Edwards v. Stranghellan , 105 Pa. 103 ( 1884 )

Mr. Justice Gordon

delivered the opinion of the court, February 18th, 1884.

We have before us for our consideration two appeals and two writs of error; as, however, they all arise from the distilbution of but one fund, they were argued as one case, and therefore require but one opinion for their disposition.

We are of the opinion that the two cases which are now before us in the shape of appeals were well disposed of in the court below. When, on the 24th of August, 1881, the appellants gave notice to the sheriff, who had then levied, or was about to levy, on the furniture of the St. George Hotel as the property of John D. Ward, on the writs of Stranghellan and others, that they claimed the goods as their own, and thus denied' the title of their tenant, their status as adverse claimants to those writs was fixed. Two things resulted from the position which they in this manner assumed; first, they put the sheriff and the execution creditors in the position of trespassers, and imposed upon them the risk and cost of maintaining Ward’s title, from which necessity they would have been relieved had the appellants claimed but as landlords; second, they disclaimed all interest in any fund that might arise from the sale, in that they denied their tenant’s title in the goods levied upon; for necessarily their claim must be limited to the proceeds of the sale of the goods of the tenant, and not to the proceeds of the sale of their own goods, which sale was a proceeding adverse to their alleged right, and for the infringement of which they held the plaintiffs to an account in the whole value of the goods levied upon. How then, we ask, can they come in on the fund raised from a sale of these goods, claiming, as they do, adversely to the very writs on which that sale was made ? We think that even without the authority of Bush’s Appeal and Vetter’s Appeal we might venture to say this cannot be done. But it is urged that these landlords were not bound to make choice between these two claims; they might pursue both, and if one failed they might resort to the other. That is, in plain English, they might both affirm and deny their own title; claim under the writs or adversely to them ; might hold the plaintiffs in those writs for the whole value of the property, or failing in this, might nullifj'- their own words and acts, and as landlords claim the fund as the product of their tenant’s goods. To this we cannot agree. With bon& fide creditors this kind of double dealing is not allowable. It is out of all conscience that creditors should be thus driven to the trouble and expense of disproving title in the claimants, and when this has been successfully accomplished, that those same claimants should be permitted to pocket the fund by the interposition of the very title by which they were defeated. As to this, the learned Judge of the court below has well said, “ If they lose their claim as landlords by attempting to play a double-handed game for the fund in court, no one is to blame for it but themselves.”

The remaining question arises in the consideration of the writs of error. The auditor and court below held, that the agreement of the 26th of March, 1877, between George L. Crawford, trustee of the Edwards’ estate and John I). Ward, was, as to the personal property therein described, a conditional sale, constructively fraudulent as to creditors, hence, said property was liable to seizure and sale as the property of Ward'. We are inclined to think that this conclusion was erroneous. In order to make a sale, which is conditional as to the parties, absolute as to creditors, there must be a delivery of the goods in pursuance of the contract, for without this there can be no present sale, and an agreement of sale without an accompanying transfer, amounts to nothing more than a contract to sell at a future time, or upon the fulfillment of stipulated conditions. Furthermore, the delivery of possession alone, though a material indicium of ownership does not of itself constitute a sale, for the goods may be delivered in bailment, as in loan or hiring. There must in addition to the possession, be at least such a conditional or qualified title passed to the buyer as to give him a transferable interest in the chattels; such an interest as he can, at any time during the running of the condition, sell and dispose of at his own will. Krause v. The Commonwealth, 12 Nor., 418. Again, in order to ascertain whether the contract is one of sale, or of bailment only, we must, where there is doubt, ascertain from the terms of that contract, the intention of the parties. Enlow v. Klein, 29 P. F. S., 488. If from that contract we discover that the party who receives the possession of the goods, receives them under an agreement that he is to retain them for a definite period, and if at or before the expiration of that period, lie pays for them he is to become tlie owner, otherwise to pay for the use of them, this, as was held in Rose v. Story, 1 Barr, 190, is but a bailment, and the title to the property, even as against creditors, remains in the bailor. If during the period of the bailment the bailee pays part of the price fixed, a creditor may levy upon and sell the bailee’s interest, but no right of the bailor will thereby be extinguished. Although payment for the use of the bailed goods is, in the above citation, stated as a condition of the bailment, yet it is clear that this is not always necessary, for a loan under a like condition of sale would be good. Clark v. Jack, 7 Watts, 375. Neither is a stipulation for the return of the property on the expiration of the time during which the bailment is operative, necessary, for if it is not returned the bailor may resort to his legal remedies, and thus enforce the contract. Enlow v. Klein supra.

