Schmidt v. Bader

• Decision Date: 27 June 1925
• Docket Number: 145
• Citation: 284 Pa. 41,130 A. 259
• Parties: Schmidt, Appellant, v. Bader
• Court: Pennsylvania Supreme Court

130 A. 259

284 Pa. 41

Schmidt, Appellant, v. Bader

No. 145

Supreme Court of Pennsylvania

June 27, 1925

Argued May 12, 1925

Appeal, No. 145, Jan. T., 1925, by plaintiff, from judgment of C.P. Northumberland Co., Feb. T., 1922, No. 186, for defendant, on case tried by the court without a jury in suit of Arthur G. Schmidt v. J. H. Bader. Reversed.

Replevin. Before LLOYD, J., without a jury.

The opinion of the Supreme Court states the facts.

Judgment for defendant. Plaintiff appealed.

Error assigned was, inter alia, judgment, quoting bill of exceptions.

The judgment is reversed, and is here entered for the plaintiff.

Calvin F. Smith, of Smith & Paff, for appellant. -- The bailment contract of July 30, 1919, was the written agreement which was accepted by the original parties to the contract as a consummation and performance of the terms of the original contract between Schmidt and the Giles Manufacturing Company. The terms of this written contract undoubtedly stamped it as a contract of bailment and not a contract of conditional sale: Stiles v. Seaton, 200 Pa. 114; Federal Sales Co. v. Kiefer, 273 Pa. 42; Michael v Stuber, 73 Pa.Super. 390.

Charles C. Lark and Wm. H. Unger, with them Wm. W. Ryon for appellee. -- In a bailment it must appear that there was an intention to transfer the possession: Trunick v. Smith, 63 Pa 18, 23.

But in the case at Bar, Schmidt had no possession to deliver: McFarland-Mead Co. v. Doak, 63 Pa.Super. 27.

A sale and delivery of personal property, with an agreement that the ownership shall remain in the vendor until the purchase money is paid, enables creditors of the vendee to seize and sell the same for the payment of his debts: Brunswick v. Hoover, 95 Pa. 508.

The trustee stands in the shoes of both the bankrupt and the creditors and can enforce the rights of either: Duplex Printing Press Co. v. Clipper Publishing Co., 213 Pa. 207.

Before MOSCHZISKER, C.J., FRAZER, WALLING, KEPHART, SADLER and SCHAFFER, JJ.

OPINION

MR. JUSTICE SADLER:

The Giles Manufacturing Company operated a hosiery mill at Shamokin. In 1919, it desired to increase the plant, and entered into negotiations with a corporation at Norristown for the purchase of additional equipment. No satisfactory arrangements could be made as to payment, and a salesman, Schmidt, the present plaintiff, agreed to buy what was needed, with the verbal understanding that he should retain title. The purchase price was paid by him, and the fifteen knitting machines were then ordered to be consigned directly to the company, and were received by it. At the time, part were marked with permanent tags, showing the name of the "owner and lessor," and, later, the remaining ones were so identified. The actual delivery was on June 5th of the year mentioned, but no formal lease was drawn up until July 30th following, and it seems not to have been executed by the company until about two weeks later. It called for certain payments every two months, and they were made on four occasions, at the rate stipulated. An additional sum was credited on the back of the written agreement, but this apparently was to cover the cost of other machinery not included in the lease now in question. After providing for a definite rental, with the right on the part of the owner to retake possession on failure to pay, it was agreed that, upon full compliance with the stipulated terms, a bill of sale would be given if the additional sum of five dollars was paid. It is true that the checks for rent in three instances had noted upon them the statement that they were given each in payment of one machine, but this fact in itself would not affect the title of the lessor. There is no reason why there could not be a release of his rights in part of the property without affecting his claim to the balance, if properly held under the bailment contract.

There is nothing to show any creditors were misled by the company's possession of the machines between June 5th and July 30th, when the understanding of the parties was put in written form, and the bankruptcy which followed was not until two years later. The trustee appointed claimed title, and the lessor instituted a reclamation proceeding in the United States District Court, which was finally dismissed on appeal, without prejudice to his right to arrest title in the appropriate state tribunal. This action of replevin, brought against the purchaser at the bankrupt sale, was heard by the court below without a jury, and findings of fact were reached, as well as conclusions of law. Judgment was entered in favor of defendant, based on the theory that the transaction was a conditional sale, as shown by the consignment directly to the now insolvent company, and the delivery of the machines to the carrier in its name. This led the court to the conclusion that the title passed immediately to the manufacturing company, and that the lease, executed some weeks after, was ineffective, though in accordance with the verbal agreement of the parties, entered into when the purchase was made by Schmidt. Under the findings, there can be no doubt the plaintiff paid for the knitting machines in question, and that there was an understanding the title should be held by him, and that a bailment contract should be executed for his benefit. The record, as before noted, does not show any creditors were injured by reason of the delay in the execution of the written paper, signed later, and we cannot agree with the learned court below that the case, upon which its decision rests (In re Devon Manor Corp., 257 F. 766), makes necessary a holding to the contrary.

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