Chilberg v. Smith

• Decision Date: 06 December 1909
• Docket Number: 1,748.
• Citation: 174 F. 805
• Parties: CHILBERG v. SMITH. In re AMERICAN MACH. WORKS.
• Court: U.S. Court of Appeals — Ninth Circuit

174 F. 805

CHILBERG v. SMITH.

In re AMERICAN MACH. WORKS.

No. 1,748.

United States Court of Appeals, Ninth Circuit.

December 6, 1909

Frank E. Hammond and A. J. Tennant, for petitioner.

Daniel Landon, for respondent.

Before GILBERT and MORROW, Circuit Judges, and HUNT, District Judge.

GILBERT Circuit Judge (after stating the facts as above).

The question presented on the petition is the construction to be placed upon section 4585, Ballinger's Ann. Codes & St Wash. (section 6547, Pierce's Code), which provides that:

'All conditional sales of personal property or leases thereof containing a conditional right to purchase, where the property is placed in the possession of the vendee, shall be absolute as to the purchasers, incumbrancers, and subsequent creditors in good faith, unless within ten days after taking possession by the vendee, a memorandum of such sale, stating its terms and conditions, and signed by the vendor and vendee, shall be filed in the auditor's office of the county wherein, at the date of the vendee's taking possession of the property, the vendee resides.'

The petitioner contends that the purpose of the statute is to give notice to persons who might become creditors of the vendee, and that, inasmuch as the memorandum of the conditional sale was recorded prior to the time when any of the creditors of the bankrupt extended credit, they are charged with constructive notice of the rights of the vendor and were therefore not subsequent creditors in good faith within the terms of the statute.

Ordinarily, certain instruments, such as deeds and mortgages, may be recorded at any time after their execution, and the record will be effective as against all claims attaching subsequently, unless there have been such circumstances and unreasonable delay as to constitute laches, and ordinarily statutes in regard to the registration of such instruments, while requiring that they be filed within a certain time, are not to be so construed as to render them void as to subsequent lienors with notice if not so recorded. But the statute of Washington, in regard to the registration of conditional sales, declares the policy of the state in regard to agreements, whereby a vendee of personal property so sold is placed in the possession thereof with all the apparent indicia of ownership, and it clearly provides that, unless the instrument be recorded within 10 days from the delivery of the property to the vendee, the sale shall be absolute as to subsequent creditors in good faith.

The period of 10 days thus provided is the limit of the time within which the right to continue to hold, as conditional as to all the world the sale of personal property, may be exercised. At the end of that time, it no longer exists, and subsequent creditors are not required to examine the records to ascertain whether the vendor retains the title to the property. The statute was evidently enacted in view of the common-law rule that the title to property passes by delivery of possession, and possession is evidence of ownership, and the intention of the Legislature is clearly expressed, that all conditional sales of personalty shall be absolute as to subsequent creditors and lienors unless the provisions of the act are strictly complied with.

Cases in point are Bugbee v. Stevens, 53 Vt. 389, and In re Bosch (D.C.) 121 F. 602. The petitioner cites Sayward v. Nunan, 6 Wash. 87, 32 P. 1022, as affording a construction of a similar statute of the state. In that case the court said that the failure to record the bill of sale within 10 days would protect only such parties as had...