Stokes & Co. were extensively engaged in the importation and sale of goat skins and sumac, in the city of Philadelphia, between July, 1S74, and February, 1S7S. From time to time they issued “warehouse receipts" for such merchandise, representing the same to be stored -with them, the holders of -which receipts obtained advances thereon from the defendants. The merchandise had been sold by Stokes & Co. to the holders of the receipts, who had left ii on storage — excepting only that covered by a receipt held by German Smith, which was for goods* sent to the store on his account. The bill states that "at the time the advances were made by the defendants the goods were examined by their agent, to see that they corresponded with those called for by the warehouse receipts, were placed in separate lots, and identified by a tag of the company.” Among the advances so made by the defendants was one to George W. Hummel & Co., for thirty-two thousand dollars, on receipts covering the last six items specified in the plaintiff’s Exhibit A, accompanying his bill. In December, 1878, Hummel & Co. having resold these goods to Stokes & Co., subject to the defendant’s claim upon them, it was arranged between Stokes & Co. and the defendants that the loan should be reduced to thirty thousand dollars; that the latter should lease from the former the cellar of the store, deposit the goods therein, and take the keys, '['his arrangement was carried into effect on the 20th day of the month. The goods pointed out by Stokes & Co., when the defendants' agent called with the German Smith receipt, were not, in part, those specified in it. though similar in kind. On the 38th of January, 187S. Stokes & Co. failed to meet their business engagements, and, as subsequent events show, were insolvent. On the 24th of the same month the defendants took a lease of the premises, where the merchandise covered by the receipts which they held were stored, and entered into possession. They then discovered that a. large part of the iiroperty had been fraudulently abstracted and disposed of by Stokes & Co., who, to meet the claim made on this account, handed over other merchandise to the defendants, worth about two thousand three hundred dollars. On the 22d of February following, a petition was filed against Stokes & Co., by creditors, and on the 27th of the same month they were adjudged bankrupts.

On the argument several important questions were raised and discussed, which, in the view we take of the case, need not be considered. As respects the goods placed in the cellar, we see no room for controversy; and did not, indeed, understand the claim made on this account to be seriously pressed. Leasing the cellar and removing the goods thereto, constituted a sufficient delivery to satisfy the requirements of the law. That the transaction was free from taint of actual fraud is not doubted. Indeed, it is not suggested that such taint attaches to either of the defendants’ transactions respecting any part of the goods in controversy.

The other merchandise covered by the receipts, was, as we have seen, also delivered to the defendants. As, however, this delivery did not take place until after Stokes & Co. had become insolvent (though before proceedings in bankruptcy had been commenced), the plaintiff regards it as a fraud on the bankrupt law. We cannot adopt this view. The title to the property was in the defendants, who could have recovered the possession from Stokes & Co. by law. The surrender of the possession was not, therefore, a violation either of the terms or the spirit of the bankrupt act. It did not deprive the creditors of anything which they were entitled to receive. It is unimportant that the surrender could not have been made after seizure on execution. No such question is raised. The effect of the proceedings in bankruptcy alone, is before us for consideration. The case in this aspect cannot be distinguished in principle from Sawyer v. Turpin, 91 U. S. 114, where the defendant (sued by the assignee) had taken a bill of sale from the bankrupt without acquiring possession of the property purchased, and. subsequent to the insolvency, exchanged it for a chattel mortgage — provided for by a statute of the state. The court held that the sale vested the title to the property in the purchaser, as against the bankrupt, that the creditors could not take advantage of the non-delivery, except by execution or attachment, and that the mortgage given in exchange for the bill of sale was therefore valid, in the opinion, Strong, J., says. "The conveyance was by a bill of sale, absolute in terms; * * * but it was understood by the parties to be a security for an existing debt. * * * Having been executed more than four months before the petition in bankruptcy was filed, there is nothing to show that it was invalid. * * * True, no possession was taken under it by the vendee, but for neither of these reasons was it less operative between the parties. It might not have been a protection against. attaching creditors, if there had been any. It. was in the power of Mr. Turpin, the purchaser, to take possession at any time before other rights against, it accrued.’' The statute which authorized the chattel mortgage referred to in this case in no wise affected the question — which turned upon, and was disposed of according to. general principles governing the sale and transfer of personal prop [*1171] erty. Tlie ease of Casey v. Cavaroe, 96 U. S. 467, is readily distinguished from Sawyer v. Turpin, and tlie ease before us. The defendant there had but an agreement to pledge the property involved. The transaction amounted to nothing more. And inasmuch as the statute of Louisiana requires a transfer of possession to vest an interest in property pledged, the defendant necessarily failed in his contest 'with the assignee. While the opinion of the court recognizes this distinction, as is apparent on page 490, it may be conceded that general terms are employed which are not inconsistent with the plaintiff’s interpretation of the cáse. They must be read, however, in connection with what precedes and follows them, and as applicable to the facts involved. , It is worthy of remark that in this case three of the justices dissented — holding the defendant's title to be good, as the circuit court had done. We regard it as unimportant that other goods, to some extent, were substituted for those named in the German Smith receipt. At the time this was done the power of Stokes & Co. over their property was not liable to quostion. Having represented the goods (which the defendants afterward got) to be those specified in the receipt, and the defendants having acted upon this representation, Stokes & Co. could not assert the contrary. The transaction effected a transfer of the property, at a time when no one could object.

As respects the merchandise transferred to the defendants after they became insolvent, to meet the demand which arose out of their previous abstraction of the defendant's property, we agree with the plaintiff. This transfer (though honestly intended) was a violation of the bankrupt laws. We cannot regard the property as having passed to the defendants when the abstraction occurred. It did not. Stokes & Co. continued to own it until after their insolvency. It was then too late to ai>ply it to the defendant's claims. It is unimportant that the claim does not arise upon contract. The defendant's rights against the bankrupt’s property were not superior to those of the other creditors; and the transfer made was a preference within the terms as well as the spirit of the statute.