87 FEDERAL REPORTER.
years after the issuance of Groeck's patent, and withiIdeSs than one year after selection was made: The decree will be reversed; and reo mandedt6:lihe circuitcotirt' fot" further proceedings not inconsistent with this' <>pinion: '
RYLE et al. v. KNOWLES LOOM WORKS. (Circuit Court of Appeals, fJlhlrd Circuit. June 29, 1898.)
CONDITIONAL SALES-RIGHTSOB CRBlJITORS.
In Pennsylvania a sale and delivery of personal propertYl with an agree-: ment that the ownership shall remain In the vendor until the purchase price Is paid, Is voJd as to creditors of the vendee and Innocent purchasers; ,and this rule applies, the, form of tjle agreement. Where personal property ,Is delivered under a contract of bailment, accompanied with an agreement for Ii future sale to the bailee on the payment of a certain price, the ownership of the bailor Is preserved, and the transactlonJs valid, even as against the creditors of the bailee iUld innocent purchasers.
CREDITORS-LEASE AS, ,
BAILMENT-RIGH'fS OF CREDITOR. '
In Pennsylvania, a res,ervatlonof title, by a11 instrument in the form of a lease, as security for the: purchase price of personal property sold and delivered, is ,unavailing as against creditors and innocent purchasers; and It matters not that the lease was contemplated from the beginning, and the property delivered in pursuance of that co,ntemplation. In replevin for'machinery sold by the plaintiff,' \vith reservation of title as security for the purchase price, the rights of innocent mortgage bondholders under a mo/:tgage exeouted by the veIldee are available as a defense.
REPLEVIN-DEFENSES-RIGHTS OF MORTGAGE BONOHPLDERS,
In Error to the Circuit Court of the United States for the Eastern District of Pennsylvania. ,,' This was an action of replevin by the Knowles Loom W6rks against William Ryle and others to recover possession of certain machinery. In the circuifcClurt, verdict and judgment were given for plaintiff, and the defendants sued out this writ of error. RobertB. Honej'Wan, for plaintiffs Benno Loewy andJ. M. Rommell, for defendant in error. Before AOHE80N and DALLAS. Circuit Judges, and BRADFORD, District Judge. ACHESON, Oircuit Judge. It is, and long has been, the established rule in Pennsylvania that a sale and delivery of personal property, with an agreement that the ownership shall remain in the vendor until the purchase price is paid, is ineffectual and void as respects the creditors ofthe vendee and innocent purchasers i and the rule applies, whatever may be the form of the agreement. Hltakv. Linderman, 64 l'a. 81. 499 iStadtfeld v. Huntsman, 92 Pa. St. 53 i Thompson v. l'aret,94 Pa.' St. 'Brunswick & Balke Co. v. Hoover, 95 Pa.St. 50S;' Forrest v. Nelson, lOS Pa. Sti'481; Dearborn v. Raysor, 132 Pa. St. 231, 20 At!. 690; Farquhar v.McAlevy, 142 Pa. St. 233,21 Atl. 811; Ott v. Sweatman, 166Pa. St. 217, 31 AtI. 102. But where personal
RYLE V. KN"OWLES LOOM WORKS.
property is deliver,ed under a contract of bailment, accompanied 'with an agreemen.t for a fUture sale to the bailee on the payment of a' certain p!1ice,. the ownership of the bailor is preserved, and the transaction is valid, even as against the creditors of the bailee and purchasers. "Rowe v. Sharp, 51 Pa. St. 26; Enlow v. Kleiu, 79 Pa. St. 488; Printing-Press Co. v. Jordan, 171 Pa. St. 474, 32 At!. 1031. Within which of the two rules does the present case fall? The material facts are these: On March 16,1895, the Cutter Silk Manufacturing Company signed and delivered to the plaintiff in this suit (Knowles Loom and the latter accepted and agreed to, the following written proposal or order:
: "New York, March 16th, 1895. "Knowles'Loom Works-Gentlemen: Please build for us one hundred silk loomS, 35 In; 20 harness 4x4 box, with multiplier and angular drive % each right and left, With Jacquards, 600 hooks rise and fall, three levers; price, two hundred and eighty dollars each. Terms of payment: Notes bearing Interest. 6 per cent. per annum, and maturing twelve months from the average date of delivery, but to be written 'slx months,' for convenience, and renewed as per above. The Knowles Loom Works to own the macblnery until paid for, as per their usual form" and to hold, also, In first mortgage bonds of the Cutter Silk Mfg. Co., fifteen thousand [dollars], as collateral security towards the payment of said notes. Cutter Silk Mfg. Co., "By John P. Cutter, Prest."
