rate, and the conclusions reached in these two cases meet with the approval of this court.

Section 974, Rev. St. (section 1615, U. S. Comp. St. 1916), provides: "When judgment is rendered against the defendant in the prosecution for any fine or forfeiture incurred under a statute of the United States, he shall be subject to the payment of costs."

On the part of the government it is insisted that this includes all costs from the time a person is arrested until the entry of the judgment, including the costs of the examining magistrate, the United States commissioner in this case, as well as those of the marshal and witnesses, who appeared at the examination for the government. This contention is, in the opinion of the court, untenable. A preliminary examination before a United States commissioner, or other officer, is not a case pending in any court of the United States. It was so expressly held in Todd v. United States, 158 U. S. 278, 15 Sup. Ct. 889, 39 L. Ed. 982; Virginia v. Paul, 148 U. S. 107, 119, 13 Sup. Ct. 536, 37 L. Ed. 386; Post v. United States, 161 U. S. 583, 587, 16 Sup. Ct. 611, 40 L. Ed. 816; Ocampo v. United States, 234 U. S. 91, 100, 34 Sup. Ct. 712, 58 L. Ed. 1231.

Proceedings before a commissioner, or other magistrate authorized to conduct examinations under section 1014, Rev. St. (section 1674, U. S. Comp. St. 1916), are merely preliminary for the purpose of ascertaining whether there is reasonable cause to believe that the person brought before the examining officer has violated a statute of the United States, and, if he so finds, it is his duty to hold or admit him. to bail, to await the action of the grand jury. In no sense can it be said that this is a trial, for no judgment or sentence can be pronounced or imposed by the commissioner, or any judge, sitting as an examining magistrate, even if it is the District Judge, who holds the examination. In Virginia v. Paul, supra, it was said:

"Proceedings before a magistrate to commit a person to jail, or to hold him to bail, in order to secure his appearance to answer for a crime or offense, which the magistrate has no jurisdiction himself to try, before the court in which he may be prosecuted and tried are but preliminary to the prosecution, and are no more a commencement of the prosecution, than is an arrest by an officer without warrant for a felony committed in his presence."

In Ocampo v. United States, supra, it was held:

"A finding that there is no probable cause is not equivalent to an acquittal, but only entitles the accused to his liberty for the present, leaving him subject to rearrest. * * * In short, the function of determining that probable cause exists for the arrest of a person accused is only quasi judicial, and not such that, because of its nature, it must necessarily be confided to a strictly judicial officer or tribunal."

To meet this omission in the statutes Congress, in enacting the Penal Code (Act March 4, 1909, c. 321, 35 Stat. 1088), added in sections 135 and 136, originally sections 5399, 5405, and 5406, Rev. St. (Comp. St. 1916, §§ 10305, 10306), the words in section 135, "or [any] officer who may be serving at any examination before any United States commissioner or officer acting as such commissioner, in the discharge of his duty," and in section 136 the words, "or in any examination before a United States commissioner or officer acting as such com

* * *

missioner," thereby clearly indicating that, in the opinion of Congress, an examination before a commissioner or other examining magistrate is not a proceeding in a court, as determined by the Supreme Court in the cases hereinbefore cited.

A commissioner or examining judge has no other power than to commit the defendant to jail or to hold him to bail. The only court in which an accused can be tried, and, if convicted, punished, is the District Court, and only upon an indictment which has been duly presented, or in case of misdemeanors he may be tried upon an information filed by the United States attorney by leave of the court. It is therefore clear that only after an indictment has been returned, or an information filed in the District Court, is there a cause or prosecution pending in a court.

There is some conflict among the decisions of the state courts under statutes somewhat similar to section 974, Rev. St. The Constitution of the state of Washington (article 1, § 22) provides that the accused in criminal prosecutions shall have the right "to have compulsory process to compel the attendance of witnesses in his own behalf." In State v. Grimes, 7 Wash. 445, 35 Pac. 361, the question before the court was whether under this provision the state, or county, were liable for defendant's witnesses at a preliminary examination, there being such liability in the trial court, and it was held that they were not. The court, after holding that the county and state are liable for such costs in the trial court, said:

"But defendant's witnesses at a preliminary examination are an entirely different matter. The constitutional provision referred to applies to trials only, and a preliminary examination is not in any proper sense a trial."

Whether the judgment entered upon a conviction reads "costs in the cause" or "costs of the prosecution" is wholly immaterial. A question left open by Judge Sanford in United States v. Smith, supra.

