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July 28, 1932


The opinion of the court was delivered by: SCHOONMAKER

This is an action in equity to enforce a conditional sale contract for furniture used in the hotel of defendant Webster Hall Corporation of America, now in custody of this court through its receivers, who are also defendants in this case. From the bill, answer, and proofs, we make and find the following findings of fact and conclusions of law.

Findings of Fact.

 We find the facts in this case to be as stated in the plaintiff's requests for findings of fact, which are hereby affirmed and filed herewith as the findings of fact in this case.

 Conclusions of Law.

 On these facts we make the following conclusions of law:

 We adopt and affirm the plaintiff's requests for conclusions of law, which are filed herewith as the conclusions of law in this case.


 The sole issue in this case is the validity of a conditional sale contract between the plaintiff, as seller, and defendant Webster Hall Corporation of America, as buyer of the furniture and furnishings of the Webster Hall Hotel in Pittsburgh, Pa. The validity of this contract, as between the parties, is not disputed; but the receiver defendants deny its validity as against the general creditors of the Webster Hall Corporation of America.

 The conditional sale contract grew out of an agreement between the Webster Hall Corporation and S.W. Straus Company, Inc., dated November 25, 1925, wherein the Straus Company was to buy an issue of bonds in the sum of $1,650,000, to be secured by a mortgage to a trustee on real estate of the Webster Hall Corporation, with the understanding that the proceeds of the bonds were to be applied to the construction of a hotel building, and to furnishing the same. The title to the furniture in the hotel was to be placed in the name of the trustee under the mortgage, and was to remain in him until the bonds were fully paid off. This was to be accomplished by the assignment to the trustee of the contract for the purchase of the furniture, and then the execution and delivery of a conditional sale contract between the trustee and the Webster Hall Corporation covering the furniture and furnishings of the hotel. This plan was carried out. On Janurary 22, 1926, the Webster Hall Corporation entered into a written contract with Albert Pick & Co. for this furniture and furnishings for the hotel. The same day the Webster Hall Corporation assigned this contract to the trustee. On January 27, 1926, the trustee paid $100,000 to Albert Pick & Co. to apply on this furniture contract. Thereupon, the furniture and furnishings contract was carried out, and the furniture and furnishings were installed in the hotel. When this was accomplished, on or about December 7, 1926, Albert Pick & Co. executed and delivered to the trustee a bill of sale of the furniture and furnishings. Then, on March 31, 1927, the conditional sale contract involved in this suit between the trustee, as seller, and the Webster Hall Corporation, as buyer, was executed, delivered, and filed in the office of the prothonotary of Allegheny county, Pa., in conformity with provisions of the Uniform Conditional Sales Act of Pennsylvania (69 PS § 361 et seq.).

 We hold this to be a valid conditional sales contract under the Pennsylvania law.

 In the first place, this contract was executed and filed of record before any of the debts owed by the Webster Hall Corporation at the time of the appointment of receivers by the court came into existence, with the possible exception of Albert Pick & Co., who certainly are estopped from contesting its validity after execution and delivery to the trustee of a bill of sale for this furniture. All other persons dealing with the Webster Hall Corporation had notice of this conditional sale from the record.

 The contention of the receiver that this sales agreement is a mere attempt to subject the furniture and furnishings of this hotel to the mortgage lien of the entire amount of the mortgage indebtedness, and is therefore illegal and ineffective as against creditors, will not hold in the case at bar. True, it is that a conditional sales contract is more often conditioned for the payment of the purchase price. But the Pennsylvania Conditional Uniform Sales Act specifically provides in section 1 as follows: "Section 1. Definition of Terms. Be it enacted, etc., That in this act 'conditional sale' means any contract for the sale of goods under which possession is delivered to the buyer and the property in the goods is to vest in the buyer at a subsequent time upon the payment of part or all of the price or upon the performance of any other condition or the happening of any contingency." 1925 Laws of Pennsylvania, page 604 (69 PS § 361).

 The act further provides in section 4 (69 PS § 401): "Section 4. Conditional Sales Valid except as Otherwise Provided. Every provision in a conditional sale, reserving property in the seller after possession of the goods is delivered to the buyer, shall be ...

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