Bell v. Cooper

230 F. 976, 145 C.C.A. 170, 1916 U.S. App. LEXIS 1513

• Court: Court of Appeals for the Eighth Circuit
• Decided: February 24, 1916
• Docket: No. 160
• Status: Published

Opinion

TRIEBER, District Judge

(after stating the facts as above). In this proceeding the bank does not complain of the order of the court so far as it affects its rights, the petitioner Bell alone filing this petition to revise. Therefore the only question to be determined is whether, upon the facts hereinbefore set out, the trial court erred in disallowing the petitioner’s claim of a lien on the stock of goods and fixtures sold by him to the bankrupt.

The parties having reduced their contract of sale to writing, it is at best doubtful whether oral testimony to vary it, by adding other agreements thereto, is admissible (Bunday v. Huntington, 224 Fed. 847, 140 C. C. A. 415), especially when the rights of third parties, either purchasers or creditors, who have obtained a lien on the property by reason of a levy, or seizure under process, are to be affected.

[1] By the amendment of 1910 to section 47 of the Bankruptcy Act, the trustee, “as to all the property in the custody or coming into the custody of the bankruptcy court, shall be deemed vested with all the rights, remedies, and powers of a creditor holding a lien by legal or equitable proceeding thereon.”

[2] But it is claimed on behalf of the petitioner that, excluding the oral proofs, the clause in the bill of sale, “subject, however, to a certain promissory note of S3,500, dated December 18, 1912, payable to V. W. Sylvester, which note said grantee assumes and agrees to pay,” is in effect a retention of a lien on the property for the payment of that note, and the bill of sale having been recorded was notice to the world.

We fully agree with the learned trial judge that no such effect can be given to this clause of the bill of sale. Considering the entire instrument, it is impossible to reach any other conclusion than that the consideration of the sale was $16,200, of which $12,700 was paid to the petitioner by his vendee, and that the balance of the consideration, amounting to $3,500, was the assumption of Mr. Bell’s indebtedness to Sylvester, by his vendee.

As stated by the learned trial judge in his opinion:

“If it was the intention, when tlie sale was made to Cooper, that the bill of sale should give to Bell a lien or mortgage, the parties would have found language with which to describe it, so that the intention would be clearly apparent.”

A mere recitation that a part of the purchase money for personalty remains unpaid is insufficient to create a lien. Jones on Riens (3d Ed.) § 1110.

There can be no doubt but that, if a levy had been made upon this stock of goods under a judgment, the petitioner’s claim could not have been maintained against such a levy. As the trustee occupies the same position such a creditor would have occupied, the result must be the same. Potter Mfg. Co. v. Arthur, 220 Fed. 843, 136 C. C. A. 589.

The petition to revise must be denied.