"On 3,000 wooden box cars of 60.000 pounds capacity, in accordance with your company's drawings and specifications, delivered f. o. b. your company's tracks, Chicago, Ill., a price of Eight Hundred Twenty-Five Dollars ($825.00) each car, your company to furnish the grain doors free of cost to us at our works.

"Delivery of these cars to begin at our works during April, 1903, at the rate of from 30 to 35 cars per day, until completion of order.

"Should your company decide to furnish f. o. b. cars the material listed below we will make allowance in accordance with the following schedule:Point of Delivery.

[Signed]

J. M. Hansen,
"President."

ceive your favorable consideration, we beg to remain. "Yours very truly,

It would needlessly incumber this opinion to set out the specifications and the subsequent correspondence between the parties to the contract, and between the Santa Fé Land & Improvement Company and the Southern Car & Foundry Company, the bankrupt; the Standard Steel Car Company having assigned the car building contract to the Southern Car & Foundry Company, at Anniston, Ala., under an arrangement by which that company was to build the cars, instead of the Standard Steel Car Company.

In the auditing departments of the Santa Fé Land & Improvement Company and the Atchison, Topeka & Santa Fé Railway Company, and on their books, the contract was clearly treated as a sale, and the price of the car material and specialties furnished by the Santa Fé Land & Improvement Company through the Atchison, Topeka & Santa Fé Railway Company as a debt against the Standard Steel Car Company, and finally against the Southern Car & Foundry Company, to be deducted from the price at which the cars were to be manufactured, and credit for the material to be allowed in settlement for the cars as made and delivered from time to time. A regular bill or invoice of these goods, in the usual form, was sent to the Southern Car & Foundry Company, stating how a draft for the price annexed should be sent, but accompanied by a letter which stated that the bill calling for the price would be deducted in the voucher remittance of the Santa Fé Land & Improvement Company, in payment for the cars. When the car material was shipped from the manufacturers to the Southern Car & Foundry Company, a printed form of receipt, or acknowledgment of the arrival of the goods, was sent by the Southern Car & Foundry Company.

It is shown in evidence that it was customary for railways, in making contracts for the construction of cars, to furnish parts of the material necessary to a completion of the cars, but it is not shown in the evidence that a course of dealing like this had previously occurred between these parties; and Hodges, a witness for the Santa Fé Land & Improvement Company, explains that the reason why the Santa Fé Land & Improvement Company furnished the material through its associate, the Atchison, Topeka & Santa Fé Railway Company, was that it could purchase the material at a lower price than the figure at which the same goods were estimated in the contract-the Atchison, Topeka & Santa Fé Railway Company being a large purchaser of such material -and that when, in the car-building contract, the estimate on the cost of the cars was fixed, it was seen that the Santa Fé Land & Improvement Company could make a profit by buying and furnishing such material as it had the right to furnish under the contract. The right to supply this material by the Santa Fé Land & Improvement Company was not because there was any difficulty in the Southern Car & Foundry Company securing these car specialities or material, or that they were to be of any particular design or standard, which the Southern Car & Foundry Company could not secure on the market, but, as explained by the witness Hodges, because a profit could be derived in purchasing this material direct from the manufacturers by the Atchison, Topeka & Santa Fé Railway Company at an advantageous price, and furnishing the material to the Southern Car & Foundry Company at a price above that sum; this price to be deducted from the contract price of the cars when completed and delivered. And in this connection it may be remarked that the Santa Fé Land & Improvement Company was not under obligation by the contract to furnish these car specialities and material, but had the option to do so, provided it availed itself of that option, in order to secure a profit and gain by reason of the difference between the purchase price to it and the credit price which it was allowed against the full contract price of the cars.

It is insisted on behalf of the Santa Fé Land & Improvement Company that the letter of January 26, 1903, tends to show that the transaction was a bailment, and so intended, and not a sale; and likewise in regard to the acknowledgment or receipt forwarded by the Southern Car & Foundry Company when the consignment of this material was received at its plant at Anniston, Ala. It is also said that the circumstance that neither the Santa Fé Land & Improvement Company nor the Atchison, Topeka & Santa Fé Railway Company was a dealer or seller of material and car specialties like those furnished under this contract is material in determining whether, under the contract, there was a sale or bailment of the personal property in question.

