Pacific Metal Co. v. Joslin

359 F.2d 396 (1966)

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Pacific Metal Co. v. Joslin

United States Court of Appeals for the Ninth Circuit
359 F.2d 396 (1966)

Facts

Pacific Metal Company (Pacific) (plaintiff) was an Oregon corporation. Pacific sold machinery to Edsco Manufacturing Company (Edsco), a business in the state of Washington. The sale contract allowed Pacific to repossess the machinery if Edsco failed to pay for the machinery and allowed Pacific to obtain a deficiency judgment against Edsco for the balance due. Pacific recorded the contract as a conditional sale contract in the state of Washington. Both Pacific and Edsco thought the contract was a valid contract of conditional sale under Washington law. After receiving and using the machinery, Edsco declared bankruptcy. The trustee in bankruptcy was Fairell Joslin (defendant). In the bankruptcy action, Joslin contended that the contract between Pacific and Edsco was void and unenforceable as against Edsco’s other creditors. The district court (acting as a bankruptcy court) accepted Joslin’s contention and ruled that the sale contract was void as against Edsco’s other creditors. Pacific appealed.

Rule of Law

Issue

Holding and Reasoning (Duniway, J.)

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