Caldwell Finance Co. v. Samuel A. McAllister Trustee in Bankruptcy of the Estate of Oscar Herman Herreid, Bankrupt

This is an appeal from an order of the district court affirming an order of a referee in bankruptcy holding that an alleged conditional sale contract claimed by appellant Caldwell Finance Company was in the nature of an unrecorded chattel mortgage, hence was void as against the bankruptcy trustee.

Briefly, summarized, the facts are these: At the time of his adjudication in bankruptcy on October 27 of 1953 the bankrupt (a dealer in cars and trucks) was in possession of two International pickup trucks stored for sale on his premises. These he delivered to the referee at the first meeting of creditors. In 1952 the bankrupt had given to appellant as security for an indebtedness a chattel mortgage upon a Mack diesel tractor which he owned. The mortgage was duly recorded. In July of 1953, with appellant’s consent, the bankrupt had traded the tractor to the International Harvester Company for five used trucks, two of which the bankrupt im mediately sold, applying the proceeds of sale upon his indebtedness to appellant. The payments left a balance of $2,000 owing the latter.

To secure this balance certain instruments pertaining to the three remaining trucks were delivered to appellant,…