[2] The construction of the statute by the Department of Justice is entitled to high consideration, but it is not conclusive on the courts. Cornelius v. Kessel, 128 U. S. 456, 9 Sup. Ct. 122, 32 L. Ed. 482; Deweese v. Smith, 106 Fed. 438, 445, 45 C. C. A. 408, 66 L. R. A. 971, affirmed 187 U. S. 637, 23 Sup. Ct. 845, 47 L. Ed. 344; Hemmer v. United States, 204 Fed. 898, 905, 123 C. C. A. 194, affirmed 241 U. S. 379, 36 Sup. Ct. 659, 60 L. Ed. 1055. In Lewis Publishing Company v. Morgan, 229 U. S. 288, 311, 33 Sup. Ct. 867, 57 L. Ed. 1190, the court refused to follow an opinion of the Attorney General in the construction of an act of Congress. It is only when the construction by the department is "contemporaneous and uniform" that it will be followed by the courts, and then only when the language of the statute is found to be ambiguous. United States v. Healey, 160 U. S. 136, 148, 16 Sup. Ct. 247, 40 L. Ed. 369; Wisconsin Central R. R. v. United States, 164 U. S. 190, 205, 17 Sup. Ct. 45, 41 L. Ed. 399. In the last case it was said:

"Some reliance is placed on departmental construction, but we may dismiss that contention with the observation that we do not consider the true construction as doubtful, and that the departmental construction referred to was neither contemporaneous nor continuous."

The statute, digested as section 974, Rev. St., was enacted in 1792, and the construction by the Attorney General that under this act the costs before the commissioner or examining magistrate are properly taxable as costs of the cause or prosecution, was made in June, 1916, more than 124 years after the enactment of the statute. This can hardly be said to be contemporaneous. Until then, the uniform practice of this court, ever since its organization in 1836, and so far as the court has been able to ascertain, of nearly all other national courts, has been not to tax such costs against the defendant. The only reported federal cases in which such costs have been included, which the court has been able to find, is United States v. Leopold (D. C.) 43 Fed. 785, and from the report it seems the only issue raised in that case was whether costs before the commissioner in examinations, in which the defendant was discharged by the commissioner, could be taxed, when the defendant was thereafter indicted on these charges and entered a plea of guilty. The point now in issue seems not to have been raised, and of course was not decided by Judge Hallett.

Another ground upon which the contention of the government must fail is that section 1014, Rev. St. (section 1674, U. S. Comp. St. 1916), expressly provides that such examination before the commissioner, or officer of the state, shall be "at the expense of the United States." Nothing is said, in this or any other statute, that such costs shall be taxed against the defendant upon conviction. It may be proper to add, although in the opinion of the court it is not material, that in the courts of the state of Arkansas it is the uniform practice not to tax the costs of the preliminary examination as costs of a criminal prosecution. The court refers to this only for the reason that the learned District Attorney cited 1 Comp. Dec. 536, where the comptroller held that the statutes of Georgia should be followed in proceedings under section. 1014, Rev. St.

The motion to retax the costs is sustained, and the clerk directed not to include any costs, except those of this court.

In re ARONSON.

(District Court, D. Massachusetts. August 6, 1917.)

No. 24446.

1. BANKRUPTCY 116-RECLAMATION PETITIONS-HEARING.

Where the referee's certificate separated and distinguished the claims of several creditors, each of whom petitioned to reclaim goods in the possession of the receiver in bankruptcy, on the ground that they did not belong to the bankrupt, the fact that the referee heard the reclamation petitions together was not an abuse of discretion.

2. BANKRUPTCY 140(2)-CONDITIONAL SALE-PASSAGE OF TITLE.

Whether an arrangement whereby possession of goods was transferred from one to another is a conditional sale, a consignment, or a sale on credit, depends less on how it is described by the parties than on the rights and liabilities created by it, and where the seller delivered goods to the buyer, authorizing the buyer to dispose of them and retain the For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

purchase price, the fact that the transaction was denominated a consignment, or a conditional sale, does not prevent title passing; ownership being acquired, and the provisions that title should not pass being fraudulent as to the buyer's creditors.

3. BANKRUPTCY 140(1)-EVIDENCE-PASSAGE OF TITLE.

On petition of creditors of a bankrupt to reclaim goods, on the theory that title had not passed, evidence held to show that the sales were sales on credit, and title passed.

4. BANKRUPTCY

116-PROCEEDINGS-PERJURY-INFERENCES.

Where a petition for reclamation of goods delivered by petitioner to a bankrupt was of a suspicious character, and supported by testimony which the referee might rightly believe to be perjured, it is proper to draw every adverse inference from the evidence, and resolve all reasonable doubts against the petitioner.