In pursuance of the contract thus entered into, the plaintiff delivered to, the Outter Silk Manufacturing Oompany the specified rna· chinery, and the same was set up in the company's mill at West Bethlehem, Pa.; the looms being fastened to the floor by the ordinary leg screws,' and the Jacquards attache'd to the looms. The delivery be· gan early in April. One-half of the machinery was delivered and set up in the mill before May 18th, and all of it was delivered and set up before July 12, 1895, except 18 Jacquards, of the value of $810, which were delivered shortly after the date last mentioned. On May 18, 1895, the Outter Silk Manufacturing Company, executed and delivered its mortgage on its mill, including "all machinery now placed or hereafter to be placed on said mortgaged premises," to the E. P. Wilbur Trust Oompany, in trust to secure an issue of $100,000 of the mortgagor's bonds, payable to bearer; and on May 22, 1895, the mortgagee accepted the trust. The mortgage was duly recorded on May 23, 1895. The price of the entire machinery delivered as above men· tioned by the plaintiff was $29,650. For this sum the Outter Silk Manufacturing Company on July 12, 1895, gave to the plaintiff its promissory notes, namely, its two notes dated July 12, 1895, payable in 30 days, one for $3,650, with interest, and one for $4,000, with interest; its four notes dated July 1, 1895, each for $5,000, payable six months after date, with interest; and its note dated July 1, 1895, for$2,000, payable six months after date, with interest. On the same day these notes were given, namely, July 12, 1895, the plaintiff and the Cutter Silk Manufacturing Company executed the following instrument of writing:
"ArtiCles of agreement made and concluded this first day of .July, A. D. 1895, between the Knowles Loom Works, of Worcester, in the county of and commonwealtbof Massachusetts; of the one part, and Cut87 F.-62
ter 'liUIl!'Mfg;;OOl,'nf of the Part:; ,,1.\ ['bEl said ,W unto' tbesald Co. to wit: ' 35" bo)!: silk loom, wlt1:\: :Ta:cquards; !llano l!lltd.;cuttlng macI:l1ue,' repeater, .and 'press;-for; the period t 'ofione' year from hereof, at a rental or price of twenty-two :ll,nIWp:l; said rE)ntal to be sq.jd, Knp,wles Loom paid 011 or befp,re "tbe first day, Works doth: agr,ej} to make a sale, s/!.).Q.1llacllinery to Co., at any time prior to theexplraHon'(HfthiS' lease; for"the"cash price or sum of twenty-two thousand dollars. provided the herein-reserved rental and Insurance sbaIl' hllvebeen promptly :paid; lalld wlllallow as a'crE)dit on ,such, pure,h"a.se, all, O,f t,he $,.,awreP,t,al ili!O. ',. ',.lll,' il'he ,s,ll-ldCut,ter Si, Mfg. Co. agrees to pay, I!rolllPHy as,they shall"belcoroe,due, said LMm Works, both the said' rental and all expen'BeJl Inc!ttrrea by It during the continuance of tbis lellse,lp, keepiJ;lg said, machinery Insured; to maintain the same In good order and replilrduring sl1ldl 'term; and In the event of any failure to pay the said relit as It becomes due, or at thelerminatloIl of this lease, tG ,immediately sutrender salll n1ll.chlneryto said: Iinowles,Loom Works, Its successors or as-' slgns,'otilllow it or them to retake possession of the same. In wherehereunto set thelr'ba:nds and seals'.the day and year first of, abov'e'written. . , ,Kinowles Loom Works. [Seal.] . .' : "J. M. Russell, Cashier. "Cutter Silk Mfg.,Co. [Seal.] ','Joh.n ,D. Cutter, :prest. "Sealed and delivered In presence of Frll.nkE.
The oral testimony respecting this paper was conflicting. Mr. Stevens, t:b:e',vice the,Cutter Company, testified that a lease was never mentioned July 12, 1895. On the other hand, Mr, MarkOe, who con<lucted the original negotiations on the, part of the ·plai;ntiff,stated. that it was "underMr. Cutter and wyself that a lease would be drawn up tp that and. upon he testified. thus: '
,"x-Q. Was ,the wbrd 'lease' used' between you and Mr.· Cutter, or a suggestion about reservatlonof title? 4,. The question of Jease,.-that the looms were tOtllema1n the property of the Knowles Loom W,orks.untll paid for.By the Court: X-Q. Was it said how? The usual form that our people used for at that 'time. Thent,iIl!',word 'lease' was' mentioned? A. It was." . ., .
