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All the goods covered by the bill of December 5th, in which the terms were stated as "Cash," were paid for by the bankrupt four days later with a 2 per cent. discount; and some of these are among those retaken by the claimant as his property, and to which title is now asserted by him. The same is true as to the bill of November 28th, and certain items therein specified. The contention that these goods, which have been bought and paid for by the bankrupt, are the property of the claimant, is obviously untenable. They were never sold by the bankrupt, but they were paid for by him—a significant circumstance in determining what his arrangement with the claimant was. Various facts, as to which there can be no doubt, are absolutely inconsistent with the claimant's testimony that the goods were merely consigned to the bankrupt, not to be paid for till sold by him, and with no obligation on his part to buy them.
It is apparent, as the referee finds, that "the evidence of both Simon and the bankrupt [is] of very little value in the matter of what the arrangement between them was.” Against a claim of such an obviously suspicious character, supported by testimony which he might rightly believe to be perjured, the learned referee was quite warranted in drawing every adverse inference which the facts and evidence fairly suggested, and in resolving all reasonable doubts against the party resorting to such methods.
I have no doubt that the goods were in fact sold to the bankrupt as the bills state, that he agreed to buy them and to pay for them at the prices stated, that he had the right to sell them at such prices as he might put upon them, and to use the proceeds of such sales as he saw fit. What the nominal understanding as to payment was between Simon and the bankrupt seems to me, as it did to the learned referee, to be unimportant. It was not, in my opinion, intended to be acted on, unless the bankrupt got into financial difficulties, and was therefore fraudulent as to creditors. Flanders Motor Car Company v. Reed, 220 Fed. 642, 136 C. C. A. 250 (C. C. A. 1st Cir.). The findings of the learned referee on this petition are affirmed.
As to the petitions of the Boston Traveling Goods Company and the Murrell Leather Goods Company:
As above stated, the claimant in each of these petitions contended that the goods sought to be recovered had been merely consigned to the bankrupt, without obligation on his part to purchase them. Whether this was the fact was sharply disputed, and the evidence was conflicting. The learned referee disbelieved the testimony for each claimant, and found that all the goods had been sold, not consigned. His certificate sufficiently states the nature of the controversy, and the evidence on which he acted. I agree with his findings and conclusion.
The orders appealed from, dismissing the petitions, are affirmed.
In re MOBILE CHAIR MFG. CO.
(District Court, s. D. Alabama. September 24, 1917.) 1. BANKRUPTCY 324–PROCEEDINGS—CLAIMS—"PRESENT CONSIDERATION."
Bankr. Act July 1, 1898, c. 541, 8 670, 30 Stat. 564, as amended by 'Act June 25, 1910, c. 412, & 12, 36 Stat. 842 (Comp. St. 1916, § 9651), declares that liens given or accepted in good faith, and not in contemplation of, or in fraud upon, the act, and for a present consideration, which have been recorded according to law, shall to the extent of such present consideration only not be affected by the act. The amendment added the phrase "to the extent of such present consideration only." Held that, where a note given by the bankrupt reserved interest, the interest was part of the “present consideration," and might be recovered.
[Ed. Note.-For other definitions, see Words and Phrases, Second Series,
Present Consideration.] 2. BANKBUPTCY 322—PROCEEDINGS—CLAIMS.
Under such section as amended, fees paid by the holder of a note to
Stevens, McCorvey & McLeod, of Mobile, Ala., for petitioner.
ERVIN, District Judge. This matter comes on for hearing on a petition praying for a review of the order of the referee heretofore rendered, wherein the referee denied the payment of interest and attorney's fees claimed by petitioner.
