In re Landis

• Decision Date: 05 March 1907
• Docket Number: 2,338.
• Citation: 151 F. 896
• Parties: In re LANDIS.
• Court: U.S. District Court — Eastern District of Pennsylvania

151 F. 896

In re LANDIS.

No. 2,338.

United States District Court, E.D. Pennsylvania.

March 5, 1907

Joseph R. Dickinson, for trustee.

Rieser & Schaffer, for claimant.

J. B McPHERSON, District Judge.

The undisputed facts appear in the following extract from the referee's certificate:

'On Tuesday August 22, 1905, Landis saw Cleaver in Reading, and said he needed a pair of horses. Quoting from the testimony of Cleaver, he replied: 'I have just the horses for you. I sell them on good faith, and, if you buy the horses if you want them, you can take them and try them, and, if they do not prove satisfactory to you, you are not supposed to keep the horses.' On those conditions Landis took the horses. Cleaver testified: 'He never made much fuss when he bought anything. He said, 'Send them out to my place here in Reading. ' I sent the horses next morning. One of my men down at the stable took them up. I delivered them at Landis' place here in Reading.' Cleaver, when asked the question, 'On the night when you made this sale to Landis, did you agree on a price?' replied, 'Yes, sir; $380. Landis said, if the horses proved all right, he would keep them. Landis never made any fuss. That way I sold him lots of horses. Q. You would do it in the same way you sold them heretofore? A. Yes, sir; he usually took the horses home, and when he came to Reading again he would stop in to see me, or I would send him a letter that I wanted to know how the horses were doing, and he would give me a note, as a rule. We always had a note. Q. He would always let you know whether they were satisfactory or not? A. Yes, sir. Q. There was no time fixed in which he was to return them? A. No, sir.'

'Charles Landis, the bankrupt's son, testified: 'My father said he bought a nice pair of horses from Cleaver if they were satisfactory, and they were coming out on trial. My father never tried them. He said that the pair of horses was given on trial. Q. He stated that he bought the horses from Cleaver? A. He said that he bought them from Cleaver, and, if they were satisfactory he would keep them. He was going to give them a trial. It was always the custom to return horses if they were not satisfactory. Father went away Thursday or Friday, when the horses were got Tuesday evening, and delivered Wednesday. My father never said they were satisfactory.'

'From the record and testimony taken, the referee finds the following facts: On August 22, 1905, Cleaver entered into an agreement to sell to Landis two horses for $380. Cleaver sent them to Landis' place in Reading on August 23d, from whence Landis took them to his farm at Bowers. Landis was to try them, and, if he found them satisfactory, he was to keep them. Otherwise he was to return them to Cleaver. Cleaver and Landis had had many similar transactions. It was always the custom to return horses if they were not satisfactory. Landis would take or have horses sent home and try them, and would soon after come to Reading and see Cleaver, and, if he found the horses satisfactory, would give him a note in payment. On August 24th or 25th Landis absconded, and on August 29th creditors filed their petition to have Landis adjudged a bankrupt. C. D. Kutz was appointed receiver, pending the election of a trustee. On August 30th Cleaver, having received word of Landis' disappearance and the bankruptcy proceedings, went to Bowers, and against the will of the receiver removed the horses from Landis' stables and brought them to Reading. Landis had never tried the horses and as his son, Charles, says, they had not been harnessed while in his possession. They were in the actual possession of Landis and his trustee seven days.'

Upon these facts the referee was of opinion that the controversy between Cleaver and Landis was a contract of sale, but that delivery was not complete, and therefore that title did not pass in favor of the bankrupt's creditors. He accordingly refused to make the order prayed for by the trustee, and this refusal is now before the court for review.

I regret to differ from the learned referee, but I am constrained to do so on two grounds: The first is that the horses were in the actual custody of the District Court, acting by its receiver, and that Cleaver's conduct in taking them away by force was wholly without warrant. This wrongful removal might have been summarily redressed, and the order asked for by the trustee might have been granted for this reason alone. As was said in White v. Schloerb, 178 U.S. 548, 20 Sup.Ct. 1009, 44 L.Ed. 1183:

'We are of opinion that the judge of the court of bankruptcy was authorized to compel persons who had forcibly and unlawfully seized and taken out of the judicial custody of that court property which had lawfully come into its possession as part of the bankrupt's property to restore that property to its custody; and therefore our answer to the first question must be: 'The District Court sitting in bankruptcy had jurisdiction by summary proceedings to compel the return of the property seized."

On the merits, also, which both parties agreed should be passed upon by the referee, the order should have been granted. As I look at the testimony, it presents a case of sale or return, and, where the transaction is of this character, the American rule is clear-- whatever may be the prevailing doctrine in England-- that the title passes to the vendee subject to be divested if the option to return should be exercised. In Mr. R. M. Benjamin's General Principles of the American Law of Sales (2d Ed.) pp. 80, 81, the result of our own cases is thus stated:

'Rule 23. (Subrule 4.) When goods are delivered to the buyer on a contract of 'sale or return' (1), the property therein passes immediately to the buyer, defeasible by a return of the goods within the time fixed for their return, or, if no time has been fixed, within a reasonable time (2).

'(1) That is to say, sale to the one to whom they are delivered or return.

'(2) Hotchkiss v. Higgins, 52 Conn. 205, 211, 52 Am.Rep. 582; Moss v. Sweet, 16 Q.B. 493; Jameson v. Gregory's Ex'r, 4 Metc. (Ky.) 363; March v. Wickham, 14 Johns. (N.Y.) 167; Westcott v. Thompson, 18 N.Y. 365; Buswell v. Bicknell, 17 Me. 344, 35 Am.Dec. 262; Ray v. Thompson, 12 Cush. (Mass.) 281, 59 Am.Dec. 187; Martin v. Adams, 104 Mass. 262; McKinney v. Bradlee, 117 Mass. 321; Schlesinger v. Stratton, 9 R.I. 578; Robinson v. Fairbanks, 81 Ala. 132, 1 So. 552; Stevens v. Hertzler, 109 Ala. 423, 19 So. 838; Hadfield v. Berry, 28 Ill.App. 376; In re Ward's Estate, 57 Minn. 377, 59 N.W. 311; Houck v. Linn, 48 Neb. 227, 66 N.W. 1103.

'The American authorities treat the contract of 'sale or return' as a present sale with option to return

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