was erected. If, therefore, under the law of Pennsylvania, as declared by its highest judicial tribunal, the intention of the contracting parties is the standard by which the character of boilers, engines, and their appliances which may be placed upon the premises of another, is to be judged, it will not be necessary in the present case to pursue the inquiry as to whether or not a mortgage of the premises will cover after-acquired property; for we have only to discover what was the intention of the parties to the contract of August 3, 1887, to ascertain whether the pumping engines manufactured by the Holly Company were to be considered as personalty or realty. In Vail v. Weaver, supra, the court emphasized its conclusion by saying, "No matter what the law formerly may have been," mere physical attachment with the realty is no longer a criterion of annexation, but the latter depends on the intention of the parties; citing Hill v. Sewald, supra; Seeger v. Pettit, 77 Pa. St. 437; Morris's Appeal, 88 Pa. St. 368. It is admitted by counsel for the appellants that, while the engines remained detached and separable from the real estate, the Holly Company was entitled to its lien, but it is claimed that when they were incorporated into the real estate the rights of the defendants, as mortgage creditors and bondholders, attached, and the lien was lost. If, however, this question is to be determined by the law of Pennsylvania, as announced in the cases just cited, then the intention of the parties to the contract of August 3, 1887, must prevail. What the intention was is to be gathered from the terms of the contract, and the parties to it could not have used plainer language than they did to express their understanding of the conditions on which the engines were to be made and placed in position, namely: "It is expressly understood and agreed that the party of the second part (the Holly Company) shall have a lien on all of said engines and connections, and the party of the second part may remain in and have full possession thereof until the whole amount of the purchase price of said engines and connections shall have been fully paid to the party of the second part or its assigns." The parties did not intend an absolute sale of the property. The sale was not to be perfected until the property had been paid for, and to secure the payment of the price the vendor was to retain possession until this condition had been complied with. Retention of possession under such circumstances is inconsistent with an absolute sale. Hineman v. Matthews, 138 Pa. St. 204, 20 Atl. Rep. 843. The words used by the contracting parties must be taken in their ordinary sense, and there is no rule of construction which admits of any other meaning being given to them than that the sale was made subject to the payment of the price agreed on; and this interpretation is confirmed by the action of the Holly Company in holding on to the possession of the engines, and by the proof that there had been no delivery of the property to Bullock & Co. or to the water company, or of acceptance by either of the latter. As to the general rule of law, uncontrolled by local statutes, governing conditional sales, the opinion of the supreme court of the United States, in Harkness v. Russell, 118 U. S. 663, 7 Sup. Ct. Rep. 51, contains an elaborate discussion of the whole subject, with a full review of the adjudged cases both in England and in the courts of our own country; and the decision of the court was that, both on principle and authority, a conditional sale of personal property, even where it has been accompanied by delivery, is valid both as against the parties and third persons; and the court stated the general rule, as established by overwhelming authority, to be "that, in the absence of fraud, a conditional sale is good and valid as well against third persons as against the parties to the transaction." The present case does not fall within the class of cases cited by appellants' counsel, in which it has been held that the rails and bridges of a railroad, of necessity, become a permanent part of the whole structure, and therefore cannot be made the subjects of special liens, but is more analogous to the class in which the rolling stock of a railroad company has been held to be the subject of a conditional sale, and on which a lien may be reserved by the vendor. And this appears to be reasonable. Locomotive engines and cars are as essential to the operation of a railroad as pumping engines are to waterworks, but it has been held that the former may be treated as personal property, and as such may be liable to a lien in favor of the seller, which will not be lost in consequence of a prior mortgage which, by its terms, was made to cover after-acquired property. U. S. v. New Orleans & O. R. Co., 12 Wall. 362. See, also, Gregory v. Morris, 96 U. S. 619; Harlan v. Harlan, 20 Pa. St. 303; Benedict v. Marsh, 127 Pa. St. 309, 