The facts, stated briefly, are that on June 27, 1916, the Mobile Chair Manufacturing Company, the bankrupt, executed a mortgage on certain personal property to petitioner, to secure $1,500 then loaned by petitioner to the bankrupt; a list of the property being attached to and made a part of the mortgage. The note, which was given to evidence the debt and for the payment of which the mortgage is security, bore the same date, and is payable 30 days after date with interest. The agreement as to attorney's fees contained in the note is shown by the following words:
"Agree to pay all costs of collecting or securing, or attempting to collect or secure, this note, including a reasonable attorney's fee, whether the same be collected or secured by suit or otherwise."
Kirk-McConnell-Davies Company, the petitioner, is a partnership composed of C. M. Kirk, H. L. McConnell, and H. S. Davies. The petition for adjudication was filed on the 4th day of August, 1916, and the adjudication was entered on August 5, 1916, and on the 5th day of August, 1916, H. L. McConnell, who was one of the partners in the
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firm of Kirk-McConnell-Davies Company was appointed receiver of said bankrupt estate.
On August 8, 1916, the receiver filed a petition, setting out the loan of the $1,500 and the making of the mortgage and note by the bankrupt, and that prior to the filing of the petition in bankruptcy the mortgagees had had all of the property covered by the mortgage piled together in a separate lot and delivered to it by the bankrupt; that a portion of the property covered by the mortgage is not yet in a completed condition, and not ready to be shipped out to fill orders which had been received therefor; that the necessary material and necessary work for completing said chairs can be had for a few hundred dollars, and that the bankrupt had on hand this material, which might be used in the completion of the chairs, so as to render them salable, and that it would be to the interest of the bankrupt estate that the receiver be authorized to proceed to complete the manufacture of the chairs covered by said mortgage; and prayed that he be authorized to borrow such money as may be necessary for labor and to purchase such necessary supplies as might be needed in the completion of the chairs, so as to sell them, and praying further, that a separate account be kept of the cost of completion of such chairs as were covered by the said mortgage. This petition has attached to it a copy of the mortgage and schedules.
On the same day an order was made by the then referee granting the prayer of said petition. Thereafter the receiver completed the manufacture of the chairs, using some materials not covered by the mortgage, as well as the mortgaged materials, borrowing money and paying for the labor necessarily used in completing the chairs, and then sold the chairs on existing contracts then held by the bankrupt concern, and collected for said chairs, and, after paying for the materials and labor, had left more than enough to pay the mortgage, interest, and attorney's fees claimed. Thereafter a petition was filed in the bankrupt estate by the mortgagees, praying for the payment of their debt, interest, and attorney's fees.
 The referee, on July 9, 1917, ordered the payment of the $1,500 principal, but denied payment of the interest on this mortgage and the attorney's fee claimed. The referee bases his ruling on the language of section 67d as amended, which reads as follows:
“Liens given or accepted in good faith and not in contemplation of or in fraud upon this act, and for a present consideration, which have been recorded according to law, if record thereof was necessary in order to impart notice, shall, to the extent of such present consideration only, not be affected by this act."
The words italicized were added by the amendment of June 25, 1910. I find no authorities discussing this question. It will be noticed that the act, as, originally drawn, preserved liens given in good faith and for a present consideration. The words added by amendment must have been designed by Congress for some purpose. Congress certainly concluded that the words "for a present consideration," as found in the original act, needed some further limitation; so the words added in 1910 were undoubtedly put into the act to further limit
the protection given by the act to liens given in good faith. It was, no doubt, found that liens, which were given for a present consideration, had also other considerations moving, and Congress intended to limit the protection given these liens to the present consideration given for such lien.
The question then arises whether the interest which the present cash consideration bears is the same as the consideration itself. I think that, in a lien given to secure $1,500 presently advanced, with interest, the interest is a necessary part of the advance. It is produced by or grows out of the
advanced. It is contracted for and absolutely payable by the terms of the lien. Suppose the mortgagor, 10 days after the making of this mortgage loan, had gone to the mortgagee and tendered the $1,500 in payment of the mortgage. This would not have required the mortgagee to take the money
and surrender his mortgage. He might have properly replied:
"Your mortgage obligates you to pay, not only the principal, but the interest for 30 days, and, while I will take the money now, instead of at the end of 30 days, you still must pay me, in all events, both principal and interest."
