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purchase money mortgage on the lot for $1,000. He also held that the York Manufacturing Company had no lien on the machinery, but was a general creditor only.

The District Court, on a petition for review, reversed this ruling, and held that the mortgage of Waight & Ames did not cover the machinery supplied by the York Manufacturing Company, but that the latter had no lien thereon as against general creditors; that the mortgage of Waight & Ames was a valid lien on the rest of the property, subject to the purchase money mortgage on the lot; that they were not creditors of the bankrupt corporation, except as to the sum of $1,500 they had charged for becoming sureties under the contract above mentioned, but the court held that they might prove the debts of the creditors who held the notes on which they were sureties, if the creditors failed to do so, and that they might be subrogated to the rights of the creditors to the extent they had paid or might pay any balance due on said notes remaining after applying thereon the surplus of the proceeds of the sale of the real estate, after the purchase money mortgage had been paid, and that the entire $10,000 of the notes, which were mentioned in the contract between Waight & Ames and the company, and for which they were to be sureties, might be included in this right of subrogation. This of course did not include a note for $1,000, which had been paid five months before the proceedings in bankruptcy. The District Court held that the mortgage of Waight & Ames was subordinate to the lien of the York Manufacturing Company, because no part of it had been placed on the ground of the bankrupt until two months after the making of the mortgage to Waight & Ames. The court, however, held that the general creditors were entitled to have the plant of the York Manufacturing Company sold for the payment of their claims because of the failure of that company to file the conditional sale contract, as required by the Ohio statute, and such failure rendered the contract void as to the creditors. Waight & Ames did not appeal from the District Court's decree.

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obtained from. Waight & Ames agreed to become such sureties, and the parties then entered into an agreement for that purpose, the particulars of which it is not necessary here to deal with.

At the date of the Waight & Ames agreement, November 1, 1902, no part of the machinery had come to the possession of the company, but it began to arrive in January, 1903, and was finally installed in the plant three or four months later.

On the same date that the agreement was executed a mortgage, without date, was also executed by William Mild, in whom the title was, to Waight & Ames, conditioned for their indemnification for becoming sureties, as contemplated by their agreement. This mortgage was not recorded until July 16, 1903, and on the next day the corporation made a general assignment for the benefit of its creditors. On July 22, 1903, a petition by creditors of the corporation was filed for an adjudication of bankruptcy against it, and on December 11, 1903, the adjudication was made.

Soon after the adjudication the York Manufacturing Company filed an intervening petition, which set forth the contract under which they sold the machinery to the bankrupt, and alleged default in payment and prayed that the company might be allowed to enter the premises and remove the machinery therefrom. This petition was resisted by the creditors.

A short time thereafter Waight & Ames filed their intervening petition, setting up their mortgage, and alleging that they had no knowledge of the contract with the York Manufacturing Company at the time of taking their mortgage, and prayed that they might be given precedence over that company. It appears they did raise for Mild the sum of $10,000, by indorsing for him to that extent, and a portion of it they have since been compelled to pay, and they are liable for the balance.

The referee in bankruptcy, before whom the question came, held that the mortgage of Waight & Ames was a valid lien on all the bankrupt's property, including the machinery furnished by the York Manufacturing Company, subject, however, to a

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purchase money mortgage on the lot for $1,000. He also held that the York Manufacturing Company had no lien on the machinery, but was a general creditor only.

The District Court, on a petition for review, reversed this ruling, and held that the mortgage of Waight & Ames did not cover the machinery supplied by the York Manufacturing Company, but that the latter had no lien thereon as against general creditors; that the mortgage of Waight & Ames was a valid lien on the rest of the property, subject to the purchase money mortgage on the lot; that they were not creditors of the bankrupt corporation, except as to the sum of $1,500 they had charged for becoming sureties under the contract above mentioned, but the court held that they might prove the debts of the creditors who held the notes on which they were sureties, if the creditors failed to do so, and that they might be subrogated to the rights of the creditors to the extent they had paid or might pay any balance due on said notes remaining after applying thereon the surplus of the proceeds of the sale of the real estate, after the purchase money mortgage had been paid, and that the entire $10,000 of the notes, which were mentioned in the contract between Waight & Ames and the company, and for which they were to be sureties, might be included in this right of subrogation. This of course did not include a note for $1,000, which had been paid five months before the proceedings in bankruptcy. The District Court held that the mortgage of Waight & Ames was subordinate to the lien of the York Manufacturing Company, because no part of it had been placed on the ground of the bankrupt until two months after the making of the mortgage to Waight & Ames. The court, however, held that the general creditors were entitled to have the plant of the York Manufacturing Company sold for the payment of their claims because of the failure of that company to file the conditional sale contract, as required by the Ohio statute, and such failure rendered the contract void as to the creditors. Waight & Ames did not appeal from the District Court's decree.

Argument for Appellant.

201 U. S.

The Circuit Court of Appeals, upon appeal by the York Manufacturing Company, affirmed the District Court, 135 Fed. Rep. 52, and that company has appealed here.

