United States v. United Aircraft Corporation

80 F. Supp. 52, 1948 U.S. Dist. LEXIS 1764
CourtDistrict Court, D. Connecticut
DecidedMay 22, 1948
DocketCivil Action 2183
StatusPublished
Cited by18 cases

This text of 80 F. Supp. 52 (United States v. United Aircraft Corporation) is published on Counsel Stack Legal Research, covering District Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. United Aircraft Corporation, 80 F. Supp. 52, 1948 U.S. Dist. LEXIS 1764 (D. Conn. 1948).

Opinion

SMITH, .District Judge.

In March, 1946, the Hoosier Air Freight Corporation executed two purchase money chattel mortgages to War Assets Corporation on two; twin-engine Douglas aircraft. Each mortgage was in the amount of $17,000. These mortgages were recorded with the Department of Commerce, Civil Aeronautics Administration. There they were indexed by the Civil Aeronautics Administration aircraft number and by the manufacturer’s serial number for the airplane. As part of its equipment one aircraft had a Pratt & Whitney engine, Model R 1830-92, Engine Number CP-354390, and the other had an engine of the same model with the number CP-351247.

In July of 1946, the Hoosier Air Freight Corporation removed these engines from the aircraft and shipped them to the Pratt & Whitney Division of United Aircraft Corporation for a complete ‘ major overhaul. In the course of overhauling these two engines, United Aircraft expended a sum of $10,658.36 for labor and materials. For this it claims an artificer’s lien and, pursuant to such claim of lien, has retained possession of the engines at,, all times and refused to surrender possession.

On April 16, 1947, a petition was filed against Air-Borne Cargo Lines (formerly Hoosier Air Freight Corporation) for reorganization under Chapter X of the Bankruptcy Act, 11 U.S.C.A. § 501 et seq. On August 1, 1947, the corporation was adjudicated bankrupt. ' On or about August 19, 1947, the referee in bankruptcy authorized the foreclosure of the chattel mortgages and the sale of the chattels covered by the mortgages without prejudice to the rights of those asserting artisan’s or possessory liens. The aircraft were then sold without the engines which aré the subject of this controversy. The plaintiff received $7,000 for one of the aircraft and $8,500 for the other.

After demand for the engines, the United States has brought this action to replevy the engines from defendant United Aircraft Corporation, asserting that the lien of its chattel mortgage is superior to that of the defendant. Defendant contends that such an issue may not be tried by replevin but that the controversy must be litigated by foreclosure and sale. However, Section 911'h of the 1945 Supplement to the Connecticut General Statutes is permissive. “The mortgagee * * * may bring a complaint claiming the sale of the mortgaged property * * Nor do we' think that the Court’s intention in Windsor Trust Co. v. Champigny et al., 1927, 105 Conn. 615, 622, 136 A. 556, was to overrule Pease v. Odenkirchen, 1875, 42 Conn. 415, where the Court permitted a mortgagee to bring a replevin action against a mortgagor’s vendee.

It cannot be said that, with respect to a mortgage of personal property, the parties may not, by contract, extend the remedies of the mortgagee to other than those expressly provided in the statute in view of the permissive language of the *54 statute. Therefore, plaintiff may utilize a replevin action in this proceeding.

Defendant contends that the description of the engines is not sufficiently definite to be binding as against persons other than the mortgagor.

The Congress has preempted the field of conveyancing of interests in aircraft and portions thereof, to facilitate the control and promotion of air commerce. The power to do so may not be denied.

We, therefore, now have a Federal law governing the validity of such conveyances. The statute, by its recordation ■requirement, voids as to third parties, without actual notice, conveyances not recorded. The principles of fraudulent conveyance of personalty without transfer of pos-, session are to be applied except so far as notice to third persons has been given in accordance with the terms of the Federal statute.

The question here is whether the conveyances recorded in this case adequately furnish such notice.

Here we have conveyances which purport to affect the title to aircraft and also to portions thereof, the engines, which are easily removable and interchangeable, a-nd often in practice so removed and interchanged. The Civil Aeronautics Act, 49 U.S.C.A. § 401 et seq., in section 523(b), does not attempt to define the particularity with which the aircraft or portions thereof shall be described. The particularity of description intended must, therefore, be -such particularity as would be reasonably sufficient for notice to third parties whose rights against the transferees of title without delivery of possession -are to be cut off by the recording under the statute. Among those third parties will obviously be engine overhaulers.

Obviously, too, the description ■ used in the mortgages in suit is totally lacking in particularity sufficient to warn such artificers of the inclusion of these particular engines in the claimed mortgage lien. In view of the removability and interchangeabli'ty of engines, a mortgage description to cover them should sufficiently identify them so that recourse to the records would .reveal their inclusion in the conveyance.

An airplane engine in itself is a saleable article. It may be easily removed from an aircraft just as a machine tool may be removed from its position in a factory. In fact, in view of the requirement of proper maintenance in Paragraph 9 of the mortgage, and the fact that major overhaul is .a periodic requisite of aircraft engines, it was contemplated by the parties that such removals would occur -at periodic intervals. Since the only description in the mortgage of the engine is in a definition of aircraft as including “all parts, engines, equipment and accessories * * ,” it is not sufficiently definite to give notice of the lien of the mortgage on the engines to third parties.

We have been unable to find any interpretátion of the statute so far as the sufficiency of notice to third persons dealing with aircraft engines is concerned. The case of In re Veterans’ Air Express Company, Inc., D.C.N.J., 76 F.Supp. 684, relied upon by- the government, had to do with third persons dealing with the entire aircraft -and there would appear to be no difficulty as to the sufficiency of notice since both manufacturer’s number and the Civil Aeronautics Board number were known to the third person and the conveyance to the government for security was indexed under both -those numbers. Nor is the old "Federal common law” prior to Erie Railroad Co. v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, -of any grqa-t assistance. There is, perhaps, discernable some t-rend-tow-ard holding conveyances for- security without transfer of possession not fraudulent, since the retention -of possession was-not necessarily inconsistent with the granting of limited title for security purposes disclosed in the instrument. See note, Volume 1, Smith’s Leading Cases 44 (1847) and cases cited. However, the Civil Aeronautics Act recognizes that such -transfer should be considered invalid as to -third, persons unless notice is given by the recording of the instrument. Here the instrument itself lacks a sufficiency of description -of -the engines to meet -any -standard of fair notice to third persons dealing: *55 with the engines under the circumstances in which engines are used and maintained.

As an alternative ground, defend- and contends that under Connecticut law the artificer’s lien prevails over the mortgage.

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Bluebook (online)
80 F. Supp. 52, 1948 U.S. Dist. LEXIS 1764, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-united-aircraft-corporation-ctd-1948.