Dunlop v. Mercer

Citations

• 156 F. 545
• 86 C.C.A. 435
• 1907 U.S. App. LEXIS 4719

Syllabus

<p>1. Sales — “Conditional Sale” — Definition-Contract in Question.</p> <p>A conditional sale is one in which the vesting of the title in the purchaser is subject to a condition precedent, or in which its revesting in the seller is subject to a failure of the buyer to comply with a condition subsequent.</p> <p>An agreement that the purchaser will buy and pay for merchandise, that he may sell It in tiie regular course of his business, but that the proceeds shall be applied as a credit or as collateral security to the debt of the vendee at the option of the vendor, and that the latter will sell and deliver the goods on condition that the title to them shall remain in him until the notes and accounts of the vendee are paid in cash, is a valid contract of conditional sale.</p> <p>[Ed. Note. — For cases in point, see Cent. Dig. vol. 43, Sales, § 1321.</p> <p>For other definitions, see Words and Phrases, vol. 2, pp. 1408-1410.]</p> <p>2. Same — Option of Purchaser to Pay is Not an Indispensable Element.</p> <p>An option in the purchaser to pay, or to refuse to pay, for the property, is not essential to a conditional sale.</p> <p>3. Same — Permission to Vendee to Sell and to Apply Proceeds to His Debt does Not Render Contract Voidable.</p> <p>A stipulation that the purchaser may sell the merchandise in the regular course of business, and that he shall apply the proceeds to his debt as a credit or as collateral security, at the option of the vendor, does not render such a contract fraudulent or voidable against creditors. It does not make it a chattel mortgage with a secret lien.</p> <p>4. Same — Bankruptcy—Failure to Record.</p> <p>The failure to record a contract of conditional sale renders it voidable by attachment creditors, judgment creditors, and bona fide purchasers only, in Minnesota; and, where there wore no such creditors and purchasers when the petition in bankruptcy was filed, such failure did not render it voidable by the trustee, because he had no better title