In re Perpall

KNOX, District Judge (after stating the facts as above). In the case of Empire State Type Founding Co. v. Grant, 114 N. Y. 40, 21 N. E. 40, it was held that, where a contract for the sale of personal property does not provide, in express terms, that payment shall be made on delivery, or that payment and delivery shall not be concurrent, the intent of the parties must control, and if from the acts of the parties and the surrounding circumstances it can be inferred that it was intended that payment and delivery should be concurrent acts, the title will be deemed to have remained in the vendor until the condition of payment is complied with. The court in that case also concluded that the question of intent in such case is one of fact. [1] Upon the facts now under consideration, the referee, before [760] whom the testimony was taken, has found that the sale of the bond in question was for cash or the equivalent of cash upon delivery; in other words, it has been resolved as a question of fact that before title to the bond should pass to the bankrupt there was the necessity of the performance by him of the condition precedent of payment. We believe this finding of the referee to be entirely justified by the evidence. [2, 3] It therefore remains to be determined if the delivery of the' bond to the cashier of the bankrupt in the manner shown by our recital of the facts constituted a waiver upon the part of the claimant of the condition of payment. Unquestionably it lay within the power of the ■vendor to waive any condition imposed by him in his original contract, and we also realize that an apparently unrestricted and unconditional delivery of goods sold for cash is presumptive evidence of the waiver of the condition that payment should be made on delivery in order to vest the title in the purchaser. Scudder v. Bradbury, 106 Mass. 422; Hammett v. Linneman, 48 N. Y. 399; Smith v. Lynes, 5 N. Y. 41. Nevertheless, whether or not there has been a waiver of the condition is a question for the jury, and this is particularly true when the eights of third persons have not intervened. Mechem on Sales, § 549, and cases referred to in footnote. [4] The transaction in the case at bar was along lines and in accord with, practices well- known and understood in the financial district of this community. As has been shown, the bankrupt was a member of the Consolidated Stock Exchange, while the claimant was formerly a member of the New York Stock Exchange, and his agents, E. Bunge & Co., were what are known as “outside brokers”; that is, dealers- in securities not listed upon the local stock exchange. It would seem to follow, at least in the absence of any proof to the contrary, that the sale of the Seattle-Everett bond was made subject to the customs and practices obtaining among dealers in securities within the financial district. Now, what happened here was this: The sale of the bond was made upon Saturday, June 29th, and the sale under the custom “carried” until Monday, July 1st; that is to say, the bond was deliverable upon Monday for, cash or its equivalent, and upon Monday E. Bunge & Co., through one of their messengers, did deliver the bond to the cashier of the bankrupt. Before drawing a check for the purchase price of the bond, it was necessary for the cashier to make his comparisons and his blotter entries, whereupon he would draw the check and deliver the same to Bunge & Co/s messenger. Instead of waiting in the office of the bankrupt for these details to be attended to, the messenger occupied the time in making other deliveries, and later another messenger of the Bunge firm called to pick up the check which, when he reached the bankrupt’s office, was awaiting him. In view of the finding of the referee as to terms of sale, we believe that the facts incident to the delivery of the bond fall short of constituting a waiver of the condition of payment. From the circumstances here present, no intent or purpose to extend credit to the bankrupt arises. The claimant is in no worse position than he would have been in, had the messenger idled away his time in the office of the bankrupt while waiting for the details of making the entries and drawing [761] the check to be completed. Had he remained there, he would have been entitled to receive a check that would be the equivalent of cash, and that was what he was entitled to receive when, in the regular course of business, he or his substitute returned to the bankrupt’s office. As is said by Mr. Mechem, at section 551 of his work on Sales: “There is always an implied understanding that the vendee is acting honestly and that he takes the goods subject to the contract. It is not necessary, therefore, that the vendor shall in express terms declare that he makes the delivery conditional; it is sufficient if the intent of the parties that the delivery is conditional can be inferred from their acts and the circumstances of the case.” The above conclusions, as applicable to the facts before us, we consider to be supported by Empire State Type Founding Co. v. Grant, 114 N. Y. 40, 43, 21 N. E. 40; Sprague Canning Machinery Co. v. Fuller, 158 Fed. 588, 86 C. C. A. 46, 20 Am. Bankr. Rep, 157; In re Pittsburgh Industrial Iron Works (D. C.) 179 Fed. 151, 25 Am. Bankr. Rep. 221, 225. The referee has found upon entirely satisfactory evidence that there was no waiver here. [5] It has previously been said that when the bankrupt drew his check for the purchase price of the bond his account was largely overdrawn, and the bank dishonored the check upon a demand for its certification or payment. The claimant, therefore, never received that which, as a condition precedent to the passing of title to the bond, the bankrupt had agreed to give him; and taking a check of the buyer does not ordinarily operate as payment, to prevent the seller from retaking the goods if the check is not paid. Nat. Bank v. Railroad Co., 44 Minn. 224, 46 N. W. 342, 560, 9 L. R. A. 263, 20 Am. St. Rep. 566. So as to the buyer’s note. Davison v. Davis, 125 U. S. 90, 8 Sup. Ct. 825, 31 L. Ed. 635. Where such prepayment is the express condition of tire sale, there is no doubt that the vendor could retake the goods from the vendee, if the condition is not performed. Barrett v. Pritchard, 2 Pick. (Mass.) 512, 13 Am. Dec. 449. The order appealed from is affirmed.