182 F. 603 | 3rd Cir. | 1910
Lead Opinion
These appeals are from orders dismissing the petitions of appellants for the reclamation of certain articles of personal property in the possession of the bankrupt’s trustee. The articles were delivered to the bankrupt under the terms of certain written contracts, which the appellants insist were bailments for hire, and which the appellees insist were conditional sales. If any of the contracts be a bailment, the property delivered under it should be restored to the appellant whose contract is so construed; if any of them be a condL tional sale, it is conceded! that the property delivered under it belongs to the bankrupt’s trustee. ' The facts are so fully stated in the opinion of the court below (see In re Rinker [D. C.] 174 Fed. 490) that they need not be repeated here.
As to case No. 55 — the National Cash Register Company’s Case— we agree with the conclusion of the court below. The contract in that case expressed no term for the bailment and no time when the cash register was to be surrendered by the bankrupt to the cash register company. It fixed the value of the register at $620, admitted a credit of $205, and provided for the payment in installments of the remaining $4Í5. True, the remaining $415 is denominated “rental,” and there is other language in the contract appropriate to a bailment for hire; but, read as a whole, we think the contract is one of sale and not a bail
We also agree with the conclusion of the court in case No. 52, in which an ice cream apparatus was delivered by the Diquid Carbonic Company to the bankrupt. Although one of the Diquid Carbonic Company’s blank printed leases was used in preparing the contract, such changes were made in it as to show that the contract was one of sale and not a bailment. The decree as to this case is also affirmed, with costs.
In case No. 54 we find an order, dated July 1,1908, addressed by the bankrupt to the Diquid Carbonic Company, requesting that company to ship to him a soda water apparatus, fully described in the order. In the upper left-hand corner are the words “Sold by Hawkins,” and in the margin, under the heading “Prices,” are entries showing the value of the apparatus to have been $2,227.75, and a credit of $498.50 for a secondhand apparatus, leaving a balance, termed “net price,” of $1,-729.25. Then follows language by which the bankrupt declared that he leased the apparatus from the company for the term of 36 months for a total rental of $1,729.25, payable in designated installments. Further on is this language:
“At the expiration of the term of this lease we agree to surrender to you all the property herein described, in good condition, or, at our option, to purchase the same upon the further payment to you of one dollar; upon which payment you are to execute and deliver to us a bill of sale covering said property. No title to said property to vest in us, except as lessees thereof, until the execution of such bill of sale.”
This order was accepted by the company. Its full text will be found in 174 Fed. 494-496. We differ with the court below in its construction of this contract. The language employed by the parties shows that they intended to create a bailment with a right in the bailee to become a purchaser at the end of the definite term prescribed for the bailment. The words “Sold by Hawkins,” in the upper left-hand corner, and the gross price, allowance for the secondhand apparatus and net price, given in the margin, are separated from the body of the order by lines, and constitute no part of the real contract between the parties. The provisions that the apparatus should be “leased” to the bankrupt, for a specified term and a specified rental, and that at the expiration of the term it should be surrendered to the company, are the indicia of a bailment. The cases of Farquhar v. McAlevy, 142 Pa. 233, 21 Atl. 811, 24 Am. St. Rep. 497, Kelly Road Roller Co. v. Spyker, 215 Pa. 332, 64 Atl. 546, In re Tice (D. C.) 139 Fed. 52, and In re Morris (D. C.) 156 Fed. 597, referred to in the opinion of the court below, differ from the present case in that in none of them was surrender by the party in possession required, nor in some of them was any term of bailment expressed. Following the decisions in Rowe v. Sharp, 51 Pa. 26; Crist v. Kleber, 79 Pa. 290; Enlow v. Klein, 79 Pa. 488; Ditman v. Cottrell, 125 Pa. 606, 17 Atl. 504; Stiles v. Seaton, 200 Pa. 114, 49 Atl. 774; Cincinnati Equipment Co. v. Strang, 215 Pa. 475, 64 Atl. 678; American Car Co. v. Altoona, etc., Railway Co., 218 Pa. 519, 67 Atl. 838; Kelly Springfield Road Roller Co. v. Schlimme, 220 Pa. 413, 69 Atl. 867, 123 Am. St. Rep. 707; and National Cash
Our conclusion is the same as to case No. 58, in which the Liquid Carbonic Company delivered to the bankrupt certain carbonating machinery. The contract is similar to the one under which the soda water apparatus was delivered in case No. 54. It is unnecessary to. say more. The decree as to this contract should also be reversed, with costs.
Decrees as to cases Nos. 52 and 55 affirmed,- with costs. Decrees as to cases Nos. 53 and 54 reversed, with costs.
Concurrence Opinion
In cases Nos. 52 and 55 of the Liquid Carbonic Company and of the National Cash Register Company against the trustee of the estate of Harry Rinker, bankrupt, relating respectively to certain ice cream apparatus and a cash register, I fully concur in the opinion and conclusion of the court. In cases Nos.- 53 and 54 of the Liquid Carbonic Company against the above mentioned defendant, relating respectively to a carbonatar and a soda water fountain, I do not concur in the reasoning of the court and with extreme reluctance concur in its conclusion. In No. 53 .the instrument, which the court holds to embody a bailment of the car-bonatar and an option on the part of the bailee to purchase the same, and not a conditional sale, contains in the upper left hand corner the words “Sold by Hawkins,” and on the right hand side of and half way, down the .sheet under the word “Prices” the following: “Total consideration $2227.75. Less allowance for 2d hand apparatus $498.50. Net price $1729.25.” The “rental” is fixed at the identical amount of the “Net price,” payable in thirty-six months as follows: By honoring the sight draft or other demand of the Liquid Carbonic Company for $329.25, and the balance in monthly instalments of $40 each. The instrument also contains, among others, the following provisions:
“We also agree, upon receipt or tender of goods or bill of lading for tbe same, to execute and deliver promissory notes, as collateral security for said deferred payments of rental bearing interest from date at tbe rate of six per cent, per annum. At tbe expiration of tbe term of tbis lease we agree to surrender to you all tbe property herein described, in good condition, or, at our option to purchase tbe same upon tbe further payment to you of $1. s ⅜ * Should we fail to * ⅜ * execute said notes, or default in tbe payment of tbe rent for any month when tbe same falls due, * * * then, or in either of said cases, ,the full amount of rent for balance of term shall forthwith become due and payable, anything in said notes to tbe contrary notwithstanding. Should any such default be made, you, or your agent or attorney, may, without process of law enter upon our premises, and take possession of and remove said property.”
■In case No. 54-the instrument mutatis mutandis is similar to that in No. 53. These instruments are transparent attempts by mere indirection to avoid the consequences of the rule based upon a supposed public policy, judicially established in Pennsylvania at an early day, denouncing conditional sales as constructive frauds upon bona fide creditors and purchasers. No sensible man would agree to pay. for the mere use and enjoyment of the carbonatar or the soda water fountain
