Barry

Appeal by the trustee in bankruptcy of the Central Auto Supply Company, an Arizona corporation from a judgment of the United States District Court for the district of Arizona, holding that the pledge of non-negotiable warehouse receipts to the Valley National Bank of Phoenix, representing goods allegedly deposited with Lawrence Warehouse Company, a California corporation, entitled the bank to retain possession of the goods to satisfy debts owing the bank by the bankrupt.

Long prior to the filing of its petition in bankruptcy the Central Auto Supply Company, a retail dealer in supplies, found itself in financial difficulty. In order to continue to operate as a going concern, and in the hope of extricating itself from financial distress, Central borrowed money from the defendant bank. To obtain these loans, Central allegedly entered into certain transactions in conformity with what has become known commercially as “field warehousing”. The object of this plan was to afford security to the bank through a transfer of possession and control of Central’s stock in trade to the Lawrence Warehouse Company, and the issuance by Lawrence of warehouse receipts in favor of the bank.

In order…