5. BANKRUPTCY 140(2)-RECLAMATION PETITIONS-FRAUD ON CREDITORS. An agreement between a seller and buyer of goods that title should not pass is unavailing, being fraudulent as to creditors, where not intended to be acted on unless the buyer should get into financial difficulties.

In Bankruptcy. In the matter of Casper A. Aronson. Petitions by the Boston Traveling Goods Company and others to reclaim from the receiver goods which petitioners contended were their own property. The referee denied the petitions, and petitioners appeal. Order affirmed.

Samuel J. Freedman, of Boston, Mass., for trustee.

Jacobs & Jacobs, of Boston, Mass., for Boston Traveling Goods Co. Louis Rosenthal, of Boston, Mass., for Hugo Murrell.

Clarence F. Eldredge and Edward E. Ginsburg, both of Boston, Mass., for Isaac A. Simon.

Barnett White, of Boston, Mass., for Maurice Feinzig and others.

MORTON, District Judge. [1] These are three petitions brought by independent petitioners to reclaim from a receiver in bankruptcy certain goods which the several petitioners contend were their property. The learned referee heard all the petitions together. His course in so doing was objected to by the petitioner Simon; but it seems to me to have been right, and certainly it was within the referee's discretion. In the certificate the different claims are carefully separated and distinguished, and Simon's rights were in no way prejudiced by what was done. This action of the referee is affirmed.

[2] Aronson, the bankrupt, conducted a retail shop in Boston for the sale of trunks, bags, and other leather goods. All the goods here in question went into the active stock in the shop, were used for display purposes, and were sold when the opportunity arose. The proceeds from the sales were treated exactly like the proceeds from sales of goods owned by the bankrupt. All these facts were known to and approved by each of the claimants. The arrangements between the several claimants and the bankrupt-whatever the details may have been-clearly gave him the right to deal with the goods as above stated. If it was also understood that the bankrupt was to buy the goods from the vendors, it would seem that, as a matter of law, he acquired absolute title to them.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

Whether an arrangement is a consignment, a conditional sale, or a sale on credit depends less on how it is described by the parties than on the rights and liabilities created by it. It is difficult to generalize, so as to cover all possible cases; but it seems clear that, where the person to whom the goods are delivered becomes obligated to buy them at a certain price, and at some time to pay for them, and also has the right to sell the goods without keeping the proceeds of such sales separate, and with the right to use such proceeds as he sees fit, there is no retention of title in the vendor, as against creditors of the buyer. To have agreed to buy goods, to take possession of them, to have the right to sell them at such price as one may fix, and the right to use the proceeds as one pleases is to own the goods. Ownership is acquired upon delivery of goods under such an understanding, and it is not negatived by an agreement that, until they shall be sold by the vendee, the title to them shall remain in the vendor. Such an agreement is inconsistent with the arrangement as a whole. It is a misuse of language to say that the title is retained; the facts show that it is not.

"Contracts of sale, under which title is to remain in the vendor, although the vendee may consume the goods, or sell them and apply the proceeds to his own use, are fraudulent as to creditors, because the stipulation that the title is to remain in the vendor is entirely inconsistent with the purpose of the contract." Ludvigh v. American Woolen Co., 188 Fed. 30, 33, 110 C. C. A. 180, 183; Id., 231 U. S. 522, 34 Sup. Ct. 161, 58 L. Ed. 345.

It was in dispute whether the bankrupt agreed to buy the goods here claimed. Each of the claimants or its representative testified in substance that the goods were merely consigned to him; that he never had any title to them, and never became obligated to buy them. In no case was there a written contract of consignment or conditional sale between the bankrupt and the claimant. The evidence relied on by the claimants consists, speaking generally, of bills of parcels accompanying delivery of the goods, and of alleged conversations with the bankrupt. On the other side, there was the testimony of two clerks, employed by the bankrupt, who are now preferred creditors of the estate, which was, to say the least, inconsistent with the testimony of the bankrupt and each claimant. The foregoing statement applies to all the petitions.

[3-5] As to the Simon petition: All the goods claimed in this petition were covered by bills or delivery sheets reciting that they were "sold to Reliable Trunk & Bag Company," the name under which the bankrupt did business. There were about half a dozen such bills, running in date from October 27, 1916, to December 5, 1916. They differed as to terms. That of October 27th is net 30 days; that of November 10th has no terms stated; another of November 10th has terms "Regular"; that of November 28th has terms "Cash"; that of November 29th has terms "Cash"; that of December 1st has terms. "Memo. Cons." (meaning memorandum consignment); that of December 5th has terms "Cash." The claimant makes no distinction between the arrangements evidenced by these various bills, after the one of "about November 1st" (which I take to be the bill of October 27th above referred to). No goods in this bill are now claimed.

245 F.-14