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Schnitzer Steel Products Co. v. Henry C. Eastburn & Son, Inc.

Superior Court of Delaware, New Castle County

August 31, 1951

SCHNITZER STEEL PRODUCTS CO.
v.
HENRY C. EASTBURN & SON, Inc.

The Schnitzer Steel Products Co., a corporation of the State of Oregon, brought action against Henry C. Eastburn & Son, Inc., a corporation of the State of Delaware, to recover possession of a crane which plaintiff's conditional buyer, who was a dealer in such equipment, had sold to the defendant. The Superior Court, Carey, J., held that plaintiff was not entitled to recover possession of the crane though conditional sales contract had been recorded.

Motion of plaintiff for summary judgment denied, and motion of defendant for summary judgment granted.

Page 685

[46 Del. 306] Leslie H. Gluckman, Wilmington, for plaintiff.

W. Thomas Knowles, of Knowles & Allmond, Wilmington, for defendant.

CAREY, J., sitting.

CAREY, Judge.

The purpose of this suit is to recover possession of a large Bay City crane, or its value. Ownership is claimed by both parties. It is a case where one of two innocent parties must suffer loss caused primarily by the default of a third person.

In February 1949, plaintiff made a contract for the sale to one Richard Thorpe, who traded under the name of Thorpe's Machine Company, of several items of large machinery, including the crane here involved. In the same month, plaintiff shipped this machinery from Portland, Oregon, by railroad to its own order at May's Landing, New Jersey, Thorpe's place of business. The bill of lading, to which were attached sight drafts drawn [46 Del. 307] against Thorpe's Machine Company, was duly forwarded to a bank in May's Landing. The crane arrived in that city on March 24th, but Thorpe did not honor the sight drafts and the bank accordingly retained the bill of lading. The crane and the other machinery remained on the freight car at the railroad company's siding.

On April 28, a bill of sale was executed by ‘ Thorpe's Machine Co., Richard Thorpe’ selling the crane to defendant. This paper was a printed form containing an express warranty of title. The blank spaces were filled in very unskillfully. Defendant's affidavits aver that its check for $8,000 was given to Thorpe in part payment for the crane on that same day, and the other part of the consideration to wit, a bulldozer, was delivered to Thorpe the following day. This sales contract was made in Delaware. It is alleged on belief that defendant's check for $8,000 was actually credited upon Thorpe's general account with plaintiff, but this allegation is denied by plaintiff.

On June 14th, Thorpe had still failed to honor the sight draft and plaintiff accepted from him a conditional sale contract for $7,000 payable October 15, 1949, by which title to the crane was reserved in plaintiff until said amount was paid. The bill of lading was thereupon given to Thorpe. This conditional sale agreement was filed in the office of the Clerk of Atlantic County, New Jersey, on June 24, 1949.

On June 24, defendant's agent went to May's Landing for the crane, obtained the bill of lading from Thorpe, and got the crane after paying the railroad company's freight and demurrage charges.

The complaint simply alleges property and right of possession in the plaintiff and unjust detention by the defendant. The answer denies plaintiff's title and avers property in the defendant. It mentions the conditional sale by plaintiff to Thorpe and the sale by Thorpe to defendant. It denies that plaintiff is protected by the conditional sale agreement on the ground that [46 Del. 308] Thorpe was a recognized machinery dealer in New Jersey and was known by plaintiff to be such, that plaintiff expressly and impliedly agreed to resale of the crane by Thorpe prior to compliance with the conditional sale contract, and that defendant was an innocent purchaser for value in the ordinary course of business. Plaintiff's reply admits that Thorpe got the crane from it under the contract of conditional sale, but denies all other averments in the answer.

Affidavits filed for the defendant outline its version of the facts in considerable detail. They contain nothing, however, to indicate that plaintiff expressly ...


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