Pacific Metal Company v. Fairell D. Joslin, Trustee of the Estate of Edsco Mfg. Co., Bankrupt

Pacific Metal Company, an Oregon corporation, a creditor of Edsco Manufacturing Co., bankrupt, appeals from a decision of the District Court for the Western Division of Washington. We affirm.

The facts are stipulated. Pacific sold certain machinery to Edsco under a conditional sale contract. The machinery was delivered to and used by Edsco at Vancouver, Clark County, Washington. The contract was duly and regularly filed, as a conditional sale contract, in the office of the County Auditor of Clark County. It is valid under the laws of Oregon. Before using the form of contract for sales in Washington, Pacific obtained the opinion of Washington counsel that the form would be valid as a conditional sale contract in that state. It used the form in reliance upon that opinion. Both Pacific and Edsco believed that the contract in question was valid and enforceable, and intended that it should be. If the contract is not valid, it is because of a mistake of law on the part of Pacific and Edsco.

Edsco’s trustee asserted, and the court held, that the conditional sale contract was void as against the trustee. The contract is not valid as a conditional sale in Washington, but is valid as a…