"title to the property in this invoice reserved in car company until full payment made.' There is nothing in the contract to show that the title to the car was reserved, unless the words in the contract, "Price eleven hundred sixty ($1,160.00) dollars, f. o. b. cars, Detroit, Mich.," are to be construed as meaning cash on delivery of car at Detroit to the carrier, and unless it follows from this inference that a sale for cash on delivery is a conditional sale; the title remair.ing in the vendor as against the vendee. It is a familiar principle of law that, unless time is stipulated in a contract of sale, the sale is for cash. Benjamin on Sales, 320, note "d"; Ency. of Law (2d Ed.) vol. 6, p. 457, and cases in note; Whitcomb v. Whitney, 24 Mich. 486. It is also an established principle of the law that, when goods are sold to be paid for in cash upon delivery, such payment is a condition precedent, and until it is made or waived no title passes to the vendee. Ency. of Law, vol. 6, p. 456; Benj. on Sales, 320, note "d"; Harkness v. Russell, 118 U. S. 663, 7 Sup. Ct. 51, 30 L. Ed. 285; Beardsley v. Beardsley, 138 U. S. 262, 11 Sup. Ct. 318, 34 L. Ed. 928; Segrist v. Crabtree, 131 U. S. 287, 9 Sup. Ct. 687, 33 L. Ed. 125; Davison v. Davis, 125 U. S. 90, 8 Sup. Ct. 825, 31 L. Ed. 635; Couse v. Tregent, 11 Mich. 65, and the cases cited in Pettyplace v. Mfg. Co., 103 Mich. 155, 61 N. W. 266. We must therefore determine from the facts as stipulated in this case whether the sale was for cash. The order which the Pittsburgh Industrial Iron Works sent to the American Car & Foundry Company, as set out in the twelfth stipulation of fact, shows that the price was to be $1,160, f. o. b. cars, Detroit, Mich. There is nothing to show that any time for payment in the future was contemplated, and the price, $1,160, f. o. b. cars, Detroit, Mich., easily and convincingly bears the interpretation that the price was to be paid on delivery of the goods sold to the carrier at Detroit. This is strengthened by the conduct of the vendor when the car was delivered to the carrier at Detroit, for at that time, March 13, 1907, they made the invoice in triplicate, one of which was mailed to the vendee, which invoice contains the words, as we have seen, "terms cash," and "title to the property in this invoice reserved in car company until full payment made." So we have not only the price stated payable at Detroit, the point of shipment, but that price stated to be cash at the time of delivery to the carrier, and title reserved until full payment is made. This, we think, shows conclusively that the sale was for cash, that the car was delivered with the express condition that the terms were cash, and that title would remain in the car company until the price was paid. In our opinion the cases above referred to make the sale a conditional one, which under the law of Michigan, and under the decisions. in the United States courts, left the title to the car in the vendor. This being true, the title never passed to the Pittsburgh Industrial Iron Works, the vendee. It necessarily follows that the trustee in bankruptcy could only take such title as the bankrupt had. He has no greater rights than the bankrupt. York v. Cassell, 201 U. S. 344, 26 Sup. Ct. 481, 50 L. Ed. 782; Security Warehousing Co. v. Hand, 206 U. S. 415, 27 Sup. Ct. 720, 51 L. Ed. 1117; Hewit v. Berlin Machine Works, 194 U. S. 296, 24 Sup. Ct. 690, 48 L. Ed. 986. While, therefore, the title to this property remains in the car company, so far as the bankrupt or his trustee is concerned, the question arises whether or not the First National Bank of Huntingdon, standing in the relation of an innocent third party, is entitled to have the car by virtue of its alleged assignment or pledge contained in Exhibit B attached to the petition. As the title to the car never passed from the vendor, we are of opinion, under the law of Michigan, that the First National Bank of Huntingdon acquired no right superior to the vendor, and any rights he may have must be subject to the claims of the vendor. Pettyplace v. Mfg. Co., 103 Mich. 153, 61 N. W. 266, and cases there cited. The First National Bank of Huntingdon, not only claims the car, but also its equipment by virtue of an alleged assignment or pledge of the car and its equipment to it, and we must now decide whether the First National Bank