18 Atl. Rep. 26; Haak v. Linderman, 64 Pa. St. 499; Krause v. Com., 93 Pa. St. 421; Peek v. Heim, 127 Pa. St. 500, 17 Atl. Rep. 984; Summerson v. Hicks, 134 Pa. St. 566, 19 Atl. Rep. 808; Levan v. Wilten, 135 Pa. St. 61, 19 Atl. Rep. 945; Hineman v. Matthews, 138 Pa. St. 204, 20 Atl. Rep. 843. As between the parties to the contract, there can be no question of the validity of the lien, or of the right of the Holly Company to enforce it against Bullock & Co.; and it must not be overlooked that Bullock & Co., at the date of the contract, were substantially the owners of the whole capital stock of the New Chester Water Company, and that Samuel R. Bullock held the legal title to the real estate on which the pumping engines were erected, and did not convey it to the water company until long after this suit had been instituted. It has not been deemed necessary to consider the question of the invalidity of the bonds, issued by the water companies, on the ground that the companies had no power to issue these obligations because of the failure to comply with the requirements of the Pennsylvania statute which authorizes the issue of bonds by stock corporations to an amount proportioned to the value of their paid up shares. The facts found by the circuit court, and confirmed by an examination of the evidence, are sufficiently conclusive to establish the creation of the lien of the Holly Company, and to satisfy us that this lien was not lost or waived by any act of that company, and that no one of the appellants had acquired a superior equitable right to the property in dispute. The decree of the circuit court is therefore affirmed. WATSON v. STEVENS et al. (Circuit Court of Appeals, First Circuit. October 29, 1892.) BILL OF REVIEW-APPEAL-MANDATE. After the decision of an appeal it was made to appear by suggestion of counsel in open court, and by a verified petition supported by affidavits, that counsel for the defeated party conceived himself entitled to make application for leave to file a bill of review. Held, that the circuit court of appeals would not itself determine the right of such party to file the bill, but would, in its mandate, reserve to him liberty to file an application therefor in the circuit court, and to proceed thereon and on the bill of review, as the circuit court might determine. Appeal from the Circuit Court of the United States for the District of Massachusetts. In Equity. Bill by Jeremiah M. Watson against George H. Stevens and others for infringement of letters patent No. 367,484, issued August 2, 1887, to the complainant, for the "method of" and apparatus for compressing shank stiffeners. Thecircuit court held that the alleged invention consisted only of the mechanical adaptation of well-known machines and processes to a new use, and dismissed the bill. 47 Fed. Rep. 117. The complainant appealed to this court, which, on September 6, 1892, rendered the following decision, (see 51 Fed. Rep. 757:) "The decree of the circuit court is reversed. The first and sixth claims of complainant's patent are sustained for use in producing shank stiffeners from leather board; and the case is remanded to the circuit court, with instructions to enter a decree for complainant for an accounting, and for a perpetual injunction against making, vending, or using, for producing shank stiffeners from leather board, any machine or method infringing the first or sixth claims; and for other proceedings in conformity with this opinion; the complainant to recover his costs in this and the circuit court. Thereafter, on September 28, 1892, the appellees (defendants below) filed in the circuit court of appeals a petition supported by affidavits alleging that, since the publication of the opinion on the merits of the appeal, they had discovered the existence and use of two machines for more than two years prior to the application for the patent, which machines were an anticipation of the alleged invention. The machines were described in full, and the petition alleged that their existence and use were well known to complainant before applying for his patent. The relief prayed was: "(1) That this case be reopened for the purpose of introducing the newly-discovered evidence herein referred to. (2) That this case be remanded to the circuit court, with instructions that the case be reopened for the purpose of introducing the newly-discovered evidence herein referred to. (3) That the decree in this case shall be without injunction, or that injunction proceedings shall be suspended until such time as your petitioners shall have an opportunity, when the case is remanded to the circuit court for further proceedings, to move in that court for the reopening of the case for the introduction of the newly-discovered evidence herein referred to; and, in case said motion is granted by said circuit court, that the injunction proceedings shall be suspended, pending the final determination of the cause on