On the other hand, when, from the contract or arrangement between the parties, the possession is transferred to the vendee, and the ostensible ownership reserved to 0the seller for the purpose of security only, there, whilst the condition is good as between the parties, it is bad as to creditors; as to the latter the sale is absolute. Martin v. Mathiot, 14 S. & R., 214; Brunswick Co. v. Hoover, 14 Nor., 508.

The legal principles entering into the consideration of this case being thus defined, let us see what were the terms and conditions of the agreement of the 26th of March, 1877, and ascertain, if we can, from those terms and conditions, what was the true and honest intention of the parties. First, there was the lease of the hotel to run for the term of five years from the 1st of April, 1877; then there was, second, the agreement “ to furnish to the party of the second part, with the said hotel, under this lease, all the stock and furniture therein on March 31st, 1877.” This looks to us like a leasing of the furniture as well as of the hotel. Under this lease the lessor was as much bound to put Ward into the possession of the personal property as he was to put him into the possession of the realty, and, in fact, the latter could not be used without the former; if Ward did not get the furniture he could not run the hotel. He thus went into the possession of both by virtue of the lease and by virtue of nothing else. Nor is it necessary for us to stop to consider the partial payment made upon account of the furniture under the previous lease, for both parties deal upon the assumption that that furniture did, on the 1st of April, 1877, belong to the lessor, and as there were at that time no intervening creditors, we must leave the matter as the contracting parties settled it.

Now, the auditor admits that a lease of both hotel and furniture would, as to the latter, have been a legitimate bailment-, and that not even a superadded clause for a conditional sale, would have brought the plaintiffs within the statute of Elizabeth, and in this he is undoubtedly correct. But we cannot see how any one can undertake to say, in view of the contract of the parties and the surrounding circumstances, that Ward either did get, or could have gotten into the possession of these goods on the 1st day of April, 1877, in any other capacity than as the tenant of Edwards’ estate. It was certainly not at that time intended that they should be handed over to him as owner, or that he should have a present transferable interest in them. They were the necessary appurtenances of the hotel, and as tenant of that hotel he came into the possession of them. But if his possession came through the lease, it is conceded that the subsequent provision for a sale could not alter the character of that possession, or change the nature of the contract resulting from it. Nor do the words of the agreement leave the intention of the parties at all obscure. By express stipulation no title to the goods was to pass to Ward until they were fully paid for, and until he did so pay for them he could have no transferable interest in them, otherwise he could at any time defeat the object of the lease by a sale of that interest. It is however, unnecessary for us to dwell upon this matter, for, as we have shown, if Ward’s possession was originally under the lease, that determines the character of the transaction, and fixes it in the outstart as a bailment, and as he never complied with the conditions of the contract, under which alone he could have acquired title, the matter remained throughout as it began, a bailment.

The appeals are dismissed and the decrees therein affirmed at the costs of the appellants. The judgments on the feigned issues are reversed, and it is ordered that judgments be entered for the claimants, the plaintiffs below.

Per Curiam.

On motion, ordered that the judgment of this court in the above named cases be so amended as to read as follows: After the words, “ the appeals are dismissed and the decrees therein affirmed at the costs of the appellants,” the judgments on the feigned issues are reversed, and it is ordered that a single judgment be entered for the defendants in the sum of $719.28.

(Filed March 24, 1884.)