of Huntingdon may claim the car and equipment after satisfying the claim of the American Car & Foundry Company. The contract of pledge, having been made by the parties in Pennsylvania, must be decided by the law of that state. Security Warehousing Co. v. Hand, 206 U. S. 415, 27 Sup. Ct. 720, 51 L. Ed. 1117; Hartford Ins. Co. v. Railway, 175 U. S. 91, 20 Sup. Ct. 33, 44 L. Ed. 84. It appears from the agreement of facts in this case that the First National Bank of Huntingdon, on March 5, 1907, and more than four months before the filing of the petition in bankruptcy, which was filed on November 9, 1907, discounted for the Pittsburgh Industrial Iron Works, the bankrupt, its collateral promissory note for $5,125, and the same day paid to the bankrupt the sum of $5,125, taking at the same time the following writing: Number D-5. Pittsburgh, Penna. Dated Dec. 31st, 1906. This certifies that the Detroit River Tunnel Co., of Detroit, Michigan, is indebted to Pittsburg Industrial Iron Works, Pittsburg, Pa., for goods sold and delivered as stated below: Shipped via P. R. R. Terms, 30 days. To Mdse. as per invoice of this date hereto attached and made a part hereof. The Pittsburg Industrial Iron Works, Pittsburg, Pa., sold to Detroit River Tunnel Company, Dec. 31, 06. Terms, 30 days. 1 structural steel travelling derrick mounted on type P. M. steel flat car with 8x10 D. C. 3 drum. Hoisting Engine, traction gear and 4 yd. Hayward Orange Peel Bucket Complete according to contract .... .$5,125.00 Know all men by these presents, that we, Pittsburg Industrial Iron Works for value received have bargained, sold, assigned, transferred and set over and by these presents do bargain, sell, assign, transfer and set over unto the First National Bank of Huntingdon, Pa., its successors and assigns, the claim or account set forth or described in the above statement, and the goods covered by or described therein, and all moneys due or to grow due upon the same or sales therein set forth, and the sole right to collect the same, and we hereby constitute and appoint the said the First National Bank of Hunting don, Pa., our true and lawful attorney, irrevocably for us and in our name and stead, but to its own use and benefit, to sell, assign, transfer, set over, compromise or discharge the whole or any part of the aforesaid claim or account, and for that purpose to do all acts and things necessary or proper in the premises, and one or more persons to substitute with like power hereby ratifying and confirming all that our said attorney or its substitutes shall lawfully do by virtue hereof. We hereby guarantee and certify that this amount so assigned is bona fide sale and a correct account for goods actually sold and delivered and accepted, and that there is no set-off or counterclaim of any kind thereto, and we agree that any claim or deductions allowed will be refunded by us by allowing the same to be deducted from future advances or by payment of the amount of such deductions in cash at the option of the First National Bank of Huntingdon, Pa., and that any invoices or bills rendered by us for this account shall have the statement upon their face that they are payable only to the bank of deposit designated by the First National Bank of Huntingdon, Pa. We hereby guarantee payment in full of the above account. In witness whereof, we have hereunto set our hands and seals this fifth day of March, 1907. Pittsburg Industrial Iron Works, $5,125.00 By C. F. Dickinson, President. Pittsburg, Penn'a, Sept. 23, 1907. Sixty days after date, for value received, we promise to pay to the order of the First National Bank of Huntingdon, Pa., fifty one hundred twenty-five and no/100 Dollars, with interest at the rate of 6 per cent. per annum, having deposited herewith as collateral security for payment of this or any other liability or liabilities of ours to the holder hereof, now due or to become due, or that may be hereafter contracted, the following property, viz.: Account #D-5 against the Detroit River Tunnel Co., Detroit, Michigan-the market value of which is now $5,125.00, with the further right to call for additional security in case there should be a decline in the market value thereof, and on failure to respond, this obligation shall be deemed to be due and payable without demand or notice, with full power and authority to the holder hereof