on the briefs), for appellant.
Thos. W. Davis, for appellee.
Before PRITCHARD, Circuit Judge, and MORRIS and BRAWEEY, District Judges."
For other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep’r Indexes

Opinion:
PRITCHARD, Circuit Judge
(after stating the facts as above). In disposing of the case of the Walter A. Wood Company v. Eubanks, Trustee of Implement & Supply Company (decided at this term of the court) 169 Fed. 929, we considered and passed upon every material point involved in this controversy, and therefore do not deem it necessary to enter into a discussion of those matters which have already been determined.
The contract relied upon in this instance is not, in our opinion, a conditional sale, therefore it does not come within that class of instruments required by the North Carolina statute to be registered. It clearly creates a trust in favor of the grantor, and by its provisions the vendee holds the property, or the proceeds of the sale thereof, for the sole use and benefit of the vendor until his debt is paid. Even if this contract were a conditional sale, under the laws of North Carolina such sale would be good inter partes without registration. In this instance the trustee occupies the same relation to the vendor that the bankrupt sustained prior to his adjudication as a bankrupt.
We have carefully considered the contentions of the parties with respect to the matters in dispute in this proceeding, and are of opinion that the court below erred in its ruling affirming the report of the referee ; therefore we are of opinion that the petitioner is entitled to the relief sought to be obtained in this proceeding.
For the reasons stated in the case of Walter A. Wood Company v. Implement & Supply Company, supra, and the cases cited in support thereof, and also the case of York Mfg. Co. v. Cassell, 201 U. S. 344, 26 Sup. Ct. 481, 50 L. Ed. 782, the judgment of the District Court is reversed, and this case is remanded to that court with instructions to proceed in accordance with the views herein expressed.
Reversed and remanded.