Mr. Constant Southworth, with whom Mr. John L. Lott and Mr. Louis J. Dolle were on the brief, for appellant:

Unrecorded conditional sale of chattels is superior to lien of prior realty mortgage. Fosdick v. Schall, 99 U. S. 235; Manhattan Trust Co. v. Sioux City Ry. Co., 76 Fed. Rep. 658; Meyer v. Car Co., 102 U. S. 1; Cumberland v. Maryport (1892), 1 Chan. 415; Mott Iron Works v. Middle States L. B. & C. Co., 17 App. D. C. 584; Duntz v. Granger Brewing Co., 83 N. Y. Supp. 957. Other cases of conditional sales are: Ins. Co. v. George, 77 Minnesota, 319; Adams Mach. Co. v. Association, 119 Alabama, 97; Warren v. Liddel, 110 Alabama, 232; Lansing &c. Works v. Wilbur, 111 Michigan, 413; Harris v. Hackley, 127 Michigan, 46; German v. Weber, 16 Washington, 95; Page v. Edwards, 64 Vermont, 124. See also Campbell v. Roddy, 44 N. J. Eq. 244; Hine v. Morris, 3 Bull. 515 (Ohio Dist. Ct.); Tifft v. Horton, 53 N. Y. 377; Blinkley v. Forkner, 117 Indiana, 176; Wheeler v. Bedell, 40 Michigan, 693.

Whether personalty attached to realty becomes realty is a question of intention between the parties. Tifft v. Horton, supra; Aldine Mfg. Co. v. Barnard, 84 Michigan, 632.

The word "creditors" in the Ohio conditional sales law includes only judgment creditors. A judgment is requisite in order to enable a creditor to attack a previous conveyance by his debtor. This is because the existence of his debt must be in some way ascertained and must be fastened upon the land. Martin v. Bowen, 51 N. J. Eq. 452.

It is as well settled in statutes as to conditional sales, as in statutes in regard to chattel mortgages, that the word "creditor" refers solely to creditors who hold some additional lien. The reason for this is that the fact that the conditional vendor, or the mortgagee, under instruments not properly filed, has no less rights than formerly, and such failure to record does not

201 U. S.

Argument for Appellant.

give to the mere creditor any specific right in the property conditionally sold. It merely leaves the property in such a condition that the general creditor by diligence may acquire a prior lien thereon. Jones on Chattel Mortgages, 4th ed., § 245; In re Cassie L. Chadwick, 50 Wkly. Law Bull. (Ohio) 413; Jones v. Graham, 77 N. Y. 628; Sheldon v. Wickham, 161 N. Y. 500; Stephens v. Meriden Brittania Co., 160 N. Y. 178; Meyer Bros. Drug Co. v. Pipkin Drug Co., 136 Fed. Rep. 396; Stewart v. Beale, 7 Hun, 405; Hall v. Keating Implement Co., 33 Tex. Civ. App. 526; Bowen v. Wagon Works, 91 Texas, 385.

The statute protects only subsequent creditors and mortgagees and not prior creditors. In re Sewell, 111 Fed. Rep. 791; In re Ducker, 133 Fed. Rep. 771; S. C., aff'd, 134 Fed. Rep. 43; Baldwin &c. Co. v. Crow, 86 Kentucky, 679; Wicks v. McConnell, 20 Ky. L. R. 84; Brown v. Brabb, 67 Michigan, 17; First National Bank of Corning v. Reid, 122 Iowa, 280; In re Cannon, 10 Am. B. Rep. 64; Harrison v. South Carthage Mining Co., 106 Mo. App. 32. The date from which to reckon who are prior creditors is the date of delivery of the machinery. In re Gosch, 126 Fed. Rep. 627.

The trustee in bankruptcy takes no greater title than the bankrupt and the bankruptcy proceedings do not operate as a judicial seizure,' conferring new and greater rights on the creditors of the bankrupt. Thompson v. Fairbanks, 196 U. S. 516; Hewit v. Berlin Machine Works, 194 U. S. 296; Sheldon v. Wickham, 161 N. Y. 500; Collier on Bankruptcy, 5th ed., 553; Gibson v. Warden, 14 Wall. 244; Douglas v. Vogeler, 6 Fed. Rep. 53; Donaldson v. Farwell, 93 U. S. 631; Winsor v. McLellan, 2 Story, 492; Mannix v. Purcell, 46 Ohio St. 102; Shaw v. Glen, 37 N. J. Eq. 32; Van Heusen v. Radcliff, 17 N. Y. 580; Nebraska Plow Co. v. Blackburn, 104 N. W. Rep. 178; Cincinnati Warehouse Co. v. Combs, 109 Kentucky, 21; In re Wise, 121 Iowa, 359; Ryder v. Ryder, 19 R. I. 188.

It would be unconstitutional for Congress to attempt to give the mere filing of the petition, or the adjudication, the

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