Before LUMBARD, Chief Judge, and WATERMAN and HAYS, Circuit Judges.
The appellant Ex-Cello Corporation brought a reclamation proceeding in the bankruptcy court for the recovery of the sum of $15,296.37 which constituted the proceeds of a sale, pursuant to order of the court, of a Staude window patch gluing machine, with attachments, originally sold by appellant to the bankrupt on a conditional sales contract. The appellee bank asserted its right to the same sum under a chattel mortgage on the same machine. The referee and district court were asked to determine which of these secured creditors had prior claim to the proceeds of the sale of the machine. The referee and district court held for the bank. We set aside that judgment and remand the case to the district court.
It is uncontroverted that the bank's chattel mortgage, which included the machine in its list of secured property, was filed on June 25, 1962, in the office of the county clerk of Oneida County. A search of the files of the county clerk at the time of this filing revealed no indication of any prior encumbrance on the machine. The files contained no record of Ex-Cello's conditional sales contract because that contract was not accepted by the clerk for filing, recording and indexing until four days later, June 29, 1962. Ex-Cello's claim depends on its contention that its earlier attempt to file must be held for purposes of priority to have been equivalent to an actual filing, although the county clerk wrongfully refused to accept the contract for filing.
The evidence before the referee shows that by letter from Detroit, Michigan, dated June 12, Ex-Cello inquired of the county clerk about filing procedures. This letter was returned with an undated endorsement informing Ex-Cello that the fee for filing a conditional sales contract was fifty cents and that a conditional sales contract for property in Utica, New York, should be filed with the Oneida county clerk. This endorsement was identified by the deputy county clerk at the trial as having been typed in the clerk's office. Ex-Cello sent the contract and a check for fifty cents with a covering letter dated in Detroit on June 20, requesting evidence of filing. Again the clerk's office returned the letter to ExCello in Detroit with the two enclosures and the following undated endorsement: "Miles H. Knowles/nt
"We are returning the contract for a notarial certificate from the County Clerk of the County of Wayne to be attached to the last sheet of the contract. This will have to be taken care of before it can be filed in this office.
The deputy county clerk testified that it was normal office procedure not to time-stamp any correspondence that was not accepted for filing, but that this letter must have been received on or about June 21. He based his testimony on the date of the June 20 letter from Ex-Cello. The notarial certificate requested was dated June 27 in Detroit and the clerk's office time-stamped the contract for filing on June 29, 10:09 A.M.
The referee and the district court considered it unnecessary to determine when the letter dated June 20 was received by the county clerk because they held that, since the bank's instrument was accepted for filing before Ex-Cello's, the bank had priority. This holding was based on an erroneous view of the governing New York law and must therefore be reversed.
Section 65 of the New York Personal Property Law*fn2 provides:
"Every provision in a conditional sale reserving property in the seller shall be void as to any purchaser from or creditor of the buyer, who, without notice of such provision, purchases the goods or acquires by attachment or levy a lien upon them, before the contract or copy thereof shall be filed as hereinafter provided, unless such contract or copy is so filed within ten days after the making of the conditional sale. This section shall not apply to conditional sales of goods for resale."
Section 70 prescribes the method of "Filing, entering [or recording] and indexing" conditional sales contracts. It reads: "The filing officer shall mark upon the contract or copy thereof filed with him the date and hour of its filing and shall file such contracts or copy thereof in his office for public inspection."
Under these statutes the inquiry is as to what constitutes "filing." In the light of the extensive body of relevant law on analogous New York filing statutes, we hold that presentation of a conditional sales contract together with the required filing fee constitutes filing for the ...