of water, moving with varying winds and tides, some being navigated with more skill than others, could all successfully, or with the same degree of risk, pass her as she was then anchored. Even in this particular instance, some of those passing, as a matter of precaution, went out of the channel in doing so, their draft permitting, and the others were materially interfered with by the sheer caused by their necessary proximity to the southern bank of the channel. This argument may show that the position of the Caldy did not prevent the passage of other vessels; but it does not show that it did not "obstruct the passage of vessels and craft." The Caldy did not exercise proper care in anchoring, for she obstructed the channel to a far greater extent than the necessities of the situation required, than the statute permitted, than ordinary caution should have suggested. When she concluded to make her temporary anchorage answer for the night, she might have held her place by dropping her stern anchors, with which she was supplied, or she might have arranged for moving her anchor if the change of the wind and the consequent swinging of the vessel rendered it expedient for her to do so. No such precautions were taken, the risks of the night were either not appreciated or recklessly assumed, and with an indifference which it is desirable may never be duplicated, a careless watch was left on deck, all others going below. The pilot had left them. The crew were strangers to the locality, absolutely ignorant concerning the channel, without even a chart to guide them. They knew of their danger, for the pilot had admonished them, and the first officer was to have been called if the vessel swung; but he was not. We do not think the Congress intended by Act March 3, 1899, c 425, § 15, 30 Stat. 1152 [U. S. Comp. St. 1901, p. 3543], to absolutely forbid anchoring in navigable waters, except only at such places as the location of the vessel would necessarily prevent the passage of other vessels, or obstruct them in passing to such an extent as to make the effort to do so a dangerous maneuver. If a vessel anchors at a point in a channel where, notwithstanding such anchorage, other vessels, navigated with the care the situation requires, can safely pass then she has neither violated the statute, nor rendered herself liable under the general rules applicable to navigation, even though to a cer tain extent she has obstructed the channel. The navigator of the New Orleans, coming down the middle of the channel, observed the Caldy when a mile distant and saw that she was at anchor, located as he thought across the channel, one-half her length on each side. He had therefore--provided his location of the steame was correct-the distance of 143 feet on the northern side, from which the anchor chain was to be deducted, in which he could pass, and 14 feet for the same purpose between her stern and the southern bank He was entitled to the southern side-to pass to the starboard-and besides, as he was unaware of the length of the Caldy's anchor chain which he thought was well across the channel, he concluded, as di the other steamers passing the Caldy that evening, that it would b safer to pass under her stern on the southern side. With this conclu sion under then existing conditions we find no fault. But we thin that the evidence conclusively shows he was mistaken when he locate the Caldy where he did, for at that time her stern was considerably nearer the southern edge of the channel than he had calculated it to be, as we have found from the testimony and as became apparent to him when his vessel sheered and refused to respond to his port wheel. The master of the New Orleans did not give the order to port as soon as he should have done, nor did he seem fully to appreciate the danger he was incurring in his movement to pass the Caldy. The Atlanta ported when one-half mile from the vessel at anchor, the Georgia and the Howard in time to counteract, before they reached the Caldy, the sheer with which they both contended. The Georgia moved closer to the southern bank, and the Howard left the channel. The New Orleans was within 1,300 feet of the Caldy when she first ported. She then, having steadied her helm, proceeded with the Caldy's stern light half a point on her port bow, until she was about 500 feet distant, when she again ported; but her master, seeing that his vessel was swinging to port and not answering her helm, gave the order to hard. aport, hoping thereby to overcome the sheer. But he failed so to do, and the orders to "slow down" and "to stop," which followed, did not prevent the collision. Her speed increased the danger from the sheer, which was well known to her master, who, familiar, as he was, with that channel, and of the tendency of vessels to sheer when near its banks, should have guarded against it by slowing down and approachng more cautiously, thereby retaining better control of his own vessel. The other passing vessels evidently went by under greater speed than was prudent, taking the risk and fortunately escaping accident. The fact that the New Orleans has also been found in fault does not, under the circumstances disclosed by this record, palliate the offense of the Caldy; but it does provide for her a companion in misfortune and liability. The Caldy, having violated the provisions of the statute applicable to her anchorage, was required, in order to excuse her for that fault, to show, not only that her fault did not contribute to the disaster following, but also that it could not have done 50. This she has signally failed to do. The decree appealed from is without error. Affirmed. BRAWLEY, District Judge, dissents. In re E. M. NEWTON & CO.