Security Trust & Sav. Bank v. Wm. R. Staats Co.

(after stating the facts as above). The appellant contends that the court erred in sustaining the exceptions of the defendants: To the finding of the special master that the deed of trust operated to enable the Staats Company to obtain a preference; to the finding that the deed of trust was executed to secure an antecedent debt, and that the transaction between the Stilson Company, bankrupt, and the Staats Company, was not a single transaction; to the finding that the 60 shares of stock had been hypothecated by the bankrupt prior to the execution of the trust deed; and to the finding that the Staats Company, at the time of the execution >of the deed of trust, had reasonable cause to believe that a preference was intended.

The history of the transaction involved, as gathered from the evidence, is in accord with the findings of the special master, and may be briefly stated as follows: The Stilson Company was adjudged a bankrupt on October 24, 1912, upon an involuntary-petition filed on July 2, 1912. The particular act which was made the basis of the adjudication in bankruptcy was that about March 14, 1912, while the Stilson Company was insolvent, it conveyed certain of its real…

On Motion for Rehearing.

We have given attentive examination to the appellees’ motipn and brief for rehearing. Stress is laid by the appellees upon the recent decision of the Supreme Court in Bailey, Trustee, v. Baker Ice Machine Company, 239 U. S. 268 , 36 Sup. Ct. 50, 60 L. Ed. 275 . But the facts of that case are very different from those here involved. The statement by Justice Van Devanter shows that *519 by a contract in writing it was there stipulated that the title to the machine installed should he and remain in the Baker Company until full payment of the purchase price; that the machine should he kept insured for the benefit of the Baker Company; that if default was made in the payment of the purchase price the Baker Company should have the right to resume possession and take the machine away; and that the Baker Company should have a right to file a mechanic’s lien for materials and labor furnished under the contract. The court held that the title to the property was retained in the vendor and that the contract had been rightly held to be one of conditional sale. Much closer to the present case are National City Bank v. Hotchkiss, 231 U. S. 50 , 34 Sup. Ct. 20, 58 L. Ed.…