Babcock & Wilcox Co. v. Spaulding

86 F.2d 256, 1936 U.S. App. LEXIS 3708
CourtCourt of Appeals for the First Circuit
DecidedNovember 5, 1936
DocketNo. 3169
StatusPublished
Cited by3 cases

This text of 86 F.2d 256 (Babcock & Wilcox Co. v. Spaulding) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Babcock & Wilcox Co. v. Spaulding, 86 F.2d 256, 1936 U.S. App. LEXIS 3708 (1st Cir. 1936).

Opinion

BINGHAM, Circuit Judge.

These are appeals under section 24a of the Bankruptcy Act, as amended (11 U.S. C.A. § 47(a), from decrees of the District Court for Maine, in one case denying the petition of the Cameron Machine Company, a New York corporation, to repossess itself of a paper winder, a slitter grinder, and their equipment, sold, under a conditional sale contract, to the Brown Company, a Maine corporation having its principal offices at Portland, Me.; and, in the other case, denying the petition of Babcock & Wilcox Company, a New Jersey corporation, to repossess itself of a certain pulverizing and burning equipment and attachments, also sold to the Brown Company under a conditional contract of sale.

The Brown Company had previously, on September 3, 1935, filed in the court below a petition for reorganization under section 77B of the Bankruptcy Act (11 U.S. C.A. § 207), which petition was duly approved.

It appears that the Brown Company, after its incorporation in the State of Maine, registered as a foreign corporation in New Hampshire where it had mills of a substantial value — the greater part of them being in Berlin where its principal New [257]*257Hampshire offices were located. It also had mills in the adjoining town of Gorham, N. H., and owned timberlands in various towns of the State.

The conditional sale contract between the Cameron Company and the Brown Company was dated August 19,. 1934, and the property sold was delivered to the latter company at Gorham, N. H., October 10, 1934, when its installation was begun in one of its mills there under the supervision of a representative of the Cameron Company. The purchase price was $11,347.50, of which there is still due $6,899.38. A memorandum of this conditional sale contract was recorded in the office of the city clerk in Berlin on October 5, 1934, but no record was made in the town clerk’s office in Gorham, where the property was situated.

By a written contract dated May 27, 1935, between the Babcock Company and the Brown Company, the former agreed to install the property covered by that contract in the latter’s mill at Berlin, the title to which was not to pass until full payment of the price. The installment of this property was completed on August 26, 1935. The price to be paid was $23,173, no part of which has been paid. No memorandum of this sale, as is required by the law of New Hampshire, was made and recorded in Berlin or elsewhere in New Hampshire. The Babcock Company had no residence in that State.

The trustees objected to the allowance of the petition of the Cameron Company on the ground that the memorandum of sale was not recorded in the clerk’s office in Gorham where the-property was situated; and to the allowance of the petition of the Babcock Company because no memorandum of sale, as required by the law of New Hampshire, was made and recorded in Berlin where the property was situated.

For these and other reasons not necessary to mention, the District Court entered decrees denying the petitions, from which these appeals were taken.

It is conceded that the questions here involved are governed by the law of New Hampshire. Sections 27, 28, and 30 of chapter 216 of the Public Laws of New Hampshire here applicable provide:

“27. Memorandum. No lien reserved on personal property sold conditionally and passing into the hands of the conditional purchaser, except a lien upon household goods created by a lease thereof, containing an option in favor of the lessee to purchase the same at a time specified, shall he valid against attaching creditors, or subsequent purchasers without notice, unless the vendor of such property takes a written memorandum, signed by the purchaser^ witnessing the lien, the sum due thereon and containing an affidavit as provided in the following section, and causes such memorandum to he recorded in the town clerk’s office of the town:

I. Where the purchaser resides, if within this state; or

II. Where the vendor resides, if within this state, and the purchaser does not reside in the state; or

III. Where the property is situated if neither purchaser nor vendor resides in the state.”

“28. Affidavit. Each vendor and purchaser shall make and subscribe an affidavit in substance as follows: We severally swear that the foregoing memorandum is made for the purpose of witnessing the lien and the sum due thereon as specified in said memorandum, and for no other purpose whatever, and that said lien and the sum due' thereon were not created for the purpose of enabling the purchaser to execute said memorandum, but said lien is a just lien, and the sum. stated to be due thereon is honestly due thereon and owing from the purchaser to the vendor.”

“30. Record. If the record required by section 27 is made within twenty days after the property is delivered the lien reserved shall be valid against all attaching creditors and purchasers; but if it is not made until after the expiration of twenty days it shall be valid against those attaching creditors and purchasers only who become such after the record.”

(Italics, except the headings of the sections, supplied.)

Under these provisions of law the validity of the Cameron Company’s lien depends upon whether the Brown Company resided in Berlin. If it did, the memorandum could be properly recorded there. If both the Brown Company and the Cameron Company resided out of the State, the memorandum should have been recorded in Gorham where the property was situated. It was not recorded in Gorham, but in Berlin, and was properly recorded there only in case the Brown Company had a residence in Berlin. Did the Brown Company, a corporation organized under the laws of Maine, have a residence in Berlin, N. H.?

[258]*258Undoubtedly an individual domiciled in Maine* can acquire a temporary residence in New Hampshire sufficient to make a lien valid if the memorandum of conditional sale is there recorded. But as to a corporation the situation is different.

A corporation “cannot migrate.” Baltimore & O. Railroad Company v. Harris, 12 Wall. 65, 81, 20 L.Ed. 354. It is generally held in this country, and particularly in the federal courts, that a corporation’s residence is in the state of its incorporation “and can be nowhere else.”

In Germania Fire Insurance Company v. Francis, 11 Wall. 210, 216, 20 L.Ed. 77, the court said: “The declaration avers that the plaintiff in error (the defendant in the court below) is a corporation created by an act of the legislature of the State of New York, located in Aberdeen, Mississippi, and doing business there under the laws of the State. This, in legal effect, is an averment that the defendant was a citizen of New York, because a corporation can have no legal existence outside of the sovereignty by which it was created. Its place of residence is there, and can be nowhere else. Unlike a natural person, it cannot change its domicile at will, and, although it may be permitted to transact business where its charter does not operate, it cannot on that account acquire a residence there.”

In Re Schollenberger, 96 U.S. 369, 377, 24 L.Ed. 853, the court said: “A corporation cannot change its residence or its citizenship.

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Bluebook (online)
86 F.2d 256, 1936 U.S. App. LEXIS 3708, Counsel Stack Legal Research, https://law.counselstack.com/opinion/babcock-wilcox-co-v-spaulding-ca1-1936.