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title, and interest in and to the equipment to Black Mountain.
Respondent argues that there is no evidence that legal title was
actually transferred to Black Mountain and points out that no
bill of sale was given to Black Mountain.
The parties to the agreement designated that title passed
with the signing of the agreement, and under Kentucky law, the
parties' designation controls. We conclude that legal title
passed to Black Mountain on the execution of the agreement.
2. How the Parties Treated the Transaction
Four A recorded the transaction as a sale in its bankruptcy
filings and ceased taking depreciation deductions related to the
equipment after executing the agreement. Respondent argues that
Black Mountain treated the transaction as a lease and relies on
the testimony of William Phipps, president of Black Mountain, for
this proposition. Mr. Phipps testified that the transaction was
a "lease purchase" and not a sale. However, during cross-
examination, Mr. Phipps admitted that he did not know the
difference between a lease purchase and a sale agreement and that
the purpose in executing the note was to gain ownership of the
equipment. Mr. Phipps also conceded that his partner, Mr.
Donovan, did most of the negotiating with Four A regarding the
equipment.
We find that the parties to the agreement treated the
transaction as a sale.
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