Court Opinion

ID: 7222485
Source: CourtListenerOpinion
Date Created: 2022-07-25 03:50:59.173119+00
Date Added: 2024-06-11T16:17:18.411134
License: Public Domain

DICKINSON, District Judge
(concurring).
I concur in the ruling of the court in this cause, but plant my concurrence solely on the ground that I think we are bound to follow the ruling of this court in Re Stein, 17 F.Supp. 587. The Stein Case was in turn ruled by the authority of the interpretation given to the ruling of the Circuit Court of Appeals for this circuit in General Motors v. Horton, 85 F.(2d) 452.
The question of bailment leases is one which arises now in almost every bankruptcy case. The referees in bankruptcy have differed in the interpretation given to the Horton Case. It is of very great practical importance to have a ruling which will settle the question over which the referees have differed. The ruling in the Stein Case was intended to settle the question. The point of difference can be best presented in a series of propositions. Until the ruling of the Horton Case, there was a general agreement upon the following propositions:
(1) The owner of personal property might let it out on hire and deliver possession to the bailee on any terms agreed upon and yet retain his title as owner in the property made the subject of the bailment.
(2) If, however, instead of letting the property on hire he sold it, delivering possession to the vendee, he could not thereafter, against an innocent purchaser for value, or an execution creditor, or a trustee in bankruptcy, retain title to the property as security for the unpaid purchase money otherwise than by a compliance with the Conditional Sales Act (69 P.S.Pa. § 361 et seq.).
(3) Whether the transaction was in truth and fact a bailment for hire or a conditional sale is a question of fact to be found as are other questions of fact.
Without doubt there has been of late years an increase in the practice of installment sales, the vendor seeking to retain his title as security for the unpaid purchase price. The volume of such sales is now very large. The ruling in the Stein Case recognizes this and rules that whatever the law on the subject had once been that the courts of ^ Pennsylvania had declared a new rule, which may be stated in the following proposition:
(4) A vendor may make a conditional sale of property and deliver possession to the vendee, retaining his title to the property as security for the unpaid purchase money if the transaction is cast in the form of a bailment lease and the vendee executes such bailment lease in due form.
It may be said in passing that the rulings of the Courts of Pennsylvania referred to in the opinion in the Stein Case are rulings of the Superior Court. The Supreme Court of the state has not given its sanction to the change as evidenced by the ruling in Root v. Republic Acceptance Corporation, 279 Pa. 55, 123 A. 650, the opinion of which was delivered by Mr. Justice Schaffer.
The Stein Case was ruled on the authority of the Horton Case, which was interpreted as laying down the proposition last stated.
The other interpretation given to the Horton Case is that a transaction which has been made the subject of a bailment lease cannot, without other evidence, be found to have been a conditional sale. In other words, that a bailment lease cannot be construed to be a bill of sale. It does not rule, however, that what the transaction was in truth and fact cannot be shown by proper evidence. The like ruling had been made by this court in an unreported case, in which the opinion was filed by Judge Kirkpatrick.
In the instant case the referee, from all the evidence before him, has found that the transaction was a conditional sale, although it was made the subject of an otherwise valid bailment lease. Following the interpretation given to the Horton Case, in the Stein Case the ruling made *110is that the vendee having executed in due form a bailment lease that the transaction cannot be shown to have been in truth and fact a conditional sale.
The Stein Case having so ruled, this court is bound by the ruling made, and for this reason, and for this reason alone, I concur in the ruling now made.