In re HINSDALE

In re HINSDALE. (District Court, D. Vermont. October 31, 1901.) Bankruptcy—Title of Trustee—Property Sold to Bankrupt Conditionally. V. S. § 2290, wbicb provides that no lien reserved on personal property sold conditionally, and which passes into the hands- of the conditional purchaser, shall be valid “against attaching creditors or subsequent purchasers without notice” unless a memorandum is signed by the purchaser and filed, does not enlarge the rights of a trustee in bankruptcy in respect to goods which had been furnished to the bankrupt, to be paid for as sold by him, or to become his property when paid for, and which had not been paid for; and since the title to such goods did not pass at common law under such circumstances, the sellers have the right to retake the same. In Bankruptcy. Frank S. Williams, for petitioners. Matthew M. Gordon and George A. Swase)1-, for trustee. [MAJORITY — WHEELER, District Judge.] WHEELER, District Judge. The Berry Hall Company and the Walker Grocery Company put groceries into the store of the bankrupt for sale by him; those of the former to be paid for as sold, those of the latter to become his when paid for. They have filed petitions for the goods unsold, which have been heard. The title to goods does not pass under either of these circumstances at common law. Am. & Eng. Enc. Law (2d Ed.) 436, 798, and note; Manufacturing Co. v. Nash, 70 Vt. 434, 41 Atl. 429. It is provided (V. S. § 2290) that “no lien reserved on personal property sold conditionally, and passing into the hands of the conditional purchaser, shall be valid against attaching creditors or subsequent purchasers without notice unless the vendor takes a written memorandum, signed by the purchaser witnessing such lien, and the sum due -thereon,” and causes the same to be recorded within 30 days. The facts found by the referee show no such record, and the want of it is much relied upon on behalf of the trustee. But this statute applies only to such as come within its description. Manufacturing Co. v. Nash, 70 Vt. 434, 41 Atl. 429. The trustee is neither an attaching creditor nor subsequent purchaser, but is a successor, like an executor or administrator, taking the title of the bankrupt. Bankr. Act. § 70. He may have rights to property conveyed by the bankrupt in fraud of creditors that the bankrupt could not enforce, but the questiort here is not as to whether the bankrupt validly conveyed the property, but whether he fully acquired it. The property had been attached before the bankruptcy proceedings, but, if that attachment became a lien paramount, it could probably be preserved only by the trustee being allowed to be subrogated to the rights of the ■ creditor, under the provisions of section 67, “Liens,” cl. 3, no question in respect to which is presented here. Property decreed to petitioners.