F^OH MATTHEW BENDER, LAWBOOK PUBLISHER, ALBANY, - N'. Y. KF /o6 j> ?L^ Cornell University Law Library The Moak Collection PURCHASED FOR The School of Law of Cornell University And Presented February 14, 1893 IN nEnoRY OF JUDGE DOUGLASS B0ARDMA^ FIRST DEAN Or THE SCHOOL By his Wife and Daugh,ter J^. M. BOARDMAN and ELLEN D. WILLIAMS Cornell University Library KF 1053.P65 A treatise on the law of chattel mortgag 3 1924 019 384 167 Cornell University Library The original of tiiis bool< is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924019384167 A TREATISE ON THE LAW OF Chattel Mortgages JERSEY CITY, N. J. -. FREDERICK D. LINN & CO. fsk ^uUisl^ers mi ^ookstlUrs. 1891. Entered, according to Act of Congress, in the year 1891, by Dabtos H. Pingbey, In the Office of the Librarian of Congress, at Washington, D. C. J. L. MUBPHY PUB. CO., PBINTEBS, TBENTON, N. J. PREFACE. In this work the author has endeavored to produce a complete and practical treatise on the law of chattel mortgages. It has been his aim to make a full classification of topics, systematically arranged, with a thorough discussion of the doctrine enunciated. The current of authority has been stated in the text, and, where it has seemed of importance, the contrary doctrine in the following section. As the validity of the contract depends largely upon the inter- pretation of statutory provisions, it has been found desirable, in some cases, to group the decisions of the various States in separate sections. This method, while it does not detract from the unity of the work, will greatly facilitate the practitioner in finding the law. It is hoped that the profession will find in this work a complete systematic exposition of the subject. The author has gathered, analyzed and compared, and then formulated the rule from such investigation. If such labor and study, embodied in this work, meet the approval of a wise and discriminating bench and bar, and render them valuable assistance, his object will be accomplished. THE AUTHOE. Bloomington, 111., June 1st, 1891. (iii) TABLE OF CONTENTS. PART I. The Nature and EEqmsiTES or the Conteactj CHAPTER I. DEFINITION AND DISTINCTION. 1. Definition, 2. Distinguished from a Pledge. 3. An Assignment Distinguished, 4. Conditional Sale Distinguished, 5. Title Conveyed, . -6. Absolute Sale, 7. Requisites, SECTION. . 1 9 . 13 19 28 35 44 CHAPTER II. VALIDITY. 1. Principles Governing, 2. The Parties, . 3. Consideration, 4. Stipulations — Constraction, ■5. Property Covered, 79 90 107 115 120 CHAPTER III. DELIVERY DP INSTRUMENT AND PROPERTY. 1. Delivery of Instrument, . "2. Constructive Delivery of Property, 133 141 CHAPTER IV. DESCRIPTION AND IDENTIFICATION. 1. Description, :2. Construction, . 142 158 CHAPTER V. PRESENT PROPERTY, OR INTERESTS IN ESSE. 1. Present Interests, .... 2. Statutory Provisions, . .... 3. Fixtures, . -4. Chattels Real, . (v) 163 172 189 210 VI TABLE OF CONTENTS. CHAPTER VI. APTEB-ACQUIBED PROPERTY, OR INTERESTS IN EUTURO AND IN POSSE. SECTION, 1. The Doctrine of the Law, . . . 211 2. Unplanted and Growing Crops . 217" 3. Perfecting Lien by Taking Possession, . 237 4. Potential Interests, 244 5. In Equity, 248- , CHAPTER VII. POSSESSION. 1. Change of Possession, . 25& 2. Kind of Possession, 260 3. Priority, . . 264 PART II. Registration of the Instrument. CHAPTER VIII. statutory laws op registration. 1. Effect of Record, ...... 279' V CHAPTER IX. construction op the statutory laws op registration. 1. Between the Parties, _ 340- 2. Registration, 042^ 3. Refiling, . ggj 4. Notice, • QQP7- CHAPTER X. '^' instruments within the statute. 1. Instruments to be Recorded, 42g 2. Validity, ... ' 433 PART IIL Liens Created by Marine Mortgages. CHAPTER XI. MARINE MORTGAGES. 1. Laws of the United States, 44. 2. Priorities, ... ^g^^ 3. Relative Rights of the Parties, 4gg^ 4. Enforcement— Foreclosure, . 4qa TABLE OF CONTENTS. VU PAKT IV. CONTEACfTS IN FbAITD OF ThIBD PeESONS. CHAPTER XII. FBATJOUIiBNT CONVEYANCES. 1. Betaining Possession without Eecording the Instrument, ■2. State Courts' Decisions, ...... 5. Badges of Fraud, ..... 4. Frauds in Genei^al, as Applied to Chattel Mortgages, .5. Fraudulent Conveyances under the Assignment and Insolvent Laws, ■6. Eule as to Consumable Property, 7. Retaining Possession after Default, .... SECTION. . 502 504 . 540 555 . 580 603 CHAPTER XIII. SALE AND REPLENISHMENT OF STOCK. 1. Doctrine of the United States Courts, 2. English and other Authority, 3. The Doctrine of the State Courts, 619 623 625 PART V. Rights of Parties Before Default. CHAPTER XIV. RELATIVE EIGHTS OP THE PARTIES. 1. Rights of Mortgagee, 2. Rights of Mortgagor, . 3. Rights of Subsequent Mortgagee, 4. Confusion or Intermingling of Goods, 5. Rights of bona fide Purchasers, . 665 704 737 746 753 CHAPTER XV. ASSIGNMENT OF THE MOBTGAGE. 1. The Assignment — Requisites of, 2. Rights of Assignee, . 3. Eight of Action, . 4. Extingnishment, 767 775 788 794 CHAPTER XVI. BIGHTS OF ATTACHMENT AND EXECUTION CEEDITOES. 1. As to Mortgagor's Interest, 2. As to Mortgagee's Interest, 3. The Law of the States, . 795 810 812 VIU TABLE OF CONTENTS. CHAPTER XVII. WRONGFUL SALE AND KEMOVAL OF THE PBOPERTY. 8ECTI0H. 1. Statutory Provisions, ........ 848 CHAPTER XVIII. SATISFACTION OF DEBT. 1. Payment of Debt, ... . . 906 2. Application of Payment, . 930 3. Change in the Form of the Debt, . 936 4. Discharge by Agreement, . 943 5. Constructive Payment, . . . 943 6. Merger and Subrogation, 959 7. Statutory Provisions, 965 PART VI. Rights of Parties after Default. CHAPTER XIX. FORECLOSURE AND SALE. 1. Non-Formal Foreclosure, .... 966 2. Foreclosure Barred by the Statute of Limitations, . 994 3. Sale of Property, . . ., oog 4. Formal Foreclosure in Court, , ]^027 5. In Equity, ... . 1038 6. Pleadings, Proof and Decree, . IO49 CHAPTER XX. statutory FORECLOSURE AND REDEMPTION. 1. Statutory Provisions, . -^Qgg CHAPTER XXI. REDEMPTION. 1. Mortgagor's Right to Redeem, , , ,- 2. Right of Action, 1137 1132 3. Accounting by Mortgagee, 4. Extinguishment of Right to Redeem, . 1^^ TABLE OF CASES. Reference is to Sections. Abbott V. Upton, 794, 907 Abell V. Warren, 92 Abercrombie v. Bradford, 581 Acker v. Bender, 45, 706, 944 Ackerman v. Hunsicker, 108 Ackley v. Finch, 5, 10, 31, 949, 966, 1122 Adams v. Beadle, 199 V. Foley, 563 V. Frye; 133 V. Hill, 101 V. Nat. Bank, 676, 696, 966, 1134 V. Eice, 69, 83, 111 V. Wheeler, 108, 541 V. Wildes, 126, 401, 732, 748 V. Wilson, 42 Adamson v. Fagan, 142 V. Jones, 398 V. Horton, 142 v. Peterson, ' 158 Addington v. Etheridge, 185, 549, 661 Adler v. Claflin, 636 iEtna Ins. Co. v. Aldrich, 441, 442 Alabama Warehouse Co. v. Lewis, 45, 79 Alden v. Smith, 141 Alderson v. White, 25 Aldrich v. ^tna Ins. Co., 450, 480 v. Goodell, 1038 V. Grimes, 92 Alexander v. Graves, 726 V. State, 899 V. Walter, 929 Alger V. Farley, 1019 Allen V. Bryson, 42 V. Cart, 533 V. Cowan, 541 V. Goodnow, 351, 511, 639 V. Kennedy, 664 v. Kimball, 934 V. Lathrop, 109 V. Massey, 349, 593 V. McCalla, 276, 397, 413 V. Montgomery, 106 V. Wheeler, 567 Almy v. Wilbur, 1, 541, 994 Altman v. Guy, 328, 363 Ambler v. Warwick, 1030 Am. Well Works v. Whitney, 398 Amerman v. Wiles, 106 Ames V. Foster, 499 V. Hobble, 626 Iron Co. V. Warren, 435 Andenriel v. Eandall, 277 Anderson v. Baumgartner, 777 V. Brenneman, 141, 272, 342 V. Case, 741 V. Dyer, 726 V. Hoaks, 812 V. Howard, 633 V. Hun, 569, 571 V. Patterson, 242, 664 Andrews v. Chandler, 202 V. Jenkins, 758 V. Jones,' 504 V. Smith, 938 Angell V. Packard, 585 Ansonia Bank's Appeal, 1074 Anthony v. Butler, 356, 427 Apperson v. Moore, 225, 254 Appleton Iron Co. v. British Ameri- can Assoc. Co., 117 Appleton Mill Co. v. Warder, 355, 358 Applewhite v. Morrell Mill Co., 375 Armfield v. Tate, 92 Armory v. Dalmire, 746 Armstrong v. Brown, 369, 723 V. State, 899 V. Tuttle, 549 Arnett v. Trimmer, 692, 720 Arnold v. Crowder, 192, 195 V. Stock, 122, 615, 710, 737 Arnot V. Post, 949 Arques v. Wasson, 212, 223, 245 Arundell v. Phipps, 503 Ashkew v Stevens, 981 Ashley v. Wright, 670, 681 Ashmead v. Kellogg, 717, 858 Ashton's Appeal, 783 Atchison v. Graham, 1072 Atherton, v. Dearman, 42 V. Phoenix Ins. Co., 464 Atkins V. Byrnes, 719 Atkinson v. Graves, 4 V. Tomlinson, 59 J Atwater V. Mower, 4,10 Atwell V. State, 850 Ayres v. Adams, 15 V. Haw, 926 V. Watson, 1029 Babb V. Clemson, Babcock v. Booth, V. Gill, B. 538 347 124 TABLE OF CASES. Beference is to Sections. Baboook v. Hawkins, 944 Bacon v. Bonham, 425 V. Brown, 933 V. Kimmel, 799 V. Van Schoonhaven, 398 Badger v. Batavia Manuf. Co., 106, 340, 592, 683 Badlam v. Tucker, 1, 10, 454, 795 Bagg V. Jerome, 168, 514, 567, 591 Bailey v. Barenburger, 92 V. Bidwell, 563 V. Burton, 569, 798, 807, 837 T. Godfrey, 356, 670, 683 V. Kansas Manf. Co., 587 V. Smith, 775 Bainbridge v. Eichmond, 114 Baird v. Williams, 135 Baker v. Gray, 255 V. Hall, 19 V. Humphrey, 555 V. Smith, 347 V. Thrasher, " 24 Baldwin v. Beck, 488 V. Crow, 35, 409 V. Flash, 578 y. Bichardson, 99 V. Bradish Johnson, 466, 475, 485 209 979 520 945 844 320 472 20 997 996 190 273 1051 574 976 268 236, 246, 837 399 950 279 912 425 628 609 349, 572, 619, 689 425 44,48 1,5 870 433 730 951 563 451 515, 643 Barbieri v. Eamilli, Barbour v. White, Barfield r. Cole, Barker v. Bell, V. Buel, V. Stacey, Barkerman v. Simmons, Barnard v. Eaton, Barnes T. Holcomb, 1071 615, 782, 978 10 706 42 410, 433 426 128, 254 37 Bamet v. Fergus, 79, 549, 576, 634, 719 V. Walker, Ball V. Liney, T. Loomis, V. Wyeth, Ballard v. Anderson, V. Burgett, V. Wiltshire, Ballew V. Sudderth, Ballinger v. Worley, Ballou V. Cunningham, V. Jones, Balton V. Cannon, Bamhall v. Flood, Bane v. Detrick, Bangs V. Friezer, Bank v. Anderson, V. Crary, V. Davis, V. De Graw, V. Ellis, V. Finch, V. Gettinger, V. Goodrich, V. Goodin, V. Hunt, V. Huth, V. Johnson, V. Jones, V. Knapp, V. Lee, V. Low, V. Marshall, V. Northrup, Banks v. ^tna Co., Bannon v. Bowler, V. Timberlake, Barney v. McCarty, Barr v. Cannon, T. Hatch, Barrett v. Fire Insurance Co., V. Fisch, V.Hart, V. Pitchard, Barron v. Cobligh, V. Morris, Barrow v. Paxton, V. West, Barrows v. Thomas, Barry v. Bennett, 676 355 160 522 117, 118 143 621, Bartholomew v. Fennemore, Bartlett v. Blake, V. Lape, V. Thynes, V. Williams, Barton v. May, Baskin v. Shannon, Basset and Prome's Case, Bassett y. Bassett, Bass Foundry v. Galletin, Bassinger v. Spangler, Batchelder v. Jennes, Bates V. Jordan, V. Eipp, V. Wiggins, V. Wilbur, V.' Wiles, Baxter v. Gilbert, V. Spencer, Bayard y. Hofifman, Bayaud v. Fellows, Beach v. Derby, Beall V. White, 982 22 125 622 28 653 927 132, 147, 760 764,^794, 910, 954 V. Williamson, Beaman v. Whitney, Beamen v. Freeman, Bean v. Barney, Beard v. State, Beardsley v. Ontario Bank, Bearss v. Preston, Beck V. Armstrong, Becker v. Dunham, Beckley v. Munson, Beckwith v. Burrough, V. Sibley, Beebe y. Bank, 92 511 957 1130 513 1134 571 563 83 193 274 781 347 803, 837, 976 5 383, 683, 966, 980 676 768, 803 967, 975 347 687, 1043 146, 147, 672, 786, 823 212, 254, 256 429, 622, 711, 727 433, 475, 609, 610 48, 100 271, 283, 815 31, 676, 966 854 164, 428 718, 971, 993 42 831 1005 523 1036, 1037 784 TABLE OF CASES. XI Reference is to Sections. -Beeman v. Lawton, 340, 423 Beers v. Waterbury, 711, 763, 1062 Selden v. Perkins, 11 3elford v. Deakin, 1031 Belknap v. Wendell, 151 Bell V. Pharr, 973 V. Prewitt, 568 V. Badcliff, 933 V. Shrieve, 130, 212 V. Tyson, 397 -Bellune v. Wallace, 795, 807 , 842, 897 Belohardsky v. Kuhn, 700 Bement v. Bailroad Co., 164, 428 Bendel v. Crystal Ice Co., 1001, 1014 1017, 1019, 1071 Benedict v. Renfro, 626 Benford v. Schell, 141 Benjamin v. Le Baron, 347 Vi Railroad Co., 402 Benner y. Puffer, 19 Bennett v. Bailey, 232 V. Ellison, 597 V. Simms, 19 V. Bank, 569, 593 Benson v. Nunan, 341 Bentley v. Wells, 568, 592 Benton v. Snyder, 515 Bentrin v. Zierling, 99, 100 Bentz V. Rooky, 538 Bernstein v. Hobleman, 1099 Best V. Staples, 445, 446, 449, 450, 451 :Bevan v. Balton, 410, 414 Beverley v. Ellis, 355 Bethel v. Steam Mill Co.,, 277 Bickley v. Keenan, 280 Bierbower v. Polk, 15, 586 Bigelow V. Capen, 684 V. Huntly, 19 V. Kinney, 92 V. Smith, 789 Billingaby v. Harrell, 942 Bingham v. Jordan, 349, 355 -Binkley v. Forkner, 1 90 Bird V. Davis, 933, 1003 V. Wilkinsoft 418, 527 JBirnie v. Main, 109 JBishop V. Cook, 374, 542 V. Connell, 536 V. Rutledge, 23 V. The Mystic, 468, 469 V. Warner, 530, 549, 629 Bismark Build. Asso. v. Balston, 326, 543 Bissell V. Hopkins, 258, 541 v. Pearce, 377, 722, 730 Biteler v. Baldwin, 392 Either v. Buswell, 368 Block V. Howell, 970, 1068 Blockman v. Wheaton, 515, 555 Blades v. The Marcella Ann, 478 Blake v. Corbett, 35, 37 V. Leius 994 Blakely'v. Patrick 142, 147, 150 Blakemore v. Bymside, 25 Blakeslee v. Rossman, 528, 564, 578, 664 Blanchard v. Colburn, 811 V. Cook, 237 V. Kussell, 440 V. The Martha Washing- ton, 453, 480 Blaridy v. Benedict, 102 Blanke v. Rogers, 194 Blant V. Gabler, 542 Blatchford v. Boyden, 369 Blauvelt v. Feohtman, 836 Blodgett V. Blodgett, 25, 31, 36, 676, 708 949, 951, 966, 1128, 1132 V. Webster, 562 Bloom V. Noggle, 347 Bloomer v. Henderson, 775 Blnnt V. Burgett, 433, 434, 443 Boarman v. Catlett, 832 Bogart V. The John Jay, 461, 490, 498 Boggs V. Stankey, 122 Bolton V. Lambert, 534, 636 V. The J. L. Pendergast, 470 Bond V. Cape, 195 V. Mitchell, 767 V. Seymour, 550 V. Ward, 746 Bonfleld v. Whipple, 567 Bonham v. Galloway, 794, 907 Boody V. Davis, 113, 114 V. McKenney, 92 Boon V. Moss, 22 Booth V. Kehoe, 189, 210, 430 ■ V. Brown, 534 Bordon v. Croak, 211, 248, 249 Boston, &c , R. B. Co. v. Gilmore, 164 V. Montague, 1102, 1132, 1133 Bostwick v. Menck, 594 Boswell V. Goodwin, 108, 939 Bourne v. Littlefield, 113 Boutwell V. Steiner, 1020 Bowditch V. Green, 962 Bowen v. McCarthy, 736 Bowers v. Andrews, 143 V. Benson, 31, 966, 975 V. Bodley, 788 Bowin V. Cook, 268 Boyce v. Smith, 833 Boyd V. Beck, 362, 413, 939 Boyden v. Boyden, 92 Boydson v. Goodrich, 410, 439 Boykin v. Rosenfield, 158, 235, 928 Boyle Ice Manf. Co. v. Gould, 356 Brackenridge v. Holland, 126, 746 Brackett v. BuUard, 258, 801, 807, 974 V. Harvey, 520, 584, 651 Bradley v. Buford, 535 V. Byrnes, 682, 966 V. Copely, 798 V. Doud, 906 V. Gregory, 706, 944 Bradwell v. Roberts, 5 xu TABLE OF CASES. Reference is to Sections. Bragelman v. Dane, 31, 676, 966 977, 1132, 1141 Bragg V. Fire Ins. Co., 115 Bragunier v. Beck Iron Co., 1024 Brainard v. Peck, 153 V. Simmons, 1132 Braley v. Byrnes, 561 Brandt v. Daniels, 634 Brasher v, Christophe, 242, 616, 628 V. West, 593 Breck v. Adams, 168 Breese v. Bange, 210, 430 Brem v. Lockhart, 354 Brennan v. Whittaker, 194, 206 Bret V. Carter, '238, 254, 622 Brettell v. Williams, 100 Bretz V. Bull, 492 Brice v. Myers, 555 Bridford v. Barbour, 1058 Bridge v. Eggleston, 561, 562, 563 Brierley v. Kendall, 979 Briggs v. Bryan, 951 V. Fleming, 1049 V. Leitelt, 365 v. Mette, 389, 683 v. Oliver, 1039 V. Parkman, 513, 548, 641 Brigham v. Avery, 118 V. Potter, 169 V. Weaver, 410 Bright V. Wagle, 951 Bringholffv. Munzenmair, 206 Brinely v. Spring, 146 Brink v. Freoff, 708, 970, 979, 1068 Briscoe v. Bement, 31, 1122 Bristow V. Burt, 398 British Col. Bank v. Marshall, 12 31, 1122 Britton v. The Venture, 461 Broadhead v. McCay, 294, 676 824, 996, 1038 Broadwell v. Howard, 533 Brock V. Aldrich, 147 V. Borr, 145 Brookenbrough v. Brookenbrough, 603 605, 661 Breaker v. Jones, 245 Brookover v. Easterly, 980 Brooks V. Bondsy, 487 v. Briggs, 692 V. Powers, 513 V. Record, 782 V. Ruff, 794, 907 Brouse v. Amee, 451 Brown v. Allen, 245, 708 V. Brabb, 376 v. Bates, 811 V. Bement, 10, 11, 31, 37, 676 705, 949, 966, 1122 V. Campbell Co., 258, 398, 609 V. Cook, 683, 799 T. Corbin, 47, 189, 368 Brown v. Dewey, V. Fitch, V. Greer, V. Guthrie, V. Heathcote, V. Hedge, V. Holmes, V. Kiefer, V. Lipscomb, 26; 19 1038, 1082: 35 348 563. 731 108 807, 966- V. Phillips, 31, 708, 966, 979, 980 V. Piatt, 138,578 V. Rich, 914 V. Riley, 568, 634 V. Roberts, 398- V. Snell, 800 V. Valkenning, 502 V. Webb, 13, 254, 340, 653- Brownell v. Curtis, 1058 V. Hawkins, 10 Brothers v. Mundell, 378 Brummell v. Stockton, 535- Brunswick v. Brackett, 50 V. McClay, 262, 27a 541, 546, 641 Bryan v. Bowles, 487 V. Roberts, 996, lOlO- V. Smith, 255 Bryant v. Carson Riv. Lum. Co., 31 966, 996 V. Crosby, 42 V. Pennell, 131 V. Pollard, 911 V. Simoneau, 558 V. Vix, 782^ V. Ware, 126- Buck V. Ingersoll, 808, 1036, 1037 V. Payne, 728 V. Remsen, 707 V. Sanders, 811 Buckley v. Elliott, 1132 Bucklin v. Thomson, 541 Buckmaster v. Smith, 19^ Buhl Iron Works v. Trenton, 35 BuUard v. Anderson, 844 V. Hinckley, 135- Bullis V. Montgomery, 261 Bullock V. Narrett, 558 V. Williams, 142, 150, 502, 548 Bunacleugh v. Poolman, 30, 1129 Bunker v. McKenney, 19 Burchard v. McVaenner, 1, 966 - Burdett v. Clay, 909' V. Woodworth, 369 Burdickv Dowd, 706,980 Burditt v. Hunt, 140, 146, 398 Burgert v. Borchert, 536 Burke v. Murphy, 572 Burks V. Albert, 933 Burnell v. Robertson, 533. Burnett v. Pratt, 104 Burnham y. Brennan, 520' v. MuUer, 359, 544 TABLE OF CASES. XIU Reference is to Sections. Burnishisel v. Firman, 600 Burns v. Camijbell, 126, 214, 989 V. Harris, 147 Burnside v. Twitchel, 195, 196 Burr V. Dana, 664, 1023, 1138, 1141 V. Wilcox Lum. Co., 197, 386 Burrows v. Turner, 410, 796 V. Waddell, 735 Burt V. Mansfield, 563 V. Battle, 106 Burtis V. Bradford, 1027, 1142 Burton v. Tannehill, 936, 977 iushnell v. Avery, 1133 V. Wood, 568 Buson V, Dogherty, 19 Butler V. Hill, 252 V. Miller, 1, 542, 911, 936, 937, 942 V. Eahm, 640 V. Stoddard, 258 V. Tufts, 794, 906, 910, 954 V. Van Wyck, 541 Butt V. EUet, 254 Butterfield v. Baker, 254 Button V. Downhan, 553 V. Eathbone, 375, 753 Butts V. Peacock, 569 V. Privett, 35, 41 V. Pub. Co., 147 Byers v. McClanahan, 136 Byram v. Gordon, 422, 973 Byrd v. Forbes, 3, 662, 678, 969 V. McDaniel, 994, 1130 V. Wilcox, 4 Byron v. May, 676, 966 Bystow V. Smith, 768 c. •Cadwell v. Pray, 252, 682, 710, 939 Cagghill V. Kailroad Co., 19 ■Cahart v. Horsiiall, 550 Cahill V. Wiera, 34, 122, 216 Cake V. Shull, 4, 35 •Caldwell v. Trobridge, 161 Caldwell's Bank v. Crittenden, 17 Call V. Gray, 92, 147, 250, 548 Calloway r. Walls, 1082 Cambell v. Anchoria, 492 Cameron v. Cooper, 538 V. Marvin, 369 Cammell v. Sewell, 440 Camp V. Birch, 773 V. Camp, 263, 598 V. Johnson, 581 V. Thompson, 515 Campbell v. Clark, 575 V. Johnson, 759 V. Leonard, ■ 636, 825 V. Eoddy, 197 Printing Co. v. Walker, 19, 289 V. Woodstock Iron Co., 30, 35 1007, 1014, 1016, 1017 Campodonico v. Oreg. Imp. Co., 763 Cape Fear Steamboat Co. v. Conner, 449 Capen v. Peckham, 194 Capron v. Porter, 502, 530 Cardinwell v. Bennett, 19 Carey v. Hewitt, 668 Caring v. Eichardson, 520, 651 Carnes v. Apperson, 843 Carney v. Carney, 525 Carpenter v. Bank, 970 V. Bridgs, 920 V. Carpenter, " 92 V. Longan, 773, 775, 781, 785 V. Snelling, 35 Carr v. Clough, 91, 92 V. Hilton, 349 V. Carr, 25 V. Lester, 280 Carroll v. Deimel, 1128 V. Wiggins, 19 Carrington v. Boots, 236 V. Smith, 255 Carter v. Burris, 41 V. Fately, 713 V. WUlard, 513 Carty v. Fenstemaker, 838 Cartwright v. Cook, 706, 944 v. Phoenix, 277 Case V. Allen, 731 V. Boughton, 31, 1010, 1122, 1137 V. Conroe, 763 V. Fesh, 212, 239 V. Jewett, 570 Manf. Co. v. Garver, 191 Thresh. Mach. Co. v. Campbell, 332, 386, 679, 968 V. Winship, 30, 508, 691, 807 Casey v. Cavaroc, 9 Cass V. Gunnison, 120, 876 V. Perkins, 613, 615 Casserly v. Witherbee, 1021 Casswell v. Keith, 41 Catlin V. Currin, 13, 572, 621 V. Hoffman, 600 Cattle Co. V. McLain, 158 Cayce v. Stovall, 212 Ceas V. Bramley, 5 Chadbourn v. Eahilly, 370 Chadwick v. Baker, 451 V. Lamb, 681 Chamberlain v. Martin, 996 V. Meeder, 921 V. Shaw, 979 V. Smith, 22 V. Stern, 541 Champlin v. Butler, 487, 489 Chander v. Temple, 133 Chapin v. Cram, 128, 143, 203 237, 239, 255, 426 V. Johnson, 803, 837 V. Eosenberg, 536 V. Schafer, 92, 93 XIV TABLE OF CASES. Reference is to Sections. Chapin v. State, 968 V. Thompson, 1128 T. Whiteett, 616 Chapman v. Clough, 1029 V. Hunt, 591, 710 810, 996, 1046 V. Jenkins, 942 V. State, 3, 32, 679, 968 v. Turner, 26 V. Warner, 347 V. Weimer, 220, 254 Charles v. Neighbor, 730 Charter v. Stevens, 779, 914, 918, 949 951, 954, 966, 996, 1038, 1128 Chase v. Bennett, 356 V. Hodges, 712 V. Ingalls, 165 V.Pike, 19 Chateau v. Thompson, 939 Chatham Nat. Bank v. O'Brien, 239, 651 Chauncey v. Arnold, 85 Chaytor v. Brunswick, 362, 1052 Cheatham v. Hawkins, 652 Chemical Bank v. Johnson, 375, 418 Cheminant v. Thornton, 951 Cheney worth v. Daily, 358, 414 Cheshire v. Barnett, " 92 Chesley v. Joselyn, 254 Chesman v. Whittemore, 83 Chessolm v. Hawkins, 22 Chicago Lum. Co. v. Fisher, 834 &c., V. Howard, 164, 428 B. E. Co. V. Union K. Mills, 278 Chipron v. Friekert, 47, 48, 264 676 Chisholm v. Chittenden, 241, 633 Choteau v. Jones, 343 Chrislfield v. Neal, 161 Christy v. Pedgeon, 593 Chynoworth v. Tenny, 254 Ciootte V. Grynier, 775 City Bank v. Eatkey, 161 V. Westbury, 568, 651 Claflin V. Carpenter, 235 v^ Foley, 575 V. Houseman, 602 Claggett V. Salmon, 340, 688, 696 Clapp V. Campbell, 744 V. Dittmann, . 590 V. Glidden, 1130 T. Halliday, 745 V. Trobridge, 161 Clark V. Barnes, 107, 369 V. Depew, , 563 V. Draper, 277 V. Griffith, 918, 925 V. Haighton, 99, 114 V. Hale, 701 V. Henry, 23, 25 V. Hyman, 536, 636 V. Iselin, 600 V. Jack, 22 V. Morse, 276 Clark V. Pease, 56S V. Eobinson, 1061, 1136, 1143 V. Tarbell, 69, 413, 434 V. Tucker, ■ 43a V. Washington Ins. Co., 494 V. Wills, 19 V Whitaker, 678 V. Wilson, 494 Clary v. Frayer, 512: Clason V. Morris, 962 Cleaves v. Herbert, 978 Clements v. Moore, 555- Clenden v. Wells, 99» Cleerly v. Brackett, 936 Cline V. Libby, 670, 709- Clore V. Lambert, 192, 202. Cloud V. Hamilton, 1142 Clow V. Woods, 234, 538, 543, 65& Clute V. Eobinson, 784 Clyde V. Steam Trans. Co., 471 Cobb V. Bushwell, 433 V. Chase, 139 V. Farr, 16& V. Malone, 735, 911 Coble V. Nonemaker, 271, 4ia Coburn v. Pickering, 518, 549 Cochran v. Paxis, 603, 661 V. Price, 35- V. Eich, 771, 829 Cock V. Chapman, 505 Cocke T. Montgomery, 1093- Codman v. Freeman, 213, 237, 254 Coe V. Cassidy, 41 V. Columbus E. E. Co., 164, 428 V. McBrown, 824 Coffman v. Hillard, 96& Coggeshall v. Potter, 340, 348 Cole V. Kerr, 154, 220, 246- V. Marple, 292 V. White, 541 Coleman v. Allen, 86a V. Lewis, 190 V. Stearns, 19& Coles V. Clark, 398 Colie V. Tim, 1128 Collet. V. Jones, 1132 Collier v. Barr, 89- V. Faulk, 108 v. Wood, 589 Collins' Appeal, 724 V. Evans, 767 V. Myers, 347, 522, 549, 653 Colman v. Packard, 691 Colquit V. Kirkham, 731 Colton v. Colton, 734 Colwill V. Eeeves, 126- Comer v. Cunningham, 320 V. Lehman, 83, 1065 Comly V. Dazian, 1013, 1059^ Com. Bank V. Cunningham, 108,111 V. Davidson, 143 V. Eeckless, 135 TABLE OP CASES. XV Reference is to Sections. Com. Bank v. Waters, Commonwealth v. Dawson, V. Lee, V. Wallace, Comron v. Standland, Comstook V. Eayford, V. Scales, Gonard y. Atlantic Ins, 832 874 Conchman v. Wright, Conderman v. Smith, Congreve v. Evertts, Conkey v. Hart, Conkling v. Shelly, Conn V. Bernheimer, Conner v. Carpenter, V. Sheehan, Conover v. Van Meter, Constant y. Matteson, Constantine v. Twelves, , Conway v. Alexander, y. Wilson, Cooch V. Gerry, Cook V. Cook, 874 23 516 188, 227, 246 Co., 10, 541 795, 1038 5 215, 216, 245, 251 247, 254, 255 670 147, 149, 906 651, 946, 992 10 732 784 544, 961 504, 626 7, 21, 24, 26, 420 591, 1132 3, 811, 819 563 y. Corthrell, 203, 237, 254, 257, 656 y. Hager, y. Hall, y. Manning, y. Stearns, V. Steele, V. Thayer, y. TuUis, Cool y. Koche, Coolidge y. Melyin, Cooper V. Brock, y, Jackson, y. Koppes, V. Nat. Bank, •y. State, Cope y. Overton, Copeland y. Barnes, v. Bosquet, Coppage y. Barnett, Corbet v. Littlefield, Corbin y. Kinkaid, Corcoran v. Webster, Corey y. Burton, v. Hewitt, Corlis v. McLagin, Cornell v. Hall, v. Hilehens, V. Lamb, Cornish v. Dewes, Cornwall y. Gould, Cottingham y. Springer, Cotton v. Marsh, v. Watkins, v. Willoughby, Coty v. Barnes, Covell V. Dolloff, Cowtry V. Eailroad Co., 48 355 274, 529a 235 233 278 348, 600 352, 410 572 19, 25, 421 135 387, 392 1023 854 92 35 19 105 439 370, 683 205 92,93 677, 967, 980 195 •23, 25,420 77 911 563, 568, 593 1036, 1037 965 30, 341, 528 664, 688, 807, 847 683, 807, 847 87, 233 4, 271, 974 1137 429 Cox V. Morrow, 433 Craft y. BuUard, 997, 1137 V. Bunster, 775 Crafster y. Williams, 564 Craig v. Tappin, 996 Crain v. McGoon, 948, 951 y. Paine, _ 922, 994 Cranch v. McLaughlin, 440 Crandall v. Brown, 272 Crane v. Brigham, 190, 194 Crawford y. Kirksey, 504 Cray v. Currier, 154 Cresinger y. Welch, 92 Cressey v. Sabre, 246, 891 Crofoot v. Bennett, 141 Crompton v. Pratt, 165 Cromwell v. Lovett, 909 Cronan v. Fox, 434 V. Honor, 1132 Croner v. State, 900 Crosby v. Baker, 124 V. Chase, 941 V. Wadsworth, 236 Croswell v. Allis, 142, 147, 150, 176 Crow V. Beardsley, 14, 590 V. Bed River Co. Bank, 146 y. Woods, 141 Cudworth y. Scott, 235, 246 Cullrfm y. Erwin, 777 CuUum v. Bank, 922, 939 Culver V. Sisson, 1032, 1035 Cumegys v. Vassee, 163 Cummings v. Coleman, 268 V. Cassilly, 99, 100 V. Griggs, 141 v. Holmes, 614 y. Newton, 125 Cunningham y. Hamilton, 613 V. Nelson, 737 V. Trevitt, 303 y. Tucker, 450 Curd V. Miller, • 527 v. Wunder, 347, 681, 798 Curren v. Benard, 533 Curtis v. Gooding, 959 V. Leayitt, 6, 555 v. Martz, 131 V. Wilcox, 212, 249 Curtiss v. McDougal, 92 Cushing v. Seymour, 991 Cushman v. Luther, 114, 433 Cutler v. Copeland, 511, 542, 683 Cutter V. Hake, 98 Cutting V. Jackson, 518 Cutts V. York Manf. Co., 1027 D. Dacy, y. Agricultural Ins. Co., 115 Daggett v. McClintock, 642 Dahlman v. Jacobs, 590 Daley v. Proetz, 710, 942 XVI TABLE OF CASES. Keference is to Sections. Dalrymple v. Sheehan, 496 Damer v. Cope, 538 Dance v. Seamon, 593 Dane v. Mallory, DangerfleM v. May, 996, 1114 929 Daniel v. Morrison, 638 Daniels v. Nelson, 539 Danielson v. Gude, / 1060 Danby v. Rector, 505 Dannefelser v. Weigel, 19 Darling, v. Shumway, 235 Darnell v. Darlington, 1002, 1187 Darst V. Bates, 939 Dart V. WoodhouBe, 550 Darwin v. Handley, 605, 606 Dashwood v. Blythway, 1136 Daubigny v. Duval, 270 Davenport v. Ledger, 672, 680 Davidson v. Gorham, 446 V. King, 13,16 V. Rogers, 1079 Davis V. Austin, 784 V. Bigelow, 538 V. Blume, 710 V. Hubbard, 35, 706, 1128, 1137 • V. Marx, 129 V. Mills, 794 V. Ransom, 340, 549, 634 V. Richardson, 100 V. Rider, 918 V. Scott, 243, 517, 647 V. Thomas, 25 V. Turner, 502, 527, 542 555 Dawson v. Garland, 1080 Day V. Griffith, 133, 135, 139 V. Leal, 1034 V. Swift, 10 Dayton v. People's Saving Bank, 260, 300, 384 Deadman v. Earle, 358 Deal V. Osborn, 673 V. Palmer, 20 Dean v. Davis, 833 V. Whitaker, 798 Deason v. Boyd, 92 De Costa v. Young, 355 De Courcey v. Collins, 364, 411 Deere v. Nelson, 135 Deering v. Cobb, 243, 351, 511, 639 V. Chapman, 169 V. Lord, 189, 796 V. Wheeler, 826 De Forest v. Bacon, 582 Degnan v. Parr, 95 De Herrera v. The Acme, 459 Dehority v. Paxton, 1018 V. Pearson, 120 ' Delana v. Blake, 92 Delaware v. Ensign, 584, 651 &o., V. Oxford Ins. Co., 208 De Leon v. Hegunera, 4 Del op V. Winsor, 302, 437 Demainburg v. Metcalf, Demerit v. Batchelder, Demeyer v. Souser, Deming v. Comings, Dempsey v. Gardner, Denby v. Melgrew, Denham v. Sanky, Denno y. Nash, Denny v. Danna, 108 994 702 1144 513 732 189 770, 845 169, 572, 575 V.' Faulkner, 970, 996, 1011, 1068 V. Lincoln, 358 V. Van Dusen, 1009 Densmore v. Matthews, 743 V. Tomer, 517 Dent V. Beers, 451 Derby v. Meysech, 550 Dermott v. Wallach, 732 Desar v. Field, 508, 635 Deshazo v. Lewis, 906, 944, 1144 Despard v. Walbridge, 454 Detroit v. Osborne, 593 Dewey v. Bowman, 951 De Wolf V. Harris, 454 Dexter v. Arnold, 1144 Dezell V. Odell, 702 Dice V. Irwin, 79, 604 Dickinson v.. Lovett, 732 V. Valpy, 100 Dieborough v. Outcalt, 798 Dikeman v. Puckhafer, 355 Dillingham v. Bolt, 393, 396, 763 V. Ladue, 390, 393 Dirigo Tool Co. v. Woodruff, 9, 259 Dispatch Line of Packets v. Bellamy Manf. Co., 45, 106, 769 Ditmar v. Norman, 35 Dixon V. Coke, 153 V. White S. M. & Co., 840 Doak V. Bank, 10 V. Brubaker, 141, 242 Dobyns v. Meyer, 645, 986 Dodd V. Hill, 587 Dodds V. Neel, 154 Dodge V. Potter, 361, 374 Doe V. Ball, 347 V. Bachmaster, 347 Doggett V. Bates, 13 Dole V. Bodman, 135, 138 Dolson V. Saxton, 651 Domestic Sewing Machine Co. v. Arthurhultz, 19 Donaldson v. Fornell, 348 V. Johnson, 414, 568 Donnell v. Byem, 576 V. The Starlight, 471, 479 484, 727 Doolittle V. Lewis, 1048 Doremus v. O'Hara, 590 Doty V. Gorham, 189 V. Hawkins, 398 Dougherty v. Bonavia, 705 Doughten v. Gray, 790, 798, 836, 1038 TABLE OF CASES. XVU Reference is to Sections. Douglass V. Smith, 120 V. Vogeler, 380 Dowdell 7. Empire and Lum. Co., 55 Downing v. Falmateer, 1137 Doyle V. Mizner, 163 v. Stevens, 263, 273, 413 Drake v. Kioe, 556 Draper v. Mann, 1027 V. Perkins, 80, 142, 156 V. Saxton, 911 Dreutzer v. Bell, 550 Drew V. Livermore, 809 ' v.Streeter, 403 Drummon y. Bichards, 1035 Drury v. Briscoe, 941 V. Foster, 85 V. Henry, 19 Dubose V. Dubose, 552, 610 V. Young, 355 Dubuque v. Kailroad Co., 164, 428 Duck V. Wilcox, ' 936 Dudley v. Hurst, 199 Duff V. Bayard, 487 Duffield V. Spottiswood, 798 Dugan V. Pentz, 487 Duke V. Strickland, 157, 252, 712 Dukes V. Jones, 418 Duncan v. Stone, 19 V. Taylor, 659 Dundas v. Dutens, 550 Dungan y. Mutual Ins. Co., 9 Dunham y. Chastine, 122 V. Dey, 936 V. Rowles, 19 y. Waterman, 582 ©unlap V. Epler, 613, 684 Dunning v. Mead, 533, 634 V. Stearns, 4, 124, 126, 132, 746 Du Pont y. McLean, 96 Dupey V. Gibson, 1087, 1128 Durfee y. Grinnell, 1, 293, 823, 966 Durham v. Railway Co., 192 Dutch V. Boyd, 368 Dutcher v. Swartwood, 128, 545 Duter y. Sellere, 97 v.^Smith, 1024 Dutton V. Ines, 785 Duyal V. McLoskey, 922 Dwight V. Scranton Lum. Co., 758 Dyer y. Cady, 817 y. State, 122, 848 Dykeman y. Sevaston, 992, 1036 E. Eadie v. Ashbough, Easter v. Goyne, Eastman v. Ayery, V. Foster, Eaton V. Allen, V. Green, v. Lynde, 105 730 10, 423 189 563 25 124 Eaton V. Truesdail, 971 V. Turner, 369 V. Whiting, 811 Eaves v Estes, 190, 198, 208 V. Powis, 706 Eddy V. Caldwell, 142 143, 146, 147 V. Ireland, 81 V. Kenny, 982 V. McCall, 158, 369, 767, 802 Edgell V. Hart, 151, 549, 651 Edgerly v. Bush, 440 V. Shaw, 91 Edling V. Bradford, 115 Edminster y. Brucker, 1021 Edrington v. Harper, 23, 25, 26 Edsell V. Buchanan, 1130 Edson V. Newell, 763 Edwards y. Cattrel, 1005 V. Dragon, 1064 V. Farmers, 949 y. Harben, 540, 623 Eggert y. White, 154 Eggleston v. Mundy, 799, 803, 804, 807 Ehler v. Turner, 71 Einstein y. Shouse, 48, 1058 Elder y. Miller, 147 V. Kouse, 1033, 1035 Eldridge v. Sherman, 876 Elgin Co. v. Meyer, 590 EUett V. Butt, 254 Ellington v. Charleston, 4,676 Elliott v. Long, 142 Ellis V. Boston, &c., 106, 687 V. Martin, 157 Ellison V. Jones, 20 Elmer v. Welch, 530 Elmes y. Sutherland, 606, 607 Elsey V. Oconto, 126, 746 Elson V. Carnley, 382 Ely V. Ely, 1027 V. Hooper,' 951 Emerson y. Mfg. Co., 106 Emery v. Seayey, 795 Emmons v. Dowe, 779 y. Haven, 1021 Enders v. Williams, 638 Endlow V. Klein, 19 Engle v. Marshall, 529 Erskiu v. Plummer, 235 Estabrook y. Messersmith, 1058 Estwich V. Caillaud, 593 Etheridge y. Goodwin, 714 y. Hillard, 893 Eumer v. Van Giesen, 655 Eureka Steel Works v. Bresnahan, 107, 563 Evans v. Darlington, 10 V. Merriken, 122, 216 V. Smith, 48 V. Warren, 796, 808 Evansville v. State, 957 Everett v. Buchannan, 1000, 1115o V. Hall, 19, 165 XVlll TABLE OF CASES. Reference is to Sections. Everett v. Whitney, 139 Everman v. Eobb, 218, 245 Ewell V. Tidwell, 994 Ewing V. Cargill, 516, 607, 644 V. Gray, 567 Exparte Ames, 124 Belcher, 195 Cotton, 195 Easton, 483 Fitz, 423 Games, 623 Tromason, 885 White, 791 Wilson, 210 Express Co. v. Pinckney, 83 F. Faeth v. Leary, 1018 Fain v. Smith, 136 Fairbanks v. Bloomfield, 540, 837 V. Davis, 374 Fairfield Bridge Co. v. Nye, 44, 511 Fairman v. Fluck, 988 Fanell v. Tinsman, 784 Farley v. Carpenter, 398 V. Lincoln, 722 Farwell v. Meyers, 588 Farmers Bank v. Douglass, 603 Loan and Trust Co. v. Bank, 254, 255 Loan and Trust Co. v. Hen- drickson, 402, 416 Loan and Trust Co. v. Min- neapolis, &c., Works, 192 196, 689 Loan and Trust Co. v. Long Branch Imp. Co., 213, 230 Loan and Trust Co. v. St. Joe K. K. Co., 164, 429 Farnsley v. Anderson, &c., 1047 Famsworth v. Shipard, 674 Farquhar v. Morris, 971 Farr v. Summers, 92 Farrar v. Peterson, 105 V. Stackpole, 193, 209 V. Smith, 122 Farrell v. Bean, 971 Farwell v. Howard, . 590 V. Nilsson, 593 Feary v. Cummings, 560 Fejavary v. Broesch, 212, 1132 Fells V. Bead, 698 Fergerson v. Clifford, 92, 377, 410 433, 441, 443, 676 Ferguson v. Hogan, 1105 V. Lee, 10, 810 V. Thomas, 30, 258, 681, 807 V. Union Fur. Co., 5 Ferry v. Corby, 590 Fetherstone v. Hutchinson, 161 Feurt V. Eowell, 341, 410, 433, 609 Field V. Fisher, 133, 93& V. Holland, SSO V. Silo, 71 Fields V. Sherrill, 962 Fifield V. Elmer, 19 V. Gaston, 56a Fikcs V. Manchester, 966, 705, 980 Filch V. Burt, 141 Fink V. Davidson, 622 Findley.v. Deal, 4 Finn v. Donahoe, 369 Finney v. Harding, 711, 712, 728 Fishbume v. Kunhardt, 609- Fisher v. Fisher, 936- V. Friedman, 710 v. Otis, 775- V. Syfer, 508, 635 V. Willing, 489- Fiske V. Hershaw, 528, 664 Fitch V. Humphrey, 394 V. Jones, 563 Fitchorn v. Boyer, 99- Fitts V. Hall, 92: Fitzgerald v. Andrews, 380 Flagg V. Mann, 7, .24, 26- v. Pierce, 274 Flanders v. Barstow, 1, 794, 910, 954, 966- 974, 975, 978, 1128, 1144 V. Chamberlain, 677, 956, 996- 1011, 1103, 1128, 1134 V. Thomas, 11, 966, 112& V. Wells, 1132 Flay V. Morran, 812. Fletcher v. Morey, 250 V. Newdeck, 31, 676, 966 V. Powers, 120, 513, 641 Flick V. Warner, 22 Flint V. Phipps, 135, 136 Flocton V. Hall, 944 Flower v. Cornish, 592, 105S V. Elwood, 939- Floyd V. Morrow, 254 Floyer v. Lovingston, 26 Fogg v. Fire Ins. Co., 117, 118 Folger V. Weber, 450- Fountain v. Beers, 450, 480' Fonville v. Casey, 122 Foote V. Gouch, 200 Forbes v. Parker, 341, 548, 829 V. Walker, 42; Ford V. Cobb, 190, 198, 200, 204 V. Irwin, 24 V. Ransom, 38, 704, 709- V. Sutherlin, 156 V. Williams, 520, 567, 651, 803- Fordyce v. Neal, 147 Forest v. Tinkham, 340, 415- Forkner v. Stuart, 527 Forman v. Parker, 122, 165, 216 Fort V. Black, 120' Fortman v. Goepper, 191, 204 Fosdick V. Car Co., 11, 278 TABLE OF CASES. XIX Reference is to Sections. Fosdick V. Schall, 192, 278 Foster v. Ames, 1128 V. Chamberlain, 480 V. Gillespie, 398 V. Hull, 563 V. McGregor, 550 V. Perkins, 133 134 445, 451 V. Prentiss, 190 V. The Richard Busteed, 484 7. State, 849 V. "Wallace, 536 Fouke V. Fleming, 13 Fowler v. Gilmsin, 979 V. Hoffman, 115, 125 V. Hunt, - 142, 150 V. Merrill, 122, 216 V. Eapley, 711 Fox V. Davidson, 652 V. Holt, 458 470, 489 V. Wallis, 571 France v. Thomas, 242, 645 Frank v. Playton, 237 683, 763 Franker v. Eeeve, 11 Frankhouser v. Ellet, 509 548 593, 637 Franklin v. Byers, 1066 V. Gummersell, 536 V. Jones, 1139 V. Moulton, 199 V. Thurston, 443 Bank v. Pratt, 908 Fraz^r v. Bass, 35 V. Marsh, 455 Frazier v. Frederickson, 502 Frederick v. Duval, 204 Freeman v. Freeman, 31, 966 996, 1003, 1038, 1137 V. Eansom, 549, 653 French v. Edwards, 970, 1068 V. Hall, 440 v. Powers, 1021 Freund v. Yaegerman, 590 Frey v. Dahos, 209 Frisbee v. Langworthy, 670 680, 683 807 847, 980 Frizzell v. Eundle, 398 Fromme v. Jones, 341, 636 Frost V. Allen, 36 V. Beekman, 355 v.Dickman, 365 V. Mott, 552, 559 V. Shaw, 1132 V. Warren, 520 569, 651 Fry V. Eussell, 514, 642 Fryatt v. Sullivan Co., 193 Fullenwider v. Eoberts, ' 563 Fuller V. Acker, 541, 807, 966, 980 v. Cunningham, 377 V. Michigan Cent. E. R. Co.. 353 V. Paige, 126, 340, 748 V Parrisb, 41,918,956 Funk V. Miner, 49, 266, 352, 415, 676 V. Paul, 122, 123, 216, 246, 268 Funk V. Staats, 593, 613 Furlong v. Cox, 672: Furniss v. The Magoun, 466 G. Gaar v. Hurd, 103, 706, 1041, 1087 Gable v. The Delos De Wolf, 475- Gaff V. Harding, 781 Gage V. Chesebro, . 13. V. Wayland, 970 V. Whittier, 713,719' Gaithers v. Mumford, 37, 39, 421 V. Teague, 20- Gale V. Burnell, '247, 254 Mfg. Co. V. Phillips, 102& V. Ward, 199, 431 Galen v. Brown, 803, 804 Gallatin v. Fay, 704 Gait V. Jackson, 7 Galveston E. E. Co. v. Cowdry, 254, 429' Gambling v. Eead, 19, 599' Game v. Whaley, 159 Games v. Stiles, 133- Ganong V. Green, 120, 987 Garden v. Bodwing, 242, 663 Gardiner v. Parmelee, 74 Gardner v. Adams, 541 V. Calle, 556 V. McEwen, 149, 213 520, 576, 651 V. Finly, 195 V. Moore, 46 Gamer v. Wright, 342, 443, 674 Garwood v. Hastings, 726 Gassner v. Patterson, 174, 414 Gatterling v. Armstrong, 344 Gates V. Bennett, 99- Gauss V. Doyle, 627 Gay V. Moss, 11 Gaylor v. Hardin, 17ft Geery v. Geery, 594 Gelhaar v. Eoss, 804 George v. Norris, 605 v. Tall, 380 Gere v. Murray, 585 Gerrey v. White, 45 Gerrish v. Clark, 19 Gerow v. Castello, 19 Gevers v. Wright, 256 Gibbs V. Parsons, 518, 649 Gibson v. Love, 532 Gibson v. Warden, 45, 348 Giffert v. Wilson, 823. Gifford V. Ford, 1, 10, 25 Gihon V. Bellville Co., 1142 Gilbert v. State, 92 V. Vail, 77, 316 Gilchrist v. Patterson, 769 Gildersleve v. Landers, 399, 413 Gill V. Pinney, 346 V. Weston, 895 XX TABLE OP CASES. Gillett V. Balcom, <}illiam v. Henderson, ■Gillilan v. Kendall, Oillman v. Henry, Gilmore v. Hill, V. Wilbur, ■Gilpeke v. Blake, Oist V. Presley, Gitting V. Scott, <51a8s V. Ellison, Glasscott V. Day, ■Glaze V. Blake, Globe Works v. Wright, ■Glover v. Austin, V. 'McGilvray , V. Paine, Godard v. Gould, 'Godchaux v. Mulford, Goddard v. Weaver, 'Golden v. Cockrell, Gomes v. Kamping, Goodell V. Fairweather, 'Goodenough v. Thomas, ■Goodenow v. Allen, V. Dunn, ■Goodhue v. Berrien, Gooding v. Riley, ■Goodloe V. Clay, ■Goodman v. Grierson, V. Pleasant, V. Pledger, Goodrich v. Downs, V. Michaels, V. Willard, •Goodwyn v. Goodwyn, Goody V. Gilbert, Goodyear v. Williston, Googins V. Gilmore, Reference is to Sections. 971 844 711 14 746 743 42 609 246 810 950, 951 167 727 124 5 25, 26 199 6, 13, 581 348 149, 43i, 548 891 524 402, 413 189 451, 454 577 69, 340, 413 971 7, 23, 24 19 ■ 953 577 349 241, 633, 744, 972 507 347 712 511, 541 542, 548, 605 1009, 1133 825 Gordan v. Clapp, V. Hardin, V. Harper, 798 V. Preston, 106 V. Tweely, 563 V. Summers, 352, 355 Gottschalk v. Klinger, 1057 Goulet V. Asseler, 798, 837 Gould V. Marsh, 781 Grace v. Hall, 92 Graem v. Cellar, 195 GraflBn v. Jackson, 798 Graighle v. Natnagel, 271 Grand Forks Nat. Bank v. Minne- apolis, &c., Co., 3, 32, 232 Island Bank Co. v. Frey, 207 Granger v. Adams, 365 Grangers v. Clark, 175 Grant v. Lewis, 273, 528 Grantham v. Hawley, 215, 244 Gravel v. Clough, 708 Greeley v. Smith, 463 Greeley v. Winsor, 630 Green v. Armstrong, 236 V. Church, 22 V. Gaston, 1039 V. Rugeby, 433 V. Tanner, 567 V. Van Buskirk, 434 , 440, 823 V. Wade, 606 Greenbaum v. Webster, 242 Greene v. Dingley, 794, 910, 919, 954 Greenebaum v. Wheeler, 533 544, 634 Greenleaf v. Sanborn, 1132 Greither v. Alexander, 758 Gregg V. Fisher, 100 V. Sanford, 205, 237 252, 254 V. Wells, 702 Gregory v. N. Pac. Lum. Co., 158 V. Thomas, 683, 763 V. Whedon, 647 Grice v. Haskins, 259, 429 Griffin v. Barr, 927 V. Marshall, 1082 V. Pugh, 19 V. Wertz, 340 343, 618 Griffith V. Alexander, 1046 V. Douglass, 237, 639 V. Hodges, 950 V. Morrison, 204, 410 Grimes v. Cannell, 158 V. Farriogton, 586 Grimstone V. Carter, 279 Grinlee v. Eockhill, 889 Griswold v. Morse, 999 V. Sheldon, 541, 542 549, 651 V. The Otter, 472 Grosvener v. Ins. Co., 116, 117 Grounds v. Ingram, 1121 Grove v. Wise, 680 Grover v. Wakeman, 572 Grubbs v. Greer, 525 Gruner v. Star Print Co., 943 Gryson v. Veech, 271 Guery v. Perryman, 784 Guice V. Sanders, 510 Guilander v. Howells, 434 Gulley v. Copeland, 1137 Gundy v. Biteler, 122 Guy V. Bid well, 514, 548, 642 V. Pearkes, 550 Gwarthmeys v. Ragland, 777 H. Hackelman v. Goodman, 824 Haddock v. Bullfinch, 912, 941 Hale V. Nat. Bank, 710 Hall V. Bellows, 966, 396, 1038 V. Ditson, 996, 1135 V. Fire Ins. Co., 117, 118 V. Forqueran, V. Gaylor, 937 530 V. Pillow, 433 TABLE OF CASES. XXI Keference ie to Sections. Hall V. Railway Co., 492 V. Sampson, . 704, 754, 766 798, 803, 804, 805, 837 V. Snowhill, 1, 340, 1122 v. Tuffis, 114 Hallacher v. O'Brien, 520, 541, 542 Haller v. Parrott, 825 Halliday v. Bartholomae, 828 V. McKinne, 1058 Halsey v. White, 581 Halstead v. Blakeslee, 530 V. Swartz, ' 1134; 1135 Hamill v. G-illeepie, 765, 798, 806 Hamilton v. Blackwell, 563 V. Bredeman, 921 V. Kerr, 1084 V. Haas, 154 V. Bogers, 128, 213, 254 Hamlyn v. Boulter, ' 676 Hammers v. Dole, 48, 79 1038, 1087, 1128 Hammock v. Loan Co., 177, 278, 428 Hammond v. Danieldson, 727, 730 V. Morgan, 1128 V. Plimpton, 710 V. Solliday, 687 Hanch v. Eipley, 730 Hancock t. Ins. Co., 11 Handley v. Howe, 360 Hanes v. Tiffany, 74, 102, 347, 350 Hanford v. Artcher, 520 V. Obrecht, 613 Hangen v. Hochemeister,- 345, 651 Hanks v. Pritzloff, 1058 Hannah v. Carrington, 1008, 1019, 1040 Hanuing v. Monaghan, 798 Hansard v. Hardy, 1130 Hanson v. Dennison, 87, 231, 233 Harbinson v. Harrell, 798 Hardaway 7. Semmes, 280, 358 359, 360, 434 Harder v. Hosp, 669, 970, 1012 Harding v. Coburn, 124, 146, 147 Hardmau v. State, 899 Hardy v. Potter, 513 Hargadine v. Bank, 1044 V. Henderson, 14, 590 Harker y. Danent, 732 V. Jones, 571 Harkness T. Bussell, 19, 686 V. Sears, 195 Hardlow v. Berger, 293 Harmon v. Abby, 549, 653 V. Bardydt, 777, 783 V. Haskins, 212, 577, 644 V. Jones, 832 Harper v. Eoss, 42 Harrington v. Brittain, 341, 548, 924 Harris v. Alcock, 828 V. Alden, 170, 362 V. Jones, 4, 87, 411 V. Kennedy, 147 Harris v. Lindsey, 1031 V. Lyon, 983, 1025 V. Mayor, lOO V. Woodstock, 144 Harrison v. Hicks, 706, 794, 906, 954 V. Jackson, 99 V. Lee, 23. Hart V. Carpenter, 19' V. Farmers Bank, 252 V. Ten Eyck, 126, 746, 951 996, 1039, 1128 V. Wing, 533. Hartley v. Kerlin, 108 Hartshorn v. Williams, 42 Harvey v. Crane, 349, 572 V. Dunn, 48 V. Locomotive Works, 22 V. McAdams, 680, 692- Haskins v. Warren, 563- Hasleth v. Stevens, 487 Hasseltine v. Stockwell, 126, 746. Hatch V. Fowler, 514 V. Hatch, 83 V. White, 936 Hatchet v. Malone, 380 Hatfield v. Montgomery, 1130 Hathaway v. Brayman, 681, 710, 754, 798 V. Einglenberg, 1057 V. Eyder, 126. Hathorn v. Lewis, 634 Hattou V. The Melita, 471, 475- Haug V. Bank, 451 Haven v. Emery, 190 V. Lowe, 795, 796 Hawkins v. Alston, 569' V. Bank, 45, 99, 622. V. Ingalls, 541 T. May, 799 Hayden v. Demets, 277 V. Snow, 79' Haynes v. Hunsicker, 141 V. Lippig, 668 V. Sanborn, 808 Hanie v. Eobertson, 23. Hayes v. Wescott, 577 Hays V. Pac. Mail Co., 45a V.Ward, ^ 962 Hazzard v. Loring, 42, 951 Head v. Goodwin, 360, 377 V. Ward, 541 Heath v. West, Oa Hedge v. Drew, 135. Hedley v. Bainbridge, ^ 100 Hedman v. Anderson, 647 Hedrick v. Brattain, 245 Hefts' Appeal. 724 Hegler v. Eddy, • 19 Hembree v. Blackburn, 13, 99 100, 679, 968 Hempstead v. Jackson, 13, 505, 568 Henby v. Forgy, 682 Henderson v. Anderson. 647 3X11 TABLE OF CASES. Henderson v. Gales, , V. Grewell, V. Herrod, V. Morgan, JHendricks v. Walker, Hendy v, DinkerhofiJ Henley v. Hotaling, Henry v. Fullerton, V. B. I. Locom. Works, V. Van Branstein, Henshaw v. Bank, V. Sumner, Herbert v. Herbertj V. Mechanics, Reference is to Sections. 44 100, 154 48 777 293 980 190 23, 24, 25 832 27, 434 208 254 13 135 798 48, 63, 293 563, 564, 568 687 85 351 407 19 19 99 634 563 529 775 380 1, 10, 676 705, 952, 966, 1128 933 353, 355 23 658 729 362, 410, 445, 446 911, 938 909 1040 258, 283, 399, 402 773, 908, 909, 939, 941 V. Gillman, 69, 352, 298, 544 V. Merriman,. 676, 690 V. Nelms, 83, 94, 108 V. Nutter, 303 V. Payton, 949 V. Snell, 398 ' V. Stockwell, 622 V. The Golden Gate, 456 V. Wentworth, 190 Hilliard v. Cagle, 516 Hillyer v. Bennett, 92 Himmelman v. Fitzpatrick, 949 Hinohman v. Town, 973 Hine v. Koberts, 22 Hinnan v. Judson, 951, 980, 1128, 1131 Hires v. Hurff, 142 Hirshom v. Canney, 19 Hirskjnd v. Israel,' 212, 657 Hitchman v. Walton, 195 Hixon V. MuUikin, 107 Hobbs V. The Interchange, , 449 Herkelrath v. Stookey, Herman v. Fisher, Herr v. Denver Mills Co., Herrick.v. Marshall, Herring v. Cannon, V. Hoppcock, V. Willing, Herzog v. Sawyer, Hesser v. Wilson, . Hessing v. McCloskey, Hasthal v. Myles, Hew V. Nichols, Hewitt V. Morris, Heyland v. Badger, Heyward v. Lemax, Hibbard v. Zenor, Hickman v. Cantrell, V. Perrin, Hicks V. Eoss, V. Williams, Higgins V. Case, V. Packard, High V. Brown, Hill V. Beebe, Hobson V. Porter, 99 Hodson V. Shaw, 962 Hoey V. Pierron, 79, 569 Hoffman v. Carow, 398 V. Macall, 17 V. Porter, 100 Hogel V. Lindell, 42 Hoit V. Eemick, 410, 541 Holbrook v. Baker, 610 Holland v. Hodgson, 193 HoUingsworth v. Dowe, ' 727 V. Holbrook, 83, 105, 990 Holloway v. Arnold, 718, 990 HoUowell V. Milne, 19 Holly V. Brown, 127 Holman v. Lock, 165 Holmes v. Bell, 705, 807 V. Blagg, 92 V. Grant, 7, 24 V. Hall, 1122 V. Marshall, 652 V. Sprowl, 360 Holroy v. Marshall, 246, 254 256, 257, 429 Holt V. Holt, 19, 1083 Holway v. Gilman, 777 Homer v. Grasholz, 921 V. Jones, 584 Homes v. Crane, 10 Hommel v. Devinney, 726 Hoopes V. Bailey, 23, 24, 25 Hope V. Hayley, 247, 255 Hopkins v. Scott, 799 V. Thompson, 37, 980 V. Woodward, 193, 195, 208, 209 Horn V. Briggs, 788 V. Keteltas, 23, 25, 26 V. Eeitler, 35, 37, 80, 143 Hornbeok v. Vanmeter, 522, 541 Horton v. Williams, 79, 242, 341, 515 547, 549, 567, 577, 643 Hosea v. McClure, 502 Hotchkiss V. Hunt, 19, 683 Hough V. Bailey, 11 V. Osbume, 777 Houston V. Howard, 539 Bank v. Martin, 760 Howard v. Burns, ' 683 V. Odell, 487 V. Nat. Bank, 763 V. Eohlfing, 243, 509, 637 V. Witters, 207, 369, 692 Howe V. Clark, 711, 712 Howell V, Francis, 144, 1049 Hower v. Geesaman, 538, 549, 655 Howes V. Newcomb, 730 Howland v. Willett, 799, 807, 971 Hows V. Tefftt, 841 Hoyle V. Plattsburg, &c., 164, 428 Hoyt V. Thompson, 441 Hozey v. Buchannan, 450 Hubbard v. Savage, 111 TABLE OF CASES. XXlll Reference is to Sections. Hubbard Lumber Co. v. Covert, 356, 365 Hubbell V. Allen, 243, 536, 645 Hubbly V. Hubbly, 103 Hubly V. Harris, 27 Hudgins v. Wood, 425 Hudson V. Snipes, 988 V. Walker, " 966, 996 V. Warner, 340, 413 Huebner v. Koebke, 671 Huggans v. Fryer, 996 Hughes V. Corey, 341, 502, 541, 548, 636 V. Graves, V. Klingender, V. Menefee, V. Sheaf, V. Stanly, V. Wheeler, Hugunin v. Starkweather, Huidekoper v. Locom. Works, Huliok V. Scovel, Hull V. Oarnley, V. Sigsworth, Hulziger v. Opdyke, Hume V. Breck, Hungate v. Reynolds, 122, 216 437 400 23, 24, 25 35 219 912 278 135 541, 766, 798 799, 803, 806, 837 530 729 744 1004, 1008 1010, 1020, 1041 148, 177, 212, 278, 254 703 Hunt V. Bullock, V. Daniels, V. Holton, 796 V. Iron Co., 190 V. Nevers, 906 Hunter v. Bosworth, 212 V. Corbett, 548, 623 V. Warner, 19 Huntington v. Smith, 811 Huntzinger v. Phila. Coal Co., ' 163 Hurd V. Ascherman, 763 V. Gallaher, 42 V. Eobinson, 113, 114 Hurford v. Harned, 41 Hurst V. Bell, 245 Huschle V. Morris, 634 Hutchins v. Gilchrist, 141 V. Hanna, 443 Hutchinson v. Ford, 221, 246 V. Kay, ■ 194 V. Murchie, 351, 778 Hutton V. Amett, 148 Hyde v. Dalloway, 1130 V. Shank, 108, 693 Her V. Baker, " 1134 Imboden v. Hunter, 1019 Ing v. Brown, 36, 421 Ingalls V. Herrick, 513, 542 V. Morgan, 399 V. Vance, 730, 1123 Ingraham v. Disborough, ' 7S4 V. Martin, 767 In re Abram, 340 In re Binford, Bloom, 239, Borrows, Collins, Dow, Eldridge, Forbes, Griffith, Gurney, Haake, Kahley, Kirkbride, Leland, Lyon, Manly, Metzer, Morrill, The Josephine, Ulrich, Werner, Wynn, Insurance Co. v. looker. Iron Works v. Eenfro, Isett,v. Lucas, Jackson v. Bain, V. Bertholock, v. Blodgett, V. Bronson, V. Brown, V. Crafts, V. Cunningham, V. Dean, V. Hall, V. Kassell, V. Packard, V. Phillips, V. Pickens, V. Sackett, V. Turner, V. Willard, Jaeobsen v. Dodd, . Jacoby v. Brigman, Jaflfray v. Greenbaum, V. McGehee, James v. Jackques, V. Morey, V. Whittaker, Janvrin v. Fogg, Jaques v. Church, Jarrett v. McDaniel, Jarvis v. Banta, Jefferson v. Jefiries, Jenckes v. Goffe, Jenkins v. Jenkins, V. Steanka, v. Walker, Jenkinson v. Ewing, Jennings v. Gage, V. Mcllray, 19 519, 622, 650 584 348 348 349 578 348 38, 349 1137 79, 576, 622 79, 576, 622 349 19 239, 622 601 622 472 622 349 348 563 224 42 224 773 775 773 106, 114 949 952 514 985 730 577 135, 136 728 1034 1048 773, 775 793 665 636 593 962 108 623 578 133 109 558 340 124, 714 92 751 92 936 533 795, 814 XXIV TABLE OF CASES. Keference is to Sectloiis. Jennings v. Wood, 355 Jerome v. McCarter, ' 348 Jerry v. Pittinger, 124 Jeter v. Fellows, 435, 438 Jewett V. Fink, 550, 551, 559 V. Harris, 343 V. Simpson, 86 V. Warren, 10 Johns V. Church, 113, 114, 147, 809 Johnson v. Browne, , 35 V. Clark, 23, 25 V. Grissard, 100, 143 V. Hart, 781 V. HiU, ' 781 V. HoUoway, 533 T. Hughes, 280 V. Morrill, 445, 453 V. Murphy, 1027 . V. Patterson, 348, 622 V. Prior, 784 V. State, 850 V. Stear, 979 V. Stellwagen, 83, 375, 397 V. Vernon, 996 Jones V. Blum, _ 487 y. Chamberlain, 252 V. Flint, ■ 236 V. Franks, 1019 V. Goodwin, 686 V. Graham, 571 V. Guaranty, &c., 106 V. Henry, 1030 V. Huggesford, 514, 548, 641, 774 V. Jones, 922 V. Keen, 471 V. Parker, 371 V. Kichardson, 213, 254 V. Scott, 1132 V. Smith, 10, 108, 276, 669, 949 V. Taylor, 410, 433, 441 V. Turck, 701, 945 V. Webster, 683 V. Workman, 161 Jordan v. Farnsworth, 1#, 377 Joseph V. Levi, 242, 644 Jowers V. Blandy, 19, 22 Joyner v. Vincent, 994 Judd V. Harris, 258 Judge V. Vogel, 781, 785 Judson V. Easton, 676, 966 Justi Pon V. The Arbustci, 473 K. Kapaga v. Taylor, 410, 433 Kane v. Drake, 508 V. Bice, 365 Kanady v. McCarren, 676 Kater v. Steinsuck, 724 Keating v. Hannenkamp, 237, 248, 1107 V. Ketan, > 355 Keck V. Fisher, 99, 100 Keel V. Levy, Keeler v. Keeler, Keenan v. Stimpson, Keith V. Haggart, V. Ham, Keller v. Blanchard, V. Paine, Kellogg V. Anderson, v. Brennan, V. Lovel, 120, V. Olsen, V. Bichardson, V. Second, Kelly V. Boyland, V. Calhoun, V. Beid, V. Seely, V. Shepard, Kemmitt v. Adamson, Kemp V. Carnley, v. Westbrook, Kendall v. Carpet Co., V. Lawrence, Kendell v. Kendell, Kendrick v. Beard, Kennard v. Harvey, Kennedy v. Nunan, Kent V. Lyon, Kenyon v. Tramel, Ke*bs V. Ewing, Ketchum v. Brennan, V. Frost, V. Watson, Keve V. Paxton, Keyes v. Wood, Kidd V. Eawlinson, Kilbourne v. Fay, 165, 340, Kile V. Giebner, Killough V. Steele, Kimball v. Hildreth, V. Marshall, V. Morrison, V. Sattley, V. Thompson, King V. Bailey, V. Hubbard, V. Van Vleck, V. Wallace, V. Wright, Kingland v. Drum, Kingsbury v. Smith, Kinsey v. Bailey, Kirkland v. Brune, Kirtland v. Snow, Kitchen v. Lee, V. Lowry, Klapp v. Shirk, Kleeman v. Frisbie, Kleine V. Katzenberger, Klock v. Cronkhite, Knight v. Nichols, Knoop V. Nelson Distil. Co. 712, 716, 762- 199, 202, 208 410' 837a, 842a 97, 775 510, 748 35, 375, 434 143 471' 122, 123, 216 igo 590' 762 428, 431 48 142, 147 309- 408 89- 239 951, 1128 582 92 8S: 43 711, 712 815 1058 143 590 516 784 166, 533: 194 777 503 346, 522, 653- 200 541 10, 951 1036 835. 712- 562- 536, 807, 833 830- 1140 362 879 269- 722 200 425 530 92 597 577 784 522, 567, 653. 734 420 645. TABLE OF CASES. XXV Reference is to Sections. Enop V. Dietz, Knox V. Williams, Kohl V. Lynn, Koplin V. Anderson, Korns v. Shafer, Kortwright y. Cady, Kranert v. Simon, Kreth v. Rogers, Kribbe v. Alford, Kreutzer v. Cooney, Kromer v. Eebman, Krone v. Phelps, Kuhlman V. Wood, Kuhn V. Graves, V. Mack, Kuschell T. Campan, 143 951 3, 32, 676, 677, 967 49, 63, 293, 544 1019 949 110, 737 521, 652, 747 174, 197, 776 512 1094 154 928 418, 636 663 120 Lacey v. Giboney, 980 La Due v. Eailroad Co., 109 Laeber v. Langhor, 36, 41 Lafayette Co. Bank v. Metcalf, 883 Laigne T. Naramore, 1129, 1130 Lake v. Morris, 530 La Mothe v. Finck, 696, 698 Landers v. George, 824, 1129 Landon v. Emmons, 31, 80, 956 Lane v. Mason, 367 Langdon v. Buel, 1, 10, 676, 781 966, 1038 Langert v. Brown, 243, 662 Langton v. Eorton, 255, 256 Langworthy v. Little, 433, 440 Lanphere v. Lowe, 189, 199, 722 Larmon v. Carpenter, 966 Lary v. Nat. Trust Co., 951 Lashwood v. Hathaway, 239 Lath V. Carty, 535, 638 V. Schoflf, 357 Latham v. Summers, 22 Lathrop v. Blake, 209 V. Cheney, 1137 Latimer v. Balston, 503 V. Wheeler, 390, 402 Laubenheimer v. McDermot, 982 Lawrence v. Bumham, 537, 648 V. Evarts, 142, 147 Lawson v. Barton, 709 V. Lovejoy, 92 V. Moffat, 87, 246 Lay V. Neville, 529 Lazarus v. Henrietta Bank, 368 Leach v. KimbaU, 11, 31, 258, 676 705, 966, 1008, 1020 Leacock. v. Griffith, 92 Leadbetter v. Leadbetter, 807 Leake v. Loveday, 732 Learned v. Tillotson, 1128 Leavitt v. Jones, 122 Lee V. Cole, 88, 143, 170 Lee V. Fox, 1015, 1021 1022, 1023, 1057, 1091 V. Onstott, 99 Leeds V. Ameron, 111 Lefever v. Mires, 533 Legg V. Legg, 433 v. Willard, 513 Leighton v. Shapley, 794, 954 V. Stewart, 250 Leisherness v. Berry, 277 Leitch V. HoUister, 13, 163, 581 Leland v. Callner, 115, 642 T. The Medora, 450, 592 Leloverus v. Einggold, 213 Lemar v. Miles, 189 Lemay v. Williams, 340 Lemon v. Kobinson, 415 Leonard v. Baker, 503 Leopold v. Silverman, 66, 242, 646 Lesem v. Herriford, 536 Leslie v. Hinson, 224, 852 Lesser v. Glaser, 637 Lessing v. Grimland, 35 Lester v. Webb, 106 Leuthold v. Fairchild, 398 Levi V. Long, 716, 842, 897 Lewis V. Buttrick, 95 V. Carpenter, 603, 606, 661 V. CArcey, 670, 672, 681, 823 V. Palmer, 390, 399, 402, 962 V. Stevenson, 541 V. Swift, 533 Lewiston Bank v. Martin, 633a Libby v. Cushman, 808, 1036, 1037 Liberty Land Co. v. Barnes, 750 Lickbarrow v. Mason, 10 Liggat V. Morgan, 571 Lightfoot V. Wallis, 573 Lindsey v. Gibbs, 488 Lininger v. Herron, 1023 V. Mills, 143 Lippincott v. Shaw, &c., 107 Little V. Page, 19 Littlejohn v. Pearson, 715 LivCT V. Orser, 799 Livingston v. Mclnlay, 111 Lloyd V. Fulton, 593 V. Linch, 563 Lobban v. Garvett, 25 Locke V. Palmer, 23, 26 Lockwood V. Crawford, 385 V. Ewer, 966, 1122 V. Harding, 635 V. Slevin, 358 Locomotive Works v. Lewis, 19 Lodge V. Samuels, 645 Loeb V. Milner, 998, 1068 Logan V. Logan, 532, 632 Logwood V. Hussey, 24 London v. White, 1057, 1090 V. Youmans, 375 Lonergan v. Stewart, 35 xxyi TABLE OP CASES. Long V. Cockem, V. Hines, V. Knapp, V. Lee, Longbottom v. Berry, Long Dock v. Malloiy, Longey v. Leach, Longstaffv. Meagoe, Longuet v. Scawan, Looker v. Peckwell, Loomis V. Green, Lord V. Ferguson, V. Loaming, Lorimer v. AUyn, Loring v. Cooke, V. Ins. Co., Lorton v. Fowler, Louthain v. Mnller, Love V. Blair, Lovelace v. Webb, Lovele v. Cherry, Lovell V. Osgood, 69 Lowe V. Gist, 92 V. Pettingill, 570 V. Pew, 224 V. Swart, 962 V. Wing, 683, 741, 763 Lowell V. Fire Ins. Co., 117, 118 Loyd V. Currin, 5, 41 Lucas V. Campbell, 22 T. Saunders, 99 Luce V. Hadley, 486 V. Morehead, 155, 229, 369 V. Voorhees, 160 Lucking v. Wesson, 963, 967, 1131 Luuderberg v. Elevator Co., 362 Ludwig V. Kipp, 108, 212 Lumber Co. v. Ashworth, 100 Lund V. Fletcher, 426 Lunn V. Thornton, 254 Lunt V. Whittaker, 541 Lupton V. White, 125, 254 Lyle V. Bucomb, 111, 746 Lyman v. Bowe, 799 Lynch v. Welch, 234 Lynde v. Borne, 195 Lyon v. Bank, 633a Lyons v. Field, 541 M. Macay v. Bloodgood, 99 Machette v. Wanless, 47, 48, 110, 340, 980 Mackie v. Cairnes, 575 Macomber v. Parker, 541 V. Saxton, 668, 980 Macombie v. Davis, 398 Macy V. Wheeler, 487 Magee v. Carpenter, 541, 612 Mager v. Clark, 504 Magill V. Bank, 766, 761 Maguire y. Card, 484 Reference Is to Sections. 49, 293, 415 220 141 242, 549, 661 195 688, 996, 1038 268 195 26 213, 650 125 489 698 219, 239 950 117, 118 264 558 1132 108 365 Maier v. Davis, 267 Malatt V. Price, 190 Malonghney v. Cuch, 911 Manard v. Bond, 687 Manchester v. Tibbetts, 95, 803 Manheim v. Claflin, 1078 Manhood v. Crick, 911 Mann v. Flower, 592, 601, 602, 966 Manning v. Cunningham, 369, 725 V. Monaghan 383, 390 402, 806, 837 V. Wortram, 933 Manns v. Brookville Bank, 163 Manny v. Woods, 734 Manson v. Phoenix Ins. Co., 258, 676 Maples V. Burnside, 567 V. Maples, 609 v. Millon, 195, 199 Marable v. Mayer, 46 Margentham v. Harris, 581 Marks v.HiU, 582,661 V. McQehee, 988 V. Philon, 382 V. Kobinson, 224, 398, 732 Marlet T. Hinman, 852, 355 Marsdon v. Cornell, 382, 394 Marseilles Mfg. Co. v. Kockford P. Co., 369 Marsh v. Austin, 811 V. Burley, 164, 341 V. Lawrence, 795, 796, 807 V. The Minnie, 475, 477 V. Titus, 35 V. Wade, 83, 276 V. Woodbury, 425 Martendale v. Burdi, 787 Martin v. Hamlin, 42 V. Hill, 410, 433, 440, 441, 442 V. Hausman, 14, 590 V. Jewitt, 828 T. Paiton, 489 V. Potter, 435 Martindale v. Booth, 503 Martineau v. McCullom, 775 Marx V. Davis, 129 Massey v. Gorton, 511 v. Harding, 1013 Masson v. Anderson, 607 Mather v. Frazer, 431 Matthews v. Aiken, 962 V. Burke, 712 V. Fisk, 706 V. Sheenan, 26, 951 V. Wallwyn, 775, 784 Mattingly v. Dorwin, 88 Mattison v. Baucus, 268, 795, 807 Mattock V. Straughn, 414 Maugi V. Heringhi, 31 Maxwell v. Newton, 1021 May V. Walters, 520 Mayers v. Taylor, 224 Mayhew v. Davis, 361 Maynard v. Hunt, 951 TABLE OF CASES. XXVll Reference i8 to Sections. 133, 135 930 716 276 120, 219 438, 443 35, 121 251, 254, 256, 257 120 167 754 550 595 122, 216 273 1067, 1087 147 13, 99, 580 974, 983 19 825 Maynard v. Maynaid, Mayor v. Patton, V. Taylor V. Williams, McArthur v. Gorman, McCabe v. Blymyre, McCaffrey v. Woodin, McCall V. Walters, McCalla v. Bullock, McCandless v. Moore, McCarthy v. Gould, V. Kelley, MoCarty v. Blevin, , V. Grace, McCauley v. Kogers, McChesney v. Wainwright, McClelland v. Kemsen, McClure v. Hill, McComb V. Donald, McConnell v. Denham, V. Scott, 593, 706, 977, 1001 McCord V. Burson, 120 McCormick v. Degby, 912 V. Hadden, 533 McCoughey v. McCaw, * 807, 812 McCowen v. Mayer, 218 McCoy V. Bail, 1132 McCrasley v. Hasslock, 658 MoCrea v. Bank, 194 McCready v. Haslock, 12 McCnllougk V. Dowerville, 593 McCuUy y. Gracelan, 511 V. Swackham, 523 McDaniel v. Morris, 51 McDaniels v. Colon, 108 MoDermott v. Strong, 798 McDonald v. Eggleston, 99, 100 V. Kellogg, 41 V. Norton, 868 V. Vinson, 1039 McDonnell v. People, 1 V. Stewart, 47, 49 McDowell V. Stewart, 415 McEntee v. Scott, 199 McFadden v. Fritz, 508, 635 V. Hopkins, 635 V. Turner, 37 MiGee v. Fitzer, 252 V. Edwards, 730 McGinney v. Childs, 1132 MeGinnis v. Hart, 23 V. Savage, 19 McGorrick v. Dwyer, 200 McGowan v. Keed, 995 McGuire v. Benoitt, 676 Mclsaacs v. Hobbs, 767 McKibben v. Martin, 242, 538, 658 McKim V. Mason, 195 McKinsler v. Babcock, 114 McKnight v. Gordon, 753 McLaren v. Brewer, 497 McLaren v. Thompson, 563 McLaughlin v. Ward, 635 McLean v. Klein, 4 V. Lafayette Bank, 622 V. Walker, 1 McLemore v. Pinkston, 914 McLeod V. Jones, 665 McLure v. Boman, 108 MoMahan v. Tyson, 988 MoMonagle v. Nolan, 484 . McNally v. Bailey, 767 V. Connally, 200 McNamara v. Culver, 24 McNeal v. Emerson, 989 McNeil V. Nat. Bank, 19 MoTaggart v. Rose, 340, 593 Mead v. Gardiner, 524, 541 V. Noyes, 542 V. Smith, 530 V. York, 794, 907 Means v. Worthington, 1116 Meech V. Patchin, 390, 402, 545, 763 Meherin v. Oakes, ■ 405 Mehlhop V. Pettibone, 563 Meinhard v. Strickland, 588 Meixsell v. Williamson, 563, 568 Melin v. Keynolds, 154 Melledge v. Boston ton Co., 106 Melvin v. Fellows, 114 Memford v. Canty, 410 Meuoz V. Wilson, 135 Mercer v. Tinsley, 826 Merchants Nat. Bank v. Raymond, 113 Meredith v. Kuntze, 143 Merg's Appeal, 195 Merrick v. Avery, 449, 485 V. Wallace, 355 Merrill v. Dawson, 46, 133, 541, 568, 609 V. Eessler, 4 V. Swift, 113 Merritt v. Bartholick, 773 V. Judd, 195 V. Lambert, 949 V. Niles, 702, 823, 913 V. Parker, 171 Martens v. Kielman, 379 Merviue v. White, 4, 31, 44, 966, 980 Metcalf V. Scholey, 795 Metropolitan Nat. Bank v. St. Louis Dispatch Co., 163 Metzler v. James, 816, 1132, 1138, 1141 Metzner v. Graham, 645 Meyers v. Cook, 89, 122, 216 V. Evans, 243, 636 Michelson v. Fowler, 707 Michigan Cent. E. K. Co. v. Chicago E. E. Co., 177 Michigan Ins. Co. v. Brown, 113 Milburn Mfg. Co. v. Johnson, 402 Mill V. Money, ' 1084 Millar v.J^Uen, 717, 896 V. Olmey, 869 XXVlll TABLE OF CASES. Reference is to Sections* Millard v. Hall, 504 Miller v. Fraley, 563 V. Gorman, 538 V. Henshaw, 358 V. Jones, 340, 605, 621 V. Lookwood, 520, 567, 651 V. McCormick, 229 V. PancoaBt,502,519,542, 676, 838 V. Shreve, 519 V. Smith, 92 V. The Alice Getty, 468, 475 V. Wilson, 208 Milliken v. Hathaway, 778 Milliland v. Armstrong, 193 Miln V. Spinola, 487 Miltenherg v. Parker, 510 Milton V. Mosher, 45, 769 Miner v. Phillips, 563 Mingler V. Sibley, 243 Minnesota Linseed Oil Co. v. McGin- nis, 229 Minock v. Shortridge, 93 Mitchell V. Beal, 569 V. Black, 340 V. King, 951 V. Roberts, 1 V. Steelman, 480 V. West, 520 V. Winslow, 2, 250, 254, 256, 348 Mitford V. Mitford, 348 Mittnacht v. Kelly, 572 Moak V. Bourne, 954 Mobley v. Letts, 635, 980 Mohr V. Tulip, 90 Moliter v. Robinson, 514 Monaghan v. Longfellow, 303, 355, 358 Monell V. Smith, , ' 111 Money v. Killongh, 525 Monnat v. Ibert, 682 Monroe v. Douglas, 433 V. Hamilton, 96, 425 V. Hussey, 502 Montany t. Bock, 42 Montgomery v. Chase, • 249 V. Kerr, 683 V. Merrill, 87 V. Wright, 439 Monticello v. Madison, 492 Moody V. Haseldon, 260 ■ V. Wright, 128, 242, 254 Moog V. Benedicks, 504 Mooney v. Alsen, 502 V. State, 899 Moore v. Abernathy, 92 V. Byrum, 254 V. Murdock, 683 V. Norman, 949 V. Simonds, 448, 449, 480 V. Whitson, 341, 548 V. Young, 238 Moroum v. Coleman, 694 More V. Bennett, 798 More V. Wade, 41 MorgaB V. Morse, 563 V. Shinn. 457, 464, 487 V. Spangler, 838 V. Smith, 706 V. Tapscott, 490 Moriarty v. GuUickson 308 Morrill v. Noyes, 257 V. Sanford, 341, 363 Morris' Appeal, 1058 Morris v. Baker, 811 V. Fisher, 1038 V. Hyde, 258 V. Lewis, 1038 V. Eexford, 19 V. Stem, 635 V. Tillson, 127, 1028, 1038 Morrison y. Mendenhall, 99, 100 Morrow v. Eeed, 254, 258, 264, 272 V. Tumey, 5,8 Morse v. Bellows, 99 V. Caipenter, 100 V. Clayton, 9l2, 941 V. Powers, 275, 276, 436, 591 V. Ware, 777 Morton v.'Gahana, 1081 V. Bagan, 535 Mosely v. Shattuck, 19 Mowry v. Nat. Bank, 1138 V. White, 751, 1138 Moxley v. Bagan, 1132 Mueller v. Prove, 80, 569 Muir V. Berkshire, 962 V. Blake, 142 Mumper v. Bushmore, 520 Muncie Bank v. Brown, 52, 158, 635, 959 Murphy v. Calle, . 25 Murray v. Blackledge, 100 V. Bnrtis, 541 V. Erskin, 977 V. McNeal, 243, 504, 626 V. Walker, 25 Muse V. Lehman, 712 Musgat V. Pumpelly, 20, 25, 31 676, 955, 966 Myers v. Kinzie, 563 V. Ladd, 147 N. Nantes v. Canork, 550 Nantz V. McPherson, .268 Napier v. Cartron, 99 Nash V. Ely, 275 V. Norment, 275 Nat. Bank v. Anderson, 515, 578, 643 V. Comfort, 630 V. Davidson, 675 V. Ebbert, 242, 658 T. Elmore, 208 V. Holman, 1137 V. Lovenberg, 242, 659 TABLE OF CASES. XXIX Reference is to Sections. Nat. Bank v. PettU, 843 V. Sprague, 272, 384, 391, 392 413, 417, 580, 590, 593 V. Summers, 342, 350, 776 V. Wilder, 9 Nat. Ins. Co. V. Webster, 40, 41 Neally v. Ambrose, 681 Neimcewicz v. Gahn, 962 Nelson v. Brown, 35 V. Bryce, ' 113 V. Dunn, 777 V. Ferris, 668, 781, 798, 830 V. Kessinger, 48, 63, 293 V. Neil, 366 V. Nelson, 235 V. Wheelock, 676, 980 Nesbit V. Bartlett, 711 New V. Sailors, 1051 Albany Ins. Co. v. Wilooxson, 508 Newcomb v. Cabell, 277 Newell V. Warner, 142, 151, 392, 541 Newlean v. Olson, 670, 999 Newlin v. Lyon, 568 Newly V. Hill, 425 Newman v. Tymeson, 104, 152, 744, 763 Newsam v. Finch, 799 Newton v. McKay, 100 V. Thornton, 270 Nichols "v. Barnes, 712 V. Flanders, 1125 V. Hampton, 48, 356 V. Lee, 785 V. Maee, 441 V. Mead, 804 V. Reynolds, 355 V. Webster, 11 Nicholson v. Karpe, 143, 147 Nickling v. Betts, 418 Niggeler v. Maurice, 26 Nitchie v. Townsend, 385 Niion V. Cobleigh, 726 V. Stanley, 383 Nohl V. Gunter, 504 Nordman v. Wilkins, 682 Norman v. Craft, 738 Norris v. Hix, 219, 665, 772 V. Sowles, 410, 799, 845 North V. Crowell, • 541 V. Turner, 163 Norton v. Dodlittle, 530 Noyes v. Wyckoff, 941, 1135 Nunn V. Wilsmore, 593 Nutter V. Harris, 508 Nutwell V. Tongue, 988 o. Oakes v. Moore, 122 Odell V. Gallup, 1056 Offutt V. Flagg, 410, 433 Ogden V. Stewart, 634, 719 Oloott V. Kathbone, 909 V. Tioga E. K. Co., 1021 Olds V. Andrews, 824 O'Leary v. Snedeker, 936 Oliver v. Eaton, 514, 542, 642 V. Town, 254, 664 Omaha v. Suthlerland, 37 O'Neal V. Wilson, 807 Orgall V. Seymour, 611 Ormsby v. Nolan, 162 Orser v. Steams, 704 Orton T. Orton, 654 Osborne v. Berge, 100, 1049 V. Fuller, 530 Osen V. Sherman, 528 Osgood V. Pollard, 1137 Osnold V. Hayes, 701 Otis V. Sill, 213, 224, 254, 545 V. Wood, 807 Otto V. Lord Vaux, 917 Ottumway Mill Co. v. Hawley, 193 Ousley V. Patterson, 602 Overstreet v. Manning, 375, 755 Overton v. Bigelow, 113S Owen V. Orms, 580 Oxnard v. Blake, 138 Packard v. Kingman, 909, 939, 941 1038, 1039, 1094 V. Wood, 513 Paden v. Bellinger, 224 Page V. Kfendig, 369 Paget, V. Perchard, 503, 549, 623 Paine v. Benton, 110, 113 V. Mason, 385 V. Waite, 942 Palmer v. Forbes, 177, 804 V. Yates, 775 Parish v. Gates, 41 Parker v. Farmers, 142 V. Jacobs, 243, 657 V. Lombard, 398 V. Stainland, 236 Mills V. Jacot, 449 Parks V. Hall, 10, 794, 954 Parr v. Brady, 410, 519 Parris v. Eoberts, 19,20 Parshall v. Eggart, 1 Parsons v. Copeland, 193 V. Wells, 949 Partelo v. Harris, 563 Partridge v. Swazey, 113, 114, 140, 682 V. White, 105 Patch V. Wheatland, , 99 Patchin v. Pierce, 794, 910, 949, 951 954, 996, 1038, 1122, 1128 Paton V. Coit, 563 Patrick v. Meserve, 713, 719 Patten v. Aces. Trans. Co., 687, 1042, 1043 V. Smith, 541, 550, 591 Patterson v. Gillies, 382, 395, 396 V. Hull, 931 XXX TABLE OF CASES. Beference Is to Seotions. Patterson v. Jones, 280 V. Taylor, 702, 1132 Pattison v. Adams, 767 Paul V. Hayford, 794, 807, 910, 942 Payne v. Wilson, 170 Pea V. Pea, 195 Peabody v. Landon, 243, 660 Peacock v. Dickinson, 950 Pearson v. Carter, 99, 538 V. Hooker, 99 T. Seay, 24,25 Pease v. Ctole, 100 V. Odenkirchen, 410 676, 682 V. Smith, 398 Pecker v. Silsby, 739 Peiser v. Peticolas, 659 Pence v. Armstrong, 959 Pennock v. Coe, 224 254, 429 People V. BiTistol, 352 355, 514 648, 642 677, 749 V. Hamilton, 48, 404 V. Johnson, 823 People's Bank v. Gridley, 277 Saving Bank v . Bates, 375 514 560, 620 Perifuli V. Piatt, 100 Perkins v. Barnes, 568 V. Cummings, 169 V. Drye, 23 V. Eckert, 667 V. Emerson, 445 446, 451 V. Mayfield, 799, 807 V. Smith, 398 Peminter v. Kelly, 807 Perre v. Castro, 949, 951 Perry v. Hadley, 778 V. Kearnes, 759 V. Meadowcraft, 24 V. Nat. Bank, " 661 V. Somerby, 827 Petch V. Tutin, 245, 247 Petering v. Chrisler, 645 Peters v. Bnin, 593 V. Ballustier, 10 Peterson v. Foli, 159 V. Kaighler, 29, 352 Pettee v. Dustin, 369, 578 Pettiboue v. Griswold, 1051 V. Perkins, 1019 V. Stevens, 1027, 1028. 1040 Pettis v. Kellogg, 30 Phares v. Barbour, 1019 Phelps V. Murray, 254, 658 Philip Best Brew. Co. V . Pillsbury, ' 712 Phillips V. Cummings, 743 V. Frye, _ 95 V. Hawkins, 810 V. Johnson, 69, 911 V. Eeitz, 1 509, 564 V. Winslow, 106 Philon y. Olney, 777 JPhippen v. Durham, 593 Phips V. Leddy, Pickard v. Low, V. Sears, Pickerell v. Carson, Pierce v. Emery, V. Faunce, V. George, 190, V. Hasbrouck, V. Parker, V. Stevens, Pike V. Colvin, Pindell v. Grooms, Pioneer If ill Co. v. Baker, Pitkin V. Fletcher, Pillsbury v. Kingon, Pitlock V. Jordon, Pitts V. Cable, Place V. Grant, V. Langworthy, Piano Mfg. Co. v. Griffith, Planters Bank v. Willis, Piatt V. Stewart, 349, Plummer v. Shirely, Poindexter v. McCannon, Poland V. Bailroad Co., PolhemuB v. Trainer, Polk V. Foster, V. State, Pollak V. Davidson, Pomroy v. Eice, Pool V. Adkinson, Porter v. Dement, 49, 278, V. Parmly, V. Pettingill, v. Steel Co., Pothonier v. Dawson, Portland Bank v. Stubbs, Potter V. Cromwell, v. Holden, V. Irish, V. McDowell, V. Paine, Potts V. Blackwell, V. Hart, V. N. J. Arms Co.,, • V. Ordnance Co., Powder v. Bunkhardt, Powell V. Hunt, Powers V. Elias, V. Freeman, V. Green, Prather v. Parker, Pratt V. Maynard, V. Stiles, V. Wheeler, V. Whittier, Presley v. State, Preston V.Hull, V. Perton, V. Whitney, Prensser v. Henehaw,, 384, 487 258, 676, 801 702: 209 106, 21S 775 193, 198, 208 704 114 41, 541, 691 147, 293, 82a 16a 26 728 105& 397 2a 918 549, 572 15», 397 610 867, 368, 394 1,36 2a 703 35, 773 252 881 362, 397 936, 93» 398 340, 415, 432: 1, 261, 382 598, 803, 954 19 192 966- 454 194, 201 792 453 568 542 775 584 1142 431 35 759' 799" 130, 214, 362 533 534 713, 714, 71& 1128 800 igO' 899^ 85 911 19,22 101 TABLE OF CASES. XXXI Reference Is to Sections. Price V. Furman, 92 Eeed v. Jewett, 541 V. Jenks, 120 Eeeder v. The Geo. Creek, 471, 475 V. Jones, 19 Eees V. Coats, 87 v. Malatt, 190 Eeese v. Lyon, 676 966 988, 999 T. Mateison, 563 V. Mitchell, 613, 615 V. Mazange, 504, 626 V. Taylor, 355 V. McComas, 143, 146 Beeves v. Scully, 775, 785 V. Pitzer, 512 V. Sebern, 21 Prior V. White, 141, 563, 568 593, 823 Eeichenbach v. McKean, 840 Prout V. Koot, 796, 810 Eeiohert v. Simons, 243 506, 630 V. Vaughn, Provost y. Wucox, 591 Reid V. Abemethy, 135 471 V. Eensselaer, 971 Puckett V. Keed, 141, 277 Eeison v. Mott, • 1105 Puldfer V. Page, 124 Reubens v. Joel, 1043 Purcell V. Mathers, 163, 165 Eeynolds v. Case, 362 Purdy V. Phillips, 971 V. Shirk, 344 Purnell v. Vaughn, 1045 V. Stark, 106 Pusey V. Pusey, 698 v. Witte, 105 Putnam v. Cushing, 124 Ehines v. Phelps, 127, 128 242, 634 V. Osgood; 549 , 572, 651 Ehode Island Cent. Bank v. Dan- V. White, 419, 425 forth, 433 Pyle V. Warren, 541, 546 , 559, 647 Eice V. Catlin, V. Chase, 1032 702 Q. V. Cobb, 487 V. Courtis, 434 Quarles v. Kerr, 605, 661 V. Cribb, 781 Queen v. Wernwag, 746, 747 V. Kahn, 388, 392, 669 951 958, 966 ex rel. v. Lee, 193 V. Nolan, , 1132 Quinby v. Manhattan, &c., Co., 194, 195 V. Eice, 25 Quinu V. Brittain, 687, 1042, 1043 Eich V. Doan, 23, 24, 25 V. Schmidt, 681, 692 V. Eoberte, Richards v. Holmes, 363 1021 R. V. Schroeder, 529 V. Spicer, 1040 Eagan v. Simpson, 25 V. Vaccaro, 563 Eahilly v. Wilson, 35 Richardson v. Alpena Lum. Co., 80, 142 Bailroad Co. v. Cowdry, 192 143, 150 V. Jones, 429 V. Boright, 92 V. Woepper, 429 V. Boston, &c., Labor, 950, 951 Eamsey v. Glenn, ' 369 V. Copeland, 190 Eand v. Barrett, 268 V. Lester, 99 Eandall v. Elwell, 428 V. Eording, 533 V. Higbee, 677 Eichmond v. Cordup, 605 V. Sweet, 92 V. Miss. Mills, 17 Eandlett v. Blodgett, 130, 549 Eicker v. Kilgore, 980 Eandolph's Ex. v. Quidnick Co., 593 Eickert v. Madiera, 811 Eankins v. Green, 674 Eider v. Edgar, 712 Eape V. Heaton, 433 v. Harrison, 9 Eatcliffv. Davis, 936 V. Kidder, 550 Eawley v. Brown, 502 Eiggs V. WUson, 1054 Bawlins v. Hunt, 87, 245 Eigney v. Lovejoy, 767 V. Kennard, 142 Eiley v. Mallory, 92 Eawson v. Taylor, 1031 Einchey v. Stryker, 559 Eaymore v. Merchant, 909 Eindskoff v. Vaughan, 635 Eea v. Alexander, 521 Eing V. Neale, 744 Read v. Wilson, 634 V. Wing, 369 Eeceivers v. Goodwin, 99 Roach V. Cosine, 725 Eecker v. Eilgore, 1132 V. Turk, 398 Eedd V. Burns, 246 Robbins v. Eaton, 92 Eeed v. Blades, 503 V. Olham, 535 V. Eames, 544, 613, 615, 1088 V. Parker, 605. 641 V. Godwin, 99 Roberts v. Crawford, 69, 719; 887 xxxu TABLE OF CASES. Reference is to Sections. Koberts v. Dauphin Bank, 195 V. Ins. Co., 116 V. Jackson, 440 V. Norris, 682 V. White, 742 V. Wiggins, 92 Robertson v. McDonald, 254 V. French, 83 V. Luddington, 163 V. Stark, 113 V. Todd, 601 Eobinson v. Bliss, 1009 V. Campbell, 676, 960, 396, 1122 V. Cropsey, 725 V. Elliot, 242, 341, 349 548, 549, 578, 619 V. Ezzell, 228, 236, 245 V. Fitch, 767 V. Holt, 561, 562, 746, 749 V. Kruse, 245, 728 V. Mansfield, 809 V. Maudlin, 254 V. May, 553 V. Kice, 450, 451, 480 V. Williams, 109, 113 Kobson V. Mich. Cent. E. R. Co. 252 Kocheblane v. Potter, 536 Rockwell V. Daniels, 784 V. Humphrey, 24,25 Roddy V. Brick, 26 Roden v. Jaco, 921 Rodwell V. PhUlips, 236 Rogers v. Burrus, 26 V. Cox, 190 V. Hall, 563 V. Huie,' 398 V. Lawrence, 718 V. Plattville, &c., 190 V. Traders Ins. Co., 807, 949 V. Vaughn, 36 Rood V. Welch, 149 Root V. Bonnema, 1138 V. Harl, 585 V. Potter, 585 Rose V. Bevan, 128, 213 242 688, 828 V. Colter, 508 V. Page, 996, 1004 V. Wilcox, 242 541, 638 V. Young, 607 Rosin V. Swann, 733 Ross V. Menefee, 404 694 763, 962 V. Wardlaw, 369 Rothchilds v. Eowe, 539 Roundy v. Convers, 664 Rountree v. Britt, 154 Rouke V. BuUens, 513 Rowan v. Rifle Co,, 255, 256 V. Union Arms Co., 19 Rowand v. Anderson, 192 Eowe V. Sharp, 327 Eowland v. Plummer, 426 Eowler v. Eice, 254 255, 541 Eoy V. Goings, Rudderow v. Huntington, Ruggs V. Barnes, Ruiter v. Plate, Runyan v. Groshon, Eussell V. Butterfield, 670, V. Dyer, V. Fillmore, V. Longmore, 7. Southard, V. Waite, V. Winne, 549, Rust V. Morse, Eutherford v. Stewart, Eyall V. Eowles, Ryan v. Clanton, Eyder v. Hathaway, V. Townsend, s. • Safe Co. V. Norton, Sage V. Browning, V. Sleutz, St. Louis Drug Co. v. Darst, Salisbury v. Phillips, Saltus V. Everett, Sampson v. Shaw, Sams V. Armstrong, Sanders v. Barlow, V. Kerber, V. Knox, V. Pepoon, Sanger v. Frieie Press, Sargeant v. Home, V. Metcalf, V. Solberg, V. Usher, Sarle v. Arnold, Satterwhite v. Kennedy, Saunders v. McCarthy, V. Voorhees, Sawyer v. Gerrish, V. Pennell, V. Eogers, V. Turpin, Saxton V. Hitchcock, V. Williams, Sayre v. Hewes, Soaife v. Stovell, Scarry v. Eldridge, Scates V. Wilsey, Scharfenberg v. Bishop, 142, Schermerhorn v. Mitchell, Schlesiger v. Stratton, Schmidt v. Bender, Schneider v. Lee, Schuchardt v. Babbidge, V. Angelique, Schulenburg v. Harrison, V. Martin, 254, 672, 983 1025 744 276 434, 541, 996 681, 708, 979 800 11, 258, 270 37 23,25 785 79, 147, 153 572, 577, 651 553 237 10, 1122 410, 433 749 950 434 415 19 128, 242 1035 398, 722 590 799 265 19,22 935 418 375 777 19 134, 147 722, 730 524 1027 934 160 122 398, 426 355 340, 600 24,25 708, 1128 417 711 1047 355 212, 245, 254 242, 634 35 158, 161 325 491, 495 490, 492 126, 746 923, 932 TABLE OP CASES. XXXIU Reference is to Sections. Schwaz V. Sears, 1134 Scott V. Brittain, 26 V. Clinton, 177, 429 V. Dansley, 99 y. Delahunt, 475, 476, 477 V. Field, 1035 V. Oilman, 169 V. Henry, 30, 41, 1131 V. Newhirter, 811 V. Shreves, 784 V. Warren, 733 V. Winship, 541 Scott's Case, 472, 475 Scammon v. Eager, 324, 385 ScrafiTord v. G-ibbons, 142 Scrugham v. Wood, 133 Seaborn v. Henry, 433 Sears v. Abrams, 1063 Seay v. Jenks, 152 203 236, 712 Self V. Sanford, 359 Sellgman v. Ten Eyck, 43 Selking v. Hebul, 47, 49, 414 Sellena v. Lester, 254 Seuter v. Moore, 163 Sewall V. Henry, 19 Sexton V. Monks, 833 Seymour v. Canandaigua, &c.. 254 V. Colburn, 9 V. O'Keefe, 530 Shaffer v. Sawyer, 19 Shallenberger v. Binns, 930 Sharpe v. Eccles, 784 V. Orme, 83 V. Pearce, 127 128, 242 Sharron v. Humphreys, 519 Shaver v. Williams, 734 Shaw V. Bill, 106 V. Gil more. 237 V. Jeffrey, 25 V. Levy, 538 V. McCandless, 450 V. Thompson, 518 V. Wilshire, 418 423, 511 V. Wood, 443 Shears v. Kodgers, 347 Shedd V. Anderson, 347 Sheehy v. Manderville, 971 Sheldon v. Conner, 235, 414 V. Dodge, 163, 580 V. Edwards, 201 Shelton v. Ficklin, 208 Shepperd v. Earles, 1025 V. Trigg, 536 V. Turpin, 242 661, 974 Sherman v. Dajris, 795, 796 V. Fitch, 106 SherriU v. Hopkins, 433 Sherry v. Gilmore, 100 Sherwood v. Ins. Co., 115 Shirley v. Burch, 135 V. Watts, 797 Shirras v. Caig, 114 Shiver v. Johnson, Shores v. Doherty, Shotwell V. Webb, Showman v. Lee, Shuart v. Taylor, Shnber v. Boutwell, Shuey v. Latta, Shumway v. Butter, Shurtleff v. WUlard, 906 563 784 95 103 422, 941 1051 513, 746 277, 513, 548, 603 606, 607, 609, 611, 800 Sidener v. Bible, 358, 824 Siedenbach v. Eiley, 375, 418, 595 Sife v. Earman, ^ 552, 661 Sickley v. Hood, 536 Simmons v. Anderson, 309 V. Jenkins, 31, 126, 130, 401 634, 681, 683, 823, 966 Simms v. Hervey, 85 V. McKee, 433, 608 Simons v. Pierce, 189, 206, 413 Simpson v. Carleton, 970, 1068 V. Hinson, 269, 1137 V. Mitchell, 605 Sims V. Canfield, 10, 1137 V. Mead, 108 V. Wilson, 19 Single V. Phelps, 220, 254 Singleton v. Young, 362 Sinker v. Green, 107 Sirrine v. Briggs, 786 Sisson V. Hibbard, 190, 198, 200 Skiff V. Solace, 433, 681 Skinner v. Maxwell, 92 Skip V. Harwood, 687 Skipper v. Slakes, 163 Skowhegan Bank v. Farrar, 143, 146 Slade V. Biggs, 1039, 1128 Slee V. Morsalton Co., 7 Sleeper v. Chapman, 641 Sloan V. Cobum, 4, 87 Slowey V. McMurray, 24, 25 Small V. Audly, 593 Smith V. Andrews, 99 V. Atkins, 245 V. Beattie, 13, 35, 420, 583 V. Benson, 189, 205 V. Camp, 46 V. Coolbaugh, 167, 966, 1128, 1131 V. Cooper, 584 v. Crosby, 24 V. De Vaughn, 4 V. Ellis, 1050 V. Ely, 572, 578, 622 V. Fletcher, 82, 375 V. Henry, • 609 V. Hiues, 532 V. Hutchins, 433 V. Jones, 692 V. KeUey, 93, 949 V. Kenny, 622 V. Konst, 683, 966 V. McAtee, 437 XXXIV TABLE OF CASES. Reference Is to Sections. Smith y. McLean, 142, 433, 584, 563, 433, V. Menominee, V. Moore, V. Phillips, 7. Post, V. Prince, y. Putney, y. Quartz Min. Co., y. Rice, V. Koberts, y. Rogers, y. Sloan, y. Smith, y. State, y. Stewart, V. Stevens, y. Waggoner, y. Welch, v. Worman, Smithursf y. Edmunds, 256, Smith Purifier Co. y. McGroarty, Smyth V. Tankersly, Snedeker v. Warring, Sneed v. Lord, Snyder y. May, Somers v. Craig, , Somerset y. Coatson, Southard v. Benner, 594, 520, y. Pickney, Southerin y. Mendum, Southwick y. Hapgood, Southworth y. Isham, Souverbye y. Arden, Sawdon y. Craig, Spader y. Lawler, Spaid y. Barrett, Spangler v. Barnes, Sparks y. Brown, y. Compton, y. Mack, 242, 505, y. Wilson, Sparr y. Railroad Co., Spaulding v. Mozier, Spence y. Bogwell, Sperry y. Ethridge, Spira y. Homthall, Spooner y. Holmes, Spraights y. Hawley, Spriggs V. Camp, 1, 683, Spring y. Grant, V. Short, Staak y. Sigelkow, Stackhouse y. AUord, ^tadeker y. Loeb, Stadfield y. Mfg. Co., Stafford y. Roof, y. Whitcomb, Standard Imp. Co. y. Schultz, Stanley y. Bunce, 147, 410 548, 636 668, 687 340, 412 695, 966 565, 671 939 541 23 103 309 784 100 542, 738 899 1035 731 352, 361 541 110, 722 254 429, 697 100 807 195 22 99 206 698 571, 584 596, 651 601, 651 767 972 125, 401 133 190 108 573 706 367 824 558, 627 79, 107 93 147, 823 661 636 563 398 398 807, 842 146 594, 596 726 382 218 22 92 719, 761 637 549 Starin y. Kelly, 56S Stark y. Redfield, 25 State y. Bell, 39^ y. Boynton, 666 V. Burns, 893 y. Carroll, 1132; y. Devereux, 899 y. Ellington, 893 v. Gustafson, 867 y. Harberson, 854 y. Ladd, 887 y. Logan, 160 V. Morse, 590- y. Plaisted, 887 y. Quick, 96 y. Rice, . 106^ y. Ruhnke, 878 y. Smith, 373 V. Someryille, &c.. 164 y. Tasker, 576 y. Williams, 878 y. Words, 893 Bank v. Kerohival, 195 Jour. Co. y. Commonwealth Co., 1044 Treasurer y. R. B. Co. 164, 428 Stearns y. Gage, 398 y. Marsh, 11 Steele y. Adams, 413, 612: V. Benham, 554, 598 Stein y. Munch, 242, 515, 643 Steinart v. Deuster, 549, 664 Steiner y. McCall, 108 Stenter y. Mitchell, 245^ Stephens y. Elwell, 398 y. Muir, 759 y. Tucker, 147 Stephenson v. Little, 749 Sterling y. Rogers, 1034 Steyens y. Bell, 581 y. Blanchard, 600 y. Breen, 1125^ y. Buffalo, &c.. 164 V. Cabell, 1047 y. Irwin, 529- y. Pence, 212, 239, 245 y. Railroad Co., 416, 428. y. Tuck, . 