* SWOFFORD BROS. DRY GOODS CO. v. BRYANT. No. 2,454 1. BANKRUPTCY-SURRENDER OF PROPERTY-STIPULATION-PERformance. Where intervener surrendered possession of property received from the bankrupts which was to be the subject of litigation, on the faith of a stipulation between the intervener and the bankrupt's receiver, approved by the referee, that intervener should lose no rights thereby, the bankrupt's trustee should not be permitted to repudiate the stipulation, though the receiver and referee may have acted improvidently in entering into it. *Rehearing denied June 17, 1907. 2. CHATTEL MORTGAGES-DISTINGUISHED FROM CONDITIONAL SALE. Intervener contracted in writing to deliver certain goods to the bank. rupts prior to their bankruptcy, to be sold by them in the usual course of their business, but that the title and right of possession of all such goods and all the proceeds of sales thereof, whether in cash or in book accounts, should be vested and remain in intervener until the purchase price of the goods had been fully paid to it; that, except for the right to resell the goods in the ordinary course of business, the bankrupts should not remove any from the city in which they were doing business; and that they should keep the goods insured for intervener's benefit. Held . that the bankrupts, not only held such goods for intervener, but were bound to account for and pay over the proceeds of goods sold as collected, and that the contract was therefore a conditional sale, and not a chattel mortgage. [Ed. Note.-For cases in point, see Cent. Dig. vol. 9, Chattel Mortgages, § 23.] 3. BANKRUPTCY-CLAIMS TO PROPERTY-WHAT LAW GOVERNS. Where intervener in bankruptcy proceedings claimed certain property delivered to it just prior to the institution of the proceedings, whether the contract under which intervener claimed was a conditional sale or a chat tel mortgage, whether it was valid as between the parties, and the effect of intervener's failure to record it were questions which were determi nable exclusively by the local law. [Ed. Note. For cases in point, see Cent. Dig. vol. 6, Bankruptcy, 273, 275, 276, 277.] 4. SALES CONDITIONAL SALES-RECORD. Under the law of Arkansas a conditional contract of sale is valid thoug it provides that the vendee may sell the property in the usual course o business, and it is not recorded. [Ed. Note,-For cases in point, see Cent. Dig. vol. 43, Sales, § 1351 1353, 1384, 1397, 1370.] 5. BANKRUPTCY-TITLE OF TRUSTEE. The bankrupts' trustees acquire no greater right to property which ha been in the bankrupts' possession than the bankrupts themselves had. [Ed. Note.-For cases in point, see Cent. Dig. vol. 6, Bankruptcy, 193, 353, 1384, 1397, 1370.] Appeal from the District Court of the United States for the Wes ern District of Arkansas. Swofford Bros. Dry Goods Company, a corporation, appeal from a order denying its right to certain moneys and property in the hands the trustee of E. M. Newton & Co., bankrupts. Ernest S. Ellis (Webber & Webber, on the brief), for appellant. R. L. Searcy and William H. Arnold, for appellee. Before SANBORN, HOOK, and ADAMS, Circuit Judges. HOOK, Circuit Judge. The appellant intervened in the bankrupt proceedings, claiming to be the owner of certain goods, notes, a accounts under the terms of a written contract made with the ban rupts about a year before the proceedings were instituted. The co tract provided, in substance, that appellant should sell goods to t bankrupts to be resold by them in the usual course of their busine in Arkansas, but that the title to and right of possession of all goo delivered under the contract and of all proceeds of resales there whether in cash, note, or book account, should be vested and rem in appellant until the purchase price had been fully paid to it; th except for the right to resell the goods in the ordinary course of their business, the bankrupts should not remove them from the city in which they were doing business; also that they should keep the goods insured for the benefit of appellant. The contract was not recorded. Thereafter, and at a time when the bankrupts were insolvent and appellant knew it, they turned over to appellant the remainder of the goods then on hand and certain notes and accounts, which were claimed to be proceeds of other goods obtained under the contract and resold by them to their customers. The notes were indorsed and the accounts assigned in writing to appellant. Three days afterwards voluntary proceedings in bankruptcy were commenced and an adjudication was made. A receiver was appointed, who demanded possession of the property from appellant. The demand was refused. Subsequently, however, the goods, notes, and accounts were delivered to the receiver under a written stipulation made with the approval of the referee in bankruptcy that the appellant should not be prejudiced thereby; that, while the property might be converted into cash, the proceeds should be held to abide the final determination of the controversy as to the ownership. The receiver succeeded himself as trustee. The goods were sold, and part of the notes and accounts were collected by him. By its intervention the appellant sought the proceeds of the sale and the