In re Fabers, Inc.
United States District Court for the District of Connecticut
12 U.C.C. Rep. Serv. 126 (1972)
The Dealer (plaintiff) allowed Fabers (debtor) to sell its rugs under an agreement retaining title in the Dealer, requiring Fabers to hold sale proceeds "in trust," and placing the risk of damage or loss on Fabers, while a joint newspaper ad announced a "distinctive collection" of the Dealer's rugs without clarifying that the Dealer retained title; both parties believed this was a true consignment exempt from Article 9's security-interest filing requirements, but the Dealer never made any UCC filing. When Fabers went bankrupt, the Dealer petitioned to recover the rugs as its own property under the consignment arrangement.
Whether a consignor has an automatic security interest in consigned property against outside creditors of the consignee.