the new evidence. (4) That the decree in this case shall not be entered or recorded, and that all proceedings therein shall be stayed pending the consideration of this petition. (5) Your petitioners pray for such other or further relief in the premises as to this court may seem meet, and as is required by the principles of equity and good conscience. The appellant thereafter filed a motion to strike this petition and its accompanying affidavits from the files, which motion was heard before Colt and Putnam, circuit judges, and Aldrich, district judge. At this hearing the court suggested that under the decision in Southard v. Russell, 16 How. 547, 571, permission should be obtained by application to the circuit court of appeals to file a bill of review or supplemental bill in the nature thereof, and thereupon counsel were granted leave to file briefs on the question of the appropriate procedure. Frederick P. Fish and W. K. Richardson, for appellant. At the hearing it was suggested by the court that under the decision in Southard v. Russell, 16 How. 547, 571, permission to file a bill of review or a supple mental bill in the nature thereof should be obtained by application to the appel- rer. Treating this petition, then, as amended into a petition for leave to file a bill of review, a difficulty at once occurs, namely, is the question whether a bill of review should be allowed to be filed to be decided by the circuit court of appeals or by the circuit court? It was suggested by the court at the argument that the application to the appellate court was merely formal, and leave would be granted as of course. This can be so only if the appellate court simply reserves to defendant the right to apply to the circuit court for leave to file, for it is plain that the preliminary questions of diligence and materiality must be settled by some court before leave to file is finally granted. This will appear from the following considerations: It is well established generally that granting of leave to file a bill of review is not a matter of course. "The granting of such a bill of review for newly-discovered evidence is not a matter of right, but it rests in the sound discretion of the court." Story. Eq. Pl. (10th Ed.) § 417; 2 Daniell, Ch. Pl. (5th Ed.) p. 1577, note 2. This rule is expressly stated by Mr. Justice Story in the leading case on bills of review. Dexter v. Arnold, 5 Mason, 303, 315. The principal preliminary question to be examined by the court before granting leave to file such a bill of review is whether the alleged newly-discovered evidence was not discovered by the party until after publication of the decree, and could not have been known to him by the use of reasonable diligence. In Dexter v. Arnold, above cited, at page 312, Story, J., says: * * * * "In regard to new matter, there are several considerations deserving attention. In the next place, the new matter must have come to the knowledge of the party since the period in which it could have been used in the cause at the * A qualification of the rule, quite as important and inoriginal hearing. * structive, is that the matter must not only be new, but that it must be such as that the party, by the use of reasonable diligence, could not have known it, for, if there be any laches or negligence in this respect, that destroys the title to the relief. The court cites numerous English decisions to this effect. (In this case, affidavits from both sides were received in order to determine whether the matter The rule as to diliwas newly discovered or not.) See, to the same effect, Story's Eq. Pl. (10th Ed.) § 414, citing numerous English and American cases. gence is stated as follows by 2 Daniell, Ch. Pl. p. 1578: "Upon the application [for leave to file a bill of review] the court must be satisfied that the new matter has come to the knowledge of the applicant and his agent for the first time since the period at which he could have made use of it in the suit, and that it could not, with reasonable diligence, have been discov ered sooner. 1 Fost. Fed. Pr. (2d Ed.) § 355, states the rule as follows: "Leave should be obtained by a petition praying for leave to file the bill, supported by an affidavit showing that the new matter which it is desired to prove was not known to the petitioner, and could not have been discovered by him with the exercise of due diligence, in time to prove it before the entry of the decree sought to be reviewed." The reasons for this rule are vigorously stated by Lord Eldon,-Young v. Keighly, 16 Ves. 348, 351, where he says, after stating that the evidence newly offered is very material: "On the other hand, it is most incumbent on the court to take care that the same subject shall not be put in the course of repeated litigation, and that, with a view to the termination of the suit, the necessity of using reasonably active diligence in the first instance should be imposed upon parties; and the court