Reference no: EM131630777

Bertha lives in Beulaville, North Carolina, where she owns and operates a retail store specializing in the sale of clothing and toys for young children. In July, 1985, a representative of Ace Doll Company of Asheville, North Carolina, persuaded Bertha to accept fifty dozen of their Turnip Patch Dolls on consignment with the understanding that after six months, all unsold dolls would be taken back in lieu of payment.

A memorandum setting forth the essential terms of their agreement was signed by both parties and the dolls were promptly delivered. Bertha's business languished and not long afterwards the Bank of Beulaville obtained a judgment against Bertha in the amount of $ 15,000 for nonpayment of an unsecured promissory note. Execution was issued on the judgment and the Sheriff levied upon all of Bertha's inventory, including forty of the original fifty dozen Turnip Patch Dolls which had not been sold. The Ace Doll Company seeking to recover the unsold dolls, contends that its business relationship with Bertha is one of true consignment and points to the memorandum agreement with Bertha which clearly provides that title to each doll is to remain in the consignor until sold by the consignee. The Bank of Beulaville had no knowledge that Bertha sold goods on consignment. Q: Between Ace and Bank, who has superior claim?