The opinion of the court was delivered by: AUGELLI
This matter is before the Court on petition of Redisco, Inc. (Redisco) for review of an order of the Referee in Bankruptcy (Referee), made on January 5, 1965, which denied Redisco's petition for reclamation of certain property from the Bankrupt herein, United Thrift Stores, Inc. (United Thrift).
On October 30, 1964, United Thrift filed a petition for an arrangement under Chapter XI of the Bankruptcy Act. Redisco was listed in United Thrift's schedules as an unsecured creditor in the amount of $ 42,753.79. On November 13, Redisco filed its petition to reclaim from United Thrift certain Kelvinator appliances, or for the proceeds thereof, which totaled $ 36,816.44. On that date, the Referee signed an order directed to James E. Masterson, Esquire, who had been appointed Receiver for United Thrift, to show cause why that relief should not be granted.
On November 24, the Referee held a hearing on said order to show cause, and denied the petition for reclamation on the ground that United Thrift bought the appliances in question on open account, and that therefore Redisco was not a secured creditor entitled to reclamation. An order to this effect was entered on January 5, 1965. In the meantime, on December 16, United Thrift was adjudicated a bankrupt, and the Receiver, Masterson, was thereafter appointed Trustee.
Redisco filed this petition for review on January 13, 1965, and the Referee's findings of fact and conclusions of law were filed on February 23, 1965. The following are the facts disclosed by the record in this case.
Redisco is a subsidiary of American Motors Corporation, and is engaged in the business of financing Kelvinator electrical home appliances sold to distributors by the American Motors Sales Corporation. United Thrift was engaged in the business of buying Kelvinator and other brand appliances, and selling them to retail dealers.
On March 12, 1963, a financing statement, pursuant to the Uniform Commercial Code (effective in New Jersey on January 1, 1963), N.J.S.A. 12A:1-101 et seq., was filed with the Secretary of State of New Jersey. This statement covered 'inventory of Kelvinator appliances and products including Kelvinator refrigerators, washers, dryers, freezers, and other Kelvinator gas and electrical appliances.' United Thrift was named as debtor, and Redisco as the secured party. Proceeds of collateral were also noted as being covered. There is no indication of termination of financing on the statement before the Court.
On March 22, 1963, the Secretary of State certified that he had searched his files under the Uniform Commercial Code, and found four previously recorded, secured parties for United Thrift as debtor. Redisco thereupon duly sent notices, informing the other secured party that it 'has or expects to acquire a purchase money security interest in inventory of Kelvinator electrical and gas appliances * * *, which (it) * * * will from time to time deliver or cause to be delivered to United Thrift * * *.'
Four separate agreements were thereafter entered into between the Kelvinator Division of the American Motors Sales Corporation, United Thrift, and Redisco. These agreements, on identical printed forms prepared by Redisco, are entitled 'Redisco Wholesale Floor Plan.' Each agreement contains three sections, as follows: (1) a bill of sale from the Kelvinator Division to Redisco for the articles listed by model and serial numbers; (2) a trust receipt from United Thrift to Redisco, covering the same articles and setting forth a release amount opposite each item; and (3) a signed, but incompleted, promissory note from United Thrift to Redisco, which bears the same identification number as the trust receipt.
In the section labeled 'trust receipt', United Thrift acknowledges the receipt of the listed appliances, acknowledges that they are the property of Redisco and will be returned to Redisco on demand, and agrees 'not to sell, loan, deliver, pledge, mortgage, or otherwise dispose of said articles to any other person until after payment of amounts shown in Release Amount column below.' The trust receipts do not indicate thereon that any payments have been made, or any appliances released, pursuant thereto.
The trust receipts also provide that the total release amounts are the 'Amount of Promissory Note.' A portion of the trust receipts further provides for terms of payment in either 90 days or one-third in 30, 60 and 90 days. The identification number, date, and total amount of each trust receipt are as follows:
Number Date Total
N77167 7/27/64 $ 14,372.60
N77168 7/29/64 13,088.65
J20658 9/10/64 12,442.95
J20660 9/24/64 11,939.10
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