for that purpose, preparatory to its shipment or its delivery to the buyer. Until the elevator company turned over control of it to the railway company for transportation, or to the buyer, no one but it-not even the railway company-had any right to ship out the wheat. As to the right of a subsequent purchaser in National Bank v. Chicago, B. & N. R. Co., the court said: "The general rule is that a title, like a stream, cannot rise higher than its source, and it is difficult to see how a person can communicate a better title than he himself has, unless some principle of equitable estoppel comes into operation against the person claiming under what would otherwise be the better title. We have found no case holding that any different rule obtains in cases like the present, as to a subvendee, than as to the original purchaser, except, perhaps, that as to the former a waiver of the condition -as, for example, of payment on delivery-will be more readily inferred from the delivery, especially when the condition is not express, but implied.

. It is suggested that Gen. Stat. 1878, chap. 39, § 15, would apply, and that any condition attached to the delivery would be void as against creditors and purchasers, unless the contract is filed. This statute may establish such a rule as to conditional sales, properly so called, where the condition is that the title is to pass, not upon delivery, but upon payment at some subsequent date. But it can have no application to a case like the present, where the terms of sale are cash on delivery, and the only condition attached to the delivery arises from the fact that payment by check is conditional. In such a case, if the check is dishonored, the vendor, if guilty of no fraud or laches which creates an equitable estoppel against him, may retake the property even from an innocent subvendee for value. We are not called upon to decide what would have been the effect if anyone had dealt with the wheat in reliance upon the acknowledgment of the elevator company, in the receipted bill, that it had been paid.

for, for there is no evidence that such was the fact. But it is difficult to see how any negligence or laches can be ascribed to the act of a vendor, giving his vendee a receipted bill of the goods upon receiving his check on his banker, which the vendor has every reason to suppose will be paid on presentation."

It has been held that an assignee of a non-negotiable bill of lading stands in no better position than the assignor, where neither of the parties. had possession of the articles called for by the bill of lading, and hence the assignee does not stand in any better position than the assignor as to the claim of the seller for the purchase price, or for the return of the article, where the purchase price is represented by a check, which was dishonored upon presentation for payment. Quality Shingle Co. v. Old Oregon Lumber & Shingle Co. (1920) 110 Wash. 60, 187 Pac. 705.

d. Effect of application of proceeds upon pre-existing indebtedness of buyer.

Where the proceeds of the sale of goods acquired by the buyer by means of subsequently dishonored check or draft are applied by the subsequent purchaser upon a pre-existing indebtedness, it has been held that he is not a bona fide purchaser for value.

For example, where title had not passed as between the original parties to a sale, because the check given in payment of the purchase price was dishonored when presented, a bank to which the bill of lading for the goods had been assigned prior to the presentation of the check, for the purpose of taking care of an overdraft then standing against the purchaser, is not a bona fide holder for value. Wright v. Mississippi Valley Trust Co. (1910) 144 Mo. App. 640, 129 S. W. 407. The court said that the consideration for the transfer of the warehouse receipts was a pre-existing debt. The debt was in existence before the transfer was made, and the creation of the debt by the payment of the money on the overdraft and the transfer of this

collateral cannot be held to be contemporaneous, for the reason that the money was not paid under an agreement that this particular collateral should be furnished; this being true, the fact that the time which elapsed between the creation of the debt and the transfer of the collateral was short, both occurring on the same day, can make no difference.

In First Nat. Bank v. Griffin (1912) 31 Okla. 382, 49 L.R.A. (N.S.) 1020, 120 Pac. 595, it is held that where a bank received cotton and placed the value thereof to the buyer's credit, he at the time being overdrawn, and with knowledge of these facts refused to honor a check given by the buyer for the price of the cotton, it was liable to the seller for the value thereof.

In Ballard v. First Nat. Bank (1917) Mo. App. -, 195 S. W. 559, it is also held that where a bank with which the buyer is transacting his banking business knows that goods were not paid for, it is not a bona fide purchaser for value, and cannot hold the proceeds of the goods as against the seller, the check given by the buyer in payment of the same being dishonored, and the bank having credited the proceeds to an overdraft of the buyer.

To the same effect is Armstrong v. First Nat. Bank (1917) — Mo. App. -, 195 S. W. 562. In the latter case recovery of the proceeds of the sale of the property was permitted on the ground that the defendant bank had orally agreed that, when such proceeds were received by it, it would pay the check given the seller, the seller at that time being in a position where he could have reclaimed the goods.

e. Creditor of buyer.

Where the buyer of goods pays for the same by a check, which is not paid, the seller may retake the goods or recover the proceeds proceeds thereof from the trustee in bankruptcy of the buyer. Re Perpall (1919) 168 C. C. A. 104, 256 Fed. 758.

