In re ROBERTS. SMITHSON v. EMMERSON, 166 F. 96

PER CURIAM. Appellant Smithson admits that his alleged lien is not good unless possession of the property was actually or constructively delivered to him before the bankruptcy of Roberts intervened. Further admitting that there was no actual delivery, counsel contends that a good constructive delivery of possession to Smithson was consummated by Roberts’s delivery of the lien instrument to Smithson, followed by Roberts’s notice to the Monarch Refrigerating Company that it should hold the property for Smithson, subject to its own possession and liens.

But appellant is not in a position to require us to examine that contention and determine its soundness or unsoundness. No positive and unequivocal notice was given to the Monarch Company that it should hold the property for Smithson, subject to its own possession and liens.

When the Monarch Company demurred, Roberts apparently acceded to the Monarch Company’s position that its consent was necessary to a valid transfer from Roberts to Smithson, and “pocketed the paper, saying, ‘Let it pass,’ and left.” It is contended by appellant that the receiver should have sold the butter and eggs separately to satisfy the lien of each collateral note out of the property described in the warehouse receipts to which the note referred. One of the notes held by the Monarch Company for $5,000 was for butter and eggs held in storage by the Monarch Company, without specification of case or car numbers.

The evidence sustains the view that this note was given as a pledge in gross of all eggs and butter stored with the Monarch Company. The terms of the order empowering the receiver to “sell at public or private sale within his discretion, at current rates, without notice,” to which order the appellant assented, was broad enough to justify a sale in bulk of perishable property, after the receiver had offered the property for sale in car load lots.

IJie allowance of fees and expenses of the receiver is questioned on the ground that the receiver did not literally follow the order of the court to pay Smithson, as a lienholder, the prima facie amount of his asserted lien out of the proceeds of sale, and on the assumption that the receiver was guilty of gross misconduct in selling the property in bulk instead of in lots.

We conclude that under the circumstances of this case there was no misconduct of the receiver either in selling the property in bulk, or in failing to pay to Smithson money which it would be the duty of the court to order repaid by Smithson to the trustee for distribution to the general creditors. The decree below is affirmed.