147 Stewart y. Anderson, 921 y. Beale, 427 y. Hanson, 30" y. Harry, 472 y. Jaques, 161 y. Lornke, 503 y. Piatt, 340 348, 365, 368 y. Redditt, 13ft y. Slater, l,80a Stickney y. Stickney, 1065 Stillman y. Flennike, 192 Stinson y. Minor, 446, 450, 480 y. Wrigley, 578 Stix y. Sadley, 585 TABLE OF CASES. XXXT Reference Is to Sections. Stockwell V. Campbell, 193 Stoddard t. Butler, 549 V. Denison, 996, 1128 1130, 1132, 1135, 1137 Stone V. Marvel, 69 V. Perry, 22 7. Vanheythuysen, 571 Stonebraker v. Ford, 149, 150, 684 Stonebreaker v. Kerr, 140 Storm V. Davenport, 1058 Storms V. Storms, 1051 Stoughton V. Pasco, 109 Stowe V. Taft, 518 Stowell V. Bair, 231, 246 V. Goodale, 947 Strahn \. Hayes, 564 Stratton v. Parker, 674, 699 Straub V. Screven, 1137 Straus V. Kranart, 558 Street v. Sinclair, 989 Stringer v. Davis, 175, 180 Strolberg v. Brandwerg, 160 Stromberg v. Lindberg, 970 1008, 1068 Strong V. Harney, 950, 951 V. Thompson, 28 Studebaker v. Bird, 1053 V. McCargner, 777 Sturgis V. Warren, 199, 258 SufEeld V. Baskeroil, 1035 Sullivan v. Hadley, 994 V. Miller, 596 V. O'Neal, 594 V. Sullivan, 502 V. Toole, 202 Summers v. McKee, 613, 618 V. EooB, 516, 644 V. Scboles, 795 •V. Wood, 278 Summervill v. Horton, 575, 603, 607 Summerville v. Horton, 606 Sumner v. Bacbelder, 1, 794 V. Blakeslee, 120 V. Dalton, 69, 104, 274, 518 V. Hamlet, 124 V. Hicks, 593 V. McFarland, 19 Supervisors v. Davenport, 365 Sutpben v. Cushman, 22, 25 Sutton V. Dillage, 399 V. Hawkins, 951 Swartzer v. Jones, 195 Sweeney v. Coe, 274, 529a Sweetzer v. Mead, 55 V. Lowell, 114, 133 Swett V. Brown, 1036 Swift V. Agnes, 502 V. Hall, 371, 943 V. Hart, 542, 980 Swiggett V. Dodson, 273 Sword V. Low, 197, 356 Syfer v. Bradley, 824, 1020 T. Taber v. Hamlin, 1101, 1127 Taft V. Pike, 92: Talbert v. Horton, 143 , 279, 559- Talbott V. Sandifer, 19 Tallen v. Ellison, 647, 676, 1134 Tancred v. AUgood, 798 Tannahill v. Tuttle, 10 ,799 , 801, 807 Tantnm v. Green, 563- Tapley v. Butterfleld, 99, 100' Taylor v. Barber, 369 V. Boardman, 433, 440' V. Cheever, 1036,1037 V. Duesterberg, 558 561, 562 V. Page, 775- V. Bichardson, 277 531, 631 Teaf V. Hewitt, 194 Teal V. Hincbman, 959' Tedford v. Wilson, 252, 254 Teed v. Corruthers, 912: Ter-Hoven v. Kerns, 108 Terbune v. Aldis, 135. Terry v. Wheeler, 277 Texas Bank v. Lovenberg, 4 Tbayer v. Brackett, 950 V. Mann, 922 V. Stark, 137, 377 The Acacia, 477 Acme, 470, 471 Albany, 483 Alice, 473. America, 500" Antarctic, 931 Barnard, 500- Barque Great West, 485- Belfast, 484 Brown, 468 Chieftain, 489' City of Towas, 468 481, 500 Desdemona, 500- De Smet, 472 Emily Souder, 47.0 471, 475. Fanny, 484, 500 Farron, John, 471, 475. Favorite, 475, 482: Feronia, 466, 489 Franklin, 485 General BueU, 472: General Bumside, 471 Grace Greenwood, 450, 469, 475, 485 Grand Bapids, 492: Granite State, 471, 475, 479, 481, 727 Graves, W. T., 471, 475, 481 Guiding Star, 471 GuBtav, 477 Harrison, 481, 482; Heligoland, 466 Hendrick Hudson, 475 Hiawatha, 471, 475- Hine v. Trevor, 472 Hope, 489' Hull of a New Ship, 471 XXXVl TABLE OF CASES. Reference is to Sections* The Island City, 468, 475 Josephine, 472 Josephine Spangler, 475 Kate Hinohman, 472, 476 Katie, 482 King V. Hanger, 795 Kingston, 471 Lattawana, 491 Live Oak, 486 Lunt, J. B., 458 Mary, 466, 467 Marina, 19 Mary Ann, 466, 489 McChesney, 473, 474 Moore, John T., 448,453 468, 475, 480, 485 Neptune, 490, 491, 498 Norfolk and Union, 471, 475 Old Concord, 492 Pacific, 471 Panama, 457, 462 Persererapce, 462 Propeller Hilton, 485 Ealeigh, 475 Eomp, 458 Eoyal Arch, 466 Sailor Prince, 490 Saint Joseph, 475, 727 Scio, 471, 727 Scotland, 443 Selah, 501 Sherbro, 493 Sky Lark, 485 Starlight, 479 Superior, 500 Theodore Perry, 482 Troubadour, 486 Two Ellens, 477 Underwriters v. The Venture, 471 Union, 501 Wexford, 450, 486, 489 Theilman v. Carr, 192 Thomas v. Dyke, 92 V. Farley, 694 V. The Kosciusko, 450, 471, 480 Thompson v. Blanchard, 258, 520, 542, 702 V. Cooper, 974 V. Dillon, 12 V. Lambert, ' 106 V. Morgan, 375 V. Paxet, 538 V. Spittle, 102, 732 V. Thornton, 803, 974 V. "Van Vechten, 112, 383, 390 402, 416, 450, 545, 915, 954 V. "White, 533 V. Yeck, 533 Thorn v. Bank, 522 Thornhill v. Gilmer, 1, 676, 832, 966 V. Manning, 498 Thornton v. Davenport, 533, 544, 599 V. Smith, 526 Thorpe v. Cowles, Thorsen v. The Martin, Thrash v. Bennett, Thurber, V. The Fannie, V. Jewett, Tibbets v. Towell, 123 481, 482 245 445, 456 918, 936, 1027 19 Tioknor v. McClelland, 48, 63, 272, 293, 533 V. "Wiswal, 504o, 626 Tiffany v. "Warren, 413, 416 Tiffi V. Horton, 190, 200, 201, 208 Tift V. Dunn, 342 Tillman v. De Lacey, 192, 195 Tilson V. Terwilliger, 520, 541 Timms v. Shannon, 784 Tingle v. Fisher, 163, 372, 425 Tison V. People, &c., 728, 781 Titsworth v. Spitzer, 854 Titus V. Ginheimer, 177 V. Mabee, 130, 177, 203, 254, 255 Tognini v. Kyle, 141 Tolman v. Smith, 676, 966, 996, 1006, 1114 Tompkins v. Batie, 950 V. Chemune, 35 V. Crosby, 316 V. Henderson, 107, 159 Tomlinson v. Greenfield, 246 Tootle V. Caldwell, 502 V. Lyster, 142, 398 V. Taylor, 867, 998 Torbert v. Hayden, 636 Torp V. Gulseth, 718 Towell V. Hollweg, 385 Trapnall V. State Bank, 810,811 Trask v. Bowers, 274, 518 Travis v. Bishop, 358, 414 V. McCormick, 617 Treadway v. Sharon, 192 Treat v. Gilmore, 740, 1131 Tregear v. "Water Co., ' • 80, 529 Tremper v. Barton, 340 Trimbel v. Koons, 99 Trittipo v. Edwards, 1046 Troy V. Smith, 791, 961 Trull V. Hupler, 190 Truman v. Hardin, 19 Trustees v. "Wheeler, 784, 785 Tryon v. Mansir, 1132 Tuck V. Olds, 397 Tucker v. Fenno, 95 V. Toomer, 919 V. Wilson, 966 Tuite V. Stevens, 739, 1127 TuUy V. Harloe, 569 Turbeville v. Eyan, 99 Turner v. Kerr, 21 V. Killiam, 517, 647 V. Langdon, 1055 v. McFee, 110 V. Watkins, 17 Twyne's Caae, 557, 622, 1122 Tyler v. Strong, 433 V. Taylor, 103 TABLE OF CASES, XXXVll Beference is to Sections. u. TJhl V. KobinsQn, 517 Union Bank v. Bank, 100, 590, 593 V. Emmerson, 195 United States v. Astley, 99 V. Hooe, 108, 540 V. January, 930 V. Lyman, 938 V. New Orleans, &c., 254, 951 V. Eailway Co., 192 V. Seven Barrels of Dist. Oil, 721 V. The Victoria Perces, 452 Upson V. Eaiford, 504a Upton V. Archer, 85 V. Van Antwerp v. Newman, 798 Van Buskirk v. Ins. Co., 433 Vancise v. Nat. Bank, 837o Vandeberg v. Van Valkenburgh, 767 Van Heuson v. Kadcliff, 152, 576, 1058 Van Hooszer v. Cory, 230, 245, 251 Vanmeter v. McFadden, 425 Van Ness v. Packard, 189 Van Fatton v. Burr, 14 T. Leonard, 120 V. Thompson, 107, 569 Van Slyck v. Foster, 112 V. Mills, 795, 825 Varney v. Hawes, 105 Vamum v. State, > 716, 850 Vaughn V. Bell, 362 V. Parr, 92 V. Thompson, 550, 591 Veazie v. Somerby, 153, 362 445, 446, 451, 513 Vent V. Osgood, 92 Vernon v. Morton, 541 V. Upson, 585 Very v. Levy, 944 ViUa V. Bodreguez, 25 Vinson v. Hallowell, 638 Volney Stamps v. Grilman, 31, 252 683, 966 Voorhees v. McGinnis, 193, 208 Voorhis v. Freeman, 208 V. Frisbie, 602 V. Langsdorf, 576, 645 Vose V. Whitney, 731 w. Wade V. Johnston, 190 V. Strachan, 160, 369 Wagner v. Jones, 559 V. Watts 147 Waite V. Denniso'n, 1001, 1004, 1019, 1128 Waith V. Jones, 169 Wakeman v. Barrows, 169, 592, 1058 Walfordv. Baxter, 192, 196 Walker v. Johnson, 784 V. Eadford, 669 V. Schreibo, 777 V. Snedeker, 111 V. Staples, 10, 424, 951 V. Stone, 964 V. Vaughn, 203, 237, 356 Walmsley v. Milne, 195 Wallace v. Lewis, 92 V. Palmer, 309 Wallach v. Wylie, 79 Waller v. Cralle, 535 Walling V. Lewis, 344 Wallis V. Long, 706, 944 V. Ehea, 360 V. Taylor, 133 Walter v. Wimer, 549, 645 Ward V. Ayre, 126 V. Deering, 41 V. Sumner, 12 V. Watson, 85, 371, 943 Wardsworth v. Barlow, 139 Warner v. Jaflfray, 434 V. Kenning, 190 V. Norton, 541 V. Whittaker, 784 V. Wilson, 158, 161 Washburn v. Goodheart, 591 Washington v. Eyan, 568 Waterford v. Peniston, 431 Waters v. Bank, 712, 716,867 V. Cox, 88 Watkins v. HiU, 909 912, 936, 937 V. Wyatt, 87, 226, 245 Watson V. James, 26 V. Pugh 143 V. Taylor, 600 V. Thomson Lum. Co., 352 V. Williams, 541 Watt V. Euckman, 455 Watt's Appeal, 106 Wayne's Case, 601 Weatherbe v. Farrar, 369 Weaver v. Chunn, 362 V. Beilly, 579 , V. The Owens, 483 Webb V. Pierce, 455 V. Sharp, 711 Webber v. Emerson, 1019 Weber v. Armstrong, 536, 645 V. Sampson, 487 V. Mick, 13, 404, 690, 806 Webster v. Nichols, 250 Wedgworth v. City Bank, 647 Weed V. Beebe, 92 V. Covell, 119, 1032 Weeden v. Hawes, 569, 575, 576 Weeks V. Baker, 949 V. Maillordet, 151 V. Eake Co., 99 Weil V. Polack, 590 XXXVUl TABLE OF CASES. Reference is to Sections. Weill V. Thompson, 870 "Welch V. Sackett, 30, 103, 133 670, 680, 683, 743, 980 V. Whittemore, 807 Weld V. Cutter, 141, 263, 277 Welland v. Hathaway, 929 ^ells V. Connable, 676, 966 V. People, 365 V. Strachan, 160, 369, 389 Welsh V. Lewis, 79 V. Taylor, 304 V. Usher, 463 V. Whittaker, 801 Wente v. Young, 602 Werner v. Bergman, 983 West V. Crary, 954, 1128 V. Hendricks, 24 V. Madison, &c., 106 Westbrook v. Kemp, 31 Westcott V. Gunn, 940 Westerdell v. Dale, 1127 Westlake v. Westlake, 102, 324, 365 Westmoreland v. Wootin, 711 Wetherbee v. Green, 125 Wetts V. Chapman, 984 Wetzer v. Kelly, 273 Wharf V.Howell, 26 Wheaton v. East, 92 Wheeler v. Becker, 161 V. Konst, 528 V. Lawson, 594 V. McCormick, 568 V. McFarland, 807 V. Monteflore, 798 V. Nichols, 103, 275 V. Train, 767 Wheeldou v. Wilson, 566 Wheelwright v. Depeyster, 440 Whildon v. Pearce, 120 White V. Cole, 10, 276, 1038 V. Cotzhausen, 14, 593 V. Graves, 571 V. Phelps, 702 V. Spitigue, 398 V. Wilks, 150 Whitehead v. Jordan, 276 White's Bank v. Smith, 450, 453, 480 Whiteman v. Conner, 434 Whiting V. Eichelberger, 1, 4, 8 Whitney v. Eaton, 19, 22 V. Farrar, - 808, 1036, 1037 V. Hall, 142 V. Heywood, 118, 410, 946 V. Griffis, 637 Whittaker v. Sumner, 42, 423, 951 V. The Travis, 475 Whittemore v. Fisher, 55, 1137 Whittleshoflfer v. Strauss, 224, 852 "Whitwell V. Brigham, 1037 Wickerson v. Steme, 933 Weil V. Bank, 906 "Wiber v. Illing, 159 Wiez V. Potter, 15 Wiggins V. Lush, 135 WUbur V. Kray, 349 V. Jones, 42 Wilcox V. Bates, 25 V. Jackson, 128, 240, 274 Wildman v. Eadenaker, 175 Wiles V. Clapp, 383, 390 WUey V. Knight, 504a, 509, 626 V. Shars, 145 Wilhelmi v. Leonard, 636, 940, 960 Wilkinson v. Keller, 233 V. King, 280 V. Solomon, 757 Wilks V. Walker, 588 Willard v. Burley, 164 V. Eice, 124 , 125, 126, 746 Willet V. Stringer, 99, 100 Willey V. Snyder, 147 Williams v. Allsup, 476, 477 V. Briggs, 128, 203, 237 242, 254, 257, 656 V. Brosnahan, 397 V. Dobson, 31, 676, 685, 966 V. Evans, 647 V. Galleck, 839 V. GUlespie, 9 V. Hatch, 1013 V. Hilton, 113, 114 V. Merle, 398 V. Nealy, 351, 778 V. Nehr, 246, 254 V. Nolan, 1044 V. Owens, 23, 24, 25 V. State, 899 V. Stem, 976 V. Winsor, 212, 524, 656, 1058 Williamson v. Eailroad Co., 164, 256 340, 413, 417, 425, 431 V. Steele, 142, 156 Willis V. Bremner, 585 V. Twambly, 92,784 Willison V. Desenburg, 569 Williver v. Kray, 659 Willoughby v. Willoughby, 279 Willow V. Tarbox, 38 Wilmerding v. Mitchell, 19 Wilson v. Brannan, 676, 996, 1003, 1128 V. Carson, 435 V. Esten, 1058 V. Giddings, 123, 125 V. Gray, 3 y. Hill, 242, 537, 648 V. Hunt, 141 V. Leslie, 340, 371 V. Eountree, 672 V. Eussell, 13 V. Sullivan, 518, 649 . V. Traer, 48 T. Tramp, 773 V. Voight, 79, 242, 616, 628 V. White, 726 TABLE OF CASES. XXXIX Reference Is to Sections. "Wilson V. Wilson, 213, 488 Woods y. Gilson, 964 Winchester v. Ball, 31, 966, 1130, 1144 V. Hilderbrand, 83 V. Charter, 568 y. Eussell, 124 V. King, 19 y. Wheeler, 1086 Wineburgh v. Sehaer, 662 Woodside v. Adams, 3, 33, 798, 836 Wingler v. Sibley, 642 Woodward y. Marshall, 582 Winner v. Hoyt, 14, 18, 580, 585 y. Prickett, 24 Winslow V. Jones, 83, 129 Woolsey y. Fry, 615 V. Ins. Co., 152, 193, 195 y. Jones, 715, 851 Winsor v. McLelland, 348, 425, 454, 600 Wooten y. Wheeler, 844 Winstead v. Holmes, 79 Worman y. Kramer, 538 Winter v. Landphere, 123, 216 Worseley y. De Mattos, 623 Wintermute v. Light, 203, 236 Worthington y. Hauna, 695, 804, 805 Wisser v. O'Brien, 779 Worthy y. CaddeU, 563 Wiswall V. Sampson, 687 Wray y. Fedderke, 369, 402, 571 Witberell v. Spencer, 383, 389, 413 Wright y. Bircher, 237 Wittowsky v. Wasson, 35 V. Bundy, 366 Witczinski v. Everman , 108, 109 V. Fellow, 277 Wolf V. Dorr, 796 y. Gray, 195 V. Dowell, 832 y. Hencock, 569 V. Driggs, 135 y. Henderson, 844 y. Homer, 929 V. Pierce, 19 V. Hunter, 355 y] Ross, 1, 10, 11, 31, 966 Wolfe V. Perkins, 342 V. Storks, 683 Wolff V. Farrell, 676, 966 y. Tetlow, 272 Wolfley V. Kising, 276, 509, 676 Wyatt y. Stewart, 504o Wolverton v. Collins, 133 Wygat y. Bigelow, 1008, 1019, 1020, 1134 Wood, <&c., V. Brooks, 19 Wylder y. Crane, 613, 1004 Wood V. Dudley, 1, 10, 807 1038 1062, 1128, 1142 y. Hitchcock, 950 Wynn v. Carter, 268 y. Leadbitter, 251 y. Lester, 235, 252 Y. V. Lowry, 341, 545, 549, 651 Yant y. Haryey, 143 y. Manly, 251 Yates y. Olmsted, 38 y. Kowcliff, 696, 698 Yeatman v. Sav. Listitution, 348 y. Stsckwell, 450, 487 Yeldell y. Stemmons, 833 y. Whelan, 195 Yenni v. McNamee, 598 Woodall V. Smith, 549 Young y. Bradley, 533 Woodbum y. Chamberlain, 112 Youngs y. Wilson, 113 Woodman v. Chesley, 676 Woodruff V. Halsey, 30, 683 z. y. King, 99, 100, 781 Zaring y. Cox, 238, 242, 638 y. PhilUps, 371 Zollinger y. The Emma, 475 Woods V. Bugbey, 141, 529 Zouch V. Parsons, 92 THE LAW OF CHATTEL MORTGAGES. Part I. — The Nature and Requisites of the Contract. CHAPTER I. DEFINITION AND DISTINCTION. ARTICLE I. DEFINITION — ;WHAT CONSTITUTES A CHATTEL MORTGAGE. 1. Common-Law Definition. 2. Equitable Definition. 3. Common-Law Definition Bejected. 4. Instruments Held to be Chattel Mortgages. 5. Oral Mortgages Good Between the Parties. 6. Statute of Frauds— Application of. 7. The Relation of Debtor and Creditor Must Exist. 8. Equitable Intention. § 1. Common-Law Definition. — A chattel mortgage is an instrument of sale, conveying title of property to the mort- gagee with terms of defeasance, and if the terms of redemp- tion are not complied with, then, at common law, the title becomes absolute in the mortgagee. The nature of the agreement must be such, that by the mere non -performance of the condition by the mortgagor, the title will be trans- ferred to the mortgagee by the force of the agreement.^ Or it is a conveyance of title upon condition, and it becomes an absolute interest at law, if not redeemed by the time stipu- lated, and it may be valid in certain cases without actual delivery.^ iParshall v. Eggart, 52 Barb. (N. Y.) 367 ; Heyland v. Badger, 35 Cal, 404 ; Hembree v. Blackburn, 16 Oreg. 153; Wright v. Ross, 36 Cal. 414. ^Langdon v. Buel, 9 Wend. (N. Y.) 80; Qifford v. Ford, 5 Vt. 532; McLean V. Walker, 10 Johns. (N. Y.) 471 ; Porter v. Parmley, 43 How. Pr. (N. Y.) A 2 DEFINITION AND DISTINCTION. Under the common law a personal mortgage is more than a mere security ; it is a sale of the thing mortgaged, and operates as a transfer of the whole legal title to the mort- gagee, subject only to be defeated by the full performance of the condition.^ A distinction now exists between real-estate and chattel mortgages. While the character and eflPect of real-estate mort- gages have changed under the influence of modern statutes and decisions, yet no such change has taken place in regard to chattel mortgages, nor has the distinction between real and personal mortgages been removed or affected by modern rulings. "There is a wide difference," says Judge Duer, ■" between a mortgage of lands and mortgage of chattels. In the first case, as the law in this State is now settled, the estate subject to the mortgage, remains in the mortgagor, is bound by a judgment, and may be sold under an execution against him ; the mortgage is regarded merely as a security for the debt, and not as a transfer of the title. But a mort- gage of personal chattels in all cases vests the legal title in the mortgagee, and when by the terms, or by the legal con- struction of the instrument, he has an immediate right to the possession, although the possession may not in fact have been changed, he is, in judgment of law, the absolute owner, and it is merely as his bailee and by his sufferance that the mortgagor retains the possession."^ § 2. Equitable Definition. — In equity, a chattel mortgage is the transfer of the title to personal property, with or with- out possession, as a security for a debt or liability, upon 445; Story on Bailm. | 287; Flanders v. Barstow, 18 Me. 357; Plummer v. Shirely, 16 Ind. 380; Whiting i). Eiohelberger, 16 Iowa 422; McConnell v. People, 84 111. 583 ; Almy v. Wilbur, 2 Woodb. & M. C. C. 371 ; Mitchell v. Roberts, 17 Fed. Rep. 776; Rhines v. Phelps, 3 Gilm. (111.) 455; Durfee v. Gnnnell, 69 111. 371 ; Butler v. Miller, 1 Denio (K. Y.) 407 ; Sumner v. Batch- elder, 30 Me. 39; Thornhill v. Gilmer, 4 Sm. & M. (Miss.) 158; Wood v. Svn®.^'o^<7'-/^,>l ^r^.^h"' ^- Tucker, 1 Pick. (Mass.) 389; Howland v. Wi lett, 3 Sand. (N. Y.) 607; Spriggs v. Camp, 2 Spears (S. Car.) 181; Bor- .io "■ McVanner, 2 Denio-(N. Y.) 170; Bank v. Jones, 4 Comst. (N. Y.) 498; Alden v. Lmcoln, 13 Met. (Mass.) 204. ^Butler V. Miller, 1 Comst. (N. Y.)" 496. ^Stewart v. Slater, 6 Duer (N. Y.) 99. See, also, 2 Story's Eq. 1008, 1009. INSTRUMENTS HELD TO BE CHATTEL MOETGAGES. 6 condition that the transfer shall be void if the debt or liability be paid or discharged.^ The interest of the mort- gagee is considered as a mere lien- — an equitable interest — which will prevail over creditors and subsequent claimants, although the mortgagee does nothing to reduce the property to possession.^ § 3. Common-Law Definition Rejected. — Some of the States have rejected the common-law definition, and hold that a chattel mortgage conveys no title to property, but is a mere lien thereon. Thus, in Washington, a chattel mortgage, says Chief Justice Greene, is a mere security, under which no title can pass except by foreclosure and sale.* It was so held in Oregon, that no title passes without foreclosure,* but that decision is now virtually overruled.^ In New Jersey, Judge Depue says a chattel mortgage is regarded as a mere security for a debt, and does not entirely divest the property of the mortgagor." So, in Dakota,^ the. equity rule in regard to chattel mortgages is adopted, as held by Chief Justice Tripp, and they do not convey title to property, but are a mere lien thereon.^ In Michigan, a chattel mortgage dogs not transfer a legal title until after foreclosure or something equivalent thereto. It only creates a lien.' § 4. Instruments Held to be Chattel Mortgages. — Many instruments are chattel mortgages though not so named. Thus, an instrument conveying goods, says Chief Justice Willie, requiring the grantee to dispose of the same within a specified time, to apply the proceeds to a debt due him '2 Story's Eq. 21031. 'Mitchell V. Winslow, 2 Story C. C. 644. ^Boyd V. Forbes, 3 Wash. St. 818. ■'Chapman v. State, 5 Oreg. 432. ^Case V. Campbell, 14 Oreg. 460 ; Hembree v. Blackburn, 16 Oreg. 153. " Woodside v. Adams, 40 N. J. L. 417 ; Wilson v. Gray, 2 Stock t. 323. ^The admission of Dakota into the Union as two States has been of so recent date, it was thought best not to change the name. 'Grand Forks Nat. Bank v. Minneapolis, etc., Elevator Co., 43 N. W.'Eep. 806; Comp. L. ?§ 4330, 4331. ' Kohl V. Lynn, 34 Mich. 360. The equity rule prevails in Georgia and Texas as to chattel mortgages. See Cooch v. Gerry, 3 Harr. (Del.) 280. 4 DEFINITION AND DISTINCTION. from the grantor, he to return to the grantor any goods or money remaining, is a chattel mortgage,^ So, as held by Chief Justice GilfiUan, a clause in a lease, reserving to the lessor a lien for the rent on the chattels of a lessee, placed on the demised premises, to be enforced on non-payment, by taking possession and sale of the property, is, in equity, a chattel m'ortage.^ But, in North Carolina, says Judge Ashe, an instrument purporting to be a mort- gage of a bale of cotton to be made " during the year," is not a mortgage, but an executory contract merely.^ The following was held to be a chattel mortgage: " Eeceived of A., $26, in full payment for one black cow. * * * It is agreed by A, and B., that B. shall retain the property, use the same from this date to October first next ; at which time, should B. pay A. $25, then the property to remain B.'s ; otherwise to be delivered up to A."* So, where A.'s mare was served to B.'s stallion, and it was agreed in writing that A. should pay B. twenty dollars, in twelve months from date, if the mare proved with foal, " colt holden for payment ; " this was, as held by Judge Virgin, a mortgage oj" the colt.° But an instrument of writing by which the maker binds himself to pay a sum of money, mortgages and conveys a mule as security, with a recital that part of the debt is the purchase-money for the mule, and a further provision that it was to remain the vendor's property until paid for ; it was held by Judge Simmons, that such an agreement was a con- ditional sale with reservation of title^ and not a mortgage so far as the price of the mule is concerned." ' Texas Bank v. Lovenberg, 63 Tex. 506. 'Merrill v. Ressler, 37 Minn. 82. For various contracts which have been declared chattel mortgages, see Atwater v. Mower, 10 Vt. 75 ; Coty v. Barnes, 20Vt.79; Byrd V. Wilcox, 8 Baxt. {Tenn.)165; Dunning w. Stearns, 9 Barb. (N. Y.) 639; McLean v. Klein, 3 Dill. C. C. 118; Harris v. Jones, 83 N. Car. 317 ; Merwine .v. White, 50 Ala. 388 ; Ellington v. Charleston, 51 Ala. 166 ; De Leon v. Heguera, 15 Cal. 483 ; Whiting v. Eichelberger, 16 Iowa 422. 'Atkinson v. Graves, 91 N. Car. 99. 'Findley v. Deal, 60 Ga. 359. "Sawyer v. Gerrish, 70 Me. 254. 'Smith V. De Vaughn, 82 Ga. 574. ORAL MORTGAGES GOOD BETWEEN THE PARTIES. O A bill of sale will not be declared a mortgage where the evidence shows that a third person held complainant's notes and controlled his interest in mining property as security ; that he being about to sell the interest, complainant fearing it would not satisfy the note, obtained from defendant the money to pay the note and gave him, a bill of sale in suit, and the note was canceled.^ Chief Justice Reese, speaking for the court, says an in- strument by which a debtor, for the purpose of securing a debt, conveys personal property to his creditor, giving him the possession thereof, with authority to sell the same and account to the debtor for the surplus, paying the debt so secured, together with the necessary expenses of sale is a chattel mortgage not only as between the parties, but also as to the creditors of the mortgagor.* § 6. Oral Mortgages Good Between the Parties. — ^As between the parties, a mortgage of chattels may be created by parol, and may be valid. .No special words are necessary to its creation. It is enough that the transaction indicates an intention and agreement that the chattels shall stand as a security for the debt. Thus, a verbal agreement between the seller and the purchaser of a chattel, that the former shall have a mortgage on the chattel, if the note for the purchase-money is not paid at maturity, is a mortgage.^ And a verbal agreement to give and to accept security upon personal property is valid between the parties, although it is not valid against creditors and subsequent purchasers in good faith.* And the delivery of a chattel by the pur- chaser, to one who is to become surety for the payment of the purchase-money, is a valid and legal mortgage. And the continuance of the possession and use of the property by the purchaser does not invalidate the right of the surety ' Cake V. Shull, 45 N. J. Eq. 208. 'Sloan V. Coburn, 26 Nebr. 607. 'Glover v. McGilvray, 63 Ala. 508. S. ?., Morrow v. Tuney, 35 Ala. 131; Bardwell v. Boberts, 66 Barb. (N. Y.) 433; Bates v. Wiggin, 37 Kans. 44. *Conchman v. Wright, 8 Nebr. 1 ; Bank v. Jones, 4 N. Y. 497. 6 DEFINITION AND DISTINCTION. to control the property upon the happening of the event which, by the agreement of the parties, was to render his interest absolute.' Where a verbal contract is made between an execution creditor and debtor, that the creditor shall pur- chase tlie chattel of the debtor at the execution sale, and hold the legal title as a security for the debt, it is a mortgage.^ § 6. Statute of Frauds — Application of. — The eleventh sec- tion of the statute of frauds of California does not apply to mortgages, whether they contain the usual defeasance upon their faces, and thus create an open trust, or exist in the form of an absolute conveyance, with the understanding that they are intended as mortgages, and thus create a secret , trust.* § 7. The Relation of Debtor and Creditor Must Exist. — Where the transaction does not create the relation of debtor and creditor between the parties, it is not a mortgage. If the relation of creditor and debtor exists and a debt subsists, it is a mortgage; but if the debt is extinguished by the agreement of the parties, or the money advanced was not by way of loan, and the grantor has the privilege of refunding, if he so desires, by giving time, and thereby entitling him- self to a reconveyance, it is a conditional sale.* § 8. Equitable Intention. — In case of a chattel mortgage, no particular form of words is necessary, in order to give it that character. So, when a party claims a loan without having a technical mortgage, a court of equity will recognize and sustain it, whenever it appears from the transaction, ^Ferguson v. Union Furnace Co., 9 Wend. (N. Y.) 345. 'Loyd V. Currin, 3 Hump. (Tenn.) 462. See, also, Ceas v. Bramley, 18 Hun (N. Y.) 187; Ackley v. Finch, 7 Cow. (N. Y.) 290. Several of the States have statutory provisions that every mortgage must be in writing. See California Civil Code, ? 2922 ; Laws of Alabama of 1886, § 1731. , J^odfihaux V. Mulford, 26 Cal. 316. See, also, Curtis v. Leavitt, 17 Barb. (N. Y.) 309. *Galt V. Jackson, 9 Ga. 151; Slee v. Morsalton Co., 1 Paige (N. Y.) 56 ; Goodman v. Grierson, 2 Ball & Beat. 274; Conway v. Alexander, 7 Cr. 237 ; Robertson v. Crapsey, 2 Edw. Ch. 138 ; Flagg v. Mann, 14 Pick. (Mass.) 467 ; Holmes v. Grant, 8 Paige (N. Y.) 243. \ / . PLEDGE — DEFINITION AND DISTINCTION. / that it was the intention of the parties that a mortgage should be executed.^ An equitable mortgage may be created by a verbal agree- ment. A verbal agreement to give a mortgage, based upon a consideration of a debt contracted on the faith of such agreenaent, will be upheld and enforced as a mortgage in a court of equity, as between the parties and their represent- atives, on the principle that equity will consider that as done which ought to have been done.^ ARTICLE II. DISTINGUISHED FROM A PLEDGE. 9. Pledge — Definition and Distinction. 10. Passing of Title. 11. Collateral Security. 12. Further Illustrations. § 9. Pledge- — Definition and Distinction. — A pledge is a delivery of personal property as a security for a debt, to be kept by the creditor until default or until the debt is dis- charged ; there must be an actual delivery of possession,. and the pledgee, to preserve his pledge, must retain posses- sion.' A delivery must be made in order to establish a pledge in elementary law. The character of this delivery must be dependent upon the circumstances which surround each transaction. This delivery may be symbolical where no statutory provisions interdict. Thus, a delivery may be made by the delivery of a bill of lading, or a warehouse receipt, or a delivery of a key to a building containing goods is a delivery of the goods.* Unlike a chattel- mortgage, the requirements of posses- ' Whiting V. Eichelberger, 16 Iowa 422. * Morrow v. Turney, 35 Ala. 131. 'Dungan v. The Mutual Life Ins. Co., 38 Md. 242 ; Baper v. Harrison, 37 Kans. 243 ; Nat. Exch. Bank i). Wilder, 34 Minn. 149. *2 Story's Eq. § 1030; 2 Kent's Com. 58; Edwards' Bailm. 201, 251, 252, 253; 1 Pars. Cont. 113 ; The Dirigo Tool Co. v. Woodruff, 41 N. J. Eq. 336 ; Bateman's Com. Law. U 674, 681; Story's Bailm. g 287. 8 DEFIliriTI01*r AND DISTINCTION. sioii in a pledge is inexorable in law. Want of possession is fatal, though the parties may act in good faith.^ § 10. Passing of Title. — In the chattel mortgage trans- action the whole title passes conditionally to the mortgagee. If the condition is not complied with, the chattels become absolutely at law the property of the mortgagee.^ In the case of a pledge, a special property only passes to the pledgee, the general property remaining in the pledgor, and the right of the pledgee is not consummated, except he has possession, and generally when that possession is relinquished, the right of the pledgee is extinguished.* Possession is not, nor may not be, essential to create a chattel mortgage and title in the mortgagee.* § 11. Collateral Security. — Collateral security has been applied in late transactions of the pledge character, and it is dijBicult to distinguish whether the contract is a pledge or a chattel mortgage. Collateral security seems to embrace both pledge and chattel mortgage transactions, but applies more appropriately to pledges, and especially of incorporeal chat- tels. Thatest is difficult to apply, inasmuch as so many new kinds of incorporeal chattels have sprung up, and because of local statutes which make the two classes quite alike.® 'CasevD. Covoroc,96 U. S. 467; Seymour i;. Colburn, 43 Wis. 67 ; Williams V. Gillespie, 30 W. Va. 586. ''Langdon v. Buel, 9 Wend. (N. Y.) 80 ; Parks v. Hall, 2 Pick. (Mass ) 206; Brown v. Bennett, 8 Johns. (N. Y.) 96; Peters v. Ballistier, 3 Pick. (Mass.) 495; 2 Story's Eq. §? 1030, 1031; Ackley v. Finch, 7 Cow. (N. Y.) 290. 'Brownell v. Hawkins, 4 Barb. (N. Y.) 491 ; Conrad v. Atlantic Ins. Co., 1 Pet. (U. S.) 449 ; Jones v. Smith, 2 Ves. Jr. 378 ; Lickbarrow v. Mason, 6 East 25, note; Badlam v. Tucker, 1 Pick. (Mass.) 389; Byal v. Rolle, 1 Atk. 167; Day v. Swift, 48 Me. 368; Evans v. Darlingten, 5 Blackf. (Ind.) 320. 'Kimball v. Hildreth, 8 Allen (Mass.) 168 ; Eastman v. Avery, 23 Me. 248 ; Russell V. Fillmore, 15 Vt. 135; Walker v. Staples, 5 Allen (Mass.) 34; Jewitt ■W.Warren. 12 Mass. 300; Homes v. Crane, 2 Pick. (Mass.) 610; Fer- guson V. Lee, 9 Wend. (N. Y.) 61; Heyland v. Badger, 35 Cal. 404; Wood I). Dudley. 8 Vt. 430; White v. Cole, 24 Wend. (N. Y.) 116; Barfield «. Cole, 4Sneed (Tenn.)465; Tannahillri. Tuttle, 3 Mich. 110; Doakv.Bank 6 Ired. (^; ^^'^■1 h ^°^'' Eastman v. Avery, 23 Me. 248; Wright v. Ross, 36 Cal. 414; Gifford v. Ford, 5 Vt. 532; Connor v. Carpenter, 28 Vt. 237; Brown v. Bement, 8 Johns. (N. Y.) 96; Sims v. Canfield, 2 Ala. 555. f See Belden^. Perkins, 78 111. 449; Gay v. Moss, 34 Cal. 125; Leach v. Kimball, 34 N. H. 568; Hancock v. Franklin Ins. Co., 114 Mass. 155; Stearns v. Marsh, 4,Denio (N. Y.) 227. FUETHEE ILLUSTRATIONS. \) An instrument expressly transferring to a party notes, together with a chattel mortgage securing the same as col- lateral security for the payment, upon condition that if default is made in the payment of the last-named notes, then the party was authorized to collect the former notes, or to negotiate them for the purpose to liquidate the last- described note, is a chattel mortgage.^ If the transfer is for collateral security, and it conveys the legal title to the second party, on default the chattels become the property of the second party.^ If a note and mortgage are sold by the owner, by an instrument in writing which conveys the legal title, and contains a defeasance in the usual form of a chattel mort- gage, and a further provision that the instrument is made for the purpose of securing a sum of money, and for no other purpose, and that if the assignee collects the money, he is to account to the assignor for the excess, and a still further provision that the assignee will insure the buildings on the premises covered by the mortgage assigned, and that the premium shall be a lien on the note mortgaged — the instrument will be treated as a chattel • mortgage, and not as a pledge, and upon default of the mortgagor, the title at law will vest in the assignee.^ § 12. Further Illustrations. — A contract was made between a grain dealer and a bank ; the latter to furnish the former advances and to take as security warehouse receipts, the bank having the power to sell in case of default ; it was also agreed that in case of floods, the grain was at the risk of the owner. The grain was stored by third parties in warehouses on wharves. While thus stored, a sudden and unexpected flood damaged it, the owner trying to save it from the flood. This contract was construed by the court 'Fraker v. Eeeve, 36 Wis. 85. See, also, Brown v. Bennett, 8 Johns. (N. Y.) 96 ; Atwaler v. Mower, 10 Vt. 75. 'Nichols V. Webster, 1 Chand. (Wis.) 203; Flanders v. Thomas, 12 Wis. 410. 'Wright V. Ross, 36 Cal. 414. 10 DEFINITION AND DISTINCTION, as a pledge and not a mortgage, and that the owner must bear the loss.^ A receipted bill of parcels of chattels, purporting to be on its face a security for a debt, is a pledge and not a mort- gage.'^ And where the owner of a stock of goods, bought at a chancery sale, agreed in writing, in order to indemnify his surety on the purchase-notes, to turn over to a receiver who should superintend the business, and weekly pay the receipts over to the surety, such agreement is in the nature of a pledge and not a mortgage.^ But in many cases, whether the transaction shall be treated ag a mortgage or a pledge, must depend upon the intention of the parties.* ARTICLE III. ASSIGNMENTS DISTINGUISHED. 13. Distinction. 14. When a Chattel Mortgage will be Construed as an Assignment. 15. IllustraJons. 16. When an Assignment is Construed as a Mortgage. 17. Intention Must Control. 18. Parol Evidence. § 13. Distinction. — A fundamental distinction between a chattel mortgage and an assignment for the benefit of cred- itors, is^ that a mortgage is a mere security for a debt, the equity of redemption remaining in the mortgagor, while an assignment is more than a security for a debt, and is an absolute appropriation of the property to its payment. It does not create a lien in the creditors, but passes both the legal and equitable title to the property absolutely beyond the control of the assignor. It leaves no equity of redemp- tion as in the case of a chattel mortgage.' The sale and transfer by a debtor of his personal property 'British Columbia Bank v. Marshall, 8 Saw. C. C. 29. 'Thompson v. Dolliver, 132 Mass. 103. 'McCready v. Haslock, 3 Tenn. Ch. 13. * Ward V. Sumner, 5 Pick. (Mass.) 59. "* Weber v. Mick, 131 111. 520. DISTINCTION. 11 to a creditor to sell and to pay the debtor's debts, the debtor reserving the surplus, is in eflfect a chattel mortgage. In an assignment the debtor would have no control over the prop- erty transferred.^ A voluntary assignment is an instrument in writing exe- cuted by a failing debtor, by which he assigns or transfers to some third person, as assignee or trustee, the whole or some- times the bulk of his property, to be by such trustee distri- buted among the assignor's creditors in satisfaction of their demands. It differs materially from a mere sale in payment of a debt, and also from a pledge or hypothecation of prop- erty in the nature of a mortgage. The act referring to voluntary assignments cannot be applied to other subjects ; it has nothing to do with chattel mortgages.^ Where the assignee is to complete the process of manu- facture of the assigned property, and prepare the same for sale, such condition is not inconsistent with his duties as a mortgagee, and consequently does not render the assignment void.^ Conveying certain specified articles of personal prop- erty to a trustee, with power to sell the same, and from the proceeds pay certain specified debts, and the residue to the grantor, is a quasi mortgage, and not a voluntary assignment of all the grantor's property for the benefit of his creditors.* And an instrument not sufiicient under the statute as an assignment for the benefit of creditors, may be good as a mortgage of personal property.^ So, an assignment by a debtor, of his property, for the benefit of his creditors^ binding the trustee to sell and pay his own debts, reserving the surplus to the assignor, is in effect a chattel mortgage.® So, when it appears that an instrument transferring title to chattels, is intended merely as a security, and the debtor has^ ^Doggett V. Bates, 26 111. App. 369. = Weber v. Mick, 131 111. 520. 'Smith V. Seattle, 31 K. Y. 542. ' *Fouke V. Fleming, 13 Md. 392. See, also, Wilson v. Russell, 13 Md. 494 ; Hempstead v. Johnson, 18 Ark. 123. ^Davidson v. King, 47 Ind. 372. ^McClelland v. Remsen, 36 Barb. (N. Y.) 622. See Henshaw v. Sumner, 23 Pick. (Mass.) 446 ; Catlin v. Currier, 1 Saw. C. C. 7. 12 DEFINITION AND DISTINCTION. ihe right to redeem within a reasonable time, though there is no express defeasance, such an instrument is a chattel mortgage.^ Likewise, assigning property to creditors for the purpose -of securing their demands, is in legal effect a mortgage, and creates a specific lien on the property.^ So, an assignment by a debtor to a creditor of all his per- sonal property and choses in action, for the payment of debts, with a provision for the return of the surplus, is in effect a mortgage, and not void under the statute of trusts, as for .the use of the person making it.^ § 14. When a Chattel Mortgage will be Construed as an Assignment. — ^Where chattel mortgages and assignment of accounts, transferring the entire property of the insolvent debtor to certain of his creditors, with the intent that one of such creditors, for himself and as agent and trustee for the others, should take immediate possession and convert such property into money, and divide the same pro rata among such creditors, they must be held to be, in effect, a general assignment with preferences.* This is in accord with the principle that several mortgages and assignments, when made in pursuance of the same agreement and substantially at the same time, and for the same common purpose, and in relation to the same subject-matter, must be construed together as constituting one paper in law.^ Two mortgages and a confessed judgment may constitute an assignment, by reason of the intention of the parties and the operation of the instruments." ' Gage V. Ohesebro, 49 Wis. 486. = Leitoh V. Hollister, 4 Comst. (N. Y.) 211. 'Dunham v. Whitehead, 21 N. Y. 131. See Godchaux v. Mulford, 26 Cal. 316. Compare Brown v. Webb, 20 Ohio 389, and case cited. * Winner v. Hoyt, 66 Wis, 227. ^ Van Patten v. Burr, 52 Iowa 518 ; Gillman v. Henry, 53 Wis. 468. •White V. Cotzhausen, 129 U. S. 329. It is necessary to consider the statutory provisions to determine the nature of the instrument. The Wisconsin law. provides that " all voluntary assignments or transfers whatever * » » aliall be void as against the creditors of the person making the same, unless" executed as therein required. Sec. 1694, K. S,, that " any and all assignments * » » made for the benefit of creditors, which shall contain or give any preferences to one creditor over another creditor, except for the wages of laborers, » * * WHEN ASSIGNMENT IS CONSTKTJED AS A MORTGAGE. 13 § 15. Illustrations. — A chattel mortgage was made and taken by the mortgagee in good faith to secure a debt due to the latter. At the date of its execution the mortgagor was hopelessly insolvent, though the fact of the insolvency was unknown to both parties. The General Statutes of South Carolina, Section 2015, allow no preferential assign- ments on the part of the insolvent party if made within ninety days of the- general assignment. It was decided under these circumstances that the mortgage could not be set aside ; that no general assignment had been made, and the transaction was in good faith.^ Where a debtor executed a chattel mortgage to secure the payment of a bona fide pre-existing debt, and soon there- after executed a general assignment of his property for the benefit of his creditors, but which assignment was abandoned by the assignee and all parties in interest, and the mort- gaged property taken possession of by the mortgagee, the mortgage will be upheld, even though it was executed on the same day and nearly the same time at which the assign- ment was executed.^ • A mortgage made by an insolvent debtor to secure a. valid claim, is not invalid because it was executed while a suit was pending by another creditor against the mortgagor for collection of a debt, and because it was made to give the- mortgagee the preference over such other creditor.^ § 16. When. Assignment is Construed as a Mortgage. — In general, an assignment by a debtor to a creditor of all his personal property and choses in action, for the payment of a debt, with a provision for a return of the surplus, is in effect a mortgage.* So, an instrument not sufficient under the shall be void." Sec. 1, ch. 349, Laws of 1883. In Missouri it is held that a deed of trust to secure the debts of two creditors is an assignment. Martin V. Hausman, 14 Fed. Eep. 160; Crow v. Beadsley, 68 Mo. 435; and see Hargadine v. Henderson, 97 Mo. 375. 'Wietz V. Potter (S. Car.), 32 Fed. Eep. 888. ''Bierbower v. Polk, 17 Nebr. 268. The Nebraska statute allows an insol- vent debtor to prefer a creditor. See Laws of 1877, Com. 1881, ch. 6. ^Ayres v. Adams, 82 Ind. 109. 'Dunham v. Whitehead, 21 N. Y. 131. 14 DEFINITION AND DISTINCTION. Statute as an assignment for the benefit of creditors, may be good as a chattel mortgage.^ § 17. Intention Must Control. — The intention of the parties, as gathered from the whole transaction, must determine its legal character. The law will not be blinded by forms or names, but will look beyond, to the substance of the trans- -action, and fix the character according to the intention of the parties. The giving of one or more mortgages, the con- fession of judgments, or other means adopted to give security or preference, may not necessarily be an assignment. But where one or more instruments are executed by a debtor, in whatsoever form or by whatsoever name, with the inten- tion of having them operate as an assignment, and with the intention of granting the property conveyed absolutely to the trustee, to raise a fund to pay debts, the transaction con- stitutes an assignment.^ § 18. Parol Evidence. — Parol evidence may be given to show that mortgages and an assignment of accounts were executed by a debtor, with the intention of transferring all his chattels to certain preferred creditors, to be converted by one of them into money, and then divided among them pro rata. A conveyance and bill of sale absolute in form, may nevertheless be shown by parol evidence to be nothing more than a mortgage or security. Whether it be one or the other, is very often a question depending wholly upon the intention. So, whether a written instrument constitutes a -conditional sale, a conveyance absolute, or mortgage, is very often a question of intention, to be determined by contem- poraneous facts and circumstances. Hence, resort may be had to contemporaneous facts and evidence to determine whether several mortgages and an assignment are to be taken together as a mortgage.^ ^Davidson v. King, 47 Ind. 372. See Section 13. 'Richmond v. Mississippi Mills, 52 Ark. 30. See, also. Turner v. Watkins, 31 Ark. 437 ; Hoffman v. Mackall, 5 Ohio St. 124 ; Caldwell's Bank v. Critten- den, 66 Iowa 237. "Winner v. Hoyt, 66 Wis. 227. DISTINCTION. 15 ARTICLE IV. — CONDITIONAL SALE DISTINGUISHED. 19. Distinction. 20. Instruments Under Seal. ^1. As to Intention. 22. Condition Precedent. ^3. Character of the Conveyance. ■24. When the Relation of Debtor and Creditor is not Created. 25. When the Relation of Debtor and Creditor is Created. ■26. Equitable Rule of Construction. 27. Parol Evidence. § 19. Distinction. — Where the purchaser of chattels is bound by the contract to do anything as a condition, either precedent or concurrent, on which the title depends, the prop- erty will not pass until the condition is fulfilled, even though the chattels may have been delivered into possession of the vendee. When there is a condition precedent, the chattels do not vest in the purchaser on delivery, nor until the condition is performed ; the right to the property still remains in the vendor, under the common law, even against creditors and subsequent purchasers of the vendee.^ When goods are sold at a fixed price to be paid on a day certain, and delivery is therefore made, with the agreement that until the price is paid the title is to remain in the ven- Mass. 179. ''Catlin V. Willoughby, 83 N. Car. 75; 35 Am. Rep. 564. 'Harris v. Jones, 83 N. Car. 317. 'Hansen v. Dennison, 7 111. App. 73. ^Rid^r V. Edgar, 54 Cal. 127. ^Rawlings v. Hunt, 90 N. Car. 270. ' Rees V. Coats, 65 Ala. 256. 60 VALIDITY. may maiatain a special action on the case against any one who, with notice of such lien, has converted the crop, when gathered, to his own use.^ A mortgage of cotton to be planted may be the subject of a valid mortgage, even as against creditors of the mortgagor.^ An instrument in form of a lease may be shown to be, in fact, a mortgage of a crop to be raised. If so construed, possession must have been taken, to render the mortgagee's title good as against a bona fide purchaser from the mort- gagor.* A mortgage of lands, including "the rents, issue and profits," is a lien on the crops growing on the premises.* § 88. Identification of Property. — In order to make the mortgage valid, one requisite is that the property must have identification or it will be void. Thus, a party claimed an equitable mortgage as the result of agreement by the defend- a,Qt to give one to secure money furnished. The property was not in the State at the time of the supposed agreement, or in possession of the mortgagor. No one had specific in- formation as to what it consisted of, it being a "plant" or manufacturing concern. This was not a sufficient identifi- cation of the property to which the alleged mortgage related, and the mortgage, if any, was invalid.^ • The question of identity, however, between the mort- gagee and the purchaser, as to the description of the prop- erty, may be settled by evidence outside of the mortgage.'' But property acquired in another State by a bailee and carried into another jurisdiction, to which, at the time of its removal, or subsequently, the legal title, by the law of the first State, still remained in another, cannot be mortgaged by the mere bailee in the latter State.' ' Rees V. Coats, 65 Ala. 256. ' Watkins v. Wyatt, 9 Baxt. (Tenn.) 250. "LawBon v. Moffat, 61 Wis. 153. * Montgomery I). Merrill, 65 Cal. 432. *Lee V. Cole, 17 Greg. 559. 'Mattingly v. Darwin, 23 111. 618. ' Waters v. Cox, 2 111. App. 129. INFANCY — LUNACY. 61 § 89. Usurious Interest on Secured Note. — One who receives notes secured by mortgage must not take usurious interest ; if he does it will operate against him as in any other trans- action. Thus, one to whom property is niortgaged to secure a usurious debt is not a bona fide purchaser thereof, and equitable defenses may be interposed against him, whether he had notice of them or not. Chief Justice Stone says that when the interest charged is in excess of the lawful rate per annum, the note is tainted with usury. So, the pur- chasers of the property are precluded from making the defense of bona fide purchasers or mortgagees.* •ARTICLE II. THE PARTIES. 90. Infancy — Lunacy. 91. Infant's Mortgage Voidable, Not Void. 92. Borrowed Money — Remaining in Possession. 93. May Disaffirm in a Reasonable Time. 94. When Acquiescence Not a Disaffirmance. 95. Chattel Mortgage of a Married Woman. 96. Partnership Mortgages— Between the Partners. 97. No Right to Deprive a Partner of Money Advanced. 98. Mortgaging Individual Goods. 99. Between Partner and Third Party. 100. Must be a Member of a Commercial Firm. 101. Widow Taking Place of Her Husband. 102. Bankruptcy — Rights of Assignee and Mortgagee. 103. Mortgagee — When Tenant in Common. 104. Tenants in Severalty. 105. Agent and Principal. 106. Corporations. § 90. Infancy — Lunacy. — The capacity of the parties to convey by chattel mortgages is no different than that re-' quired in contracts generally. An infant who has bought personal property and given a mortgage back to secure the purchase-money, or a part of itj cannot avoid the mortgage under the plea of infancy, without rendering void the sale and losing his rights under it. Thus, when an infant purchased a chattel and paid a part of the consideration, and at the same time gave his ' Meyer v. Cook, 85 Ala. 417. See Collier v. Barr, 64 Ala. 543. See, also, Kemmitt v. Adamson (Minn.), 46 N. W. Rep. 327. *62 VALIDITY. notes and mortgage upon the chattel to secure the balance, he cannot repudiate the mortgage and hold the chattel against the mortgagee, or maintain trespass against, him or his assignee for taking the chattel by virtue of the mortgage. The repudiation of the mortgage operates to nullify the sale, and consequently he cannot hold the chattel under the sale.^ A mortgage given by a lunatic after inquisition found, if not void is voidable, whether the mortgagee knew of his unsoundness of mind or not.^ § 91. Infant's Mortgage Voidable, Not Void. — ^An infant's mortgage of personal property, by the weight of authority, is not void but voidable. It is binding upon him until avoided. Chief Justice Gilchrist thus expresses the doc- trine : " The case of a promissory note rests on the same ground as other executory contracts. It is not void, because it may be confirmed, but it is invalid, that is, without bind- ing force, until it- is confirmed. The executory contracts of .an infant are said to be voidable, but this word is used in a sense entirely different from that in which it is applied to executed contracts of an infant. In the latter case, the con- tract is binding until it is avoided by some act indicating ihat the party refuses longer to be bound by it. In the former case, it is meant merely that the contract is ca,pable of being confirmed or avoided, though it is invalid until it has been ratified." * § 92. Borrowed Money — ^Remainiiig in Possession. — A mort- gage of an infant upon personal property for borrowed money, there being no delivery of the mortgaged property, is voidable at his election, at any time during his infancy. If the property is taken from him under the mortgage, with- out his consent, he may reclaim it upon disaffirmance of the contract, without returning or offering to return the money borrowed, it not appearing he had the ability so to do. If an infant can borrow money upon a mortgage security ' Heath v. West, 28 N. H. 101. = Mohr V. Tulip, 40 Wis. 66. ' Edgerly v. Shaw, 25 N. H. 514. See, also, Carr v. Clough, 26 N. H. 280. BORROWED MONEY — REMAINING IN POSSESSION. 63 upon his property, without reference to his necessities, and cannot, upon reaching the age of legal discretion and •capacity, or before, repudiate the transaction, except upon the condition of returning the amount of the loan, whether he had it or not, this privilege which the law accords to in- fancy for its protection, will generally be of little benefit. '•' Under the operation of such a rule, money-lenders would soon become permanently possessed of the property of infant spendthrifts, for with them the demands to borrow for im- mediate gratification are generally to be resisted. Its adop- tion as a rule would be in violation of the principle of protection that underlies the whole doctrine of the law per- taining to the dealings and contracts of infants."^ The general rule seems to be, that if an infant rescinds the con- tract and avoids his liability upon it, he must surrender the -consideration and restore what he has received, for it would be unjust to permit him to recover back what he has paid or "delivered, and at the same time permit him to retain the fruits of the contract, which he has received.^ But this rule is subject to an important qualification. A distinction is to be observed between the case of an infant in possession of such property after age, and when he has lost, sold or de- stroyed it during his minority. In the former case, if he has put the property out of his power, he has ratified the con- tract and rendered it obligatory upon him ; in the latter case, the property is to be restored, if it be in his possession and control. If the property is not in his hands, nor under his •control, that obligation ceases. To say that an infant cannot recover back his property which he has parted with under ■such circumstances, because by his indiscretion he has spent, •consumed or injured that which he received, would be making ' Miller v. Smith, 26 Minn. 248. And see Stafford v. Roof, 9 Cow. (N. Y.) ■626; Cliapin li. Shafer, 49 N. Y. 407; Randall v. Sweet, 1 Den. (N. Y.) 460; Riley i>. Mallory, 33 Conn. 201; Prices. Purman, 27 Vt. 268; Carr v. Clough, 22 N. H. 291; Willis v. Twambly, 13 Mass. 204; Carpenter v. Carpenter, 45 Ind. 142; Bailey v. Barenberger, 11 B. Mon. (Ky.) 114; Grace v. Hall, 2 Hump. (Tenn.) 27 ; Leacox v. Griffith, 76 Iowa 89. ^Taft V. Pike, 14 Vt. 405; Weed v. Beebe, 21 Vt. 495; Hillyer v. Bennett, 3 Edw. Oh. (N. Y.) 222; Kitchen v. Lee, 11 Paige (N. Y.) 107. 64 VALIDITY. his want of discretion the means of binding him to all his improvident contracts, and deprive him of that pro- tection which the law designed to secure to him. The weight of authority fully sustains this qualification of the rule.^ But the Ohio courts do not accept this doctrine, and hold that where an infant purchases a chattel, and at the same time, and in part performance of the contract of purchase, executes a mortgage on the purchased property to secure the payment of the purchase-money, it is not within the privi- lege of infancy to avoid the security given without also avoiding the purchase. If, in such case, the infant should rescind a part, he must rescind the whole contract, and thereby restore to his vendor the title acquired by the pur- chase. The privilege of infancy may be used as a shield, but not as a sword. And in such case, if the infant sells the mortgaged property, the purchaser takes it subject to the mortgage.^ If he borrows money and improvidently disposes of it, as the law, from his want of discretion, presumes he may do, this very indiscretion which the law endeavors to shield and pro- tect, becomes the means of fastening the imperfect obliga- tion irrevocably upon him, and his inability to refund what he has borrowed affirms his contract to repay it with interest. It is needless to say that there is no privilege and no protec- tion in any such rule, and it is not in accord with the cur- rent of authority.^ But there is no reason why one who, by means of a void- able contract made in his infancy, has obtained possession of property which he retains on coming of age, should be allowed to disaffirm the contract and at the same time retain ' Pitts V. Hall, 9 N. H. 441 ; Robbing v. Eaton, 10 N. H. 561 ; Boody v Mc- Kenney, 23 Me. 517 ; 1 Amer. Lead. Cases 260, note by Hare and Wallace. 'Curtiss V. McDougal, 26 Ohio St. 66. And see Kinner v. Maxwell, 66 N. Car. 45; Bartholomew v. Fianemore, 17 Barb. (N. Y.) 428; Vint v. Osgood, 19 Pi&k. (Mass.) 572; Jenkins v. Walker, 17 Me. 38; Abell v. Warren, 4 Vt. 149; Thomas v. Dike, 11 Vt. 273. ' Corey v. Burton, 32 Mich. 30. MAY DISAFFIRM IN A REASONABLE TIME. 65 the benefit derived from it. In such case, if he retains the property, he is justly held to aflSrm the contract.^ It is held by some courts that an infant cannot demand the return of the property sold by him until he shall return the purchase-money.^ So, also, it is held that where property is sold and a mort- gage given back to secure the purchase-money, it is in law one transaction ; that this is well settled in regard to real- estate property, and the doctrine should be applied to per- sonal property;' that there is no reason to except a mort- gage of chattels from the general rule which is applied to mortgages of real estate, and the law governing an infant as to real estate will operate in chattel mortgages.* § 93. May Disaffirm in a Reasonable Time. — An infant has a reasonable time, after becoming of age, to disaflSrm his con- tracts. He may avoid the mortgage before he is of age, or after it, provided he does it in a reasonable time after be- coming of age. What is a reasonable time is a question for the jury.^ The mere fact that property purchased by him remains undisposed of at the time of his coming of age does not make the previous promise to pay for it binding upon him, unless he has in some uneqijivocal manner dealt with it as his own after that time." 'Lawson v. Lovejoy, 8 Me. 405; Boyden v. Boyden, 9 Met. (Mass.) 519 ; Cresinger v. Welch, 15 Ohio 156; Aldrich v. Grimes. 10 N. H. 194; Arm- field V. Tate. 7 Ired. (N. Car.) 258 ; Deason v. Boyd, 1 Dana (Ky.) 45 ; Delano V. Blake, 11 Wend. (N. Y.) 85; Cheshire v. Barrett, 4 McCord (8. Car.) 241. ^Holmes v. Blagg, 8 Taunt. 508; Cope v. Overton, 10 Bing. 252 ; Farr v. Sumers, 12 Vt. 28 ; Zouch v. Parsons, 3 Burr. 1794. ' Roherts v. Wiggin, 1 N. H. 73 ; Bobbins v. Eaton, 10 N. H. 561 ; Bigelow V. Kinney, 3 Vt. 353 ; Richardson v. Boright, 9 Vt. 368 ; Weed v. Beebe, 21 Vt. 495. Where the property of an infant is delivered, and thus the mort- , gage takes effect, the title passes to the mortgagee. Ferguson v. Clifford, 37 N. H. 86 ; Call v. Gray, 37 N. H. 433. *Lowe V. Gist, 5 Harr. & J. (Md.) 106. See, also, Gilletti;. Stanley, 1 Hill (N. Y.) 121 ; Kendall v. Lawrence, 22 Pick. (Mass.) 540 ; Moore v. Abernethy, 7 Blackf. (ind.) 442; Wallace v. Levfis, 4 Harr. (Del.) 75; Jenkins v. Jenkins, 12 Iowa 195; Wharton v. East, 5 Yerg. (Tenn.) 41; Vaughn v. Parr, 20 Ark. 600. 'Chapin v. Shafer, 49 N. Y. 407 ; and see Sparr v. Florida S. R. R. Co., 25 Fla. 185. •Smith V. Kelley, 13 Met. (Mass.) 309. See, also, Minock «. Shortridge, 21 Mich. 304. 66 VALIDITY. The ground upon which it is held that one who, by means of a voidable contract made in his infancy, has obtained pos- session of property which he retains on coming of age, may not disaffirm the contract and at the same time retain the benefit derived from it, is that the conduct after he has reached the age of discretion has precluded his relying upon an infant's privilege, and what he may have done previously cannot bind him either by way of contract or of ,>estoppel.' § 94. When Acquiescence Not a Disaffirmance. — So, where an infant executed a chattel mortgage, mere acquiescence or failure to disaffirm by merely postponing the act of repudia- tion after attaining majority, is not a legal ratification.^ § 95. Chattel Mortgage of a Married Woman. — The right of a married woman to give a chattel mortgage upon her separate estate is regulated by statutory provisions, where there is such a right, and the statutes of the different States must be consulted for the interpretation of the law. In Massachusetts a mortgage by a married woman on goods of which she avouches herself therein to be the owner, but which really belonged to her husband, passes no such title as to enable the moatgagee to replevy them from a third per- son, although the husband has indorsed on the mortgage that he formally sanctions and ratifies his wife's action, she having been made his agOnt for the transaction of business.' To secure a loan made by a wife to her husband of money which came to her before marriage, the husband executed a mortgage of chattels to a third party to secure the payment of the promissory note of even date, signed by the husband and payable to the third party or order. On the same day the third party executed a deed on the back of the mortgage, assigning to the wife the mortgage deed, the note and claim thereby secured, and all his right, title and interest in the property mortgaged. It was decided that the wife, after a 'Corey V. Burton, 32 Mich. 30. 'Hillv. Nelms, 86 Ala. 442. 'Lewis V. Buttrick, 102 Mass. 412. CHATTEL MORTGAGE OF A MAKKIED WOMAN. &1 demand under the Gen. Stat., ch, 123, § 63, could maintain an action against an officer who attached the mortgaged property on a writ against the husband, and that she might properly, in her demand upon the officer, describe the sum due upon the note as due to her upon the mortgage.' By the assignment of the mortgage the legal as well as the equitable title in the mortgaged property passed to the wife, although she could not, for a like reason, foreclose it while her husband continued to own the equity of redemption.* And a wife, being the lawful owner of a chattel mortgage, duly recorded, may maintain any action necessary to protect her title or possession thereto against a third person.' So, a chattel mortgage executed by a debtor to his wife, to secure a bona fide indebtedness is valid as against his other creditors, and it is immaterial that the statute of limitations had run against a portion of the debt thus preferred. Judge O'Brien says that dealings between husband and wife, which result in the appropriation of the husband's property for the payment of a debt claimed to be due to the wife, to the exclusion of other creditors, it must be admitted, furnish uncommon opportunities for the perpetration of fraud, and should be carefully and rigidly scrutinized. But the husband is not obliged by any duty he owed his other cred- itors to interpose the statute of limitations as a defense to the validity of the mortgage. When the wife, by proper and sufficient proof, shows that her husband owes her, she is entitled to the same remedies and has the same standing to enforce any security for the payment of the debt that she may have received, as any other creditor.* When a married woman indorses notes in order to obtain security for a debt owing her by the maker, who thereupon • Degnan v. Farr, 126 Mass. 297. 'Tucker v. Fenno, 110 Mass. 311. 'Landon v. Emmons, 97 Mass. 37. But such a mortgage would be invalid if the husband had the right to reduce the money to possession. Phillips V. Frye, 14 Allen (Mass.) 36. 'Manchester v. Tibbetts, 121 N. Y. 219. The dealings between husband and wife are now mostly controlled by statutes in derogation of the com- mon-law rule. 68 VALIDITY. executes to her a mortgage to secure her debt and the in- dorsed notes, the mortgagee becomes a trustee of the mort- gaged property for the benefit of the persons holding the notes secured thereby, besides her own debt, and she will be protected to the whole amount, and not the amount of her own debt only.^ § 96. Partnership Mortgages — Between the Partners. — A valid chattel mortgage can be given from one partner to another. Thus, where two partners are cultivating a crop as equal partners, and one executes to the other a mortgage of his entire interest, as security for an individual debt which the mortgagee has become liable to pay, and the mortgage contains the stipulation that, since the crop will be gathered before the maturity, the mortgagee shall take pos- session of it and dispose of it for the mutual benefit of the parties, and that the net profits, after settlement of the part- nership debts, shall be divided into two equal parts, one of which shall belong to the mortgagee absolutely, and the other shall be held by him in trust for the mortgagor, to be applied to the payment of the secured debt, and the balance paid over to the mortgagor — such a mortgage does not affect the title and liability of the mortgagor as a partner. Nor does it limit his authority as a partner to contract debts in carrying on the business, or to pay debts so contracted.' And the chattel mortgage given of the interest of one mem- ber of the firm does not necessarily operate as a dissolution of the partnership.^ By the condition of an agreement a member transferred his interest in a firm as collateral se- curity for the payment of a debt ; but the transfer contem- plated a continuance of the interest and authority in the firm. Such an instrument is merely a mortgage and did not dissolve the partnership.* § 97. Partner's Interest. — A partner cannot, by mortgaging 'Showman v. Lee (Mich.), 44 N. W. Rep. 1061. 'Monroe v. Hamilton, 60 Ala. 226. 'State V. Quick, 10 Iowa 451. *Du Pont V. McLaran, 61 Mo. 502. BETWEEN PARTNER AND THIRD PARTY. 69 the partnership property for his individual debt, deprive his copartner of his right in the property as security for money advanced by him for the firm/ But an assignment by one member of a partnership of all the interest he has in and to the stock of goods, notes and accounts due to the firm, vests the assignee with the interest of the assignor in a mortgage by the firm to secure a note due to it.' § 88. Mortgaging Individual Goods. — A partnership can- not mortgage the individual goods of one of the partners without his consent. Thus, when chattels owned by one partner but used by the firm, without having been converted into partnership property, were mortgaged to a third person without the owner's consent, a mortgage by him will be a valid lien, and his mortgage will hold the goods, though they were sold under the mortgage given by the other partner.' § 99. Between Partner and Third Party. — A legal mortgage cannot be made of partnership real estate without the con- currence of the partners.* But one partner may execute a chattel mortgage of the firm property to secure a partnership debt without the consent of his copartners ; and his attach- ing a seal to the instrument, it being uiyiecessary, will not afiect its validity. This has reference more especially to commercial partnerships.* But such a mortgage of his individual debt is invalid ; yet, if on the payment of the firm's debts, and an account- ing had of the assets of the firm, such mortgaged property falling to the mortgagor, it becomes operative and can be enforced." The individual property of the partners is not embraced in a partnership mortgage, unless specifically set out and 'Deeter v. Sellers, 102 Ind. 458. ^ Keith V. Ham (Ala.), 7 South. Kep. 234. 'Cutler V. Hake, 47 Mich. 80. 'Harrison v. Jackson, 7 Term R. 207. 'Woodruffs. King, 47 Wis. 261 ; Hembree v. Blackburn, 16 Oreg. 153. •Smith V. Andrews, 49 111. 28. 70 VALIDITY. described.^ A partner can execute a valid mortgage upon a partnership crop to secure a partnership debt, but he cannot mortgage the individual property of his copartner without his consent or acquiescence, under such circumstances as to create an estoppel.^ A partner recognizing a chattel mort- gage on the partnership property, executed by a partner, is estopped to deny its validity.' Where no intervening stat- ute prohibits, one partner has authority, without the consent or knowledge of his copartner, to mortgage the whole stock in trade of the firm to secure a particular creditor of the firm.* One partner may execute a valid mortgage of a vessel owned by the firm, by signing the individual names of the members of the partnership.^ The execution of a mortgage of personal property of a partnership by one partner in his individual name, passes no title.* A mortgage signed with the partnership name, but in the body of which is recited that it was the act of one of the partners, and given as a security for his individual debt, is not, on its face, a partnership act.^ Two parties leased a building and water-power, and put machinery into the building for the purpose of carrying on the partnership business. One of the partners gave a chattel mortgage on his interest for an individual debt. Both parties continued in the use of the machinery. On fore- elosure of the mortgage it was decided that the mortgagee was entitled to the mortgagor's interest, that is, what interest he would have left after paying the debts of the partnership, including the rent.' Generally, one partner cannot bind his copartner under 'Reid V. Godwin, 43 Ga. 527. 'Gates V. Bennett, 33 Ark. 475. 'Richardson v. Lester, 83 111. 55; Hawkins v. Hastings, 1 Dill. C. G. 462. •Tapley v. Butterfield, ^,Met. (Mass.) 515; Woodruflf v. King, 47 Wis. 261 ; Willett v. Stringer, 17 Abb. Pr. (N. Y.) 152; McClelland v. ReWaen, 8 Abb. App. Dec. (N. Y.) 74; Morrison v. Mendenhall, 18 Minn. 232. 'Patch V. Wheatland, 8 Allen (Mass.) 102. 'Clark V. Houghton, 12 Gray (Mass.) 38. 'Scott V. Dansby, 12 Ala. 714. » Receivers v. Godwin, 1 Halst. (N. J.) 334. MUST BE A MEMBER OP A COMMERCIAL FIRM. 71 seal, without especial authority, or unless the instrument is executed in his presence and by his consent, a seal being necessary to the validity of the mortgage or deed.^ § 100, Must be a Member of a Commercial Firm. — In gen- eral, a partnership may take security by way of mortgage, in the firm name, to secure a partnership debt.^ A partner- ship may purchase and hold personal property, and there is no reason why it may not take security, by way of mortgage, upon the same to secure a partnership debt.^ But a partner, unless he is a member of a commercial firm, or one engaged in general promiscuous trading, has no implied authority to bind his firm by borrowing money and executing notes,, mortgages or other securities, unless the money is necessary for the business, and such pledge of the credit of the firm is usual.* In ordinary commercial partnership, each partner has the right to pledge the partnership property or to borrow money and give notes for partnership purposes in the firm name, and when credit is given to a partnership, within the scope of its business, it will bind all the partners, notwithstanding ' McDonald v. Eggleston, 26 Vt. 154 ; Cummins v. Cassilly, 5 B. Mon. (Ky.) 74; Bentrine v. Zierlin, 4 Mo. 417; Fichthorn v. Boyer, 5 Watts (Pa.) 159; Lee V. Onstott, 1 Ark. 206; McCay v. Bloodgood, 9 Johns. (N. Y.) 285; Tur- beville V. Eyan, 1 Humph. (Tenn.) 113 ; United States v. Astley, 3 Wash. C. C. 508; Person v. Carter, 3 Murph. (N. Car.) 321 ; Lucas v Sanders, 1 Mc- Mull. (S. Car.) 311 ; Morse v. Bellows, 7 N. H. 549; Hobson v. Porter, 2 Colo. 28; Snyder v. May, 19 Pa. St. 235; Modisett v. Lindley, 2 Blackf. (Ind.) 119; Napier v. Catron, 2 Humph. (Tenn.) 534; Trimble v. Koons, 2 A. K. Marsh. (Ky.) 375; Pierson v. Hooker, 3 Johns. (N. Y.) 68; Baldwin v. Richardson, 33 Tex. 16 ; Herzog v. Sawyer, 61 Md. 344. But it has been decided that a mortgage under seal, executed by one member of a firm, binds him, but not the firm. Weeks v. Mascoma Rake Co., 58 N, H. 101. In Missouri chattel mortgages must be acknowledged as conveyances of land. Wag- ner's Stat. 28i. Under this law a partnership mortgage may be signed and acknowledged by any one of the partners with the firm name, although his name does not appear in the style of the partnership. Peck v. Fisher, 58 Mo. 532. 'Johnson v. Grissard, 51 Ark. 410; Perifull v. Piatt, 36 Ark. 456; Morse «. Carpenter, 19 Vt. 613; Sherry v. Gilmore, 58 Wis. 324; Lumber Co. «. Ashworth, 26 Kans. 212; Newton v. McKay, 29 Mich. 1 ; Beaman v. Whit- ney, 20 Me. 413 ; Hoffman v. Porter, 2 Brock. C. C. 156 ; Murray v. Black- ledge, 71 N. Car. 492. 'Kellogg V. Olson, 34 Minn. 103. * Davis V. Richardson, 45 Miss. 499. 72 VALIDITY. any secret arrangement they may have among themselves, unknown to those extending the credit.^ And a mortgage is valid which gives the description of the partnership mort- gagors by naming only the firm's name, without more par- ticulars.^ So, it may be stated as a general rule that one member of a commercial firm has authority to mortgage the chattels of the partnership to secure the payment of partnership debts, without the knowledge or consent of the other members of the firm,'' but the chattel mortgage must be in furtherance of the partnership business ; if it is not for the benefit of the partnership, neither partner has authority to execute it without the consent of all the members of the firm.* But a partner in a non-trading partnership cannot bind his copartners by a bill or note, accepted or indorsed by him in the name of the firm, not even for a debt which the firm owes, unless he has express authority therefor from the other members of the firm, or unless the giving of such instru- ment is necessary to the carrying on of the firm business, or is usual in similar partnerships.® Chancellor Kent, in his seventh edition of his Com- mentaries, omits the use of the terms "trading" and "non-trading" partnership, and makes the distinction be- tween partnerships in respect of the power of one partner to bind the firm depend upon the single test of the usual scope of the business in connection with the subject-matter of the contract,^ though this distinction is not accepted by the majority of the courts. ' Gregg V. Fisher, 3 111. App. 261. 'Henderson v. Gates, 52 Ark. 371. ■"Hembree v. Blackburn, 16 Oreg. 153 ; Woodruff w. King, 47 Wis. 261; Tapley v. Butterfield, 1 Met. (Mass.) 515} Willett v. Stoniger, 17 Abb. Pr. 152; Morrison v. Mendenhall, 18 Minn. 232; Keck v. Fisher, 58 Mo. 532. See Harris v. Mayor (Md.), 20 At. Kep. Ill; Smith v. Sloan, 37 Wis. 285; Pease v. Cole, 53 Conn. 53. 'Osborn v. Barge, 29 Fed. Eep. 725. * Smith V. Sloan, 37 Wis. 285; and see McDonald v. Eggleston, 26 Vt. 154; 'Cumins v. Caasilly, 5 B. Mon. (Ky.) 74; Bentrine v. Zierlin, 4 Mo. 417; Hedley v. Bainbridge, 3 Q. B. 316; Dickinson v. Valpy, 10 Barn. & Cress. 128 ; Brettel v. Williams, 4 Exch. 623. «3 Kent's Com. {7th ed.), p. 44. BANKRUPTCY — KIGHTS OF ASSIGNEE AND MORTGAGEE. 78 The. United States Supreme Court uses this expression in a case coming from Missouri : " It was also well settled by the decisions of that court, that each partner, by virtue of the relation of partnership, and of the community of right and interest of the partners, had full power and authority to sell, pledge or otherwise dispose of all personal property belonging to the partnership, for any purpose within the scope of the partnership business, and might therefore, with- out the concurrence of his copartners, mortgage the part- nership property by deed of trust to secure the payment, of partnership debts,"' But this court uses " trading corporation " in speaking of the Ohio law. The court says : " In the recent case of Rouse V. Merchants Bank, 46 Ohio St. 493, that court, upon a similar state of facts, adjudged that mortgages made by a trad- ing corporation after it had become insolvent, and had ceased to do business, to prefer some of its creditors, were invalid and ineffectual against creditors generally, without regard to the question whether the mortgages were or were not parts of the same transaction as an assignment under the statute."^ § 101. Widow Taking Place of Her Husband. — A wife becoming a copartner in the place of her deceased husband, the presumption will be indulged that she becomes liable for his partnership debts, and a mortgage executed therefor is a good consideration.^ § 102. Bankruptcy — Rights of Assignee and Mortgagee. — On an issue between the assignee of a partnership estate in bankruptcy and the mortgagee, any balance left after paying the debts, is payable to the mortgagee. The fact that, for additional security on the note, he had previously taken another mortgage from a third party, who was liable thereon as surety, does not affect the right of this preference.* If ' Union Bank of Chicago v. Kansas City Bank, 136 U. S. 223. See note in 31 Cent. L. Jour. 311, where the authorities are collected. 'Smith Purifier Co. v. McGroarty, 136 U. S. 237. ' Preusser v. Henshaw, 49 Iowa 41. * Thompson v. Spittle, 102 Mass. 207. 74 VALIDITY. the mortgage is invalid as against creditors, it is equally in- valid as against an assignee for the benefit of creditors/ Every right which the creditors might have asserted against the property before the assignment, the assignee is bound to secure for the benefit of the assignment.^ The knowledge of the assignee as to the mortgage, when it was filed, and when the assignment was accepted by the assignee, cannot afiect the question. He stands for the creditors, and they are not prejudiced by knowledge on his part which might have affected him had he been a subse- quent purchaser.^ § 103. Mortgagee — Tenants in Common. — A mortgagee may become a tenant in common of the property mortgaged. Thus, a party made a contract with his laborers for the cul- tivation of a crop on shares, by which a tenancy in common is created in the crop between 'the owner and the laborers. Afterwards he executed a mortgage, for supplies, on his interest in the crop. By this, the mortgagee becomes a tenant in common with the laborers until a division of ^ the crop.* So, also, the concurrent execution and delivery of two chattel mortgages upon thei same property, to different parties, makes the mortgagees tenants in common of the property mortgaged.® The legal effect is the same as it would be if the goods had been mortgaged under one instru- ment, to be held by them as security for their respective claims, and the proceeds, in case of sale, would be divided between them in proportion to the amounts of the interest of each.* A mortgage was given and provided that the mortgagee might take immediate possession of the goods if the mort- gagor attempted to sell them. Then the mortgagor made, ' Hanes v. TiflFany, 25 Ohio St. 549. 'Blandy v. Benedict, 42 Ohio St. 295. ' Westlake v. Westlake (Ohio), 24 N. E. Rep. 412. * Smith V. Rice, 56 Ala. 417. See Gaar v. Hord, 92 III. 315; Tyler v. Taylor, 8 Barb. (N. Y.) 585 ; Shuart v. Taylor, 7 How. Pr. (N. Y.) 251. * Welch V. Sackett, 12 Wis. 243. "Howard v. Chase, 104 Mass. 249; Hubby v. Hubby, 5 Gush. (Mass.) 516. TENANTS IN SEVEKALTY. 75 simultaneously, three mortgages of the goods to three other mortgagees severally, which contained a clause that " this mortgage is of the same date, given at the same time, and to be recorded with the two others, all of which are alike in time ; neither is to have precedence of the other, but to be alike security to eacli," and which expressed to be subject to the first mortgage. The last three mortgagees took title under the mortgages as tenants in common. The mort- gages are the same as if they had been made as one convey- ance to secure each party his separate debt, and the three mortgages are to be treated as substantially one conveyance.'^ A mortgage of personal property was made to several persons to secure them against their liability as indorsers for the mortgagors ; no two of the mortgagees were liable upon any one paper. The terms were " certain and various notes of hand, drafts and checks." It was decided that these were used collectively, and it was intended to be said that, upon them, taken collectively, were the indorsements of each of the mortgagees. Whether the indorsements were several or joint, or whether the names of all were upon the same papers or not, the instrument must be construed, under the evidence disclosed, as expressing a joint interest, and any action for trespass upon their rights under the mortgage should be joint.* § 104. Tenants in Severalty. — But a mortgage given ta two or more persons, to secure their several debts, is several and not joint.* If two creditors take a chattel mortgage to secure their separate debts, if the mortgage is good as to one and invalid as to the other, it will be good as to the former and void as to the latter.* The second mortgagee and the first mortgagee must sue in severalty. They are neither joint tenants nor tenants in common of the property.^ ' Howard v. Chase, 104 Mass. 249. 'Wheeler v. Nichols, 32 Me. 233. 'Burnett v. Pratt, 22 Pick. (Mass.) 556. * Sumner v. Dalton, 58 N. H. 295. •Newman v. Ty meson, 13 Wis. 172. 76 VALIDITY. § 105. Agent and Principal. — If an agent does not keep within the scope of his authority he cannot bind his princi- pal, unless the latter does some act to ratify the transaction. Thus, an absolute sale, made by an agent, who was only authorized to execute a chattel mortgage, will not bind his principal, and if disaffirmed by him the sale will be con- strued, in favor of the purchaser, as a mere security for the return of the purchase- money to the use of the principal.' When a party mortgages property to an agent, in order to procure credit from the principal, the agent may foreclose the mortgage as the trustee of the principal.^ By bringing suit to recover the value of goods mortgaged by an agent, the principal, claiming to hold them under a mortgage taken by the agent, ratifies the action of his agent in taking the mortgage in the principal's name.^ Where an agent's authority to renew and take security for notes owed by his principal is unrestricted, an alteration in a chattel mortgage, made by the agent after delivery, by inserting other property of the mortgagor, is an act in the line of his agency, and will avoid the mortgage. In making this alteration he acted for the principal or mortgagee.* While such alteration was not contemplated by his instruc- tions as agent, yet it was not forbidden, and operated as a legal fraud upon the mortgagor. It was in the line of his agency and because of it ;* and when the mortgagee received the instrument from his agent he took it subject to all de- fects and defensies which the acts of his agent caused or authorized, and the fact that the principal did not know of the alterations, is immaterial.' § 106. Corporations. — The power of a corporation to mort- gage its property is dependent upon the general right of dis- posal which it may possess. Where this right exists, the ' Ooppage V. Barnett, 34 Miss. 621. ' Varney v. Hawes, 68 Me. 442. •'' Partridge v. White, 59 Me. 564. ^ HoUingsworth v. Holbrook (Iowa), 45 N. W. Rep. 561. 'Mechem on Ag. g 739; Reynolds d. Witte, 13 8. Car. 5. *Eadie v. Ashbaugh, 44 Iowa 519; Farrar v, Peterson, 52 Iowa 420. CORPORATIONS. 77 power must necessarily follow.^ Where the charter of a private corporation granted to the company " all the powers incident and useful to a corporation," it was held that the language was broad enough to include the power to make a chattel mortgage of property purchased by it for the price.^ An instrument purporting throughout the body thereof to be a mortgage of personal property by the corporation, is not invalid as such, because signed by the president only, with his name and title, and sealed with his individual seal.* It is not necessary that the authority to mortgage corpora- tion property be given by a formal vote. Such an act by the president and general manager of the business of the corporation, with the knowledge and concurrence of the directors, may properly be regarded the act of the corpora- tion.* When one professing to be authorized, mortgages personal property of a corporation in order to procure a loan, and this money is given to the corporation, and to be retained by it, this is sufficient evidence of ratification of the mortgage.'^ The execution of a chattel mortgage by the president and secretary of a corporation, who were at the time owners of two-thirds of its stock, and its subsequent filing in the clerk's office of the proper county, is a substantial compliance with the statute requiring that the assent of stockholders owning at least two-thirds of the capital of such corporation, to execute the mortgage, should be first filed in the office of the clerk of the county where the mortgaged premises are situated.' 'Ellis V. Boston, &c., 107 Mass. 1; Reynolds v. Stark Co., 5 Ohio 205 ^ Burt V. Rattle, 31 Ohio St. 116; Jackson v. Brown, 5 Wend. (N. Y.) 590; Gordon v. Preston, 1 Watts (Pa.) 385 ; Allen v. Montgomery R. R. Co., 11 Ala. 437; State v. Rice, 63 Ala. 85; Phillips v. Winslow, 18 B. Mon. (Ky.) 431; West v. Madison Agricultural Board, 82 111. 205; Pierce i;. Emery, 32^ N. H. 484; Shaw v. Bill, 95 U. S. 10; Jones v. Guaranty, &c., 101 U. S. 622; Thompson v. Lambert, 44. Iowa 239; Watts' Appeal, 78 Pa. St. 370. 'Badger v. Batavia Paper Co., 70 111. 302. 'Sherman v. Fitcb, 98 Mass. 59. 'Emerson v. Providence Hat Manf. Co., 12 Mass. 237 ; Melledge v. Bostoa Iron Co., 5 Cush. (Mass.) 158; Lester v. Webb, 1 Allen (Mass.) 34. 'Despatch Line of Packets v. Bellamy Manf. Co., 12 N. H. 205. •Armerman v. Wiles, 24 N. J. Eq. 13. 78 VALIDITY. ARTICLE III. OONSIDERATIOlir. 107. Sufficiency. 108. Future Advances. 109. When the Amount of the Debt is not Stated. 110. To Secure a Pre-existing Debt. 111. No Present Indebtedness Subsisting. 112. New York Doctrine. 113. Identification of the Instrument. , 114. Parol Evidence — When Admissible. § 107. SuflBciency. — -Like all other contracts, a mortgage must be supported by a sufficient and valid consideration. Thus, where a purchaser of chattels, holding under a con- ditional contract, makes default, and the vendor waives his right to take possession and extends the time of payment, such act of the vendor is a valid consideration for a chattel mortgage executed on other property by the vendee.^ In an action to recover a chattel by the mortgagee, whose mortgage was executed and recorded prior to a judgment under which a party claims as execution purchaser, there being no evidence of debt to him, the mortgagee need not show the debt to uphold the mortgage." The fact, that a mortgage is given slightly in excess of the real debt is not sufficient to stamp it with fraud, when there is no actual fraud intended by the parties to the mortgage.