to sell and assign and deliver the whole of the above mentioned security, or any part thereof, or any substitute thereof or any additions thereto, at any Brokers Board, or at public or private sale, at the option of the holder hereof on the nonperformance of this promise, or the nonpayment of any of the liabilities above mentioned, at any time or times hereafter, without demand, adrertisement or notice, and with the right to purchase as any other bidder at any public sale thereof, held by virtue hereof. And after deducting all legal and other costs and expenses for collection, sale and delivery, to, apply the residue of the proceeds of such sale or sales so to be made, to pay any, either or all of said above mentioned liabilities, as the holder hereof shall deem proper, returning the overplus to the undersigned. Payable at The First National Bank, Huntingdon, Pa. Pittsburg Industrial Iron Works, On March 6, 1907, the bankrupt notified the Detroit River Tunnel Company as follows: Mar. 6, 1907. Detroit River Tunnel Co., Detroit, Mich.-Gentlemen: For financial convenience we have arranged with the First National Bank, Huntingdon. Pa., to cash the invoice mailed to you, amounting to $5,125.00. Kindly make remittances to them. You understand your compliance incurs no liability whatever, you simply settle with bank instead of us. We also inclose you form of reply, which please mail to them in stamped envelope herewith. Thanking you in advance for the courtesy, we are, Yours truly, President. And the Detroit Company wrote the bank the following letter: Detroit, Mich., March 20th, 1907. First National Bank, Huntingdon, Pa.-Gentlemen: We have received a letter from the Pittsburg Industrial Iron Works, dated March 6th, and asking us to pay you what may be due them for a derrick car which they have been building for us. After the car has been received, tested and accepted, we will pay you whatever may be due them for it. Yours truly, Benjamin Douglas. On April 3, 1907, the car with its equipment was tendered to the Detroit Company by the bankrupt company and refused as not being in accordance with the specifications, and on May 17, 1907, the same was returned to the bankrupt and was in the possession of the bankrupt from May 17, 1907, until August 15, 1907, for alteration and testing, to make it conform to the contract, and on August 17, 1907, the car with its equipment was again tendered to the Detroit Company, and again refused as not being according to the contract, and the bankrupt again attempted to change it to meet the requirements of the contract, and the same was finally refused by the Detroit Company on October 28, 1907, by notice from the Detroit Company to the bankrupt. The car at this time was in Detroit in the custody of the carrier who had carried it for delivery to the Detroit Company. The car with its equipment was there, on January 17, 1908, seized in an action of replevin upon the filing of a bond by the First National Bank of Huntingdon, and still remains in the custody of that bank by virtue of that pending proceeding. It clearly was intended by the alleged assignment and collateral note to assign and transfer to the bank the account or money arising from the sale by the bankrupt to the Detroit Company of the car and its equipment. It was for the identical amount of the contract made by the bankrupt with the Detroit Company. It is recited in the alleged assignment that the car and its equipment had been sold and delivered to and accepted by the Detroit Company, and the transaction between the bank and the bankrupt shows on its face that it was the discounting or purchasing of the account for a present consideration of $5,125 then and there paid by the bankrupt. But this assignment also, after reciting the assignment of the account, had these words, "and the goods covered by or described therein," which would be a good pledge of the car and its equipment between the pledgor and pledgee, and the question we are confronted with is whether, under the law of Pennsylvania, the place of the contract, this was a valid sale or pledge of the car and equipment, as to the trustee in bankruptcy, and, if not valid as a pledge, can the equities of the bank in the car and its equipment be preserved as an equitable lien? The Supreme Court of Pennsylvania has often been called on to pass upon these