To this extent, therefore, I think the referee erred.
 As to the attorney's fee, however, under the terms of this mortgage loan, an attorney may or may not have been employed. There may or may not have arisen a necessity after the execution of the mortgage for the employment of an attorney. This necessity could not be determined until the mortgage matured. Such employment, therefore, was contingent, and not absolutely fixed and determined by the mortgage. I cannot, therefore, see that the attorney's fee is in any sense a present consideration, as provided by the amendment to the section. Congress having been so particular, not only to use "to the extent of such present consideration," but then added the additional term "only," to show beyond any peradventure that the words were put in as a strict limitation, and as such should be so construed. I therefore conclude that this lien did not secure the attorney's fee.
I think the referee was correct in disallowing the attorney's fee for another reason. The language of the note obligates the maker to pay the costs of collecting, including the attorney's fee. The collection from the bankrupt trustee is not such a collection as was contemplated by the terms of this note. It is true there are a number of cases which hold that, where a note agrees to pay a collection fee if it is placed in the hands of an attorney for collection, this fixes the fee, so that it is added to the face of the note. Here, however, the language does not so read, and I think the language of this note brings petitioner under the cases of In re Roche, 101 Fed. 956, 42 C. C. A. 115, and Gugel et al. v. New Orleans National Bank, 239 Fed. 677, 152 C. C. A. 510.
OREGON SHORT LINE R. CO. v. PORTLAND CATTLE LOAN CO.
SAME y. PORTLAND FEEDER CO.
(District Court, D. Oregon. September 17, 1917.)
Nos. 7232, 7233.
In an action by a railroad company to recover balances due as freight for shipments of cattle, published tariffs held to show that a differential rate from the point of shipment to a central point should be collected; provisions for charging rate from central point in case of shipments routed
in a particular way not applying. At Law. Actions by the Oregon Short Line Railroad Company, a corporation, against the Portland Cattle Loan Company, a corporation, and against the Portland Feeder Company, a corporation. Judgments for plaintiff.
A. C. Spencer and W. A. Robbins, both of Portland, Or., for plaintiff.
Carey & Kerr and Charles A. Hart, all of Portland, Or., for defendants.
WOLVERTON, District Judge. These cases were instituted to recover certain balances alleged to be due plaintiff as freight for shipments of cattle, arising by reason of alleged erroneous computations of freight when the shipments were made and settled for; the plaintiff being required to institute the actions under the federal statutes. Several shipments are involved, a statement as to one of which will suffice for illustration of the whole.
Forty-four carloads of cattle were shipped from Hereford, Tex., to Amarillo, Tex., the latter being a station on the Pecos & Northern Texas Railway, where the shipment was combined into 43 cars, 27 of which were transported thence over the lines of connecting carriers to Pocatello, Idaho, and the remaining 16 to Butte, Mont., where they were delivered to the shipper.
The plaintiff claims that, under Joint Live Stock Tariff No. 100-A, then in force, the proper charges on these shipments are made up as follows: Local from Hereford to Amarillo, $26.40 per car, and from Amarillo to Pocatello, $116.50; making a total of $142.90 per car for shipment of the 27 cars. To Butte, the same local from Hereford to Amarillo, to which is added $125 to Dillon, Mont., and the local from Dillon to Butte, $19.80; total, $171.20.
The entire controversy centers about the local charge of $26.40 from Hereford to Amarillo; the defendants insisting that Hereford is a common point with Amarillo, and that the rate designated under section 2 of the tariff constitutes the entire rate from Hereford to Pocatello. This depends upon a proper construction of the tariff. Referring to section 1 thereof, under the head of "The Pecos & Northern Texas Ry. Co.," will be found lists of stations common with Amarillo, the
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