^ In Michigan a chattel mortgage given for a bona fide in- debtedness is valid, although the mortgage was given by the debtor with intent to defraud his creditors, and the preferred debtor knew of such intent.* If a mortgage is given upon a stock of goods to secure an -existing indebtedness, the time for the payment thereof is not extended, but the mortgagee goes into possession under an agreement that the property shall be sold in the usual » Sinker v. Green, 113 Ind. 264. 'Tompkins v. Henderson, 83 Ala. 391. ' Van Patten v. Thompson, 73 lowS, 103. •Eureka Steel Works v. Bresnahan, 66 Mich. 489. FUTUKE ADVANCES. 79 course of business, it is valid and is not without a present consideration/ The fact that a chattel mortgage includes property recently purchased on credit, in the usual course of business, does not make the mortgage invalid.^ But a chattel mortgage to secure a note for a large sum and short time, and a note for $1 on much longer time, is not bona fide, and is made to prevent the seizure of the chattels by creditors.^ A party purchased goods and gave his note for them. In order to give security he induced another to sign the note as surety, and promised him a mortgage on the goods as security, and agreed that, until such mortgage was executed, the surety should have a lien on the goods. Afterwards the vendee mortgaged the goods to a third party, and soon after left the State without executing a mortgage to his surety as agreed. The third party, in consideration of the surety releasing his claim on the goods, mortgaged other property to the surety to secure him from liability on the notes which he signed at first. This was adjudged a good consideration.* So, it is a good consideration where a first mortgagee promised to pay the lien of a second mortgage, provided the mortgagor would deliver him the property ; it was a valid agreement, which the second mortgagee might enforce.^ § 108. Future Advances. — Much diversity of view exists with courts and law-writers on the question of the validity > of mortgages for future advances, and the rights of mort- gagees in such mortgages as against purchasers and junior incumbrancers of the mortgaged property. "Some hold that a mortgage which does not specify that for which it is given so distinctly as to give definite information, on the face of the mortgage, of what it secures, so as to render it un- necessary for the inquirer to look beyond the mortgage and ' Clark V. Barnes, 72 Iowa 563. ^Lippincott v. Shaw Carriage Co., 25 Fed. Rep. 577. 'Hixon V. Mullikin, 18 111. App. 232. •Sparks v. Wilson, 22 Nebr. 112. ' PuUiam v. AdamBon, 43 Minn. 511. 80 VALIDITY. seek informatioQ aliunde, is void as against creditors and purchasers. Others hold that a mortgage for future advances is valid as to all advances made under it before notice by the mortgagee of the supervening rights of purchasers or incum- brancers. Others hold that a mortgage for future advances to be made or liability to be incurred, when duly recorded, is valid as a security for indebtedness incurred under it, in accordance with its terms. Then there has been modifica- tions of these views, and a distinction has been drawn between mortgages in which the mortgagee is obligated to advance a given sum, and those in which he is not so bound. The adjudications upon this question are conflicting."^ Between the parties to the instrument there is no question as to its validity. A mortgage or conditional sale of chattels to be acquired in the future may be valid between the parties thereto;^' and so, a chattel mortgage to secure a debt to be subsequently contracted, is valid between the mortgagor and the mortgagee and their privies.* It is also held by some courts that a chattel mortgage can be extended to cover advances in contemplation at the time of the execution, and such action is valid as against cred- itors of such mortgagors. But advances under verbal agree- ment, subsequent to the execution of the mortgage, are not good.* In New York the question cannot be regarded as settled. There are numerous cases holding that a mortgage, judg- ment or other security may be taken and held for ftiture advances or responsibilities. It is held that a mortgage given to secure future advances, which the mortgagee has the option to make or not, as he chooses, is, as to advances 'Witczinski v. Everman, 51 Misa. 841. 'Ludwig V. Kipp, 20 Hun (N. Y.) 265. 'Steiner v. McCall, 61 Ala. 406. 'Sims V. Mead, 29 Kans. 124; Brown v. Kiefer, 71 N. Y. 610; Adams «. Wheeler, 10 Pick. (Mass.) 199; Commercial Bank v. CunniDgham, 24 Pick. (Mass.) 270; Hyde v. Shank, 77 Mich. 517; Jones v. Smith, 2 Ves. Jr. 372; Demainburg v. Metcalf, 2 Vernon 698; James v. Morey, 2 Cow. (N. Y.) 246 ; United States v. Hooe, 3 Cranch 73. FUTUKE ADVANCES. 81 made upon it, to be regarded as a fresh mortgage, and is, as to such advances, subject to the lien of all incumbrances which are duly recorded at the time it is made, whether the mortgagee has notice of them or not. In those cases in which the mortgagee is bound to make future advances, this rule does not apply.' Numerous decisions hold that, under the registry system, judgments docketed or mortgages re- corded take precedence of all advances or instruments made after they were entered, as such instruments are subsequent incumbrances and give due notice.'' A mortgage to secure future advances which are optional, does not take effect between the parties as mortgage or in- cumbrance until some advance has been made ; if not made until after another mortgage or incumbrance has been made and recorded, it is, in fact, as to such after-advance, a sub- sequent and not a prior incumbrance ; the record of the subsequent mortgage is notice as to such after-advances, as much as if the mortgage first recorded had not been executed only after such advances were made.^ In Vermont there is a different rule, founded upon English authority, which has been abandoned in England. It is held in that State that express notice of a subsequent incum- brance is required in order to stop further advances upon the mortgage, to secure future advances, and, in addition to ' this, a formal protest against the first mortgagee continuing to increase the indebtedness under his mortgage.* In Alabama, where a note and chattel mortgage to secure it were given for supplies obtained for the declared purpose of maturing a crop, the mortgage providing that if the mortgagee should advance additional supplies, the mortgage should stand as security for them, as fully as if included in 'Ackerman v. Hunsicker, 21 Hun (N. Y.) 53. = Spader t). Lawler, 17 Ohio 371; Ter-Hoven v. Kerns, 2 Pa. St. 96; Mc- Lure V. Eoman, 52 Pa. St. 458; Parker v. Jacoby, 3 Grant (Pa.) 300; Boswell V. Goodwin, 31 Conn. 74; Hartley v. Kirlin, 45 Pa. St. 49. 'Ter-Hoven v. Kerns, 2 Pa. St. 96. *McDaniels v. Colon, 16 Vt. 300. F 82 VALIDITY, the note, then the mortgage will include such advances or supplies for planting, cultivating and gathering the crop, though such advances were after maturity of mortgage. Judge Somerville says the note and mortgage were executed in April of the year 1880, and the supplies gotten by the mortgagor were obtained for the declared purpose of making a crop. Whatever supplies or advances, therefore, which were shown to have been obtained to aid in making the crop for the current year, that is, in cultivating and gathering it, must be construed to come within the terms of the mortgage.^ § 109. When the Amonnt of the Debt is Not Stated. — ^Upon this question also there is an irreconcilable conflict of authority. In Mississippi it is not necessary for a mortgage to secure future advances to specify any particular or definite sum which it is to secure. It is not necessary for it to be so completely certain as to preclude the necessity of all extraneous inquiry. If the mortgage contains enough to show a contract, that it is to stand as a security to the mort- gagee for such indebtedness as may arise from future deal- ings between the parties, it is sufficient to put a purchaser or incumbrancer on inquiry ; and if he fails to make it, he cannot claim protection as a bona fide purchaser. Judge Campbell ably holds that the law requires mortgages to be Recorded for the protection of creditors and purchasers, and if it gives information that it is to stand as a security for all future indebtedness to accrue from the mortgagor to the mortgagee, all are put upon inquiry as to the state of deal- ings between the parties, and the amount of indebtedness covered by the mortgage, and are duly advised of the rights of the mortgagee to hold the mortgaged property as a security for such indebtedness as may accrue to him. " Thus informed, it is folly of any one to buy the mortgaged prop- erty, or take a mortgage on it, or give credit on it, and if he does so, his claim must be subordinate to the paramount ' Hill V. Nelms, 86 Ala. 442. See, also, Collier v. Faulk, 69 Ala. 58 ; Love- kce V. Webb, 62 Ala. 271. TO SECURE A PRE-EXISTING DEBT. 88 right of the senior mortgagee, who in thus securing himself by mortgage, and filing it for record, as required by law, has advertised the world of his paramount claim on the property covered by his mortgage, and is entitled to advance money and extend the credit according to the terms of his contract thus made with the mortgagor, who cannot complain, for such is his contract ; and third persons afterwards dealing with him, cannot be heard to complain, for they are affected with full notice, by the record, of what has been agreed on by the mortgagor and mortgagee."^ In some States the statute requires a definite amount to be stated or fixed in the mortgage, which must be followed* Chief Justice English says mortgages to secure future ad- vances have always been favored by the common law. The statute requiring the amount to be fixed, is a modification of the common law, under which the mortgage would be equally valid without such limitation, and a mortgage to secure indefinite future advances is valid as against third parties.^ So, it is held in Georgia that a mortgage made in consid- eration of advances in money and plantation supplies, to be furnished for the purpose of carrying on a farm for a certain year, no sum being named, is valid, notwithstanding a stat- ute requiring a mortgage to specify the debt which it is given to secure.^ § 110. To Secure a Pre-existing Debt. — One's own debt, though past due, is always a sufficient consideration to sup- port his chattel mortgage to the creditor to secure the debt, and, as to parties and privies, is as effectual as if made upon an adequate new consideration. Thus, a mortgage condi- tioned for the payment of all sums due and to become due, is sufficiently certain, and the mortgage is valid. The clause relating to past indebtedness must be brought within the ' Witczinski v. Everman, 51 Miss. 841. See, also, Bobinson v. Williams, 22 N. Y. 380;. Stoughton v. Pasco, 5 Conn. 442. '^ Jarrett v. McDaniel, 32 Ark. 598. See La Due v. Railroad Co., 13 Mich. 580; Birnie v. Main, 29 Ark. 591. 'Allen V. Lathrop, 46 Ga. 133. 84 VALIDITY. terms of the defeasance, in order to make it effectual; and when this appears to have been the intention of the parties, this construction will give effect to every part of the instru- ment, but the excluding past indebtedness will not comply with the law upon this subject. No cases can be found in which a man's own debt has been ruled to be an insufficient consideration between him and his creditor, for a mortgage or other security received by the latter from the debtor.* . § 111. No Present Indebtedness Subsisting. — Judgments and mortgages may be taken to secure future advances, though no present indebtedness is subsisting between the parties at the time of their rendition.'* In Alabama, a note and mortgage are valid, where they are given for supplies obtained for the declared purpose of inaking a crop, and the mortgage providing that the mort- gagee should advance additional supplies, the mortgage standing as security for them as fully as if included in the note. The mortgage included advances or supplies for planting, cultivating and gathering the crop, though made after it had become due. And any verbal mortgage to cover or include other debts created, to be made in the future, would be good as a vei:bal mortgage of the property designated.^ § 112. New York Doctrine. — ^Where a mortgage is given to secure a prior liability, the mortgagee is not a bona fide purchaser for a valuable consideration, as against one from whom the mortgagor obtained the property by fraud. A pre-existing indebtedness in New York repels the idea that the mortgagee is a bona fide party to the transaction. » Turner v. McPee, 61 Ala. 468; Maohette v. Wanless, 1 Colo. 225; Pain& V. Benton, 32 Wis. 491 ; Smith v. Worman, 19 Ohio St. 145 ; Kranert v. Simon, 65 111. 344. "Conrad v. Atl. Ins. Co., 1 Pet. (U. 8.) 386; Leeds v. Cameron, 8 Sumn. 0. C. 488 ; Hubbard v. Savage, 8 Conn. 215 ; Walker v. Snediker, 1 Hoflf. Ch. (N. Y.) 145; Commercial Bank v. Cunningham, 24 Pick. (Mass.) 270; Mo- nell V. Smith, 5 Cow. (N. Y.) 441; Lyle v. Ducomb, 5 Binn. (Pa.) 585; Liv- ingston V. Mclnlay, 16 Johns. (N. Y.) 165. •Hill V. Nelms, 86 Ala. 442. IDENTIFICATION OP THE INSTRUMENT. 8^ Such mortgagee acquires no title or lien, by virtue of his mortgage, as against the original owner, or vendor, to the mortgagor, because he parts with nothing, nor does he relin- quish any security or incur any liability upon the faith of the mortgage/ § 113. Identification of the Instnuuent. — It is enough that the description in the mortgage of the instrument which it is given to secure, states correctly sufficient facts to identify the instrument with reasonable certainty. It is not indis- pensable that all the particulars of such description should correspond with the instrument. Thus, a mortgage pur- porting to be given to secure a certain promissory note, made and delivered on or about the 8th day of August, 1867, signed by three persons, payable in or about one year from date, in an action to foreclose, the note produced in evidence was dated August 6th, 1867, signed by the three persons named as makers, and' payable on or before September 1st, 1868, having the same amount, and there was a condition in- serted that it might be paid by the delivery of a barge in lieu of the money. This was a sufficient identification by the description in the mortgage.^ So, a note was described in a mortgage as being for |236; but the note produced in evidence was for $256, but corresponded in other respects with the description in the mortgage. This was a sufficient identification, upon the evidence given, which showed that the note produced was the only one which the party had signed as security.^ So, where a condition in the mortgage describes the contract secured as signed by one party, while it was in fact signed by a firm of which the party was a member. This was sufficient.* In a condition to save harm- less the mortgagee against a note that he has signed, it is sufficient to describe such note, so that it may be identified. ' Woodburn v. Chamberlain, 17 Barb. (N. Y.) 446 ; Van Slyck v. Foot, 10 Hun (N. Y.) 554 ; Thompson v. Van Veohten, 27 N. Y. 568. ' Paine v. Benton, 32 Wis. 491. 'Johns V. Church, 12 Pick. (Mass.) 557. •Robertson v. Stark, 15 N. H. 109. 86 VALIDITY. The omission of the sum, the date, and the name of one of the signers, is not fatal, if the note is so described as to be identified.^ Where a mortgage and note secured thereby are made and delivered at the same time, the mortgage is valid, if by mistake dated a year prior to the date of the note.^ § 114. Parol Evidence — When Admissible. — Parol evidence of an erroneous date in a mortgage of personal property, not under seal, is admissible.' So, where a note agrees in some respects with the description given in the mortgage, though it differs in others, it may be proved by parol evidence to be the one intended in the mortgage.* Parol evidence is competent to show that a promissory tiote, which conforms to the description in the mortgage in all respects except the year of the date, was the note intended to be secured in the mortgage.^ Where two notes were described in the condition of the mortgage, " two notes for $150 each," one note produced in (evidence was for $150, the other for $200, but in all other respects they corresponded with the description in the mort- gage. Parol evidence was introduced to show that the two notes were the ones described.* So, a note was described in the mortgage as dated in 1824 ; the note produced was dated 1821. Parol evidence was admissible to show that the note was the one intended to be secured by the mortgage.' In the condition of the mortgage the note was described ' Bood'y V. Davis, 20 N. H. 140. ' Partridge v. Swazey, 46 Me. 414 ; Williams v. Hilton, 35 Me. 547 ; Bourne V. Ljttlefield, 29 Me. 302 ; and see Hurd i;. Robinson, 11 Ohio St. 232; Mer- chants National Bank v. Raymond, 27 Wis. 567; Youngs v. Wilson, 27 N. Y. 351; Merrills v. Swift, 18 Conn. 257; Hough ■». Bailey, 32 Conn. 288; Michigan Ins. Co. v. Brown, 11 Mich. 266 ; Robinson v. Williams, 22 N. Y. 380 ; Nelson v. Boyce, 7 J. J. Marsh. (Ky.) 401. ' Partridge v. Swazey, 46 Me. 414. * Shirras v. Caig, 7 Cranch (U. 8.) 34; Boody v. Davis, 20 N. H. 147 ; Hurd V. Robinson, 11 Ohio St. 232; Johns v. Church, 12 Pick. (Mass.) 557; Mc- Kinster v. Babcock, 26 N. Y. 378; Pierce v. Parker, 4 Met. (Mass.) 80; Mel- vin V. Fellows, 33 N. H. 401 ; Cushman v. Luther, 53 N. H. 562. 'Clark V. Houghton, 12 Gray (Mass.) 38. * Cushman v. Luther, 53 N. H. 562. ' Sweetser v. Lowell, 33 Me. 446. CONSTEUCTION OP AGREEMENTS TO INSURE. 87- as payable to a firm. The note proved was made payable to an individual. Parol evidence was introduced to prove that this note was the one secured by the mortgage.^ A chattel mortgage will be sustained when parol evidence shows that its real consideration was the indorsement by the mortgagor to the mortgagee of notes for $1,000, for accommo- dation of the latter, and upon his failure to raise the money thereon, two notes for $500 were substituted in its place, although the consideration stated in the mortgage was a present absolute indebtedness of $1,000, though no such in- debtedness existed, and no money was advanced. In such case evidence is admissible that the mortgagee indorsed the substituted notes of $500 in reliance upon the mortgage as security therefor, and that it was the purpose of the mortgage to secure such substituted liability.^ ARTICLE IV. STIPULATIONS CONSTRUCTION. 115. Construction of Agreements to Insure. 116. New York Rule. 117. Wisconsin Bule. 118. Release of Part of the Property — Discharge of Lien. 119. Meaning of a Mortgagor's Covenant. § 115. Construction of Agreements to Insure. — When the mortgage contains a covenant to insure, and is not kept by the mortgagor, the mortgagee may properly insure the chat- tels, and then add the premiums to the debt, if fair and reasonable.^ The word " due " in a stipulation contained in a mortgage of personalty, providing for insurance for the mortgagee's ' Williams v. Hilton, 35 Me. 547. See, also, to the same effect, Hall v. Tufts, 18 Pick. (Mass.) 455; Pierce v. Parker, 4 Met. (Mass.) 80; Jackson v. Bowen, 7 Cow. (N. Y.) 13. ' McKinster v. Babcock, 26 N. Y. 378. When a chattel mortgage appears by its terms to have been given to a second indorser of two notes to secure their pa.yment, it may be shown by parol evidence that it was intended as a security for all the indorsements uppn the notes, and upon such proof being made, it can be enforced by the first indorser. Bainbrid&re v. Rich- mond, 17 Hun (N. Y.) 391. 'Leland v. Collver, 34 Mich. 418. 88 VALIDITY. benefit, in a. sum equal to the full amount due on the mort-r gage, is construed to be synonymous with " owing," and contemplates insurance on the amount remaining unpaid/. Parties insured property that was mortgaged, and by a memorandum upon the policy agreed to pay the amouat of the insurance to the mortgagee in case of loss, with the con- sent of the mortgagor. The mortgage was afterwards fore- closed without any act of the mortgagor to whom the policy was issued ; held, that this did not work an alienation of the property so a& to defeat the policy.^ After the delivery of the policy, the mortgagor, without the consent of the company, which was one of the con- ditions, gave a chattel mortgage upon four cows which were covered by the policy. The policy provided that if the property shall be sold or conveyed, or if the interest of the parties shall be sold or conveyed, or if the interests of the parties therein changed in any manner, whether by act of the parties or by operation of law, or if the property shall become incumbered by mortgage, judgment or otherwise, * * * then, and in every case, the policy shall be null and void, unless the written consent of the company at the home ofiice is obtained. This rendered the policy as to the cows void.^ A chattel mortgage on certain buildings in course of erec- tion and upon the leasehold, and an assignment of the lease, and a contract between the parties in relation to the subject- matter, were executed on the same day; in determining the rights of the parties thereunder, these transactions were properly construed together.* § 116. New York Rule. — It is settled law in this State that an assignment of a policy by the assured to his mort- gagee, with the express consent of his insurers, will enable ' Fowler v. Hoflfman, 31 Mich. 215. ' Bragg V. New Eng. Fire Iiis. Co., 25 N. H. 289. ' Dacey v. Agricultural Ins. Co., 21 Hun (N. Y.) 83 ; Sherwood v. Aeri- cultural Ins. Co., 73 N. Y. 447. ♦Edling V. Bradford (Nebr.), 46 N. W. Rep. 836. RELEASE OF PART OP THE PROPERTY. 89 the mortgagee to recover, in case of loss, although the assured may have done acts which, by the terms of the policy, render it void. And a policy which, by its terms, declares that the loss, if any, shall be payable to the mort- gagee, is an equally eflPective protection of his interest."^ § 117. Wisconsin Rule. — It is settled in this State that the mortgagee of chattels has the legal title of the property before the debt is due, and that he may take immediate pos- session thereof, unless, by express stipulation, the mortgagor is permitted to retain possession. So, a provision in a policy of insurance issued to the chattel mortgagor, by which any loss is payable to the mortgagee, as his interest may appear, is valid. Judge Cole says that the legal title of this policy vested upon its execution in the mortgagee, as fully as if it had been suosequeatly assigned to him.^ He says this view is not precisely the view taken in Massachusetts,* but is not essentially different. § 1 18. Release of Part of the Property — Discharge of Lien. — The parties to a mortgage can make a valid agreement to have the lien divested on one part of the mortgaged prop- erty on payment of the debt fro tanto. Thus, a party sold his interest in a farm, stock and farming tools, receiving a mortgage and five eight-hundred-dollar notes, payable an- nually. The mortgagee had the first lien of the crops until $800 and interest were paid. The said lien was not to be enforced in any way until after the said $800 is due and un- paid ; that when the $800 and interest are paid, the said mortgagee is to release the security upon the live stock before described in the mortgage, and when the further sum of $200 is paid, the said mortgagee is to release the security upon the tools before described — meaning that the payment of said 'Grosvenor v. Ins. Co., 5 Duer (N. Y.) 517 ; Ennis v. Ins. Co., 3 Bosw. (N. Y.)516; Robert v. Ins. Co., 9 Wend. (N. Y.) 406. ^ The Apple on Ins. Co. v. The British Am. Assur. Co., 46 Wis. 23 ; and see Grosvenor v. Ins. Co., 17 N. Y. 391. ' Barrett v. Fire Ins. Co., 7 Cush. 175 ; Lowell v. Fire Ins. Co., 8 Cush. 127 ; Fqgg V. Fire Ins. Co., 10 Cush. 337; Hale v. Fire Ins. Co., 6 Gray 169; Lor- ing V. Ins. Co., 8 Gray 28. 90 VALIDITY. sums of $800 and $200 is to operate as a release of the said live stock and tools. The court interpreted this, that when the first $800 of said purchase-money, and the interest thereon, ■were paid, the lien of the live stock was discharged.^ The parties to a chattel mortgage executed an agreement that if the mortgagor should sell any of the property the mortgagee would discharge the claim of the amount upon the receipt of the money therefor. It ivas held that this agreement was conditional, and gave no authority to the mortgagor to divest the mortgagee's interest in the property by sale, except upon a performance of the condition by pay- ing the purchase-money to the mortgagee.^ § 119. The Meaning of a Mortgagor's Covenant. — When a mortgagor gives a mortgage and covenants in it forever to warrant and defend the property mortgaged, this covenant will be construed as a mere covenant of title, and not a cove- nant that he will forever keep and protect the property.^ ARTICLE V. PEOPEKTY COVERED. 120. Conveying Terms Construed. 121. Goods — Definition. 122. Natural Increase of Live Stock. 123. When the Natural Increase is Not Covered. 124. Accessions to Unfinished Articles. 125. When Bepairs are Included. 126. Intermingling Mortgaged Chattels. 127. Substituting One Chattel for Another. 128. Beplacing Goods Sold. 129. Exchanging Articles by Consent. 130. As to Third Persons. 131. Cuttings From Plants and Trees. 132. Parol Evidence to Fix the Quantity. § 120. Conveying Terms Construed. — It is necessary that the property covered shall be clearly set out in the mort- 'Brigham v. Avery, 48 Vt. 602. 'Whitney v. Heywood, 6 Cush. (Mass.) 82. See, also, Fogg v. Fire Ins. Co., 10 Cush. (Mass.) 337; Barrett v. Fire Ins. Co., 7 Cush. (Mass.) 176; Lowell V. Fire Ins. Co., 8 Cush. (Mass.) 127; Hale v. Fire Ins. Co., 6 Gray (Mass.) 169; Loring v. Ins. Co., 8 Gray (Mass.) 28. " Weed V. Covill, 14 Barb. (N. Y.) 242. CONVEYING TERMS CONSTRUED. 91 gage, and be in such a state that it can be m(»rtgaged. Thus, in a chattel mortgage, certain naval stores were referred to which were not then in existence. Simply declaring a lien, and covenanting to ship to the mortgagee material made by the mortgagor during a certain year, but no words denoting a conveyance or transfer appearing, these stores were nof legally mortgaged, and therefore not necessarily applicable to pay the mortgage debt.^ So, a mortgage of a horse, pro- viding that the mortgage shall cover earnings of the horse, whether by premiums or otherwise, does not cover premiums earned after the execution of the mortgage.'^ Several chattel mortgages were given, known as " crib receipts," to secure money advanced by a commission firm, under arrangements for the purchase of corn by the mort- gagor on speculation. This corn was to be consigned to and sold by the mortgagees. The mortgage covered the corn in the particular crib, and was conditioned to be void on the payment by the mortgagor, by a certain day, all moneys and accounts due, including commissions on the above-described corn, and on other grain, which the mortgagor agreed to consign and to pay commission on. In this case each receipt was given, not merely as security for the corn in the crib which it especially designated, but for all advances made by the mortgagees in pursuance of the adventure, including mar- gins advanced, or sales of corn for future delivery in excess ©f the amount which they possessed, and the mortgage was not restricted by the word " due " to securing only indebt- edness at the time before the date indicated, but would secure any outlay made by the mortgagees in good faith, in pursu- ance of or to protect the enterprise.' An assignee took a mortgage given to secure ^313.50, and, in a contest to collect the whole amount, it was shown that he only, in fact, paid $40 for the assignment. It was shown that the understanding between the parties to the mortgage 'Whilden v. Pearce, 27 S. Car. 44. ' McArthur v. Garman, 71 Iowa 34. ' Douglass V. Smith, 74 Iowa 4fi8. 92 VALIDITY. was, that upon 'payment of the $40 the mortgage should be released, and that the assignee knew of this understanding. Under this condition of facts, the assignee could not be allowed to set up the mortgage and claim the whole amount which it was given to secure.^ A mortgage was taken on a stock of goods, and, at the time of its execution, only |1,000 was advanced, but the balance soon after and before the mortgagee took possession ; held, that it was valid for the full amount.^ A mortgage executed to secure any sums that may become due for supplies to be furnished by the mortgagee to the mortgagor before a certain date following, does not secure an account contracted by the mortgagor after said date.* -Nor can the intention of the parties to a chattel mortgage be in- voked to apply the mortgaged property not known to them when the mortgage was made.*, A mortgage on a stock of goods, and on all fixtures and utensils in the store, covers an iron safe, show-cases, platform scales, a truck, cheese-case and chandeliers." And a mortgage of all the furniture, lumber and materials in a factory, and all furniture hereafter manufactured in said factory, will cover furniture manufactured there out of said material and lumber.' A piano, billiard table and paintings will beincluded in a mort- gage of all the furniture in a certain house.^ But whether the machinery of a mill is included in a purchase-money mort- gage may be determined by the intention of the parties as shown by their conduct, and the circumstances of the case.* A horse cannot be deemed to be embraced in the descrip- tion, "all goods, wares, merchandise, household furniture, fixtures or other property " on certain premises.* Nor can 'Ganong v. Green, 64 Mich. 488. ' McCord V. Burson, 38 Kans. 278. " Port V. Black, 50 Ark. 256. ' Cass V. Gunnison, 58 Mich. 108. ' MoCall V. Walter, 71 Ga. 287. 'Dehority v. Paxson, 97 Ind. 253. ' Sumner v. Blakslee, 59 N. H. 242; 47 Am. Dec. 196. « Price V. Jenks, 14 Phila. (Pa.) 228. ' Kuschell V. Campau, 49 Mich, 34. NATURAL INCREASE OF LIVE STOCK. 93 a mortgage of "groceries " contained in a country store in- clude pails, shovels and the like, although such goods are usually kept in such a store.^ Nor will a chattel mortgage cover wagons and teams used by the mortgagor for the de- livery of goods from the store, when its terms include " fix- tures, furniture and appliances used in and about the carry- ing on of" a certain store.^ A purchase-money mortgage on a pregnant mare covers the colt, unless it is weaned before the maturity of the mort- gage-' § 121. Goods — Definition. — The word "goods," as used in mortgages, includes all chattels, both real and personal.* The. corresponding Norman-French term, " biens," is said to include property of every description except estates of free- hold.' The lien, when the term includes all " goods, imple- ments, stocks, fixtures, tools and other personal property which may be put on said premises," includes the hay and crops. Farm produce may be properly said to be "put" upon the premises. The word " put," in a general sense, means simply to " lay or place." When crops are planted they are " put " upon the premises. This is true of hay, although, while in the form of growing grass, it was part of the realty.® § 122. Natural Increase of Live Stock. — Partvs sequilur itentrem is a well-known maxim of the law, giving the off- spring to the owner of the dam. So, the increase of live stock is covered by a chattel mortgage on the dam, and a party purchasing such increase before the expiration of the mortgage, acquires no greater rights than the mortgagor had.' ' Fletcher v. Powers, 131 Mass. 333. 'Van Patten v. Leonard, 55 Iowa 520. 'Kellogg V. Loveley, 46 Mich. 131; 41 Am. Kep. 151. * Coke Litt. 118b ; Williams on Per. Property 2. 'Bouvier's L. Diet, title " Biens." "McCaffrey v. Woodin, 65 N. Y. 459. 'Cahoon v. Miers, 67 Md. 573; Gundy v. Bi'eler, 6 111. App. 510; Meyer V. Cook, 85 Ala. 417; Evans v. Merriken, 8 Gill & J. (Md.) 39; Hughes v. Graves, 1 Litt. (Ky.) 317; McCarty v. Blevins, 5 Yerg. (Tenn.) 195;' Fon- ville V. Casey, 1 Murph. (N. Car.) 389. ^ VALIDITY. Thus, a vendee of a mare on credit, who gives back a chattel mortgage for the entire purchase price, cannot keep the colt which the mare bears after sale, if he makes a de- fault in the payment and the mare is taken on the mort- gage/ An agreement in writing for the owner of a mare t© pay to the owner of a stallion $20 in twelve months, if the mare should get with foal — "colt holden for payment" — creates a lien in the nature of a mortgage, as the chattel has a potential existence,^ And, generally, the lien of property retained by the vendor covers all of its natural incidents and accesssories^ unless circumstances show a different intention.^ The pro- duce or increase of stock mortgaged, is subject to the mort- gage. It is an incident following the condition,* § 123. When the Natural Increase is Not Covered. — While a mortgage on the pregnant dam covers the oflfepring with- out naming it in the terms of the mortgage, •yet the mort- gage lien cannot reasonably be supposed to follow it after maturity and separation from its dam. Thus, two cows were mortgaged and kept in possession by the mortgagor. While in his possession, and before the mortgage expired, each cow gave birth to a calf. At the age of eighteen months the mortgagor sold these calves. The court held that, as it was not shown that the mortgage, by its terms, covered the calves, the purchaser, therefore, had no notice of the claim of the mortgagee that the mortgage covered the two calves, and hence the sale was valid. This decision seemed to turn on the fact that " the time had passed when it was necessary for their nurture to permit them to follow the cows. At such time it is unnatural to ' Kellogg V. Lweley, 46 Mich. 131; Arnold v. Stock, 81 111. 407. 'Sawyer v. G-errish, 70 Me. 254; Farrar b. Smith, 64 Me. 74; Oakes v. Moore, 24 Me. 214. 'Dunham v. Chaslin, 14 Eng. 418; Evans v. Merriken, 8 Gill & J. (Md.) 39 ; Fowler v. Merrill, 11 How. (U. S.) 375. *Forman v. Proctor, 9 B. Mon. (Ky.) 124; Funk v. Paul, 64 Wis. 35 ; Boggs V. Stankey, 18 Nebr. 400; Leavitt v. Jones, 54 Vt. 423; Dyer v. State, 88 Ala. 225. ACCESSIONS TO UNFINISHED ARTICLES. 9$ separate the calf from its dam, when it is not taken to the butcher." After nurture and separation, and sale of the off- spring, there is no notice to the purchaser, unless the offspring is named and described in the mortgage.' § 124. Accessions to Unfinished Articles. — The materials used in finishing a mortgaged article in possession of the mortgagor are embraced in the mortgage, and the mortgagee is entitled to the additional value derived from the materials as well as the labor of the mortgagor. Thus, an unfinished engine was mortgaged and subsequently finished by the mortgagor out of materials also covered by the mortgage; Chief Justice Greene, speaking for the court, held that the mortgagee was entitled to the additional value derived from said materials and the labor of the mortgagor.^ The articles, however, should remain substantially the same. Judge Dewey, in delivering the opinion of the court, says that when unfinished articles of manufacture are mortgaged, and the mortgagor afterwards adds labor and material to them, the mortgagee will hold them, as against third persons, if they remain substantially the same ; "and if such identity was continued, additions not making an important part of its whole present value, would not divest the mortgagee of his interest."^' The doctrine has been held still stronger than this ; which is, that an attaching creditor cannot hold the shoes manu- factured from mortgaged leather.* Judge Merrick holds, in consonance with this doctrine, that cucumbers in bulk and in salt, at the time when a mort- gage thereof is executed, are not so substantially changed or intermingled with other property by being subsequently " greened," and put into bottles and vinegar, which are not ' Winter v. Landphere, 42 Iowa 471 ; Thorpe v. Cowles, 55 Iowa 408. See, also, Funk v. Paul, 64 Wis. 35 ; Kellogg v. Loveley, 46 Mich. 131. ' Jenckes v. Goffe, 1 E. I. 511. See, also, Woods v. Eussell, 5 B. & Aid. 310. ' Harding v. Coburn, 12 Met. (Mass.) 333 ; Ex parte Ames, 1 Lowell D. C, 561. 'Putnam v. Cushing, 10 Gray (Mass.) 334. 96 VALIDITY. included in the mortgage, as to render the attachment of them lawful and effectual against the mortgagee/ So, when a debtor mortgaged a number of unfinished pruning shears, and afterwards finished the shears, and thereby greatly added to their value, it did not invalidate the mortgage, and the mortgagee was fully protected against third persons. The court concludes an able argument in this language, which is the correct doctrine : " In case materials were mortgaged by a particular description, and, with the assent of the mortgagee, were manufactured into articles not an- swering to that description, and so changed that with reason- able diligence a creditor could not know that they were the same, if he should, without actual notice of the claim under the mortgage, attach them for the debt of the mortgagor, it would deserve serious attention, whether, under our statute requiring mortgages of personal property to be registered, the mortgagee could hold against the attaching creditor. " But if the mortgagor, after the mortgage, add to the value of the mortgaged property, no matter how much, the added value, as between mortgagor and mortgagee, goes to increase the security. This is a familiar rule in mortgages of land, and we see no reason why the principle should not apply with equal force to mortgages of personal property. If the mortgage is fair and fairly used no creditor of the mortgagor has just ground of complaint. * * * But in absence of fraud it does not occur to me that a creditor of the mort- gagor has any good reason to complain that the labor or materials of the mortgagor have been incorporated with the property originally mortgaged."^ § 125. When Repairs are Included. — A rifle having a skele- ton stock at the time when the mortgage thereof was exe- cuted, is not so substantially changed, by having a new 'Crosby •«. Baker, 6 Allen (Mass.) 295. * Perry i;. Pettengill, 33 N. H. 433. See, also. Glover v. Austin, 6 Pick. (Mass.) 209 ; Sumner v. Hamlet, 12 Pick. (Mass.) 76 ; Eaton v. Lynde, 15 Mass. 241 ; Willard v. Kice, 11 Met. (Mass.) 493 ; Pulcifer v. Page, 32 Me., 404 ; Bab- cock V. Gill, 10 Johns. (N. Y.) 287; Dunning v. Stearns, 9 Barb. (N. Y.) 630. SUBSTITUTING ONE CHATTEL FOE ANOTHER. 97 wooden stock and a new and different kind of lock substi- tuted for tlie original ones, by way of repairs, as to authorize an attaching creditor of the mortgagor to hold the same against the mortgagee, provided it is capable of being iden- tified/ New printing material, purchased after giving a chattel mortgage on the printing establishment, to supply the wear, decay and destruction of the old, and which has been so intermingled with the old stock as not to be readily distin- guished, would be included in the mortgage and become a part of the mortgaged property by accession ; but if kept separate, so as to be readily distinguished, it would not be thus included.^ If a mortgagor removes old sails from a ship and substitutes new sails, the latter will go with the ship if taken under mortgage.^ § 126. Intermingling Mortgaged Chattels. — If a mortgagor of goods mixes them purposely or carelessly with his own, and sells the whole, the mortgagee can take them all from the purchaser, in the absence of evidence to distinguish the mortgaged goods from the others.* Or if the goods cannot be distinguished, and the mortgagor consigns them for sale to a third party, who sells them, the mortgagee is entitled to recover of the assignee the value of the whole.^ In general, if the intermingling is made purposely or carelessly, the party making the mixture must bear the loss.* § 127. Substituting One Chattel for Another. — If a mort- 'Comins v. Newton, 10 Allen (Mass.) 518. 'Fowler V. Hoffman, 31 Mich. 215. See VVillard v. Rioe, 11 Met. (Mass.) 493; Loomis V.Green, 7 Greenl. (Me.) 386; Barron u. Cobleigh, 11 N. H. 559; Wetherbee v. Green, 22 Mich. 311. 'Southworth v. Ishano, 3 Sandf. (N. Y.) 448. * Adams v. Wildes, 107 Mass. 128. * Willard v Rice, 11 Met. (Mass.) 493. « Ward V. Ayre, Cro. Jac. 366; Lupton v White, 5 Ves. 439 ; Hart v. Ten Eyck, 2 Johns. Ch. (N. Y.) 62 ; Brackenridge v. Holland, 2 Blackf. (Ind.) 377 Hathaway v. Eyder, 2 Pick. (Mass.) 298; Oolvill v. Beeves, 2 Campb. 576 2 Shouler's Per. Prop. 46; Hasseltine v. Stockwell, 30 Me. 237; Bryant v. Ware, 30 Me. 295; Dunning v. Stearns, 9 Barb. (N. Y.) 630; Burns v. Camp bell, 71 Ala. 271 ; Huflf v. Earl, 3 Ind. 306 ; Eldred v. O'Conto, 33 Wis. 133 Schulenbel-g v. Harriman, 2 Dill. C. 0. 398; Fuller v. Paige, 26 111. 258 Simmons i;. Jenkins, 76 111. 47. G 98 VALIDITY. gagor of chattels belonging to a business establishment, dis- poses of such articles, and converts them into money, and then buys other articles with the avails, the title of these last will not, by simple operation, vest in the mortgagee. But if they are procured for the same purpose, to supply the place of worn-out articles belonging to the business, and they become attached to and incorporated with it, by the right of accession they follow the title of the displaced chattels.^ A horse having been mortgaged, was, by consent of the parties, exchanged for a second horse, which was to take its place. Afterwards the mortgagor exchanged the second horse for a third, without the mortgagee's consent or knowledge. It was decided that third parties were not bound by the actions of the parties, unless notice had been brought to their knowl- edge.^ Nothing can be taken in exchange for mortgaged property and by verbal agreement of the parties become substituted for and stand in the place of that whichhas been included in the mortgage.^ Neither can a chattel mortgage, given to secure a certain indebtedness therein expressed, be so extended as to become a lien for the amount of an award for other and different indebtedness.* § 128. Replacing Goods Sold. — In many of the States, a mortgage cannot cover goods bought to replace those sold. Thus, in Colorado, where it was shown that new goods were purchased and mixed with the original stock from time to time, after the mortgage was executed on the stock, and no testimony established the fact that any portion of the goods seized by an attaching creditor was the same goods mentioned in the mortgage, and the mortgage making no provision for goods afterwards acquired, the attaching creditor can hold the goods attached.^ So, in Maryland, a chattel mortgage of goods in a store, ' Holly V. Brown, 14 Conn. 254. '' Sharpe v. Pearce, 74 N. Car. 600. 'Rhines v. Phelps, 3 Gilm. (111.) 455. * Morris v. Tillson, 81 111. 607. ' Wilcox V. Jackson, 7 Colo. 522. EXCHANGING ARTICLES BY CONSENT. 99 providing for all renewals and substitutions for the same, the object being to include not only the articles then in the store, but whatever may be at any time therein, in the course of the mortgagor's business, cannot convey subsequently- acquired goods so as to give the mortgagee a right of action at law against a party seizing them.^ So, in Massa- chusetts, a mortgage was made of all goods in a store, and of all goods which might afterwards be substituted by the mortgagor for those which he then possessed, the mortgagor making sales and substituting other goods of equal value; Tinder this condition the mortgage cannot, at law, apply to goods not in existence, or not capable of being identified at the time it was made, or to goods intended to be afterwards purchased to replace those which were sold.^ § 129. Exchanging' Articles by Consent. — The parties to a mortgage, as between themselves, can substitute one article for another a^d be bound by the contract. Thus, a chattel mortgage was executed on two horses ; some months there- -after, by request and consent of the mortgagor, one of the horses was released from the mortgage, and, in lieu thereof, another horse was substituted by interlineation. This was held a valid transaction and passed the title, as between the parties, to the second horse, which was substituted. The general rule, that parties may alter at pleasure their con- tract after its consummation, applies to deeds and mortgages.^ In Mississippi a party may mortgage all the live stock that he shall own during the coming year, and the mortgage -will apply to exchanges, and hold the substituted animal in place of the one traded. Thus, a mortgage was made on an iron-gray horse and all other live stock which the mort- ' Hamilton v. Rogers, 8 Md. 301. 'Barnard v. Eaton, 2 Gush. (Mass.) 294. See, also, Sharpe v. Pearce, 74 N. -Car. 600; Ohapin v. Cram, 40 Me. 561; Williams v. Briggs, 11 R. I. 476; Moody V. Wright, 13 Met. (Mass.) 17 ; St. Louis Drug Co. v. Dart, 7 Mo. App. 590; Rose v. Bevan, 10 Md. 466; Rhines v. Phelps, 3 Gilm. (111.) 455; Dutcher ■!). Swartwood, 15 Hun (N. Y.) 31. The authorities do not agree on the question o£ sale and replenishment of stock by the mortgagor, See .Section 619 et seq. for a full discussion of this subject. ' ' • Winslow V. Jones, 88 Ala. 496. , 100 VALIDITY. gagor might own during the year. During the specified time the mortgagor exchanged this horse for a second and then exchanged the second for a third, and gave his note for $118, as the difference in the value of the horses, secured by a mortgage. The court held that the second horse was covered by the mortgage, and also the third horse, if that animal had been a mere exchange for the second ; so, the mortgagee had a lien upon the third to the value of the second horse, and therefore ordered that the third horse should be sold and the proceeds, to that extent, applied to the satisfaction of the first mortgage and the balance to the second mortgage.^ § 130. As to Third Persons. — In Illinois and many other States, as to third parties, there can be no substitution or exchange of property by the parties to the mortgage that will bind third parties, unless the mortgagee takes actual possession of the substituted articles before the rights of third parties intervene.^ As between the parties, they maj agree to substitute other property for that first mortgaged,, which, in equity, gives the mortgagee a lien upon the article substituted.^ § 131. Cuttings from Plants and Trees. — Plants and shrubs, the growth of cuttings from plants and shrubs mortgaged, pass to the mortgagee by accession. These were included in the mortgage. The cuttings are from the plants. The por- tion secured before severance was subject to mortgage. They are none the less so after severance. The mortgagee loses none of his rights because after severance they remain in the same green-house in the condition for further growth and development.* § 132. Parol Evidence to Fix the Quantity. — Parol evidence is admissible to fix the quantity of property to be mortgaged, ' Davis V. Marx, 55 Misg. 376 ; Marx v. Davis, 56 Miss. 745. 'Simmons v. Jenkins, 76 111. 479; Powers v. Freeman, 2 Lans. (N. Y.) 127; Ranlett v. Blodgett, 17 N. H. 298; Titus v. Mabee, 25111. 257. ' Simmons v. Jenkins, 76 111. 479 ; Bell «; Shrieve,. 14 111. 462. •Bryant v. Pennell, 61 Me. 108. PAROL EVIDENCE TO FIX THE QUANTITY. 101 when the amount is left in blank. So, where a party mort- gaged ashes, the number of bushels not being stated, parol evidence may be admitted to fix the number of bushels. And this is sufficient notice to third parties, it appearing that he had no other ashes except those described in the mortgage.^ Parol evidence is admissible to show that in mortgaging a stock of goods, together with the fixtures, fur- niture and signs of the store, a wooden statue of an elephant was included as a sign used by the mortgagor.^ So, " one ton of brass wire " may be shown to cover a particular mass of brass wire, and not exactly one ton in weight.' ' Dunning v. Stearns, 9 Barb. (N. Y.) 630. ^ Curtis V. Martz, 14 Mich. 506. 'Barry v. Bennett, 7 Met. (Mass.) 354. In this case the entire amount ■was but a little heavier than a ton, but the parties treated it as a ton and pointed it out as such, and made no arrangements for weighing it. Under these circumstances, parol evidence is admissible. But parol evidence can- not be resorted to, to show, as against creditors of the mortgagor, that the terms covering a stock of goods were intended to include the fixtures of the store where the goods were kept. The court says : " It would, indeed, be a startling doctrine if it should be held that written instruments, deriving all their force and effect from a record pursuant to the statute, could be ex- plained and enlarged by parol proof of the real, though unexpressed, con- tract, as against one who became purchaser, or acquired a lien, relying upon terms of the recorded instrument." In Van Evera v. Davis, 51 Iowa 637, the court refused the mortgagee the right to show, by parol, that the mortgage had a different meaning and interpretation than the ordinary and obvious meaning of the words would imply. 102 DELIVERY OF INSTRUMENT AND PROPERTY. CHAPTER III. DELIVEKY OF INSTKUMENT AND PROPERTY. ARTICLE I. — DELIVERY OF MORTGAGE. 133. Presumption of Execution and Delivery. 184. Acceptance by Mortgagee.' 135. When Filing Not a Delivery. 136. Acceptance by Creditor's Attorney. 187. Previous Agreement — Accepting Mortgage. 138. Ratification. 139. Deliverv of Mortgage for Record — Presumption. 140. Parol Evidence. § 133. Presumption of Execution and Delivery. — A mort- gage must be presumed to be executed at its date unless the contrary appears. The time of acknowledgment or record- ing may furnish the date. The delivery to the register of the mortgage and its subsequent possession by the mortgagee, are, in absence of other controlling facts, sufficient evidence of the delivery of the instrument. The date of the mortgage is prima facie evidence of the time when it was delivered.^ The execution of a mortgage by one party in payment or security for payment of a bona fide indebtedness, and its filing for record, is, as between the parties, a sufficient delivery. If the mortgagor, instead of filing it himself, delivers it to a third party to be filed, and such person files it, it will also be a good delivery between the parties to the instrument. But if the rights of third parties intervene between the filing of such instrument and its acceptance by the mortgagee, the filing of the mortgage is not a sufficient delivery as against such parties. It kas been said that if a creditor attaches the property mortgaged before the mort- ' Foster v. Perkins, 42 Me. 168. See, also, Maynard v. Maynard, 10 Mass. 455 ; Sweetzer v. Lowell, 33 Me. 446 ; Merrill v. Dawson, Hemp. C. C. 563. peestjmptiojST of execution and delivery. 103 gagee had accepted the security, he would have a prior lien upon the goods.' Several mortgages were given and accepted by the parties upon the day they were executed, excepting one, who lived in another city. The mortgage to him was delivered to his attorney to be placed on file. He notified his client by mail of the fact of the execution and filing the same day. It did not appear whether his client received the letter before or after the assignment of the mortgagor. But the court held that it made no material difference, under the circumstances of the case, whether the attorney was filing the mortgage as agent of his client ; that the execution of the mortgage and filing for record were a sufficient delivery.^ A mortgage, like any other contract, requires the consent of the mortgagor and the mortgagee, and it must be con- summated by delivery. But when there is no prior under- standing or agreement that any mortgage should or would be given, until after the property has been attached, no rule of law exists by which a subsequent assent could- fix a lien on the attached property that would override the lien ac- quired by the attachment.^ But an understanding between the debtor's creditors and himself, that a mortgage on the merchandise should be exe- cuted for their security, the delivery of the instrument to the clerk of record is a sufficient delivery, for, under such cir- cumstances, the act of the maker would as fully evidence his intention to consummate the prior agreement as would a delivery of the instrument to the creditor. But, until the contract had the assent of the parties, delivery to a person in no way a representative of the creditors could not give validity to the mortgage.* Judge Miller says that it is a legal presumption, arising in all cases where an instrument, properly executed and acknowledged, and found in the pos- ' Day V. Griffith, 15 Iowa 104 ; Welch v. Sackett, 12 Wis. 243. ' Field V. Fisher, 65 Mich. 606. ^Foster v. Perkins, 42 Me. 168. * Wallis V. Taylor, 67 Tex. 431. 104 DELIVERY OF INSTRUMENT AND PROPERTY. session of the grantee, that it has been delivered, that it was delivered by the grantor and accepted by the grantee, in the absence of proof to the contrary.^ § 134. Acceptance by Mortgagee. — Delivery of a deed vests the title in the mortgagee. A delivery and acceptance of a mortgage are essential to its validity.^ An attorney, to whom was sent money for investment, at his discretion, applied it to his own use, executing a chattel mortgage to his principal as security. This was a valid de- livery, because the attorney was authorized by the mortgagee, and accepted the mortgage and filed it in the clerk's office. He had full authority to place the money. It was contended by third parties that he could not avail himself of the chat- tel mortgage, because it was incompatible with his obligations as attorney to make use of the money as he did. But as the principal was satisfied with his agent's disposal of the money, third parties had no right to complain. They cannot avoid a chattel mortgage made by the agent for the benefit of the principal, even if it had to be conceded that, under the cir- cumstances, the principal might have treated the transaction as unauthorized. But if a mortgagor executed a chattel mortgage in the absence and without the knowledge of the mortgagee, and handed it to his attorney with the declaration that he delivers it for the use of the mortgagee, it does not vest in the mortgagee the property, so as to defeat an attachment levied upon the same property by a creditor of the mort- gagor, after the delivery of the mortgage to the attorney, prior to the time when the mortgagee received notice of the execution of the instrument and acceptance.* § 135. When Filing Not a Delivery. — The mortgagee must know of the mortgage and have entered into an agreement with the mortgagor. If made without the knowledge or ' Wolverton v. Collins, 34 Iowa 238; Adams v. Frye, 3 Met. (Mass.) 103; Chandler V. Temple, 4 Cush. (Mass.) 285; Scrugham v. Wood, 15 Wend. (N. Y.) 545; 30 Am. Dec. 75; Games v. Stiles. 14 Pet. (U. S.) 322; Jaques v. Church, 17 Johns. (N. Y.) 548; Souverbye v. Arden, 1 Johns. Ch. (N. Y.) 240. ' Poster V. Perkins, 42 Me. 168. 'Sargeant ti. Solberg, 22 Wis. 132. . ACCEPTANCE BY CREDITOK's ATTORNEY. 105 authority of the mortgagee it is not valid.^ There can be no delivery without acceptance by the mortgagee or grantee. The filing or having an instrument recorded is not a de- livery nor evidence of a delivery to the grantee.^ So, an instrument delivered to a register of deeds, is not a valid mortgage as against attachments, when the mortgagee had no knowledge of it; even his assent afterwards cannot make it so, as against third parties.' A mortgagor, by agreement, executed a mortgage to his creditor, and delivered it to a third person with the expecta- tion that it would be delivered to the creditor by the person receiving it, who caused it to be recorded, but the mortgagee did not authorize it. This was a good delivery to the mort- gagee and his acceptance will be presumed.* And, generally, the execution and record of a mortgage, pursuant to a previous agreement to that efiect, constitutes a sufficient delivery and acceptance thereof.' A mortgage in existence, having been executed and re- corded long before a levy of an attachment, is prior in point of date.' Where a person named as payee in a note and accom- panying mortgage never had any interest in the same, and knew nothing of the transaction, and the papers were never delivered to him, the transaction is invalid and the mortgage void.'' § 136. Acceptance by Creditor's Attorney. — In general, if a chattel mortgage is executed under an agreement that the ^Baird v. Williams, 19 Pick. (Mass.) 381 ; Dole v. Bodman, 3 Met. (Mass.) 139; Day v. Griffith, 15 Iowa 104. ''Maynard v. Maynard, 10 Mass. 455; Bullard v. Hinkley, 5 Greenl. (Me.) 272; Hedge v. Drew, 12 Pick. (Mass.) 141 ; Jackson v. Phipps, 12 Johns. (N. Y.) 418; Elsey v. Metcalf, 1 Denio (N. Y.i 323; Commercial Bank v. Reckless, 1 Hals. (N. J.) 430; Wiggins v. Look, 12 III. 132. ' Cooper I). Jackson, 4 Wis. 537 ; Hulich «. Scovr!, 4 Gilm. (111.) 159; Her- bert ■;;. Herbert, Breese (111.) 278. 'Munoz V. Wilson, 111 N. Y. 295. '- Deere v. Nelson, 73 lowii 187. 'Keid V. Abernethy, 77 Iowa 438. 'Shirly ^. Burch, 16 Oreg. 83. See, also, Terhune v. Oldis, 44 N. J. Eq. 146; Wolf V. Driggs, 44 N. J. Eq. 363 ; Flint v. Phipps, 16 Oreg. 437. 106 DELIVERY OF INSTRUMENT AND PROPERTY. debt shall be secured, the form of the security not having been specified, and then delivered to the attorney of the- creditor, who filed it for record, this is a sufiicient delivery.^ And in general, the question of delivery is purely a ques- tion of fact. No particular form of words is necessary to constitute a delivery. An instrument may be delivered by doing something and saying nothing, or by saying something and doing nothing, or it may be by both.*^ But by one or both of these it must be raade.^ It is not necessary that there should be an actual handing over of the instrument tO' constitute a delivery.* § 137. Previous Agreement — Accepting Mortgage. — The making of a mortgage of personal property in pursuance of a previous agreement by the mortgagee, and a delivery of it by the mortgagor to the register for record, followed by acts of the mortgagee, assenting and adopting the mortgage,, are evidence by which a jury may infer a delivery of the mortgage, from the time when such adoption takes place.* A delivery of a mortgage to the register for record with- out the knowledge of the mortgagee, more than a year after the mortgagor has agreed with the mortgagee to secure his debt by such mortgage, is not necessarily a valid delivery of the mortgage, but is evidence of such delivery to be sub- mitted to a jury." § 138. Ratification. — A mortgage of personal property made by a debtor to secure a creditor, without his knowledge, although recorded, is not valid until its approval by the mortgagee.' § 139. Delivery of Mortgage for Record — Presumption. — ' Field V. Fisher, 65 Mich. 606. ••' Flint V. Phipps, 16 Greg. 437 ; Shep. Touch. 57. 'Jackson v. Phipps, 12 Johns. (N. Y.) 421; Byers v. McClanahan, 6 Gill & J. (Md.) 250 ; Stewart v. Redditt, 3 Md. 67. *Fain v. Smith, 14 Oreg. 82; 58 Am. Rep. 281. 'Thayer v. Stork, 6 Cush. (Mass.) 11. "Jordan v. Farnsworth, 15 Gray (Mass.) 517. 'Oxnard v. Blake, 45 Me. 602 ; Dole v. Bodman, 3 ilet. (Mass.) 139 ; Brown. V. Piatt, 8 Bosw. (N. Y.) 324. PAROL EVIDENCE. 107 The delivery by the mortgagor of a mortgage for record does not of itself raise the presumption of delivery for the use of the mortgagee.^ But when it is agreed between the parties that the debtor shall execute and record a mortgage^ his filing constitutes a delivery.^ Where there is an agreement that the debtor should be secured, but no specific property nor character of security is referred to, and a debtor, without the knowledge of his cred- itor, executes and files for record a chattel mortgage, it is na delivery as against an intervening attaching creditor.^ Where it is agreed that the debtor shall execute a chattel mortgage upon some specific property, but not specifically pointed out nor agreed upon, and the debtor afterwards, in the absence of the creditor, and without his knowledge, executes a mortgage upon certain of the specific chattels,. and files it for record, this is not an effectual delivery against attaching creditors.* But when a creditor authorizes his debtor to execute a chattel mortgage to secure his debt on property to be selected by the latter, the creditor being a non-resident, and to have the same recorded, it was held that the filing for record, by the debtor, of the mortgage executed in accordance with such agreement, constitutes a delivery to the mortgagee.^ • § 140. Parol Evidence. — If a chattel mortgage is made,, and is without date, parol evidence is admissible to show the date of execution and delivery of the instrument.^ So, parol evidence of an erroneous date in a mortgage of personal property, not under seal, is admissible.' The date of an instrument is only prima facie evidence of execution, and the true date can be shown by parol evi- ' Wardsworth v. Barlow, 68 Iowa 599. ''Everett v. VV^hitiiey, 55 Iowa 146. 'Day V. Griffith, 15 Iowa 104. 'Cobb V. Chase, 54 Iowa 253. ^Everett v. Whitney, 55 Iowa 146. ^Burditt V. Hunt, 25 Me. 419. 'Partridge i>. Swazey, 46 Me. 414. 108 DELIYKEY OF INSTRUMENT AND PHOPEKTY. dence.^ So, parol evidence is admissible to show that a deed in the possession of the grantor was not delivered ; such •evidence does not infringe the rule that such evidence shall not be received to contradict a deed.^ ARTICLE II. CONSTRUCTIVE DELIVERY OP PROPERTY. T.41. V^^hatls. § 141. What Is. — ;In certain cases constructive instead of -actual delivery satisfies the law ; still, in every case where delivery is not actual, there must be such a delivery and change of possession as the nature of the property is capable of. In every sale of personal property there must be such a delivery and change of possession attending the transfer as the nature of the property will permit, followed by removal and actual possession as soon as the bulk and condition of the thing and the circumstances will warrant. Thus, when a large quantity of lumber, piled in a mill-yard, was sold ■boTiafide, the quantity being ascertained and the price paid, and the possession taken by the vendee, and the pile con- spicuously marked with his name, but he was prevented by the condition of the roads, without incurring unusual ex- pense, from removing it, he can maintain his title, and the lumber cannot be levied upon and sold for the debt of the vendor.^ What acts will amount to an immediate delivery and actual continued change of possession of personal property of a cum- brous and ponderous nature, such as a kiln of bricks, must depend in a great measure upon the circumstances of the particular case. Care should be taken in such case to keep in view the object of the statute, and to exact nothing less than a substantial observance of its salutary provisions.'' ' Stonebreaker v. Kerr, 40 Ind. 186. , • 2 Roberts v. Jackson, 1 Wend. (N. Y.) 478. 'Haynes v. Hunsicker, 26 Pa. St. 58. * Woods V. Bugbey, 29 Cal. 466. WHAT IS. 109' A creditor taking a large quantity of brick for his debt, and placing an agent in charge of them, is a suflBcient change of possession, notwithstanding the property remains in the kiln and brick-yard of the debtor. It is not always neces- sary that there should be an actual removal of the goods- and a change of possession from hand to hand.^ But parties must leave nothing undone within the compass of their power to secure third persons from consequences of" the change of ownership.^ A mortgagor delivered to the mortgagee a mortgage of three hundred cords of wood, situated upon a roadside, with- out an inclosure. Both went to the place where the wood; was piled. The mortgagor said : " There is the wood. I deliver it to you as security for the money loaned." The wood was not marked. No persop was put in charge. Once a day for a week after, the mortgagee went to the place where- the wood was piled to see whether it was interfered with,, and thereafter went from one to Jhree times a week. The wood was never measured, except by the estimate of the mortgagee, or corded or moved, nor^jovas any person in, charge. This was not a valid delivery as against third parties.' Actual delivery is contemplated by the statute, unless such, delivery is impossible or extremely inconvenient; in such case a symbolic delivery would be sufficient. If property mortgaged can be transferred to the mortgagee by mere con- structive or symbolic delivery, where actual delivery can be readily made, practically this would render the statute entirely nugatory and its object be totally defeated. There being no means by which the public can ascertain whether personal property is mortgaged or not, except by the change of possession, the person in possession, exercising ownership over it, will be presumed to be the owner ; for, 'Allen V. Smith, 10 Mass. 308. See, also, Benford v. Schell, 55 Pa. St. 393 ; Hutchins v. Gilchrist, 23 Vt. 82 ; Cummings v. Griggs, 2 Daval (Ky.) 87 ;. Long V. £iiapp, 54 Pa. St. 514. ''Crow V. Woods, 6 S. & E. (Pa.) 274; Tognini v. Kyle, 17 Nev. 209. •Wilson V. Hunt, 17 Nev. 401. 110 DELIVERY OF INSTRUMENT AND PROPERTY. after being mortgaged, if it were allowed to remain in the possession of the mortgagor, without actual or constructive possession of the mortgage, mortgage after mortgage might readily be placed upon it. To accomplish the purpose of the statute, and to secure probity and fair dealing in transactions of this kind, the opportunities for fraud must be removed. There must not only be a transfer of the right of property, but possession must accompany it, either actual or constructive. Thus, cattle were left where they were before the execu- tion of a mortgage, under the control and charge of the same herdsman. Had there been a change in the herdsman, that would have been evidencing a change of property, and would have been sufficient to have eflfected a delivery, but there was no change, apparently, of property or of pos- session, when a delivery could easily have been made. This was not a sufficient change of possession, and a creditor of the mortgagor could hold by attachment or under execution.' In those States where jiotice is sufficient to protect the mortgagee's right against subsequent purchasers and cred- itors, the notice must be a clear and unequivocal designation of the property. Thus, where heavy merchandise, like pig- iron, is mortgaged, and the mortgage is not placed on file, and there is no actual delivery or apparent change of pos- session, there must be a sufficiently clear and unequivocal designation of the property to serve as notice of the mort- gage to creditors or subsequent purchasers. Marston, C J., speaking of bulky articles, says that " no such delivery and actual and continued change of possession of such bulky property could be expected or insisted upon. Yet, there should be, even of bulky articles, such a clear and unequivocal designation thereof that creditors or subse- quent purchasers could not be misled or be in doubt as to the nature of the transaction."^ A. sale of personal property may be completed and the title pass, as to third parties, without actual delivery, when, ^Doak V. Brubaker, 1 Nev. 218. 'Anders*!) v. Brenneman, 44 Mich. 198. WHAT IS. Ill from the nature or situation of the property, actual delivery is impracticable. Thus, in Arkansas, the delivery to a pur- •chaser of a ginner's receipt for cotton, which stipulated that the same was to be ginned, baled, &c., and delivered to the holder of the receipt, is a symbolic delivery of the ■cotton, and passes title to the purchaser free from the land- lord's lien for rent, of which he had no notice.^ The delivery of mortgiaged chattels to the mortgagee, to render valid an unrecorded mortgage against a third person, is such a delivery as would be necessary in case of an abso- lute sale of the chattels.^ A mortgagee of four hundred tons of coal, part of a larger pile on the wharf of the mortgagor, took possession of the whole pile, with the consent of the mortgagor, and appointed the mortgagor his agent to sell his coal for him. This was held to be a sufficient delivery to vest the title in the mortgagee, and that he was entitled to hold the whole pile, against third parties, until he had had time and oppor- tunity to separate and remove his four hundred tons. Judge Bigelow said : " The property in the part mortgaged passed, it being left to the mortgagee to select and separate it from the whole, which was placed in his possession and control for that purpose. Under such circumstances, it is very clear that neither the mortgagor nor those claiming under him ■could dispute the right of the plaintiff to hold the entire property until the object for which its possession was de- livered to him should have been accomplished. The right of possession of the entire bulk had become legally vested in the mortgagee for a lawful purpose ; neither the mort- gagor nor his assigns had the possession or the right to the immediate possessi(5n of it ; neither of them, therefore, could maintain trespass or trover against the mortgagee ; nor could a creditor of the mortgagor, by attachmeat on mesne process or seizure on execution, disturb a possession thus acquired. The power to hold the whole property by the mortgagee was iPuckett V. Reed, 31 Ark. 131. "Wright V. Tetlow, 99 Mass. 397. 112 DELIVER Y OF INSTRUMENT AND PEOPEKTY. coupled with an interest in him which neither the mortgagor nor his creditors could defeat. The right of all persons claiming title under the mortgagor, to the property not in- cluded in the mortgage, must be taken to be subordinate to the right, previously acquired by the mortgagee, of holding the whole in his possession until, by the use of due and reasonable diligence, he had peparated and taken out the portion mortgaged to him." He further says that this case does not come within the rule touching sales of property in bulk in the hands of the vendor, where there is no designa- tion or separation of the portion sold, but that it comes- within a distinct class. The principle on which it rests is, that the delivery of the entire mass to the vendee, under the contract of sale, for the purpose of enabling him to separate and take out the portion sold, makes the sale and delivery complete between the parties ; that thereby the property in the articles sold passes out of the vendor and vests in the vendee, who has the right to retain the whole until he has had sufficient time and opportunity to separate and take out the part belonging to him, in pursuance of the contract of sale.^ So, the delivery of a brick-ya,rd, upon the sale of a por- tion of the bricks by the thousand, passed the property in those sold, and the vendee could make his own selection.'' "Weld V. Cutler, 2 Gray (Mass.) 195. ^Orofoot V. Bennett, 2 N. Y. 258. See Section 277. SUFFICIENCY OF DESCRIPTION. 113 CHAPTER IV. DESCRIPTION AND IDENTIFICATION. ARTICLE I. DESCRIPTION. 142. Sufficiency of Description. 143. What is a Valid Description — Illustrations. 144. Admitting Identity by the Pleadings Cures a Faulty Description. 145. Sufficient when Mortgagor and Chattels are in the Same County — Wh«t Included. 146. Including all the Chattels of a Certain Class. 147. Rendered Sufficient by Parol Evidence. 148. The Property Must be Included in the Description. 149. Vague and Indefinite Terms. 150. Taking the Chattels from a Larger Amount of the Same Class. 151. Mortgages with Schedule. 152. Failing to Attach Schedule. 153. General and Spe.ific Terms. 154. As to Crops. 155. Defective Description Cured. 156. When the Part Mortgaged Must be Separated. 157. Identification of Crops by Proof. § 142. Sufficiency of Description. — Any description in a chattel mortgage which will enable a third party, aided by inquiry which the iastrument indicates and directs to iden- tify the property covered by it, is sufficient.' In some cases, the identity is not ascertained by any specific description which distinguishes it from other prop- erty of the same kind or species, but by its locality. Thus, the description of a machine in a chattel mortgage by the name by which it is usually known, and as being in a certain place, is sufficient, although the machine is in an unfinished state, if it be in such a condition that, from its appearance, persons acquainted With like machines would know it by the designation given it in the mortgage. This description is sufficient, although some material parts are necessary to be added to make it complete.^ 'Smith V. McLean, 24 Iowa 322; Eawlins v. Kennard, 26 Neltr. 181. ' Lawrence v. Evarts, 7 Ohio St. 194. H 114 DESCKIPTION AND IDENTIFICATIOIf. Where there is a larger quantity in the possession of the mortgagor than he specifies in the description, and no par- ticular description of the articles, otherwise than by their general class and number, nor any selection or delivery of the articles, nor any specification as to which are intended, out of a larger lot of articles, such mortgage will be in- effectual to pass title to any particular property, or any interest in the property.' Thus, a mortgage which describes the property as " the entire stock in trade and fixtures " of the mortgagor, " consisting of clocks, watches, chains, show- cases, jewelry, and all goods included in his stock, tools and materials, excepting one safe, one regulator * * * and stock in trade to the amount of $200," is void for uncer- tainty. This exception leaves in the mortgagor a propor- tionate interest in each article mortgaged, as $200 is to the whole value of the property, uncertain and unsevered, and which is unseverable, excepting by some future act of the parties; it leaves the right to future selection of any of the property by the mortgagor to the value of $200. Such uncertainty of description renders the mort- gage void.'' And unless property is described so as to be capable of identification, the mortgage must be held void for un- certainty.* Thus, a mortgage upon a stated quantity of mixed logs in the drive, is void for uncertainty, as against third persons who have acquired rights, if it does not furnish the data for separating the mortgaged logs from the mass. In a case involving these facts, the court said : " If the mortgagee should attempt to take possession of the quantity described, would he have the right to assort and take such logs as he thought proper, or would the mortgagor be the person to make the selection, or both together ? If the mortgagee 'Croswellv. AUis, 25 Conn. 301; Blakely v. Patrick, 67 N. Car. 40. 'Fowler v. Hunt, 48 Wis. 345. 'Tootle V. Lyster, 26 Kans. 589. SUFFICIENCY OF DESCRIPTION. 115 was the proper person, would he not be himself likely to pick out and take the most valuable, and if the mortgagor was the proper party to make the selection, he might take the very extreme, and point out those of least value, while if both should act in concert and disputes arise between them, whidi would have the right to control? Or, if they did agree, might they not make a selection entirely different from the one contemplated at the time the mortgage was given, for the purpose of injuriously affecting the rights and interests whicb third parties had in the meantime acquired in the property ? It is clear that if the parties interested are to make a selection, then the persons who have, inter- mediate the date of the mortgage and the time of selection, acquired interests, should be consulted and take part, and if a number of persons have thus acquired distinct and separate interests, all would have to be called and would have a right to participate in the selection. This, to say the least, would result in such, a diversity of interests that an amicable adjustment would hardly be within the range of possibility. There would be but one course left open, and that would be, in some way to take an average from the entire lot both in -quantity, quality and value. The quantity might be taken by an average value, which would be very fair, as the best -and the poorest logs might be selected to make the quantity taken average in value with the entire mass. It may be said that an average quantity should be taken from the entire lot that is found in the river. But from what part of the entire lot should they be taken — from tbe front, the rear or the center of the drive? It may be said there would be no difference, but this is not true; owing to the current, the quantity of water, and from other causes, logs of a certain kind, size and quality do not come down as fast as others ; so, after the logs have been driven within the boom limits, a very great difference will be found to exist between the quality and value of the logs in the front and those in the rear of ^ drive. It seems to me that serious difficulties must inevit- 116 DESCRIPTION AND IDENTIFICATION. ably arise in any aspect of the case in attempting to carry out such an agreement."^ Whatever comes under the description will be held under the mortgage, and one kind of property will not be taken to supply a deficit in another. Thus, when the mortgage covers forty head of beeves and twenty-five head of stock cattle, it will not authorize the appropriation of cattle of either kind to make up a deficit in the number of the other." Circumstances may sometimes be sufficient to identify the property. Thus, in a chattel mortgage, the property was described as forty milk cows, and the increase or calves of said cows; one gray horse, about ten years old; one bay horse, about ten years old ; one sorrel pony, about four years old, and one mule, about twelve years old. The mortgagor was to retain possession, and not remove the property from a certain county. While in said county the property was levied upon, as shown by the evidence. But the court de- cided that the circumstances of the case made the descrip- tion sufficient, and the mortgage was not, therefore, void for uncertainty.' The mortgagee of cattle included in a certain chattel mortgage, covering all the property of the mortgagor, and describing it by the locality in which it is to be found, is entitled to their possession as against a subsequent pledgee of the same cattle, claiming under an instrument by which the mortgagor simply conveys all his interest in them.* The mortgage cannot be made to cover property not in- cluded in the description. Thus, where the logs covered by a chattel mortgage are specifically described, parol testimony is inadmissible, in an action against a third person by the mortgagee, to show that the logs claimed by such third party were intended to be included in the mortgage, though not ' Richardson v. Alpena Lum. Co., 40 Mich. 203 ; and see Hires v. Hurff, 39 N. J. L. 4 ; Williamson v. Steele, 3 Lea (Tenn.) 527 ; Bullock v. Williams, 16 Pick. (Mass.) 33. ' Elliott V. Long, 77 Tex. 467. 'Serafford v. Gibbons (Kane.), 24 Pac. Eep. 968. * Parker v. Farmers L. & T. Co. (Iowa), 46 N. W. Hep. 1004. StTFFICIENCY OP DESCRIPTION. 117 mentioned thereiu.^ But the mere description, in a chattel mortgage, of a white horse as a gray horse, there being several other chattels described correctly, will not vitiate the mortgage, as to a purchaser from the mortgagor, unless he was, in fact, after due diligence, misled by it. The mistake in one item of the description will not necessarily vitiate the mortgage as to third persons. To have that effect, the mis- take must be such as would naturally mislead, or, notwith- standing due diligence, has misled third persons." In general, when the description is so indefinite and un- certain that third persons cannot be charged with the notice of the mortgage, it is invalid.^ A mortgage was upon all the stock in trade of the mortgagor, and it contained thi$ clause : " Including any and all fixtures and stock now, or hereafter, kept in my said leather business, in the city of Keokuk, Lee county, and State of Iowa." The mortgagee placed the mortgage in the hands of the sheriff for fore- closure, who took possession of the stock in trade, including that which had been added after the mortgage was made, and a compromise was made between the mortgagor and mort- gagee, by which the latter took possession of all the property and credited the former with the agreed value. Afterwards other creditors attached the property in the hands of the mortgagee, claiming that the after-acquired property could not be covered by the mortgage, but it was held to be a valid mortgage.