On behalf of the defendant banks the point is made that at the time this contract was executed, and, so far as the record discloses, now, the Standard Steel Car Company was entirely solvent, and that neither party ever contemplated, even remotely, any difficulty such as that which has come about on account of the bankruptcy of the Southern Car & Foundry Company, the assignee of the Standard Steel Car Company. It is said there was no motive for making a bailment instead of a sale, but, on the contrary, good reason on the part of the Santa Fé

Land & Improvement Company for furnishing these goods as a sale, instead of a bailment, as the burden of loss by accident would, in that view, be put upon the other party.

Without further reference in detail to the facts, or the discussion of these facts, it is sufficient to say that if it is permissible to look outside of the contract as made by the letter which contained a final proposition by the Standard Steel Car Company, and accepted in due form by the Atchison, Topeka & Santa Fé Railway Company in writing, much may be said on both sides in the way of pointing to minor circumstances as bearing on the question of whether this was a contract of sale or of bailment; and the case would, in these minor circumstances, perhaps, be about evenly balanced. I do not understand eminent counsel for the Santa Fé Land & Improvement Company to insist that the contract was a bailment, if its interpretation must be limited to the letter which contained the final proposition, and the written acceptance of that proposition. However this may be, it seems to me that it is too plainly evident for denial that the letter, as accepted, construed without regard to previous negotiations or subsequent dealings, constitutes a contract of sale, and not of bailment, and that the circumstance that the purchase price was to be paid by deducting from the contract price of the cars is not material, and would not change the result. After careful study of this contract, I have concluded that the contract cannot be affected in its interpretation or enforcement by any facts disclosed in previous negotiations or in the subsequent dealings between the parties, and this view renders it unnecessary to discuss minutely the circumstances both previous and subsequent to the execution of this contract which are supposed to bear upon its interpretation.

I conclude that the written contract contained in the final letter and specifications referred to, and the acceptance, is complete, and is not ambiguous, and that the case is within the principle of Powder Company v. Burkhardt, 97 U. S. 110, 24 L. Ed. 973. I would be entirely willing to announce a different conclusion if I felt that I could justifiably do so on this record, and under the authorities in relation to this question of sale or bailment.

It is hardly necessary to state that, under its cross-bill intervention, the burden is on the Santa Fé Land & Improvement Company to establish the proposition that the contract was a bailment, and not a sale, and that the title to the property did not pass to the bankrupt. Crosby v. Delaware & Hudson Canal Co., 141 N. Y. 589, 36 N. E. 332; In re Leeds Woolen Mills (D. C.) 129 Fed. 922.

As between the Santa Fé Land & Improvement Company and the Southern Car & Foundry Company, bankrupt, this result would militate against our common sense of justice and against equity, but the question here is considered between parties both of whom are entirely innocent in regard to the rights which they are asserting in the case. The Santa Fé Land & Improvement Company placed the property in the possession and under the control of the bankrupt, and clothed the bankrupt with the apparent ownership of the property, without any restriction or limitation in the contract, or otherwise, calculated to protect itself or others dealing with the Southern Car & Foundry Company, as innocent purchasers, from the possibility of just such wrong and hardship

as must now fall upon some one. Placing this particular property in pledge under a warehouse receipt by the Southern Car & Foundry Company could not be regarded as an honorable transaction, as there was clearly an implied confidence and trust in the consignment of this property to the Southern Car & Foundry Company under the contract, and the abuse of that trust and confidence is without any redeeming feature. But the unfortunate situation now is that an injury has been inflicted, and all that remains for the court to do is to determine, as between the Santa Fé Land & Improvement Company and the defendant banks, as holders of the warehouse receipts and of this property in pledge, upon whom this harsh loss must fall. Both parties have acted in good faith, and nothing can be charged against either in that regard. If the testimony as to negotiations previous to the final contract and the methods of dealing with the car material furnished under the contract subsequent to its execution were admitted as competent evidence, and duly considered, it could hardly be regarded as sufficient to change the result. It must be acknowledged that the case is close and doubtful. If, upon the whole of the evidence, the proper interpretation of the contract were still left doubtful, there is authority for the doctrine that this doubt would be resolved against the maker of the contract, in favor of an innocent purchaser. In Arbuckle v. Kirkpatrick, 98 Tenn. 221, 29 S. W. 3, 36 L. R. A. 285, 60 Am. St. Rep. 854, the question was whether or not the contract under consideration was one of sale, or of mere agency; and, in the concluding paragraph of the opinion, Judge Wilkes, giving the opinion of the Supreme Court of the state of Tennessee, said:

"In construing such a contract, whenever it affects the rights of others, it will be so construed as to protect such rights, and not to enable the complainant to carry out any double purpose. In view of its uncertainty and contradictory provisions, the court will see that third persons are not prejudiced by its construction. The decree of the Court of Chancery Appeals is therefore affirmed."

