of the property has been delivered, retain the title as security for the payment of the purchase price? Our embarrassment is due to the circumstance that as an individual our opinion is that such vendor cannot retain title or a lien as against execution creditors of the vendee.
We are confronted however with the case of In re Max Stein, D.C., 17 F.Supp. 587, which it is urged upon us decides otherwise. The ruling made in that case is authoritative and controls this Court, whatever may be the individual opinion of the sitting Judge.
A short review of the Bailment Lease controversy is helpful to an understanding of the Stein Case and of the subject. Beyond all doubt the owner of personal property may give the possession and use of it to another for hire, without affecting his title thereto. He may not however, as against creditors of his vendee, sell personal property to another and yet retain the title as security for the purchase price. Whether he has done the one thing or the other is a question of fact to be found as any other fact is found. As between vendor and vendee there are several ways in which the vendor might retain title or a lien. One is by a chattel mortgage; another is by a conditional sale. Neither would be good against creditors. In recent years the practice of installment sales has very greatly increased. Strenuous efforts followed to give protection to vendors. The Legislature responded to the pressure by enacting the Conditional Sales Act. Vendors however were unwilling to comply with its provisions. Then the device of a Bailment Lease was resorted to. At first the Pennsylvania trial Courts sought to meet the problem by criticising the form of the so called leases. Condemnation for some defect only resulted in a new form. Soon the Bailment Lease form had been so far perfected as that no defects could be found. The Courts were then faced with the question of whether installment sales contracts should be upheld, notwithstanding the Statute of Elizabeth.
The Stein Case was ruled upon the theory that Pennsylvania contracts were ruled by the Pennsylvania law and that the Courts of Pennsylvania had so far yielded to the need for protection to the big business now concerned with installment sales as that they would uphold such a sale provided only that it was cast in the form of a valid Bailment Lease. It is true that a number of cases ruled by the Superior Court and cited in the majority opinion in the Stein Case seem to justify this conclusion. It was urged however that the Supreme Court had ruled otherwise. Root v. Republic Acceptance Corp., 279 Pa. 55, 123 A. 650. The Stein Case supported its ruling by that of the Circuit Court of Appeals in the case of General Motors Acceptance Corp. V. Horton, 3 Cir., 85 F.2d 452, which was interpreted to have ruled that notwithstanding that in truth and fact a transaction was a sale that if the vendee executed a Bailment Lease, the vendor could assert his title against a trustee in bankruptcy. So far as we are advised the Circuit Court of Appeals has not passed upon this interpretation of its ruling in the Horton Case, nor whether that case is merely authority for the proposition that where the written instrument executed by the parties to a transaction made of it a bailment, the finding could not be made from the instrument alone, that the transaction was a sale.
The learned Master ruled the instant case with these decisions before him. The writing here was not the Bailment Lease alone but the agreement of purchase as well, both of which the Master held should be read together. When so read in the light of the testimony and other evidence the finding was justified that the claimant's assignor had first sold the machinery in question and delivered possession to the vendee, from whom he had subsequently taken a Bailment Lease. The Master has held that the view taken by him is consistent with the ruling in the Stein Case, and has vindicated his opinion in a Report of exceptional clarity and force. We see no need to add to it. All which could be said would be a mere paraphrase of what he has so well said.
A formal decree dismissing the exceptions and confirming the Report of the Master may be submitted.
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