* "All the crops raised by me in any part of Jones county for the term of three years," is a roving description, with nothing in the way of identification to suggest inquiry where the crops may be found, except the body of the county. ^' One crop may be in one place in the county for one year in the three, and another place for another year, or there 1 Whitney v. Hall (Mich.), 47 N. W. Rep. 27. 'Adamson v. Fagan (Minn.), 47 N. W. Rep. 56. See, also, Eddy v. Cad- well, 7 Minn. 225; Adamson v. Horton, 42 Minn. 161. ' Muir V. Blake, 57 Iowa 662. * Scharfenberg v. Bishop, 35 Iowa 60. 118 DESCKIPTION AND IDENTIFICATION. may be crops in diflFerent parts of the county for the same year, and all would be covered by the mortgage, if the de- scription be held suflScient." But such a description is ineffectual, because a chattel mortgage cannot be a drag-net covering a whole county in any such general terms.* The things to be mortgaged must be pointed out — described or pointed out — in some way, so that they can be distinguished and taken by the mortgagee. The mortgage and transfer of property are not completed, so as to pass the property, so long as anything remains to be done to identify it, or discriminate it from other things, when the property is capable of being identified by its physical attributes or char- acteristics.^ That is, a chattel mortgage must contain terms of descrip- tion that will serve to distinguish the property embraced therein from all other property of the same kind, because the claim of the mortgagee is to be enforced on the identical property mentioned in the mortgage, and, if the description in that instrument be so vague' and uncertain as necessarily to apply equally to all property of that kind, then there can be no identification of it, without proving some fact or cir- cumstance connected with the property not referred to in the mortgage.^ But the courts will construe the language of the instru- ment, if they can do so without violence to it, so as to sus- tain the contract, rather than to avoid it, because it is not to be presumed, in a case of doubt, that the parties deliberately made an instrument which was of no legal value whatever. On the other hand, the presumption must be indulged, unless the contrary appears from the language employed, that the parties meant to make a legal and binding contract.* § 143. What is a Vahd Description. — The description of the property must be such as to distinguish it from other 'Muir V. Blake, 57 Iowa 662. 'Newell V. Warner, 44 Barb. (N. Y.) 258. •Kelly V. Reid, 57 Miss. 89. * Draper v, Perkins, 57 Miss. 277. WHAT IS A VALID DESCKIPTION. 119^ chattels, or should contain some hint to direct any party a& may examine the mortgage as a source of information. The description must be such as to enable third persons to iden- tify the property, aided by inquiries which the mortgage indicates/ Thus, the description must contain such par- ticularity as will guide to the property, or point to some extrinsic fact, by means of which the requisite certainty is obtained.^ A wagon described as " one four-horse, iron-axle wagon," without designating the ownership or location or other description, is insuflBcient.' But a mortgage of , ten horses, when the mortgagor has only ten, is good/ A description as " forty-one Berkshire hogs and sixty-five grain sacks," is not void for uncertainty as to invalidate the mortgage. The court says : " The hogs are described in the mortgage as Berkshire hogs. The testimony shows, or, at least, tends to show, that the mortgage covers and includes all the hogs and grain sacks the mortgagor owned. The description of the property in the mortgage is about as specific as the nature of the property will allow. One hog is very much like another hog of the same breed, and one grain sack is apt to be much like another. These belong to a large class of articles which it is difficult to describe except by name and variety. We did not think it ought to be held that the description of the property in the mortgage is so uncertain as to render the mortgage void as to such property. We apprehend that the property might be found and iden- tified without much difficulty, if a little diligence was used in that direction." ° Though a bill of sale is not executed and recorded as re- quired by statute, it may become a valid mortgage as between the parties, giving the mortgagee right to take possession. And on his being compelled to pay the costs, for which he 'Price V. McComas, 21 Nebr. 195. 'Bowers v. Andrews, 52 Miss. 596. ' Nicholson v. Karpe, 58 Miss. 34. *Eddy V, Caldwell, 7 Minn. 225. 'Knapp V. Deitz, 64 Wis. 31. 120 DESCRIPTION AND IDENTIFICATION. was security, the legal title to the mortgaged property vests in him. And to strangers the bill of sale may be void for uncertainty, but this objection would not be material between the parties. The mortgagee's taking possession of the prop- erty, any defect in the description was cured, and the instru- ment must then be upheld.'^ It is not to be unnecessarily presumed, in the absence of proof or conflicting rights, that the parties deliberately made an instriiment which was to be of no legal effect whatever, even between themselves ; on the contrary, the presumption is that the parties meant to make a valid and binding con- tract.^ Where an equitable mortgage is claimed as the result of an agreement, there must be, at the time such agreement was made, such an identification of the property that the equity able mortgagee may see, with a reasonable degree of cer- tainty, what property it is that is subject to his lien. In order that a lien may arise, the agreement must deal with some particular property, either by identifying it or by so describing it that it can be identified, and must indicate with sufficient clearness and notice that the property was de- scribed, or rendered capable of identification, which was to be given or transferred as security for the obligation. If the evidence fails to show the particular property in a contro- versy, to which the alleged agreement refers, so as to identify it, it cannot be ascertained to what property the lien att,aches, and the claim cannot be allowed.^ A description, " one sorrel horse, three years old," is not sufficiently definite to import constructive notice. to third parties, though the mortgage also recites the mortgagor's place of residence, and provides for the place of sale in case of foreclosure.* 'Horn V. Keitter, 12 Colo. 310. = Draper v. Perkins, 57 Miss. 277; Richardson v. Alpena Lutn. Co., 40 Mich. 203. "Lee V. Cole, 17 Oreg. 559. * Barrett v. Hsch, 76 Iowa 553. See Lininger v. Mills (Nebr.), 45 N. W. Bep. 463. WHAT IS A VALID DESCRIPTION. 121 But a description was held sufficient that mentioned all the cattle of one year of age and upwards, mentioned in a certain bill of sale, describing them of the "star brand" of a certain party, and which were to be branded with a tally brand for their better identification, the tally brand to consist of a bar, and that the cattle were situated on a certain range, and included all of said star brand.^ A description is not sufficient which describes with other cattle, ten oxen among them, "one red, five years old; two red, five years old," and " one blacli, five years old," in pos- session of the mortgagor in a certain town, when it appears by evidence that the cattle were two red oxen, five years old, and one black ox, five years old.^ A description is valid which describes "fifty head of steers about (20) months old, now owned by me, and in my possession on my farm in Independence township, in Jasper county, Iowa." The fact that part of the farm is in another township is not material.^ The following is sufficient to render constructive notice: "All my crop of corn and cotton for the year 1884, in Faulkner county, Arkansas," provided the mortgage is ;reeorded.* The mortgage of brick to secure money loaned, described the brick as located on certain lots at the kiln, but no brick were designated as those on which the mortgage was given. The mortgagor thereafter used brick from the kiln in the erection of a house, but testified that during the time in which the brick used in the building were made, he was making and selling brick continually, and could not state whether those used in the building were made before the mortgage was executed or not. Held, an invalid mortgage as to third persons, and that the mortgagee had no mechanics' lien on the building as against the lienholders.' 'Com. Nat. Bank, v. Davidson (Oreg.), 22 Pac. Eep. 517. 'Kellogg V. Anderson, 40 Minn. 207. 'iCenyon v. Tramel, 71 Iowa 693. 'Johnson v. Grissard, 51 Ark. 410. See, also, Watson v. Pugh, 51 Ark. 218. 'Meredith v. Kunze, 78 Iowa 111. 122 DESCRIPTION AND IDENTIFICATION. When the description in a chattel mortgage is correct as far as it goes, but fails fully to point out and identify the property intended to be conveyed, a subsequent purchaser or incumbrancer is bound to make every inquiry whieh the in- strument itself could reasonably be deemed to suggest. A description cannot be said to be incorrect where it is shown that some would call a horse brown in color, and others would call it black, if it be described by either color.' A mortgage bill of sale of " all the desks, chairs, trunks and office furniture " in a certain office, the mortgagor in- tending that all articles of use in the office at the time should pass, embraces an iron safe which was then used there, as it would be considered as an article of furniture.^ § 144. Admittinif Identity by the Pleadings Cures a Faulty Description. — Thus, a mortgagee of a " dark-bay mule " may recover on a black mule from a subsequent purchaser, when the identity of the mule is admitted by the pleadings and established by proof.^ Otherwise the chattel should b& specifically named. A mortgagee claimed three horses under the following description : "And all and singular other the goods, chattels and effects whatsoever, now in or upon the premises occupied by the within-named mortgagor. * * * And all the fixtures, other goods, chattels and effects whatsoever in our store, coming, or which may, during the continuance of the within security, be brought into or upon said above-mentioned premises." The mortgagors had previously offered the horses as security to another creditor,, and at the time of the execution of the naortgage, the parties were disputing whether the horses should be included. It was decided that the mortgage did not cover the horses,^ but that it did include horses afterwards obtained by ex- change for them and brought upon the premises.* ' Yant V. Harvey, 55 Iowa 421. 'Skowhegan Bank v. Farrar, 46 Me. 293. See, also, Talbert v. Horton, 33- Minn. 104; Talbert «. Horton, 31 Minn. 518. 'Harris v. Woodard, 96 N. Car. 232. * Howell V. Francis (N. J.), 10 At. Kep. 436. INCLUDING ALL CHATTELS OF A CERTAIN CLASS. 12S'- § 145. Sufficient When Mortgagor and Chattels are in the^ Same County — What Included. — A description of " one bay horse named Billy, ten years old last spring, and one one- seated buggy, and one set of harness, all of which is in my possession, and clear of incumbrance," is sufficient, provided the mortgage shows that the mortgagor resided in a particu- lar county, and had a condition that if any attempt to re- move the property from that county is made, the mortgagee may take possession.^ So, also, where the description was "twenty-three head of horses and mules. * * * AH situated on their range on the S. L. river ; * * * the above-described chattels are now in their possession, are owned by them." The testimony showed the range in ques- tion to be situated in the county where the mortgage was- filed, and that the horses and mules were all those possessed. by the mortgagors, which made it a sufficient description.^ § 146. Including all the Chattels of a Certain Class. — A description in a trust deed of a number of chattels as " on- y. Farm," is sufficient to pass title to the property, when the number mentioned in the deed includes all the articles an- swering that description.^ But a description of "nine head of two and three-year-old steers," is, where the mortgagor own& a herd of ninety steers, insufficient, even if the mortgagee has separated the cattle alleged to be those described. The fact that, before the levy of the attachment, certain steers had been separated from the whole number and claimed under a second mortgage, is unavailing as against such cred- itor, unless it was also shown at the time the mortgage was executed there was an agreement that it should apply to such steers.* The following description was held sufficient : "All goods of whatever description which we have at Annona, Texas ; 'Brock V. Barr, 70 Iowa 399. ' Wiley V. Shars, 21 Nebr. 712. 'Spivey v. Grant, 96 N. Car. 214. •Price V. McComas, 21 Nebr. 195. See, also, Eddy ■». Caldwell, 7 Minn. 225; Burditti;. Hunt, 25 Me. 419; Brinley v. Spring, 7 Me. 241; Beach v. Derby, 19 III. 617 ; Skowhegan Bank v. Farrar, 46 Me. 293. 124 DESCKIPTION AND IDENTIFICATION. also the stock o^ goods which we have at Dalby Springs, Bowie Co., Texas."' When a mortgage mentions a specific number of articles -of a certain kind, in and about a shop, and also all the other personal property there situate, the specific enumeration does not prevent the parsing of other articles of the same kind, which are in and about the shop.^ § 147. Rendered Sufficient by Parol Evidence. — Parol evi- dence is admissible to identify the chattels when they are covered by the mortgage.^ Thus, when a description is in- sufficient, parol evidence may be admitted. A duly-recorded chattel mortgage of livery stock described the horses as " eight horses ; being the same now in stable No. 19 Silver street." This was valid as against a subsequent purchaser of two of the horses, although, at the time the mortgage was executed, for some time previous and subsequent thereto, many other horses, not owned by the mortgagor, were con- stantly boarded at the stables. Parol evidence to establish ithe identity of the personal chattels enabraced in a mortgage, but not particularly described therein, is admissible.* So, iwhere a chattel mortgage specifically describes sundry printers' implements, material, presses, and the like, in a printing office, and also, in addition, included, in general terms, all fixtures and furniture used therein, parol evidence may be introduced to show what property might properly be so denominated in such an establishment, and what articles are not included in either description.® The following description in a chattel mortgage is suf- ficient: "All the cattle, consisting of two yoke, aged six >Crow V. Bank, 52 Tex. 362. 'Harding n. Coburn, 12 Met. (Mass.) 333. 'Sargent v. Solherg, 22 Wis. 132; Russell v. Winne, 37 N. Y. 591; Nichol- son V. Karpe, 58 Misa. 3t; Harding w. Coburn, 12 Met. (Mass ) 333; Wagner 4). Watt^, 2 Cr. 0. C. 169; Burns v. Harris, 66 lud. 536; Stephens v. Tuck, 13 N. J. L. 600; Pike v. Oolviii, 67 III. 227 ; Myers v. Ladd, 26 111. 415; Spauld- ing V. Mozier, 57 III. 148; Beach v. Derby, 19 111. 617 ; Smith v. McLean, 24 Iowa 322; Luce v. Morehead, 77 Iowa 867. 'Elder v. Miller, 60 Me. yS. "Butts V. Print, and Pub. Co., 43 Minn. 66. EENDERED SUFFICIENT BY PAKOL EVIDENCE. 125 and seven years, color red, white and blue, * * * and all other property now in our possession, in or about said village." Where several oxen are described in a mortgage as red, white and blue, the full description need not apply to each.' Parol evidence is admissible to establish the identity of personal chattels in a mortgage, not particularly described in it.^ So, a mortgage of " 30 head of cattle, 3 horses, and 2 mules," is void for uncertainty ; but if the animals were described as belonging to the mortgagor, who owned only that number of each class, it would seem that the mortgage would be valid, and the animals could be identified by parol evidence. In all mortgages the fact of the ownership or locality of the property, or some other mark, when proved to exist, which would separate and distinguish it from other property, should be mentioned in the mortgage.' Whenever the description is applicable to more than one subject, extrinsic evidence is admissible to prove what is in- tended.* A mortgage of "ten horses, in the possession of the mortgagor," is good whe"n he has only that number ;° so is one valid of "6 bales of cotton, now growing and being grown and produced on the plantation in Lee county, culti- vated by fnyself, and known as the Jesse Tucker plantation.""^ But a mortgage of " ten new buggies " is void when the mortgagor has more than that number.' A mortgage of a specified number of different kinds of furniture is valid as to those kinds of which all are covered, and void as to those kinds of which all were not covered.' And, in general, written descriptions of property are to be ^Fordycei). Neal, 40 Mich. 705. 'Brooks V. Aldrich, 17 N. H. 443; and see Johns v. Church, 12 Pick. (Mass.) 557. 'Kelly V. Eeid, 57 Miiss. 89. * McChesney v. Wainwright, 5 Ohio 452 ; Johns v. Church, 12 Pick. (Mass.) 557. 'Eddy V. Caldwell, 7 Minn. 225. 'Stephens v. Tucker, 55 Ga. 543. ' Blakely v. Patrick, 67 N. Car. 40. 'Croswell v. AUis, 25 Conn. 301. 126 DESCKIPTION AND IDENTIFICATION. interpreted in the light of the facts known to and in the minds of the parties at the time of the contract. A subse- -quent purchaser is supposed to acquire a knowledge of all the facts, so far as may be needful to his protection, and he purchases in view of that knowledge. Descriptions do not identify themselves, but only furnish the means of identification ; they give certain marks or characteristics, or historical data or incidents by the aid of which the thing intended may be singled out from all others, .not by the description alone, but by that explained and ap- plied.^ Thus, a description in a chattel mortgage, of "all the dry goods, boots and shoes, millinery goods, and gentle- men's furnishing goods and stock in trade now in the store occupied by " the mortgagors, is valid, because the generality and indefiniteness of the description can be rendered suf- ficiently definite by evidence of the facts as to the goods in the store at the time, and will convey whatever in fact an- swers the description.* Neither is a mortgage invalid because the description is not correct as to the age of cattle embraced, where it clearly appears from the evidence what cattle were intended ; and especially will it be so held where the party claiming in opposition to the mortgage was not misled by the erroneous description, and could not have been so misled, in the exercise of ordinary care. Thus, Tvhere the mortgagor has but one yoke of oxen at the time of giving the mortgage on them, and continued to have the same oxen, and no others, from that time until purchased by a third person, and the jury find that they are the ones described in the mortgage, the mortgage is valid.^ So, a chattel mortgage is good that describes the property as " fifty cords of wood piled upon lot 1, block 83," although the evidence showed that there were eighty-five cords of wood on Lot 1 at the time the mortgage was executed, owned by the mortgagor. The court said : " It would un- ' Willey V. Snyder, 34 Mich. 60. > Conkling v. Shelley, 28 N. Y. 360. 'Harris v. Kennedy, 48 Wis. 500. TAGUE AND INDEFINITE TERMS. 127 doubtedly be a very desirable rule, if it were possible, to describe property mortgaged so that one could ascertain from the face of the instrument itself what property was intended to be embraced therein. But it is evident that resort must frequently be had to parol evidence to apply the description in the mortgage. It is not readily perceived how the description of the wood in this case could have been more certain and specific ; and, as there were several other piles of wood on the same lot, it was necessary to resort to extrinsic proof to identify the property."^ § 148. The Property Must be Included in the Description. — While parol evidence may be admitted to identify prop- erty which is included in the descriptive words, yet property not answering the description cannot be shown to be covered by the mortgage.^ There can be no agreement by the parties that will bind others, that there shall be a substitution of other property for that first specified.^ § 149. Vague and Indefinite Terms. — Vague and indefinite terms will defeat a chattel mortgage. The authorities hold, with marked unanimity, that where there is a larger quantity of property of the same kind in the possession of the mort- gagor than is expressed in the specification of the mortgage, and no particular description of the articles or property otherwise than by their general class or number, nor any selection or delivery of the articles, nor any specification as to which are intended out of the large lot of articles then on hand, such mortgage will be ineffectual to pass any title to any particular property, or any interest in the property on hand.* Thus, a mortgage of " forty head of cattle, of differ- ent ages and sexes, most of them thoroughbreds," on the mortgagor's farm, where, at the time of the execution of the 'Sargeant v. Solberg, 22 Wis. 132. And see, also, Harding v. Coburn, 12 Met. (Mass.) 333; Barry v. Bennett, 7 Met. (Mass.) 354; Lawrence v. Evarts, 7 Ohio St. 194; Call v. Gray, 37 N. H. 428. = Hutton V. Arnett, 51 111. 198. 'Hunt V. Bullock, 23 111. 320.- 'Rood V. Welch, 28 Conn. 157 ; Golden v. Cookril, 1 Kans. 259. 128 DESCKIPTION AND IDENTIFICATION. mortgage, he had forty-five or forty-six head of cattle, is too indefinite.^ But the degree of accuracy of particularity with which property must be described, depends upon its nature, but inust t)e such that a third party can have no great difficulty, in identification as described. The mortgage must mention some fact or circumstances connected with the property which will serve to distinguish it from all other property of the same kind. This fact or circumstance must be stated in the mortgage itself It cannot be proved by parol testimony, unless there be added to the mortgage a term not contained in it. If the description in the instrument be so vague and. uncertain as necessarily to apply clearly to all property of that kind, then it is clear there can be no identification of it, without some fact or circumstance connected with the property not referred to in the mortgage. When the precise number oiily is conveyed, and there is in fact a greater, number, and no intention is manifest to include the whole, there would be a failure of identification of particular things conveyed, and the mortgage must be void for want of proper description.^ § 150. Taking the Cl^attels From a Large Amount of the Same Class. — Where there is a larger quantity of property of the same kind in the possession of the mortgagor, than is embraced in the specifications of the mortgage, and no par- ticular description of the articles of property, otherwise than by their general class or number, nor any selection or de- livery of the articles, nor any specification as to which are intended to be taken from the large lot of articles then on hand, such mortgage will be ineflfectual to pass any title to any particular property, or to any interest in the property.' So, a mortgage of " ten new buggies," without delivery of possession, the mortgagor having more than ten buggies on hand at the time, will be ineffectual to pass title to any 'Stonebraker v. Ford, 81 Mo. 532. 'Gardner v. MoEwen, 19 N. Y. 123 ; Conkling v. Shelley, 28 N. Y. 360. 'Fowler v. Hunt, 48 Wis. 345. TAKING THE CHATTELS FROM A LARGE AMOUNT. 129 particular buggies, or to any interest in the buggies on hand/ The articles mortgaged must be of such a nature and so situated as to be capable of being specifically designated and identified by the written description. If they are to be weighed, measured, counted off, or otherwise separated from others of the same kind, and larger parcels or quantities, such requisites must be fulfilled.^ The authorities hold, with marked unanimity, that where there is a larger quantity of property of the same kind in the possession of the mortgagor than is embraced in the specification of the mortgage, and no particular description of the articles or property, the mortgage will be ineffectual to pass any title to the property.^ Thus, a mortgage given on " one hundred and twenty-four head of mules," in the State of Kansas, is invalid, although it did not appear affirmatively that the mortgagor had any other mules in said locality. The court said : " But he might have had a much larger number than he chose to include in the mortgage, and as there was nothing to distinguish those intended to be included in the mortgage from the rest, an indefinite amount of stock might, perhaps, have been shielded from the claims of creditors by the mortgage of a small part of them."* So, a mortgage is invalid that is given to cover "one hun- dred feet of white-pine saw-logs, now on the north branch of Thunder Bay river," because, at the time of the execution of the instrument, the mortgagor had a much larger amount of such logs at the given place. Judge Marston said : "As well might we undertake to enforce a chattel mortgage given upon ten head of tattle in a drove or herd of fifty. To sustain such mortgage would, I think, enable parties to com- mit gross frauds, and would also tend to prevent third 'Blakely v. Patrick, 67 N. Car. 40; 12 Am. Rep. 600. See, also, White v. Wilks, 5 Taunt. 176. 'Bullock V. Williams, 16 Pick, (Mass.) 33. ^Fowler v. Hunt, 48 Wis. 345. ^Golden v. Cockril, 1 Kans. 259. I 130 DESCBIPTIOIir AND IDENTIFICATION. parties from afterwards purchasing or acquiring interest in the property, a part of which had been thus mortgaged, and thus tend to discourage trade." ' So, a mortgage describing the property therein conveyed as " forty head of cattle of different ages and sexes, most of them thoroughbreds," and as being on the mortgagor's farm in a certain county, is ineffectual, where the evidence showed that, at the time of the execution of the mortgage, the mort- gagor had " forty-five or forty-six head of cattle on his farm, of different ages and sexes." ^ § 151. Mortgage With Schedule. — If a schedule is used in mortgaging property, and the mortgage recites it as annexed, the mortgage will be void, unless it contains a sufficient description of the property to identify it.' A mortgage of personal property described the " following goods and chattels," and then followed a list of articles on a separate piece of paper and attached to the deed by a wafer. This was equivalent to a description in the mortgage, as it completed and perfected it. It is something without which the deed would be insensible. It is not an erasure nor an interlineation, nor is there anything in it which raises a sus- picion of fraud. In the absence of evidence the presump- tions are all in its favor.* § 152. Failing to Attach Schedule. — If a mortgage refers to a schedule, it will be valid as to all property that can be identified, though the schedule be not annexed.^ A mortgage which is made on the furniture of a hotel, and reciting that an inventory is to be made and annexed, is good, though the schedule is not made and annexed.® A mortgage is valid which refers to a schedule annexed to ' Richardson v. Alpena Lum. Co., 40 Mich. 203. ' Stonebraker v. Ford, 81 Mo. 532. See, also, Croswell v. AUis, 25 Conn. 801. ■'Edgellv. Hart, 9N. Y. 213. •Belknap v. Wendell, 21 N. H. 175. See, also. Weeks v. Maillordet, 14 Ea3t-568; Newell v. Warner, 44 Barb. (N. Y.) 258. ' Wlnslow V. Merchants Ins. Co., 4 Met. (Mass.) 306. •Van Heusen v. Eadoliff, 17 N. Y. 580. GENERAL AND SPECIFIC TEEMS. 131 another mortgage, made by the same mortgagor to another mortgagee. Description of the other mortgage should be given sufficiently to identify it.^ § 153, General and Specific Terms. — A mortgage enumer- ating particular articles, followed by a general description, will include the property in the general description, if the language used so indicates.^ Thus, a mortgage specifically describing the furniture of an hotel, had a general clause embracing " all the other goods, effects, furniture, chattels, property, things of every name and nature now used, attached, situate and being in or about the hotel," includes a schooner-rigged sail-boat, then upon a lake near the hotel, and which was used in connec- tion with the hotel, though the mortgage specified mentioned four other similar boats.* A party made a mortgage of eighteen hundred bushels of salt, and of his entire fishing outfit, consisting of seine-boats and fish-stands at a certain place. Then he executed a second mortgage, conveying all the fishing outfit, consisting of seine-boats, fish-stands, barrels, sixteen hundred bushels of salt, and kegs, subject to the prior mortgage, property being located at the same place as the first. The sixteen hundred bushels of salt were purchased subsequently to the giving of the first mortgage and had been kept by itself. It was decided that the first mortgage was no lien upon these ; the words " entire fishing material " did not cover the barrels and kegs mentioned in the second mortgage, and that "sub- ject to prior liens" did not extend the scope of the previous grant, and included nothing except as described by its own terms.* General clauses following specific enumerations of articles, refer, ordinarily, to articles of the same kind as those spe- cifically enumerated.* 'Newman D. Tymeaon, 13 Wis. 172. ^Russell V. Winne, 37 N. Y. 591. 'Veazie v. Somerby, 5 Allea (Mass.) 280. * Dixon V. Coke, 77 N. Car. 205. *Brainerd v. Peck, 34 Vt. 496. 132 DESCRIPTION AND IDENTIFICATION. When a chattel mortgage embraces a whole herd of cattle, a separation is unnecessary.^ ' § 154. As to Crops. — ^The description of crops must be definite enough to identify the property mortgaged. A vague description will not answer. Thus, a mortgage of " my entire crop of every description " is too vague and is insufficient.^ But a mortgage of " all of the crops of corn and cotton, and cotton seed, and crops of every other name and description to be grown " in a certain year, in a certain county, is a sufficient designation.' A mortgage was made of corn to be planted. It was duly planted, and then levied upon by the mortgagor's creditor, the mortgagee not having taken possession. The levy was held good under the Nebraska law.* A mortgage of " my entire crop of corn, cotton seed, 'fodder, peas, potatoes and cane, that I may grow the present year," is good.® A mort- gage of " all and the entire crop of flax and wheat and other grain and produce raised on the east half," &c., is insufficient and indefinite, as not showing when the crop was raised." A mortgage of ten bales of each annual crop of cotton to be produced on certain lands, is void for uncertainty.' So, a mortgage of " all of a crop of ten acres of cotton to be grown " on a forty-acre field, is void for uncertainty.* But " one-half of all the crop " on certain land is a suf- ficient description.' A mortgage describing property as " all the cut and grow- ing and having grown " crop on the premises is insufficient to give third parties notice." A description as " my entire crop of cotton and corn to be 'Cattle Co. V. McLain, 42 Kans. 680. 'Kountree v. Britt, 94 N. Car. 104. "Hamilton v. Maas, 77 Ala; 283. *Oole V. Kerr, 19 Nebr. 553. "Seay v. McCormiok, 68 Ala. 549. •Eggert V. White, 59 Iowa 464. 'Dodds V. Neel, 41 Ark. 70. 'Krone «. Phelps, 43 Ark. 350. •Melin v. Reynolds, 32 Minn. 52. "Cray v. Currier, 62 Iowa 535. IDENTIFICATION OF CROPS BY PBOOF. 133 xaised by me the present year, or contracted by me," is not void for insufficiency.^ § 155, Defective Description Cured. — A chattel mortgage, designed to cover crops to be raised on certain land, is bind- ing, according to the Iowa law, on one having actual notice of it, though the description is defective. A description is defective when it fails to state the year or time in which the crop is to be raised, where the description is so indefinite and uncertain that the recording thereof will not import notice, yet such a mortgage is not void, but, on the contrary, is good as to all persons having actual notice of its existence, And the intent as to the property which it was designed to include. Thus, a mortgage describing " all crops growing and to be grown " on the land specified, is good as to those having actual notice, even if the description is defective.' § 156. When the Part Mortgaged Must be Separated. — If a party should give a mortgage on three bales of cotton which he might raise the present year on a certain planta- tion or elsewhere, and it appeared that he raised more than three bales, in order to secure these, they must be separated before any other lien attaches.* So, a- mortgage of so much ■of a growing crop of cotton as will make two bales of cotton, each weighing no less than five hundred pounds, the same to be prepared for market by the mortgagor, and delivered by a certain date, passes no title to the mortgagee unless they are separated, provided another lien attaches before the date, and before separation from the rest.* A mortgage of crops " now standing and growing," does not include grain which has been cut at the time of the •execution.^ § 157. Identification of Crops by Proof. — A mortgage of " my entire crop of cotton and corn for the present year," 'Henderson v. Gates, 52 Ark. 371. 'Luce V. Moorehead, 77 Iowa 367. 'Draper v. Perkins, 57 Miss. 277. * Williamson v. Steele, 3 Lea (Tenn.) 527. ^ Ford V. Sutherlin, 2 Mont. 440. 134 DESCRIPTION AND IDENTIFICATION. with no other descriptive words, may be identified by ex- trinsic proof.^ So, growing crops, after harvesting, may be shown to be those described in the mortgage, even after being sold in market.^ A mortgage of six acres of grass on ground occupied by the mortgagor as a tenant, may be shown to be hay stacked upon other land occupied by the mortgagor, and is subject to the mortgagee's claim.' ARTICLE IV. — CONSTRUCTION. 158. As to the Location of the Chattel. 159. As to Identity of Chattels. 160. As to Crops. 161. As to Animals. 162. As to Farming Utensils. § 158. As to the Location of the Chattel. — It is not a suffi- cient location of mortgaged chattels to describe them as being in a county named.* A description is insufficient where the chattel mortgage describes the property as " contained in cribs 1 and 2, south of the side track," the testimony showing that the cribs were not numbered.* But describing the personal property in general terms, giving its character and specifically stating in what building and rooms it is situate, is sufficient.^ So, it is a sufficient description of saw-logs, when the mortgage is for one and a half million feet of pine saw-logs, a part of which are in a specified lake, and the balance to be cut and placed there from certain designated lands.^ A mortgage describing the property conveyed as " lumber piled on said premises known as block 113," without 'Ellis V. Martin, 60 Ala. 394. 'Duke V. Strickland, 43 Ind. 494. 'Smith i;. Jenks, 1 Denio (N. Y.) 580. * Warner v. Wilson, 73 Iowa 719. ^Grimes v. Cannell, 23 Nebr. 187. "Muncie National Bank v. Brown, 112 Ind. 474. 'Boykin v. Eosenfield, 69 Tex. 115. AS TO IDENTITY OF CHATTELS. 135 extrinsic evidence showing that the mortgagor had, at the time of its execution, lumber answering such description^ is defective and is inadmissible to show title in the mort- gagee.' The description is sufficient when it substantially corresponds with the property intended to be mortgaged, and the mortgagor has no other property to which it could be applied, so that no one could be misled by the improper description, and where it is admitted that the property claimed is the same as was intended to be mortgaged.'^ A recorded mortgage, covering specified property, and all other property which the mortgagor may thereafter acquire and use in connection with a particular business, is valid as against an attachment by a subsequent creditor, upon the property afterwards bought by the mortgagor for use in that business.* A mortgage " of all that certain stock of one-inch seasoned lumber, being one car-load of 12,000 feet," and further de- scription of the property as being at a particular place in a certain city, may, as between the parties, or as to a subset quent purchaser with notice, or a stranger, be shown by evidence to be applicable to the car-load of said lumber situ- ated at a different place in the city from that named in the mortgage.* § 159. As to Identity of Chattels. — Whether the property embraced in a mortgage can be identified by the description^ is a question for the jury. Thus, a mule sold under a mortJ- gage was the one described, and the judgment debtor had no other mules. The question of identity of the mule was for the jury, although the mortgage described the mule as black, and the mule sold was described as dark mouse-colored.' Property described as " one six-i foot cut Piano Harvester or Binder," is insufficient to import constructive notice, but 'Gregory v. North Pacific Lumber Co., 15 Oreg. 447. ^Schmidt v. Bender, 39 Kans. 437. 'Eddy V. McCall, 71 Mich. 497. 'Adamson v. Peterson, 35 Minn. 529. ^Tompkins v. Henderson, 83 Ala. 391. 136 DESCKIPTION AND IDENTIFICATION. the mortgage may be introduced in an action against a con- stable for levying on the property mortgaged, where the execution creditor is shown to have had actual notice.^ Where the property secured is described as " one portable saw-mill," evidence is admissible to prove the extent and meaning of the words, and of the sense in which the parties used them. It was also proper to show that a " skid engine," used to run the mill, was a part, and intended to be included in the description.^ Any description of property which is sufficient to lead to its identification is valid,* and whether property embraced in a mortgage can be identified by the description in the instru- ment is a question of fact to be determined by the jury.* But lack of proof of the identity of the property mortgaged, and the property iu controversy, in an action to recover property, will defeat the claim.® § 160. As to Crops. — A mortgage of " 20 acres of wheat now sown and growing on the ground, and still to be sown, on the 20 acres, this present season, on the farm," is not void for uncertainty, as against a subsequent mortgagee; it covers the first twenty acres sown that season, or so much thereof as was sown when the mortgage was executed." A mortgage describing certain property as " crops growing and to be grown " on certain land, is sufficiently definite to cover crops growing at the time of the execution, and as to them is valid, although the year when the crops are to be grown is not specified ; distinguishing Pennington v. Jones, 57 Iowa 37.' An instrument was filed as a chattel mortgage, which had the following description : "All that certain personal prop- erty described as follows, to wit : The N. W- i of N. W. i 'Piano Manf. Co. v. Griffiths, 75 Iowa 102. 'Wiberi;. Illing, 66 Wis. 79. » Wells D. Wilcox, 68 Iowa 708. 'Peterson v. Foli, 67 Iowa 402. 'Game v. Whaley, 43 Minn. 234. "Wade V. Strachan, 71 Mich. 459. 'Luce V. Moorhead, 73 Iowa 498. AS TO ANIMALS. 137 and S. W. i of N. W. i, in section 11, township number (134) one hundred and thirty-for, north of range (38) thirty- eight, eighty (39) acres in crass, (33) ackers in whead, and (6) ackers ods, all of said property." Other parts of the in- strument clearly indicated it to be a mortgage on personal property. It was held valid and covered a crop of thirty- three acres of wheat, six acres of oats, growing, when the mortgage was executed, on the land described therein, in the possession of the mortgagor.^ The description in a chattel mortgage was : " My tobacco €rop, to be grown this year on my own land, and to contain eight acres, including one-third of the crop of G., to contain no less than three acres, and my one-third interest in J.'s land, to be grown this year." This was a sufficient descrip- tion of the property and of the mortgagor's interest to admit oral evidence to cure any uncertainty.^ This descrip- tion is invalid for uncertainty : "All the grain, oats, wheat and corn raised " on certain land, but which fails to state the year or time in which the crops were or were to be raised.^ The following description is void for uncertainty : *' Six hundred bushels of corn, growing, located and being on the W. i of section thirty-six, township, south of Range S »East. If said corn matures before the maturity of the note secured by this mortgage, the said Burnside to shuck the same, and any crops on the premises above described," the mortgagor to remain in possession of the corn ; although there were m'ore than one thousand bushels on the tract •described, there was no separate identification of the part intended to be conveyed. Some of the corn was of good quality, while other parts were, inferior in quality.* § 161. As to Animals. — The description of animals must be such as to put a bona fide purchaser from the mortgagor upon notice. Thus, a description as " two mare mules and 'Strolberg v. Brandenberg, 39 Minn. 348. == State V. Logan, 100 N. Car. 454. 'Barr v. Cannon, 69 Iowa 20. * Souders v. Voorhees, 36 Kans. 138. 138 DESCRIPTION AND IDENTIFICATION. one horse mule," does not specify the property so as to put a purchaser from the mortgagor of one black horse mule and a dark mule, upon notice that the animals are the ones mortgaged, when the mortgagor had several farms on which he had mules.^ So, a description is insufficient which describes cattle separately, as to color, age and name, but which contains no statement as to the present or past ownership, nor of the place where they are kept.^ Property was described as "two brown mules, aged 8 and 12 years." A. statement followed of the county in which it was situated, and also that it should remain in the possession of the mortgagee until default, or until the mortgagee should deem himself in- secure. This was a sufficient description.* A description was as follows: "One dark-bay horse, fifteen hands, high, heavy made, with black mane, tail and legs, the closer to the hoofs the blacker the legs ; star in the forehead on a level with the eyes, running upwards; stripe on the nose, extending to both lips ; a little white streak on withers and a little spot just behind the withers ;" held, not void for uncertainty in the description.* So, also, a description of "one bay horse, seven years old, weight 1,150; one bay mare^ nine years old, weight 1,250, * * * gaid property, until default in payment of the debt secured, to remain in posses- sion " of the mortgagor, is sufficient.^ A description, "Sixty head of two and three-year-old steers,, forty head of yearling steers ; also sixty-five actes of standng corn," situated in a township and county, is not sufficient.' When a horse is accurately described, the mere fact that it was not found at the place where the mortgage recited it was, will not vitiate the instrument.' 'Stewart v. Jaques, 77 Ga. 365. 'Warner v. Wilson, 73 Iowa 719. 'Schmidt v. Bender, 39 Kans. 437. •Adams v. Hill, 10 Kans. 627. * Wheeler v. Becker, 68 Iowa 723. "Caldwell v. Trobridge, 68 Iowa 150. 'Jones V. Workman, 65 Wis. 269. t AS TO FAEMING UTENSILS. 139 1 Where a party owns just one hundred and eighty head of merino and Cotswold sheep, a chattel mortgage of the same is effective which describes them as one hundred and eighty head of merinos, owned and possessed by said party .^ So, a chattel mortgage is sufficient and effective which de-^ scribes the property as " the following cattle," giving the names by which they were registered in the American Short- Horn Herd-Book, " eighteen head of two-year-old steers, of various colors," and " one span of heavy, dark-bay mules," all kept on the farm of the mortgagors in a certain township.^ § 162. As to Farming Utensils. — In describing farming utensils, the description should be sufficient to fully identify the article. But in those States where notice is sufficient to third parties, the notice may waive the necessity of a full enumeration in particular terms. Thus, in describing wagons,^ the clause was used, " 11 Smith farm-wagons, 4 Ketchum farm-wagons," all of the wagons in the possession of the mortgagor. This was a sufficient description as to third parties having claims against the mortgagor.' But the following description is too indefinite : " One- buggy with fills, new, made by Taylor Brothers, Emmets- burg, and bought of them ; one sulky, new, made by the Taylor Brothers."' 'Chrisfield v. Neal, 36 Kans. 278. 'City Bank v. Ratkey, 79 Iowa 215. 'Clapp V. Trobridge, 74 Iowa 550. •Ormsby v. Nolan, 69 Iowa 130. 140 PRESENT PKOPEBTY, OK INTERESTS IN ESSE. CHAPTER V. PEESENT PKOPERTY, OR INTERESTS IN ESSE. ARTICLE I. PRESENT INTEREST. 163. In General. 164. Eolling-Stook of Bailroads. 165. Executory Interests. 166. Illinois Rule. 167. Special Interests. 168. Prohibited Articles. 169. In Violation of Statute. 170. General Rule — Identification. 171. Ratification of Invalid Mortgage. § 163. In General. — All property, real and personal, cor- poreal and incorporeal, may be subject to mortgage. Every- thing which may be considered property, whether by the technical language of the law denominated real or personal property, may be mortgaged, though a mere incident of property cannot be mortgaged alone and apart from it. Bank stock is property, and may be mortgaged.^ So, also, all claims growing out of, or adhering to, rights of action ex contractu, and interests in action, may be mortgaged for the benefit of creditors.^ That is, all claims growing out of, or adhering to, property, rights of action for damages e% contractu, and interests in actions pending, may all be assigned or mortgaged, for the benefit of creditors.* But a party cannot mortgage causes of action growing out of per- sonal wrongs of the debtor, because causes of action arising out of personal wrongs to the debtor, not being for the recovery of damages for property illegally taken out of his ' Manns v.- Brookville Nat. Bank, 73 Ind. 243 ; Huntzinger v. Phila. Coal Co., 11 Phila. (Pa.) 609. » Comegys v. Vassee, 1 Pet. (U. S.) 193 ; Leitch v. Hollister, 4 Comst. (N. Y.) 211 ; North v. Turner, 9 S. & R. (Pa.) 244. » Pindell v. Grooms, 18 B. Mon. (Ky.) 501 . IN GENERAL. 141 possession, or unlawfully withheld from him, are not em- braced by the reason or spirit of this rule of law, and may not, therefore, be legally mortgaged or assigned/ Mere choses or rights of action may be assigned or mort- gaged for the indemnity or security, or to secure creditors. The legal title of the property will not pass, but the equitable title of it will vest in the mortgagee,^ A person's choses in action would be included in a conveyance of all his personal property of every name and nature.^ But a party cannot mortgage property in which he has no interest.* So, a party has no interest which he can mortgage, where he contracts with the owner to raise a crop on his land, in consideration that the owner give him so much of the crop as shall remain after taking out what was necessary to pay the owner of the land for supplies furnished him.^ The owner of chattels not in possession may make a valid mortgage of the same, if the person in possession professedly holds under him and has only a special property in the thing, such as that conferred by a pledge or lien. So, the owner of goods in the possession of the sheriff, seized under execution against such owner, may give a mortgage on the same which will be good as against the sheriff, when the judgment under which the execution issued is void for want of jurisdiction.^ The good-will of a business is property that may be sold or mortgaged. It is intangible property, in the nature of things, and can have no existence apart from a business of some sort that has been established and carried on at a par- ticular place. It cannot be sold by judicial decree or other- 'Pindell v. Grooms, 18 B. Mon. (Ky.) 501. 'Pindell v. Grooms, 18 B. Mon. (Ky.) 501. 'Sherman v. Dodge, 28 Vt. 26. * Doyle V. Mizner, 40 Mich. 160. * Sentell v. Moore, 34 Ark. 687. The words " goods and chattels," as used ill the recording acta of West Virginia, do not embrace choses in action. Tingle v. Fisher, 20 W. Va. 497. 'Gardiner d. Bunn, 132 111. 403. 142 PRESENT PKOPEKTY, OR INTERESTS IN KSSE, wise, unless it be in connection with a sale of the business on which it depends.^ Hence, the good-will of a business iS property that may be mortgaged or sold in connection with the business, but it cannot be sold or mortgaged unless it be in connection with the sale of the business on which it de- pends, and of .which it is a mere incident. Thus, where a newspaper, whose good-will has been mortgaged, in consoli- dation with another paper, and the name of the paper is changed, and a new corporation is formed to publish it, the lien of the mortgage does not attach to the good- will of the consolidated paper, though the new corporation occupied the old place of business for several years, and paid interest for several months on the mortgage debt. Judge Thayer held that a mortgage of the " machinery, type, presses, cases, furniture, paper, forms and tools " of a newspaper company, together with the " good- will " of its business, cannot be foreclosed as to the good-will after all the tangible property covered by the mortgage has been alienated, worn out or destroyed, and the corporation has become consolidated with another newspaper corporation.* A mere possibility or expectancy, not coupled with any interest in, or growing out of, property, cannot be made the subject of a mortgage.^ § 164. Rolling-stock of Railroad Companies. — Some of the States, by their constitutions, declare rolling-stock of rail- way companies personalty. Where there is no such declara- tion, the decisions conflict as to whether a chattel mortgage can be made on rolling-stock of railroad companies. In New York the rolling-stock of railroad companies is not a part of the realty, but retains the character of personal property. It does not become a part of the realty, so as to pass by conveyance of the land as part thereof, and a chattel 'Robertson v. Quiddington, 28 Beav. 529; 3 Pom. Eq. Jur. ? 1355; Story on Partn. ? 99; Smith's Merc. Law 188, and cases cited. ^ Metropolitan Nat. Bank v. St. Louis Dispatch Oc, 36 Fed. Rep. 722, U. S. -Circuit Court, Missouri, E. D. 'Skipper v. Stokes, 42 Ala. 255 ; Purcell v. Mather, 35 Ala. 570. EOLLINQ STOCK OP KAILKOAD COMPANIES. 143 mortgage given on rolling-stock in this State is valid.^ Thus, a mortgage was given by a railroad corporation on its real estate, chattels and franchises, but it was held that it did not cover its rolling-stock:^ On the other hand, it has been held that rolling-stock, properly speaking, appurtenant to a rail- road, is a part of the road, and a mortgage thereof, in con- nection with the road, if duly recorded as a mortgage of real estate, need not be recorded also as a chattel mortgage.^ In New Hampshire it has been held that the locomotive engines and freight and passenger cars of a railroad corpo- ration are liable to attachment; when not in actual use, like other personal property,* thus clearly classing them with personal chattels. So, it is the rule of New Jersey, that a mortgage by a railroad company on its road-bed and franchises, together with its engines, cars and rolling-stock, so far as regards the latter class of property, is a chattel mortgage; that the engines, cars and rolling-stock of a railroad must be re- garded" as chattels, which have not lost their distinctive character as personalty by being affixed to and made part of the realty,® and, of course, are subject to a chattel mortgage. And this is the view taken by the majority of the courts when not controlled by statute ; that where the question has been directly presented, whether the rolling-stock of a rail- road, included in a mortgage of its road-bed and franchises, is real or personal property, the rolling-stock is personalty and must be mortgaged as such.® •Hoyle V. Plattsburg, &c., R. R. Co., 54 N. Y. 314; Randall v. Elwell, 52 N. Y. 521; Stevens v. Buffalo, &c., R. R. Co., 31 Barb. (N. Y.) 590. ^Beardsley v. Ontario Bank, 31 Barb. (N. Y.) 619. 'Farmers Loan and Trust Co. v. St. Joe, &c., R. R. Co., 3 Dill. C. C. 412. * Boston, &c., R. R. Co. v. Gilmore, 37 N. H. 410. 'Williamson v. N. J. Southern R. R. Co., 29 N. J. Eq. 311 ; State v. Somer- Tille, &c., R. R. Co., 4 Dutch. (N. J.) 21. 8 Stevens v. Buffalo, &c., R. R. Co., 31 Barb. (N. Y.) 590; Beardsley v. Ontario Bank, 31 Barb. (N. Y.) 619; Bement v. P. & M. R» R. Co., 47 Barb. (N. Y.) 104; Randall v. Elwell, 52 N. Y. 521; Hoyleu. Plattsburgh, &c., R. R. Co., 54 N. Y. 314; Chicago, &c., R. R. Co. v. Howard, 21 Wis. 44; Boston, Ac, V. Qilmore, 37 N. H. 410 ; Coe v. Columbus, &c., R. R. Co., 10 Ohio St. 372; City of Dubuque v. 111. Cent. R. R. Co., 39 Iowa 56; and see Marsh ». Burley, 13 Nebr. 261; Millard v. Burley, 13 Nebr. 259. 144 PRESENT PROPEKTT, OE INTERESTS IN ESSE. , So, Chief Justice Green declared that engines and cars are no more appendages of a railroad than wagons and carr riages are appendages of a highway — both were equally es- sential to the enjoyment of the road — neither constituted any part of it.^ In Alabama, Illinois, Missouri, Nebraska, Texas and West Virginia rolling-stock of railroads is declared by the consti- tution to be personal property.^ § 165. Executory Interests. — The interest of a party in property which may be perfect by performance of an execu- tory contract, may be the subject of a mortgage.^ But an unpaid legacy is not subject to a mortgage at law.* A mortgage, by which a party transfers an account to be created in the future by one as customer, who was no party to the contract, and under no obligation to have his work done by the mortgagor, is at most a mere executory agreement, and does not convey to the mortgagee such title or interest in the account when created as will enable him successfully to contest the right of an attaching creditor.* In Maine, property in the possession of the vendee, who is not to become the owner until he has fully paid for it, before the price is fully paid, if it be mortgaged by the vendor to another person, such person will acquire title to the property superior to that of the conditional vendee.* So, also, in Alabama, a vendor may show by the terms of the contract of sale, that the title was to remain in him until the performance of the sale, or the purchase-money was paid, whether the mortgagee from the vendee had notice or not.' In Massachusetts, a lessee, who is in possession of chattels under a lease, by the terms of which he is to pay for them ' State Treasurer v. S. & E. R. R. Co., 4 Dutch. (N. J.) 21. ' Wood on Railroads, 1625. 'Forman v. Prflctor, 9 B. Mon. (Ky.) 124. *Kilbourne v. Fay, 29 Ohio St. 264. ' Puree) 1 V. Mather, 35 Ala. 570. « Everett v. Hall, 67 Me. 497. 'Holman v. Lock, 51 Ala. 287. PKOHIBITED ARTICLES. 145 by installments, until the entire price is paid, and, in case of failure, the lessor may take possession of the chattels and terminate the lease — can, if he fails to complete the contract by non-payment of an installment, and the lessor has not taken possession, convey a good title to them as against an officer who attaches them as the property of the lessor/ A purchaser of machinery, who held it on condition that the title should remain in the seller until the price was paid, mortgaged it to a third person. On payment of the price, the mortgage became valid.^ § 166. Illinois Rule. — ^A contract between the vendor and the vendee, that the title to the property shall not pass until fully paid for, is valid between them, though the property is given into the vendee's possession. But as to creditors and purchasers of the vendee, they can hold the property after sale or mortgage. The vendor cannot set up his title to de- feat the bona fide rights of third persons.^ § 167. Special Interests. — A mortgage of a chattel is valid, although, at the time', the mortgagor was not in possession, the person in possession holding under the mortgagor, and having only a special property in the chattel.* An owner of chattels in possession, has a mortgageable interest in them, after default on a prior mortgage and before sale.* But having possession of personal property, by permission of the owner, does not confer a power to sell or mortgage it, even in favor of a bona fide purchaser for a valuable consideration.* § 168. Prohibited Articles. — ^A mortgage of spirituous and intoxicating liquors passes the title therein, notwithstanding such be in violation of a statute, to this extent : No one can take them without authority, without becoming liable to an action for conversion. "Chase v. Ingalls, 122 Maes. 381. ' Crampton v. Pratt, 105 Mass. 255. 'McCormick v. Hadden, 37 111. 370; Ketchum v. Watson, 24 111. 591. *McCallai). Bullock, 2 Bibb (Ky.) 288. 'Smith V. Coolbaugh, 21 Wis. 427. •Glaze V. Blake, 56 Ala. 379. K 146 PRESENT PEOPEETY, OE INTERESTS IN ESSE. A sale, even when made under such circumstances as the law forbids, yet passes the property to the purchaser. The seller commits no offense for which he is punishable, but he does not retain his property in the article sold. A mortgage is a sale defeasible upon condition, but it passes the title sub- ject to the right of redemption. As it is not criminal in the buyer to take an absolute title, it is not criminal for him to take a defeasible title.' And when the mortgagee has taken possession, the mortgage cannot be treated as void under the law prohibiting the sale of such property. The mortgage is valid as between the mortgagor and the mortgagee, and as between the mortgagee and creditors of the mortgagor. At ■common law, all contracts in violation of law are void. The law in such case will not aid either party, but leaves them to reap the reward of their own folly. If the contract is executory, it will not enforce it or give damages for non-per- formance; if executed, it will not undo what the parties themselves have done, by divesting the title that has passed. Hence, a mortgage of intoxicating liquor, under which pos- session has been taken by the mortgagee, cannot be treated as void under a prohibitory law as between the parties, nor as between the mortgagee and the creditors of the mortgagor, unless made to defraud such creditors.^ § 169. In Violation of Statutes. — If a mortgage is given to secure a debt, and given to prefer a creditor, which action is in violation of the insolvent laws, it is void.^ So, where a mortgage is given to secure notes, part of the cbnsideration being a debt contracted for intoxicating liquors sold in contravention of the statute, it is void. The notes are wholly void, and the mortgage is therefore wholly void.* § 170. General Rule. — In order to mortgage property so as 'Cobb V. Farr, 16 Gray (Mass.) 597. '^Bagg V. Jerome, 7 Mich. 145. See, also, Breck v. Adams, 3 Gray 569. 'Denny v. Dana, 2 Gush. (Mass.) 160. ■■Brigham v. Potter, 14 Gray (Mass.) 522. See, also, Fetherstone v. Hut- chinson, 3 Leon 128; Cro. Eliz. 199; Perkins v. Cummings, 2 Gray (Mass.) 258 ; Waite v. Jones, 1 Scott 735 ; Scott v. Gillman, 3 Taunt. 225 ; Deering v. Chapman, 22 Me. 488. RATIFICATION OF AN INVALID MORTGAGE. 147 to create a lien upon it, such property must be ascertained and identified at the time of the execution of the instrument. Thus, where a party endeavored to mortgage a newspaper plant out of the State, calling it the" Chronicle Plant," this is not a sufl&cient identification of the subject-matter. Judge Lord says the evidence discloses that the property, whatever that was, to furnish the security, was not in the State or county, or in possession of the mortgagors, but was repre- sented in a general way to be in a city in another State, or on the way to the State where the parties resided. That ^' in fact it does not appear definitely when the plant was ordered, and of what it consisted, and no one pretends to any specific information concerning it, or could, at the time the alleged agreement was made, enumerate in the most general way what it was that was subject to the lien." Such a mort- gage could not, therefore, be made effective as a security against any specific property which the court could ascertain and identify, and was unavailing as a lien on any subject-matter.^ And Judge Folger said : " There must be an identification of the property, so that the equitable mortgagee may say, with a reasonable degree of certainty, what it is that is sub- ject to his lien."^ In order that a lien may arise, the agreement must deal with some palrtieular property or interest, either by identify- ing it or by so describing it that it can be identified and made certain.^ But a mortgage of "all the personal property of which mortgagors are possessed," passes chattels in possession at the time of the mortgage's execution, and parol evidence is admissible to identify the same.* § 171. Ratification of an Invalid Mortgage. — A husband, to secure a debt of his own, mortgaged his wife's separate prop- erty. The mortgagee, in the presence of the wife, threatened 'Lee V. Cole. 17 Oreg. 659. ^ Payne v. Wilson, 74 N. Y. 352. ^3Pom. Eq. Jur. U235. • Harris v. Alden, 104 N. Car. 86. 148 PRESENT PROPERTY, OR INTERESTS IN ESSE. to foreclose the mortgage, and demanded more security. Then the wife said to him, "What more do you want? You have a mortgage on all the personal property already." This was suflBcient to authorize the jury to find that she had ratified the act of her husband in giving the mortgage.* ARTICLE II, — STATUTORY PROVISIONS. 172. In General. 181. New Hampshire. 173. Arizona. 182. New Mexico. 174. Arkansas. 183. Pennsylvania. 175. California. 184. By Act of 1887. 176. Connecticut. 185. Virginia. 177. Illinois. 186. "Washington. 178. Louisiana. 187. West Virginia. 179. Michigan. 188. Wisconsin. 180. Nevada. § 172. In General. — Some of the States have declared what personal property may be mortgaged. The following have statutory enactments : § 173. Arizona. — ^Upholstery and furniture used in hotels and public boarding-houses, when mortgaged to secure the purchase-money of the identical article mortgaged, and not otherwise ; also saw-mills, grist-mills, steamboat machinery, tools and machinery of machinists, of foundry-men and other mechanics ; steam boilers, steam engines, locomotives, engines, and the rolling-stock of railroads ; printing presses and other printing material ; instruments and chests of sur- geons, physicians or dentists ; libraries of all persons ; ma- chinery and apparatus for mining purposes ; growing crops,, grain in store or field ; teams or implements pertaining to a farm, and stock of all kinds on a farm ; provided such mort- gages be executed and recorded in the manner prescribed by this act. Stocks of merchandise only are excepted from mortgage." § 174. Arkansas. — In this State no exceptions I are made as 'Merrill v. Parker, 112 Mass. 260. 'Com. Laws, S 8644. CALIFORNIA. 149 to personal property, but a statute provides that mortgages of crops planted or to be planted have the same effect as mortgages of things in esse. Before this statute, mortgages of crops to be planted were invalid.^ § 175. California. — Upholstery and furniture used in hotels, lodging or boarding-houses, to secure the purchase-money of the identical article, and not otherwise; steamboat machinery, machinery used by machinists, foundry-men and other me- chanics ; steam boilers, steam engines, locomotives, engines, and the rolling-stock of railroads ; printing presses and other printing material ; instruments of physicians, surgeons or dentists ; professional libraries ; instruments, negatives and fixtures of photograph galleries ; mining machinery, grow- ing crops, machinery, casks, pipes, tubs and utensils used in the manufacture of wine, fruit brandy and fruit syrup and sugar.^ A mortgage which cannot be governed by this act, comes under the common-law rules.^ The upholstery and furni- ture of a hotel or boarding-house must be used for the purpose of carrying on the business.* But the furni- ture and fixtures of a saloon do not come under this enactment.* The mortgagee must allege and prove that the articles of furniture and upholstery were actually used in connection with the business.* A mortgage cannot be created by verbal agreement, as the Code^ provides that " a mortgage can be created, renewed or extended only by writing executed with the formalities re- x^oired in the case of a grant of real property." Growing crops' can be mortgaged, but after they are har- 'Aot8ofl874-75, p. 149. ' Civil Code, ?§ 2955-2958. ' Wildman v. Radenaker, 20 Cal. 615. 'Stringer v. Davis, 30 Cal. 318. 'Gassner v. Patterson, 23 Cal. 299. ^Stringer v. Davis, 30 Cal. 818. ' •' Civil Code, ? 2922. "Civil Code, ? 2955. i60 PRESENT PEOPERTY, OK INTERESTS IN ESSE. vested, the grain cannot be the subject of a chattel mortgage^ as it would be in contravention of the Civil Code/ § 176. Connecticut. — A chattel mortgage may be given on the following : Machinery, engine and implements situated and used in any manufacturing establishment; the ma- chinery, engines, implements, &c., situated and used in a printing, publishing or engraving establishment ; the furni- ture used by its owner in housekeeping ; the furniture, fix- tures, (fee, of any hotel-keeper contained and used in the hotel occupied by him ; hay, tobacco in the leaf, any piano, organ and melodeon, or any musical instrument used by an orchestra or band ; the lines, appliances or machinery of any telegraph company, and brick in any kiln or brick-yard." The statute requirement that the mortgage shall contain a particular description of machinery, must be complied with when the machinery is left with the mortgagor ; otherwise it is void as against attaching creditors.* But when the mortgagee takes possession, this particular description is not necessary, either at common law or by statute.* A mortgage of household furniture belonging to the owner of the building, and used by him, is valid, even if it constitutes the furniture of a hotel kept by him.* § 177. Illinois. — By the constitution of 1870 the rolling- stock of railroads is declared to be personal property, and is liable to execution and sale in the same manner as the per- sonal property of individuals." When mortgaging the realty, franchises and other prop- erty of a railway in Illinois, as an entirety, the property thus mortgaged may be sold as an entirety under decree in equity, without any right of redemption, and such action is ' Grangers v. Clark, 84 Cal. 201. ''Gen. Stat. p. 359, § 7, and Acts of 1878, ch. 90. 'Gaylor v. Harding, 37 Conn. 608. * Howe V. Keeler, 27 Conn. 538. 'Croswell v. Allis, 25 Conn. 801. "Const, of 1870, art. XI. ? 10. MICHIGAN. 151 not in conflict with the State constitution.^ But before the adoption of the constitution of 1870, rolling-stock wa& con- sidered as realty.^ But this constitution does not change the rule that the mortgage made by a railway company, convey- ing after-acquired property, holds such property as against creditors obtaining judgments and executions after the com- pany has taken possession of such property.^ Chattel mortgages on household goods and mechanics' tools must be foreclosed in a court of record. Chattel mort- gages on household goods must be executed by both husband and wife.* § 178. Louisiana. — In this State chattel mortgages are un- known. But all movables, whether corporeal or incorporeal, may be pledged or pawned. The civil-law rule is adopted in this State, and personal security is governed accordingly.* § 179. Michigan. — The exemptions of personal property are as follows : 1. Spinning-wheels, looms and stoves put up for use in a dwelling-house. 2. A seat, pew or slip occu- pied by a householder or his family in any house or place of public worship. 3, Cemeteries, tombs and rights of burial in use as repositories of the dead. 4. All arms and accoutre- ments required by law to be kept by any person, and all wear- ing apparel of every person or family. 5. The library and school-books of every person and family, not exceeding in value $150, and all family pictures. 6. To every house- holder ten sheep with their fleeces and the yarn or cloth manufactured from the same; two cows, five swine, and pro- visions an.d fuel for comfortable subsistence of such house- holder's family for six months. 7. To each householder all household goods, furniture and utensils, not exceeding in value $250. 8. The tools, implements, material, stock, ap- ' Hammock v. Loan and Trust Co., 105 U. S. 77. = Palmer v. Forbes, 23 111. 301; Hunt v. Bullock, 23 111. 325; Titus v. Mabee, 25 111. 257; Titus v. Ginheimer, 27 111. 462; Mich. Cent. B. E. Co. v. Chicago, &c., 1 111. App. 399. 'Scott V. Clinton, &c., R. K. Co., 6 Bias. C. O. 529. * Laws of 1889, tit. "Mortgages." 'Civil Code, tit. " Pledges," §§ 3115, 3158. 162 PRESENT PEOPEETY, OE INTEEESTS IS ESSE. / paratus, team, vehicle, horses, harness or other things to enable any person to carry on the profession, trade, occupa- tion or business in which he is wholly or principally engaged, not exceeding in value $250. 9. A sufficient quantity of hay, grain, feed and oats, whether growing or otherwise, for properly keeping for six months the animals in the several sections mentioned. And any chattel mortgage, bill of sale or other lien, created on any part of property above de- scribed, except such as mentioned in the eighth division, shall be void, unless such mortgage, bill of sale or lien be signed by the wife of the party making such mortgage or lien.^ § 180. Nevada. — All personal property, including grow- ing crops, may be mortgaged, provided that a chattel mort- gage upon a growing crop may be executed as well before as after the crop is planted.* § 181. New Hampshire. — All personal property is subject to mortgage. And it is provided by statute that crops matured or growing may be mortgaged.* § 1 82. New Mexico. — In this territory' all personal prop- erty is subject to mortgage, excepting growing crops. Grow- ing crops are made an exception by statutory provisions, and, of course, unplanted crops cannot be subjiect of a mort- gage.* § 183. Pennsylvania. — By act of April 27th, 1855, it was made lawful for lessees of collieries, manufactories and other premises to mortgage their leases, with the buildings, ma- chinery, (fee. Leases of min^s, &c., in Schuylkill county might be mortgaged under act of April 5th, 1853. An act was passed May 18th, 1876, allowing mortgages to be made of the following articles: Saw-logs, sawed lumber, laths, pickets, shingles, hewn lumber and spars, and petroleum or ' How. St. ch. 266. ^ Laws of 1885, ch. 54. "Gen. Laws, ch. 137, ? 1, p. 328. ' See Gen. Laws of 1874, tit. " Mortgages." WISCONSIN. 16S ■coal oil, crude and refined, in tanks, reservoirs, barrels or other receptacles, in bulk ; also, iron tanks and tank cars ; iron ore, mined and prepared for use; pig-iron, blooms, rolled or hammered iron, in sheets or bars, manufactured slate and canal boats. This act was limited to a duration of five years. Except as provided in the statutes, mortgages of chattels are not sanctioned. They are mere pledges, and are not good as against creditors and third persons unless the mortgagee takes possession.' § 184. By Act of 1887.— By act of April 28th, 1887, chat- tel mortgages were authorized of not less than $500 upon iron ore mined and prepared for use, pig-iron, blooms and rolled or hammered iron, in sheets or in bars, iron and steel nails, steel ingots and billets, rolled or hammered steel, in sheets, bars or plates, and all steel and iron castings of every description not in place. § 185. Virginia.— 'Chattel mortgages and deeds of trust may be given upon personal property, as upon real estate.* § 186. Washington. — In this State, all personal property is subject to mortgage. But a mortgage of chattels exempt from execution is not valid, unless the wife of the mort- gagor, if he be married, signs and executes the instrument with her husband.'' § 187. West Virginia. — In this State, chattel mortgages are seldom used. Deeds of trust are almost universally used, and the law concerning such instruments prevails.* § 188. Wisconsin. — Chattel mortgages of exempt personal property, if made by a married man, must be signed by his ' Bismark Build. Ass'n v. Bolster, 92 Pa. St. 123. ^Code,ch. 117, §§ 4,5. A conveyance of a stock in trade to trustees, in trust to pay certain debts, ■with power of sale in the usual way of trade, to occupy the store where business was carried on, until default in the payment of any of the debt secured, and until any of the creditors should require the deed to be closed by sale, is fraudulent per se, and void as to creditors of persons conveying. Addington v. Etheridge, 12 Grat. (Va.) 436. This was decided in 1855. "Rev. Code, ? 1986. *Code, oh. 76. 154 PRESENT PROPERTY, OR INTERESTS IN ESSE. wife, if she be at the time a member of the family, in the presence of two witnesses, or it is absolutely void.^ Chattel mortgages can operate only upon property in actual existence at the time of its execution.^ ARTICLE III. — FIXTURES. 189. When Buildings Become Personalty. 190. Fixtures May Bemain Personal Property by Agreement Between the Parties. 191. Ohio Rule. 192. Intent Alone Not Sufficient to Convert a Chattel Into a Fixture. 193. When Fixtures Become Kealty — Bule of Some Courts. 194. Another Rule. 195. The General Rule Between the Parties. 196. Machinery — Physical Annexation. 197. Between the Parties. 198. When the Chattels are to be Annexed to the Realty. 199. Incorporated with the Realty. 200. Improvements by Mortgagor. 201. When Mortgaged Personalty is Annexed to Realty. 202. General Fixtures. 203. Fixtures on Another's Realty. 204. Estoppel. 205. Evidence of Estoppel. 206. Priority— Notice. ' 207. Divesting Lien. 208. Mortgaged Property Being Attached' to the Realty. 209. What Is Appurtenant. 210. Chattels Real. § 189. When Buildings Become Realty. — There may be a valid chattel mortgage of property which is generally treated as real estate. A building erected upon another's land, prima facie, is a fixture and part of the realty. But if an understanding exists between the parties that it may be removed at any time, it then becomes personalty. One deriving title from a person who had previously mortgaged a building so erected as personal property, is not in a posi- tion to insist, as against the mortgagee, that it is a part of the realty ; nor is he at liberty to dispute the title of the raoytgagor.. Whenever one party owns real estate, upon ' Laws of 1887, oh. 268. 'Comstock v. Scales, 7 Wis. 159. WHEN BUILDINGS BECOME REALTY. 155 ■which there are fixtures belonging to another, with right of possession, the owner of the fixtures may mortgage them by a chattel mortgage. Thus, a chattel mortgage of an elevator erected under such an agreement is valid.' So, all buildings placed upon leased premises by the ten- ant, to be used for the purpose of trade and business, are, in law, deemed personal property and may be mortgaged as chattels, or levied on as personalty and sold upon execution.^ When a building is erected under an understanding or agreement that it may be removed at any time, it is then no part of the realty, and one deriving title from a party who had previously given a chattel mortgage on such building, is in no situation to insist, as against the mortgagee, that it forms part of the real estate.' And where one owns land in fee, but which he had leased to the owner of a mill situ- ated thereon, and then purchased the mill, this does not operate to extinguish the lien of an existing chattel mortgage upon the mill at the time of the purchase by the owner of the fee. The Assignee of the mortgagee can enforce his rights as set forth in the mortgage.* The law of recording a chattel mortgage or taking posses- sion of the property by the mortgagee does not apply to leases of real estate. The omission to file any instrument transferring a lease as a security, or failure of the transferee to take possession of the lease or of the demised premises, does not render the transfer void as to creditors, or raise a presumption of a fraudulent intent.^ The priority of a lien of a chattel mortgage upon a frame building subsequently removed by the mortgagor to and upon other lands, is not defeated by a subsequent mortgage upon such other land, given by the same mortgagor to a 'Deering v. Ladd, 22 Fed. Rep. 575. 'Lemar v. Miles, 4 Watts (Pa.) 332; Doty v. Gorharn, 5 Pick. (Mass.) 487 Van Ness v. Pacard, 2 Pet. (U. S.) 141 ; Lanphere v. Lowe, 3 Nebr. 131 Goodenow v. Allen, 68 Me. 308. 'Smith V. Benson, 1 Hill (N. Y.) 176. * Denham Vi Sankey, 38 Iowa 269. 'Booth V. Kehoe, 71 N. Y. 341. 156 PRESENT PKOPEBTY, OE INTERESTS IN ESSE. mortgagee having full knowledge of the prior chattel mort- gage/ A building erected on the land of another by permission of the owner's agent, and sold several times independently of the land, one-half being bought by one who afterwards buys the land without disputing the title of the owner, and occupant of the other half, is personal property.^ § 190, Fixtures May Remain Personal Property by Agree- ment Between the Parties. — It is not held that parties may, by contract, make personal property real, or real personal, at law ; but where an article, personal in its nature, is so attached to the realty that it may be removed without ma- terial injury to it or to the realty, the intention with which it is attached will govern. And if there is an express agreement that it shall remain personal property, or if, from the circumstances attending, it is evident it may be pre- sumed that such was the intention of the parties, it may be held to have retained its personal character.^ So, if chattels have been mortgaged and the mortgage placed upon record, and then the chattels placed upon realty, upon which mechanics acquire a mechanics' lien, the constructive notice is sufficient, and the mortgagee of the chattels will hold them.* And in general, when chattels are of such a nature as to retain their identity and distinctive characteristics after the annexation, and do not thereby become an essential part of the building, so that the removal of the chattels will not 1 Simons v. Pierce, 16 Ohio St. 215. ^ Brown v. Corbin, 121 Ind. 455. Buildings erected under an agreement with the owner of the land to convey it to the builder, provided he pay for it within a certain time, are not thus transformed into personalty, but are fixtures, and constitute a part of the real estate and are not subject to a chattel mortgage. Eastman v. Poster, 8 Met. (Mass.) 19. *Ford V. Cobb, 20 N. Y. 344; Eaves v. Estes, 10 Kans. 314; Coleman v. Lewis, 27 Pa. St. 291; Richardson v. Copeland, 6 Gray (Mass.) 536; Haven V. Emery, 33 N. H. 66 ; Sisson v. Hibbard, 10 Hun (N. Y.) 420; Robertson V. Corsett, 39 Mich. 777 ; Foster v. Prentiss, 75 Me. 279. * Sowden v. Craig, 26 Iowa 162. See Rogers v. Prattville, &c., 81 Ala. 483 ; Crane v. Brigham, 3 Stock. (N. J.) 29; Trull v. Puller, 28 Me. 548; Ballou v. Jones, 37 111. 95; Wade v. Johnston, 25 Ga. 331; Hill v. Wentworth, 28 Vt. 428; Manwaring v. Jenison, 61 Mich. 117; Pratt v. Whittier, 58 Cal. 126; Warner v. Kenning, 26 Minn. 173. FIXTURES MAY REMAIN PERSONAL PROPERTY. 157 materially injure the building, or destroy or unnecessarily impair the value of the chattels, a mutual agreement in respect to the manner in which the chattels shall be regarded^ after annexation, will have the effect to preserve the per- sonal character of the property between the parties to the' agreement.^ Hence, the proposition is well settled that one who purchases machinery with a view that it shall be an- nexed to or placed in a building of which he is the owner,, and executes a chattel mortgage on the property so pur- chased, thereby evidences his intention that the property shall retain its character as personalty, regardless of the manner in which it may be annexed to the realty.'' And it is the policy of the law, except where the rights of innocent purchasers are concerned, to uphold such contracts in the interest of trade. The execution of a chattel mortgage by the owner of realty, upon machinery which he afterwards places in a building situated thereon, is regarded as a clear intention that the act of annexation shall not change or take away the character ef the machinery as personalty until the debt secured by the mortgage has been fully paid.