The Cutter Silk Oompany paid iUl, two notes at 30 days, at Or the rp.atu;ritytllereof.. Its othe.r raggregating$22,OOO, at roatu'rity The renewal notes were,:IH>tpaid. Onllarch: 1896, the Cutter $ilk Manufacturing COI1lpany ma<ie a voluntary assignment the benefit of its creditors.,:', iBefore this /;lJtleast $45,000 of the bonds secured by the mortgage of May 13, 1895, 'had been negptiated, and were in the' Mods of: bona fide holder$: i'ofyalue. to the bringing of this ,su:it· the defendant Ryle had become the and bolder;of:these,bonds,and he bad also purchased the equity of redemption in the mortgaged premi,sef:\ from thevolAAtl:1-!-'y assignee, and- he was,in,ptlssession of tbemiU.and machinery when the writ of , .. . replevin 'issued. :I ' ; " The court below instructed the jury, as matter of law, that the trllnsaction between the plaintiff and the Outter Silk Manufacturing Company respecting this machinery wag a bailment, and, therefore, that the plaintiff had a right to recover the value of the machinery in this
RYI,E V. KNOWLES LOOM WORKS.
action. The only question SUbIilitt'ed to the jury was that of value. We are now to determine whether these instructions were correct. In our treatment of this case, we naturally begin with the paper of March 16, 1895, showing the original contract relating to this maSubstantially the whole of the machinery was delivered on the footing of that paper alone. It was the only contract on the subject in existence when the trust mortgage took effect. Now, the paper of March 16th fixed the purchase price of the machinery, and the terms of payment. Interest-bearing notes were to be given and received in payment; and, what is very significant, the Knowles Loom Works was to take and hold $15,000 of the mortgage bonds of the Outter Silk Manufacturing Company as collateral security for the payment of the notes. These provisions, we think, plainly import a sale of the machinery. The stipulation that the Knowles Loom Works was "to own the machinery until paid for" seems to us to negative the idea that the parties had in view a bailment (Summerson v. Hicks, 134 Pa. St. M6, 569, 19 Atl. 80S); for, upon a bailment, ownership remains in the bailor, as of course. This stipulation im'plies. a sale with a reservation of title, to secure the purchase price. A lease is not named in the paper. If, however, the words "as per their usual form" are referable to a lease, they must be read in .connection with the context: "The Knowles Loom Works to own the machinery until paid for, as per their usual form, and to hold, also, in first mortgage bonds of the Cutter Silk Mfg. Co., fifteen thousand [dollarsJ, as collateral security towards the PFtyment of said notes." If a lease was here contemplated, undoubtedly it was a lease to secure the purchase price of the machinery. The oral testimony put no different face upon the matter. But it is the declared law of Pennsylvania that a reservation of title, by an instrument in the form of a lease, as security for the purchase price of personal property· sold and delivered, is unavailing as against creditors and innocent purchasers; and it matters not that the lease was contemplated from the beginning, and the property was delivered in pursuance of that contemplation. Bru.nswick & Balke Co. v. Hoover, supra; Farquhar v. McAlevy, supra. In Oooper v. Whitmer, 6 Atl. 571, the supreme court of Pennsylvania said:
'The word 'lease' being by common consent part of the written contract of the parties, the case comes dearly within the ruling of this court in Brunswick & Balke Co. v. Hoover. 95 Pa. St. 508. The agreement Is, beyond doubt, a sale of the property, with a provision for a lease security which was good enough between the parties, but worthless as against creditors."
In Farquhar v. McAlevy, as in Brunswick & Balke Co. v. Hoover, the lease was stipulated for in the original contract, which, as here, was in the form of an order for machinery. We find nothing in what was done on July 12, 1895, to change the complexion of the case. Evidently the short-time notes for $7,650 were given and taken. on account of the purchase money of the machinery. It is idle to suggest that tqese notes represent rent. They were not embraced in the so-called lease executed that day. That instrument .cQveredonly the balance of the purchase price, namely, $22,000,· for which the other notes were given. The paper calls for
"a, -:eptal or price of twenty-two thousand dollars per annum." . This was in name, but price in fact. The leaSe ran for a s,ingle and this large lump. S1.lIn .waS to be paid at the end of the before. Regarding the two instrUments ?f March. and as parts of one and the $ame transactlOn.-wh1ch IS the mOljlt favot',able view that can be taken for the Knowles Loom Works, ,.......the. cQnclUsion is irresistible that .the transaction was not a bailment, but a sale, of the machinery, witp. a lease security for the price. Whe case is not distinguishable from tbose of Brunswick & Balke Co. V. lIoover, Coopel' v. Whitmer, and Farquhar v. McAlevy, supra. In Summerson. v. Hicks, supra, the parties,under date of October 31, 1885, signed the following paper:
"This is to certify that I have this day Jeased to John Summerson 1 pair ,of dark-bay horses, for the sum of ope hundred and twenty-five dollars, to be paid by the first of April, 1886; and In case the said John Summerson shall fall to make such payment as above agreed, to me (Mary Hicks), then I shall have full and free possession ot said horse team; and it is further agreed that the ownership shall remain in hands of Mary Hicks until payment Is made in full."