As between the trustee in bankruptcy of the buyer and the seller,

actual fraud in inducing the seller to deliver the goods need not be shown; it is sufficient in this regard if the sale was made upon condition, which was never performed.. The fact that the seller accepted a check which was never paid does not affect his right to claim goods delivered under the belief that the check would be paid, although given in payment of other goods, payment being a condition to delivery. Marion Mach. Foundry & Supply Co. v. Girand (1922) 285 Fed. 160.

In Re A. O. Brown & Co. (1911) 189 Fed. 442, in holding a dishonored check did not preclude the seller from asserting a claim to the property sold, or the proceeds thereof, in the hands of the trustee in bankruptcy of the buyer, the court said: "It now appears that when Becker gave the check to Mrs. Parker, there were no funds in his account. The question is what Becker's representation really was, and what Mrs. Parker had the right to believe was involved in giving her a check at all. If the natural meaning of the transaction was that there was money there at that time, subject to withdrawal by the check, then she may rescind, for confessedly that representation was untrue. If, on the other hand, the representation is only a promise that there will at some future time-that is, when she chooses to present the check-be funds to meet it, then there is no misrepresentation of fact unless Becker at the time did not intend to put the drawee in funds before the check should be presented, of which there is no evidence. Now a check is undoubtedly a draft, and, in the case of a time draft, I suppose no one would say that there was any representation by the drawer that the drawee was in funds in præsenti. Everyone knows that business usage does not contemplate that the drawee shall be in funds until the draft is due. The trustee makes a plausible argument, through what he says is the common custom among brokers in meeting out-of-town checks upon their branch offices. He says that it is customary for the branch house to

wire the New York house that a check has been delivered, and for the broker to put the drawee bank in funds by wire before the check goes through the clearing house. It is doubtless the custom to deposit checks, and so to take twenty-four hours to cash them, and if that were a part of the engagement, so that the check could not be presented for payment except at the end of twenty-four hours, then the check would properly be held to be a time draft; and, though the time would be short, it would be also quite proper to hold that to give the check was no more than a representation that at the end of the twenty-four hours the drawee would be in funds.. Were that the fact, it would be impossible to show fraud or a misrepresentation of fact without showing that the drawer did not intend to put the drawee in funds when he uttered the check. However, though it is the usual custom to deposit checks, it is by no means the inevitable custom, nor is there anything implied in the transaction

to prevent the payee from going at once to the drawee's paying teller and demanding payment in cash, or requiring a certification. Unless there is some agreement to the contrary, this right of the payee gives him immediate control over the funds in the drawee's hands, and he certainly has the right to assume that the drawee will be in funds when he appears, and that the drawer so means to represent. In short, the period of the time of presentation of a check is by no means one day, but it is the earliest time within which the check may be presented, and that, of course, varies with the facts. In a case like that at bar, where the drawer, the payee, and the drawee all live in the same city, and where the payee may cash the check in a few minutes, the time is reduced practically to nothing, and it seems to me that the drawer must be held to represent that the drawee is already in funds, unless he indicates in some way that the check is not to be presented at once."

In Continental Bank & T. Co. v. Hartman (1910) Tex. Civ. App.

129 S. W. 179, where the seller took the buyer's check in payment, delivering the property in reliance thereon, and the check was dishonored when duly presented for payment, the goods were held not subject to attachment by the buyer's creditors, unless it appeared that the goods were delivered and the check accepted as absolute payment, with intention to pass the title.

In Bristol v. Wilsmore (1823) 1 Barn. & C. 515, 107 Eng. Reprint, 190, 2 Dowl. & R. 755, 1 L. J. K. B. 178, 25 Revised Rep. 488, as against a creditor of the buyer who had levied upon the goods under an execution, the right of the seller to retake the goods was held to depend upon a question of fact as to whether the buyer obtained possession of the goods with a preconceived design not to pay for them, he having given a check on a bank where his account had been overdrawn for several months.

III. Effect of delay of original seller in receiving or presenting check.

The fact that a check as a means of payment for goods was not delivered simultaneously with the delivery of a bill of lading with the goods by the seller to the buyer, but a short time thereafter, does not show that it was intended to sell the article upon credit, this being the usual, customary way for a transaction of what was regarded as a cash business. Hall v. Missouri P. R. Co. (1892) 50 Mo. App. 179.