^ A provision in a chattel mortgage that, upon default of payment of the mortgage debt, the mortgagee may take pos- session of the mortgaged chattels and sell the same, if any- thing beyond the mortgage was needed, is equivalent to an express agreement that the property shall continue to be re- garded as personalty. Judge Mitchell says that when the nature of the property admits of it, parties may, by conven- tion, fix its character as personalty, as between themselves, after it is annexed to the freehold, and that a chattel mortgage is equivalent to an express agreement in that respect, and questions of the rights of the parties would be of easy solu- tion but for the intervention of the rights of third persons.*' 'Kogers v. Cox, 96 Ind. 157; Price v. Malott, 85 Ind. 266; Hendy v. Dinkerhoff, 67 Cal. 3; Malott v. Price, 109 Ind. 22; Ewell on Fixt. 66. ' Eaves v. Estes, 10 Kans. 314 ; Ford v. Cobb, 20 N. Y. 344 ; Sisson v. Hib- bard,.75 N. Y. 542; Tifft v. Horton, 53 N. Y. 377. 'Tifft V. Horton, 53 N. Y. 877. *Binkleyi). Forkner, 117 Ind. 176. 158 PRESENT PKOPEETY, OE INTERESTS IN ESSE. The authorities are not wholly in accord. In some juris- dictions the rule seems to be that an agreement between the owner of the realty and the vendor of chattels which are to be annexed thereto, concerning the character of the chattels, is valid, not only between the parties and against a prior mortgagee of the land, but also against a subsequent mortr gagee or purchaser without notice, while other courts hold an essentially different effect to such agreements. Thus, it has been held that neither a precedent nor subsequent mort- gagee of real estate can defeat the claim of one holding a chattel mortgage upon property which has been annexed to the mortgaged realty under an agreement that it shall con- tinue to be regarded as personalty, because the agreement between the holder of the chattel mortgage and the owner of the realty, that the chattels shall retain their character as personalty, rebuts the presumption that they were intended as permanent accessories to the realty, and binds both prior and subsequent mortgagees.'^ But it has been held that a chattel mortgage taken upon certain machinery, in contemplation that the machinery was to be fastened to a building and annexed to real property owned by the mortgagor, was not protected as against a sub- sequent mortgagee of the real estate," who would hold the mortgaged chattels as a part of the mortgaged realty.^ So, an agreement between the owner of iron rails- and a railroad company, that the rails should retain their character as bhattels after they had been fastened to the road-bed, would be unavailing as against a previous mortgagee of the road or a purchaser without notice.^ No general rule exists which declares that machinery, upon which there is a chattel mortgage, becomes necessarily subject to an existing mortgage upon real estate to which it may afterwards be annexed with the consent of the mort- ^Tifft V. Horton, 53 N. Y. 377 ; Ford v. Cobb, 20 N. Y. 344. ^ Pierce v. George, 108 Mass. 78. ' Hunt II. Iron Co., 97 Mass. 279. See, also, Stillman v. Flenniken, 58 Iowa 460. INTENT ALONE NOT SUFFICIENT TO CONVERT. 159 gagee, to the exclusion or postponement of a prior chattel mortgage. A prior mortgagee does not occupy the attitude of an innocent purchaser. The interests and rights of the holder of a chattel mortgage upon property which is annexed to realty, upon which there is an existing mortgage, must be determined by the practical application of equitable prin- ciples to the rights of the respective parties. " Whether the chattel mortgage shall be postponed, not- withstanding the agreement between the owner of the land and the mortgagee, must depend upon the inquiry whether or not the preservation of the rights of the holder of the chattel mortgage will impair or diminish the security of the real-estate mortgagee as it was when he took -it. If it will not, then it would be inequitable that the latter should de- feat or destroy the security of the former. If it will, then it was the folly or misfortune of the holder of the chattel mortgage, that he permitted the property to be annexed to a freehold, from which it cannot be removed without diminish- ing or impairing an existing mortgage thereon." ^ § 191. Ohio Rule. — In this State, it is held that, although the parties concerned may make a binding agreement that what would otherwise be a fixture shall be regarded as per- sonalty, yet such an agreement will not affect the rights of a subsequent mortgagee of the realty without notice of it, and that the delivery and filing of a chattel mortgage upon the property which is the subject of the agreement does not con- stitute the required notice.^ § 192. Intent Alone Not Sufficient to Convert a Chattel Into a Fixture. — Intent alone will not convert a chattel into a fix- ture.'' Where a chattel is annexed after giving the mortgage on the realty, and is of a doubtful nature, there must be stronger evidence, to make it a permanent accession to the ' Binkley v. Forkner, 117 Ind. 176. ^ Case Manufacturing Company v. Garver, 45 Ohio St. 289 ; and see Fort- man V. Goepper, 14 Ohio St. 558. ^Thielman v. Carr, 75 111. 385; Arnold v. Crowder, 81 111. 56; Treadway ii. ■ Sharon, 7 Nev. 37; Walfordw. Baxter, 33 Minn. 12; Farmers Loan and Trust Co. V. Minneapolis, &c., Works, 35 Minn. 543. 160 PRESENT PROPERTY, OR INTERESTS IN ESSE. freehold, than if it was annexed prior to or at the time of the execution of the real-estate mortgage.^ It is necessary to keep in view the distinction between chattels whose completeness and identity, as separate and distinct articles, may be preserved, notwithstanding their annexation, and those which necessarily become absorbed and merged in the realty.* Unless the detachment of mortgaged chattels would ma- terially affect the security of the real-estate mortgagee by depreciating the value of the mortgaged property, or by dis- mantling it of any important feature at the time the mort- gage was taken, the precedent real-estate mortgage only attaches to the. actual interest which the mortgagor has in the personal chattels subsequently annexed, at the time of their annexation.'' § 193. When Fixtures Become Realty — Rule of Some Courts. — It is held that there are several tests which aid in deter- mining the question whether articles personal in their nature have acquired the character of real estate: 1. Actual annexation, which must be of a permanent character, except in case of those articles which are not themselves annexed, but are deemed to be of the freehold from their use and character. 2. Adaptability to the use of the freehold. 3. The intention of the parties at the time of making the annexation. In the case of machinery, the circumstance that it may or may not be removed from the freehold with- out great injury to the building containing it or to itself, is not now deemed to be controlling. But when a building is constructed for milling or manufacturing purposes, and is so employed, all the machinery and appliances used in connec- tion with the business, whether attached in any way to the realty or not, become a part of the realty, and a mortgage 'Tillman v. De Lacey, 80 Ala. 103; Clore v. Lambert, 78 Ky. 224; Ro- wand V. Anderson, 33 Kans. 264. "Porter v. Steel Co., 122 U. S. 269; Durham i>. Railway Co., 1 Wall. (U. S.\ 254; Railway Co. v. Cowdrey, 11 Wall. (U. S.) 459. 'United States v. Railroad Co., 12 Wall. 362 ; Fosdick v. Sohall, 99 U. S. 235. WHEN FIXTURES BECOME REALTY. 161 simply on the land carries with it such machinery and ap- pliances, even without any; mention being made thereof. Judge Hunt says : " I am of the opinion that upon general principles, that is, unless there be some specific agreement to the contrary, or some circumstances controlling the general rule, that the boilers and engines, shafting and gearing, be- came a part of the realty, and passed to the plaintiff upon his purchase."^ The remedy of the party is against those that wrongfully convert the personal property into real property.^ So, the owner of real estate with a flouring mill thereon, which was subject to a mortgage duly recorded, procured new machinery therefor on credit, upon agreement that title to the machinery should not pass until it was paid for. The machinery was attached to the realty, as was intended. It was held that a purchaser upon foreclosure took title to the machinery as against the vendor of it, notwithstanding the contract and a failure to pay for it. The court said personal property, thus voluntarily affixed to mortgaged real estate, necessarily becomes subject to the mortgage ; there is no semblance of equity against the mortgagee in favor of the party who thus permits his personalty to become real estate, having notice of the mortgage by the record. Property which has thus become real estate, cannot be changed again so as to become personalty, without the consent of the mort- gagee.^ So, the machinery of a woolen mill, consisting of looms, carders, breakers, condensers, is fixtures, and included in a trust deed covering the realty.* The Pennsylvania court holds that a mortgage of a ma- ' Voorhees v. McGinnis, 48 N. Y. 278 ; Pierce v. George, 108 Mass. 78 ; Farrar v, Stackpole, 6 Greenl. (Me.) 154; Parsons v. Copeland, 38 Me. 537 ; Winslow «. Mer. Ins. Co., 4 Met. (Mass.) 306; Stockwell v. Campbell, 39 Conn. 362; Millikin v. Armstrong, 17 Ind. 456; Queen ex rel. v. Lee, 1 L. E., Q. B. 241; Holland v. Hodgson, 7 L. R., C. P. 328. 'Fryatt v. Sullivan Co., 5 Hill (N. Y.) 116. ' Bass Foundry v. Gallentine, 99 Ind. 525. *Ottuinwa W. Mill Co. v. Hawley, 44 Iowa 57. 162 PRESENT PKOPEETY, OR INTERESTS IN ESSE. chine shop includes all its fixtures as such, and the mortgagor cannot remove them to the injury of the mortgagee. Thus, a mortgagor having sold a lathe belonging to a mortgaged machine shop, it was decided that the mortgagee could hold it/ § 194. Another Rule. — ^The decisions are not uniform on ^his question. Some courts lay down the rule that the eri- iterion of a fixture, applicable to a mill or manufactory, is the resultant of three requisites : 1. Actual annexation to the realty, or something appurtenant thereto. 2. Application ito a use or purpose to which that part of the realty with which it is connected is appurtenant. 3. The intention of the party making the annexation to make a permanent ac- •cession to the freehold.^ And, as between mortgagor and mortgagee of a large brick building, certain boilers, engines, shafting and steam- pipes for heating purposes, the latter fastened along the walls with wrought-iron spikes, were held to be part of the realty, although called personal property in a deed and bill of sale to the mortgagor.' § 196. General Rule Between the Parties. — ^The general rule 'between the mortgagor and the mortgagee is that annexa- tions to the real estate pass to the mortgagee, unless by "express terms the mortgagor excepts them from the terms of the conveyance ;* and this rule applies to subsequent annexa- tions to the property.^ ' Hoskin v. Woodward, 45 Pa. St. 42. 'Teaffu Hewitt, 1 Ohio St. 511; Keve v. Paxton, 26 N. J. Eq. 107; Capen V. Peckham, 35 Conn. 88; Brennan v. Whitaker, 15 Ohio St. 446; Crane v. Brigham, 11 N. J. Eq. 29. 'Quinby v Manhattan, &c , Co., 24 N. J. Eq. 260. See, also, Blanoke v. Kogers, 26 N. J. Eq. 563 ; Hutchinson v. Kay, 23 Beav. 413 ; Potter ii. Crom- Tvell, 40 N Y. 287; McRea v. Bank, 66 N. Y. 489; Ewell on Fixt. 21; Tyler on Fixt. 114. ♦Arnold v. Crowder, 81 III. 56; Merritt v. Judd, 14 Cal.59; Union Bank v. Emerson, 15 Mass. 159; Maples v. Millon, 31 Conn. 598; Pea v. Pea, 35 Ind. 887 ; Quinby v. Manhattan, &c., Co., 24 N. J. Eq. 260 ; McRea v. Nat. Bank, €6 N. Y. 489; Winslow d, Mer. Ins. Co., 4 Met. (Mass.) 306; Hoskins ti. Woodward, 45 Pa. St. 42 ; Longbottom v. Berry, 5 L. R., Q. B. 123 ; Hitcbman v Walton, 4 M. & W. 409 ; Ex parte Belcher, 4 Dea. & Ch. 703 ; Longstaff v. Meagoe, 2 A. & E. 167 ;■ Walrasley v. Milne, 7 C. B. (N. S.) 115. 'Wood V. Whelen, 93 III. 153; Snedeker v. Warring, 12 N. Y. 170; Lynde V. Bowe, 12 Allen (Mass.) 100; Corliss v. McLagin, 29 Me. 115; Wright v. ■Gray, 73 Me. 297; Bond v. Cope, 71 N. Car. 97. GENERAL RULE BETWEEN THE PARTIES. 163 Thus, when one purchasing machinery gives a chattel mortgage for its price, and orally agrees that it shall be -treated as personalty until paid for, and the realty to which it is afterwards attached by him will not be injured by its removal, the machinery will be considered as personal prop- erty, as against a prior mortgagee of the realty. So it will be considered, as against a subsequent mortgagee of the realty, whose mortgage, after describing the land, provides that the mortgagor also mortgages and warrants all ma- chinery, particularly enumerating it, and that none of the same is to be removed until the mortgage is paid, as such mortgage treats the machinery as personalty, and is therefore subject to the prior chattel mortgage.^ In general, different rules prevail, dependent on the rela- tion of the parties, whether of grantor or grantee, landlord and tenant, or executor and heir, and also upon the uses for which the things are intended, whether for the purpose of agriculture or trade or manufacture. But as between mort- gagor and mortgagee, the same rules prevail, substantially, as between vendor and vendee.^ There is no material diifer- ence whether the chattel is attached before or after the exe- cution of the mortgage, except stronger evidence of intention to annex is required where the chattel is placed subsequently to the execution of the mortgage.* It may be regarded as the settled rule that any chattel permanently annexed to the freehold, and which cannot be severed without material injury to the premises, becomes a part of the realty, irrespective of the intention with which it was attached.* It is, however, held, and rightly, too, that it may be re- quired, by the future growth and extension of manufacturing industries, that the requisite of physical attachment in or to the soil be relaxed to the extent that the question of fixtures ' Binkley v. Forkner, 117 Ind. 176. ^ Walmsley d. Milne, 7 C. B. (N. S.) 115; Maples v. Millon, 31 Conn. 598- vQuinby v. Manhattan, &c., 24 N. J. Eq. 260 ; M'Kim v. Mason, 3 Md. Oh. 186. ' Gardner v. Finley, 19 Barb. (N. Y.) 317. ' Harkness v. Sears, 26 Ala. 493. 164 PRESENT PROPERTY, OR INTERESTS IN E^E. vel non shall depend on the nature and character of the act by which the structure is put in place, the policy of the law connected with its purpose, and the intention of those con- cerned in the act.' But, while it is not essential to a fixture that the connection with the freehold shall be to such degree that it cannot be severed without breaking or lasting injury to the premises, actual' annexation to some degree and in some mode, though it may be slight iand indirect or con- structive, ordinarily is regarded as requisite.^ The weight of authority is in favor of viewing everything as a fixture which has been attached to the realty, with a view to the purpose for which it is held or employed, how- ever slight or temporary the connection between them.* , An important case was decided in Alabama. An engine was put on the land by one of the mortgagors after the making of the mortgage. It was an upright engine and rested on brick or plank on the ground, being sustained in place by its own weight. A house was erected over it, the sills of which rested on the ground, not being set into the soil. The engine was connected by a band with the gin, situated in a house about eighty feet distant. The engine could not be moved from the house without breaking the house for that purpose. It was used to furnish motive power for ginning the cotton raised on the premises and the cotton of other persons for toll. The court held that the intention must control, the onus being on the mortgagee of the land to show that the mortgagor intended that the engine should be a permanent accession to the freehold.* A frame building erected by the side of a mill, for use as an office, in connection with the mill, is part of the realty, although erected after the mortgage was given, intended to be temporary only and to be ultimately removed, and not ' Winslow V. Mer. Ins. Co., 4 Met. (Mass.) 306; Meig's Appeal, 62 Pa. St.- 28 ; Wright v. Gray, 73 Me. 297. 'Tillman v. DeLacy, 80 Ala. 103. '2 Smith's Lead. Gas. 221. 'Tillman v. De Lacy, 80 Ala. 103. AGEEEMENT BETWEEN THE PARTIES. 165 attached to the mill, nor fixed to the ground, but resting upon wooden blocks sitting upon the surface of the earth.' 80, the boilers and steam engine in a marble-mill are fixtures.^ § 196. Machinery — Physical Annexation. — The weight of authority holds that physical annexation to the realty is necessary to make machinery a part of the freehold.^ While physical annexation is not indispensable, the adjudicated cases are almost universally opposed to the idea of mere loose machinery or utensils, even where such property is the main agent or principal thing in prosecuting the business to which the realty is adapted, being considered a part of the realty for any purpose. To make it a fixture, it must not merely be essential to the business of the structure, but it must be attached to it in some way, or at least it must be mechanically fitted, so as in ordinary understanding to con- stitute it a part of the structure itself It must be perma- nently attached to, or the component part of, some erection, structure or machine which is attached to the freehold, and without the erection, structure or machine would be imper- fect or incomplete.* § 197. Agreement Between the Parties. — The agreement made by the parties will control them, unless the articles are of such a character that their detachment would involve a destruction or great injury to the realty, as such annexation might well be regarded as an abandonment of the lien by him who impliedly assents to the annexation ; otherwise the agreement will control. Thus, an engine and boiler were purchased by the chattel mortgagor, who executed a chattel mortgage on them for the price, payable at a certain date. He failed to pay at the time specified, and gave a new chat- ' State Bank v. Kercheval, 65 Mo. 682. ' Sweetzer v. Jones, 35 Vt. 317 ; and see Burnside v. Twitchell, 43 N. H. 390; Colemau v. Stearns Man. Co., 38 Mich. 80 ; Roberts v. Dauphin Bank, 19 Pa. St. 71 ; Ex parte Cotton, 2 M., D. & D. 725 ; Ex parte Belcher, 4 Dea. & Oh. 703; Grseme v. Cullen, 23 Gratt. (Va.) 266. ' Farmers Loan and Trust Co. v. Minneapolis, &c., Works, 35 Minn. 543 ; Burnside v. Twitchell, 43 N. H. 390. ♦ Walford v. Baxter, 33 Minn. 12. 166 PRESENT PROPERTY, OR INTERESTS IN ESSE. tel mortgage in lieu, payable at a time named, but before this date of payment he gave a real-estate mortgage on the property on which the engine and boiler were situated. It was decided that the real-estate mortgage could not cover them to the exclusion of the chattel mortgage lien.^ Accordingly, where a chattel mortgage was given for the price of a portable engine and saw-mill, it was agreed that the property was to continue as personalty. It was placed on land owned by one of the mortgagors, in a mill, in such a manner that when the supply of lumber was exhausted there it could be easily removed elsewhere, which was done several times, and the engine was often taken out for threshing. Under these circumstances, the property remained as per- sonalty, and could not pass to the mortgagee of the real estate." A vendor of an engine, boiler and machinery, knowing that they were to be annexed to realty, took a chattel mort- gage for a part of the price, but failed to register it. The mortgagor of the chattels annexed them to the real estate, on which he had given a mortgage. It was held by a divided court that the lien of the chattel mortgage would be pro- tected so far as it would not diminish the security which the real-estate mortgagee would have had if the annexation had not been made.^ A saw-mill which is subject to a chattel mortgage does not become a fixture, under a provision of a contract that the buildings or improvements placed or made upon the premises shall remain thereto as further and additional security for the execution of the covenants therein contained, unless the removal of the said improvements or buildings is consented to in writing by the owner of the land, and the title to such mill does not vest in him.* § 198. When the Chattels Are to Be Amiexed to the Realty. — ' Sword V. Low, 122 111. 487. See Kribbs v. Alford, 120 N. Y. 519. 'Henkle v. Dillon 15 Oreg. 610. ' Campbell v. Roddy, 44 N. J. Eq. 244. ' Burrill v. Wilcox Lum, Co., 65 Mich. 571. INCORPORATED WITH THE REALTY. 167" When chattels are so annexed to the realty that they cannot be removed without destroying or injuring the land, they cannot be removed. Thus, the owner of a machine shop gave a chattel mortgage on the machinery before it was set up. After setting up the machinery in a permanent manner, he gave a real-estate mortgage on the shop and machinery. Under these circumstances, the chattel mortgage was ren- dered unavailable.^ But if machinery or other chattels are not annexed to the realty in a permanent manner, it would be sufficient evi- dence of the intention of the parties that they are to remain. as personalty .'^ Where one purchases machinery, giving a chattel mort- gage for its price, and orally agrees that it shall be treated as personalty until paid for, the realty to which it is attached afterwards by him could not be injured by its removal ; the machinery will be considered as personalty as against a prior mortgagee of the realty, and against a subsequent mortgagee of the realty, whose mortgage, after describing the lien, pro- vides that the mortgagor also mortgages and warrants all the machinery (particularly enumerating it), and that none of the same shall be removed until the mortgage is paid.^ § 199. Incorporated With the Realty. — When chattels be- come incorporated with the realty, they become a part of it, . no matter how incorporated. Thus, a mortgagor planted trees on the mortgaged premises, and gave a chattel mort- gage on them, which was duly recorded. Afterwards the real-estate mortgage was foreclosed, and the purchaser of the realty took title to the trees.* There can be a constructive incorporation. Thus, when the principal part of the machinery is permanently annexed,, such part of it as may not be so physically annexed, but which, if removed, would leave the principal thing unfit for ' Price V. George, 108 Mass. 78. 'Sisson V. Hibbard, 75 N. Y, 542; Eaves v. Estes, 10 Kans. 314; Ford v. Cobb, 20 N. Y. 344. ' ' Binkley v. Forkner, 117 Ind. 176. 'Adams v. Beadle, 47 Iowa 439. See, also, Maples v. Millon, 31 Conn. 698.. 168 PRESENT PROPERTY, OR INTERESTS IN ESSE. use, and would not of itself, and standing alone, be well adapted for general use elsewhere, is constructively annexed/ But where machinery of a cotton mill is fastened to the floor by nails and screws, or held in position by cleats, it is no part of the realty, and may be mortgaged as personalty.'' But if the machinery was permanently attached, it would be otherwise.^ § 200. Improvements by Mortgagor. — Where a mortgagor left in possession improves the mortgaged premises, after the execution of the mortgage, by the erection of new works and the introduction of new machinery, which are intended to be permanently- annexed to the freehold, he cannot remove such fixtures and thus impair the increased security, and it seems that this rule applies even to trade fixtures.* Thus, an engine and machinery for a flouring mill erected by a lessee of the demised premises, securely attached by bolts and screws thereto, are fixtures as between him and his attaching creditors, notwithstanding an agreement between the lessor and lessee that he should be at liberty to remove the machinery upon the expiration of the lease." Fixtures erected by the tenant of the demised premises for the purpose of carrying on his trade, being accessory to the enjoyment of the term, are personal property during the continuance of the term." That the chattels shall remain permanently, it is necessary, as held by some courts, that they shall be so annexed to the reality that they cannot be removed without injuring the freehold or substantially destroying their own value.'' If the fixture be annexed to a building which is a personal 'Dudley v. Hurst, 67 Md. 44. "Keeler v. Keeler, 31 N. J. Eq. 181. S. P., Godard v. Gould, 14 Barb. (N. Y.) 662; McEntee v. Scott, 2 Thomp. & G. (N. Y.) 284; Gale v. Ward, 14 Masa. 352; Sturgis v. Warren, 11 Vt.433. 'Frankland v. Moulton, 5 Wis. 1. 'Foole V. Gooch, 96 N. Car. 265. »McNally v. Connolly, 70 Cal. 8. •Kile V. Giebner, 114 Pa. St. 381. 'Ford V. Cobb, 20 N. Y. 844; Sisson v. Hibbard, 75 N. Y. 542; Tifft «. Horton, 53 N. Y. 377 ; Kinsey v. Bailey, 9 Hun (N. Y.) 452. SEVERED FIXTURES. 169 •chattel, then the fixture will be included in a chattel mort- gage on the building. Thus, a track scale, used mainly in the business of an elevator, and erected for that purpose, which is closely connected with a hopper, from which grain can be taken by means of conveyors to and from the ele- vators, and which is joined to the same by visible frame- work, is a fixture to the building, within the meaning of, -and passes by a sale under, a chattel mortgage on an elevator and other buildings upon certain leased premises, " with the machinery therein, and all the fixtures thereto belonging." The fact that the elevator is a chattel, and not part of the realty, and that the scale is not on the leased .premises but adjacent thereto, is immaterial. Judge Granger says that the intent had much to do in determining whether the scale was a fixture. He says the testimony shows that the scale was bought for use with the elevator, and, after being adjusted, it was mainly used for the purpose of carrying on the busi- ness of the elevator ; that it was as much a part of the ele- vator, for the purposes of the business, as the machinery of the elevator, and for such purposes as arose closely connected therewith. Having settled that the scale was a fixture to the elevator, it passed with it under a chattel mortgage.* § 201. When Mortgaged Personalty is Annexed to Realty. — If personal property, such as machinery, by consent of the mortgagee, be annexed to the realty, then the intention and -agreement of the parties have much to do with the determina- tion of the question whether it retains its character as per- sonalty and subject to the first lien of the chattel mortgage.^ § 202. Severed Fixtures. — A mortgage of a farm covers poles used in raising hops thereon, though brought thereto after its date, and the mortgagor's lien is superior to that of one who, after the removal of the poles from the farm, took a chattel mortgage thereof, to secure an antecedent debt.® In ' McGorrisk v. Dwyer, 78 Iowa 279. ^Potter V. Cromwell, 40 N. Y. 287 ; Tiffl v. Horton, 53 N. Y. 377; Sheldeo V. Edwards, 35 N. Y. 279. 'SulUvan v. Toole, 26 Hun (N. Y.) 203. 170 PRESENT PROPERTY, OR INTERESTS IN ESSE. Kentucky, if chattels are attached to the realty by the ven- dor or mortgagor, after the execution of the deed or mort- gage, and are not mentioned therein, they will not be subject to the lien, although so attached that a removal will impair the lien.' Upon a bill being filed by the mortgagee under a mort- gage on an opera-house, to enjoin a foreclosure of a chattel mortgage of the opera-house chairs contained in such house, it was held that it was evident that it was the intention of the mortgagor that the chairs should remain personal prop- erty, and that a new mortgage could be given at the expira- tion of the fii;st.^ Cotton machinery, though fastened to the floor by nails and screws, or held in position by cleats, is personal prop- erty, and will pass under a chattel thereon as against a mort- gage of the real estate subsequently given.^ § 203.. Fixtures and Personalty on Another's Realty, — Where one owns real estate upon which there are fixtures which belong to another, who has the right of possession of them, such owner may give a chattel mortgage on them.* So, grass growing is, in general, a parcel of the realty, yet, when it is owned by one who does not also own the land, it is personal property, and may be mortgaged as such.* So, a tenant of a farm who has set out wine plants during his tenancy, may mortgage them by a chattel mortgage, and the mortgagee's title will take preference to the vendee of the landlord," § 204. Estoppel. — Parties can be estopped by their agree- ment to claim fixtures as part of the realty. Where a real- estate mortgage was given with a verbal agreement that the ■Clore V. Lambert, 78 Ky. 224. ' AdrewB v. Chandler, 27 111. App. 103. 'Keeler v. Keeler, 31 N. J. Eq. 181. • Cook V. Corthell, 11 R. I. 482; Williamg v. Briggs, 11 R. I. 476; Walker V.Vaughn, 33 Conn. 577; Gregg v. Sanford, 24 111. 17; Titus v. Mabee, 25- 111. 257 ; Chapin v. Cram, 40 Me. 561. ^ Smith V. Jenks, 1 Denio (N. Y.) 580 ; 1 Oomst. 90. » Wintermute v. Light, 46 Barb. (N. Y.) 278. PRIORITY — NOTICE. 1 7 J mortgagor should erect a saw-mill on the premises, and did thus erect said mill, but gave a chattel mortgage on the engine and machinery, six months after the real-estate mort- gage, to secure the purchase price, these chattels did not become a part of the realty and the chattel mortgage could hold them.* A vendor sold his real estate and took a mortgage back. At the same time, by bill of sale, he sold his chattels. The chattels were mortgaged by the vendee, and it was held that between the vendor and the mortgagee of the personal prop- erty under the agreement, it must be regarded as personalty and not subject to the real-estate mortgage.'* § 205. Evidence of Estoppel. — If the owner of machinery and other things in the nature of fixtures, which may be easily removed without injury to the realty, treats them as chattels, and executes a chattel mortgage covering them, he thus estops himself from asserting as against the mortgagee that they are real estate, and the mortgagee may introduce the mortgage in evidence to show his right to the possession of the chattels, without putting in issue the title to the real estate.' § 206. Priority — ^Notice. — A chattel mortgage upon ma- chinery which afterwards becomes fixtures, with knowledge- and consent of the mortgagee, will not be afiected by the lien of a mechanic, having notice of the facts, for work done- on the mill ; and no person chargeable with notice can, by purchase of the realty or otherwise, acquire from or through the mortgagor any title to the said fixtures paramount to- the mortgagee. This is so when the property is a legitimate subject for fixtures and is that class of property of which the law permits parties to contract so as to control, as between themselves, its character. The mortgaging of it as personal pi'operty would, as between the parties and those having: 'Crippen v. Morrison, 13 Mich. 23. ''Fortman v. Goepper, 14 Ohio St. 558. See, also, Frederick v. Devol, 15- Ind. 357 ; Ford v. Cable, 20 N. Y. 344. 'Corcoran v. Webster, 50 Wis. 125; Smith v. Benson, 1 Hill {N. Y.) 176. 172 PBESBNT PEOPERTY, OR INTERESTS IN ESSE. aotice thereof, make it such. Of course a different rule would obtain in relation to bricks, lime, boards, beams and the like, used in the construction of a bouse. These, by such use, lose their individuality and become absorbed in and made a part of, rather than simply annexed to the realty.' The priority of lien of a chattel mortgage upon a frame building subsequently removed by the mortgagor to and upon other lands, is not defeated or affected by a subsequent mortgage upon such land, given by the same mortgagor to a mortgagee having full knowledge of the prior chattel mort- gage.* When the annexation of fixtures to a mill was made by the owner with the consent of the holder of a chattel mortgage upon the property so annexed, such mortgage, though duly filed and renewed, is inoperative as against a bona fide mortgagee of the real estate without notice. Actual notice of the severance before the making of the real-estate mortgage, or notice of a binding agreement to sever, is re- quired in such case to deprive a mortgagee of the freehold of the right to the fixtures.^ r Fixtures attached to the real estate by the owner, so as to become a part thereof, between vendor and vendee, pass to the vendee of the real estate, free of the lien of a prior mortgage of the same, as personal property, of which vendee had no notice. A purchaser, in searching the title to real estate, is not required to examine the records of chattel \mortgages.* § 207. Divesting Lien. — One who purchases machinery on which there is a valid chattel mortgage cannot divest the lien by attaching such machinery as a fixture in a roller mill.* So, also, a chattel mortgage is superior to a prior real- estate mortgage, in common form, covering the same chattels, ' Sowen V. Craig, 26 Iowa 156. '' Simons v. Pierce, 16 Ohio St. 215. 'Brennan v. Whittalcer, 15 Oliio St. 446. *Bringholfif V. Munzenmaier, 20 Iowa 513. ■* Grand Island Banking Co. v. Frey, 25 Nebr. 66. WHAT IS APPURTENANT. 173 where the chattel mortgagee is in the position of an innocent purchaser.^ § 208. Mortgaged Property Being Attached to the Realty. — When a chattel mortgage is given on machinery which is afterwards attached to the realty, but in such a way as to be easily removed without injury to the freehold, it will be valid against a prior real-estate mortgage of the realty.'' But a mortgage of a factory eo nomine includes, ex vi termini, all machinery and other articles essential to the factory then in place.* § 209. What Is Appurtenant. — Where the conveyance is of a mill or factory eo nomine, with the privileges and appur- tenances, if the article in question is an essential part of the mill or factory, it is included in the term, and passes there- with, whether real or personal property.* Thus, the prop- erty as described in the mortgage was, " one frame grain elevator warehouse, * * * ^^j^jj ^^ ^jjg appurtenances thereto belonging." Under this description a party in in- terest claimed title to an engine-house, together with the engine and boiler, complete ; also an office building and a stationary Fairbanks' scale, the former situated fifty feet and the latter over one hundred, feet distant from the warehouse, and entirely disconnected therefrom. This property was not appurtenant nor could it pass to the mortgagee under the general term " appurtenances thereto belonging." ° > Howard v. Witters, 60 Vt. 578. 'First Nat. Bank v. Elmore, 52 Iowa 541; Tifft t;. Horton, 53 N. Y. 377; Eaves v. Estes, 10 Kans. 314; Henry v. Van Branstein, 12 Daly (N. Y.) 480; Keeler v. Keeler, 31 N. J. Eq. 181 ; Miller v. Wilson, 71 Iowa 610. But see Voorhees v. McGinnis, 48 N. Y. 278 ; Pierce v. George, 108 Mass. 78. ' Shelton v. Ficklin, 32 Gratt. ( Va.) 727 ; Delaware, &c., K. R. Co. v. Oxford Iron Co., 36 N. J. Eq. 452; Voorhis v. Freeman, 2 W. & S. (Pa.) 116; Hos- kin V. Woodward, 45 Pa. St. 42. * Farrar v. Stackpole, 6 Me. 154 ; Lathrop v. Blake, 3 Foster (N. H.) 46 ; Baldwin w. Walker, 21 Conn. 168 ; Hoskins d. Woodward, 45 Pa. St. 42; Pick- erell v. Carson, 8 Iowa 544. ' Frey v. Drahos, 6 Nebr. 1. 174 PRESENT PROPERTY, OR INTERESTS IN ESSE. ARTICLE IV. CHATTELS REAL. 210. Leases and Similar Instruments. § 210. Leases and Similar Instruments. — ^The provisions of the statutes in relation to filing chattel mortgages do not apply to leases of real estate. Such instruments are not usually the subject of a mortgage. The statutory provisions relate specially to goods and chattels which can be removed from one place to another, and the possession thereof changed, and not to a chattel real or a chose in action. The filing of a chattel mortgage, therefore, as to a chattel real would not be necessary and of no consequence whatever. T^here could be no such change of possession of such an in- strument as is contemplated in regard to ordinary chattels. The omission to file an instrument transferring the same as a mortgage would not be a violation of the statutes in rela- tion to filing chattel mortgages or establish a case of a fraudu- lent transfer of itself, with the intent to hinder, delay or der fraud creditors.' An assignment of a lease, being not an absolute but con- ditional transfer, subject to be defeated, before the expiration of the term, by the performaHce of the conditions, is a mort- gage, and the statute providing for filing chattel mortgages has no application to a mortgage of an interest in real estate.* A chattel real can be sold only as real estate.^ 'Booth V. Kohoe, 71 N. Y. 341. ■'Breese v. Bange, 2 E. D. Smith (N. Y.) 474. :' Ex parte Wilson, 7 Hill (N. Y.) 150. GENERAL BULE. 175^ CHAPTER VI. AFTEK-ACQUIRED PEOPERTY, OR INTERESTS IN FUTURO AND IN POSSE. ARTICLE I. — THE DOCTRINE OF THE LAW. 211. At Common Law. 212. Between the Parties. 213. General Rule. 214. Verbal Agreement. 215. Natural Increase. 216. The Young of Female Animals. § 211. At Common Law. — At common law a chattel mort- gage can only operate on property in esse at the time of giv- ing the same, and then actually belonging to the mortgagor, or potentially belonging to him as an incident of other prop- erty then in existence, and belonging to him.^ § 212. Between the Parties. — A mortgage of property to be afterwards acquired by the mortgagor, is valid as between the parties, if the property is in existence at the time of its execution, and the property is clearly embraced within the description.^ § 213. General Rule. — Under the common law, the general rule is that all mortgages of property, which the mortgagor does not own at the time of the execution of the mortga;ge, though he acquires it afterwards, are void as to third per- sons. This rule has been changed in many of the States, 'Borden v. Croak, 131 111. 68. "Hirshkind v. Israel, 18 S. Car. 157; Beall v. White, 94 U. S. 382; Ludwig V. Kipp, 20 Hun (N. Y.) 265 ; Scharfenburg b. Bishop, 35 Iowa 60; Fejavary V. Broesch, 52 Iowa 88; Stephens v. Pence, 56 Iowa 257; Arques v. Wasaon, 51 Cal. 620 ; Curtis v. Wilcox, 49 Mich. 425 ; Williams v. Winsor, 12 R. I. 9 ; Caycei;. Stovall, 50 Miss. 396. Compare Hunt v Bullock, 23 111. 320 ; Hunter V. Ellsworth, 43 Wis. 583 ; Case v. Fish, 58 Wis. 56. But in Illinois it is held that suph property is not held by virtue of the mortgage but by virtue of an agreement, whereby an equitable lien arises favorable to the mortgagee. Bell v. Shrieve, 14 111. 462. 176 AFTEE-ACQtriRED PKOPEETY. and it holds good only where this common-law doctrine prevails/ § 214. Verbal Agreement. — A verbal agreement entered into by the parties to a mortgage after its execution, cannot subject after-acquired property to a lien of the mortgage as to third persons,^ though such agreement might be valid as to the parties to the mortgage." § 215. Natural Increase. — If the after-acquired property be the product of present property of the mortgagor, as the wool growing on sheep, or the produce of a dairy or farm, or anything of that character, the mortgage will take effect upon that property as soon as it comes into existence, and will be perfectly binding at law.* A party may mortgage the natural and expected product, growth or increase of his own property.* § 216. The Young of Female Animals. — Where domestic animals are mortgaged during the period of gestation, the offspring when born will, as between the parties t6 the mort- gage, be covered thereby, but as against bona fide purchasers or incumbrancers, acquiring their title without notice of the facts, and after the period of nurture has passed, such off- spring will not come under the mortgage lien." So, where the owner of a domestic animal gives a mortgage on it dur- ing the period of gestation, the mortgagee will, as against the mortgagor, be entitled to the offspring when born.' This 'Jones V. Richardson, 10 Met. (Mass.) 481; Looker v. Peckwell, 38 N J. L. 253; Farmers Loan and Trust Co. v. Long Beach Imp. Co., 27 Hun (N. Y.) 89; Codman v. Freeman, 3 Cnsh. (Mass.) 306; Letoverus v. Ringgold, 3 Cranch C. C. 103; Gardner v. MeEwen. 19 N. Y. 123 ; Pierce v. Emery, 32 N. H. 484; Wilson v. Wilson, 37 Md. 1 ; Rose v. Bevan, 10 Md. 466 ; Otis v. Bill, 8 Barb. (N. Y ) 102; Hamilton v. Rogers, 8 Md. 301. 'Powers V. Freeman, 2 Lans. (N. Y.) 127. "Burns v. Campbell, 71 Ala. 271. 'Conderman v. Smith, 41 Barb. (N. Y.) 404. 'Grantham v. Hawley, Hob. 132. 'Funk'!). Paul, 64 Wis. 35. 'M'Oartyy. Blevins, 5 Yerg. (Tenn.) 195; Conderraan v. Smith, 41 Barb. (N. Y.) 404 ; Hughes v. Graves, 1 Litt. (Ky.) 317 ; Evans v. Merriken, 8 Gill & J. (Md.) 39; Forman v. Proctor, 9 B. Mon. (Ky.) 124; Fowler v. Merrill, 11 How. 376; Kellogg t). Lovely, 46 Mich. 131; Darling v. Wilson, 60 N. H. 59. UNPLANTED CROPS. 177 mortgage will cover and include, for a reasonable time, the produce or descendants of a female animal conveyed by the mortgage, these being incidents to a legal title, and the right of immediate possession vests in the mortgagee for whom the mortgagor holds possession.* But if the mortgage is not- closed before it was' necessary for their nurture to follow the dam, the young can then be sold by the mortgagor, unless the mortgage especially covers the increase.*^ Thus, when the period of nurture is past and the young being entirely separated from the mother, and not being mentioned in the mortgage, nor any longer connected with the mother covered by the mortgage, and nothing to give the third party notice,, he will hold them by purchase.^ ARTICLE II. — UNPLANTED AND GROWING CROPS. 217. Un plan ted Crops. 227. Kule in Wisconsin. 218. Rule in Mississippi. 228. Rule in North Carolina.. 219. Rule in Iowa. 229. Rule in Minnesota. 220. Rule in Nebraska. 230. Rule in New York. 221.-Rule in Kansas. 231. Rule in Illinois. 222. Rule in Kentucky. 232. Rule in Dakota. 223. Rule in Califernia. 233. Growing Crops. 224. Rule in Alabama. 234. Pennsylvania Rule. 225. Rule in Arkansas. 235. Growing Timber. 226. Rule in Tennessee. 286. Growing Grass. § 217. Unplanted Crops. — Whether a party can make a valid mortgage of an unplanted crop is a question upon which the authorities do not agree. Some hold that the owner of the soil may make a valid mortgage of the crops to be grown, and others hold that the grain must be planted before it can be mortgaged as a crop. Many of the States have regulated this question by statutory provisions. 'Forman v. Proctor, 9 B. Mon. (Ky.) 124. ' Winter v. Landphere, 42 Iowa 471. " Funk V. Paul, 64 Wis. 35. See, also, Meyer v. Cook, 85 Ala. 417 ; Gaboon V. Miers, 67 Md. 573. The authorities do not agree on this subject, but the text is believed to accord with the weight of authority. The question whether a bona fide pur- chaser, after the period of nurture, can hold the offspring of the mortgaged dam, is a question on which the courts differ." See Sections 122 and 128. M 178 AFTER-ACQTJIRED PEOPEKTY. § 218. In Mississippi the owner of the soil may make a valid mortgage of the crops to be grown by him in fifteen months, before the crops are planted.^ This is on the doc- trine that one may make a present sale or mortgage of all things having a potential existence ; an unplanted crop has such potential existence as to the owner or the lessee of the soil.^ § 219. In Iowa a chattel mortgage upon crops to be raised in the future is valid, and attaches to the crop as soon as it comes into existence.^ The rule generally expressed undoubtedly is that a chattel mortgage will not be deemed to cover after-acquired prop- erty, unless the intention that it should is clearly expressed.* § 220. In Nebraska. — As a question of law, the lien of a chattel mortgage on a crop of corn not planted at the time of its execution and delivery, will nol attach to the corn when it comes into existence, unless seized by the mortgagee.* § 221. In Kansas the rule accords substantially with that of Nebraska and some other States. Thus, when a chattel mortgage is given on an unplanted crop of corn, which is afterwards planted and grown, but before possession is taken thereof by the mortgagee, a creditor of the mortgagor causes an execution to be levied thereon, the execution will hold it. In this case the mortgage created no lien thereon which would defeat the levy of the execution ; besides, the fact that the mortgage was filed and recorded in compliance with the statute, before the levy was made, will not charge the exe- cution creditor or subsequent purchasers with notice. The court says : "A valid mortgage can only be given upon prop- erty which has an actual or potential existence, and corn not ' MoCown V. Mayer, 65 Miss. 587. 'Everman v. Robb, 52 Miss. 658; Stadeker v. Loeb, 67 Mias. 200. " Norris v. Hix, 74 Iowa 524. *Lormer v. AUyn, 64 Iowa 725; Mc Arthur v. Garman, 71 Iowa 34. In this State, a chattel mortgage describing certain mares said: "Also all stock I may own during the existence of this mortgage ; " held, that it covered a mare afterwards- acquired by the mortgagor. Hughes v. Wheeler, 66 Iowa 641. »OoleD. Kerr, 19Nebr. 553. IN ALABAMA. 179 planted has neither an actual nor potential life, and being without life or existence there could be no legal transfer, present or prospective, and no pretended transfer could operate upon the crop of corn after being grown, at least not until taken possession of by the mortgagee/ § 222. In Kentucky a mortgage of a crop to be raised on a farm/ during a certain term, but which is not yet sown, passes no title, and the mortgagee has no claim against a purchaser of the crop for it or for its value.^ § 223. In California a lessee of land in possession may exe- cute a valid mortgage on a crop to be raised by him the coming season, but which was not yet planted, and the lien will attach.' § 224. In Alabama, though a mortgage on an unplanted crop creates only an equity, unless possession is taken or re- ceived after it is planted, or there is some new act effectual to pass the legal title, yet the mortgagee may maintain an action on the case against a stranger who has converted or disposed of the crop with notice of the mortgage.* Such a mortgage does not convey a legal title on which the mortgagee may maintain an action of trover for the con- version of the crop, unless he has acquired possession." A mortgage given in November on cotton grown and " to be grown in the year 1 887 on my land or other land in coun^," is not valid as to lands in which the mortgagor at that time had no interest. The court said : "According to the unbroken current of our decisions, as well as by the weight of authority in other States, it is essential to the cre- ation of such an incumbrance that the subject-matter should have a potential existence, as distinguishable from a mere •Long V. Hines, 40 Kans. 220. See, also, Single v. Phelps, 20 Wis. 398; Chapman v. Weimer, 4 Ohio St. 481. •Hutchinson v. Ford, 9 Bush 318. 'Arques v. Wasson, 51 Cal. 620. *Eee8 V. Coats, 65 Ala, 256. ' Whittleshoflfer v. Strauss, 83 Ala. 517 ; Mayers v. Taylor, 69 Ala. 403 ; Iron Works Co. V. Renfro,,71 Ala. 577; Marks v. Robinson, 82 Ala. 69; Jackson V. Bain, 74 Ala. 328; Leslie v. Hinson, 83 Ala. 266. 180 AFTER-ACQUIRED PROPERTY. possibility or expectancy on the part of the contracting par- ties that it will come into being. While the being itself need not have identity or separate entity, yet it must at least be a productj or growth, or increase of property which has at the time a corporeal existence, and in which the mort- gagor has a present interest — not a mere belief, hope or ex- pectation that he will in future acquire such an interest." * § 225. In Arkansas, where a mortgage is executed upon an unplanted crop, a lien attaches in equity as soon as the subject of the mortgage comes into existence.^ This ques- tion is now regulated by statutory provisions.* § 226. In Tennessee a mortgage of unplanted crops is valid. Thus, a mortgage of a crop to be planted is valid even as against creditors of the mortgagor or other third persons.* § 227. In Wisconsin a different rule prevails. In this State a chattel mortgage can only operate upon property in actual existence at the time of execution, and cannot be given upon a crop before it can be said to be in existence,, because there is nothing for it to operate upon, and grain sown or planted will not be a crop growing until it presents the appearance of a growing crop.^ § 228. InNoTth Carolina fructiisindttstriales arechattehf&nd a conveyance of one's entire crop of corn, whether growing or unplanted, is valid, and a chattel mortgage can be m^de on the same, even if the crop is to be planted, and it will .be valid.*^ § 229. In Minnesota a chattel mortgage on crops to be grown by the mortgagor on the land in his possession is valid.' ' Paden v. Bellenger, 87 Ala. 575; and see Low v. Pew, 108 Mass. 347 ; Otis- V. Sill, 8 Barb. (N. Y.) 102 ; Pennpck v. Coe, 23 How. (U. S.) 117. "Apperson v. Moor, 30 Ark. 56. »ActB of 1875, p. 149. * Watkina v. Wyatt, 9 Baxt. 250. ' Comstock V. Scales, 7 Wis. 159. • Robinson v, Ezzell, 72 N. Car. 231. ' Minnesota Lin. Oil Co. v. Maginnis, 32 Minn. 193 ; Miller v. McCormick,, 35 Minn. 399. m NORTH AND SOUTH DAKOTA. 181 Where parties by tlieir contract in clear terms express an intention to create a mortgage lien . upon personal property not then owned but to be subsequently acquired by the mort- gagor, whether then in being or not, the mortgage attaches as a lien on the property as soon as the mortgagor acquires it, as against him and all claiming under him with notice of all voluntary conveyances, the same as if the property had belonged to him when the mortgage was created, and pre- cisely as if the property had been in being and belonged to the mortgagor when the mortgage was executed. The prop- erty must be definitely pointed out, that it may be distin- guished or identified.' § 230. In New York the rule is that chattel mortgages of crops to be grown may be given, because they are property having a potential existence, and the mortgagor being in possession of the land upon which they are to be grown, has a present vested right to have the crops when they come into actual existence.^ § 231. In Illinois crops to be raised in future, not yet planted, will not pass under mortgage. To make the mort- gage valid, the crops must be in esse? But a chattel mort- gage on growing crops is valid.* § 232. In North and South Dakota an agreement may be made to create a lien on property not yet in existence, in which case the lien attaches when the party agreeing to give it acquires an interest in the property.^ Thus, a mortgage of unplanted crops is valid. Such a mortgage is valid against a bona fide purchaser for value, if recorded when given, and need not be again filed for record after the crops come into existence. Under the law the original contract, ipso facto, immediately upon the acquire- ' Ludlum V. Eothschilds, 41 Minn. 218. ' Farmers Loan and Trust Co. v. Long Beach Imp. Co., 27 Hun (N. Y.) 89; Van Hoozer v. Cory, 34 Barb. 9. 'Stowell V. Bair, 5 111. App. 104. 'Hansen v. Dennison, 7 111. App. 73 ; Stowell v. Bair, 5 111. App. 104. = Com. Laws, ?j 4330, 4331. 182 APTEK-ACQUIBED PBOPEETY. ment or creation of such property, awakens and brings into life the lien agreed upon._^ § 233. Growing Crops. — In some of the States statutory provisions are made as regards the stage of growth when crops may be mortgaged.^ But generally a crop is "a grow- ing crop," so that it can be mortgaged, giving a legal title to the mortgagee, from the time the seed is deposited in the ground.^ § 234. Pennsylvania Rule, — In this State a mortgage of a growing crop, or of any chattel, without any delivery of possession or other indicia of ownership, is fraudulent. The security by mortgage of personal property to a mortgagee or pawnee, depends on the right of the mortgagor or pawnor, and on the delivery of the chattel mortgaged or pledged. Delivery is necessary.* § 235. Growing Timber. — A mortgage of growing timber to be cut and removed from a freehold, is a mortgage of per- sonal property. Thus, a mortgage of one and a half million feet of pine logs, part of which was in a certain lake named at the time of the execution of the mortgage, and the re- mainder was to be cut and placed there within a certain time,, from lands which were designated, the mortgage to cover all timber cut therefrom, is a sufficient description, and a mortgage of trees to be cut is a mortgage of personal property.® And a mortgage of growing timber, made by one who had ' Grand Forks Nat. Bank v. Minneapolis and N. Elevator Co., 43 N. W. Rep. 806. By provisions of the Dakota statute, '_' an agreement may be made to create a lien upon property not yet acquired by the party agreeing to give the lien, or not yet in existence. In such case, the lien agreed for attaches from the time when the party agreeing to give it acquires an interest in the thing to the extent of such interest." 'Arkansas, Acts of 1875, p. 149 ; New Hampshire, Gen. Laws 1878, ch. 137, g 1; Nevada, Acts of 1885, ch. 54; Washington, Code, ? 1986; Cook v. Steel, 42 Tex. 63; must be harvested in New Mexico before mortgaged. Com, Laws, ? 1586. ' Wilkinson v. Ketler, 69 Ala. 435 ; Hanson v. Dennison, 7 111. App. 73 ; Cotton V. Willoughby, 83 N. Car. 75. *Clow V. Woods, 5 8. & R. 275. See, also, Lynch v. Welch, 3 Pa. St. 294. . " Boykin v. Rosenfield, 69 Tex. 116. TAKING POSSESSION OF AFTER-ACQUIRED PROPERTY. 183 purchased the same to be cut and removed, is a mortgage of personal property, which will be effectual as soon as the timber shall be severed from the land, and should be re- corded as a chattel mortgage.^ § 236. Growing Grass. — Growing grass, fruit and trees are natural products of the earth, and are parcels of the land. They are within the statute of frauds, and can only be sold by an agreement in writing." But gi^in and vegetables, which are annual products of the earth, are chattels, and may be seized on execution as chattels, and may be mort- gaged or conveyed by parol.' Where the mortgagor of grass owns both the land and the grass or trees, and he fails to fulfill the condition of the mortgage, then there is a severance in contemplation of law, and the grass becomes a chattel belong- ing to the mortgagee.* When the grass is owned by one not the owner of the freehold, then it is not considered a parcel of the land.^ ARTICLE III. PERFECTING LIEN BY TAKING POSSESSION. 237. Taking Possession of After-acquired Property. 238. After-acquired Stock of Goods. 239. What is Covered. 240. Mortgagor Becoming Agent for Mortgagee. 241. Statutory Provisions. 242. To Cover New Goods. 243. Rule of Other Courts. § 237. Taking Possession of After -Acquired Property by Mortgagee. — If after the acquiring such property by the 'Claflin V. Carpenter, 4 Met. (Mass.) 580; Sheldon v. Conner, 48 Me. 584; Wood V. Lester, 29 Barb. (N. Y.) 145; Cook v. Stearns, 11 Mass. 538; Douglas It. Shumway, 13 Gray (Mass.) 498 ; Cudworth v. Scott, 41 N. H. 456; Erakine v. Pluinmer, 7 Me. 447; Nelson v. Nelson, 6 Gray (Mass.) 385. 'Green v. Armstrong, 1 Denio (N. Y.) 550; Wintermute v. Light, 46 Barb. (N. Y.) 278; Bodwell v. Phillips, 9 M. & W. 501; Carrington v. Roots, 2 M. & W. 248; Crosby v. Wadsworth, 6 East 602. 'Robinson v. Ezzell, 72 N. Car. 231; Jones «. Flint, 10 Ad. & E. 753; Parker v. Staniland, 11 East 362. * Bank v. Crary, 1 Barb. (N. Y.) 542. 'Smith V. Jenks, 1 Denio (N. Y.) 580; 1 N. Y. 90; Green v. Armstrong, 1 Denio (N. Y.) 550. 184 AFTEK-ACQtJIRED PEOPEETY. mortgagor, and before any other rights intervene, the mort- gagee takes possession of the property specified in the mort- gage, his right is superior to all other persons/ A stipula- tion in a chattel mortgage that the after-acquired property shall be subject to the same lien, and that the mortgagor will execute a new mortgage thereof, is an executory agreement, which does not cover after-acquired property until executed ; nor does it avoid the mortgage as to property to which it attached at the time of its execution.^ In Maine, the growing of the yearly crop of hay on a farm to pay the purchase-money notes for an indefinite period will not give the grantee a right to replevy the fifth crop, sold by the grantor who was in possession, to a bona fide purchaser.^ Possession of after-acquired property right- fully taken and maintained by the mortgagee, under a mort- gage purporting to cover it, gives him a title good not only against the mortgagor, but even against an assignee in insolv- ency and attaching creditor.* Thus, where a chattel mort- gage covered a stock in trade of furniture and fixtures in the mortgagor's store, provides that " all goods, stock in trade, furniture and fixtures hereafter purchased by the mortgagor shall be included in and covered by the mortgage," the mortgage covers all after-acquired property of the classes mentioned, and upon foreclosure such property may be taken and sold by the mortga,gee the same as the property in pos- session of the mortgagor at the time the mortgage was executed.' In general, a mortgage of chattels to be afterwards acquired by the mortgagor and used for a definite purpose at a definite place, or definitely described, gives the mortgagee an equit- able lien upon such property when acquired, as against the 'Cook V. Corthell, 11 E. I. 482; Gregg v. Sanford, 24 111. 17; Ohapin v. Cram, 40 Me. 561 ; Williams v. Briggs, 11 K. I. 476 ; Walker v. Vaughn, 83 Conn. 577. ' Codman v. Freeman, 3 Gush. (Mass.) 306. See, also, Griffith v. Douglass, 73 Me. 532. »8hawt!. Gilmore, 81 Me. 396. * Blanchard v. Cooke, 144 Mass. 207. * Bennett v. Bailey, 150. Mass. 257. WHAT IS COVEKED. 185 mortgagor, and as against his creditors and subsequent pur- chasers, when taken possession of by the mortgagee before rights of those third parties intervene/ Thus, when a chattel mortgage given to secure the payment of rent includes after- acquired property to be placed in the leasehold buildings, such mortgage is good in equity, and the property becomes subject to the equitable lien as soon as it is so placed in the building. Such equitable lien is valid as against the mort- gagor, and also as against a subsequent mortgagee with notice, in those States where actual notice is equivalent to registration.^ § 238. After-Acquired Stock of Goods. — ^The decisions of the courts are conflicting as to whether goods to be purchased to replenisB a stock can be mortgaged. It is held by some courts that a clause in a chattel mortgage upon a stock of goods, which purports to extend the lien of the mortgage over after-acquired property, does not render the mortgage absolutely void, when there is an arrangement permitting the mortgagor to deal with the goods mortgaged ; to make it void, an intent to defraud creditors must be affirmatively found.^ - § 239. What Is Covered. — A mortgage of a stock of goods, containing a clause that goods which might be thereafter purchased by the mortgagor, should be held for the payment of the debt, will not transfer to the mortgagee goods after- wards purchased and put in with the stock of the mortgagor.* A chattel mortgage on goods, wares and merchandise then in stock, in a certain storeroom, and to be had, to replenish such stock, covers barrels of salt for sale, as a part of the stock, in a shed used in connection with the store, and also ' Wright V. Bircher, 72 Mo. 179 ; Prank v. Playter, 73 Mo. 672 ; Rutherford V. Stewart, 79 Mo. 216. ^ Keating v. Hannenkamp, 100 Mo. 161. » Yates V. Olmsted, 56 N. Y. 632; Brett v. Carter, 2 Low. D. C. 458; Zaring ■». Cox, 78 Ky. 527; Moore v. Young, 4 Biss. C. C. 128. * Chapin v. Cram, 40 Me. 561 ; In re Bloom, 17 Bank. Reg. 425 ; In re Manly, 2 Bond D. C. 261; Chatham Nat. Bank v. O'Brien, 6 Hun (N. Y.) 231 ; Case v. Fish, 58 Wis. 56. 186 AFTER- ACQUIEED PKOPEETY. barrels of oil which had been temporarily removed from the store.' A chattel mortgage of a stock of goods and " all book accounts and all rights or credits arising from such busi- ness," does not cover subsequently-accruing accounts of sales, with the mortgagee's consent, in regular course of trade.^ § 240. Mortgagor Becoming Agent for the Mortgagee. — Where a mortgagor of goods retains possession as selling agent for the mortgagee, who fails to record the mortgage, and new goods are added to the stock from time to time, which are not embraced in the mortgage, the rights of at- taching creditors of the mortgagor are, in Colorado, para- mount to those of the mortgagee.' • § 241. Statutory Provisions. — By the Revised Code of Georgia* a mortgage may be made to cover a stock of mer- chandise as it changes by sales and purchase, but to be en- forced- to the extent of the value of the stock on hand at the time when it was given, at least as against any person having a prior claim in respect to goods subsequently purchased.® § 242. To Cover New Goods. — A mortgage given which specifies that it shall cover new goods to be bought to fill the place of those sold, to be paid for out of the proceeds of sale, is inefiectual to give the mortgage any validity as to goods acquired, according to the authority of many courts.® ' Stephens v. Pence, 56 Iowa 257. ' Lormer v. AUyn, 64 Iowa 725. See, also, Lashbrooks v. Hatheway, 52 Mich. 124; Kemp v. Carnley, 3 Duer (N. Y.) 1. 'Wilcox V. Jackson, 7 Colo. 521. •Section 1954. 'Goodrich v. Williams, 50 Ga. 425; Chisolm v. Crittenden, 45 Ga. 213. "St. Louis Drug Co. v. Dart, 7 Mo. App. 590; Hamilton v. Rogers, 8 Md. 301 ; Sharpe v. Pearce, 74 N. Car. 600 ; Williams v. Briggs, 11 R. I. 476 ; Rose V. Bevan, 10 Md. 466; Moody v. Wright, 13 Met. (Mass.) 17; Rhines v. Phelps, 3 Gilm. (111.) 455; Sparks v. Mack, 31 Ark. 666; Brasher v. Chris- tophe, 10 Colo. 284; Wilson v. Voight, 9 Colo. 614; Schemerhorn v. Mitchell, 15 111. App. 418 ; Greenbaum v. Wheeler, 90 111. 296 ; Ross v. Wilson, 7 Bush (Ky.) 29; Zaring i). Cox, 78 Ky. 527; Horton v. Williams, 21 Minn. 187; Stein V. Munch, 24 Minn. 390; Joseph v. Levi, 58 Miss. 843; Harman v. Hoskins, 56 Miss. 142 ; Prance v'. Thomas, 86 Mo. 80 ; Leapold v. Silverman, 7 Mont. 266; Doak v. Brubaker, 1 Nev. 218; Wilson v. Hill, 17 Nev. 401; Jacobs V. Ervin, 9 Oreg. 52; McKibbin v. Martin, 64 Pa. St. 352; Nat. Bank V. Ebbert, 9 Heisk. (Tenn.) 163 ; Nat. Bank v. Lovenberg, 63 Tex. 506 ; Lang POTENTIAL INTERESTS MAY BE MORTGAGED. 187 § 243. Rule of Other Courts. — Other courts hold that a mortgage of a stock of merchandise, authorizing the mort- gagor to continue and sell the goods, which expressly stipu- lates that such sale shall be exclusively for the benefit of the mortgagee, and that new goods may be bought to replen- ish the stock, is valid as against the mortgagor's creditors, in the absence of evidence of actual fraud.' ARTICLE IV. — POTENTIAL INTERESTS. 244. Potential Interests May be Mortgaged. 245. Potentiality as Applied to Unplanted Crops. 246. A Contrary Doctrine. 247. Lord Hobart's Doctrine. § 244. Potential Interests May Be Mortgaged. — The au- thority to sustain this rule is the statement of Lord Hobart : " Land is the mother and root of all fruit. Therefore, he that hath it may grant all fruits that may arise upon it after, and the property shall pass as soon as the fruits are extant. A person may grant all the tithe-wool that he shall have in such a year, yet perhaps he shall have none ; but a man cannot grant all the wool that he shall grow upon his sheep that he shall buy hereafter, for then he hath it neither actu- ally nor potentially." He may, therefore, sell or mortgage the natural and expected products, growth or increase of his own property ; but he cannot sell or mortgage the crops to grow upon the, land of another, or the wool to grow upon another's sheep, or upon sheep that he may buy thereafter.^ V. Lee, 3 Band. (Va,) 410; Sheppards v. Turpin, 3 Gratt. (Va.) 373 ; Garden V. Bodwing, 9 W. Va. 121 ; Anderson v. Patterson, 64 Wis. 557 ; Kobinson v. Elliott, 22 Wall. (U. S.) 513. 'Murray v. McNealy, 86 Ala. 234; Reichert v. Simons (Dak.), 42 N. W. Hep. 657 ; Rev. Stat, of Indiana, 1881, i 4924 ; Meyers v. Evans, 66 Iowa 179 ; Howard v. Eohlfing, 36 Kans. 357 ; Deering v. Cobb, 74 Me. 332 ; Wingler v. Sibley, 35 Mich. 231 ; Hubbell v. Allen, 90 Mo. 574; Davis v. Scott, 22 Nebr. 154 ; Parker v. Jacobs, 14 S. Car. 112 ; Peabody v. Landon, 61 Vt. 318 ; Lan- gert V. Brown, 3 Wash. St. 102. For a full discussion of this subject, see Chapter XIII. ' Grantham v. Hawley, 1 Hobart 132. 188 AFTER-ACQUIRED PROPERTY. The doctrine of another holds that the following may be transferred : " Leases for years, be they present or future, wardships of tenants in capite, or by knight's service, trees, oxen, horses, plate, household stuff and the like ; also trees, grass and corn growing and standing upon ground, fruit upon the trees, wool upon the sheep's back, is grantable." ' It is noticeable that potential interests are not named by the last authority, so far as uuplanted crops are concerned. § 245. Potentiality as Applied to Unplanted Crops. — It is held by many courts, no statutory provision intervening, that a crop to be planted on one's own land or on land leased by him, may be mortgaged under the doctrine of potentiality.^ Thus, a lessee of land has a suflBcient potential interest in the land to mortgage his crops to be grown during the whole term of the lease.^ A chattel mortgage of crops to be raised in the future is valid, and attaches to the property as soon as it comes into existence. And a chattel mortgage providing that the after- acquired property shall be transferred thereby, is valid, and such property, upon its acquisition, becomes subject thereto. The principle upon which this doctrine is upheld is not wholly unlike the conveyance of land by deed of warranty, in which the grantor has no title. If he afterwards acquires the title, the land will pass under the prior deed. So as to unplanted crops. While there is nothing upon which a mortgage can operate at the time of its execution, it does attach to the property when it comes into existence.* § 246. A Contrary Doctrine. — While the weight of au- ' 1 Shep. Touch. 241. 'Rawlins v. Hunt, 90 N. Car. 270; Robinson v. Ezzell, 72 N. Car. 231; Watkins v. Wyatt, 9 Baxt. (Tenn.) 250 ; Senter v. Mitchell, 16 Fed. Rep. 206 ; Thrash v. Bennett, 57 Ala. 156 ; Hurst v. Bell, 72 Ala. 336 ; Van Hoozer v. Cory, 34 Barb. (N. Y.) 9 ; Arques v. Wasson, 51 Cal. 620 ; Conderman v. Smith, 41 Barb. (N. Y.) 404. ' Smith V. Atkins, 18 Vt. 461 ; Everman v. Robb, 52 Miss. 653 ; Booker v. Jones, 55 Ala. 266 ; Thrash v. Bennett, 57 Ala. 156 ; Robinson v. Kruse, 29 Ark. 575; Headrick v. Brattain, 63 Ind. 438; Petch v. Tutin, 15 Mees. & W. 110. * Scharfenburg v. Bishop, 35 Iowa 60; Brown v. Allen, 35 Iowa 306;' Stephens v. Pence, 56 Iowa 257. A CONTKABY DOCTRINE. 189 thority sustains the rule that unplanted crops may be mort- gaged when the mortgagor is the owner or lessee of the land on which the crops are to be planted, yet there is much authority to the contrary, and still other authority that such mortgage is valid in equity when third parties have notice. The Nebraska Supreme Court ' says : " There is, to say the least of it, great confusion of the authorities on this point being considered ; but after careful examination of those cited by the other side, in this case, I have reached the con- clusion that, as a question of law, a lien of the chattel mort- gage of crops of corn not yet planted at the time of its execution, a delivery will not attach to the corn when it comes into existence, until it is seized by the mortgagee, or until, in the language of a member of the court, in the case of Holroyd v. Marshall, 10 H. L, Cas. 191, 'a new inter- vening act.' Until then it remains a mere license only to go upon, and conveys neither a lien nor a right of property which the mortgagee can assert against a purchaser or exe- cution creditor of the mortgagor. Presumptuous as it may seem to say so, I cannot agree to the proposition stated by Lord Hobart in the case cited by counsel for the defendant in error, that the owner of land, though he had not the future crop ' actually in him nor certain, yet he had it potentially •/ while it is true, as he adds, that 'the land is the mother and root of all fruit.' The word 'potentially,' as defined by Craig,, means * in possibility, not in act, not positively, in efficacy, not m actuality.' With this definition in view, it cannot be said • that the mere ownership or possession of the soil carries with it the production of crops potentially. Soil, alone, does not produce crops of corn in this degenerate age, if it ever did. It now requires, in addition to soil, seed, and labor both of man and beast ; so that the proposition that a sale or mortgage of a crop of corn not yet planted carries with it a property in or lien upon such crop, to attach and come into efficacy without ' a new intervening act,' carries with it the proposition that a man may mortgage his labor to be performed — something which is never heard contended for in this country, but 190, AFTER-ACQUIRED PROPERTY. which is a right which, under the name of 'peonage,' is recognized in our sister republic to the south of us."^ A mortgage of a crop to be raised on a farm during a certain term, and which is not yet sown, passes no title to the mortgagee, as against a purchaser of the crop when grown, for its value.^ So, a chattel mortgage, given upon a crop of grain at or about the time it is sown, and before it is up and has the appearance of a growing crop, is wholly inoperative upon the crop when grown.^ § 247. Lord Hobart's Doctrine of Potential Interest. — The doctrine of Lord Hobart, so far as the mortgaging of un- planted crops is concerned, does not, find support in all of the English cases. Thus, when a party transfers by deed all his household goods, farming stock, crops and personal estate on his farm, as a security, crops to be planted do not pass unless taken possession of, after being planted, by the mortgagor.* So, under a bill of sale, growing crops passed on the execution of the deed, but future crops did not ; that the^mortgagee would have no legal or equitable title to crops not sown at the execution of the instrument.^ But this principle of potential interest was recognized : A tenant for years of a farm, being indebted to his landlord, assigned to him by deed " all his household goods and all his tenant right and interest, yet to come and unexpired, in and to the farm and premises. Under this agreement it was held that the tenant's interest in crops grown in future years of the term passed to the landlord.^ 'Cole V. Kerr, 19 Nebr. 653. 'Hutchinson v. Ford, 9 Bush oration, or the rolling-stock of a railroad, is valid against debts contracted in carry- ing on the business of the corporation, nor against liabilities incurred by railroad companies iaa carriers of freight or passengers, or for damages sus- tained to persons or property, except as against claiuLs in excess of $5,000 for damages to any person. Code, 1 1033. 238 STATUTORY LAWS OF REGISTKATION, § 311. Missouri. — Chattel mortgages and deeds of trust upon personal property are void as to creditors of the grantor and subsequent purchasers without notice, unless the mortgagee or beneficiary receives and retains possession of the property, or the' mortgage or trust deed must be recorded in the county where the grantor resides. No special limita- tion as to when a chattel mortgage shall be foreclosed exists. The mortgage or deed of trust must be acknowledged or proved in such manner as conveyances of land are.^ These provisions do not apply to a contract of bottomry, respondentia, nor any transfer, or assignment, or hypotheca- tion of any boat, vessel, ship, or goods at sea or abroad, if the mortgagee, trustee or cestui que trust shall take possession of such property as soon as may be after its arrival in the State. Conditional sales of personal property must be evidenced by writing, executed, acknowledged and recorded as in case of mortgages, otherwise the condition is voidable as to subse- quent purchasers in good faith and creditors. Vendor, to recover such property, must tender amount paid by pur- chaser, less reasonable compensation for use of property, not exceeding twenty-five per cent, of amount so paid, and actual damage to property.^ § 312. Montana. — No chattel mortgage is valid as against any third person unless the possession of the property is delivered to and retained by the mortgagee ; or the mortgage provides that the property may remain in the possession of the mortgagor, and be accompanied by an affidavit of all the parties thereto ; or in case a party is absent, the affidavit of those present, and of the amount named therein, and without any design to hinder or delay the creditors of the mort- gagor, and be acknowledged in manner provided for the acknowledgment of deeds for real property, and filed, together with the affidavit, in the office of the recorder of ' Wag. Stat, of 1872, ch. 35, ?| 8, 9. » 2 Eev. Stat. ?§ 5180, 5181. NEBRASKA. 239 deeds of the county where the mortgagor resides, or, in case he is a non-resident of the State, then in the office of the recorder of deeds of the county where the mortgaged prop- erty may he at the time of the execution of the mortgage. A copy may be filed of the original, if it is certified to be correct by the recorder, or the person before whom the acknowledgment has been made. It is valid as against creditors and subsequent purchasers, from the time it is filed, until the maturity of the whole debt, and a period of twenty days thereafter, provided the whole time shall not exceed one year. The mortgage may be renewed by filing an affidavit showing the date of such mortgage, the names of the mortgagor and the mortgagee, the date of filing the same, the amount of the debt or obliga- tion secured thereby and the amount of the debt justly owing at tlie time of the filing of such affidavit, or the con- dition of the obligation unfulfilled, the time to which the same is extended, which should not exceed one year, and that such debt or obligation was neither made nor renewed, or extended to hinder, delay or defraud the creditors or subsequent mortgagees of the mortgagor. The affidavit must be filed in the office where the mortgage is filed, and is attached thereto by the recorder and noted in the index. Any subsequent mortgagee of this property may, at any time during the existence of such mortgage, pay the amount of the debt and interest, as shown by the mortgage or renewal affidavit, or deposit the full amount thereof with the recorder of deeds where the mortgage is filed, subject to the order of the mortgagee, and the subsequent mortgagee will be subrogated to all the rights of the first mortgagee. A chattel mortgage shall be construed to include bills of sale, deeds of trust, and other conveyances of goods and chattels or personal property, and shall have the effect of a mortgage or lien on such property.^ § 313. Nebraska. — Chattel mortgages are void against cred- ' Statute of 1881, ?§ 1-7 ; Act of March 5th, 1887. 240 STATUTORY LAWS OF REGISTRATION. itors of the mortgagor, subsequent purchasers and mort- gagees in good faith, unless the mortgage, or a true copy thereof, is filed in the office of the clerk of the county where the mortgagor resides, or, if he is a non-resident, in the county where the property is at the time of the execution of the mortgage, unjess there is immediate delivery followed by an actual and continued change of possession of the property mortgaged. Mortgages need not be acknowledged. The mortgage ceases to be valid as against a creditor of the mort- gagor, subsequent purchasers or mortgagees in good faith, after five years from date of filing, unless re-executed and refiled. Sale or mortgage or assignment, upon any con- dition, of chattels, unless accompanied by delivery and fol- lowed by actual and continued possession, is prima facie fraudulent and void as against creditors and subsequent purchasers and mortgagees in good faith.^ A bill of sale in the nature of a chattel mortgage is good, as to the parties to it, without being filed. Every chattel mortgage containing power of sale to mortgagee may be foreclosed by sale without proceedings in court.^ Sale or mortgage of chattels, unless followed by actual and continued change of possession, is prima facie fraudulent and void as against creditors of the mortgagor and subsequent bona fide purchasers.^ No sale, contract or lease, wherein the transfer of title to personal property is made to depend upon any condition, shall be valid against creditors or subsequent purchasers of the vendee in actual possession unless it be in writing, signed by the vendee, or an affidavit of the vendor, his agent or attorney, setting forth the names of both parties, a descrip- tion of the property transferred, and the full and true interest of the vendor or lessor therein, § 314. Nevada. — Where the mortgager retains possession, the mortgage must be recorded in the office of the county ' Com. Laws, p. 288, ii 14, 16. "Com. Laws, pp. 82, 83, §§ 1-9. ' Com. Laws, p. 287, § 11. NEVADA. 241 recorder of the county where the property is situate, and also in the county where the mortgagor resides. A mortgage upon personal property, including growing crops, executed, acknowledged and recorded, shall be valid against third parties without delivery of possession to the mortgagee, provided that no such mortgage shall be valid for any purpose as against third parties unless there be appended or annexed thereto the affidavit of the mortgagor and mortgagee, or some person in their behalf, setting forth that the mortgage is made in good faith, and given for a debt actually owing from the mortgagor, stating the amount and character of such debt, and that the same is not made or received with intent to hinder, delay or defraud any creditor of the mortgagor, provided that a chattel mortgage upon a growing crop may be executed as well before as after the crop is planted ; and when executed before the crop is planted, it shall be expressed in the mortgage that it is the" intention of the parties that the same shall take effect upon the crops when planted, provided that no chattel mortgage shall be given or be valid for a less sum than $100. The lien exists one year. It can be renewed within thirty days next preceding the expiration of the year, by recording an affidavit made by the mortgagee showing the sum still due. This act does not apply to contracts of bottomry, respon- dentia, or assignments or hypothecation of vessels or goods at sea, or in foreign States, or without the State, provided the assignee or mortgagee takes possession of such goods as soon as may be after the arrival thereof within the State.^ Mortgaged property may be seized under execution or attachment against mortgagor, and surplus over mortgage debt applied to payment of judgment against mortgagor ; but the possession thereof shall not be taken from mortgagor or mortgagee, unless full payment of the mortgage debt be first made, which, if done by the attaching creditor of the 'Com. Laws, tit. "Chattel Mortgages." Q 242 STATUTORY LAWS OF REGISTRATION. mortgagor, shall entitle him to hold such personal property and the possession thereof under his levy, for payment to him of the amount so paid to the mortgagee, with interest as provided in the mortgage, in addition to his own individual demand. If the debt is not paid to the mortgagee, the oflScer may sell the property, subject tb the rights" of the mortgagee under the mortgage, and the purchaser shall take such property subject to such right and to the possession of the parties to the mortgage.^ No statutory provisions concerning conditional sales have been enacted, but such sales are sustained by the courts. § 315. New Hampshire. — Personal property and crops, growing or matured, may be mortgaged. If the mortgagor retains possession the mortgage must be recorded in the office of the clerk of the town where the mortgagor resides. No chattel mortgage is valid, save as between the parties thereto, unless the statute is complied with, nor unless both of the parties subscribe and make oath to the following affidavit, which must be made upon the mortgage and recorded there- with : 4^ We severally swear that the foregoing mortgage is made for the purpose of securing the debt specified in the condi- tion thereof, and for no other purpose whatever, and that said debt was not created for the purpose of enabling the mortgagor to execute said mortgage, but is a just debt, hon- estly due and owing from the mortgagor to the mortgagee. So help us God." When a firm is a party, any partner may make the oath, and when a corporation is a party, any director or author- ized agent may make the oath. If the mortgage is given for any other purpose than to secure a debt from the mortgagor to the mortgagee, the agreement or liability must be specifi- cally stated in the mortgage, and the affidavit made to con- form to it.^ ' Com. Laws, tit. "Attachment." *Gen. Laws 1878, ch. 137, U 2-5; Gen. Laws, 328, 329. NEW JERSEY. 