Court Opinion

ID: 9442499
Source: CourtListenerOpinion
Date Created: 2023-08-03 18:49:46.236146+00
Date Added: 2024-06-11T17:29:06.701289
License: Public Domain

PHILLIPS, Chief Judge
(dissenting).
This is an appeal from an order denying a petition in reclamation in a bankruptcy proceeding.
The question presented is whether an assignment contract was void as against the trustee in bankruptcy because it was not recorded or filed in accordance with Chapter 8, New Mexico Laws of 1923, N.M.Stat. Ann., Vol. 4, §§ 53-1101, 53-1102, 53-1103 and 53-1104. The consignment contract, in part, read as follows:
“June 18, 1949.
“Ben Sandack, 5 S. Wabash Ave., Chicago, Ill.
“Ship to Hatfield Jewelers, 142 Lincoln St., Santa Fe, N. Mex.
“These goods are billed on consigned memorandum and remain the property of Ben Sandack of Chicago, Ill., and to be returned to Ben Sandack on demand.”
The contract then set forth a large number of items of jewelry, described and numbered each item, and opposite each item set forth the value or price thereof in dollars and cents. The jewelry was shipped to the bankrupt with the understanding that he was to sell the same, account daily to Sandack for the value of each item sold as indicated in the contract and retain the excess, if any, and pass the title to each item sold to the purchaser. The contract was neither recorded nor filed, as required by the above-mentioned statute. The title of Chapter 8, supra, reads as 'follows: “An act relating to conditional sales contracts, leases, purchase leases, sale leases and other instruments in writing that are intended to hold the title to personal property in the former owner, possessor or grantor until the value or purchase-price is fully paid.”
Section 53-1101 provides: “Hereafter all conditional sales contracts, leases, purchase leases, sale leases, or other instruments in writing that are intended to hold the title to personal property in the former owner, possessor or grantor, shall be acknowledged by the sellor and purchaser, lessor and lessee, as the case may be, in the same manner as conveyances affecting real estate.”
Section 53-1102 provides that every instrument described in § 53-1101 shall be either recorded or filed. Section 53-1104 provides that the failure to so record or file such instrument shall render the same void as to subsequent mortgages in good faith, purchasers for value without notice, subsequent judgment or attaching creditors without notice, from the date of the entry of such judgment or the levy of such at*763tachment, and as against trustees in bankruptcy from the date of the adjudication.
In re Otto-Johnson Mercantile Co., D.C. N.M., 52 F.2d 678, is clearly distinguishable from the instant case. In the Mercantile Co. case, a true trust receipt was involved. The trust receiptee derived title to the property embraced in the trust receipt directly from a third party and not from the trust receiptor, and the trust receiptee was not a former owner, grantor or possessor of such property. It is only under those peculiar circumstances that a holder of a trust receipt may prevail against the trustee in bankruptcy of the trust receiptor. That distinction was clearly pointed out in the Mercantile Co. case, supra, and in In re A. E. Fountain, Inc., 2 Cir., 282 F. 816. See, also, notes 25 A.L.R. 332 and 49 A.L.R. 282. In the instant case, Sandack was the owner and former possessor of the jewelry. The bankrupt had the right to sell the jewelry, as an owner, to third persons and pass the title to the purchaser. The bankrupt was authorized to sell each item of jewelry at such price as he chose, either more or less than the value or price set forth in the contract. The bankrupt was not obligated to remit the amount for which he sold an item, or a specific portion thereof. The bankrupt’s obligation was to pay Sandack daily the agreed price of each item sold. As auctioneer, Sandack acted not for himself, but as agent for the bankrupt, and received a commission for his services. Title to the jewelry passed from Sandack to the bankrupt and from the bankrupt to the purchaser, simultaneously. In selling the jewelry, the bankrupt acted, not as the agent of Sandack, hut for himself. The bankrupt at any time could have paid Sandack the agreed value of the items of jewelry and acquired the title thereto.
The instrument was a security device designed to place the jewelry in the possession of the bankrupt, to authorize him to sell the jewelry and to pass title to the purchaser and to obligate him to pay the ■agreed value of each item of jewelry sold on the day of sale, and to retain the title in Sandack until the jewelry was sold, and to enable Sandack to repossess any unsold jewelry in the event of default by the bankrupt.
The terms of the New Mexico statute are broad. In my opinion, it covers every instrument intended to serve as a security device, where the owner delivers possession of personal property to another, and where the title to such personal property is retained in the former owner, grantor or possessor until the purchase price is paid.
The failure of the statute to specifically include the term “bailments” in the phrase, “conditional sales contracts, leases, purchase leases, sale leases,” is not, in my opinion, significant. Bailment is a term of much broader signification than the security instruments specifically named. There was no intent to embrace many types of bailment. In many bailments, the bailee has no right to dispose of the property, but is obligated to return the specific property to the. bailor. Indeed, an agreement to return the property delivered to the bailee, when the purpose of the bailment has been served, is an element of the ordinary and usual contract of bailment.1 It is only where a bailment is employed as a security device that the instrument falls within the statute.
Here, the instrument involved falls squarely within the literal language of the statute, and, in my opinion, it falls within its intended purview.
I would affirm.

. Zeterstrom v. Thomas, 92 Conn. 702, 104 A. 237, 1 A.L.R. 392; Samples v. Geary, Mo.App., 292 S.W. 3000, 1067; Suits v. Electric Park Amusement Co., 213 Mo.App. 275, 249 S.W. 656, 657; Broaddus v. Commercial Natl. Bank of Muskogee, 113 Okl. 10, 237 P. 583, 584, 42 A.L.R. 1331; Tomko v. Sharp, 87 N.J. L. 385, 94 A. 793, 794; Finch v. McClellan, 77 Ind.App. 533, 130 N.E. 13, 16, 131 N.E. 236; Hogan v. O’Brien, 123 Misc. 865, 206 N.Y.S. 831, 833; McBride v. McNally, 243 Pa. 206, 89 A. 1131, 1132, 52 L.R.A.,N.S., 259; Firestone Tire & Rubber Co. v. Cross, 4 Cir., 17 F.2d 417, 418; Walter A. Wood Mowing and Reaping Machine Co. v. Vanstory, 4 Cir., 171 F. 375, 378; Cosden v. Cline, 8 Cir., 32 F.2d 3003; State v. Chew Muck You, 20 Or. 215, 25 P. 355, 356.