Concerning this paper the supreme court of Pennsylvania, speaking by Mr. Justice Mitchell, said: '
"It Is called a lease, butU Is manifestly a sale. No term Is stipulated for the hiring, or any rate per month or per annuin. On the contrary, it is merely said that the horses are leased for a lump sum of one hundred and twenty-five dollars. But what Is conclusive of the character of the transaction, is the stipulation that 'the ownership shall remain in Mary Hicks until payment is made In fulL' If it was merely a hiring, the ownership would have remained in Mrs. Hicks all the time, without any such stipulation."
All the indicia of a sale here commented on are present in this case, taking into account the two papers of March 16th and July 12th. The authority of the decisions upon which 'we base our judgment is not in any degree shaken by the case of Printing-Press Co. v. Jordan, 171 Pa.St. 474, 32 Atl. 1031. There, while the original intention of the parties was to make a sale, yet, before their purpose was consuI\1mated, and when the first. agreement still remained wholly executory, it was superseded by a c.ontract of bailment. The printing press had not been delivered or accepted,put had been set up for trial, merely. No intervening rights had sprung up, and the parties were entirely free to contract with respect to the press. Here the facts are essentially different. As we have seen, the great bulk of the machinery was delivered and accepted under the first contract, and the property had become subject to the trust mortgage before the second instrument was executed. To the amount. of $45,000 of the mortgage bonds, the defendant William Ryle is cl'othed with the rights of the original bona fide Who took them, it would seem, free from notice of the alleged lease. Portet'v. Steel Co., 122 U., S. 267, 283, 7 Sup. Ct. 1206. As against the inb.ocent mortgage bondholders, and those claiming under the mill of this machinery and ,them, the plaintiff had no right carry it away. Undoubtedly tM rights of the mortgage bondholders are available as a defense here. In replevin a plea of property puts 'tpe plaintiff to proof of title in himself, and his right toexclm:"ye pos· '...' · · J' .\ ,
IN BE BLOCH.
session. Reinheimer v. Hemingway, 35 Pa. St. 432,438; Mathias v. Sellers, 86 Pa. St. 486, 492. The judgment is reversed, and the cause is remanded to the circuit court, with direction to set aside the verdict and grant a new trial
In re BLOCH. (DIstrict Court, W. D. Arkansas.
March 18, 1898.)
HABEAS CORPus-ARREST FOR EXTRADITION-IDENTITY OF PRISONER.
In habeas corpus proceedings for the discharge of a prisoner held under an extradition warrant issued by the governor of a state, the question of the prIsoner's identity cannot be raised by demurrer to the return of the officer to the writ.
SAME-RECITALS IN EXTRADITION WARRANT-BuRDEN OF PROOF.
In habeas corpus proceedings for the discharge of a prisoner held under an extradition warrant issued by th,e governor of a state in conformity with the requirements of the act of congress, a recital in the warrant that the prisoner is a fugitive from jUstice will be taken as true until overcome by satisfactory proof. Where one has left the state In which he Is Indicted for a crime, he Is a fugitive from justice, in the sense of the act of congress relating to the extradition of criminals, whatever may have been his motive in leavhig the state. In habeas corpus proceedings for the discharge of a prisoner held under an extradition warrant issued by' the governor of a state, the federal court will not consider or pass upoll any matters of defense to the Indictment upon which the extradition Is 'based, nor a charge that the requisition proceedings are instigated by maBce, and intended to annoy and harass the petitioner.
EXTRADITION-FUGITIVE FROM JUSTICE.
SAME-HABEAS CORPUS PROCEEDINGS-MATTERS CONSIDERED.
Hill & Brizziliara, for petitioner. Haynie R. Pearson and Read & McDonough, for People of State of Illinois. ROGERS, District Judge. The petitioner sued out a writ of habeas corpus for his release from the arrest of T. W. Bugg, sheriff of Sebastian county, Ark., and his deputies, and one Frank Tyrrell. The said sheriff, having said Bloch in custody, filed his response to the writ, alleging, in substance, that he had arrested the defendant and beldhim in custody under a writ issued by the governor of Arkansas, commanding him to arrest the said Abe Bloch for a crime under the laws of the State of Illinois, known as "confidence game," the said warrant for the arrest of the said Abe Bloch being issued by the governor of the state of Arkansas upon demand by the governor of the state of Illinois, the said demand being accompanied by a copy of the indictment against the said Abe Bloch, which indictment was duly authenticated, all of which is shown in said warrant, which is thereto attached, and the said Abe Bloch being a fugitive from justice from the said state of Illinois, which is also shown by the said warrant thereto attached, and that he holds the said Abe Bloch in obedience to the said warrant, ready to be turned over and delivered to the agent of the state of Illinois,