243 No lien for personal property sold conditionally and f)assing into the possession of the conditional vendee, shall be valid against attaching creditors, or subsequent purchas- ers without notice, unless the vendor of such property takes a written instrument signed by the vendee, witnessing such lien and the sum due thereon, and causes it to be recorded in the town clerk's office of the town where the purchaser of such property resides, if he resides in the State, otherwise in the town clerk's office of the town where the vendor re- sides, within ten days after such property is delivered. Such vendor and vendee shall make and subscribe an affida- vit, in substance as follows : " We severally swear that the foregoing memorandum is made for the purpose of witnessing the lien and the sum due thereon, as specified in said memorandum, and for no other purpose whatever ; and that the said lien and the sum due thereon are not created for the purpose of enabling the pur- chaser to execute said memorandum ; but said lien is a just lien, and the sum stated to be due thereon is honestly due thereon, and owing from the purchaser to the vendor." When copartners are parties to such a memorandum, or when a corporation is a party thereto, the affidavit may be made and subscribed as is by law provided that the affida- vit required in the case of chattel mortgages may be made and subscribed. § 316. New Jersey. — Every mortgage of goods and chat- tels, or conveyance intended to operate as such, which is not accompanied by an immediate delivery and followed by an actual and continued change of possession of the things mortgaged, is absolutely void , as against the mortgagor's -creditors and subsequent bona fide purchasers and mort- gagees, unless the mortgage be recorded in the office of the clerk of the county wherein the mortgagor, if a resident of the State, resides at the time of the execution of the mort- gage ; and, if a non-resident of the State, then in the office of the clerk of the county where the mortgaged property is at the time of such execution ; but if, in such county, there 244 STATUTORY LAWS OF KEGISTRATION. be a register of deeds, such mortgage must be recorded iu such register's office. Every chattel mortgage or conveyance- intended to operate as such, must, before it is recorded, be acknowledged or proved, and such acknowledgment or proof certified thereon in the same manner as in the case of deeds of real estate. There must be annexed, before record- ing, to such mortgage or conveyance, an affidavit or affirma- tion made and subscribed by the mortgagee or holder thereof, or his agent or attorney, stating the consideration of the mort- gage, and, as nearly as possible, the amount due and to grow due thereon. Any chattel mortgage so made, executed and recorded, will remain, from the time of such record, valid against such creditors and subsequent purchasers and mort- gagees, until it be canceled of record. Every chattel mortgage vests in the mortgagee or holder of it the right to the possession of the chattels therein de- scribed, so far as may be necessary to prevent the removal of such chattels out of the county wherein they lay at the time of the execution of such mortgage, and of recovering such chattels in case they have been so removed. This provision does not, however, apply to any vessel, rolling-stock of rail- roads, or to any chattels which, in the ordinary use of them,, at the time of the execution of the mortgage, are taken from time to time out of the county wherein they lay when mortgaged.'^ In every contract for the conditional sale of goods and chattels, made after July 4th, 1889, which shall not be ac- companied by an immediate delivery, and be followed by an actual and continued change of possession of the things con- tracted to be sold, all conditions and reservations which pro- vide that the ownership of such goods and chattels is to remain in the person so contracting to sell the same, or other person than the one so contracting to buy them, until such goods or chattels are paid for, or until the occurring of any future event or contingency, shall be absolutely void as 'Laws of 1881, p. 226; Laws of 1886, oh. 244; Laws of 1878, p. 13;}; Sup. Rev. Stat., tit. " Mortgages." NEW MEXICO. 245 agaiast subsequent purchasers and mortgagees in good faith, and as to them the sale shall be deemed absolute, unless such -contract for sale, with such conditions and reservations therein, be recorded in the clerk's office or register's office, if there be one, of the county wherein the party contracting to buy, if a resident of New Jersey, shall reside at the time of the execution thereof, and if a non-resident, then in the clerk's office or register's office, as the case may be, of the county where the property so conditionally bought shall be at the time of the execution of such instrument. No contract of sale, or conveyance intended to operate as a contract to sell goods and chattels conditionally, can be recorded, unless the execution thereof be first acknowledged or proved, and such acknowledgment or proof certified thereon, in the manner prescribed by law for the acknowl- edgment and proof of deeds of conveyances of real estate. Every contract of sale recorded as above shall be valid against creditors of the person contracting to buy, and against subsequent purchasers and mortgagees, from the time of recording it.^ A chattel mortgage given to secure an accommodation indorser of a promissory note against liability on his indorse- ment is good, and inures, at the maturity of the note, to the benefit of the holder. The affidavit, then, should state that the amount due on the mortgage is the amount of the note? When the transaction is specifically set out in the body of the mortgage an affidavit at the foot of the mortgage, which, by special reference to the statement in the mortgage, clearly states the transaction, is sufficient, under the statute. The affidavit and mortgage may be read together.^ § 317. New Mexico. — Chattel mortgages must be acknowl- edged and executed as mortgages on real estate. They must be accompanied by an immediate delivery and actual and contin- ued change of possession, or they are void as against creditors 'Laws of 1889, p. 421. 'Tompkins v. Crosby, 19 Atl. Rep. 720. See, also, Gilbert v. Vail, 60 Vt. 261; Beers v. Waterbury, 8 Bosw. (N. Y.) 396. 246 STATUTOKY LAWS OF REGISTRATION. and subsequent purchasers and mortgagees, unless they, or a copy thereof, be deposited forthwith in the office of the recorder — probate clerk — of the county where the mortgaged property is then situate. A. chattel mortgage is void as to third persons after the expiration of one year from the filing thereof, unless,, within thirty days next preceding the expiration of one year,, and each year thereafter, the mortgagee, his agent or attorney, shall make and file with such mortgage an affidavit showing the interest of the mortgagee in the property at the time of such filing ; and if such mortgage is to secure the payment of money, the amount remaining due. Growing crops cannot be mortgaged.^ § 318. New York. — Immediate delivery of the mortgaged property, with continued possession, must accompany the mortgage, otherwise it is void as against creditors and inno- cent third parties, unless it, or a true copy thereof, be filed in the office of the town clerk where the mortgagor resides,, or if he be a non-resident, then in the town where the prop- erty is when the mortgage was executed. In the city of New York such instrument shall be filed in the office of the register of said city. In the several cities of the State, other than New York city, and in the- several towns in the State, in which a county clerk's office is kept, in such office, and in the other towns, in the office of the town clerk. Such mortgage ceases to be valid after one year, as against others than the mortgagor and his representatives, unless a copy thereof is filed, with a statement of the amount due at the date of refiling, within thirty days next preceding the- expiration of each and every term of one year. Chattel mortgages need not be under seal.*^ § 319. Canal Boats. — Any party having a lien on any canal boat, steam tug, scow, or other craft navigating the- canals of the State, attaching under a chattel mortgage, shall file the same, or a true copy thereof, in the office of the ' Gen. Laws of 1880, pp. 63-65. 'Laws of 1833, oh. 279, § 1 ; Laws of 1873, ch. 501 ; Laws of 1879, ch. 418, CONDITIONAL SALES. 247 auditor of the canal department, provided the mortgagor does not give immediate and continued possession to the mortgagee. This is renewed like other chattel mortgages — hy filing the copy with the said auditor. The record of any bill of sale, mortgage, hypothecation or conveyance of any vessel of the United States, duly recorded in the office of the collector of customs where such vessels are enrolled, or a transcript or copy thereof, duly certified by said collector, may be read in evidence in any of the courts of the State, with the like force and effect as the original bill of sale, mortgage, hypothecation or convey- ance, provided that the execution of such instrument shall, before having been so recorded, have been acknowledged by the party executing the same, or proved by a subscribing witness.^ § 320. Conditional Sales. — In every contract for the condi- tional sale of personal property, accompanied by immediate delivery and followed by actual and continued change of possession, all conditions and reservations providing that ownership of goods and chattels is to remain in vendor or other person than vendee until said chattels are paid for, or until the occurrence of a future event or contingency, are absolutely void as against subsequent purchasers and mort- gagees in good faith, and as to them sales are deemed abso- lute, unless the contract for sale with said creditors and reservations, or a true copy thereof, is filed in the several towns and cities where vendee resides at the time of the exe- cution of such contract, or if not a resident of the State, in the town or city where the property is at the time. In the city of New York and in the county of Kings, such instru- ment must be filed in the, register's office ; in other cities and towns where there is a county clerk's office, in such office ; and in other towns, in the office of the town clerk. If the conditional vendee is a railroad corporation, the instrument mentioned must be filed in the office of the clerk of each county in which the railroad is located, or in coun- • Rev. Stat, of 1875, p. 789, U 36-38 ; p. 660, § 44. 248 STATUTORY LAWS OP REGISTRATION. ties where there is a register, iu the office of the register. Said conditions and reservations cease to be valid against subsequent purchasers and mortgagees in good faith, after the expiration of one year from filing such instrument ; and as to them sales are deemed absolute unless within thirty days next preceding the expiration of one year after the filing of a true copy of such instrument, together with a statement showing the interest of persons so contracting to sell such property, the contract for sale, or a true copy thereof, shall be again filed in the office of the clerks and registers as aforesaid. These provisions do not apply to the sale of household goods, pianos, organs, scales, engines and boilers, portable saw-mills and saw machines, threshing machines and horse powers, mowing machines, reapers and harvesters, and grain drills, with their attachments, provided that the contract for the sale of the same be executed in duplicate, one duplicate being delivered to the purchaser. In case any of the speci- fied articles are sold upon condition that title shall remain in vendor, or any person other than the purchaser, until pay- ment of purchase price, or until the occurring of a future event or contingency, and the same is retaken by the vendor or his successor in interest, such property so retaken shall be retained for thirty days by the person by whom or in whose behalf the same has been so taken, during which time the purchaser or his successor in interest may fulfill such contract or purchase, and shall be entitled thereupon to re- ceive such property. After the expiration of such time all the interest of the purchaser, or of his successor in interest, in such property lawfully retaken under such contract, shall cease. These provisions do not apply to railroad equipments or rolling-stock sold, leased or loaned under a contract re- corded pursuant to Laws of 1883, ch. 383.^ ' Laws of 1884, ch. 315 ; Laws of 1885, ch. 488 ; Laws of 1888, ch. 225. There is a distinction between conditional sale and conditional delivery. Sales on the installment plan generally come under conditional sales. A vendee of personal property sold upon the express condition that title shall not pass until the purchase price is fully paid, although in possession, cannot give title to bona fide purchaser. Ballard v. Burgett, 40 N. Y. 314. OHIO. 249 § 321. North Carolina. — Chattel mortgages and conditional «ales of personal property are invalid as against third per- sons, unless such instruments are registered in the county where the mortgagor resides, or, if the mortgagor be a non- resident, then in the county where the chattels are situated, unless they consist of choses in action, in which latter case the mortgage must be recorded in the county where the mortgagee resides.. No statute provides for their renewal.* § 322. Form. — A form is prescribed by statute for chattel mortgages not exceeding $300, the probate and registration fees on which are less than on ordinary chattel mortgages.^ § 322a. North Dakota. — A mortgage of personal property must be created, renewed or executed by a writing subscribed by the mortgagor in the presence of two persons, who must sign as witnesses, and no further proof or acknowledgment is required. It is void as against creditors of the mortgagor and subsequent purchasers and incumbrancers, unless it is filed by depositing the original, or an authenticated copy thereof, in the office of the register of deeds of the county where the property mortgaged, or any part thereof, is at the time of execution of the instrument. It ceases to be valid against creditors and subsequent purchasers and mortgagees after the expiration of three years from the filing thereof, unless within thirty days next preceding the expiration of such term, a copy of the mortgage and a statement of the amount of the existing debt for which the mortgagee or his assigns claim a lien, sworn to and subscribed by him, his agent or attorney, are filed anew. This renews for three years.^ § 323. Ohio. — To be valid, when the mortgagor retains possession of the property mortgaged, or other conveyance If, after sale, delivery is made upon condition that it shall not become -complete until purchase price is paid, the purchaser may, nevertheless, pass title to a bona fide transferee. Comer v. Cunningham, 77 N. Y. 391. 'Code, ?U254, 1274, 1275. * Code, 12 1273,1274. 'Civil Code, §1 1742-1755. 250 STATUTOBY LAWS OP REGISTKATION. intended to operate as a chattel mortgage of goods and chat- tels, the mortgage, or a true copy thereof, shall be deposited ■with the clerk of the township where the mortgagor resides,, or, if he is a non-resident, then with the clerk of the town- ship where the property is at the time of the execution of the mortgage. Before filing, the mortgagee, his agent or attorney, must enter thereon a verified statement under oath, in dollars and cents, of the amount of his claim, and that it is just and unpaid. If the mortgage is given to indemnify the mortgagee against liability as surety for the mortgagor, such sworn statement shall set forth such liability, and that the instrument was taken in good faith to indemnify against loss that may result therefrom. In townships where the oflBce of the recorder of the county is kept the mortgage must be deposited with him ; or, when the mortgagor resides in a township entirely merged in a city, or incorporated city, in which the oflSce of county re- corder is kept, or where the mortgagor is a non-resident of the State, and the property is within such township, the mortgage should be filed with the recorder.^ Such mortgage is void at the expiration of one year from the filing thereof, unless, within thirty days next preceding the expiration of the year, a true copy of such mortgage, together with a statement, verified as above stated, showing the interest of the mortgagee in the property at the time oF such refiling, claimed by virtue of such mortgage, is again filed at the office where the original was filed.^ § 324. Instances. — The year within which a refiling may be made begins to run from the exact date of the preceding year when the mortgage was first filed, and is computed at the corresponding day and hour of the following year.* When a mortgage is executed by partners, where one lives in the county where the property is situate and the other in another county, upon property jointly owned by them, whick ' Laws of 1883, p, 72. 'Rev. Stat. ?§ 4150, 4155. " Seaman v. Eager, 16 Ohio St. 209. OREGON. 251 is not accompanied by an immediate delivery and followed by an actual and continued change of possession, it is void as against an assignee for the benefit of creditors of such mortga- gors, subsequently appointed, unless, pursuant to the statute, the mortgage, or a true copy thereof, be properly filed in the township where each of such mortgagors resides, notwithstand- ing the fact that such assignee had, at the time of the execution of the mortgage and of the assignment, full knowledge of the execution and filing of the mortgage in the township where one of the mortgagors resided, and where the goods and chattels were situate.^ § .324a. Oklahoma Territory. — Chattel mortgages need not be acknowledged ; to be valid, as to third parties, there must be actual and continued change of possession of the property, and the original mortgage, or a true copy thereof, must be deposited in the office of the county clerk of the county where the mortgagor resides, if a resident of the Territory. Or, in case he is a non-resident of the Territory, then such mortgage or a copy must be deposited in the office of the county clerk of the county where the property is kept at the time of the execution of the mortgage. Such mortgage ceases to be valid as against creditors of the mortgagor, and subsequent purchasers and mortgagees in good faith, five years after filing of the same in the office of the county clerk.^ § 325. Oregfon. — Mortgages of chattels or a copy thereof must be immediately filed with the county clerk. Every such mortgage shall cease to be valid as against creditors, or subsequent purchasers or mortgagees, after the expiration of one year from the filing of the same, or a copy thereof, unless within thirty pays next preceding the expiration of the year the mortgagee, his agent or attorney, shall make and annex to the instrument or copy on file as aforesaid an affi- davit showing the interest which the mortgagee has by vir- ' Westlake v. Westlake, 24 N. E. Eep. 412 ; and see Aultman v. Guy, 41 Ohio St. 598, 'Gen. Laws, tit. "Mortgages." 252 STATUTORY LAWS OF KEOISTEATION. tue of said mortgage in the property therein mentioned, upon which affidavit the clerk shall indorse the time when the same was filed/ It is a penal offense to execute a chattel mortgage upon chattels not owned by mortgagor, or to dispose of mortgaged goods without consent of mortgagee.^ There is no statute relating to conditional sales. Such sales, title to remain in vendor until chattels are paid for, vests no title in vendee, and his assignee has no claim on the property as against vendor. Sewing machines, pianos, furniture and the like are sold on the installment plan, title to remain in vendor till pur- chase price is fully paid ; and the lease expressing the agree- ment need not be recorded. Property so delivered to the purchaser may be followed into the hands of innocent third parties and recovered by the vendor. Conditional sales have been upheld by the Supreme Court.^ § 326. Pennsylvania. — An act was passed April 27th, 1855, permitting lessees of collieries, manufactories and other premises to mortgage their leases, with the buildings, ma- chinery, &c. Leases of mines, &c., in Schuylkill county might be mortgaged under act of April 5th, 1853. Both leases and mortgages must be recorded. An act was passed on May 18th, 1876, which was to be limited to five years, by which certain specified chattels might be mortgaged. By act of April 28th, 1887, chattel mortgages were authorized of not less than $500 upon iron ore rained and prepared for use, pig iron, blooms and rolled or hammered iron, in sheets or bars, iron and steel nails, steel ingots and billets, rolled or hammered steel in sheets, bars or plates, and all steel and iron castings of every description not in place. Such mort- gages are not to be valid, under certain circumstances, after three months from maturity. Except as to these provisions, chattel mortgages are not sanctioned in this State. They are ' Hill's Code, ?3 3053-3058. "Code, ?« 1771-1777. 'Schneider v. Lee, 17 Pao. Rep. 269. RHODE ISLAND. i 253 considered as mere pledges, and are not valid as to creditors and subsequent purchasers or mortgagees, unless the prop- erty mortgaged is delivered to the mortgagee to take actual and contiuued possession, or what is equivalent thereto, at the time of the transaction.^ § 327. Renewal.— Under act of April 28th, 1887, the mortgage may be renewed within the said period of three months by the mortgagee or his duly-constituted agent. The mortgagee shall make and sign a statement in writ- ing, whicli he stall acknowledge, the statement specifying the amount due thereon, which statement shall be recorded in the office of the recorder wherein such mortgage was re- corded, within the said period of three months, in which case the said mortgage shall continue for the amount due for a further period of one year from the maturity thereof. On delivery of exclusive possession the vendor cannot retain a lien as against the vendee's creditors. In other cases the possession of the vendor should be such as not to deceive creditors of the vendee.^ . § 328. Rhode Island. — Chattel mortgages are invalid except between the parties thereto, unless possession of the mort- gaged property be delivered to and retained by the mort- gagee, or the mortgage be recorded in the office of the town clerk where the mortgagor resides, if within the State, and if not, in the town where the property is at the time of the execu- tion of the mortgage. In the city of Providence such mort- gage must be recorded in the office of the recorder of deeds.^ The provisions for recording of chattel mortgages do not apply nor affect any transfer of property under bottomry or respondentia bonds, or of any ships or goods at sea or abroad, if the mortgagee takes possession as soon as may be after the arrival of the same in the State. In the case of an ordinary chattel mortgage, in order to make it valid, one of three things must attend it, as against 'Biamark Building Association «. Bolster, 92 Pa. St. 123. "Rowe V. Sharp, 51 Pa. St. 26. 'Pub. Stat. ch. 176, ? 9. :254 STATUTORY LAWS OF EEGISTEATION. •creditors and subsequent purchasers : It must be recorded at once, or the mortgagee must take possession, or third parties must have actual notice. Conditional sales of personal property are not regulated by statutory provisions. § 329. South Carolina. — Chattel mortgages, when the pos- session of the chattels remains with the mortgagor, must be recorded within forty days from the time of their execution ; personal property passes by mere delivery. Every agree- ment between vendor and vendee, bailor and bailee, of per- sonal property, whereby the vendor or bailor shall reserve to himself an interest in the property, must be in writing and recorded as mortgages are, or be null and void as to creditors and subsequent purchasers.^ All deeds of trust of personal property and chattel mortgages must be recorded in the county in which the grantor resides. The place of record in every county but Charleston is the office of the- •clerk of the Court of Common Pleas. In Charleston the proper office is that of register of mesne conveyances. Third persons without actual notice are not affected by deeds and mortgages, unless those instruments are recorded accord- ing to law. If the grantor be a non-resident, then the record must be made where the property is situated. If such instruments are recorded subsequent to the expiration of forty days, they shall be valid to, affect the rights of sub- sequent creditors and purchasers for valuable consideration without actual notice, only from the time of such record.^ Conditional sales of personalty are void as to third parties without actual notice, unless they are recorded in the same manner as mortgages and other deeds requiring recording. § 329a. South Dakota. — A chattel mortgage must be in writing and executed in the presence of two persons, who must sign as witnesses, and must be filed in the office of the register of deeds in the county where the property, or any part thereof, is situated at the time of the execution of the 'Laws of 1882, §2346. 'Laws of 1876; 16 Stat. 92. TENNESSEE. 255 instrument. In order to give notice to creditors and to sub- sequent purchasers and incumbrancers, wben witnessed no further acknowledgment is necessary to make it valid. It is void as against creditors of the mortgagor and subsequent purchasers and incumbrancers in good faith, unless the original, or an authentic copy, is filed for record with the register of deeds in the county where the property, or any part thereof, is situated. The mortgage ceases to be valid at the expiration of three years, unless within thirty days next preceding the expiration of that time the holder or mort- gagee makes a copy and sworn statement of the amount due thereon, and files the same.^ § 330. Tennessee. — Chattel mortgages are valid between the parties, without registration, but registration is necessary as against purchasers without actual notice, and, as to cred- itors, the mortgage must be registered, whether they have notice or not. The mortgagor may retain possession of the property if it be not consumable in its use. This does not apply to choses in action. Cnattel mortgages must be regis- tered in the county where the mortgagor resides, or, if a non-resident, in the county where the property is situated at the time of the execution of the mortgage.^ These may be registered upon proper probate or acknowledgment of their execution. Registration without such probate or acknowl- edgment is without any virtue. Registration of such or acknowledgment is constructive notice to all persons.^ Parties may annex conditions to contracts for the sale of personal chattels, which will prevent the vesting of the title to the property, although actually delivered, until the per- formance of the condition. Where property is sold to be delivered in installments, or at intervals, to be j)aid for when the whole is delivered, the delivery does not pass the title until the condition is complied with. When goods are sold with the privilege of returning same, ' Civil Code, ?? 1742-1755. ' Milliken & Ventrees' Code, ?? 2887, 2888. 'Code of 1884, ? 2809; Milliken & Ventrees' Code, || 2843, 2844. 256 STATUTORY LAWS OF REGISTRATION. they must be returned within a reasonable time or the sale becomes absolute. A contract for the rent of a sewing ma- chine for so many months at a stated sum for the entire tim6, if this sum is paid within the time the machine is rented for, is in law a valid sale and not a renting. If a party sell and deliver personalty, but retain the title until the purchase-money is paid, it is a valid sale, and the vendor may follow the property into the hands of third parties and recover the same for the unpaid purchase-money. § 331. Texas. — Chattel mortgages or any instrument in- tended to operate as a lien upon personal property, not accompanied by immediate delivery and followed by actual change of possession, are void as against creditors, subse- quent purchasers and lienholders, unless such instrument or a true copy thereof be forthwith deposited and filed in the office of the county clerk of the county where the property is situate, or, if the mortgagor be a resident, then in the county where he resides, the instrument so filed to remain in the office. If a copy, it must be compared by the clerk with the original, which in this case must be acknowledged as for record, and must be found a true copy. Conditional sales of chattels, where the vendee takes pos- session, are treated as mortgages, and must be registered as against creditors and innocent purchasers.' § 332. Utah Territory. — All kinds of personal property, except such as may be exempt from seizure and sale on exe- cution, and that as security for the purchase-money, are sub- " ject to a chattel mortgage. No mortgjage is valid, except as to the parties, unless possession of such property be delivered ^to and be retained by the mortgagee, or unless the mortgage provides that the property may remain in the possession of the mortgagor, and is accompanied by an affidavit of the parties thereto, or in case any party is absent, an affidavit of the parties present, and of the agent or attorney of such absent party, that the same is made in good faith to secure ' Rev. Stat. 1879, Append, p. 15, |« 1, 2, 3, 7 ; ? 4341 ; ? 4332, note. VERMONT. 257 the amount therein named, and without any design to hin- der or delay the creditors of the mortgagor. Every such mortgage shall be witnessed and acknowledged. Such mort- gage, with the affidavit and acknowledgment, shall be filed and recorded in the office of the county recorder of the county where the mortgagor resides, or, if he be a non-resi- dent, then in the county recorder's office of each and every county where the property may be at the execution of the instrument. Such mortgage is valid from the time of filing until the maturity of the debt secured, and for ninety days thereafter, provided the entire time shall not exceed one year.^ § 333. Vermont. — Chattel mortgages are allowed without change of possession, provided the mortgage be recorded in the office of the clerk of the town or city where the mort- gagor resides at the time of making the mortgage, or, if he be a non-resident, then in the town where the property is situated, and provided that the mortgagor and mortgagee shall make and subscribe an affidavit as follows : " We severally swear that the foregoing mortgage is made for the purpose of securing the debt specified in the condi- tion thereof, and for no other purpose whatever, and that the same is a just debt, honestly due and owing from the mortgagor to the mortgagee." Which affidavit, with the certificate of the oath, signed by the authority administering the same, shall be made upon, or appended to, such mortgage, and be recorded there- with. In case of a corporation, any director, cashier or treasurer thereof, or any person authorized, may make the affidavit. If the mortgage be given to indemnify the mortgagee against any liability assumed or to secure the fulfillment of any agreement other than the payment of a debt due from the mortgagor, the affidavit must be made to confoftn to such 'Gen. Laws of 1884, ch. 21, U 1-5. 258 STATUTORY LAWS OF KEGISTEATION. liability or agreement. No property shall be removed from the State except by the consent of the mortgagor and the mortgagee/ Machinery in a shop, mill, quarry, mine, printing office or factory may be mortgaged in the same manner as real prop- erty is mortgaged.^ There are no provisions for renewal of a chattel mortgage. Liens reserved on property sold conditionally and passing into the possession of the vendee, are not valid against attaching creditors or subsequent purchasers without notice, unless witnessed by a memorandum signed by the vendee and stating the amount due thereon, recorded in the town clerk's office where the vendee resides, if in the State, or, if a non-resident, where the vendor resides, within thirty days after the property is delivered. Such lien may be discharged by entry upon the margin of the record thereof or by release of the lien recorded in the same office. The property can- not be removed from the State without the consent of the vendor or his assignee. The property must not be sold or concealed, with intent to defraud, and in violation of such provision the ^ctor is punishable by fine. After thirty days from condition broken the vendor may cause the property to be sold and the proceeds applied in the manner provided for enforcing chattel mortgages.^ § 334. Virginia. — There may be mortgages and, deeds of trust upon goods or chattels. Such mortgages and deeds of trust shall be void as to subsequent purchasers for valu- able consideration without notice and creditors, until and except from the time that they are duly admitted to record in the county or corporation wherein the property may be, and, although recorded in one county, they are not valid as to property being in another county. If the property be removed from the county or corporation, one year is allowed • 'Rev. Laws, U 1965-1979; 1882, Nos. 69, 70; 188 1, No. 107; 1886, No. 91. "Rev. Laws, ? 1980; 1886, No. 61. ^Rev. Laws, §? 1992, 4158; Laws of 1884, Nos. 93, 101. WASHINGTON, 259 for the recording in the county or corporation to which the property has been removed/ § 335. Conditional Sales — RoUing-Stock. — Every sale or contraqt for the sale of goods or chattels, wherein the title is reserved until the same be paid for in whole or in part, or the transfer of the title is made to depend on any condition, and possession be delivered to the vendee, is void as to creditors of and purchasers for value without notice from such vendee, unless such sale or contract be evidenced by writing executed by the vendor, in which the said reservation or condition is expressed, and until and except from the time the said writing is duly admitted to record in the county or corpora- tion in which sa^id goods or chattels may be. As to rolling-stock, cars, &c., of railroad companies, con- tracts concerning them are to be recorded in the county or corporation where the principal office of the company is located — if in Richmond city, in the Richmond Chancery Court ; and each locomotive, car or other piece of rolling- stock is to be plainly and permanently marked with the name of the vendor on both sides thereof, followed by the Tford " owner." ^ § 336. Washington. — Chattel mortgages must be acknowl- edged and recorded in the office of the county auditor in the county where the property is at the time of the execution of the mortgage, accompanied by the affidavit of the mortgagor that it is made in good faith and without design to hinder, delay or defraud creditors, and acknowledged and recorded with the mortgage. Where mortgaged property is removed from the county, it is,. except as between the parties, exempt from the operation of the mortgage, unless, within thirty days, the mortgage be recorded in the county to which it is removed, or the mortgagee takes possession. Mortgages are given upon the rolling-stock of railroad 1 Code, ?§ 2465, 2466, 2468. The county and corporation courts are those in which wills and deeds are recorded. The clerk of the court, under the supervision of the judge, acts as recorder. ^ Code of 1887, §2462. 260 STATUTORY LAWS OF BEGISTEATION. companies, all kinds of machinery, boats and vessels, grow- ing crops, portable mills and all kinds of personal property. The wife must join when the property is exempt from execution.' Chattel mortgages are binding until six years after they become due, between the parties.'^ A mortgage on any vessel or boat, or part of a vessel or boat, of over twenty tons burden, shall be recorded in the office of the collector of customs where such vessel is registered, and need not be recorded elsewhere/' § 337. West Virginia. — Chattel mortgages and deeds of trust are executed with the same formality as deeds of real estate. Chattel mortgages are seldom used. They are not required to be renewed. No statute nor decision exists about letting a mortgagor hold possession of the mortgaged property. Deeds of trust are generally used. No specific time is given for the record of deeds, mort- gages and contracts in writing relating to real or personal property. They are void as to creditors and subsequent purchasers until and from the date they are duly admitted to record in the county wherein the property embraced in such deed or contract may be. If any such personal prop- erty shall be removed from the county the instrument must be recorded in such other county within three months after such removal,* Any sale of goods and chattels, reserving the title until the same are paid for, or otherwise, and possession is delivered to the vendee, the same shall be void as to creditors of and purchasers without notice from such vendee, unless notice of such reservation be recorded in the office of the clerk of the county court of the county where the property is, or in case said goods and chattels consist of engines, cars or other rolling-stock or equipment to be used in or about the opera- ' Rev. Code, §? 1986-1998. 'Rev. Code, §27. 'Rev. Code, §U988, 1999. *Code, oh, 76, S§1, 2. WISCONSIN. 261 tioa of any railroad, unless such notice be recorded in the office of the secretary of state, for which he is entitled to receive a fee of |5.^ § 338. Wisconsin. — No chattel mortgage is valid against third parties unless the possession of the mortgaged prop- erty be delivered to and remain with the mortgagee, or un- less the mortgage, or a copy thereof, be filed in the office of the clerk of the town, city or village where the mortgagor resides, or, if he be a non-resident, then where the property may be at the time of the execution of the mortgage. Such mortgage ceases to be valid as against third persons after the expiration of two years from the filing of the same, urfless, within thirty days next preceding the expiration of the two years, the mortgagee, his agent or attorney, shall make and annex to the mortgage on file an affidavit showing the inter- est which the mortgagee has by virtue of such mortgage, which extends the mortgage two years more. No contract for the sale of personal property, by the terms of which the title is to remain in the vendor until paid for, and the possession in the vendee, shall be valid against any third person without notice, unless such contract shall be in writing, and the same, or a copy thereof, shall be filed in the office of the clerk of the town or city or village where the vendee resides, or, if he be a non-resident, then in the office of the clerk of the town, city or village where the property is at the time of making the contract.^ All mortgages, liens, bills of sale, or other written instru- ments, in any way affecting the ownership of any marked logs in any lumber district, which shall specify the marks placed upon said logs, and when they were cut, shall be recorded in the office of the lumber inspector in which said marks are recorded.^ Chattel mortgages upon exempt property shall not be 'Acts 1882, p. 310, amending ? 3 of ch. 74 of Code. ^Bev. Stat, of 1878, ch. 105, U 2313-2318; subdiv. 10, § 832. ^ Kev. Stat, of 1878, ch. 84, § 1739. 262 STATUTOKY LAWS OF EEGISTRATION. valid unless the same be also signed by the wife of the mort- gagor, and her signature witnessed by two witnesses/ All contracts for sale of furniture or other household goods, made on condition that the title to the property sold shall not pass until the price is paid in full, whether such contract be in form of a lease or otherwise, shall be in writing, and a copy thereof furnished to the vendee by the vendor at the time of such sale, and all payments made by or in behalf of the vendee, and all charges, as they accrue, shall be indorsed on such copy by the vendor, if the vendee so requests, and a continuous failure waives the condition of such sale. Such contract shall not be valid, except as to the parties thereto, unless duly subscribed and filed as a chattel mortgage, but the effect of such filing shall not extend for more than one year after the time fixed for the payment of the contract price and the performance of the other con- ditions of such sale.^ No contract for the sale of personal property, by the terms of which the title is to remain in the vendor, and the posses- sion thereof in the vendee, until the purchase price is paid or other conditions of sale are complied with, shall be valid as against any other person than the parties thereto and those having notice thereof, unless such contract shall be in writing, subscribed by the parties, and the same, or a copy thereof, shall be filed in the oflfice of the clerk of the town, city or village where the vendee resides, or, if he shall be a non-resident, then in the office of the clerk of the town, city or village where the property may be at the time of making such contract ; but the effect of such filing shall not extend for more than one year after the time fixed for the payment of the contract price or the performance of the other conditions of sale.^ § 339. Wyoming. — Chattel mortgages must be executed .and acknowledged in the same manner as conveyances of 'Laws of 1887, ch. 268, § 2313. 'Laws of 1889, ch. 518, ? 2319b.. 'Rev. Stat. §2317. WYOMING. 26S real estate ; that is, a mortgage must be signed and sealed by the mortgagor, and proved as follows : If executed within the State, it shall be executed in the presence of one witness, who shall subscribe the same as such, and acknowledge it before any judge or clerk of a court of record, or before any clerk, justice of the peace or any notary public, in the State ; and the officer taking such acknowledgment shall indorse thereon the same under his hand and seal of office, if there be one/ If the mortgagor retains possession, the mortgage must be recorded in the office of the county clerk of the county where the property is situated ; but if the mortgage be upon cattle, horses, mules, sheep or other live stock, the mortgage may be recorded in the county wherein the range, upon which such live stock is or shall be principally running or ranging, is located. Chattel mortgages are in force from and after the time of delivering the same to the clerk of record, and not before, as to creditors and subsequent purchasers or mortga- gees in good faith, for valuable consideration and without notice. These are in force as against such third parties dur- ing the term for which they are given and for two months thereafter. A chattel mortgage can be renewed before the expiration of the two months, if the mortgagee files or causes to be filed an affidavit setting forth his claim to the debt or any part thereof, which affidavit continues the mortgage for the term of one year, and by succeeding affidavits the mort- gage may be indefinitely continued in full force and effect.^ ' It is also lawful for any person, firm or corporation to mortgage, in accordance with and subject to the provisions of the Chattel Mortgage act, possessory claims to public lands, all buildings, fences, ranches and improvements thereon ; all quartz, coal and other mining claims, and all such per- sonal property as shall be fixed in its structure to the soil ; all neat-cattle or herds of cattle, horses, mules, sheep or other live stock ; and any or all other, personal property 'Eev. Stat. pp. 77-82. 'Acts of 1882, ch. 11, ? 2. 264 STATUTORY LAWS OF KEGISTEATION. owned, occupied or in possession of such mortgagor at the time of making such mortgage, and also all personal prop- erty of like kind and character as that described in such mortgage, thereafter to be acquired, owned, occupied or possessed by such mortgagor. It is also lawful for the insertion in the mortgage of a pro- vision that the mortgagor may use, handle, operate, herd, manage and control the property mortgaged, and to market, sell and dispose of portions thereof as may be necessary in the course of business, or to preserve and care for the same, and replace such parts sold with other property of like kind and character, which shall be subject to the operation and effect of such mortgage ; provided, however, that such per- mission shall not allow the mortgagor to retain and use the proceeds of any such sale or sales to his own use, but the same shall be applied in and toward the payment of the debt or obligation by such mortgage.^ •Rev. Stat. |§ 70-91. IN GENERAL. 265 CHAPTER IX. CONSTEUCTION OF THE STATUTOEY LAWS OF KEGISTRATION. ARTICLE I. — BETWEEN THE PARTIES. 340. In General. § 340. In General. — Between the parties to a mortgage tlie mortgage is valid without a change of possession of the property or registration of the instrument. As to third per- sons, registration is equivalent to a continued change of pos- session in most of the States. As between the parties, even s, defective mortgage may be good. Whenever a chattel mortgage has been given for a valu- able consideration, between the parties it is valid and bind- ing, whatever may be its eflFect as to third persons.^ And in most States a chattel mortgage which has not been filed or recorded is valid against subsequent purchasers or mort- gagees of the chattels with notice. Even a conveyance by bill of sale, absolute on its face, without conditions or defeasance expressed, when it is under- stood by the parties to be security for a debt, is substan- tially a mortgage, and if not recorded the vendee may take possession of the property, which perfects his lien as against third persons who had no prior lien before he took posses- ' Wilson V. Leslie, 20 Ohio 161 ; Jefferson v. Jeffries, 30« Mo. 423 ; Sawyer V. Turpin, 91 U. 8. 114; Machette v. Wanless, 2 Colo. 169; Badger v. Batavia Man. Co., 70 111.302; Stewart v. Piatt, 101 U. S. 731; Hackett v. Manlove, 14 Cal. 85 ; Hall v. Snowhill, 2 Green (N. J.) 8 ; Beeman v. Lawton, 37 Me. 543; Claggett i). Salmon, 5 Gill & J. (Md.) 314; Hudson v. Warner, 2 Harr. & G. (Md.) 415 ; Lemay v. Williams, 32 Ark. 166 ; Kilbourne v. Fay, 29 Ohio St. 264 ; Williamson v. N. J. Southern R. B. Co., 26 N. J. Eq. 398 ; McTaggart v. Rose, 14 Ind. 230; Davis v. Ransom, 26 111. 100; Fuller v. Paige, 26 111. 358; Forest v. Tinkham, 29 111. 141; Porter v. Dement, 35 111. 478; Griffin v. Wertz, 2 111. App. 487; Smith v. Moore, 11 N. H. 55; Fitz- gerald V. Andrews, 15 Nebr. 52. 266 CONSTKirCTION OF THE STATUTORY LAWS. sion. Thus, one who takes a bill of sale of merchandise from his debtor as a security for money loaned, and the debtor .is allowed to sell portions of the property in the usual course of business as if he were owner thereof, may take possession of the merchandise in order to secure his debt, and such taking is legal. This bill not being recorded yet vests the complete title in the vendee, subject only to be defeated by the discharge of the debt, or by some intervening right acquired before the possession was taken.' Even if the mortgage be made in fraud of the mortgagor's creditors, yet it is good between the parties to it. And a mortgage of personalty without the affidavit required by law, is, in some States, valid against subsequent mortgagees having notice that the prior mortgage was made in good faith and for a valuable consideration. But if the creditor knows it to be given to defraud the creditors, then it does not serve as notice to him, and he may seize the property. And in those States where it is unlawful for the mortgagor to hold the possession and sell the goods, as to subsequent purchasers and mortgagees, if the mortgagee takes possession, it becomes valid, so as to protect the property from execution creditors not having made a levy, and against subsequent purchasers from the mortgagor.^ 1 Mitchell V. Black, 6 Gray (Mass.) 100; Sawyer v. Turpin. 91 U. S. 114. 'Gooding v. Riley, 50 N. H. 400 ; Tremper v. Barton, 18 Ohio 418 ; Brown V. Webb, 20 Ohio 389; Douglass v. Vogeler, 6 Fed. Rep. 53; Ooggeshall v. Potter, 1 Holmes C. C. 75 ; Miller v. Jones, 15 Bank. Reg. 150. But se& Moore v. Young, 4 Biss. G. C. 128; Re Abram, 14 Bank. Reg. 125; 3 N. Y. Weekly Dig. 111. RECORDING AND PILING. 267 ARTICLE II. REGISTRATION. 341. Kecording and Filing. 342. Necessity of. 343. Eights of the Administrator of the Mortgagor. 344. Taking MortgagS to Indemnify Estate. 345. Whom he Represents. 346. Ohio Doctrine. 347. Administrator's Rights, When Mortgage is Void as to Creditors. 348. Rights of Assignee in Bankruptcy. 349. Contrary Doctrine. 350. Rights of an Assignee in an Assignment. 351. As Against an Assignee in Insolvency. 352. Sufficient Record. 353. In Iowa. 354. In North Carolina. 355. Conflict of Authority. 356. Book of Record. 357. Where Recorded. 358. Time of Record. 359. When a Valid Lien. 360. When Recorded. 361. Failing to Keep a Book of Record. 362. Place of Record. 363. Residence in Different Places in the State — Two or More Mortgagors- 364. Residing in Different States. 365. In Case of Partnership. 366. Residence of Corporation. 367. Recording in Wrong County. 368. Proof of Mortgagor's Residence. 369. Priority — Construction. 370. Priority by Agreement. 371. Withdrawal From the Files. 372. Interpretation of Words. 373. In Arkansas. 374. The Recorder's Agent May Receive for Registration. 375. Failure to Record. 376. As to an Assignee. 377. Evidence of Record. 378. In Texas. 379. In Missouri. 380. Proof of Contents. § 341. Recording and Piling. — In most of the States it is the law that recording or filing a chattel mortgage is equiv- alent to a continued possession in the mortgagee of the prop- erty mortgaged. The recording of a mortgage contemplated hy the statute is meant as a substitute for possession of the property by the mortgagee, but was not meant to protect him from all illegal stipulations contained in the mortgage, " The creditor must take care in making his contract that ■268 CONSTRUCTION OF THE STATUTORY LAWS. , it does not contain provisions of no advantage to him, but whicli benefit the debtor and were designed to do so, and are injurious to other creditors. The law will not sanction a proceeding of this kind. It will not allow the creditor to make use of his debt for any other purpose than his own in- demnity. If he goes beyond this and puts in the contract stipulations which have the effect to shield the property of his debtor so that creditors are delayed in collection of their debts, the court of equity will not lend its aid to enforce the •contract." ' Some of the States do not make the filing of the mortgage legally equivalent to actual delivery and continued change of possession; it merely adds another to the grounds on which a mortgage of personal chattels shall be void.^ § 342. Necessity of.— The Code' of Georgia of 1871, pro- vides that whenever any person conveys personal property by bill of sale to secure a debt, and takes a bond to reconvey upon payment of the debt, such conveyance need not be recorded and shall pass the title to such property to the vendee ; such conveyance executed in 1881, as the law then stood, the property remaining in the vendor's possession, was not required to be recorded.* An unrecorded mortgage of chattels may be enforced after the legal title has vested in the widow of the mort- gagor, under Arkansas law, conferring on the widow the right to the estate of the husband, when less than $300 in value.^ In Arkansas, if a mortgagee takes possession of the mort- gaged chattels before any other right or lien attaches, his ' Eobinson v. Elliott, 22 Wall. 513, per Davis, J. ; Miller v. Whitson, 40 Mo. «8; Cotton v. Marsh, 3 Wis. 221; Forbes v. Parker, 16 Pick. (Mass.) 462; Harrington v. Brittan, 28 Wis. 541; Morrill v. Sanford, 49 Me. 566; T'romme v. Jones, 13 Iowa 474; Feurt v. Eowell, 62 Mo. 524; Benson v. Nunan, 63 Cal. 550; Bullock v. Williams, 16 Pick. (Mass.) 33; Hughes v. Gory, 20 Iowa 399. ''Wood V. Lowry, 17 Wend. (N. Y.) 492; Smith v. Acker, 23 Wend. (N. Y.) 653; Horton v. Williams, 21 Minn. 187; Marsh v. Burley, 13 Nebr. 261. 'Code, ? 1969. • *Tiftv. Dunn,80Ga. 14. ^ Wolflf V. Perkins, 51 Ark. 43. KI&HTS OF ADMINISTRATOK OF MORTGAGOR. 269' title is good against everybody; if the mortgage was pre- viously valid between the parties, although it be not recorded nor acknowledged.^ An assignment of a lease of mortgaged property by a chattel mortgage to an assignee of the mortgage, with authority to collect the rents accruing under such lease, does not constitute such a change of possession as to dispense with filing and renewing the mortgage as required by statute, where the lessee is allowed to remain in actual possession of the mortgaged property. Thus, where the plaintiff stood in the position of assignee of the lessor of the property, with authority to collect rent, and also as assignee of the mort- gage at the time a levy was made on the property, the mort- gage under which he claimed not having been renewed as provided by the statute, the creditor levying on the property will hold it. 'There was no actual and continued change of possession of the property mortgaged as to do away with the require- ments of the statute for filing and renewing of the mortgage.^ Where doubt exists as to the fulfillment of the require- ment of the statute, it must be solved, in favor of the fore- closer or creditor against the mortgagee, because he has full power to protect himself fully and to prevent others from being deceived.^ § 343. Rights of the Administrator of the Mortgagor. — The administrator of the mortgagor of an unrecorded mortgage is not a third person within the meaning of the statute, so- as to enable him to withdraw possession of the mortgaged property from the mortgagee on condition broken. He has- no better title than had his intestate.* The administrator takes the personal property of the tes- tator as his representative, and acquires no better title than he had." 'Garner v. Wright, 52 Ark. 385. 'Nat. Bank v. Summers, 75 Mich. 107. 'Anderson v. Brenneman, 44 Mich. 198. * Griffin v. Wertz, 2 III. App. 487. ^Choteau v. Jones, 11 111. 300. 270 CONSTRUCTION OP THE STATUTORY LAWS. In an action against an administrator it appeared that tlie plaintiff or mortgagee held a promissory note executed by the intestate, and secured by a chattel mortgage on certain property. Under order of the court the administrator had sold the property free of such lien for the purpose of dis- charging the same ; so far as general creditors were con- cerned, the estate was insolvent. It was decided that under the Indiana statute,^ which provides that an administrator shall pay the debts of his intestate in proper order, as soon as he shall have money in his hands with which to pay the same, it was the duty of the administrator to pay the mort- gagee's claim as soon as this property was sold.^ § 344. Taking Mortgage to Indemnify Estate. — An admin- istrator has the right, in Indiana, when his intestate has signed certain notes as surety, to take from the principal debtor, without order of court therefor, a chattel mortgage to indemnify the estate against loss on accouHt of ^uch notes. In an action by an administrator who had possession of mortgaged goods, against a creditor of the principal debtor who has seized them on execution, and the officer executing the writ, his damages are sufficiently established by showing that the principal debtor is insolvent, and that the property not seized is insufficient to pay the claims allowed against the estate ,on account of such security debts.^ It is not necessary that the administrator should have first paid the debts in order to show damage to the estate.* § 345. Whom He Represents.^ — The administrator of a de- ceased mortgagor represents the creditors as well as the estate, and has the right to treat as void mortgages made in fraud of the rights of creditors, and may take possession of the property and sell the same, passing a good title to the purchaser.^. ^Elliott's Supp. of 1889, ? 401. ' Jewett V. Hurrle, 121 Ind. 404. » Walling V. Lewis, 119 Ind. 496. 'Reynolds v. Shirk, 98 Ind. 480; Catterlin v. Armstrong, 101 Ind. 258. ' Hangen v. Hachemeister, 114 N. Y. 566. administratok's eights when mortgage is void. 271 § 346. Ohio Doctrine. — In this State, where a chattel mortgage is declared void by the statute as against creditors of the mortgagor who dies insolvent and in possession of the property, such property becomes assets in the hands of the executor or administrator of the mortgagor, whose duty, as well as right, it is to defend his possession against the claim of the mortgagee, notwithstanding such mortgage was valid as against the mortgagor.* § 847. Administrator's Rights When Mortgage is Void as to Creditors. — If a mortgage is void as to creditors, and would be so held in any action by them to subject the mort- gaged property to the satisfaction of their claims, it is also void as to the executor or administrator of the mortgagor dying in possession of the property, and becomes assets for the payment of the general creditors. Every sale or other transfer of chattels, made with intent to defraud creditors, though valid as between the parties to the transaction, is utterly void as to creditors, and, as a gen- eral rule, they may act just as though no attempt had been made to dispose of the property. When they have obtained a judgment and execution against the debtor they may seize a,nd sell the goods iii the same way as though no transfer had been made. So long as the debtor lives, a judgment and execution, or some other legal process against, him, is, in general, the only means by which the creditors can test the validity of the sale ; but this rule does not always hold good after the debtor is dead. It is also true, for the most part, that an executor or administrator can maintain only such claims as the testator or intestate might have successfully as- serted in his life ; but this rule may have exceptions. Where one, having sold personal property to defraud his creditors, dies in possession of it, leaving debts unpaid . to the full extent of his estate, including the property sold, and subse- quently the vendee takes and converts the whole to his use, the executor or administrator may, in behalf of the cred- ' Kilbourn v. Fay, 29 Ohio St. 264. But see Gill v. Pinney, 12 Ohio St. 38. 272 CONSTRTJCTION OF THE STATUTORY LAWS. itors, treat the transfer and taking possession as absolutely void, and recover the amount against the vendee. It would appear, also, that the right of the administrator would be the same in this respect had the vendee taken and held possession during the vendor's life-time. The title of the administrator takes effect by relation from the death of the intestate. The personal representative of a fraudulent ven- dor, who remains in possession until the time of his death, can set up the fraud of his intestate.^ § 348. Rights of Assignee in Bankruptcy.' — Except in case of attachment against the property of the bankrupt, within the prescribed time preceding the commencement of pro- ceedings in bankruptcy, and except in case where the dis- . position of property by the bankrupt is declared by law to be fraudulent and void, the weight of authority holds that the assignee takes the title subject to all equities, liens or, incumbrances, whether created by operation of law or by act of the bankrupt, which existed against the property in the hands of the bankrupt." He takes it in the same plight and condition that the bankrupt held it.* § 349. Contrary Doctrine.— It has been decided that an unrecorded chattel mortgage, when the property is not in the possession of the mortgagee, is not valid against the assignee in bankruptcy ; that the assignee is the representa- tive and trustee for the general creditors, and may impeach 'Babcock v. Booth, 2 Hill (N. Y.) 181. See, also, the following, which hold the same doctrine: Collins v. Myers 16 Ohio 547; Hanes v. Tif- fany, 25 Ohio St. 549; Shears v. Rogers, 3 Barn. & A. 362; Doe v. Ball, 11 M. & W. 531; Bayard v. Hoffman, 4 Johns. Ch. (N. Y.) 450; Doe v. Backen- stose, 12 Wend. (N. Y.) 543; Bates v. Jordan, 1 Kern. (N. Y.) 237; Shields V. Anderson, 3 Leigh (Va.) 729; Benjamin v. Le Baron, 15 Ohio 517 ; Goudy V. Gebhart, 1 Ohio St. 262; Curd v. Wunder, 5 Ohio St. 92; Chapman v. Weimer, 4 Ohio St. 481 ; Bloom v. Noggle, 4 Ohio St. 45. ''Yeatman v. Savings Institution, 95 U. S. 764; Brown v. Heathcote, 1 Atk. 160; Mitchell v. Winslow, 2 Story C. C. 630; Gibson v. Warden, 14 Wall. (U. S.) 244; Cook v. TuUis, 18 Wall. (U. S.) 332; Donaldson v. Far- well, 93 U. S. 631 ; Jerome v. McCarter, 94 U. S. 734; MJtford v. Mitford, 9 Ves. Jr. 87 ; Stewart v. Piatt, 101 U. S. 731 ; In re Griffith, 1 Low. D. C. 431; In re Dow, 6 Bank. Reg. 10 ; Ooggeshall v. Potter, 1 Holmes C. C. 75 ; In re Wynn, 4 Bank. Reg. 23 ; Johnson v. Patterson, 2 Woods C. C. 443 ; Goddard V. Weaver, 1 Woods C. C. 257 ; In re Collins, 12 Bank. Reg. 579. ' Winsor v. McLelland, 2 Story C. C. 492. AS AGAINST THE ASSIGNEE IN INSOLVENCY. 273 the validity of a chattel mortgage, void by local statute as to creditors, because not recorded, and has all the rights in this respect that an attaching or execution creditor would have had, if bankruptcy pfoceedinga had not supervened. The assignee in bankruptcy of the mortgagor stands in the position of judgment creditors or lien creditors with equal rights, the adjudication of bankruptcy being equivalent to the record of a judgment and levy.' § 850. Bights of an Assignee in an Assignment. — The as- signee takes the property under the assignment and holds it for the exclusive benefit of the creditors. A mortgage void as to creditors for want of proper execution, under the Ohio statute, is void as against an assignee in trust for the benefit of creditors.^ In Michigan an assignee cannot maintain replevin against a sheriff who has levied on the property under an execution against the mortgagor, while in the possession of the lessee, as the title is in the mortgagor, and the assignee stands only in the position of a mortgagee.* § 351. As Against the Assignee in Insolvency. — The assignee of a mortgage by an assignment of date earlier than the mortgagor's petition in insolvency, and the mortgagor's as- signee for the benefit of creditors, stand in the same position as the original parties to the mortgage. The assignee for the benefit of creditors, therefore, cannot claim, as against the other assignee, goods substituted in the usual course of trade for those originally mortgaged, and which, as the mort- gage stipulated, were to be covered by its lien.* •Be Werner, 5 Dill. C. C.'ll9; Mellier v. Jones, 15 Bank. Beg. 150; Ee Gurney, 15 Bank. Beg. 373 ; Baker v. Smith, 12 Bank. Beg. 474 ; Be Leland, 10 Blatchf. C. C. 503; Carr v. Hilton, 1 Cur. C. C. 390; Harvey v. Crane, 2 Bias. C. C. 496; Bobinson v. Elliott, 23 Wall. (U. S.) 513; In re Gurney, 7 Biss. C. C. 414; In re Eldridge, 2 Biss. C. C. 362; Piatt v. Stewart, 13 Blatchf. C. C. 481; Bank v. Hunt, 11 Wall. (U. S.) 391; Goodrich v. Michael, 3 Colo. 77; Bingham v. Jordan, 1 Allen (Mass.) 373; Allen v. Massey, 4 Bank. Beg. 248. 'Hanes V. Tiffany, 25 Ohio St. 549. ' National Bank v. Summers, 75 Mich. 107. * Williamson v. Nealey, 81 Me. 447. s 274 COIfSTRTTCTION OF THE STATUTORY LAWS. * The assignee for the benefit of creditors has the same rights which the insolvent had and could assert at the time of his insolvency, except in case of fraud/ § 352. Sufficient Record. — In legal contemplation, the filing of a mortgage is complete when delivered to, received by, and left with the recording officer for that purpose.* In Nebraska, where a mortgage is duly filed in the county where the mortgagor resides, and is constructive notice there, it will be constructive notice into whatever county the mortgagor may remove with the property.^ But if the mortgagor gives a mortgage in a county where he is tempo- rarily domiciled, and the mortgage is recorded there, it will be ineffectual as against his creditors. Thus, a foreign cor- poration, doing business in a certain county in Arkansas, executed a mortgage on personal property to secure certain notes, and the mortgage was duly recorded in said county. Subsequently certain judgment creditors of the corporation levied on the personal property. The mortgagee sought to foreclose, joining the creditors as defendants. It was de- cided that as the corporation had no residence in Arkansas, the recording of the mortgage did not give the mortgagee a lien as against the creditors who had sued before the fore- closure, as, under the law,* the mortgage of personal prop- erty, to be valid as against third parties, must be recorded in the county of the mortgagor's residence." Personal property mortgaged in Alabama was casually taken into Georgia, but the mortgagor still residing in the former State. To secure the rights of the mortgagee it was ' Herriok v. Marshall, 66 Me. 435 ; Hutchinson v. Murchie, 74 Me. 187. In Maine, as between the parties to a mortgage, a mortgage upon goods which authorizes the mortgagor to sell them, and with the proceeds of such sale to purchase other goods to take their place, is valid as to such after- acquired property. Allen v. Goodnow, 71 Me. 420 ; Bearing v. Cobb, 74 Me. 332. ''Gprham .v. Summers, 25 Minn. 81 ; People v. Bristol, 35 Mich. 28; Smith V. Waggoner, 50 Wis. 155; Marlet v. Hinman (Wis.), 45 N. W. Rep. 953. 'CooU. Roch, 20 Nebr. 550. •Mansf. Dig. H742. ' ' Watson V. Thompson Lumber Co., 49 Ark. 83. CONFLICT OF AUTHORITY. 275 not necessary that the mortgage be recorded in Georgia also/ And a mortgage not complying with the statute, though re- corded, is not valid as to third persons, and cannot be con- sidered as sufficient notice.^ So, also, a record without an acknowledgment, when required by statute, or without an affidavit, where the statute requires it, is not sufficient,' and is also ineffectual if the certificate of acknowledgment is defective.* § 353. In Iowa, a chattel mortgage delivered to the recorder at 6:30 p. m. was so indorsed by him, but not entered in the index until 8:30 the next morning, and after an attach- ment had been levied upon the property mortgaged. The Iowa law* makes it the duty of the recorder to note the time of filing, and to enter it in the index, and provides that from the time of such entry the instrument shall be deemed complete as to third parties. Under these circumstances the attaching officer could not be charged with constructive notice of the mortgage by reason of the custom of the recorder not to enter in the index until the next day, instru- ments received late in the evening.® § 354. In North Carolina, while unregistered deeds in trust and mortgages are inoperative as against creditors and pur- chasers for value, until registered, yet, when registered, they are effectual between the parties from the delivery, and against third persons who have not acquired any intervening rights.* § 355. Conflict of Authority. — As to what is a sufficient record of an instrument is a question upon which the au- thorities do not agree. But the weight of authority holds that when a party has duly deposited his deed with the proper officer for record, he has performed his duty, and ' Peterson v. Kaigler, 78 Ga. 464. 'Prank v. Miner, 50 111. 444. « Hill V. Oilman, 39 N. H. 88. See Section 360. *Code, n925. 'Hibbard v. Zenor, 75 Iowa 471. *Brem v. Lockhart, 93 N. Car. 191. • 276 CONSTKTJCTION OP THE STATUTORY LAWS. consequently a subsequent- mistake or malfeasance of the recorder will not aflFect the mortgagee or invalidate his title.'^ Thus, a chattel mortgage is to be deemed filed when it is delivered to and received and kept by the proper officer, in his office, for the purpose of filing, notwithstanding he omits to place it with the other chattel mortgages in his office.^ So, also, where a mortgagee files or causes to be filed his mortgage, according to the statutory provisions, the mal- feasance of the clerk or recording officer in permitting it to become lost or abstracted, and representing that it, or a copy thereof, was not on file, will affi)rd no protection to a bona fide purchaser without actual notice ; the mortgagee's inter- ests will be protected.* But, on the other side, it is held to be the duty of the party filing the instrument, as between himself and a subse- quent iona^cZe purchaser, to see that all of the prerequisites of validity of the deed- as to registration be complied with.* § 356, Book of Record. — Recording a chattel mortgage in the book for real-estate mortgages is sufficient to give third persons notice, even if the property is a fixture. Thus, a party gave a mortgage upon machinery, and then leased land upon which to place it. The mortgage was recorded in the records of mortgages of real estate. This was held valid as against a subsequent purchaser of the personalty.^ So, also, a mortgage of both real estate and personal property, recorded in the book for real estate, according to the custom x)f the recording officer, is not therefor invalidated.* So, a 'People V. Bristol, 35 Mich. 28 ; Wolf r. Hunter, 10 111. App. 32; Nichols V. Jleynolds, 1 R. I. 30; Cook v. Hall, 1 Gilm. (111.) 575 ; Merrick v. Wallace, 19 111.486; Dubosev.Young, 10 Ala. 365; Monaghan «. Longfellow, 81 Me. 298; Beverly v. Ellis, 1 Rand. (Va.) 102; Dikeman v. Puckhafer, 1 Daly (N. Y.) 489 ; Gorham v. Summers, 25 Minn. 81 ; Chase v. Bennet' , 58 N. H. 428. 'Appleton Mill Co. v. Warder, 42 Minn. 117. See, also, Keating v. Retan (Mich.), 45 N. W. Rep. 141. 'Marlet v. Hinman (Wis.), 45 N. W. Rep. 953. *Frost V. Beekman, 1 Johns. Ch. (N. Y.) 288; Jennings ti. Wood, 20 Ohia 261 ; Barney v. McCarty, 15 Iowa 510; Sawyer v. Rogers, 8 Vt. 172 ; Scoles D. Wilsey, 11 Iowa 261; Hibbard v. Zenor, 75 Iowa 471. See note in 31 Cent. L. Journal 211. " Boyle Ice Co. v, Gould, 73 Cal. 153. •Anthony v. Butler, 13 Pet. (U. S.) 428. TIME TO KECOKD. 277 chattel mortgage of fixtures, duly recorded, is notice to a mortgagee of the real estate on which the fixture is located. Thus, a party mortgaged a boiler and engine, which mort- gage was duly recorded. Two months afterwards he gave a mortgage on the real estate on which the fixtures were placed. It was held that the chattel mortgage was notice to the mort- gagee of the real estate of the rights of the mortgagee of the chattel mortgage.^ So, a mortgage filed in the proper office, as to a portion of the property, is not rendered inoperative as to such property- from the fact that it was not filed in the proper office as to the other chattels.'' . An affidavit proving a mortgage, which is taken before a notary public, who is the attorney of the mortgagee, is not -a legal affidavit, and a mortgage so proved and recorded is not legally recorded.^ Whether a mortgage has been acknowledged and recorded is a question for the court.* § 367. Where Recorded. — The law controlling the record of chattel mortgages must be strictly complied with. Thus, a livery stable keeper who resided in Vermont, bought horses which he kept and used during the threshing season of three months in New Hampshire. Thfe court held that these horses were "situate" in New Hampshire, requiring the mortgage to be recorded in that State under the statute.* § 358. Time to Record. — It is incumbent upon the mort- gagee to show that the mortgage has been recorded within the time specified by the statutes.^ Under a statute requir- ing a mortgage to be recorded within sixty days from the 'Sword V. Low, 122 111. 487. ' Hubbardson Lum. Co. v. Covert, 35 Mich. 254. 'Nichols V. Hampton, 46 Ga. 253. "Bailey v. Godfrey, 54 111. 507. * Lathe v. Schoif, 60 N. H. 34. See, also, Watson v. Thompson Lumber Co., 49 Ark. 83. "Cheny worth v. Daily, 7 Ind. 284. 278 CONSTRUCTION OF THE STATUTORY LAWS. time of its execution, a record made on the sixtieth day after its execution is in due time.^ In Indiana, a failure to record a mortgage in the county in which the morgagor resides, renders such mortgage void as to all persons other than the parties thereto, whether such persons had or had not acquired a lien upon the property.^ It must be recorded within the statutory time, or it is not valid against subsequent purchasers.^ In Georgia, if the mortgage is not recorded in time, the mortgagee must give way to mortgages and judgments ob- tained before he had foreclosed his mortgage.* In Minne- sota a chattel mortgage is deemed to be filed when it is delivered to and received and kept by the proper officer in his office for the purpose of filing, notwithstanding he omits to place it with the other chattel mortgages in his office.' In Maine,^ where the law provides that the clerk shall note on every mortgage and in the record when received, and that it shall be considered as recorded when received, the mortgage is recorded when received by the clerk and date noted on the mortgage, as against subsequent attaching creditors of the mortgagor, though the record is not com- pleted and does not contain the date of the receipt of the mortgage, and it is immaterial that the latter is marked " entered " instead of " received." ' The Florida statute' provides that no mortgage of personal property shall be effectual or valid for any purpose what- ever, if the mortgage is not recorded, unless the property be delivered within twenty days after the execution of the mortgage. It was held under this law that no time being ' Miller v. Henshaw, 4 Dana (Ky.) 325. 'Sidener v. Bible, 43 Ind. 230. = Denny v. Lincoln, 13 Met. (Mass.) 200; Travis v. Bishop, 13 Met. (Mass.) 304; Bingham v. Jordan, 1 Allen (Mass.) 373; Lockwood v. Slevin, 26 Ind. 124. * Hardaway v. Semmes, 24 Ga. 305. "Appleton Mill Co. v. Warder, 42 Minn. 117. "Rev. Stat, of 1857, ch. 91, ? 2. ' Monaghan v. Longfellow, 81 Me. 298. 'McClel. Dig. p. 218, n. WHEN A VALID LIEN. 279 prescribed within which the record shall be made, it will be sufl&cient, as against the creditors, though made after the debt is due, if made before suit for foreclosure, and there are no circumstances, such as unreasonable delay or the death of the mortgagor, after undue lapse of time denoting laches, nor any fraud to impeach the transaction.' The Arkansas statute'^ provides that in order for a mort- gage to become a lien on personal property against strangers, without being first filed for record, the mortgagee shall indorse upon it that it is to be filed but not recorded, and shall then file it with the recorder, who shall then mark it " filed," with the time of filing on the back of it, and file it in his office, where it shall be kept for the inspection of all persons interested. A mortgagee sent his mortgage to the recorder by an agent with verbal instructions, but no indorsement on it, that it should be filed but not recorded. The agent told the • recorder that it was not to be recorded, and the recorder laid it aside and waited to see the mortgagee. Afterwards the mortgagee saw the recorder and directed him to record it. The recorder then marked it filed as on the day it was handed him, and recorded it. It was held that the mortgage was not filed for record until the instructions were given to record it.^ § 359. When a Valid Lien. — A chattel mortgage does not become a good and valid lien against creditors until it is filed for record, except where actual notice is sufficient. Thus, at the time of a sale and delivery to the mortgagor of property, there was an execution in the hands of the sheriff against the property, and the lien of such execution attached on the delivery of the property to the mortgagor under the sale, and became a prior lien to that of the vendor, created by means of a chattel mortgage back for the purchase- money, executed ' Eeese v. Taylor, 25 Fla. 283. 'Mansf. Dig. g 4750. 'Dedman v. Earle, 52 Ark. 164. 280 CONSTRUCTION OF THE STATUTORY LAWS. at the time of the sale and delivery of the property, and not filed for record until twenty hours thereafter/ § 360. When Recorded. — In those jurisdictions where it is held that the recording oflBcer must fully comply with the statute in noting the time when the mortgage is received, and enter it in the index, before the mortgage will protect the mortgagee, the mortgage of personal property will, nevertheless, take effect from the time it is actually re- corded.^ And the time when a mortgage was received by the recording officer must be noted both in the book of record and on the mortgage, in order that it should be con- sidered as recorded when left.^ But the record of the mortgage supersedes the necessity of noting in the book of record, at the time, when it was received.* The mortgage takes effect from registration; a creditor acquiring a lien before that time has a claim su- perior to that of the mortgage, and, as against such creditor, the mortgage has had, in the estimation of law, no existence." § 861. Failing to Keep a Book of Record. — It seems that a failure to keep a book of registration in which to make the entries as prescribed by statute does not invalidate the mort- gage as against a subsequent mortgagee, provided the prior mortgage had been duly filed for record ; that such provi- sion of the statute is directory and not mandatory;^ because the filing of the mortgage and the indorsement thereon are the principal things to be done as affecting the validity of the mortgage, and notice to all persons interested. The indorsements to be made in a book are not made essential to the validity of the mortgage, or constructive notice of its filing, and therefore the requirements of such indorsements, ^Self t). Sanford, 4 111. App. 328; Burnham v. Muller, 61 111. 453; Harda- way V. Semmes, 38 Ala. fi57. '^Holmes v. Sprowl, 31 Me. 73. 'Handley v. Howe, 22 Me. 560. * Head v. Goodwin, 37 Me. 181. 'Hardaway v. Semmes, 38 Ala. 657; Wallis v. Rhea, 10 Ala. 451. See Section 352. "Dikeman v. Puckhafer, 1 Abb. Pr. (N. Y.) N. S. 32; Smith v. Waggoner, 50 Wis. 155. PLACE OF RECORD. 281 by the established rule of construction, must be held to be merely directory ; the failure to make them cannot prejudice the rights of a mortgagee who has done all that the law re- quires of him to secure the filing of his mortgage by the recording ofiicer.^ § 362. Place of Record. — Most of the statutory provisions make it necessary to record or file the mortgage where the mortgagor resides, in order that it shall be good against sub- sequent purchasers and creditors. Thus, a mortgage of goods contained in a branch store of the mortgagor, in a county other than that in which he resides, recorded in the county of his residence, carries title to the goods as against a prior mortgage recorded in the county where the goods were, though possession was delivered to the prior mort- gagee;" and in case of doubt, the declarations of the mort- gagor, at the time of executing the mortgage, may tend to show the place of his residence.^ A mortgage made during a temporary absence of the mortgagor must be recorded in the county of his permanent residence;* and it must be the place of the mortgagor's resi- dence at the time the mortgage was executed, and not at the time of filing or recording the same.° ft matters not even if, at the time of the mortgage's execution, the property is in another county, and never brought to the county of the mortgagor's residence. The statute must be followed;* it must be filed in the town where the mortgagor resides.' Under the Minnesota statute,* where a mortgagor of chat- 1 Dodge V. Potter, 18 Barb. (N. Y.) 193. It was held in a tax case that the statutory provision as to iMaking an index was mandatory, because it is an act, the omission of which may work injury to those affected by it, and therefore cannot be directory. Mayhew V. Davis, 4 McLean C. C. 213. ^Weaver v. Chunn, 99 N. Car. 431. ^ Veazie v. Somerby, 5 Allen (Mass.) 280. •Boyd V. Beck, 29 Ala. 703. 'Hicks V. Williams, 17 Barb. (N. Y.) 523. 'Vaughn v. Bell, 9 B. Mon. (Ky.) 447; Singleton v. Young, 3 Dana (Ky.) ■559 ; Powers v. Freeman, 2 Lans (N. Y.) 127. 'Reynolds v. Case, 60 Mich! 76. »Gen. Stat. 1878, oh. 39. 5? 1-3. 282 CONSTKUCTION OF THE STATTJTOBY LAWS. tels resides in one town, and the property is situated in another, the mortgage must be duly filed in both towns.^ When the mortgage is only required to be registered in the county of the mortgagor's residence, no new record is necessary by the mortgagor's change of residence.'^ Under the Alabama Code,^ providing that a chattel mort- gage shall be of no effect as to creditors and purchasers, unless recorded in the county of the mortgagor's residence, and also in the county where the property is ; and further providing that if the property is removed, the mortgage must also be recorded within six months thereafter in the county to which the property is removed, a failure to record a mortgage in the county in which the property is when the mortgage is executed, renders subsequent registration in the county to which the property is removed ineffectual as to the rights of third persons.