questions. In Clow v. Woods, 5 Serg. & R. 275, 9 Am. Dec. 346, that court, speaking by Justices Gibson and Duncan, decided that a sale or pledge of goods and possession retained by the vendor or pledgor was a fraud per se. But while that case is said, in McKibbin v. Martin, 64 Pa. 352, 3 Am. Rep. 588, to be the magna charta of Pennsylvania on the subject of actual and legal fraud in the transfer of chattels, both Judge Gibson and Judge Duncan recognized that there might be exceptions to the rule, for it is there said by Judge Gibson: "The inclination of my mind is, to give the statute a liberal, perhaps an enlarged construction, by putting the rule requiring a change of possession, on grounds of public policy, and confining its exceptions to those cases, where, from the very nature of the transaction, possession either could not be delivered at all, or, at least, without defeating fair and honest objects, intended to be effected by and which constituted the motive for entering into, the contract. Where possession has been withheld pursuant to the terms of the agreement, some good reason for the arrangement, beyond the convenience of the parties, should appear." And in the same case Judge Duncan, in a concurring opinion, says: "It therefore appears to me that by the principles of the common law, and the settled construction of the statutes of Elizabeth, to a mortgage of chattels, delivery is necessary; that every such mortgage, when the parties stand in the relation of debtor and creditor, unaccompanied with such possession as the subject-matter is capable of, is fraudulent and void against all other creditors, whether the debts were contracted antecedently or subsequently to the mortgage." In McKibbin v. Martin, supra, we find that the court recognized that there were exceptions to the rule, for it is there said by Mr. Justice Sharswood: "Whenever the subject of the sale is capable of an actual delivery, such delivery must accompany and follow the sale to render it valid against creditors. The court is the tribunal to judge whether there is sufficient evidence to justify the inference of such a delivery. If there is any question upon the evidence as to the facts, or resting upon the credibility of witnesses, the determination of that must be referred of course to the jury. But, if not, it is incumbent upon the court to decide it, either by a judgment of nonsuit or a binding direction in the charge. Young v. McClure, 2 Watts & S. 147; McBride v. McClelland, 6 Watts & S. 94; Milne v. Henry, 4 Wright, 352; Dewart v. Clement, 12 Wright, 413. But it often happens that the subject of the sale is not reasonably capable of an actual delivery, and then a constructive delivery will be sufficient. As in the case of a vessel at sea, of goods in a warehouse, of a kiln of bricks, of a pile of squared timber in the woods, of goods in the possession of a factor or bailee, of a raft of lumber, of articles in the process of manufacture, where it would be not indeed impossible, but injurious and unusual to remove the property from where it happens to be at the time of the transfer. Clow v. Woods, 5 Serg. & R. 275 [9 Am. Dec. 346]; Cadbury v. Nolen, 5 Barr. 320; Linton v. Butz, 7 Barr, 89 [47 Am. Dec. 501]; Haynes v. Hunsicker, 2 Casey, 58; Chase v. Ralston, 6 Casey, 539; Barr v. Reitz, 3 P. F. Smith, 256; Benford v. Schell, 5 P. F. Smith, 393. In such case it is only necessary that the vendee should assume the control of the subject so as reasonably to indicate to all concerned the fact of the change of ownership." In Keystone Watch Case Co. v. Bank, 194 Pa. 535, 45 Atl. 328, Mr. Justice Dean, in commenting upon the case of Clow v. Woods, supra, says: "In the 80 years that have elapsed since the decision of Clow v. Woods, 5 Serg. & R. 275 [9 Am. Dec. 346], the rigor of the rule laid down in that case, and it is the leading one in this state, has been greatly relaxed; nor, considering the progress in population and wealth, and the change in methods of conducting business, could it have been strictly adhered to, without great obstruction to business and hardship to individuals. Under that ruling the cases were rare, where, as to creditors, the ownership of chattels could be in one and the possession in another. In such circumstances, with few exceptions, the transaction was constructively fraudulent as to creditors. But. |