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BAILIS v. RECONSTRUCTION FIN. CORP.

May 9, 1941

BAILIS et al.
v.
RECONSTRUCTION FINANCE CORPORATION



The opinion of the court was delivered by: KALODNER

The issues having been brought to trial before me without a jury on amended complaint and answer, I make the following

Findings of Fact

 1. During the year 1936, the plaintiffs were engaged in the scrap metal business in the City of Philadelphia.

 2. The defendant is a corporation duly organized and existing under and by virtue of an Act of Congress of the United States of America, 15 U.S.C.A. ยง 601 et seq., with agencies in the States of New York, Pennsylvania and elsewhere.

 3. During the year 1936, C.K. Eagle & Company, Inc., owned various parcels of real estate, machinery and equipment located in various cities in the Commonwealth of Pennsylvania, including an industrial plant and the machinery and equipment therein, located in the City of Phoenixville.

 4. during the year 1936, the defendant was the owner and holder of two recorded blanket mortgages made by C.K. Eagle & Company, Inc., to it, the first in the sum of $500,000 and the second in the sum of $250,000, each of which mortgages were liens upon the fixed assets of said C.K. Eagle & Company, Inc., including the said property in the said City of Phoenixville, Commonwealth of Pennsylvania.

 5. During the year 1936, the said Phoenixville plant of C.K. Eagle & Company, Inc., was also encumbered by a recorded mortgage held by the National Dime Bank of Shamokin, which was a first lien thereon.

 6. That by resolution of defendant's Board of Directors adopted on April 27, 1936, the defendant authorized the Federal Reserve Bank of New York, its custodian, to release from the lien of defendant's mortgage, surplus manufacturing machinery located at the said Phoenixville plant of C.K. Eagle & Company, Inc., upon receipt by it of

 (a) The entire sales price, less commissions and necessary expenses of sale.

 (b) Written statement of the manager of the New York Loan Agency that he had received a written request from C.K. Eagle & Company, Inc., for the release of the machinery and equipment.

 (c) A certification of agency manager that the sale price was reasonable and in all respects satisfactory to him.

 (d) A written opinion of counsel to the New York Loan Agency that none of the defendant's rights would be destroyed, limited or otherwise affected by the sale, except as permitted by the resolution.

 7.Said resolution adopted by the Board of Directors of the defendant did not contemplate or authorize the sale of real estate or any integral part thereof.

 8. Said resolution adopted by the Board of Directors of the defendant did not contain a consent to or approval of the hiring of Edward M.-P. Murphy or Industrial Plants Corporation.

 9. C.K. Eable & Company, Inc., engaged Edward M.-P. Murphy as its special agent for the purpose of liquidating surplus manufacturing machinery located at said Phoenixville plant.

 10. Defendant was thereafter furnished with a copy of a list of machinery intended to be sold by Edward M.-P. Murphy from and out of the Phoenixville plant of C.K. Eagle & Company, Inc.

 11. Edward M.-P. Murphy and Industrial Plants Corporation were not the agents or sub-agents of defendant and they did not purport to act for the defendant or on its behalf.

 12. On or about August 20, 1936, Industrial Plants Corporation accepted in writing an offer by the plaintiffs to it for the purchase of pipe, power house, boilers, railroad siding, motors, new boiler tubes, pick wheels, lamp shades, beams and tools located at the industrial plant of C.K. Eagle & Company, Inc., in Phoenixville, Pennsylvania, for the sum of $4,000 cash.

 13. The said writing addressed and directed by Industrial Plants Corporation to the plaintiffs, among other things, provided "that all the merchandise and material purchased by you is bought 'as is' -- 'where is' -- as inspected without warranty or guaranty * * *".

 14. The representation made by Edward M.-P. Murphy to plaintiffs was that he was acting as agent for C.K. Eagle & Company, Inc., in the disposition of the machinery and equipment.

 15. The list of the machinery intended to be sold by Murphy and referred to in finding No. 10 did not include all of the property mentioned in the contract of purchase between plaintiffs and Industrial Plants Corporation.

 16. Plaintiffs made no inquiry of defendant or National Dime Bank of Shamokin prior to the payment by them of the purchase price to Murphy, as to whether defendant or said bank would release the property from the lien of their respective mortgages.

 17. On or about said August 20, 1936, plaintiffs paid to said Edward M.-P. Murphy the sum of $4,000, being the amount of their bid.

 18. Thereafter said Edward M.-P. Murphy paid over to C.K. Eagle & Company, Inc., by his check, sums of money which included an amount representing the said purchase price of $4,000 less 10 per cent commission.

 19. On or about September 8, 1936, C.K. Eagle & Company, Inc., paid over to the defendant, by its check drawn on its general bank account, the sum of $6,300 and advised defendant that the amount so paid represented the net proceeds of sales of surplus equipment under the resolution adopted by the defendant on April 27, 1936, and further advised defendant that $3,600 thereof represented the proceeds for the sale of "Pipe, Power House, Boilers, Railroad Siding, Motors, New Boiler Tubes, Pick Wheels, Lamp Shades, Beams and Tools located at Phoenixville Plant". Said C.K. Eagle & Company, Inc., ...


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