Court Opinion

ID: 8776711
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:04:36.938958+00
Date Added: 2024-06-11T17:02:36.700892
License: Public Domain

BRADFORD, District Judge (concurring).
In cases Nos. 52 and 55 of the Liquid Carbonic Company and of the National Cash Register Company against the trustee of the estate of Harry Rinker, bankrupt, relating respectively to certain ice cream apparatus and a cash register, I fully concur in the opinion and conclusion of the court. In cases Nos.- 53 and 54 of the Liquid Carbonic Company against the above mentioned defendant, relating respectively to a carbonatar and a soda water fountain, I do not concur in the reasoning of the court and with extreme reluctance concur in its conclusion. In No. 53 .the instrument, which the court holds to embody a bailment of the car-bonatar and an option on the part of the bailee to purchase the same, and not a conditional sale, contains in the upper left hand corner the words “Sold by Hawkins,” and on the right hand side of and half way, down the .sheet under the word “Prices” the following: “Total consideration $2227.75. Less allowance for 2d hand apparatus $498.50. Net price $1729.25.” The “rental” is fixed at the identical amount of the “Net price,” payable in thirty-six months as follows: By honoring the sight draft or other demand of the Liquid Carbonic Company for $329.25, and the balance in monthly instalments of $40 each. The instrument also contains, among others, the following provisions:
“We also agree, upon receipt or tender of goods or bill of lading for tbe same, to execute and deliver promissory notes, as collateral security for said deferred payments of rental bearing interest from date at tbe rate of six per cent, per annum. At tbe expiration of tbe term of tbis lease we agree to surrender to you all tbe property herein described, in good condition, or, at our option to purchase tbe same upon tbe further payment to you of $1. s ⅜ * Should we fail to * ⅜ * execute said notes, or default in tbe payment of tbe rent for any month when tbe same falls due, * * * then, or in either of said cases, ,the full amount of rent for balance of term shall forthwith become due and payable, anything in said notes to tbe contrary notwithstanding. Should any such default be made, you, or your agent or attorney, may, without process of law enter upon our premises, and take possession of and remove said property.”
■In case No. 54-the instrument mutatis mutandis is similar to that in No. 53. These instruments are transparent attempts by mere indirection to avoid the consequences of the rule based upon a supposed public policy, judicially established in Pennsylvania at an early day, denouncing conditional sales as constructive frauds upon bona fide creditors and purchasers. No sensible man would agree to pay. for the mere use and enjoyment of the carbonatar or the soda water fountain *607for the period of only thirty six months by way of “rental” an amount equal to the whole of the “net price.” The term “option” as applied to such an instrument clearly is a misnomer. No man, of sound reason, after paying such a “rental” would exercise the “option” to surrender the apparatus at the expiration of the “term” and go without his money, when by the further payment of but one dollar he would acquire an absolute title. The words “Sold by Hawkins,” although in the upper left hand corner, were just as much upon the paper when signed by Rinker and accepted by the Liquid Carbonic Company, as were the other words appearing thereon, and were equally with those words located above both signatures. I perceive no difference in principle or effect between the words “Sold by Hawkins” and the words “It is agreed or admitted that the within mentioned apparatus is sold by Hawkins,” placed above the signatures. And if sold, when sold? At the time of the acceptance of the order or thereafter ? It is a general, though not universal, rule, that judicial tribunals recognize that as nature abhors a vacuum so the law abhors circuity; and usually the law regards substance rather than form, — the spirit and not the mere letter. The decisions of the Supreme Court of Pennsylvania in cases involving a consideration of agreements substantially similar to those in Nos. 53 and 54 apparently are the exceptions which prove the rule. Unsound as I believe them to be, they have, nevertheless, established a rule of property which, under the doctrine enunciated by the Supreme Court of the United States, must control the federal courts in disposing of cases involving substantially similar transactions occurring in that state. Under these circumstances I have no option, but am forced to concur in the conclusion reached by the court.