* In Texas, a chattel mortgage, registered in Bowie county, Texa^, reciting that the mortgagor is of Texarkana, Bowie county, Texas, shows prima facie that the mortgagor is a resident of Texas, and that the mortgage is registered in the county of his residence, without proof that the property was in that county.* • A party in Iowa purchased goods in a county other than the one in which he resided, and gave a mortgage on them, and had it recorded in the county where the goods were, leaving them in possession of his brother, who added to the stock, made sales, paid debts, all in the name of the vendee. It was held that this mortgage was invalid as against the rights of creditors and subsequent purchasers without notice, but it was also held that the mortgage had priority over one of a later date given by the vendee and recorded in the county of his residence.® ' Lundburg v. N. W. Eleva. Co., 42 Minn. 37. 'Harris v. Alden, 104 N. Car. 86. ^Stat. of 1886, §1806 eiseg. 'Pollak V. Davidson, 87 Ala. 551. ''Chator v. Brunswick-Balke-Collender Co., 71 Tex. 588. 'King V, Wallace, 78 Iowa 221. IN CASE OF PAETNEKSHIPS. 283- In South Carolina, a sale of mortgaged property under an improperly-recorded ahattel mortgage, will be upheld, as such record is not notice to the mortgagor's vendee residing in a different county from that of the place of sale.' § 363. Residence in Different Places in the State — Two or More Mortgagors. — A mortgage of personal property exe- cuted by two or more persons residing in different towns in the same State, is invalid as against persons other than the parties thereto, unless it is recorded in every town in which the mortgagors reside, or possession of the mortgaged property is taken and retained by the mortgagee.^ § 364. Residing in Different States, — When some of the mortgagors live in the State and others of them live out of the State, the mortgage must be recorded in the counties in which such residents reside.^ § 365. In Case of Partnerships. — A chattel mortgage must be filed in the city or town where the partners respectively reside, or as the statute provides in case of one person.^ Thus, a mortgage executed by a firm, upon firm property, is void as against creditors, subsequent purchasers or mort- gagees in good faith, unless filed or recorded at the places of residence of the individual members of the firm. In some jurisdictions, if a member be a non-resident, the mortgage must be filed where the property was at the time of execu- tion of the mortgage.* And the general rule is, that a chattel mortgage executed by partners must, as against creditors, be recorded in all the counties or towns, as the statutes shall provide, wherein the partners severally reside, and it is not sufficient to record it in the county or town where one of the partners resides and where the firm does business. Because all the partners are ' London v. Youmans, 31 S. Car. 147. = Morrill v. Sanford, 49 Me. 566; Kich v. Roberts, 48 Me. 548; 50 Me. 395 ; Altman v. Guy, 41 Ohio St. 598. ' De Courcey v. Collins, 21 N. J. Eq. 357. In New Jersey, the mortgage must also be recorded where the chattels are at the time of executing the- mortgage. * Stewart v. Piatt, 101 U. S. 731. See Section 412. ^84 CONSTRUCTION OF THE STATUTOKY LAWS. mortgagors, and as the firm cau have no place of residence, the residence of the mortgagors must be that of the indi- viduals composing the partnership.' In Michigan a partnership chattel mortgage, made in the ^rm name signed by the resident partner alone, and the others being non-residents of the State, conveying only firm property, which mortgage was filed in the office of the clerk of the township, according to the statute, where the resident partner resided, and the seat or abiding-place of the firm, is valid .^ Where the members of a firm have their actual, perma- nent residence in one place, but transact their business where they board for part of the year, but with no intention of changing their domicile, a chattel mortgage given by, them should be filed at their permanent residence But this case of Hubbardson Lumber Co. v. Covert^ was distinguished, and it was intimated that it would not apply to fix the residence of the partners living in the State away from its actual place.* One can have a domicile at one place and his residence at another.'^ § 366. Residence of Corporation. — The chattel mortgage must be filed where the corporation has its principal place of business. The court says : " It would be a most unreason- able construction of the act relating to filing chattel mort- gages to hold that they must be filed in each town within the State in which any one of the stockholders of the joint- stock company resides. The statute is complied with if filed in the office of the town clerk of the town where the princi- pal office of the company is located, or its business princi- pally conducted."' 'Granger v. Adams, 90 lad. 87; Kane v. Rice, 10 Bank. Reg. 469; West- lake V. Westlake (Ohio), 24 N. E. Rep. 412. ' Hubbardson Lumber Co. v. Covert, 35 Mich. 254. "35 Mich. 254. 'Briggs V. Leitelt, 41 Mich. 79. 'Frost V. Dickinson, 19 Wend. (N. Y.) 11; Love v. Cherry, 24 Iowa 204; Supervisors v. Davenport, 40 111. 197 ; Wells v. People, 44 111. 40. "Nelson v. Neil, 15 Hun (N. Y.) 383. PKIOBITY — CONSTRUCTION. 285 The place where the corporation keeps its office in the State must be regarded as its residence.^ § 367. Recording in Wrong County. — A mortgage recorded in the wrong county is not effectual. Thus, a party mort- gaged his chattels and the mortgage was recorded in the county where the property was located, instead of the county where the mortgagor resided. This was not a sufficient record.* Though the property be subsequently removed into the county of the mortgagor's residence, it is insufficient as to third persons, unless it be there recorded before any liens attach to it.* § 368. Proof of the Mortgagor's Residence. — When there is a conflict as to the real residence of the mortgagor, it must be proved when the validity of the record is questioned.* A mere fecital in the mortgage of the mortgagor's residence is not sufficient to prove it. Such a recital could only estop the mortgagor from claiming a different residence.® The right of subsequent purchasers, creditors and subse- quent mortgagees depends not upon recitals or representa- tions of the mortgagors as to their residence, but upon the facts of such residence ,as established by competent proof. The actual residence controls the place of filing, otherwise the object of the statute would be frustrated by the mere act of the parties.^ The description of the mortgagors as of the county where record was made is sufficient, prima facie, to show that the mortgage was recorded in the county where the mortgagors reside.' § 369. Priority — Construction. — When two or more parties have mortgages on the same property, and filed at the same minute, priority is determined by the intention of the parties. ' Wright V. Bundy, H Ind. 398. 'Piatt V. Stewart, 13 Blatchf. C. C. 481. ' Lane v. Mason, 5 Leigh (Va.) 520. * Either v. Buswell, 51 Me. 601. 'Piatt V. Stewart, 13 Blatchf. C. 0. 481. 'Stewart v. Piatt, 101 U. S. 731. ' Brown v. Corbin, 121 Ind. 455. See, also, Dutch v. Boyd, 81 Ind. 147. 286 COKSTKUCTION OP THE STATUTORY LAWS. If one was executed before the other with the intention that it should take priority, it will take precedence.^ Where a foreclosure proceeding is instituted before the expiration of the time during which the mortgagor is allowed, by the law of Utah,^ to remain in possession, the mortgage lien will be superior to that obtained by a levy of execution after the expiration of the time, while the property still remains in the mortgagor's possession.' A mortgage executed by the mortgagor in possession of the property as owner, although the legal title was not to pass to him until the property was paid for, wliere such con- tract of conditional sale was not filed for record, will take precedence over the secret lien of the party claiming to be the real owner of the property.* In an action by a mort- gagee against a judgment creditor of the mortgagor, for goods taken upon execution, which were covered by the mortgage, the judgment creditor claimed that the goods were the very same ones sold by him to the mortgagor, which were the consideration of the debt upon which his judgment was founded ; but the fact that the judgment creditor sold the goods which he claims a lien on by virtue of an execution, gives him no superior right, the sale to the mortgagor having been complete, and there being no previous fraud in the purchase whereby an equity arose in favor of the vendor.' A mortgagee of personal property which has been pre- viously conveyed by an unrecorded bill of sale, is not charge- able with notice of such prior bill of sale by a clause in the mortgage stating that the said party of the first part war- rants the title against all persons except an existing mort- gage of record in a certain county, nothing further appear- ing to show that he had notice.* A mortgagor executed a mortgage in which the property • Wray v. Fedderke, 43 N. Y. Sup. Ct. 335, ^Lawsofl884, ch. 21, ?5. 'Armstrong v. Broom (Utah), 13 Pac. Rep. 364. * Manning v. Cunningham, 21 Nebr. 288. 'Page V. Kendig (N. J.), 7 At. Rep. 878. ' Clark V. Barnes, 72 Iowa 563. PEIOKITY — CONSTRTJCTrON. 287 was described as being subject to an earlier unrecorded mort- gage to a third party. Then the mortgagor executed another mortgage to the same second mortgagee, in which reference was made in the description of the property of the previous mortgage to the second mortgagee. It was decided that this last was subject to the third party's unrecorded mortgage referred to in the second mortgage.' A mortgagee of a cotton crop, in order to gather and secure it, made further advances to the mortgagor ; this did not give him a lien on the proceeds of the sale of the crop, that took precedence of a lien created by a second mortgage or deed of trust, executed to a trustee to secure an indebted- ness due from the mortgagor to his wife for money advanced to him.^ In Illinois, if the holder of a chattel mortgage forecloses by sale to the mortgagor, and takes back a new mortgage on the same property for' the purchase-money, the foreclosure sale and taking back the new mortgage constitute but one transaction ; the new mortgage will be subject to any other lien existing at the time of the foreclosure, unless the mort- gagee retains possession of the property until the new mort- gage has been recorded.* Two parties form a, partnership in which one of them puts certain machinery covered by an unrecorded mortgage. The other partner sold his interest to three others, who continued the business with the one putting in the mortgaged machinery. It was held that upon the formation of the partnership this partner ceased to have any individual interest in any portion of the mortgaged machinery, and that as the mortgage was unrecorded, the mortgagee's only remedy was against what- ever portion of the partnership assets might remain as this partner's share, after claims against the partnership were satisfied.* ' Eaton V. Tuson, 145 Mass. 218. ' Weathersbee v. Farrar, 97 N. Car. 106. 'Blatohford v. Boyden, 122 111. 657. * Ringo V. Wing, 49 Ark. 457. 288 CONSTRUCTION OF THE STATUTOEY LAWS, A party had a deed of trust upon cotton, some bales of which were afterwards sold to a third party by the grantor of the trust deed. The third party gave in payment therefor a check in favor of the grantee in the deed of trust. The payment of the check was stopped when it was discovered that a laborer had a lien on the cotton superior to that of the holder of the check. The laborer sued out a writ of seizure, and the cotton was sold, and his claim settled out of the proceeds. The balance was paid by the sheriff to the grantee of the cotton bales, who, before action brought, tendered it to the grantee in the trust deed, in full of his claim. This was decided to be all that he could recover; that this balance tendered was all that he could legally recover."^ A chattel mortgage is superior to a prior real-estate mort- gage, in common form, covering the same chattels, when the chattel mortgagee is in the position of an innocent purchaser.^ A chattel mortgage being signed by the husband and wife, and properly recorded, it is immaterial as to the question of priority whether the mortgaged property was owned by the husband or by the wife, or by both together. An attaching creditor having extended credit to the mortgagor after the mortgage was put upon record, cannot complain that the mortgage is in fraud of his rights.^ One who takes a chattel mortgage within one year after the filing of a previous mortgage, is not a subsequent mort- gagee in good faith under the law* providing that chattel mortgages shall cease after one year from the date of filing, unless renewed within thirty days before the expiration of the year.^ A failing debtor sent for a creditor whom he had prom- ised to protect, who met him late in the evening and took a 'Ross V. Wardlaw (Miss.), 3 South. Rep. 74. 'Howard v. Witters, 60 Vt. 578. "Eddy V. McCall, 71 Mich. 497. * Howell's Stat. J 6196. 'Wade V. Strachan, 71 Mich. 459. PKIORITY — CONSTRUCTION, 289 chattel mortgage in ignorance of one which had been given to another party on the same property in the morning. The second mortgage recited that the property was unincum- bered. It was decided that the failure of the second mort- gagee to inquire whether there was a prior mortgage must arise from bad faith and not merely ignorance of the inva- lidity of his mortgage put on record first, as against the first mortgagee.^ In the absence of fraud, a mortgage to secure the mort- gagee's contingent liability as security for the mortgagor to an amount not greater than the debt, is valid against subse- quent mortgages.^ Where a mortgage secures several notes due at different times, and there is no special provisions to the contrary, they have priority of lien in the order of their maturity.^ Where a sale of property, subject to a chattel mortgage, is expressly made subject to the mortgage, the purchaser does not take in good faith, and cannot attack the mortgage on the ground of fraud ; and one to whom he later mortgages the property has no greater rights.* A lien of a chattel mortgage is not affected by a prior parol agreement between the mortgagors and third persons that their mortgage to be executed by the mortgagors shall have priority, where another mortgage is actually executed and delivered in violation of such agree- ment, and with the intent to give it priority ; and it is immaterial whether or not the mortgagees had notice of a prior parol agreement.^ Defendant sold to B. certain machinery and took his note for the price, containing a stipulation that, until paid, the title to the machinery should remain in the defendant. > Miller & Co. v. Olney, 69 Mich. 560. An attachment of the undelivered mortgaged chattels prior to the record required by the statute, is prior to the mortgage lien. Ramsey v. Glenn, 33 Kans. 271. ^ Sparks v. Brown, 33 Mo. App. 505. 'Marseilles Mfg. Co. v. Rockford Plow Co., 26 111. App. 198. *Ludlum V. Rothschild, 41 Minn. 218. * Lazarus v. Henrietta Nat. Bank, 72 Tex. 354. 290 CONSTRTJCTION OF THE STATUTORY LAWS, Plaintiff, through whose agency the machinery was sold, and who had actual notice of the stipulation, having had the notes in his hands, as defendant's attorney, for collection, after their maturity took a mortgage on the machinery to secure his own debt and recorded it. Defendant subse- quently took new notes from B. in lieu of the first series, and took a mortgage on the machinery as security. It was held that, as the plaintiff took his mortgage, the title to the ma- chinery was in defendant, B. had no power to give the mort- gage, and it could not be asserted as a lien to defendant. If taking new notes by defendant be regarded as payment of the old, thus extinguishing the lien conferred by them, the whole transaction must be regarded as a resale of the machinery to B. at the time the mortgage was first given to secure the purchase price, and such mortgage would be a superior lien to that previously given to plaintiff at the time when the mortgagor had no title.' A partner having one-half interest in a stock of goods, mortgaged his moiety to secure an individual debt, and soon after bought his partner's interest, giving a mortgage on the entire stock, which he agreed to keep up to the value of $3,000, to secure the purchase-money. There was no evi- dence that the stock was ever worth so much, or what its value was at that time. The records show that it was sold by a receiver, who had, as the proceeds, $600 in his hands. There was no evidence that any of it had been used in the payment of partnership debts. It was held that no pre- sumption existed that any of the stock was so used, and that the first mortgage constituted a paramount lien on one- half the proceeds, and the second on the other.^ If a party t^kes chattels by conditional purchase, and goes into possession under his bill of sale with the consent of the vendor, who afterwards makes a chattel mortgage of the same goods, the vendee's rights are superior to the mort- gagee's, or his assignee's, and it makes no difference that the 'Taylor v. Barker, 30 8. Car. 238. ''Burdette v. Woodworth, 77 Iowa 144. WITHDBAWAL FROM THE FILES. 291 bill of sale was not filed or recorded,^ Thus, aa agreement made on the sale of a stock of goods that one who had advanced part of the price was to be repaid out of the pro- ceeds of the business before the balance of the price should be paid, is not an agreement to give a chattel mortgage on the goods, and the vendor, who subsequently took posses- sion of the goods under an unrecorded bill of sale given to secure the unpaid price, and also under an agreement whereby he was to carry on the business until he had real- ized sufficient to pay such balance, is entitled to priority over the person who made the advances, and who procured a chattel mortgage of the goods while the vendor was in pos- session. Though the bill of sale of the goods was procured from the purchaser by the fraud of the seller, yet if the latter was in possession of the property by consent of the purchaser under an agreement whereby he was to carry on the business until he had realized sufficient to pay for tlxe rstock, his position was that of a pledgee in possession, and his rights are superior to the chattel mortgage.^ § 370. Priority by Agreement. — Priority may be created by agreement. Thus, where two chattel mortgages are executed on the same day on the same property, with the understanding that one party should have precedence, such agreement is binding upon them, though the other party filed his mortgage first." § 371. Withdrawal from the Files. — The recording officer has no right to allow an instrument filed in his office to be taken away. But if he does, and it is returned, it is still notice to subsequent purchasers and creditors after its return.* This rule goes further in Ohio, where the temporary with- drawal of the instrument from the recorder's office will not prejudice the rights of the mortgagee, if done with the intent ' Cameron v. Marvin, 26 Kans. 612 ; Pettee v. Dustin, 58 N". H. 309. ' Finn v. Donahoe (Mich.), 47 N. W. Eep. 125. ' Corbin v. Kincaid, 33 Kans. 649 ; Chadboura v. Rahilly, 28 Minn. 394. * Woodruff V. Phillips, 10 Mich. 500. But the court says, if a purchaser had called at the office to see the mortgage while it was away, a different question would have arisen. See Jones v. Parker, 73 Me. 248. 292 coNSTEtrcTioif of the stattjtoey laws. to return it. In contemplation of law, says the court, it was " on file in the office," although out of the recorder's room.^ In Nebraska the statute requires a filing of the original, or a copy thereof, with the clerk, who indorses on the instru- ment or copy the time of its receipt, and keeps the same in his office for the inspection of all persons. Where a mort- gage has been so filed, it cannot be withdrawn for the purpose of foreclosure.'* If a mortgage, after being filed, is wrong- fully withdrawn without the mortgagee's consent, his lien is not thereby divested. In this case the attaching creditor had notice that the mortgage had been withdrawn without the mortgagee's consent. But the court said if the creditor had been ignorant of the manner in which the mortgage was abstracted, and had called to learn that it was not on file, a different question would have arisen.^ § 372. Interpretation of Words. — The word " date " in the Massachusetts Statute of 1874, ch. Ill, relating to the recording of mortgages of personal property, is not limited to the date stated in the " in testimonium " clause, but refers to the day of the delivery of the deed.* The words " goods and chattels," as used in the recording acts of West Virginia, do not embrace choses in action.* § 373. In Arkansas, the act of March 10th, 1877, pro- vides that chattel mortgages are made notice to all the world on being filed, if indorsed by the mortgagee, " this instrument is to be filed but not recorded;" it is sufficient if the indorsement over the mortgagee's name is, " to be filed but not recorded.'" § 374. The Recorder's Agent May Receive for Registration. — If the recording officpr leaves a clerk in charge of the books when he is absent, the clerk can legally receive the ■ Wilson V. Leslie, 20 Ohio 161. " Ward V. Wateon, 24 Nebr. 592. 'Swift V. Hall, 23 Wis. 532. * Orcutt V. Moore, 134 Mass. 48. 'Tingle v. Fisher, 20 W. Va. 497. •State V. Smith, 40 Ark. 431. UNRECORDED MORTGAGES — FAILURE TO RECORD. 293 mortgage for registration.^ Or if there be a vacancy in this office, the person in charge can legally receive the mortgage for filing or registration.^ § 376. Unrecorded Mortgages — Failure to Record. — Under the Texas act, which avoids unrecorded mortgages and con- veyances as against creditors without notice, " creditors," as used in the act, mean those who have acquired some lien on the property by attachment or otherwise.^ The words "pur- chasers or mortgagees in good faith," as used in the Michigan statute,* providing that, as to such a purchaser or mortgagee, a prior mortgage, unaccompanied by delivery, shall be void unless filed, mean a purchaser or mortgagee for valuable consideration without notice.^ Although a mortgagee may have failed to record the mortgage, if he takes possession of the property after condition broken, he will be entitled to hold it as against creditors of the mortgagor subsequently levying an execution or attachment." And a chattel mort- gage duly recorded is not affected by the fact that it was given in renewal of other mortgages which had not been recorded.^ A bill of sale on a canal boat, recorded as a chattel mort- gage, is not merely presumptively fraudulent but absolutely void, both uuder the provisions of the New York Revised Statutes relating to chattel mortgages, and under the laws of 1864,* requiring chattel mortgages of boats navigating the canal to be filed in the office of the auditor of the canal department, and providing that every mortgage or convey- ance intended to operate as a mortgage, on any such canal boat, not accompanied by the immediate delivery and fol- ' Dodge 11. Potter, 18 Barb. {N. Y.) 193; Bishop v. Cook, 13 Barb. (N. Y.) 326. ■■'Bishop V. Cook, 13 Barb. (N. Y.) 326. See, also, Fairbanks v. Davis, 50 Vt. 251. ■'Overstreet v. Manning, 67 Tex. 657. * 2 Howell's Stat. §6193. 'People's Saving Bank v. Bates, 120 U. S. 556. "Applewhite v. Harrell Mill Co., 49 Ark. 279. ' Johnson v. Stellwagen, 67 Mich. 10. »Ch.412, §U, 2. 294 CONSTRUCTION OF THE STATUTORY LAWS. lowed by an actual and continued change of possession, shall be absolutely void as against creditors of the mort- gagor, unless so filed/ In North Carolina^ there is a provision that no deed of trust or mortgage of real estate or personal property shall be valid agaiqst creditors but from the time of registration. Another section^ provides that all conditional sales of per- sonal property in which the title is retained by the vendor, shall be reduced to writing, and registered. A vendor sold by a written contract certain goods, agreeing to take notes of the vendee in payment; the parties further agreeing that the vendee should send to the vendor all notes taken by him for any of the goods sold, and the lien on all open accounts, as collateral security for the notes, and all the goods and proceeds to be held in trust by the vendee for payment of the notes to the vendor. This transaction was not within the provisions of the statutes, and did not require registra- tion in order to be operative against creditors.* In New York a creditor who receives goods in payment of his debt, is a purchaser in good faith within the purview of the statutes which declare that an unfiled chattel mort- gage is void as against subsequent purchasers in good faith." A chattel mortgage which is not recorded in the proper county, cannot affect a bona fide purchaser with constructive notice.' Where a chattel mortgage is not acknowledged nor filed for record until after the property has gone into the hands of a receiver appointed in a suit by the vendor to enforce his right to the purchase price of the property, the mort- gagee is not entitled to priority of lien.'' 1 Keller v. Paine, 107 N. Y. 83. "Code, ? 1254. 'Code,? 1275. * Chemical Co. v. Johnson, 98 N. Car. 123. 'Button V. Rathbone, 118 N. Y. 666. •London v. Youmans, 31 S. Car. 147. 'Smith V. Fletcher (Ark.), 11 8. W. Rep. 824. EVIDENCE OF EECOED. 295 Under the New York law^ an absolute bill of sale which the evidence shows was intended as a chattel mortgage, is void as against an attaching creditor, unless filed in the proper oflBce, or unless there was an actual delivery of the property, and an actual and continued change of possession, and whether there was a delivery and change of possession is a question for the jury,^ A chattel mortgage which is withheld from the records at the request of the mortgagor because it would injure his credit, cannot avail against a creditor who subsequently takes the notes of the mortgagor in settlement of a suit, the exten- sion of credit, in good faith, in the belief that the mortgagor's property is unincumbered, and the creditor's rights cannot be affected by the subsequent filing of the mortgage.^ The Georgia Code* requires mortgages to be recorded in the county where the mortgagor resides at the time of the execution of the mortgage, and declares that mort- gages not recorded within the time required, though valid as against the mortgagor, are postponed to all other liens created or obtained before the actual record of the mortgage. Thus, a chattel mortgage executed in February, but not recorded, will be postponed to a judgment obtained in the following November.^ § 376. As to an Assignee. — A chattel mortgage to secure a valid debt, given before execution of assignment for the benefit of creditors, but not filed until days afterwards, is not void as against the assignee for want of filing, unless he shows that he represents creditors who became such after the making and before the filing of the mortgage.* § 377. Evidence of Record. — In New York, the certificate of the town clerk is not evidence that the paper purporting 'Law8 0fl833, ch. 279, il. 'Siedenbach v. Kiley, 111 N. Y. 560. » Sanger v. Gunther, 73 Wis. 354. *Code, a 1956, 1957. 'Thompson v. Morgan, 82 Ga. 548. * Brown v. Brabb, 67 Micb. 17. 296 CONSTRUCTION OF THE STATUTOKY LAWS. to be a copy of the mortgage, is a copy. The mortgage and its contents must be proved by common-law evidence.^ In Massachusetts, the testimony of the owner of a vessel, that on a certain day he mortgaged her to a certain person for a particular sum, together with a memorandum upon her registry of such mortgage, is competent to prove that there was a mortgage of the vessel, in connection with the testi- mony of the sole executor of the mortgagee, that a carefiil search has failed to find the original paper.^ It is also held in this State that a certificate of the recording officer is con- clusive evidence that a mortgage has been recorded.^ § 378. In Texas a chattel mortgage, indorsed by the county clerk as "filed for record," is not sufficient to show such filing and deposit as to render it admissible against creditors of the mortgagor.* § 379. In Missouri recorded mortgages as to third parties are not alone evidence of title against claimants, unless it be shown that the mortgagors had title.^ § 380. Proof of Contents. — In order to prove the contents of a chattel mortgage on the trial, not otherwise provided by statute, the original mortgage must be produced. Thus, a certified copy, made by the clerk or the register where the mortgage was filed, is only evidence of the fact of its filing.® ' Bissell V. Pearce, 28 N. Y. 252. ^Adams v. Pratt, 109 Mass. 59. ^Fuller D. Cunningham, 105 Mass. 442; Jordan v. Farnsworth, 15 Gray (Mass.) 517; Thayer v. Stark, 6 Gush. (Mass.) 11. See, also. Head v. Good- win, 37 Me. 181; Ferguson v. Clifford, 37 N. H. 86. , • Brothers v. Mundell, 60 Tex. 240. ~ ^Mertens v. Kielmann, 79 Mo. 412. « George v. Tall, 39 How. Pr. (N. Y.) 497. See, also, Hewitt v. Morris, 87 N. Y. Supr. Ct. 18. WHEN THE COPY IS NOT EXACT. 297 ARTICLE III. REFILING. S81. Statutory Provisions. 382. Wlien the Copy is not Exact. ' 383. When Not Necessary Under the Statute. 384. When the Mortgagee has Talien Actual Possession. 385. Computing the Time. 386. Renewal — Construction. 387. In Ohio. 388. In Wisconsin. 389. In Michigan. 390. In New York. 391. In New Jersey. 392. A Valid Refiling. 3H3. When the Mortgagor Becomes a Non-resident. 394. Statement of the Mortgagee's Interest Must he Made. 395. By Whom Made. 396. Accuracy of Statement. § 381. Statutory Provisions. — In many States chattel mort- gages cease to be valid at the expiration of one year from time of filing or recording, unless the mortgage or a true <3opy thereof is filed anew, or unless a new affidavit is made within the last thirty days, or other short time before the «nd of the year ;^ in other States the refiling must be at the «nd of two years," and others at the end of three years.' § 382. When the Copy is Not Exact. — When the copy refiled is not exact, yet, if it be sufficient to put a third per- son upon inquiry, it will be sufficient. Thus, a copy filed was not an exact copy, as required by the statute. It stated 'New York, Laws of 1873, ch. 501, p. 767; Laws of 1833, ch. 279, i 5; Ohio, Rev. Stat. § 4155 ; Michigan, Eev. Stat, g 6196; Kansas, Com. Laws, ch. 68, | 11; Oregon, Gen. Stat. ch. 6, ? 48; Nevada, Laws of 1885, ch. 54;, Montana, Laws of 1885, ch. 4; Utah, Laws of 1885, ch. 5; New Mexico, Com. Laws, ? 1589; Arkansas, Mansf. Dig. §J 4750, 4751. 'Illinois, Rev. Stat. 1887, art. 95, H; Wisconsin, Rev. Stat. § 2315; Minne- sota, Gen. Stat. 1878, ch. 39, ? 3; Acts of 1879, ch. 65, ? 3; Colorado, Gen. Stat, of 1883, 2165. 'Dakota, Civil Code, ? 1748; Delaware, Rev. Stat. ch. 63, i4et seq. In Pennsylvania, a chattel mortgage is not valid for a longer period than three months after its maturity, unless it be renewed within the period of •said three months, which continues it in force one year from the maturity thereof. Act of April 28th, 1887. In Alabama no renewal is necessary, and in the following States : Cali- fornia, Florida, Indiana, Iowa, Kentucky, Maine, Missouri, Nebraska, North Carolina, Vermont, Washington. In Colorado, in all cases where mortgages are given to secure more than $2,500, the renewal must be made annually. 298 CONSTBUCTION OF THE STATUTORY LAWS. accurately the debt and that the mortgage was unpaid, and described with certainty the property, except the original numbers upon brass plates upon machinery. These numbers, in fact, had been changed by the mortgagor, in order that he might perpetrate a fraud by selling it as unincumbered. The vendee examined the record and had knowledge of facts sufficient to put him upon inquiry. It was held that the vendee's title to the property could not take precedence to that of the mortgagee, although there was no bad faith on the vendee's part.^ § 383. When Not Necessary Under the Statute. — Refiling is not necessary for the purpose of protection against those persons to whom no record was necessary in the first in- stance. So, when the provision of the statute has not been complied with, it is no defense to an action against a person who holds the goods wrongfully, which he had purchased before the expiration of the year.^ But, unless it be duly refiled, it will be void as against a levy made within the year by an execution creditor of the mortgagor.' And a chattel mortgagee in possession need not renew his mortgage by affidavit, in order to maintain an action for the possession of the property taken from him while the mortgage continued in full force.* And the omission to refile in some States gives no rights to a subsequent mortgagee with notice.^ If not filed until after the year, the lien is restored as against an execution issued after the refiling.** § 384. When the Mortgagee Has Taken Actual Possession. — When the mortgagee has taken actual possession the mort- gage need not be refiled,' and the mortgage is valid against ' Mack V. Phelon, 92 N. Y. 20. Under New York rule a true copy must be filed. StackhoHse v. Allard, 4 T. & C. (N. Y.) 279; Patterson v. Gillies, 64 Barb. (N. Y.) 563; Marsden v. Cornell, 62 N. Y. 215; Porter v. Parmley, 52 N. Y. 185; Ely v. Carnley, 19 N. Y. 496. ' Manning v. Monaghan, 23 N. Y. 539 ; Wiles v. Clapp, 41 Barb. (N. Y.) 645. •Thompson v. Van Veohten, 6 Bosw. (N. Y.) 373. * Bates V. Wilbur, 10 Wis. 415. 'Hill V. Beebe, 13 N. Y. 556; Wetherell v. Spencer, 3 Mich. 123. 'Nixon V. Stanley, 33 Hun (N. Y.) 247. ' Porter v. Parmley, 52 N. Y. 185 ; Nat. Bank v. Sprague, 21 N. J. Eq. 530, IN OHIO. 299- a judgment creditor levying upon the property after the mortgagee has this possession/ § 385. Computing the Time. — When the year expires on Sunday, that day is included in the period stated by the law.^ The refiling must be done within the year from the hour of the next preceding filing. Fractions of a day are not to be disregarded in computing the year.^ The year within which the affidavit for the renewal of a chattel mortgage must be filed begins to run from the hour of the day on which the mortgage was filed. When, there- fore, the mortgage was filed January 1st, 1880, at 7:30 A. M.,. and a levy under an execution was made on the property January 1st, 1881, at 5 p. m., the affidavit of the renewal not having been filed, the lien of the execution superseded that of the mortgage.* When computing the time when a chat- tel mortgage must be recorded, the day of its execution must be excluded, and the day of recording included.* § 386. Renewal — Construction. — In Oregon the affidavit of continuance of a chattel mortgage,' to be filed within thirty days next preceding the expiration of the year from the time of filing, is invalid if filed prior to the thirty days.^ A renewal on May 20th, 1882, of a mortgage filed June 6th, 1881, is made within thirty days next preceding the expiration of the year from the filing.* § 387. In Ohio a chattel mortgage not reverified and refiled within thirty days next preceding the expiration of the on& year from its filing under the law," is void as against credit- ors and bona fide purchasers and mortgagees, and the mort- ' Dayton v. People's Saving Bank, 23 Kans. 421. ' Paine v. Mason, 7 Ohio St. 196 ; Nitchie v. Townsend, 2 Sandf. (N. Y.) 299. ^ Seaman v. Eager, 16 Ohio St. 209. 'Lock wood V. Crawford, 29 Kans. 286. , ^ Towell V. Hollweg, 81 Ind. 154. •Miscel. Law, ch. 6, tit. 3, ^ 48. ' Case Threshing Machine Co. v. Campbell, 14 Greg. 460. * Howell's Stat. ? 6196; Burrill v. Wilcox Lum. Co., 65 Mich. 571. »Eev. Stat. § 4155. 300 CONSTEtrCTION OF THE STATUTORY LAWS. gage so refiled four days after the expiration of the one year creates no lien as against a subsequent levy/ § 388. In Wisconsin a chattel mortgage was filed with the town clerk February 23d, 1882. On January 18th, 1884, an affidavit was filed in attempted renewal thereof. This was not in compliance with the law^ which requires such affidavit to be filed within thirty days next preceding two years from the filing of the mortgage, and the mortgage was void as to boTia fide purchasers.^ § 389. In Michigan, one who takes a chattel mortgage within one year after the filing of aprevious mortgage, is not a subsequent mortgagee in good faith, within the meaning of the statute providing that chattel mortgages shall cease to be valid as against creditors and subsequent purchasers, or mortgagees in good faith, after the expiration of one year from the date of filing, unless renewed within thirty days next preceding the expiration of the year. The court say: "The language of our statute referring to subsequent purchasers and mortgagees in good faith, refers to those who became so subsequently to the expiration of the year, and before the renewal affidavit is filed. A person who takes a second mortgage within the year is affected with notice of the mortgage on file ; but after the year has ex- pired, and there has been no renewal, a person who takes a mortgage is not affected by notice created by the filing of the first mortgage. The office and effect of filing as notice expire with the year, and remain so until renewed by filing the affidavit, and then by force of the proviso, as to all per- sons except those acquiring liens in good faith, or purchasers or mortgagees in good faith, in the interim."* § 390. In New York it is held that subsequent purchasers and mortgagees include those who become such at any time ' Cooper V. Koppea, 45 Ohio St. 625. 'Eev. Stat. p. 655, §2315. 'Ricev. Kahn, 70 Wis. 323. ' Wade V. Straehan, 71 Mich. 459 ; citing Wetherell v. Spencer, 3 Mich. 123, and overruling Briggs v. Mette, 42 Mich. 12. A VALID KEFILING. 301 after the first filing, and not merely those who become such after the failure to refile ; that one who takes a chattel mort- gage within one year after the filing of the previous mort- gage is not a subsequent mortgagee in good faith. Such purchasers and mortgagees have notice of the existing mort- gage, and take title subject to it.^ But a subsequent creditor may take advantage of the omission to refile, though a sub- sequent purchaser cannot. A general creditor may take advantage of the omission, though his right accrued previous to the default.^ A subsequent mortgagee cannot question a prior mortgage for default in not refiling it, for such mort- gagee is not considered a purchaser for value.'' § 391. In New Jersey, under a former statute, the rule is that purchasers and mortgagees who become such before the expiration of the year cannot take advantage of an omis- sion to file the mortgage, as they have notice of the existing, mortgage and therefore take title subject to it. They stand in the position the mortgagor was in when they took title from him.' But failure to refile the mortgage within the ■ time prescribed, invalidates it both against creditors who may afterwards seize the property and against purchasers who may- afterwards buy it.* . § 392. A Valid Refiling.— The refiling before the thirty days specified, is inefiectual.^ The filing of a chattel mort- gage before the commencement of the thirty days, is not sufficient to preserve the lien of such mortgage beyond the year of the first filing.^ The refiling must be effected within the time limited for that purpose. It is nugatory if done either before or after that time. The refiling after that time is not effectual to revive and continue the validity of the 'Manning v. Monaghan, 23 N. Y. 539; Lewis v. Palmer, 28 N. Y. 271; Meech v. Patchin, 14 N. Y. 71; Wiles v. Clapp, 41 Barb. (N. Y.) 645; Dil- lingham V. Ladue, 35 Barb. (N. Y.) 38; Latimer v. Wheeler, 30 Barb. (N- Y.) 485. ''Thompson v. Van Veohten, 27 N. Y. 568. 'Nat. Bank v. Sprague, 21 N. J. Eq. 530. •Nat. Bank v. Sprague, 21 N. J. Eq. 530. "Rice V. Kahn, 70 Wis. 323. •Biteler v. Baldwin, 42 Ohio St. 125. 302 CONSTRUCTION OF THE STATUTORY LAWS. mortgage for a year after such refiling. It must be refiled ■within the period limited for the purpose, which is usually thirty days previous to the expiration of the term of one year or more from the first filing. The refiling before the com- mencement of the thirty days would be wholly unavailing, and ^s nugatory as the refiling after the expiration of that time.' § 393. When the Mortgagor Becomes a Non-Residerit. — The intervening of circumstances to prevent the refiling in the time specified, does not answer to make the refiling unneces- sary. Thus, when the mortgagor becomes a non-resident of the State, and the refiling cannot be complied with, the statute operates the same as when he was in the State, and the mortgage becomes ineffectual if not refiled.^ § 394. Statement of the Mortgagee's Interest Must Be JAade. — The statement of the mortgagee's interest must be made when the refiling takes place. It must be positive and clear, in order to give precise information to third parties.* § 395. By Whom Made. — The statement must be made by the parties designated in the statute or by their attorney or -authorized agents. Thus, the statement made by a third party without authority, or by the mortgagor, without the mortgagee's consent, is not sufficient. The mortgagor could not be expected to file the statement with justice to all parties.* § 396. Accuracy of Statement. — Reasonable accuracy is only required.^ Thus, the statement that " somewhere about the sum of sixty dollars, as near as can be ascertained," is sufficient." The statement must be made in good faith, and be substantially correct ; this will comply with the statutory provisions.' ' Cooper V. Koppes, 45 Ohio St. 625. See National Bank v. Sprague, 20 N. J. Eq. 13; Newel v. Warner, 44 Barb. (N. Y.) 258. "Dillingham v. Bolt, 37 N. Y. 198; overruling, in part, Dillingham v. Ladue, 35 Barb. (N. Y.) 38. 'Marsden v. Cornell, 62 N. Y. 215; Fitch v. Humphrey, 1 Denio (N. Y.) 163 ; Piatt v. Stewart, 13 Blatchf. C. C. 481. * Patterson v. Gillies, 64 Barb. (N. Y.) 563. 'Patterson v. Gillies, 64 Barb. (N. Y.) 563. 'Dillingham v. Bolt, 37 N. Y. 198. ' Patterson v. Gillies, 64 Barb. {N. Y.) 563. WHAT IT INCLUDES. 303 ARTICLE IV. — NOTICE. 397. What it Includes. 398. Actual Notice— Constructive Notice as to Auctioneers. 399. Actual Notice— Eflfect of. 400. Under Missouri Statute. 401. When Property is Changed by Mortgagor. 402. Notice to Subsequent Mortgagees-^Rules in New York and in Mon- tana. 403. Eflfect of Prior Lien, Though Filed Within Statutory Time. 404. In Illinois. 405. In California. 406. In Nebraska. 407. In South Carolina. 408. In Georgia. 409. In Kentucky. 410. Sufficient Notice When the Mortgagor Kemoves From the County. 411. Registration When Crop is to be Planted in Another County. 412. When the Mortgagor Resides out of the State. 413. Notice to Subsequent Purchasers or Mortgagees. 414. Under Statutes Making Unrecorded Mortgages Void. 415. In Illinois — Rule. 416. In New York. 417. In New Jersey. § 397. What it Includes. — Notice of a prior mortgage may- be actual or constructive. Notice implies more than the actual fact brought to one^s knowledge. It includes knowl- edge of the communication of the fact, and knowledge that would lead a party to make inquiries.^ Under the Michigan statute,^ which requires the transfer of possession of the mortgaged chattels, or a recording of the mortgage, a mortgage upon a dock of which the mort- gagor is left in possession, no interest in the land being transferred to the mortgagee, is void as against an execution levied upon the land by a judgment creditor of the mort- gagor, the mortgage not being filed till after the levy.^ In an action by a party who claimed the property under a subsequent mortgage, but filed prior to the first, it was held that evidence of the erasure of the clause in the subse- quent mortgage to the effect that the goods were " free and 'Allen V. McCalla, 25 Iowa 464. "Howell's Stat. ? 6193. 'Tuck V. Olds, 29 Fed. Rep. 738. 304 CONSTRUCTION OF THE STATUTORY LAWS. clear from all incumbrances," &c., was proper to go to the jury upon the question of actual notice.* In Oregon, in case of successive chattel mortgages upon the same property, the one first filed is entitled to priority.^ A mortgagor had been indebted to a party for some years for advances, to secure which he had, from time to time, given chattel mortgages not recorded. On November 10th, 1885, a mortgage was given to secure a debt then due, and a liability on which the mortgagee had become surety. This last mortgage was dated back to January, and was at once recorded. The creditor having been obliged to pay the debt for which he was surety, took possession of the mortgaged property, upon which the sheriff levied an attachment for a debt incurred prior to November. The mortgage was sus- tained as against the attachment creditor.^ But if the description in a chattel mortgage be insufficient to afford constructive notice, it is valid in most States as against attaching creditors having actual notice.* And what constitutes diligence in making inquiry as to liens on the property, is a question of law, and should not be submitted to a jury .^ But there is no rule of law which makes notice of the existence of a debt to be constructive notice of a secret lien created by an unrecorded mortgage by which such debt is secured.* § 898. Actual Notice. — Constructive Notice as to Auction- eers, Brokers and Commission Merchants. — Where actual notice is effective as to third parties, it should be equivalent to actual knowledge, and cannot be inferred, even from an opportunity of knowledge, unless the opportunity be such that the inference of knowledge is conclusive.' ' Williams v. Bresuahaa, 66 Mich. 634. ^Pittook V. Jordan (Oreg.), 13 Pac. Rep. 510. 'Johnson v. Stellwagen, 67 Mich. 10. * Piano Mfg. Co. v. Griffith, 75 Iowa 102; Am. Well Works v. Whitney, 76 Iowa 400. "Pullak V. Davidson, 87 Ala. 551. •Bell V. Tyson, 74 Ala. 353. 'Foster v. Gillespie, 68 Mo. 643; Hill v. Oilman, 39 N. H. 88; Stearns v. Gage, 79 N. Y. 102; Sawyer c. Pennell, 19 Me. 169; Bacon v. Van Sohoon- ACTUAL NOTICE, 305 What is constructive notice as to an auctioneer, broker or commission merchant is a question on which there is a con- flict of authority. Property is placed in their charge for sale in the ordinary course of business, which they sell and return the proceeds, less their commission, to the principal. The weight of authority is, however, that such agents re- ceiving mortgaged property from the mortgagor or his agent, and selling the same in due course of trade, are liable to the mortgagee for conversion of the property, though the sale is made in good faith and without actual notice. Thus, a wife of a mortgagor took cattle covered by a mortgage from the county and delivered them to a commission mer- chant in another county, who sold them the next day in the usual course of trade, returning the proceeds, less the commis- sion, to his principal. The commission merchant had no actual notice, though the mortgage had been properly re- corded in the original county. The court held that he was guilty of conversion, and therefore liable* to the mortgagee for the property.^ Judge Valentine held that the commission merchant was liable, "The mortgage was valid. It had been executed and deposited in the office of register of deeds less than one year prior to the sale. The defendant [commission mer- chant] was bound to take notice of the mortgage, and of the plaintiffs' rights thereunder ; and in law the plaintiflfe were the owners of the property, and had the absolute right to the possession and the control thereof. The defendant sold and delivered this property to different persons, not under the mortgage or subject to the mortgage, but independent thereof, and as the absolute property of M. A. Blanchard, and attempted to give to the purchasers the absolute title thereto, and absolute control and dominion over the same. All this was in violation of the plaintiffs' rights, and ren- • hoyen, 87 N. Y. 446; Farley v. Carpenter, 27 Hun (N. Y.) 359; Bowman v. Koberts, 58 Miss. 126 ; Tootle v. Lyster, 26 Kans. 589. > Brown v. Campbell Co. (Kans.), 24 Pac. Rep. 492; 31 Cent. L. Jour. 395 and note. U 306 CONSTKTJCTION OF THE STATUTOKY LAWS. dered the defendant liable to plaintiffs as for a conversion of the property." So, where the mortgagor of goods, of which the mortgagee had the right of immediate possession by a mortgage duly recorded, induced the mortgagee, by false and fraudulent representations, to allow the goods to remain in his posses- sion for a certain period, during which the mortgagor, for the purpose of cheating and defraudirig the mortgagee, sent the goods to an auctioneer, by whom they were sold, and the proceeds paid over to the mortgagor, it was held that the mortgagee might maintain trover for the goods against the auctioneer, although the latter did not participate in the fraud of the mortgagor, and had no knowledge, in fact, of the existence of the mortgage.^ So, where the mortgagor in possession thereof, after de- fault in payment of the mortgage debt, fraudulently delivers the goods to a third person for sale, representing that they are his property, and the person, as agent for the mortgagor, sells them, such third person is liable to the mortgagee for the value thereof, though he acted in good faith, paying the proceeds of the sale to the mortgagor, without reward for his services.^ So, a factor or commission merchant, receiving and selling cotton for a mortgagor, without actual notice of the mortgage, is liable in trover to the mortgagee, provided the mortgage has been properly recorded.' Conversion is the gist of the action of trover, which is founded on the right of property and possession ; and any act of a party, other than the owner, which militates against this conjoint right in law, is a conversion. It is not neces- ' Coles V. Clark, 3 Cush. (Mass.) 399. 'Spraights v. Hawley, 39 N. Y. 441. " Marks v. Robinson, 82 Ala. 69 ; and see Perkins v. Smith, 1 Wilson 328 ; Stephens v. ElwalL 4 Maule & S. 259; Macombie v. Davies, 6 East 517; Hoffman d. Carow" 22 Wend. (N. Y.) 285; Hills v. Snell, 104 Mass. 173; Williams v. Merle, 11 Wend. (N. Y.) 80; Saltusi;. Everett, 20 Wend. (N. Y.) 266; Pease v. Smith, 61 N. Y. 477; Pool v. Adkinson, 1 Dana (Ky.) 110; Bristol V. Burt, 7 Johns. (N. Y.) 254; Doty v. Hawkins, 6 N. H. 247 ; Adam- son V. Jarvis, 4 Bing. 66 ; White v. Spettigue, 13 Mees. & W. 603. ACTUAL NOTICE. 307 sary for a manual taking to make conversion, nor that the party has applied it to his use. The question is, Does he exercise dominion over it in exclusion or in defiance of the owner's rights ? If he does, that is conversion, be it for his own or another's use. It is conversion if one takes the prop- erty of another and sells it, or otherwise disposes of it, with- out the owner's authority ; or if he takes it for a temporary use only, in disregard of the owner's rights, it is conversion. The word " conversion," by a long course of practice, has acquired a technical meaning, and means detaining goods so as to deprive the owner, or person entitled to possession of them, of his dominion over them. Any carrying away of a chattel for the use of one without the owner's consent, or for a tnird party, amounts to a con- version, because it is inconsistent with the general right of dominion which the owner has in it, who is entitled to the use of it at all times in all places. Such an asportation is a conversion, and upon this principle auctioneers, brokers and commission merchants become liable in trover for selling mortgaged chattels, though without actual notice. But this doctrine is not uniform. Thus, in Tennessee the registration of a chattel mortgage is not notice thereof to an auctioneer who, in the regular course of business, sells the property and pays over the proceeds to the mortgagor, and in absence of actual notice he is not liable to the mortgagee.^ Judge Lurton says : " Unless the registration of the mort- gage operates as constructive notice, they must be regarded as innocent agents or factors, who have secured the property in the regular course of their business, and sold it as agents for the one who had delivered it to them, and paid over the proceeds to their principal, without knowledge of any incum- brance on his title. * * * Having asserted no lien, claim or title for themselves, as against the mortgagee, they cannot be held guilty of conversion. * * * Will the ' Frizzell V. Bundle, 88 Tenn. 396. See, also, Roach v. Turk, 9 Heisk. (Tenn.) 708; Parker v. Lombard, 100 Mass. 405; Spooner v. Holmes, 102 Mass. 503 ; Rogers v. Huie, 2 Cal. 571. 308 CONSTRUCTION OF THE STATUTORY LAWS. registration of this mortgage operate as constructive notice to defendants ? If they assert any title or lien or interest in the mortgaged property, then, beyond doubt, they would be affected by the registration. But they do not, and have not, asserted any claim to the mortgaged property whatever. The constructive notice consequent upon registration at- taches only to persons who subsequently assert any title, charge or lien, or interest in the property described in the registered instrument, and only in favor of the grantees in such instrument. * * * Defendants, having neither actual nor constructive notice of the mortgage, and having in the whole matter acted only as the innocent agents or factors of the mortgagor, with whom the possession had been left, are not guilty of conversion.'' So, if a mortgagor of personal property makes an illegal sale to a third person, a servant of the purchaser, who merely carries the goods from one shop to the other, without any knowledge of the mortgage, or any claim upon the property, is not liable to the mortgagee in an action of trover.^ The Minnesota court holds the law to be that an agent or servant who, acting solely for his principal or master, and by his direction, and without knowing any wrong, or being guilty of gross negligence in not knowing of it, disposes of or assists the master in disposing of, property which the latter has no right to dispose of, is not rendered liable for a conversion of the property .'^ But this doctrine is against the weight of authority. § 399. Actual Notice — Effect of. — In those States where actual notice will take the place of a mortgage not properly filed, a mistake in filing will not render the refiling void to those having such notice.^ ' Burditt V. Hunt, 25 Me. 419. ^Lenthold v. Fairchild, 35 Minn. 100. » Hill V. Beebe, 8 Kern. (N. Y.) 556 ; Lewis v. Palmer, 28 N. Y. 271 ; Gilder- sleeve V. Landon, 73 N. Y. 609; Bank v. Davis, 2 Hill (N. Y.) 451 ; Sutton v. Dillaye, 3 Barb. (N. Y.) 629; Ingalls v. Morgan, 10 N. Y. 179; Goodnough v. Spencer, 15 Abb. (N. Y.) N. S. 248. IN ILLINOIS. 309 § 400. Under Missouri Statute. — Notice of an unrecorded agreement of a mortgage does not affect the right of creditors of the mortgagor in the property which is specified in the agreement. This follows from the expressed provisions of the statute.^ § 401. When Property is Changed by the Mortgagor. — Notice to third parties will not be ineffectual, if the mort- gagor changes "the appearance of the mortgaged property, either by adding to or subtracting from it. This will not impair the mortgagee's title.^ § 402. Notice to Subsequent Mortgagee. — In New York a subsequent mortgagee, with notice of a prior incumbrance on the property, is not a subsequent mortgagee in good faith within the meaning of the statute, which was merely designed to protect those who might otherwise be injured by want of knowledge.^ But in Montana actual notice will not protect a bona fide mortgagee against a subsequent mortgagee, when the mortgage is invalid.* § 403. Effect of Prior Lien, Though Piled Within Statutory Time. — If the mortgagee does not take possession of the mortgaged property an attachment takes precedence of the mortgage, in Massachusetts, if made before the mortgage is recorded, although recorded within the time — fifteen days — required by statute.' § 404. In Illinois, in the case of a chattel mortgage, actual notice will not take the place of acknowledgment or record as against subsequent purchasers and incumbrancers," but it is no ' Hughes V. Menefee, 29 Mo. App. 192. "South worth v. Isham, 3 Sandf. (N. Y.) 448; Adam v. Wildes, 107 Mass. 123 ; Simmons v. Jenkins, 78 111. 479. ''Hill t). Beebe, 13 N. Y. 556; Meech v. Patchin, 14 N. Y. 71; Marsdea v- Cornell, 62 N. Y. 215; Thompson v. Van Veohten,27 N. Y. 568; Latimer v- Wheeler, 30 Barb. {N. Y.) 485 ; Wray v. Peddirke, 43 N. Y. Superior Ct. 335 ; Manning v. Monaghan, 23 N. Y. 539; Gregory v. Thomas, 20 Wend. (N. Y.) 17 ; Lewis v. Palmer, 28 N. Y. 271 ; Benjamin v. Railroad Co., 54 N. Y. 675 ; Farmers Loan and Trust Co. v. Hendrickson, 25 Barb. (N. Y.) 484. *Milburn Manuf. Co. v. Johnson (Mont.), 24 Pac. Rep. 17. 'Drew V. Streeter, 137 Mass. 460. "People V. Hamilton, 17 III. App. 599. 310 CONSTEtrCTION OF THE STATUTOBY LAWS, objection to sucli a mortgage that the acknowledgment is defectively proved, when the mortgagee is in possession of the property.^ So, in Indiana, a chattel mortgage not recorded according to law is void as to third persons, though they have actual notice of it.^ § 405. In California^ the law makes chattel mortgages good against bona fide purchasers, when recorded, '• in like manner as are grants of real property." Grants of real property are deemed recorded when de- posited for record, which is sufficient in the case of a chattel mortgage.* § 406. In Nebraska a chattel mortgage duly filed in the county where the mortgagor resides, is constructive notice of the existence of such mortgage, and will be constructive notice in any county to which the mortgagor may remove the property.^ § 407. In South Carolina a purchaser at a sale gave to the vendor a note for the price, stipulating that the vendor should not part with the title until the money was paid. It was decided that this was an instrument in writing, and, under the law, must be recorded, to constitute a protection against third persons.* § 408. In Georgia a party having an unrecorded mort- gage of chattels foreclosed it. A second party had a junior recorded mortgage on the same property without knowledge of the first mortgage. It was decided that the property was subject to the lien of the junior mortgage, and all that the first mortgagee acquired by the sale under the mortgage was the mortgagor's equity of redemption.' ' Weber v. Mick, 131 111. 520. 'RosB V. Menefee (Ind.), 25 N. E. Rep. 545. •Code, 2 2957. •Meherin v. Oaks, 67 Cal. 57. ' Grand Island Banking Co. v. Frey, 25 Nebr. 66. •Herring v. Cannon, 21 S. Car. 212. ' Kelly V. Shepherd, 79 Ga. 706. SUFFICIENT NOTICE WHEN MORTGAGOR REMOVES. 311 § 409. In Kentucky, under the law' whicli provides that no mortgage of personal property shall be valid agairjst a pur- chaser for valuable consideration, or against creditors, until acknowledged or proved according to law and lodged for record, a holder of an unrecorded mortgage, having given notice thereof, may arrest an execution sale of the property under the judgment against the mortgagor, recovered before the execution of the mortgage.^ § 410. Sufficient Notice When Mprtgagor Removes from the County. — It is generally held that when the mortgagor re- moves to another county or town, if the mortgage has been filed or recorded in the county, it need not be filed or re- corded in the county of his new residence ; that the first record will be constructive notice in any county where he may go.^ If the mortgagee was obliged to record his mort- gage in every town or county where the mortgagor might move, the security would be well-nigh worthless; because the creditors, being on the alert, might seize the mortgaged property, or the mortgagor might pass the title to an inno- cent purchaser.* This rule holds good when the mortgagor may move out of the State, taking the property with him. A purchaser must use due diligence in buying property, and if the owner has just come into the State the purchaser must make inquiry at the former place of residence to see whether the property is incumbered.^ 'Gen. Stat. ch. 24, §10. ' Baldwin v. Crow, 86 Ky. 679. 'Grand Island Banking Co. v. Frey, 25 Nebr. 66; Elson ■;;. Barrier, 56 Miss. 394; Brigham v. Weaver, 6 Cush. (Mass.) 298; Pease v. Odenkirchen, 42 Conn. 415; Hicks u. Williams, 17 Barb. (N. Y.) 523; Offutt v. Flagg, 10 N. H. 46; Hoit v. Remick, 11 N. H. 285; Borrows v. Turner, 50 Me. 127; Whitney v. Haywood, 6 Cush. (Mass.) 82. *Hoit V. Remick, 11 N. H. 285; Bevans v. Bolton, 31 Mo. 437; Griffith v. Morrison, 58 Tex. 46; Feurt v. Eowell, 62 Mo. 524. * Smith V. McLean, 24 Iowa 322; Offutt v. Flagg, 10 N. H. 46; Feurt v. Eowell, 62 !RJo. 524; Keenan v. Stimpson, 32 Minn. 377 ; Kanaga v. Taylor, 7 Ohio St. 134; Parr v. Brady, 37 N.'J. L. 201; Cool v. Roche, 20 Nebr. 550 ; Munford v. Canty, 50 111. 370; Martin v. Hill, 12 Barb. (N. Y.) 633; Barker V. Stacy, 25 Miss. 471 ; Ryan v. Clanton, 3 Strob. (S. Car.) 413 ; Ferguson v. Clifford, 37 N. H. 87; Jones v. Taylor, 80 Vt. 42; Norris i;. Sowles, 57 Vt. 360. 312 CONSTRUCTION OF THE STATUTORY LAWS. But in Michigan this rule is not adopted, and the court holds differently from the current of authority. In that State, if mortgaged property is brought into its jurisdiction, the record of the mortgage in the other State is not notice to purchasers in Michigan.^ § 411. Registration When Crop is to be Planted in Another County. — Where a party living in North Carolina in one county made a mortgage covering a crop to be planted in another county, where he. intended to move, and did move, the registration of the mortgage in the latter county is a valid recording, though the mortgagor did not remove until after the registration.'' § 412. When the Mortgagor Resides Out of the State. — If the mortgagor resides out of the State, and the statute provides for the recording of the mortgage in the county of the mortgagor's residence, then the mortgagee must take possession of the mortgaged property, and continue in pos- session, or his lien will be lost.^ But if the statute provides that the mortgage shall; in case of the non-residence of the mortgagee, be recorded in the county where the property is situated, then the mortgage may be valid by recording in such county, and if there are several mortgagors, some of whom are non-residents, then it must be recorded in every county where the property is located.* § 413. Notice to Subsequent Purchasers or Mortgagees. — It is, in many States, held that a purchaser or mortgagee, with notice of an unrecorded mortgage, cannot take the property in good faith on his part, and his title will be sub- ject to the equitable rights of the first mortgagee.^ ^Boydson v. Goodrich, 49 Mich. 65. ^Harris v. Jones, 83 N. Car. 317. •■'Smith V. Moore, 11 N. H. 55. ♦Decourcey v. Collins, 21 N. J. Eq. 357. ^Gording v. Riley, 50 N. H. 400; Simons v. Pierce, 16 Ohio St. 215; Wetherell v. Spencer. 3 Mich. 123 ; Doyle v. Stevens, 4 Mich. 87 ; Gregory v. Thomas, 20 Wend. (N. Y.) 17; Tiffany v. Warren, 37 Barb. (N. Y.) 571; Gildersleeve v. Landon, 73 N. Y. 609; Hudson v. Warner, 2 Har. & G. (Md.) 415 ; Clark v. Tarbell, 57 N. H. 828 ; Nat. Bank v. Sprague, 21 N. J. Eq. 530 ; Williamson v. N. J. S. Railroad Co., 26 N. J. Eq. 398 ; Allen v. McCalla, 25 IN NEW JEESEY. 313 § 414. Under Statutes Making Unrecorded Mortgages Void. — Some of the States make unrecorded mortgages void as to third parties ; under such statutory provisions, such mort- gages are ineffectual against subsequent purchasers and mortgagees, although they have actual notice.* § 415. In Illinois, when the possession remains with the mortgagor, the mortgage must be acknowledged and entered in the justice's docket, and recorded ; otherwise it will be invalid as to purchasers and creditors of the mortgagor, notwithstanding actual notice.^ Thus, where a chattel mortgage is acknowledged before a notary in the form proper to mortgages of real estate, it is void as to one bona fide taking the property in satisfaction of a debt, though he has actual notice of the alleged per- sonal-property mortgage.^ § 416. In New York it is held, under the statute, that notice of an unrecorded mortgage does not affect creditors, but does affect subsequent purchasers and mortgagees.* § 417. In New Jersey, purchasers and mortgagees, to be in position to avail themselves of an omission to record an antecedent mortgage, must have acted without notice of the rights of the antecedent mortgagee. But not so with a cred- itor. He may know of an antecedent mortgage, yet if not filed according to the statute, and he obtains a judgment and procures a levy to be made, his lien, by force of the statute, will take preference over the antecedent mortgagee's.' Iowa 464 ; Bovd v. Beck, 29 Ala. 703 ; Steele v. Adams, 21 Ala. 534 ; Coble v. Nonemaker, 78 Pa. St. 501. ' Travis v. Bishop, 13 Met. (Mass.) 304; Gassner v. Patterson, 23 Gal. 299 ; Donaldson v. Johnson, 2 Ghand. (Wis.) 160; Sheldon v. Conner, 48 Me. 584 ; Bevans v. Bolton, 31 Mo. 437 ; Selking v. Hebel, 1 Mo. App. 340 ; Cheny- worth V. Daily, 7 Ind. 284; Matlock v. Straughn, 21 Ind. 128. ' Forest v. Tinkham, 29 111. 141 ; Porter v. Dement, 35 111. 478 ; Frank v. Minor, 50 111. 444; Sage v. Browning, 51 111. 217; McDowell v. Stewart, 83 111. 588 ; Lemon v. Robinson, 59 111. 115. 'Long V. Cockern, 128 111. 29. 'Farmers Loan and Trust Go. v. Hendrickson, 25 Barb. (N. Y.) 484; Tiffany v. Warren, 37 Barb. (N. Y.) 571 ; Stevens v. B. & N. Y. B. R. Co., 31 Barb. (N. Y.) 590; Thompson v. Van Vechten, 27 N. Y. 568. ^Sayer v. Hewes, 32 N. J. Eq. 652. See, also, Williamson v. R. R. Co., 29 N. J. Eq. 811 ; Nat. Bank v. Sprague, 21 N. J. Eq. 530. 314 INSTRTTMENTS WITHIN THE STATUTES. CHAPTER X. INSTEUMENTS WITHIN THE STATUTES. ARTICLE I. — INSTRUMENTS TO BE RECORDED. 418. Bills of Sale in the Nature of Chattel Mortgages. 419. Assignment of a Permit. 420. Instruments Purporting to be Bills of Sale — How Interpreted. 421. Separate Defeasance. 422. To Secure a Written Agreement. 423. Bills of Parcels. 424. A Bill of Parcels is Not a Chattel Mortgage. 425. Choses in Action. 426. Schedules. 427. Mortgages Embracing Both Realty and Personalty. 428. Mortgages of RoUing-Stock. 429. Doctrine of the United States Supreme Court. 480. Chattels-Real Mortgages. 431. Mortgages of Fixtures. 432. The Provisions of the Statute Must be Complied with. § 418. Bills of Sale in the Nature of Chattel Mortgages. — As a general rule, all instruments in the nature of chattel mortgages must be brought within the statute and filed or recorded. Thus, bills of sale which are intended to operate as chattel mortgages must be recorded. Even an absolute bill of sale, which the evidence shows was intended as a chattel mortgage, is void as against attaching creditors, unless filed in the proper office, or unless there was an actual de- livery of the property and an actual and continued change of possession.' So, a bill of sale absolute in its terms, becomes a chattel mortgage upon proof by parol that it was intended to secure a debt. But a bill of sale, as such, is not entitled to record. A record of a bill of sale, not intended for a chattel mort- gage, is an absolute nullity.* Thus, under a contract, a vendee agreed to sell the goods 'Siedenbach v. Riley, 111 N. Y. 560; Bird v. Wilkinson, 4 Leigh (Va.> 266 ; Dukes v. Jones, 6 Jones (N. C.-) L. 14. ' Nickling v. Betts Spring Co., 11 Oreg. 406. INSTRUMENTS PUKPOKTING TO BE BILLS OF , SALE. 315 and deliver to the vendor the notes received therefor, to be held as collateral security ; this was an absolute sale and needed no registration.^ A bill of sale of personal property in which there is a stipulation that the vendor shall remain in possession, is, if filed for record, notice to subsequent pur- chasers and to creditors.^ § 419. Assignment of a Permit. — In Maine an assignment in a chattel mortgage of a permit to cut and remove timber, need not be recorded as a chattel mortgage, as far as cuttings are concerned, which are made after the assignment ; other- wise as to cuttings made before the assignment. But an as- signment which is not a sale, but a mortgage of logs already cut and hauled, should be recorded as against the creditors of the assignor, or as to subsequent vendees, unless posses- sion is taken and kept by the mortgagee. If, during the lumbering operation, a permittee mortgages his permit, which remains, and a portion of the timber has been then cut and hauled, as to that portion the mortgage needs to be recorded ; as to the lumber afterwards to be cut^ a registration of the mortgage is not necessary.^ § 420. Instruments Purporting to be Bills of Sale — How Interpreted. — An instrument purporting to be a bill of sale must be considered a mortgage, if taken alone, or in con- nection with the surrounding circumstances, it appears to have been given as a security. The mere absence of terms of defeasance cannot determine whether it is a mortgage or not. If from the entire instrument, either standing alone or read in the light of the surrounding circumstances, it appears to have been given as a security, it must be construed as a mortgage, and the law will apply thereto the rules applicable to mortgages. Such an instrument being in- tended as a mortgage, must be filed for record when there is no immediate delivery of property to the mortgagee.* ' Chemical Co. v. Johnson, 98 N. Car. 123. ^Kuhn V. Graves, 9 Iowa 302. See, also, Sanders v. Pefoon, 4 Fla. 465,' Shaw V. Wilshire, 65 Me. 485. 'Putnam v. White, 76 Me. 551. * Cooper V. Brock, 41 Mich. 488. 316 INSTRUMENTS WITHIN THE STATUTES. Bills of exchange, for whatever purpose intended, need not be recorded if not mortgages.^ But a bill of sale, absolute on its face, transferring property to be held only as security, is in effect a mortgage, and must be recorded,^ and when there is any doubt, courts are inclined to construe the con- veyances as mortgages.^ § 421. Separate Defeasance. — When a mortgage is made by an absolute bill of sale and a separate defeasance, which is not recorded with the mortgage, as to third persons it is an absolute sale.* When by statutory provisions it is declared that a bill of sale absolute appears by a separate defeasance to be intended for a mortgage, the mortgagee or vendee shall not have the benefit of recording it, unless the defeasance is recorded with it, does not apply to a deed absolute upon its face, although intended for a mortgage.^ § 422. To Secure a Written Agreement. — Where a chattel mortgage is given to secure the performance of a written agreement, the agreement is no part of the mortgage and does not require to be filed with it in order to render the mortgage operative against third persons. Such an agree- ment is not part of the mortgage. The two instruments are separate and distinct contracts ; as much so as a promissory note and mortgage. It is necessary to prove the agreement to give effect to the mortgage, but the law does not require the filing of the agreement to render it operative against third persons.'' Thus, a chattel mortgage was made with an agreement. The condition was as follows : " The said principal sum and interest to be paid immediately at the expiration of five years from date, excepting in case of default should be made ' Knight V. Nichols, 34 Me. 208. 'Smith v.-Beattie, 31 N. Y. 542. 'Cornell v. Hall, 22 Mich. 377 ; Conway v. Alexander, 7 Cr. (U. S.) 218. *Gaither v. Munford, Tayl. Term (N. C.) 167. ''Ing V. Brown, 3 Md. Ch. 521. 'Byram v. Gordon, 11 Mich. 531. CH0SE8 IN ACTION. 317 in the performance of the conditions of a certain agreement this day executed by," &c. The agreement provided that it was to be paid in monthly installments of $60 each. It was held that the mortgage was not invalid by the failure to record or file the agreement re- ferred to/ § 423. Bills of Parcels. — A mere receipted bill of parcels, in which no condition is, expressed, but which the vendee named therein receives solely for the purpose of securing a debt due from the vendor, will be evidence of a pledge of which the pledgee may retain possession in order to make it available against creditors and subsequent purchasers. The pledgee must take possession if he would make good his rights against third persons.^ § 424. A Bill of Parcels is not a Chattel Mortgage. — The record of a bill of parcels of chattels, taken as security for a debt, but without any delivery of the chattels, or a retention by the creditor, does not constitute it a mortgage or enable the creditor to recover the goods legally seized by third par- ties. Thus, a debtor gave to his creditor a bill of certain goods, intending it as security for the debt. It was in effect a common bill of parcels. The goods were not delivered to the creditor, and never came into his possession. The debtor went into bankruptcy January 6th, 1874, when his assignee .took possession of the goods. The bill of parcels was recorded December 26th, 1873. It was held that the recording of the bill of parcels did not make it a mortgage nor answer the requirements of the law.^ § 425. Ghoses in Action. — Recording of mortgages of per- sonal property applies only to goods and chattels capable of delivery, and not to defeasible or conditional assignments of choses in action. Therefore, it is not necessary to the valid- 'Shuler v. Boutwell, 18 Hun (N. Y.) 171. 'Shaw V. Wilshire, 65 Me. 485; Eastman v. Avery, 23 Me. 248; Ex parte Fitz, 2 Low. D. C. 519 ; Beeman v. Lawton, 37 Me. 548 ; Whitaker v. Sumner, 20 Pick. (Mass.) 399. 'Williams v. Nichols, 121 Mass. 435. See, also, Hazard v. Loring, 10 Cush. (Mass.) 267; Walker v. Staples, 5 Allen (Mass.) 34. 318 INSTRUMENTS WITHIN THE STATUTES. ity of siich assignment of a chose in action that it be re- corded/ The capital stock of a corporation does not come under the recording acts as to goods and chattels, and hence a mortgage of such stock need not be recorded.* So, also, as to legacies, which are not chattels.^ Goods and chattels do not include choses in action under the recording acts. Thus, the assignment of a debt or a claim on another for money need not be recorded.* Where a party agrees to cul- tivate land and to receive one-half of the crop as wages, it does not give him the control and possession of the crop ; his interest being assigned as security is not necessarily a mort- gage, and need not be recorded.® § 426. Schedules. — Where a schedule of articles mortgaged is referred to, as the means of identifying them, and is the only means afforded by the instrument, it is then essential to the validity of the instrument, and must be recorded with it. But when the instrument sufficiently identifies the property, and the reference to the schedule is for convenience, it need not be recorded.* But when it is necessary, to identify the chattels, to refer to the schedule, then it must be recorded.^ Where the parties have given a more special description in the schedule, and have declared it to be a part of the mortgage, then it must be recorded as an essential part of the mortgage.* § 427. Mortgages Embracing Both Realty and Personalty. — 'Marsh v. Woodbury, 1 Met. (Mass.) 436; Newby v. Hill. 2 Met. (Ky.) 530 : Winsor v. McLelland, 2 Story C. C. 492 ; Putnam v. White, 76 Me. 551 ; Bacon v. Bonham, 27 N. J. Eq. 209 ; Monroe v. Hamilton, 60 Ala. 226 ; Van- meter V. McFaddin, 8 B. Mon. (Ky.) 435; Bank v. Huth, 4 B. Mon. (Ky.) 448. ^ Williamson v. N. J. S. R. K. Co., 26 N. J. Eq. 398 ; Rowland v. Plummer, 50 Ala. 182. " Bacon v. Bonham, 27 N. J. Eq. 209. «KirkIand v. Brune, 31 Gratt. (Va.) 126; Tingle v. Fisher, 20 W. Va. 497. "Hudgins v. Wood, 72 N. Car. 256. Words " goods and chattels," as used in the recording acts, do not include a mere chose in action, as a debt or claim of another for money due. Tingle v. Fisher, 20 W. Va. 497 ; Bank v. Gettinger, 3 W. Va. 317. «Lund V. Fletcher, 39 Ark. 825. ' Barkraan v. Simmons, 23 Ark. 1 ; Chapin v. Cram, 40 Me. 561. 'Sawyer v. Pennell, 19 Me. 167. MOKTGAGES OF ROLLING-STOCK. 319 A creditor at large of a mortgagor has no standing in court to have a chattel mortgage declared void on the ground of its not having been filed in the proper office. But, in New York, when a mortgage covering both real estate and personal prop- erty has not been filed in the proper office as a chattel mort- gage, it is void as to the personalty against the claims of a creditor, arising since the making but before the filing of such mortgage.^ But if it be the usage of the office to record chattel mortgages in the real estate record-book, a mortgage embracing both real and personal property may be recorded in this book and be valid as to third parties.^ § 428. Mortgages of RoUing-Stock.— In April, 1876, an act of the legislature of New Jersey was passed providing that a mortgage of chattels of any railroad or canal company should be valid without being filed as a chattel mortgage. But this act does not apply to a case of a mortgage given before the passage of the act, as against a levy under an exe- cution made prior to the passage of the act. But this is on the ground that, by the levy, the plaintifi" in an execution had a vested right which was not divested by this act of 1876.' But, except a lien or title was required by an incum- hrancer or purchaser before the passage of the act, the act applies to a mortgage given before the act was passed, and the mortgagee is entitled to the benefit of the act accord- ingly. Hence, levies made and judgments recovered after' the passage of the act are invalid as against the mortgage so given. But if the mortgagor buys other chattels after giving the mortgage, the mortgagee has no lien on them.* In New York it is held that rolling-stock is subject to the act concerning the filing of mortgages on goods and chattels.^ But this question has been set at rest by a New York 'Stewart v. Beale, 7 Hun (N. Y.) 405; affirmed in 68 N. Y. 629. 'Anthony v. Butler, 13 Pet. (U. S.) 230. 'Williamson v. N. J. S. B. R. Co., 29 N. J* Eq. 311. 'Kelly V. Boylan, 32 N. J. Eq. 581. 'Stevens v. B. & N. Y. K. K. Co., 31 Barb. (N. Y.) 590; Bement v. P. & M. E. E. Co., 47 Barb. (N. Y. 104 ; Hoyle v. Plattsburgh & M. E. E. Co., 54 N. Y. 314. 320 INSTRUMENTS WITHIN THE STATUTES. statute, excepting from the operatioa of the Chattel Mort- gage act mortgages by railroad companies on real and per- sonal property which have been recorded as mortgages of real estate.' The New York act of 1876, relating to the registry of mortgages, provides that nothing in any of the laws of the State shall be held to require the filing of record of any mortgage given by any such corporation conveying the fran- chises and including chattels then or thereafter to be pos- sessed and acquired, if such mortgage shall be duly lodged for registry as a conveyance of real estate,^ Where the question has been directly presented, whether the rolling-stock of a railroad company, included in a mort- gage of its road-bed and franchises, is real or personal prop- erty, the current of authority is in favor of its being considered as personalty, and the mortgage must be filed as a chattel mortgage.^ In Virginia the statute provides that contracts concerning rolling-stock, cars, and the like, of railroad companies, are to be recorded in the county or corporation court of the county or corporation where the principal office of the com- pany is located ; if in Richmond city, in the Richmond Chancery Court.* § 429. Doctrine of the United States Supreme Court. — The constitution of 1870 of Illinois makes rolling-stock of rail- roads personal property. The United States Supreme Court decided that the statutory provisions in regard to chattel mortgages do not embrace mortgages by a railroad company, in cionnection with its real estate and franchises, of its per- sonal property used and appropriated fbr railroad purposes. ' N. Y. Stat. 1868, ch. 779. 'N. Y. Laws of 1876, p. 307, | 4. ' Chicago, &c., R. R. Co. v. Howard, 21 Wis. 44 ; Stevens v. B. & N. Y. R. R. Co., 31 Barb. (N. Y.) 590; Beardsley v. Ontario Bank, 31 Barb. (N. Y.) 619; Bement v. P. & M. R. R. Co., 47 Barb. (N. Y.) 104; Randall v. Elwell, 52 N. Y. 521 ; Hoyle v. Plattsburgh R. R. Co., 54 N. Y. 314 ; Coe v. Oolnm- bus R. R. Co., 10 Ohio St. 372; Dubuque v. III. Cent. R. R. Co., 39 Iowa 56 ; State Treasurer v. S. & E. R. R. Co., 4 Dutch. (N. J.) 21 ; Ewell on Fixt. 39. *Codeofl887, ?2462. MORTGAGES OP ROLLING-STOCK. 