Where delivery of the article sold and the payment of the purchase price are to be concurrent, this does not mean that they must be simultaneous. Upon this point it has been pointed out: "As a practical necessity, to avoid the inconvenience of requiring the seller of an article to keep one hand upon it until with the other he grasps the currency tendered in payment, there must be some relaxation of this rule. Delivery and payment, as a practical matter, cannot be absolutely simultaneous. Some slight interval between the two acts is inevitable, and the criterion upon which the courts have agreed with substan

tial unanimity is that such interval does not conclusively prove a total abandonment of title and the right of possession by the seller, unless, under all the circumstances of the case, it in fact shows that result to have been intended. Some ingenuity has been exercised with doubtful profit in defining the character of the right remaining in the seller after a delivery and before payment. Whether it is more properly described as a lien, a retention of title, or an option to rescind the contract, is not very important so far as affects the solution of the problem presented here. It is a right of the seller to repossess himself of the goods if the buyer fails in the performance of the agreement on his part which was intended to be contemporaneous with the delivery. It is a peculiar right, growing out of a peculiar situation, and it is not necessary to give it a name the use of which might seem to decide controversies growing out of other relations." People's State Bank v. Brown (1909) 80 Kan. 520, 23 L.R.A. (N.S.) 824, 103 Pac. 102.

Where the seller lived some distance from the buyer, and delivery was made by barge, and payment by check was made to the seller's agent, who sent the check to the seller, the necessary delay in the transmission of the check to the seller, and then to the bank upon which it was drawn, was held in Hodgson V. Barrett (1877) 33 Ohio St. 63, 31 Am. Rep. 527, not to affect the rights of the seller as against a sheriff in control of the goods in behalf of the creditors of the buyer.

A delay of between two and three weeks in presenting a check given for the purchase price of articles to be paid for in cash was held in People's State Bank v. Brown (1909) (Kan.) supra, not, as a matter of law, to defeat the right of the seller to reclaim the articles sold from an attaching creditor of the buyer. In this case the buyer did not have a sufficient amount on deposit in the bank upon which the check was drawn to pay it at the time he gave the

check, but the bank at that time was paying his checks. The court, however, said that the fact that the check might have been paid if it had reached the bank within a week from its date did not convert its acceptance by the seller into a payment. That would have been the result if payment had been prevented by the failure of the bank in the meantime, but such effect follows only where loss is occasioned to the drawer.

Upon the question as to whether or not a delay of two or three weeks in presenting a check given for the purchase price of articles, as a matter of law, amounted to a waiver, or afforded conclusive proof of a waiver of the seller's right to reclaim the article sold, the court said in People's State Bank v. Brown (Kan.) supra, that this was a question which must be determined upon principles entirely different from those involved under similar circumstances, where the rights of innocent purchasers have intervened. There the question presented is one of equitable estoppel, and delay is important as tending to defeat others to their prejudice. Here the question is one of evidence, and delay is important as tending to show an intention that title should pass. Equitable considerations are not involved. True, it seems but fair and just that the seller should have either his property or his money, but the same would be true if he had sold it on credit, and the buyer had failed to pay at the promised time. Long as the interval was between the making of the check and its presentation, the seller deposited it for collection at the first opportunity he had to attend to the matter in person, without making a trip to the bank upon which the check was drawn for that very purpose. To say that to preserve his right of reclamation, it was necessary for him to present the check not later than the day after he received it would be to establish too rigorous a rule. And, after passing that limit, there seems to be no place where a hard and fast line can be drawn, dividing reasonable and permissible

delay from that which is unreasonable and prohibited.

However, in Goodwin v. Bear (1922) 122 Wash. 49, 209 Pac. 1080, it is held that the general rule that the acceptance of a check does not constitute payment, where the check is not paid, did not apply where a check was given in payment of live stock, and it did not appear that there were not sufficient funds to meet it, but the buyer stopped payment upon the check for the reason that, after he had obtained possession of the cattle, they had been attached by a creditor. The court said that there was no evidence indicating that the check was not drawn against sufficient funds, and the evidence further shows that the parties intended to complete the sale on the date when the stock was delivered. If the seller intended to keep possession of the cattle in security for the final payment, he lost his right to a lien when he permitted the cattle to be taken from the premises, and thus surrendered his possession. His delay of four days in presenting his check prevented its being paid in the ordinary course of business, and, if he were permitted to prevail in this action, would carry into effect the apparent effort of the buyer to defraud his creditors.

In Oldridge v. Sutton (1911) 157 Mo. App. 485, 137 S. W. 994, where the seller of chattels received a check at the time of the delivery of the chattels, and did not present it for payment for nearly a month thereafter, it was held that he could not assert that no title had passed, as against a third person receiving the proceeds of a resale of the chattels.

In South San Francisco Packing & Provision Co. v. Jacobsen (1920) 183 Cal. 131, 190 Pac. 628, it is held that while there is an assumption or presumption of fraud arising from the issuance by a buyer of a check which is not paid upon presentation, yet the fact that after the issuance of the check, and before its presentation for payment, three business days elapsed, during two of which the buyer had more than sufficient money on deposit to meet the check, was a circumstance consistent with the presumption of innocent and fair dealing, and furnished some foundation for the finding of the trial court against fraud. It was, however, held that it is not essential to show fraud where a check is not paid upon presentation, it having been given for the purchase price of an article, since such check is conditional payment only, and does not constitute absolute payment. A. G. S.