Aircraft Investment Corp. v. Pezzani & Reid Equipment Co.

LEVIN, Chief Judge.

This diversity action poses the classic problem of a dispute between a mortgagee of certain goods and the purchaser of these goods at retail from the insolvent mortgagor.

In April 1960, defendant, Pezzani & Reid Company, a Michigan corporation, ordered a new airplane from the now bankrupt Air-O-Fleet Corporation, a Michigan retailer of airplanes. The defendant paid on account a sum in cash. The balance of the purchase price was the agreed value of the defendant’s airplane, which was to be turned over to Air-O-Fleet upon delivery of the new airplane. Air-O-Fleet Corporation…