collections and such of the notes and accounts as remained on hand. On final hearing the district court held that the contract under which appellant sold the goods to the bankrupts was in effect a chattel mortgage, and not a contract of conditional sale; that it contemplated that the bankrupts as mortgagors should retain possession of the goods with authority to resell them in the usual course of their business, and without obligation to pay over the proceeds to the appellant; and that it was therefore fraudulent and void under the doctrine of Twyne's Case, 1 Smith, Lead. Cas. (7th Am. Ed.) 52, obtaining in Arkansas. The case must be considered upon the assumption that the goods which were returned to the appellant three days before the commencement of the bankruptcy proceedings were part of the identical goods criginally sold by it to the bankrupts under the contract, and also that the notes and accounts were proceeds of like goods. When the bankruptcy proceedings were commenced, the appellant was in the possession of the goods, notes, and accounts and claimed them adversely to the receiver. It refused to surrender them until a stipulation recognizing the verity of the facts as claimed by it to exist was made with the approval of the referee. Upon the faith of that stipulation the court of bankruptcy acquired possession. By voluntarily yielding possession of property which was to be the subject of litigation the appellant parted with an advantage well recognized in the law; and the agreement that its rights should not be prejudiced thereby, and that the facts existed upon which its claim of title was predicated, should not be permitted to be repudiated, especially since it received. the solemn sanction of the court of bankruptcy, and since the trustee whose present possession depends upon the act of the receiver holds fast to the advantage secured. There was no fraud practiced by the appellant in securing the stipulation, and the fact that the receiver and referee may possibly have acted improvidently affords no suf ficient cause for ignoring its terms. Therefore, the only questions that are open are those which arise from the face of the original contract, the failure to record it, and the fact that the appellant secured possession of the property on the eve of the proceedings in bankruptcy with knowledge of the insolvent condition of the bankrupts. We are not able to assent to the contention that the contract authorized the bankrupts to resell the goods in the usual course of their business without obligation to pay the proceeds to appellant. The appellant expressly reserved the title to the proceeds, in whatever form they might be, and the right to take possession of the notes and accounts arising from resales and collect them for itself. They were property of appellant in the hands of the bankrupts. An obligation of the bankrupts to account for and pay over what they collected of the proceeds is implied, and a default in performing it would be a breach of contract as much as if a mortgagor of chattels without power of sale should nevertheless dispose of the mortgaged property and appropriate the proceeds to his own use. Whether the contract under which appellant claims is one of conditional sale or is a chattel mortgage, and, as between the parties thereto, whether it is valid, and what the effect of the failure to record it may be, are questions to be determined exclusively by the local law. Thompson v. Fairbanks, 196 U. S. 516, 25 Sup. Čt. 306, 49 L. Ed. 577; Humphrey v. Tatman, 198 U. S. 91, 25 Sup. Ct. 567, 49 L. Ed. 956; York Mfg. Co. v. Cassell, 201 U. S. 344, 26 Sup. Ct. 481, 50 L. Ed. 782. Whatever may be the law in some jurisdictions it is authoritatively settled in Arkansas that a contract of conditional sale is valid notwithstanding it contains a provision that the vendee may sell the property in the usual course of his business. Triplett v. Implement Co., 68 Ark. 230, 57 S. W. 261, involved a contract of that character, and the conditional vendor was allowed to recover the goods from the vendee's assignee in insolvency who had taken possession of them. The court cited with approval Perkins v. Mettler, 126 Cal. 100, 58 Pac. 384, Dewes Brewing Co. v. Merritt 82 Mich. 198, 46 N. W. 379, 9 L. R. A. 270, and Baring v. Galpin. 57 Conn. 352, 18 Atl. 266, 5 L. R. A. 300. In one of these cases the contract of conditional sale of a stock of merchandise expressly provided that the vendee might resell in the usual course of business. and in the other two cases resales by the conditional vendees were held to have been in contemplation. In all of them the contracts were sustained as contracts of conditional sale. The contract involved in the Arkansas case provided that the title of the vendor should extend not only to the property, but also to the proceeds of sales thereof made by the vendee. It is true that, in this connection, the court ob served that, if the goods were sold by the vendee, they were to b sold as the property of the vendor, but we are unable to perceive how this difference is of importance in considering the peculiar circum stances of this case. If a conditional vendee sells the goods and min gles the proceeds with proceeds of his own goods so that they becom indistinguishable, the vendor may lose title, but the case before u presents no such difficulty. It was expressly agreed in the stipulation that the notes and accounts involved here were the proceeds of good |