As I conclude that the written contract, as finally entered into, must be regarded as a contract of sale, and not of bailment, and that this interpretation cannot be changed by extrinsic evidence, it is unnecessary to take up the inquiry whether the proposition declared by the Supreme Court of Tennessee is applicable in a contract like this, and as between the Santa Fé Land & Improvement Company and the defendant banks, who are the real parties to this contest over the car specialities prop

ertv.

In regard to the leading question here between the trustees and the defendant banks, it was said by counsel that while considering the position, as bona fide holders, of the defendant banks, it must not be forgotten that the general contract creditors are also innocent creditors, although not innocent holders as known to the law. The force of this suggestion is acknowledged, but it is also not to be overlooked that the general creditors extended credit upon the general solvency and commercial standing of the bankrupt upon the whole of its credit and property, and not upon any particular property, while the defendant banks extended credit and advanced money distinctly upon the faith of the special property and material called for by these warehouse receipts,

which are made negotiable by a statute of Tennessee, and are everywhere recognized in law and in mercantile usage as symbols of property, and as passing title to the property specially described in such instruments. So that, while both parties are innocent creditors, the one is a general creditor, and the other an assignee for value of special property, and is afforded protection by the law as such, and the position of such assignee for value is different from that of a general creditor. All of this is, of course, obvious enough without restating it.

The views thus expressed will sufficiently indicate the several orders and decrees appropriate to give effect to these views.

The costs which have accrued under the cross-bill intervention of the Santa Fé Land & Improvement Company will be paid by that company, and the remaining costs incident to the bill by the trustees in the case will be paid out of the general fund belonging to the estate of the bankrupt subject to administration and general distribution among the creditors.

NOTE. The case of Thompson v. Fairbanks, 196 U. S. 516, 25 Sup. Ct. 306, 49 L. Ed., just decided, is authority for the view, expressed in the foregoing opinion, that the trustee under the existing bankruptcy act takes the property of the bankrupt in just such condition as the bankrupt himself held the property, in the absence of fraud or some positive provision of the bankruptcy act itself. The court said:

"Under the present bankrupt act, the trustee takes the property of the bankrupt, in cases unaffected by fraud, in the same plight and condition that the bankrupt himself held it, and subject to all the equities impressed upon it in the hands of the bankrupt, except in cases where there has been a conveyance or incumbrance of the property which is void as against the trustee by some positive provision of the act. In re Garcewich, 53 C. C. A. 510, 115 Fed. 87, 89, and cases cited."

WADLEIGH v. NEWHALL.

(Circuit Court, N. D. California. March 13, 1905.)
No. 13,640.

1. CONSTITUTIONAL LAW-CIVIL RIGHTS-MATTERS WITHIN PROTECTION OF FOURTEENTH AMENDMENT.

The rights, privileges, and immunities which the fourteenth constitutional amendment and Rev. St. § 1979 [U. S. Comp. St. 1901, p. 1262], for its enforcement, were designed to protect, are such as belong to citizens of the United States as such, and not as citizens of a state.

[Ed. Note.-For cases in point, see vol. 10, Cent. Dig. Constitutional Law, § 625.]

2. PARENT AND CHILD-RIGHT TO CUSTODY OF INFANT.

Parents have no right to the custody of their infant children, except subject to the paramount right of the state, to be exercised whenever deemed for the best interest of the children.

[Ed. Note.-For cases in point, see vol. 37, Cent. Dig. Parent and Child, § 4.]

8. CIVIL RIGHTS UNDER FEDERAL CONSTITUTION-CUSTODY OF CHILDREN. Code Civ. Proc. Cal. § 1747, which authorizes proceedings for the appointment of guardians for the persons and estates of minor children