must not, therefore, be induced by any persuasion as to the fact that the defendant had originally a demand which he clearly could have sustained to break down rules established to prevent general mischief at the expense even of particular injury." See Bingham v. Dawson, 1 Jac. 243, where Lord Eldon, in dismissing a petition for leave to file a supplementary bill in the nature of a bill of review, said: "If it is to be laid down that a party may go on to a decree without looking over the defense, and may then make application of this kind, there will never be an end to them. It is not a case of a search made, and a miscarriage in that search, but it does not appear that there was any search at all." Mr. Chancellor Kent also states the same rule emphatically in Wiser v. Blachly, 2 Johns. Ch. 488, 491; and it is laid down also in numerous decisions of the supreme and circuit courts. It is equally well settled that the alleged newly-discovered evidence must be so material that it would unquestionably lead to a reversal of the judgment, and that it must not be cumulative. These questions of "diligence" and "materiality" are preliminary questions, which must be settled by some court before leave to file a bill of review is granted. After leave has been once granted, the bill is filed, and the contest proceeds as to the truth and sufficiency of the new evidence. We submit that it is our undoubted right to be heard on these preliminary questions, and we fully believe that we can show absolute lack of diligence on the part of the defendants, if not full knowledge of the "new" facts from the beginning. We desire the opportunity also to file counter affidavits on this question of diligence, as Mr. Justice Story stated was the proper practice, in Dexter v. Arnold, above cited. And it seems obvious that this question should be settled before leave to file is granted; it is plainly a preliminary question affecting the right to file the bill at all. Whether, in the case at bar, this investigation of the right of the defendants to file a bill of review should be made by the circuit court of appeals, or by the circuit court, it is not necessary for us to urge; but we submit that, if this appellate court declines to decide the question, the court clearly should not give the defendant absolute leave to file a bill of review. Its mandate should merely give the lower court power to entertain an application for leave to file a bill of review, in order that we may there have the opportunity of addressing ourselves to the discretion of the court, and showing that this is not a case where a bill of review should be allowed to be filed. As the question of practice is, however, an interesting and novel one to this court, we will say that, upon as thorough an investigation of cases as the time allowed to us has permitted, we believe that the proper practice is that it is the appellate court which should exercise its discretion in granting the leave, after hearing counsel on both sides on the preliminary questions of diligence and materiality. The various citations which we have given above from text books and cases as to the rules to be followed in granting or refusing leave to file, make no distinction whatever between courts of appeal and courts of the first instance, and it would appear that whichever court is properly applied to for leave to file (in this case, the appellate court) has the consequent duty of exercising the discretion. The cases of Southard v. Russell, 16 How. 547; U. S. v. Knight's Adm'r, 1 Black, 488; Kingsbury v. Buckner, 134 U. S. 650, 671, 10 Sup. Ct. Rep. 638, where it is said that permission to file a bill of review in a case decided by the supreme court should be given by the supreme court, throw no particular light upon the question how the permission is granted. But in the two cases which we have discovered, in which a petition for leave to file a bill of review was filed in the supreme court, that court considered the questions of diligence and materiality, heard arguments on both sides, and rendered opinions denying the motion for leave. It would seem that these cases are direct precedents for this court. Rubber Co. v. Goodyear, 9 Wall. 805; Purcell v. Miner, 4 Wall. 521. In the former case the court quotes the rule as to diligence, and then says: "Whether such an application shall be granted or refused, rests in the sound discretion of the court. The requisite leave is never a matter of right." The subject of bills of review is thoroughly considered in the recent case of Kimberly v. Arms, 40 Fed. Rep. 548, 553, where Judge Jackson says: "The court rendering the decree should properly exercise the discretion of granting or withholding leave to the unsuccessful party to file a bill of review to impeach or set it aside, either for error apparent or for new matter. The inferior court should not be called upon to exercise such discretion or to grant such v.53F.no.1-3 |