321 The Illinois statute provides for the acknowledgment and record of the mortgage. The acknowledgment is required to be made before a justice of the justice's district in which the mortgagor resides, and recorded in the recorder's office of the county where he resides. These ditections are wholly inapplicable to a railroad company whose line of road might pass through several justices' districts and extend through several counties ; and if the statutes apply to mortgages of the railroad personalty, such mortgages would cease to be of any value after the expiration of two years from execution, " unless the mortgagee, before the expiration of that time, takes possession of it, the authority to do which, in advance of the maturity of the mortgage debt, and when there has been no default of the corporation in meeting its interest, would render the negotiation of the mortgage bonds difficult if not impossible. Clearly, the chattel mortgage statute has nothing to do with the present case."* 'Hammock v. Loan and Trust Co., 105 U. S. 77. The statute of Illinois, 1887, now allows a chattel mortgage' to be renewed at the end of two years for another two years. The provisions of the Illinois constitution of 1870, that the rolling-stock of a railroad company shall be deemed personal property, does not change the rule that a "mortgage made by the company, covering all after-acquired property, includes such acquired rolling-stock, if obtained before the rights of execution creditors attach. Scott v. Clinton and S. Eailroad Co., 6 Biss. C. C. 529. Whenever a mortgage is made by a railroad company to secure bonds, and the mortgage includes all present and after-acquired property, as soon as the property is acquired, the mortgage operates upon it. In this case it was the rolling-stock of a railroad company. Pennock v. Coe, 23 How. (U. S.) 117. See, also, Dunham v. Railway Co., 1 Wall. (U. S.) 254; Galveston Railroad Co. v. Cowdrey, 11 Wall. (U. S.) 459; Smithurst v. Edmunds. 14 N. J. Eq. 408; Gevers v. Wright, 18 N. J. Eq. 330; Beall v. White, 94 U. S. 382; Holroyd v. Marshall, 10 H. L. Cas. 191; Railroad Co. i;. Woelpper, 64 Pa. St. 366 ; Cowry v. P. & T. W. Railroad Co., 3 Phila. (Pa.) 173 ; Railroad Co. V. James, 6 Wall..(U. S.) 750. A mortgage expressly covering the rolling-stock and other property per- taining to a railroad, was recorded as a mortgage on land, but not as a chat- tel mortgage, under the laws of Kansas. It was held that rolling-stock and other property, strictly appurtenant to the road, are a part of the road, and need not be recorded as a chattel mortgage, to give it priority over exe- cutions. Farmers Loan and Trust Co. v. St. Joe, &c., Railroad Co., 3 Dill. C. C. 412. This does not show whether the registry was deemed su£Qcient on the ground that the rolling-stock was a fixture, or for the reason that, as a chattel, it was such property as not to come within the purview of the Kansas statute. 322 INSTRUMENTS WITHIN THE STATUTES. § 430. Chattels-Real Mortgages. — The omission to file an instrument transferring a lease as a security, or the failure of the transferee to take possession of the lease, or of the premises, does not render the transfer void as to creditors or raise the presumption of fraudulent intent. The provisions of the statute have no application to leases of real estate. They are not usually the subject of a mortgage, and the pro- visions have no reference to this species of property.^ § 431. Mortgages of Fixtures. — The registration of a chat- tel mortgage is not necessary to pass the interest in machin- ery fixed to the soil, and comprehended in a mortgage of the realty, where it is the intention of the parties, as shown by the terms of the instrument, that the machinery should pass with and as a part of the freehold. Thus, in a conveyance by mortgage or otherwise of a factory, by any general name or description, with all of its machinery, fixtures and tools, such a factory, with all its machinery and fixtures and all necessary parts of the establishment, even slightly annexed, will pass with the freehold by such description. Things ordinarily personal in their nature, adapted to be used with the real estate, fitted to it and necessary for its beneficial enjoyment in the character in which conveyed, will pass with the realty by such description, which would not pass by an ordinary conveyance of land with its ap- purtenances.^ In England the statute^ requires the registration, in a mode prescribed, of bills of sale of chattels, by mortgage or other- wise, as against creditors, the possession remaining in the vendor or mortgagor. It was held that registration, as a chattel mortgage, was not necessary to pass the interest in machinery fixed to the soil and comprehended in a mortgage of the realty, the intention of the parties, as shown by the ' Booth V. Kehoe, 71 N. Y. 341 ; Breese v. Bange, 2 E. D. Smith (N. Y.) 474. See Section 210. * Potts V. N. J. Arms and Ordnance Co., 17 N. J. Eq. 395. » 17 and 18 Vic. ch. 36. PROVISIONS OF STATUTE MUST BE COMPLIED WITH. 323 tewns of the instrument, being that the machinery should pass with and as a part of the freehold.* In Massachusetts it was held, where the owner of a manufactory had mortgaged the building and the appurte- nances for carrying on the same, which still remained in his possession, that certain fixtures which could not be taken out of the building without being first taken in pieces were liable to attachment at the suit of the creditors of the mortgagor, the court saying that the mortgagee of the building and privilege, not being in possession, had no pos- session of the machines, which were therefore liable for the debts of the mortgagor.^ § 482. The Provisions of the Statute Must be Complied With. — In filing or having a mortgage recorded, the provisions of the statute must be complied with. Thus, in Illinois the* law provides that the entry shall be made by a justice of the peace, or a police magistrate, upon the docket, of the ac- knowledgment, together with the names of the parties thereto, and description of the mortgaged property. This provision must be fully complied with, or the mortgage will be invalid as to third parties, unless the mortgagee takes possession of the property mortgaged. The original mort- gage is required to be recorded, and a record of a copy will not be sufficient, and will be invalid as a mortgage as to third parties.^ ' Mather v. Fraser, 2 Kay & Johns. 536 ; Waterfall v. Fenistone, 6 El. & Black. 875. See, also, Williamson v. N. J. S. R. R. Co., 29 N. J. Eq.- 311; Kelly V. Boy Ian, 32 N. J. Eq. 581. 'Gale V. Ward, 14 Mass. 352. •Porter v. Dement, 35 111. 478. See, also, Marsden v. Cornell, 62 N. Y. 215. 324 INSTRUMENTS WITHIN THE STATUTES. ARTICLE II. — VALIDITY — WHAT LAW GOVERNS. 433. Lex Loei Contractus. 434. Lex Rei Sitae. 435. Lex Rei Sitx — Lex Domicilii. 436. A Mortgage Superior to an Assignment Made in Another State on the Same Day. 437. Comity Not Becognized in Some States — Louisiana Rule. 438. Pennsylvania Bule. 439. Michigan Rule. 440. Lien Cannot be Divested by Removal of Property from the State. 441. Comity May Apply to Corporations. 442. The Lien Will Remain Good. 443. Lex Fori — Remedies. § 433. Lex Loci Contractus. — The law of the place of con- tract governs as to the nature, validity, construction and effect of the mortgage. As a general rule, if a mortgage is good in the State where made, it will be good in any State to which the property may be removed. So, the removal of the mortgagor with the personal property to another county, will not affect the title of the mortgagee, nor his right to the possession for the purpose of paying his debt; and if the mortgage is valid where given, it will be valid in any State to which the property might be removed. Thus, a mort- gage was recorded in the county in which the mortgagor resided, and imparted full notice to every one who is, or might become, interested. The removal to another county did not discharge the lien. Had the property been removed out of the State, the mortgage was not thereby invalidated.^ In the absence of proof, it is the presumption that the law of another State given to the acknowledgment and recording of mortgages, deeds of trust, &c., is the same, or has the same effect, as that given by the law of the State where the ' Feurt V. Rowell, 62 Mo. 524, opinion by Wagner, J. ; Smith ■». Hutchins, 30 Mo. 380; Hall v. Pillow, 31 Ark. 32; Smith v. McLean, 24 Iowa 322; Bank v. Lee, 13 Pet. (U. 8.) 107; Tylor v. Strang, 21 Barb. (N. Y.) 198; Blystone v. Burgett, 10 Ind. 28 ; Van Buskirk v. Hartford Ins. Co., 14 Conn. 583; Clark v. Tucker, 2 Sandf. (N. Y.) Ch. 157; Ofifutt v. Flagg, 10 N. H. 46; Ferguson v. Clifford, 37 N. H. 86; Cushman v. Luther, 53 N. H. 562; Ryan V. Clanton, 3 Strobh. (S. Car.) L. 411. LEX LOCI CONTRACTUS. 325 question is adjudicated.' Foreign mortgages which have been executed and recorded accordipg to the laws of the place where made, are valid in another State." Such in- strument has the sanie force and effect to bind the property when removed to another State, and will be enforced there, as under the laws where executed. Posses- sion by the mortgagor beyond the time stipulated, against the consent of the mortgagee, and in spite of his efforts to recover it, will not defeat his rights thereto.* Thus, the validity of a mortgage executed in Georgia must be con- strued by the law of that State, and in the absence of proof it will be presumed, in Alabama or other jurisdictions, that the common law obtains there.* So, a mortgage of personal property in Massachusetts, made in another State between two citizens of that State, and executed and recorded according to the laws of that State, is valid without delivery of the property, as against subsequent attaching creditors in Massachusetts, by a third citizen of that State.^ So, also, a chattel mortgage made by citizens of a State temporarily in another State with such property, if valid by the law of the place where made, is valid in the State of their residence, against creditors of the mortgagor, who afterwards find the property in his possession.* In general, the laws of another State or country have no force outside of the State's jurisdiction, ex proprio vigore, but merely ex comitate; but the courts adhere to the rule that by the comity of nations, the lex loci contractus controls as to the validity and construction of personal contracts, though not as to the remedy and rules of evidence,^ nor where they ' Cox V. Morrow, 14 Ark. 603 ; Seaborn v. Henry, 30 Ark. 469 ; Sherrill v. Hopkins, 1 Cow. (N. Y.) 108; Legg v. Legg, 8 Mass. 99; Monroe v. Doug- lass, 1 Said. (N. Y.) 447; Rape v. Heaton, 9 Wis. 328; Green v. Eugely, 23 Tex. 539; Smith v. Smith, 19 Grat. (Va.) 545. 'Barker v. Stacy, 25 Miss. 471. ^Simms v. McKee, 25 Iowa 341. 'Beall V. Williamson, 14 Ala. 55. * R. I. Bank v. Danforth, 14 Gray 123. 'Langworthy v. Little, 12 Cush. (Mass.) 109. ' Martin v. Hill, 12 Barb. (N. Y.) 631. 326 INSTKUMENTS WITHIN THE STATUTES. clash with the rights of citizens in another State where the contract is to be enforced, or the policy of its laws.^ So, where a mortgage was executed in New Hampshire according to the law, and the mortgagor brought the property to Ver- mont, with the consent of the mortgagee, and used it for some months, it cannot be legally taken by attaching credit- ors of the mortgagor in Vermont. The mortgagee can maintain trespass against such attaching creditors for his damages. The mortgage being good in New Hampshire, was equally valid in Vermont. Judge Peck says : " Where, in a case like the present, a right is claimed to attach personal property as the property of the former owner on the ground of non-compliance with a rule of policy adopted to prevent fraud, and hold it against a purchaser or mortgagee who had acquired a title in another jurisdiction, perfect against the creditors of the vendor or mortgagor by the law of the place of the contract, where no such rule of policy prevails, more difficulty arises. The cases on this subject are not entirely harmonious. * * * If this rule requiring a change of possession does not apply to such sales made out of the State, as held in these cases, it is immaterial at whose instance, or by whose consent, or for what purpose the property was afterwards brought into the State, or how long it had remained here after the sale or mortgage before the attachment. As Wooster never owned the property absolutely in this State, and made no transfer of it here, no change of possession was necessary here to perfect the title against creditors, which was already com- pleted by the laws of New Hampshire."'' This doctrine is illustrated in another case : At the time the mortgage was executed, two of the mortgagors and the mortgagee resided in Massachusetts, and the other mortgagor resided in Ver- mont. The mortgage was executed in Massachusetts, where the law required no change of possession. The property was there situated. The mortgage was afterwards foreclosed > Kanaga v. Taylor, 7 Ohio St. 184. 'Cobb V. Buswell, 87 Vt. 837. LEX KEI SIT^. 327 in Massachusetts. Afterwards the mortgagor, without the consent of the mortgagee, took the property into Vermont, and sold it to a third party, who paid a valuable considera- tion, without notice of any defect of title in the mortgagor. The court held that the purchaser acquired no title against the title of the mortgagee.' So, a chattel mortgage executed in New York by a citizen of that State, where the property had its visible locality at the time of the execution of the mortgage, and valid against creditors by the laws of New York without a change of pos- session, will protect the property from attachment in Ver- mont at the suit of a creditor of the mortgagor resident in the latter State, though found in the possession of the mort- gagor.^ § 434. Lex Rei Sitae. — The rule that the title to movable property is to be judged of and determined by the lex rei siice has prominent application and adoption where personal property is seized under process issued from the courts of the State where the property is. In such cases the liability of the property to be seized and sold under such a writ must be determined by the law of that State, notwithstanding the domicile of all the claimants be another State.^ Thus, a party sold to another chattels. The sale being by way of security for a debt, was in effect a chattel mortgage. The sale was made in Maryland. The mortgagee resided in Maryland and the mortgagor in Pennsylvania. Then the mortgagor shipped the chattels, which were cattle, to New ' Taylor v. Boardman, 25 Vt. 581. 'Jones V. Taylor, 30 Vt. 42, overruling Skiff v. Solace, 23 Vt. 279, on this point under discussion. In Alabama, if mortgaged property is brought into the State, the mort- gage must be recorded within four months, to be valid against the rights of third persons. If mortgaged property is removed into another county from that in which the grantor resides, the mortgage must be recorded in the latter county within six months from the removal. Code,- 2 1814. In Mississippi, if the mortgaged property is removed into another county, the mortgage must be recorded there within twelve months, in order to protect the title of the mortgagee. Rev. Code, § 1210 et seq. 'Green v. Van Buskirk, 7 Wall. (TJ. S.) 139; Hervey v. R. I. Locomotive Works, 93 U. S. 664; Guillander v. Howell, 35 N. Y. 657; Warner v. Jaffray 96 N. Y. 248; Keller v. Paine, 107 N. Y. 83; Safe Co. v. Norton, 48 N. J. L. 410; Whart. Confl. Laws, J§ 340-349. 328 INSTRUMENTS WITHIN THE STATUTES. York in his own name, without the consent of the mort- gagee, who at once saw the mortgagor and got an order for the delivery of the cattle to him. Then he sent an agent to New Jersey, who there received the possession of the cattle. Then, in the latter State, creditors of the mortgagor sued out an attachment and seized the cattle in New Jersey, as prop- erty of a non-resident deotor. By a statute of Maryland a bill of sale or mortgage, when the vendor or mortgagor remains in possession, is invalid as against creditors or pur- chasers from the vendor or mortgagor unless the bill of sale or mortgage be recorded. No bill of sale or mortgage such as the statutes required was made ; nor did the mortgagee obtain possession of the cattle in Maryland. In an action by the mortgagee against the sheriff for taking the cattle, it was held that the right of the sheriff to take the cattle, and the title acquired by his levy, are to be determined by the laws of New Jersey ; that the last transaction between the mortgagor and mortgagee amounted to a contract of sale, and such a sale having been followed by delivery and possession in conformity with the Chattel Mortgage act of New Jersey,' the title of the mort- gagee thereunder was valid as against the creditors of the mortgagor.^ The lex rei sitce governs when a mortgage is executed in a State other than the one in which the property is situated.^ Thus, the chattel mortgage must be executed in compliance with the statute where the property is situated at the time. If a mortgage be executed in New York, where the parties reside, on property in Illinois, the validity is determined by the laws of the latter State.* So, in New Hampshire, a mortgage of chattels located in that State, though executed according to >Rev. Stat. p. 709, | 39; Supp. Rev. p. 491, ? 11. ^ Cronan v. Fox, 50 N. J. L. 417. ' Hardaway v. Semmes, 38 Ala. 657 ; Rice v. Courtis, 32 Vt. 460 ; Martip ■V. Potter, 34 Vt. 87 ; Whitman v. Conner, 40 N. Y. Superior Ct. 339 ; Golden V. Cockril, 1 Kans. 259. 'Green v. Van Buskirk, 7 Wall. (U. S.) 139, overruling S. C, 2 Keyes (N. Y.)119. o ., J- V MOBTGAGE SUPEKIOR TO AN ASSIGNMENT. 329 the law of the domicile of the owner in another State, is in- valid against creditors in New Hampshire who are citizens, unless the mortgage be recorded in the latter State in con- formity with the laws.' § 435. Lex Rei Sitae — Lex Domicilii. — As a rule, personal property is governed by the law of the domicile of the owner, and not by the law of the situs of the chattels ; but the assignment of personal property by way of a chattel mortgage, is an exception to the rule, and the lex rei sitae, and not the lex domicilii, governs chattel mortgages.^ Thus, a chattel mortgage executed and recorded in the State where the property is situated, will, if valid under the laws of the place of execution, be enforced by courts of the State where the property is afterwards brought by the mortgagor, unless there is some statute to the contrary.^ § 436. A Mortgfage Superior to an Assignment Made in Another State on the Same Day. — A mortgage valid by the laws of the place where executed is not invalidated by the mortgagor making an assignment on the same day in another State, valid by the laws of the latter State but not by the former State. These two transactions cannot be construed together as one transaction. The court, per Parker, C. J., says : " The assignment in Vermont appears to have been a valid instrument, according to the laws in existence there. The mortgage is valid by the laws of this State, where it was executed. The two instruments cannot be construed together as parts of the same transaction, so as to avoid the mortgage, upon the ground that the assignment is fraudulent as to creditors, and that the whole is therefore vicious. IThe assignment would have been invalid, if made here, to operate on property here, because it contains preferences not allowed by our statute. But it was not made here, and it cannot be rendered invalid by any constructive tacking of it to the 'Clark t). Tarbell, 58 N. H. 88. Compare Runyon «. Groshon, 1 Beas. Scott V. Delahunt, 65 N. Y. 128; The Acacia, 42 L. R. (N. S.) 264; Wil- liams V. Allsup, 10 0. B. {N. S.) 417. See Marsh v. The Minnie, 6 Am. L. Eeg. 328; The Gustav, Lush. 506. 'The Gustav, Lush. 506. »Md. Code, art. 67, JH4-48. * Blades v. The Marcella Ann, 34 Fed. Rep. 142. *Gen. Stat. ch. 151, ?12. "The Granite State, 1 Sprague D. 0. 277; Donnell v. The Starlight, 103 Mass. 227. X 354 MAEINE M0KTGAGE8. mortgagee does not comply with the State statute relating to the registration of chattel mortgages, for the act of congress is paramount to and exclusive of State laws upon the same subject.^ The mortgagee is also entitled to priority- over an antecedent mortgage which was not recorded in the custom- house where the vessel was registered or enrolled, although it was recorded at some other custom-house,^ or pursuant io State laws, unless he had actual notice thereof.^ If he had actual notice, then his mortgage is postponed to the prior mortgage.* But if a vessel on which a mortgage is given while it is in process of construction is subsequently registered or enrolled, and another mortgage given to a person who has no notice of the first, and who has his mortgage duly re- corded at the custom-house, then the last mortgage is entitled to priority over the firsti A different doctrine is held in Indiana.' § 481. The State Courts Have Jurisdiction to Classify Liens Upon Domestic Vessels. — The State courts can determine the rank of liens upon domestic vessels.'' Thus, liens given by the laws of a State for supplies furnished domestic vessels, take precedence of a mortgage subsequently recorded.* The States are competent to create liens which will take prefer- ence to the lien of a mortgage recorded pursuant to the act of congress ; they can determine the conditions of priority, so long as they do not infringe upon the legislation of con- 1 White's Bank v. Smith, 7 Wall. (U. S.) 646 ; Aldrich v. iEfcna Co., 8 Wall. {U. S.) 491; Blanchard v. The Martha Washington, 1 Cliff. C. C. 463; Mitchell V. Steelman, 8 Cal. 363 ; Fontaine v. Beers, 19 Ala. 722 ; Kobinson V. Eice, 3 Mich. 235. "The John T. Moore, 3 Woods C. C. 61. ' Foster v. Chamberlain, 41 Ala. 158 ; Thomas v. The Kosciusko, 11 N. Y. Leg. Obs. 38. * Moore v. Simonds, 100 U. 8. 145. " Perkins v. Emerson, 59 Me. 319. •Stinson v. Minor, 34 Ind. 89. 'The William T. Graves, 14 Blatohf. C. C. 189; The Granite State, 1 Sprague C. C. 277; Thorsen v. The J. B. Martin, 26 Wis. 488; The Harrison, 2 Abb. (U. S.) 74; The City of Tawas, 3 Fed. Kep. 170. »The Harrison, 2 Abb. (U. S.) 74. STATE COURTS CAN ENFORCE LIENS. 356 gress, by imposing additional requisites in the recording of mortgages.' § 482. When the United States Statute Does Not Apply to Domestic Vessels. — ^This statute does not apply to liens created by State laws for supplies or repairs to domestic, vessels, but it relates only to the registration of written instruments.^ So, a mortgage of a vessel of the United States is, therefore, in- ferior to a prior lien under State laws of the State in which the custom-house is located at which the mortgage is recorded.' However, if the vessel be removed into another State, after the attaching of the lien of the State law, and there regis- tered or enrolled, a mortgage duly recorded at the custom- house, in the other State, is entitled to priority over the a,ntecedent lien under the State law.* § 483. A Domestic Vessel — ^Definition. — A domestic vessel is one whose home port is within the State. A vessel owned in another State is a foreign vessel.' As between the parties, and those who deal with the vessel, and when the national character is not in dispute, the person in rightful possession, navigating the vessel for his own use and profit, by officers and mariners appointed and employed by himself, will be considered the special owner, whether he be lessee, mort- gagee or parol vendee, notwithstanding some other party may have the legal ownership.^ § 484. State Courts Can Enforce the Liens Created By State Laws for Supplies and Repairs. — The State courts can enforce the liens created for materials and supplies and work done to vessels. It is a general rule that a State court has juris- diction to enforce liens created by its laws, for labor and material furnished in constructing or repairing domestic 'The William T. Grayes, 14 Blatchf. C. C. 189. 'Thorsen v. The J. B. Martin, 26 Wis. 488. 'The Harrison, 2 Abb. C. C. 74; The Theodore Perry, 8 Cent. L. J. 191; The Favorite, 3 Saw. C. C. 405. *The Underwriters Wrecking Co. v. The Katie, 3 Woods C. C. 182. 'Weaver v. The S. G. Owens, 1 Wall. Jr. C. C. 359; Ex parte Easton, 95 U. S. 68 ; The Albany, 4 Dill. C. C. 439. 8 Weaver v. The S. G. Owens, 1 Wall. Jr. 0. C. 859. 356 MARINE MORTGAGES. vessels.^ So, also, if the general owner, who has the exclu- sive possession and control of the vessel, resides in such port, although she has been registered in the port of another State in the name, as owner, of a person there residing, to whom the builder's certificate has been made, but whose real inter- est in her is that of mortgagee." The State courts have the right of proceeding in rem against domestic vessels for supplies and repairs, which have been assumed upon the authority of a lien given by State laws.* § 485. Valid Laws of Congress Must Prevail. — When there is a conflict between the United States and the State statute, the former must prevail. Thus, a lien created by a State statute for supplies or material furnished, is subordinate to that of a mortgage given and recorded under the act of congress. A mortgage properly recorded under an act of congress takes precedence of a lien under a State law for supplies and material furnished subsequently to the mort- gage. The legislation of congress, within its legitimate au- thority, must override all State legislation upon the subject, even if in force.* ARTICLE III. — RELATIVE RIGHTS OP PARTIES. 486. The Mortgagee in Possession. 487. The Mortgagee Out of Possession. 488. When the Mortgagee is Entitled to the Earnings. 489. Liability for Master's Wages. § 486. The Mortgagee in Possession. — A mortgagee in pos- session of the vessel is liable for supplies furnished, and for ^The Belfast, 7 Wall. (U. S.) 624; The Fanny, 2 Low. D. C. 508; Foster v. The Richard Busteed, 100 Mass. 409 ; McMonagle v. Nolan, 98 Mass. 320. 'Donnell v. The Starlight, 108 Mass. 227. ' McGuire v. Card, 21 How. (U. S.) 248. 'The Sky Lark, 2 Biss. C. C. 251; The Lady Franklin, 2 Biss. 0. C. 121; The Barque Great West v. Obendorf, 57 111.168; The Propeller Hilton, 62 111. 230; Merrick v. Avery, 14 Ark. 370; Baldwin v. The Bradish Johnson, 3 Woods C. C. 582 ; The John T. Moore, 3 Woods C. C. 61 ; The Grace Green- wood, 2 Biss. C. C. 131. WHEN MORTGAGEE IS ENTITLED TO THE EARNINGS. 357 those furnished by the master or by his authority.* On the other hand, a mortgagee's possession, to entitle him to a lien on the freight, must be such as to terminate that of the owner.^ If the mortgagee allows the mortgagor to retain possession, he subjects the vessel to such liens as may accrue under the mortgagor's management.^ But the mere legal ownership conferred by a mortgage, when accompanied by possession, does not make the mortgagee liable for the ship's debts un- less they were contracted on his credit.* § 487. The Mortgagee Out of Possession. — A mortgagee out of possession is never considered as owner, and conse- quently cannot be held liable for repairs done or supplies furnished the vessel, unless by his authority.^ The right to recover payment for repairs and supplies does not depend on the registry or enrollment, but on the right and authority of the person with whom the parties deal. The mortgagee out of possession may, by his acts, hold himgelf out as the real owner of the vessel in such a way as to lead persons to believe that the master or mort- gagor is his agent, authorized to make contracts concerning the vessel, in which case he would be bound. He is not liable when out of possession, though he holds a bill of sale absolute, but intended only as collateral security for a debt, and the vessel is registered in his name.* § 488. When the Mortgagee is Entitled to the Earnings. — In an action under the Code of Louisiana to enforce a mort- 'Luce V. Hadley, 119 Mass. 229. 'The Wexford, 7 Fed. Rep. 674. 'The Live Oak, 30 Fed, Rep. 78. •The Troubadour, L. R., 1 Adm. & Ecc 302. 5 Fox V. Holt, 4 Ben. D. C. 278. ' Morgan v. Shinn, 15 Wall. (U. S.) 105; Myers v. Willis, 17 C. B. 77; Duflf V. Bayard, 4 W. & S. (Pa.) 240; Howard v. Odell, 1 Allen (Mass.) 85; Rice D. Cobb, 9 Gush. (Mass.) 302; Wood v. Stockwell, 55 Me. 76; Macy v. Wheeler, 30 N. Y. 231 ; Dugan v. Pentz, 2 Hughes C. C. 66 ; Philips v. Ledley, 1 Wash. C. C. 226; Jones v. Blum, 2 Rich. (S. Car.) 475; Lord v. Ferguson, 9 N. H. 380; Weber v. Sampson, 6 Duer (N. Y.) 358; Hesketh v. Stevens, 7 Barb. (N. Y.) 488; Champlin v. Butler, 18 Johns. (N. Y.) 169; Bryan v. Bowles, 1 Daly (N. Y.) 171; Miln v. Spinola, 4 Hill (N. Y.) 177; Brooks v. Bondsey, 17 Pick. (Mass.) 441. 358 MARINE MORTGAGES. gage on a tug, the tug was sequestered, and the mortgagees, on giving a bond with securities therefor, took the vessel into their possession and put her into the hands of their agent. He used her for hire. The vessel was subsequently- sold to satisfy their debt, and they took her as purchasers. On a libel filed against the tug by the original owner to recover the earnings of the tug while in the agent's posses- sion, it was held that the possession was lawful, and that neither the agent nor his principals were liable, ejther in contract or in tort, for such earnings.' Where the owner of a ship assigned the freight not yet earned, with the knowledge of the assignee, mortgaged the ship, the mortgage being duly registered, but the assignee neglected to give notice of his claim to the mortgagee, the mortgagee's claim to6k priority.^ § 489. Liability for Master's Wages. — A mortgagee of a ship at sea does not merely, by delivery of the documents, acquire such a possession as to be made liable to the master for wages accruing after date of the mortgage. Chief Jus- tice Tilghman says that if the ship comes into the actual possession of the mortgagee and he retains the master in the same service without any particular contract, the law will raise the assumption of payment for his services by the mortgagee. But when the mortgagee has not such posses- sion, but only that vested in him by the mortgage and de- livery of the ship's documents, he is not responsible to the master.^ So, the mortgagee of a ship, who is the registered owner, is not liable to a claim for wages by a sailor, though they accrued upon a voyage which was prosecuted for the benefit of the mortgagee, and the ship's freight and earnings during the voyage were made over to the mortgagee, by the same deed which conveyed the ship, as a security for advances, because the sailor had made the contract on which he sued, ' Baldwiu v. Beak, 119 U. S. 643. = Wilson V. Wilson, L. R,, 14 Eq. 32 ; Lindsay v. Gibbs, 22 Beav. 522. » Fisher v. Willing, 8 S. & B. (Pa.) 119. JURISDICTION OF ADMIRALTY COURTS. 359 ■with the mortgagor, the master of the ship, and had given credit to him, and therefore the mortgagee was not liable.^ But a mortgagee of a ship, in possession, is liable to the master for his wages, if the voyage be performed for the benefit of the mortgagee. Whenever the master makes a special agreement as to his wages with the mortgagor, he is held to such agreement, and cannot waive it and sue the mortgagee as owner of the ship.^ ARTICLE IV. ENFORCEMENT FORECLOSURE. .490. Jurisdiction of Admiralty Courts. 491. A Libel Upon a Mortgage Cannot be Sustained. 492. A Mortgagee May Petition as a Co-Libelant. 493. Priority of the Taxed Costs of the Mortgagee Over Lien of Material- Men. 494. Bights of the Holder of a Bill of Sale in the Nature of a Mortgage. 495. Mortgage Upon a Moiety. 496. Mortgagee's Bights When There are Several Ovirners. 497. In Case of Unauthorized Sale by Mortgagor. 498. Default— Effects of. 499. Apjjlication of the Statute of Frauds. 500. Actions to Bealize Priority. 501. The Lex Fori Governs. § 490. Jurisdiction of Admiralty Courts. — There is no jur- isdiction in admiralty to foreclose a mortgage of a vessel by a sale or by a transfer of the possession to the mortgagee.* A court of admiralty has no jurisdiction to foreclose a mort- gage. Whether the mortgage is foreclosed, whether the mortgagee has a right to take possession of chattels-personal, whether he is the legal or only an equitable owner, whether a right of redemption means that a mortgagee is restrained from selling in payment of his debt after the time specified 'Martin v. Paxton, IJIolt on Shipping 353. 'Champlin v. Butler, 18 Johns. (N. Y.) 169. Under the act of 17 and 18 Vict. ch. 104, i 191, the master of a British ship has the same lien for his wages as a seaman. He is, by virtue of this statute, entitled to priority over an antecedent mortgagee. The Chieftain, Brow. & L. 212; The Feronia, L. E., 2 A. & E. 65; The Mary Ann, L. E., 1 A. & E. 8 ; The Hope, 1 Asp. M. L. Cas. 563 ; 28 L. T. (N. S.) 487 ; The Wex- ford, 7 Fed. Eep. 674. ' Bogart v. The Steamboat John Jay, 17 How. (U. S.) 399. 360 MARINE MOKTGAGES. for redemption is passed, are questions which, belong to other courts for decision ; they are not within the jurisdiction or provisions of the courts of admiralty, which never decide on questions of property between the mortgagee and owner.^ § 491. Libel Upon a Mortgage Cannot be Sustained. — A libel upon a mortgage cannot be sustained as an original proceeding in a court of admiralty. But the mortgagee can petition for the surplus of a vessel libeled and sold, and is entitled to have the same applied to his mortgage. A mort- gage cannot be a maritime lien, not founded upon a mari- time debt. Bradley, J., in closing the decision, says : " In this case the appellants themselves have no maritime lien, but merely a mortgage to secure an ordinary debt not founded on a maritime contract. They, therefore, have no standing in court. * * * But before a final decree they filed a peti- tion for the surplus proceeds, and, as there is no question in the case about fraudulent preference under the Bankrupt law, they are entitled to those proceeds towards satisfaction of their mortgage."^ Those having a valid lien can go into court and petition for the application of the surplus proceeds of the vessel sold to the payment of their debt. The court has power to distribute surplus proceeds to all those who can show a vested interest therein, in the order of their several priorities, no matter how their claims origin- ated.* But the propriety of such a distribution in the admir- alty court has been questioned, on the ground that the court would thereby draw to itself equity jurisdiction.* But it is a wholesome jurisdiction, very commonly exercised by nearly all superior courts, to distribute a fund rightfully in its pos- session to those who are legally entitled to it ; and there is ^The Neptune, 3 Hagg. Adm. 132; Sohuchardt v. The Angelique, 19 How. (U. 8.) 239 ; The Sailor Prince, 1 Ben. D. C. 461 ; Morgan v. Tapscott, 5 Ben. D. C. 252. 'The Lottawanna, 21 Wall. (U. S.) 558. 'Sohuchardt V. Babbidge, 19 How. (U. S.) 239. *The Neptune, 3 Knapp'a Privy Council 111. EIGHTS OP THE HOLDER OF A BILL OF SALE. 361 no sound reason why admiralty courts should not do the same. If it should be so complicated as to require the in- terposition of a court of equity, the District Court of the United States can refuse to act, and refer the parties to a more competent tribunal.' § 492. A Mortgagee May Petition as a Co-Libelant. — A mortgagee of a vessel sunk by a collision is entitled, for the protection of his mortgaged interest, to come in on petition as a co-libelant in a libel filed by the owners against the offending vessel.^ He may also represent in such petition the interest of insurers, by their consent, who have paid a part of the loss.' Where jurisdiction of the res in admiralty has already been otherwise acquired in direct proceedings against the mortgaged vessel itself, the mortgagee's interest in the res is recognizable, and he may intervene for the protection of his interest either before or after the sale.* § 493. Priority of the Taxed Costs of the Mortgagee Over Liens of Material-Men. — Where a mortgagee brings an action to realize his security, and a material-man, with a common- law lien on the ship, intervenes, and the ship, by order of court, is sold, the proceeds being only sufficient to satisfy the claim of the material-man, the mortgagee is entitled to be paid his taxed costs up to the date of the sale, out of the proceeds of the sale of the ship, in priority of the material- man .° § 494. Rights of the Holder of a Bill of Sale in the Nature of a Mortgage. — A holder of a bill of sale of a vessel, abso- lute on its face, though intended as a mortgage, may main- ' 1 Conkl. Adm. pp. 48-66 (2d ed.) 'The Grand Republic, 10 Fed. Eep. 398. 'Fretz V. Bull, 12 How. (U. S.) 466; Monticello v. MoUiaon, 17 How. (U. S.) 152; Hall v. Railroad Co., 13 Wall. (U. S.) 367; Campbell v. Anchoria, 9 Fed. Kep. 840. •The Old Concord, 1 Brown Adm. 270; Schuchardt v. The Angelique, 19 How. (U. S.) 239. ^The Sherbro, 52 L. J., P. Div. & Adm. 28. 362 MAKINE MORTGAGES. tain an action for the conversion of the vessel, against a wrong-doer.^ One who has taken and caused to be recorded a bill of sale of a vessel absolute in form, but intended only as col- lateral security, but who has never taken control of the management, can recover on a policy of insurance against "barratry of the master, unless the insured be owner of the vessel," although he has charged the premium to the real owner, if the owner has not notice of such charge.^ § 495. Mortgage Upon a Moiety. — Where a mortgage exists upon a moiety of a vessel which was afterwards libeled, con- demned and sold by process in admiralty, and the proceeds brought into the registry of the court, a mortgagee was not allowed to file a libel against the moiety of these proceeds. The proper course would have been either to have appeared as a claimant when the first libel was filed, or to have ap- plied to the court by petition for a distributive share of the proceeds.^ Where a part owner of a vessel and cargo mortgages his share thereto, and afterwards the other owners appoint an agent to sell the whole cargo, such agent, after selling the cargo and receiving the proceeds, is liable to the mortgagee^ in an action for money had and received, for the mortgagor's share of the proceeds.* § 496. Mortgagee's Rights Where There are Several Owners. — A mortgagee of a vessel takes it with all the rights and powers which were passed by the mortgage, and no equities existing among several creditors will deprive the assignee of any of the usual remedies for the enforcement of the security. The court says as the mortgage was on the entire vessel, it should so be treated on foreclosure ; that there would be no propriety in selling a half interest separately. In mar- shaling securities covering several parcels, the land may 'Clark V. Wilson, 103 Mass. 219. ' Clark V. Washington Ins. Co., 100 Mass. 509. 'Schuchardt v. Babbidge, 19 How. (U. S.) 239. • Milton V. Mosher, 7 Met. (Mass.) 244. DEFAULT — EFFECTS OF. 363 be sold in such order as will best carry out tbe principle of equity, but there is no instance where an entire parcel, mortgaged as such, has been sold in separate undivided in- terests; nor would such sale of a vessel tend to raise more money than a sale of the entirety. It would rather lead to mischief, as it might be a decided objection to purchasing one-half, that the other was in bad hands.^ § 497. In Case of Unauthorized Sale by Mortgagor. — If a mortgagor of a vessel, without the authority of the mort- gagee, sells it with warranty as to title, and receives as con- sideration for the sale promissory notes, the mortgagee may elect to enforce his right to the vessel, or he may follow, in equity, the proceeds in the form of the promissory notes in the hands of the mortgagor or his representative, but he can- not do both. Kent, J., speaking for the court, said : " It may be admitted that the relation of mortgagor and mort- gagee does not of itself, and unconnected with other facts, create the relation of principal and agent, or give any right to the mortgagor to sell the whole property, by an absolute bill of sale, with warranty of a perfect title. The mortgagor in possession may sell his interest, that is, his right to redeem, but he is a wrong-doer if he sells and delivers the entire property to a purchaser, without the knowledge or assent of the mortgagee. * * * Jt jjjay also be granted that, as to the mortgagee and his title and interest, such sale does not convey nor impair his title, and that he may pur- sue and enforce his right to the thing, wherever he may find it," the mortgagee to follow the proceeds existing in the new form of negotiable notes in the haeds of the mortgagor or the representative of his estate.^ § 498. Default — Effects of. — Upon default in a mortgage of a ship, the legal title of the mortgagee becomes absolute. The mortgagee must then take possession of the vessel and apply it to the mortgage debt, either by proceedings in ' Dalrymple v. Sheehan, 20 Mich. 224. " McLarren v. Brewer, 51 Me. 402. 364 MARINE MORTGAGES. equity or by statutory remedies, so as to bar the mort" gagor's right of redemption. There is no jurisdiction in ad- miralty to foreclose a mortgage of a vessel by a sale, or by transfer of possession to the mortgagee. A debt secured by the mortgage of a ship does not give the ownership of it to the mortgagee. He may use the legal title to make the ship available for its payment. A legal title passes conditionally to the mortgagee. Where there has been a default he can- not take the ship manu forti, but he must resort either to a court of equity or to statutory remedies for the same pur- pose, when they exist, to bar the mortgagor's right of redemption by a foreclosure, which is to operate at such time afterwards when there shall be a foreclosure without a sale, as the circumstances of the case make it equitable to allow.' After a final order of foreclosure has been signed and en- rolled, and the time set by it for the payment of the money has passed, the decree may be opened to give further time, if there are circumstances to make it equitable to do so, with an ability in the mortgagor to make prompt payment.^ The court of admiralty has no jurisdiction over the ques- tion of mortgages on ships. Whether a mortgage is fore- closed, whether a mortgagee has a right to take possession of a chattel-personal, whether he is the legal or only the equitable owner, and whether a right of redemption means that the mortgagee is restrained from selling in payment of his debt till after the time specified for the redemption is passed, do not come under the jurisdiction of the admiralty court, which never decides on questions of property between the mortgagee and owner.* § 499. Application of the Statute of Frauds. — A mortgagee not in possession and not originally liable for supplies fur- 'Bogart V. The Steamboat John Jay, 17 How. (U. S.) 399. 'Thornhill v. Manning, 7 Eng. Rep. 97. ' The Neptune, 3 Hagg. Adtu. 132. There has been an enlarged cognizance of mortgages of ships by statute 3 and 4 Vict. ch. 65, in England, so now the policy of commerce and its exigencies in England have given to the admiralty courts a more ample jurisdiction in respect to mortgages of ships than they had under the former rule, before the adoption of statutes. LEX FORI GOVERNS. 365 nished her, orally promised to pay for them, provided the creditor would not attach the interest of the other part owners. It was decided that such promise was within the statute of frauds and hence the vessel was not liable.^ § 500. Actions to Realize — Priority. — It is generally held that the proceeds arising from the sale of a ship may be distributed among those who have pending libels, or who- file intervening petitions, according to their respective rights. A holder of a lien cannot obtain any right to priority over other liens of an equal rank or a higher rank, by being the first to begin suit and to be the first to obtain a decree.^ But this rule is not without exceptions of high authority.^ It has been held by Judge Brown that no creditor can inter- vene after the filing of a report classifying the claims.* § 501. Lex Fori Governs. — When a conflict of the rights of the respective lien-holders exists, the general rule is that whether one lien is entitled to priority over another depends upon the lex fori and not upon the lex loci contractus!' 'Ames V. Poster, 106 Mass. 400. 'The America, 16 Law Eep. 264; The Fanny, 2 Low. D. C. 508; The E. A. Barnard, 2 Fed. Kep. 712; The Superior, Newb. 176; The City of Tawas, 3 Fed. Rep. 170 ; The Desdemoua, Swab. 158. •The Saracen, 4 Notes of Cases 498; 2 Wm. Rob. 451 ; 6 Moore P. C. 456 ; The Clara, Swab. 1; The William F. Safford, Lush. 69; The Globe, 2 Blatohf. C. G. 427; The Triumph, 2 Blatchf C. C. 433; Goble v. The Delos De Wolf, 3 Fed. Rep. 236 ; The Pathfinder, 4 Week. Notes 528. 'The City of Tawas, 3 Fed. Rep. 170. *The Union, Lush. 128 ; The Selah, 4 Saw. C. C. 40. 366 FKATTDTJLENT CONVEYANCES. Part IV. — Contracts in Fraud op Third Persons. CHAPTER XII. FEAUDULENT CONVEYANCES. ARTICLE I. — retaining POSSESSION WITHOUT RECORDING THE INSTRUMENT. 502. Possession. 508. Change of Possession. § 502. Possession. — The common-law rule is, that posses- sion of personal property is prima facie evidence of owner- ship. Possession of personal property with the right to deal with it at pleasure, to the exclusion of others, is a degree of title, although the lowest.^ By the common law, delivery was not considered necessary to vest the title in the vendee.^ So, also, in bailments, the possession is held by parties who are not the owners, but fraud is not, therefore, implied, and the real owner's title is not imperiled.^ The rule deducing fraud as a conclusion of law from the simple retention of possession by the vendor or mortgagor originated in England in a very early day, when there were no registry laws, or none requiring such instruments as chat- tel mortgages to be registered. This policy was adopted to prevent a party from acquiring a false and deceptive credit on the strength of the possession of property which he had 1 Brown «. Volkening, 64 N. Y. 76; Sullivan v. Sullivan, 66 N. Y. 87; Swift V. Agnes, 83 Wis. 228; Eawley v. Brown, 71 N. Y. 85; Mooney «. Olsen, 21 Kans. 691. ' Miller v. Pancoast, 29 N. J. L. 250 ; Frazier v. Fredericks, 24 N. J. L. 162 ; Monroe ■». Hussey, 1 Oreg. 190 ; Davis ti. Turner, 4 Gratt. (Va.) 422. ' Capron d. Porter, 43 Conn. 389. CHANGE OF POSSESSION. 367 sold or mortgaged, and yet of which he retained possession, enjoyment and apparent ownership.' § 603. Change of Possession. — ^An agreement to let the vendor retain possession of the property and use it is not considered to be a common and ordinary transaction in the usual course of business. Such an arrangement excites sus- picion, and it is regarded in many of the cases as the bounden duty of the courts, for the safety and protection of creditors, to call upon and hold the vendee in all such cases to explain clearly and satisfactorily how an absolute sale could have been bona fide and yet the vendor retain the use and pos- session of the chattels.^ In many of the States a failure to effect a change of pos- session is made either presumptively or conclusively fraudu- lent; but the statutes of those States, on this subject, are differently interpreted. The prevalent policy of both Eng- lish^ and American courts is to consider the absence of a change of possession as prima facie or presumptive evidence of fraud. Lord Eldon says, the circumstances of possession of chat- tels, however familiar it may be to say that it proves fraud, amounts to no more than that it is prima facie evidence of fraud, which may be overcome by proof of the honesty of the transaction. Accordingly, after the conveyance of goods and chattels, want of possession does not constitute fraud, as against creditors, but is only evidence of it.* ' Hughies V. Cory, 20 Iowa 399; Bullock v. Williams, 16 Pick. (Mass.) 33; Tootle V. Coldwell, 30 Kans. 125 ; Hosea v. McClure, 42 Kans. 403. ' Wait on Fraud. Conv. I 246. 'Kidd V. Eawlinson, 2 Bos. & Pull. 59 ; Leonard v. Baker, 1 Maule & Sel. 251 ; Latimer v. Batson, 4 Barn. & Cres. 652 ; Arundell v. Phipps, 10 Ves. 139; Paget v. Perchard, 1 Esp. 205; Keed v. Blades, 5 Taunt. 212; Martin- dale V. Booth, 8 B. & Ad. 498; Steward v. Lombe, 1 Brod. & B. 506. *Kidd V. Eawlinson, 2 Bos. & Pull. 59. 368 FKAUDTJLENT CONVEYANCES. ARTICLE 11.-^— STATE DECISIONS — FKAUDTJLENT PKIMA FACIE ■ — -FRAUDULENT PER SE. 504. '^hen Prima Fade Fraud. 504a. Alabama. 505. Arkiansa'S'. 506. Dakota. 507. Georgia. 508. Indiana. 509. Kansas. 510. Louisiana. 5il. Maine. ■512.' Maryland.. 513.' Massachusetts. 514. Michigan. 515. Minnesota. 516. Mississippi. 517. Nebraska. 518. New Hampshire. 519. New Jersey. 520. New York. 521. North Carolina. 522. Ohio. 523. Oregon. 524. Rhode Island. 525. Tennessee. 526. Texas. 527. Virginia. 528. Wisconsin. 529. Fraudulent per se or Conclu- ' si ve — California. 529o. Colorado. 530. Connecticut. 531. Delaware. 532. Florida. 533. Illinois — Warehouse Receipts. 534. Iowa. 635. Kentucky. 536. Missouri. 537. Nevada. 538. Pennsylvania. 539. Vermont. § 604. When Prima Facie Fraud. — To enter upon a labored discussion of the principles underlying fraudulent sales would be a supererogatory work, as the law has been settled in the States. The rules of the different States as to sales will be given, and their applicability to chattel mortgages. § 504a. Alabama. — The retention of possession by the vendor after an absolute sale is, at most, only prima facie evidence of fraud, and may be rebutted or explained.' Thus, if the vendor retains possession of the goods after a sale, and continues to sell them as before, this is merely a badge of fraud which is susceptible of explanation.* § 505. Arkansas. — The rule is adopted in this State that 'Crawford v. Kirksey, 55 Ala. 282. ' Moog V. Benedicks, 49 Ala. 512 ; and see Upson v. Raiford, 29 Ala. 188 ; Millard v. Hall, 24 Ala. 209; Mayer v. Clark, 40 Ala. 259; Hobbs v. Bibb, 2 Stew. 54 . Noble v. Gunter, 16 Ala. 77 ; Andrews v. Jones, 10 Ala. 460; Wyatt V. Stewart, 34 Ala. 716. Same rule applies to chattel mortgages. Murray v. McNealy, 86 Ala. 234; Congtantine v. Twelves, 29 Ala. 607; Price v. Mazange, 31 Ala. 761 ; Wiley v. Knight, 27 Ala. 336 ; Tickner v. Wiswall, 9 Ala. 305. INDIANA. 369 possession by tte vendor, after an absolute sale, does not amount to fraud -per se, but merely prima facie evidence of fraud, subject to be explained. When a deed postponed the date of payment for an unreasonable length of time after the maturity of the debts by it, a provision that the grantor shall retain possession and use of the property until default of payment, a fraudulent intent to cover up the property in the use of the grantor, a hindering and delaying of cred- itors, may be inferred.^ Retention of possession of personal property after an ab- solute sale is not sufficient to sustain fraud. Evidence cannot be introduced to show that the transaction witnessed by a bill of sale was other than it recited, whether intended to be an absolute or conditional sale or mortgage or pledge ; it must be determined by the written contract.^ § 506. Dakota. — Under the law' respecting fraudulent con- veyances, which excepts from its operation chattel mortgages, when allowed by law, a chattel mortgage duly executed and filed is not even prima facie fraudulent as against the mort- gor's creditors, though it provides that the mortgagor may retain possession of the goods.* § 607. Georgia. — It is the settled rule in this State that possession of personal property by the vendor after an abso- lute sale or conveyance is a badge of fraud, which is suscept- ible of explanation. Thus, when a party holds possession of the chattel sold, he may explain the reason of his possession, and thus show the transaction to be bonafide.^ But it is held by statute that conditional sales are invalid as to third par- ties, unless such sales are executed like chattel mortgages.* § 508. Indiana. — The retention by the vendor of the pos- ' Hempstead v. Johnston, 18 Ark. 134. ' George v. Norris, 23 Ark. 121. See, also, Cocke v. Chapman, 2 Eng. 197 ; Danly v. Rector, 5 Eng. 224. Same as to chattel mortgages. Sparks v. Mack, 31 Ark. 666. 'Civil Code, §2024. 'Eeichert v. Simons, 42 N. W. Bep. 657. 'Goodwyn v. Goodwyn, 20 Ga. 600. »Code, n955a. Y 370 FRAUDULENT CONVEYANCES. session of goods sold is prima facie evidence of fraud. The purpose or intent of the parties to the sale of goods must be judged of by all the circumstances connected with the trans- action.^ Statutory provisions control in this State.^ § 509. Kansas. — The law is that the retention of personal property after absolute sale, by the vendor, is only prima facie fraudulent, and may be explained by evidence. So if the possession is retained by the mortgagor.^ But a statute provides that conditional sales shall be void as to creditors and innocent purchasers for value, unless such sales are made to conform with the laws applicable to chattel mortgages.* § 510. Louisiana. — The precarious possession of personal property carries with it the presumption of simulation, but this presumption may be disputed by the vendee showing the reality of the sale. Judge Howe says that if the vendor is in possession after the sale, by the consent of the vendee, the possession is precarious,® and the sale would, therefore, be presumed to have been simulated, but that this presumption is not conclusive, but may be disputed by the vendee show- ing the reality of the sale.^ § 511. Maine. — If the vendor retains possession of per- sonal property after absolute sale, this is only prima fade fraudulent. Thus, the failure of the vendee to take posses- sion of the property after sale is presumptive evidence of fraud, and the jury may determine the good faith of the transaction.^ 'Kane v. Drake, 27 Ind. 29; Nutter v. Harris, 9 Ind. 88; Case v. Winship, 4 Blaokf. 425; Rose v. Colter, 76 Ind. 590; New Albany Ins. Co. v. Wilcox- son, 21 Ind. 355. ' Rev. Stat. 1881, ? 4924. Same rnle as to chattel mortgages. McFadden V. Fritz, 90 Ind. 590; Dessar v. Field, 99 Ind. 548; Fisher v. Syfers, 109 Ind. 514. 'Phillips V. Reitz, 16 Kans. 396; Wolfley v. Rising, 8 Kans. 297; Frank- houser v. Ellett, 22 Kans. 127; Howard v. Rohlflng, 36 Kans. 357. *Lawsof 1889, oh. 255. ^ Civil Code, ? 3522. 'Guice V. Sanders, 21 La. Ann. 463 ; Keller v. Blanohard, 19 La. Ann. 53 ; Civil Code, ? 2456 ; Miltenberger v. Parker, 17 La. Ann. 254. 'Shaw «. Wilshire, 65 Me. 485; Bartlett v. Blake, 37 Me. 124; Fairfield Bridge Co. v. Nye, 60 Me. 372; Googins v. Gilmore, 47 Me. 9; Cutter ti. MASSACHUSETTS. 371 § 612. Maryland. — The failure of the vendee of personal property to take possession where the deed shows that the sale was not to have its completion immediately, but was prospective to a future event, the possession retained by the vendor is not a fraud.^ A bill of sale may be recorded, and the title of the grantee is then as effectually protected as if the sale had been accompanied by delivery,* § 513. Massachusetts. — The possession of personal chattels by the' vendor after an alleged sale, is not conclusive evi- dence of fraud, upon proof that the sale was made in good faith, and for a valuable consideration, and that the posses- sion after the sale was in pursuance of some agreement not inconsistent with honesty in the transaction, and the vendee may hold the property against creditors.' In settling the ques- tion of fraud, there must be considered the manner of occu- pation, the conduct of the parties,^ and all other evidence bearing upon the question of fraud, which will be passed on by the jury.* It is necessary as against subsequent purchasers or attach- ing creditors, that there shall be a delivery of the property. When no such delivery, actual or symbolical, is proved, and the buyer does no act by way of taking possession or exer- cising ownership, and the seller does not agree to hold or keep the property for the vendee, and when there is no evi- dence of delivery for the consideration of the jury, except such as may be implied from the execution and delivery of the bill of sale, such circumstances are not sufficient.^ Copeland, 18 Me. 127; McKee v. Garcelpn, 60 Me. 165. As to chattel mort- gages, see Deering v. Cobb, 74 Me. 332; Allen v, Goodnow, 71 Me. 420. • Hudson V. Warner, 2 H. & G. (Md.) 415. 'Kreuzer v. Cooney, 45 Md. 582; Clary v. Frayer, 8 G. & J. (Md.) 416 ; and see Price v. Pitzer, 44 Md. 527. As to chattel mortgages') see Hamilton V. Eogers, 8 Md. 301. 'Brooks V. Powers, 15 Mass. 244; Shurtleff v. Willard, 19 Pick. (Mass.) 202 ; Legg v. Willard, 17 Pick. (Mass.) 140; Hardy v. Potter, 10 Gray (Mass.) 89; Ingalls v. Herrick, 108 Mass. 354; Bartletti). Williams, 1 Pick. (Mass.) 288. * Ingalls V. Herrick, 108 Mass. 354. 'Dempsey v. Gardner, 127 Mass. 381 ; Carter v. Willard, 19 Pick. (Mass.) 1; Shumway v. Kutter, 7 Pick. (Mass.) 56; Packard •■!;. Wood, 4 Gray 372 FRAUDULENT CONVEYANCES. § 614. Michigan. — By Comp. Laws, § 4703, every sale made by a vendor of goods and chattels in his possession or under his control, unless the same be accompanied by an im- mediate delivery, and be followed by actual and continued change of possession, shall be presumed to be fraudulent and void against creditors of the vendor and subsequent purchas- ers in good faith, and shall be conclusive evidence of fraud, unless it shall be made to appear on the part of the person claiming under the sale that it was made in good faith and without any intent to defraud such creditor or purchaser.^ § 515. Minnesota. — Statutory provisions make a sale with possession in the vendor only a prima facie fraud. Thus, when an assignment is assailed on the ground of actual fraud in its execution, the question of fraud is properly submitted to the jury. ^ § 516. Mississippi. — Possession of personal property is not title. It is prima facie evidence of title but nothing more, and will not protect one who buys on the faith of it against the holder of the title. Possession of personal property by the vendor after an absolute sale is only prima facie fraudu- lent, and is explainable, and the title of the vendee is up- held when the continued possession of the vendor is explained so as to repel the presumption of fraud.^ § 517. Nebraska. — By the eleventh clause of the statute of frauds, where, in the absolute sale of goods, they are left (Mass.) 307; Eourke d. Bullens, 8 Gray (Mass.) 547; Veazie d. Somerby, 5 Allen (Mass.) 280. Same rule as to chattel mortgages. Fletcher v. Powers, 131 Mass. 333; Jones v. Huggeford, 3 Met. (Mass.) 515; Briggs v. Farkman, 2 Met. (Mass.) 258. 'See Hatch v. Fowler, 28 Mich. 205; Molitor v. Robinson, 40 Mich. 200; Jackson v. Deaij, 1 Doug. (Mich.) 519; Bagg v. Jerome, 7 Mich. 145. Same rule as to chattel mortgages. People's Sav. Bank v. Bates, 120 U. S. 556 ; Gay V. Bidwell, 7 Mich. 519; People v. Bristol, 35 Mich. 28; Fry v. Russell, 35 Mich. 229; Oliver v. Eaton, 7 Mich. 108. ^Blackman v. Wheaton, 13 Minn. 326; Benton v. Snyder, 22 Minn. 247; Camp V. Thompson, 25 Minn. 175. As to chattel mortgages, see Bannon v. Bowler, 34 Minn. 416; Horton v. Williams, 21 Minn. 187; Nat. Bank v. Anderson, 24 Minn. 435; Stein v. Munch, 24 Minn. 390. ' Ketchum v. Brennan, 53 Miss. 596 ; Comstook v. Rayford, 20 Miss. 369 ; Billiard v. Cagle, 46 Miss. 809. Same rule as to chattel mortgages. Sum- mers V. RooB, 42 Miss. 749; Ewing v. Cargill, 13 S. & M. 79. NEW YOKE. 373 in possession of the vendor, in a controversy between his creditors and the purchaser, the presumption is 'prima fade that the sale was fraudulent. In such case the burden of showing the sale to have been honest is on the purchaser.^ § 518. New Hampshire. — In cases of absolute sales posses- sion and use by the vendor, after sale, are always prima facie fraudulent. Thus, if the vendor retains possession after sale, the transaction is prima facie fraudulent, and if unexplained, conclusive evidence of a secret trust.^ § 519. New Jersey. — It is the law in this State that the possession by the vendor of personal property after an abso- lute sale is not conclusive evidence of fraud. The vendor may hold the property by proving the sale was bona fide, and for a valuable consideration, and that his possession after sale was in pursuance of some agreement with hon- esty in the transaction.^ But by a late statute a conditional sale and possession by the vendor is absolutely void as against subsequent purchas- ers and mortgagees, unless the contract is recorded as in case of chattel mortgages.* § 520. New York, — Statutory provisions make the reten- tion of possession, in an absolute sale, by the vendor, pre- sumptively fraudulent. This presumption can be overcome by proof, upon which the jury may pass. The retention must be shown to have been in good faith, for an honest purpose, and with no design to defraud creditors." ' Densmore v. Tomer, 14 Nebr. 392 ; Uhl v. Robison, 8 Nebr. 272. Same rule as to chattel mortgages. Davis v. Scott, 22 Nebr. 154 ; Turner v. Kil- lian, 12 Nebr. 580 ; Com. Stat. p. 288, 1 12. 'Coburn v. PickerinR, 3 N. H. 415; Lang v. Stockwell, 55 N. H. 561; Cutting V. Jackpon, 56 N. H. 253 ; Sumner v. Dalton, 58 N. H. 295 ; Stowe v. Taft,58 N. H. i45; Shaw D.Thompson, 43 N. H. 130; Trask v. Bowers, 4 N. H. 309. See Gen. Stat, g? 328, 329. Same rule as to chattel mortgages. Gibbs ft. Parsons, 64 N. H. 66 ; Wilson v. Sullivan, 58 N. H. 260. •Miller v. Pancoast, 29 N. J. L. 253; Sherron v. Humphreys, 14 N. J. L. 220; Parr v. Brady, 37 N. J. L. 201; Miller v. Shreve, 29 N. J. L. 250; In re Bloom, 17 Bank. Keg. 425. *Lawsofl889, p. 421. 'Ball V. Loomis, 29 N. Y. 412; Miller v. Lockwood, 32 N. Y. 293; Ford v. Williams, 24 N. Y. 359 ; Hallacher v. O'Brien, 5 Hua (N. Y.) 277 ; Burnham V. Brennan, 74 N. Y. 597 ; Thompson v. Blanchard, 4 N. Y. 303 ; Hanford v. Artcher, 4 Hill (N. Y.) 271 ; Tilson v. Terwilliger, 56 N. Y. 273; Mitchell v. 374 FRAUDULENT CONVEYANCES. Conditional sales are declared absolutely void against sub- sequent purchasers and mortgagees in good faith, and as to them such sales are deemed absolute, unless said contract is executed and filed as A chattel mortgage is/ § 521. North Carolina. — The retention of the possession of chattels by the vendor after giving a bill of sale absolute on its face, is not, "per iS«, fraudulent. Fraud is a question of law upon facts and circumstances.^ § 622. Ohio. — A retention of possession on the part of the mortgagor is only a badge of fraud, which may be removed by showing the transaction was honest. The sale or mort- gage of personal property and continued possession by ven- dor or mortgagor is only -prima facie evidence of a fraud, which may be explained away or rebutted by showing that such possession was honest and fair.^ § 523. Oregon. — The retention of personal property by the vendor after the sale thereof creates the presumption of fraud as against his creditors, but such presumption is a disputable one, and may be rebutted by testimony showing that the sale was made in good faith. This is a question for the jury.* § 524. Rhode Island. — An absolute transfer not followed by, or at least ostensible change of possession, at or after the time of sale, is a circumstance which, when proved, tends to show such sale merely colorable, and is a proper question for the jury to pass upon.' West, 55 N. Y. 107 ; May v. Walter, 56 N. Y. 8. See Mumper v. Rushmore, 79 N. Y. 19. Same rule as to chattel mortgages. Brackett v. Harvey, 91 N. Y. 214 ; Gardner v. McEwen, 19 N. Y. 123 ; Southard v. Pickney, 5 Abb. N. C. 184 ; Ford v. Williams, 24 N. Y. 359; Frost v. Warren, 42 N. Y. 204; Caring v. Richmond, 22 Hun 369. 'Laws of 1883, ch. 383; Laws of 1884, ch. 315; Laws of 1885, ch. 488; Laws of 1888, oh. 225. 'Rea V. Alexander, 5 Ired. (N. Car.) L. 644. Same rule as to chattel mortgages. Kreth v. Rogers, 101 N. Car. 263. "Collins v. Myers, 16 Ohio 547 ; Thorne ii. Bank, 37 Ohio St. 254; Barr v. Hatch, 3 Ohio 527 ; Hombeok v. Vanmeter, 9 Ohio 153. Same rule as to chattel mortgages. Kleine ti. Katzenberger, 20 Ohio St. 110; Kilbourne «. Fay, 29 Ohio St. 264. 'McCuUy V. Swackhamer, 6 Oreg. 438. 'Sarle v. Arnold, 7 R. I. 582; Mead v. Gardiner, 13 R. I. 257. See, also, Beckwith v. Burrough, 13 R. I. 294; Goodell ■». Fairbrother, 12 R. I. 233. Same rule as to chattel mortgages. Williams v. Winsor, 12 R. I. 9. FRAUDULENT PER SE OR CONCLUSIVE. 376 § 525. Tennessee. — A conveyance absolute on its face, when the vendor continues to retain possession of the personal property, is prima facie fraudulent. But such sale may be explained and the good faith of the transaction shown, and the presumption of fraud overthrown.^ § 526. Texas. — The retention of possession, after an abso- lute sale, by the vendor, of personal property, is not con- clusively fraudulent. Such transaction is prima fade fraud- ulent, and a badge of fraud which may be explained and the good faith of the sale shown.^ § 527. Virginia. — A grantor in an absolute conveyance of personal property, continuing in possession, raises the legal presumption that the sale was fraudulent as regards creditors of the grantor, which presumption throws imperatively upon the grantor the whole burden of proof, the fairness and good faith of the transaction, and that cannot be done without sufficient evidence that the pretended sale was for a fair and valuable consideration, and, in absence of that evidence, the prima facie presumption becomes absolutely and irresistibly conclusive.* § 528. Wisconsin. — Eetention of possession by the vendor after an absolute sale is a presumption of fraud, but the transaction can be explained and shown to be bona fide. But when fraud is charged in a bill of sale, possession re- maining with the vendor, it must be proved.* § 529. Fraudulent per se or Conclusive — California. — The statute® declares every transfer of personal property and every lien thereon, with few exceptions, where made by a 'Carneyv. Carney, 7 Baxt, 284; Grubbs v. Greer, 5 Cold. 160; Maney «. Killough, 7 Yerg. 440. 'Thornton v. Smith, 39 Tex. 544.' 'Curd V. Miller, 7 Gratt. 185; Davis v. Turner, 4 Gratt. 423; Bird v. Wilkinson, 4 Leigh 266; Forkner v. Stuart, 6 Gratt. 197. •Wheeler v. Konst, 46 Wis. 398. See, also, Blakeslee v. Rossman, 43 Wis. 116; Osen v. Sherman, 27 Wis. 505; Grant v. Lewis, 14 Wis. 487. Same rale as to chattel mortgages. Cotton v. Marsh, 3 Wis. 221 ; Pisk v. Har- shaw, 45 Wis. 665. 5 Civil Code, ? 3440. 376 FRAtJDTJLElTT CONVEYANCES. person in possession, and not accompanied by an immediate delivery, and followed by a continued change of possession of the things transferred, to be fraudulent and therefore void as against creditors of the mortgagor and subsequent purchasers. The courts cannot evade its force and effect by an inquiry into the consideration paid by the purchaser, and- the good faith of the transaction.' § 529a. Colorado. — Every sale made by a vendor of goods and chattels in his possession or under his control, * * * unless the same be accompanied by an immediate delivery and be followed by an actual and continued change of pos- session of the things sold or assigned, shall be presumed to be fraudulent and void as against creditors of the vendor, * * * and this presumption shall be conclusive." § 630. Gonnecticut. — The retention of the possession of personal property by the vendor after a sale raises a pre- sumption of fraud which cannot be repelled by any evidence that the transaction was bona fide and for a valuable con- sideration. This rule is enforced with "undiminished rigor " ajs a most important rule of public policy.^ .§ 531. Delaware. — On a bill of sale of goods, the jury must be satisfied that it was an actual and not a pretended sale of them, merely, by the vendor to the purchaser, and that they were delivered into his possession as soon as they reasonably and conveniently could have been under the 'Woods V. Bugbey, 29 Cal. 466; Engle v. Marshall, 19 Cal. 329; Richards 11. Schroder, 10 Cal. 431; Stevens v. Irwin, 15 Cal. 504; Lay v. Neville, 25 Cal. 552; Hesthal v. Myles, 53 Cal. S23. The same rule applies to chattel mortgages. Tregear v. Etiwanda Water Co., 76 Gal. 537. 'Gen. Stat. § 1523. Same rule as to chattel mortgages. Cook v. Mann, 6 Colo. 21 ; Sweeney v. Coe, 12 Colo. 485. " Capron v. Porter, 43 Conn. 383 ; Osborne v. TuUer, 14 Conn. 529 ; Norton V. Doolittle, 32 Conn. 405 ; Elmer v. Welch, 47 Conn. 56 ; Hull v. Sigsworth, 48 Conn. 258; Hatstat v. Blakeslee, 41 Conn. 301; Seymour v. O'Keefe, 44 Conn. 128 ; Meade «. Smith, 16 Conn. 346 ; Kirtland v. Snow, 20 Conn. 23 ; Lake v. Morris, 30 Conn. 201 ; Hall v. Gaylor, 37 Conn. 550. Whether there has been, in fact, a retention of possession by the vendor, is a question for the jury. Lake v. Morris, 80 Conn. 201. Same rule as to chattel mort- gages. Bishop V. Warner, 19 Conn. 460. ' IOWA. 377 circumstances, with the exercise of due diligence and atten- tion on the part of the purchaser.^ § 532. Florida. ^Fraud may be inferred from the facts and circumstances, from the character of the contract, or from the condition and circumstances of the parties ; that is, whether the creditor keeps the bill of sale, or retains the possession of the goods, or a part of them, and whether he parts with the absolute dominion over them.' § 533. Illinois — Warehouse Receipts. — As to subsequent purchasers without notice and creditors, there must be an actual delivery of the personal property to consummate the sale ; but this rule has its exceptions, as in case of warehouse receipts. Usage has made the possession of such documents equiv- alent to the possession of the property itself.^ § 534. Iowa. — This question is controlled by statute. No sale of personal property, where the vendor retains actual possession, is valid against existing creditors without notice, unless the transaction is witnessed by an instrument duly acknowledged and filed for record.* For the mortgagor to hold possession of the personal property is only prima facie fraud, which may be rebutted or explained.^ 'Taylor v. Bichardsoa, 4 Houst. (Del.) 300. A statute controls this ques- tion. Eev. Stat. oh. 63, ? 4. " Smith V. Hines, 10 Fla. 258 ; Gibson v. Love, 4 Fla. 217. Same rule as to ohattel mortgages. Logan v. Logan, 22 Fla. 561. 'Broadwell v. Howard, 77 111. 305; Thompson v. Wilhite, 81 111. 356; Lefever ■«. Mires, 81 111. 456; Ticknor v. McClelland, 84 111.471; Allen v. Carr, 85 111. 388; Eichardson v. Rardin, 88 111. 124; Curren v. Bernard, 6 111. App. 34; Thompson v. Yeck, 21 111. 73; Bozier v. Williams, 92 111. 187; Johnson -1). Holloway, 82 111. 334; Greenbaum v. Wheeler, 90 111. 296; Hart V. Wing, 44 111. 141 ; Davis v. Ransom, 18 111. 396 ; Thornton v. Daven- port, 1 Scam. (111.) 296 ; Young v. Bradley, 68 111. 553 ; Lewis v. Swift, 54 111. 436; Ketchujn v. Watson, 24 111. 591; Powers v. Green, 14 111. 387; McCormick v. Hadden, 37 111. 370; Burnell v. Robertson, 5 Gilm. (111.) 282; Jennings v. Gage, 13 111. 610. Same rule as to chattel mortgages. Dunning V. Mead, 90 111. 876. *Boothby v. Brown, 40 Iowa 104.; Prather v. Parker, 24 Iowa 26; Heaser i>. Wilson, 86 Iowa 152 ; Sutton v. Ballon, 46 Iowa 517. * Smith V. McLean, 24 Iowa 322; Clark v. Hyman, 55 Iowa 14 ; Bolton v. Lambert, 72 Iowa 483. 378 FRAUDULENT CONVEYANCES. § 535. Kentucky. — Possession must accompany the title in sale of movable property, or the sale will be, per se, fraudu- lent and void in law as to subsequent purchasers and credit- ors of the vendor, even though the contract contains a stipulation that the seller is to retain possession until a future day.^ § 536. Missouri. — There must be a complete change of do- minion and control over the personal property sold, and some act which will operate as a divestiture of title and pos- session from the vendor and transference into the vendee.'^ A mortgage authorizing the mortgagor to retain posses- sion does not alone, under the statute,' invalidate a recorded mortgage ; and there is no implied reservation of power of sale in the mortgagor, growing out of the nature of the property. If sales have been made after the execution of such mortgage, it should be left to the jury to determine whether the sales were made in pursuance of an agreement or understanding between the parties. If there was, the mortgage would be fraudulent.* § 537. Nevada. — The sale of goods and chattels must be accompanied by change of possession and immediate deliv- ery; otherwise it shall be conclusive evidence of fraud, as against creditors of the vendor or subsequent purchasers in good faith.^ § 538. Pennsylvania. — The sale of chattels will be valid against creditors, where they either pass to the vendee or the • Morton v. Ragan, 5 Bush (Ky.) 334 ; Brummel v. Stockton, 3 Dana (Ky.) 135; Bobbins v. Oldham, 1 Duvall (Ky.) 28; Waller v. Oralle, 8 B. Mon. (Ky.) 11; Bradley v. Buford, Sneed (Ky.) 12. This rule does not apply to mortgages. As to chattel mortgages, see Loth v. Carty, 85 Ky. 591. 'Claflin V. Rosenberg, 42 Mo. 439; Rocheblane v. Potter, 1 Mo. 561; Foster v. Wallace, 2 Mo. 231 ; Sibley v. Hood, 3 Mo. 290 ; King v. Bailey, 6 Mo. 575 ; Shepherd v. Trigg, 7 Mo. 151 ; Lesem v. Herriford, 44 Mo. 323 ; Bishop V. O'Connell, 56 Mo. 158 ; Burgert w. Borohert, 59 Mo. 80 ; Franklin V. Gummersell, 11 Cent. L. Jour. 132. 'Wag. Stat. p. 281, § 8; Gen. Stat. 1885, p. 440. * Weber v. Armstrong, 70 Mo. 217. See, also, Hubbell v. Allen, 90 Mo. 574. ' Com. Laws, p. 287, ? 11. As to chattel mortgages, see Lawrence v. Burn- ham, 4 Nev. 361 ; Wilson v. Hill, 17 Nev. 401. AT COMMON LAW. 379 vendor passes away from them, and leaves them in the exclusive possession of the vendee. Where possession has been retained without any stipulation in the conveyance it is fraud ftfr se, and the parties will not be suffered to unravel it and show that what seemed fraudulent was not in fact so.^ § 539. Vermont. — It is well settled in this State that a sale or pledge of chattels which can be moved, will, if not ac- companied by a manifest substantial change of possession, be voidable by attaching creditors.^ ARTICLE III. — BADGES OF FBAUD. 540. At Common Law. 541. Ill Some States the Mortgagor's Possession May be Explained. 542. Then it is a Question for the Jury. 543. Pennsylvania Rule. 544. Illinois Bule. 545. New York Rule. 546. Nebraska Rule. 547. Minnesota Rule. 548. Prevailing Rule of Registration. 549. Agreements to Defraud. 550. Possession of Exempt Property by the Mortgagor. 551. Exempt Property Being Seized — What Judgment Creditors May Show in Mitigation of Damages. 552. Effect of Insecurity Clause. 558. Waiver of Purchaser's Right to Contest. 554. Actual Possession it Necessary. § 540. At Common Law. — At common law the continued possession of the mortgagor of personal property, is only prima facie evidence of fraud, and may, by evidence, be re- butted.^ When there is an absolute sale with the possession of the chattels, the possession must immediately pass to the •Garman v. Cooper, 72 Pa. St. 32; Thompson v. Paret, 94 Pa. St. 275 ; Pearson v. Carter, 94 Pa. St. 156 ; McKibbin v. Martin, 64 Pa. St. 352; Wor- man v. Kramer, 73 Pa. St. 378 ; Davis v. Bigler, 62 Pa. St. 242 ; Clow v. Woods, 5 8. & B. (Pa.) 275 ; Dawes i;. Cope, 4 Binn. (Pa.) 258 ; Shaw v. Levy, 17 S. & R. (Pa.) 99 ; Babb v. Celmson, 10 8. & R. (Pa.) 419 ; Bentz v. Rockey, 69 Pa. St. 71 ; Miller v. Garman, 69 Pa. St. 134. Same rule as to chattel mortgages. Clow v. Woods, 5 S. & B. (Pa.) 275; McKibbin v. Martin, 64 Pa. St. 352 ; Hower v. Geesaman, 17 8. & R. (Pa.) 251. 'Houston V. Howard, 39 Vt. 54; Daniels v. Nelson, 41 Vt. 161 ; Rothchild V. Rowe, 44 Vt. 389 ; Rev. Stat. S| 1966, 1972. 'Fairbanks v. Bloomfield, 5 Duer (N. Y.) 434. 380 FRAUDULENT CONVEYANCES. vendee, but if it be a conditional sale, the possession may continue with the vendor till some future time or until the condition is performed, consistent with the deed.' The difference is marked between a conveyance which purports to be absolute and a conveyance which, from its terms, is to leave the possession in the vendor. If, in the latter case, the retaining of possession is evidence of fraud, no mortgage can be made. The possession universally remains with the grantor until the creditor becomes entitled to his money : he either chooses or is compelled to exert his right.'* § 541. In Some States the Mortgagor's Possession May be Explained. — In some States, where there is a mortgage of chattels, the possession may remain with the mortgagor, irrespective of the registration laws. In a mortgage of per- sonal property, the possession need not be in every instance transferred to the mortgagee ; especially in those cases where the possession must necessarily remain with the mortgagor, from the nature of the property mortgaged. If the mort- gage be fair and proper, and for a full consideration, then there is no fraud in the transaction. Because the possession has been left with the mortgagor, does not make the trans- action ipso facto void per se. The transaction may be ex- plained to be in conformity with honesty and fair dealing.' ' Edwards v. Harben, 2 T. E. 587. 2 United States v. Hooe, 3 Cranoh (U. S.) 73. » Newell V. Warren, 44 N. Y. 244 ; Butler v. Van Wyck, 1 Hill (N. Y.) 438 ; Watson V. Williarasi 4 Blackf. (Ind.) 26; Hankins v. Ingols, 4 Blackf. (ind.) 35; Griswold v. Sheldon, 4 N. Y. 581; Gardner v. Adams, 12 Wend. (N. Y.) 297; Hull v. Carnley, 2 Duer (N. Y.) 99; Smith v. Acker, 23 Wend. (N. Y.) 653; Mui-ray v. Burtis, 15 Wend. (N. Y.) 212; Cole v. White, 26 Wend. (N. Y.) 511; Lewis v. Stevenson, 2 Hall (N. Y.) 63; Ross v. Wilson, 7 Bush (Ky.) 29; Head v. Ward, 1 J. J. Marsh. (Ky.) 280; Bucklin v. Thompson, 1 J. J. Marsh. (Ky.) 223; Vernon v. Morton, 8 Dana (Ky.) 247; Lyons v. Field, 17 B. Mon. (Ky.) 543; Hughes v. Cory, 20 Iowa 399; Hombeck v. Vanmeter, 9 Ohio 153 ; Pierce v. Stevens, 80 Me. 184 ; Googins v. Gilmore, 47 Me. 9 ; Reed v. Jewett, 5 Me. 96 ; Smith v. Putney, 18 Me. 87 ; Lunt v. Whitaker, 10 Me. 310 ; Conrad v. Atlantic Ins. Co., 1 Pet. (U. S.) 386 ; Hoit V. Remiok, 11 N. H. 285 ; Adams v. Wheeler, 10 Pick. (Mass.) 199 ; North v. Crowell, 11 N. H. 251 ; Macomber v. Parker, 14 Pick. (Maas.) 497 ; Runyon V. Groshen, 12 N. J. Eq. 86; Merrill v. Dawson, Hemp. C. C. 563 ; Pyle v. Warren, 2 Nebr. 241 ; Magee v. Carpenter, 4 Ala. 469 ; Killough v. Steele, 1 St. & P. (Ala.) 262; Almy v. Wilber, 2 Wood. & M. C. C. 371; Bissell v. Hopkins, 3 Cow. (N. Y.) 166. ILLINOIS KULE. 381 § 542. Then it is a Question for the Jury. — In such case the continued possession of the vendor or mortgagor, as evi- dence of fraud, is a question for the jury.^ It is a question of intent to be settled by them as a question of fact,^ even though the evidence of good faith and absence of intent to defraud is uncontradicted.^ The court will not, except in very glaring cases, set aside the verdict of the jury.* § 543. Pennsylvania Rule. — It is essential to the validity of a chattel mortgage in this State that an absolute delivery be made to the mortgagee. But in this State mortgages of chattels are mere pledges and are not valid against credit- ors and third persons unless the mortgagee takes posses- sion, or what is equivalent thereto, of the mortgaged prop- erty.' A statement upon the face of the mortgage that the mortgagor may remain in possession is not sufficient to make it valid, and will be regarded as fraudulent per se.* § 544. Illinois Rule. — In this State, if the mortgaged prop- erty remains with the mortgagor, it makes the transaction fraudulent joer se, unless the retention be consistent with the terms of the mortgage.' The mortgagor may retain posses- sion, where it is provided in the instrument itself, when property executed, acknowledged and recorded." 'Ingalls V. Herrick, 108 MaBs. 351; -Mead v. Noyes, 44 Conn. 487; Thompson v. Blanchard, 4 N. Y. 303; Griswold v. Sheldon, -4 N. Y. 581; Davis V. Turner, 4 Gratt. (Va.) 422; Cutter v. Copeland, 18 Me. 127; Til«on V. Terwilliger, 56 N. Y. 273; Smith v. Welch, 10 Wis. 91; Allen v. Cowan, 23 N. Y. 502; HoUacher v. O'Brien, 5 Hun (N. Y.) 277; Warner v. Norton, 20 How. (U. S.) 460; Scott v. Winsbip, 20 Ga. 480; Chamberlain v. Stern, , 11 Nev. 268; Patten v. Smith, 4 Conn. 450; Brunswick v. McClay, 7 Nebr. 137; Maney v. Killough, 7 Yerg. (Tenn.) 440; Eowley v. Eioe, 11 Met. (Mass.) 833; Swift v. Hart, 12 Barb. (N. Y.) 530 ; Fuller v. Acker, 1 Hill (N. Y.) 473. 'Miller v. Pancoaat, 29 N. J. L. 250. •Blaut V. Gabler, 77 N. Y. 461. * HoUacher v. O'Brien, 5 Hun (N. Y.) 277 ; Potter «. Payne, 21 Conn. 360; Oliver v. Eaton, 7 Mich. 108; Butler v. Miller, 1 N. Y. 496; Bishop v. Cook, 13 Barb. (N. Y.) 326; Swift v. Hart, 12 Barb. (N. Y.) 530; Smith v. Smith, 24 Me. 555 ; Googins v. Gilmore, 47 Me. 9. * Bismark Build. Asso. v. Bolster, 92 Pa. St. 123. ' Clow V. Woods, 5 S. & B. (Pa.) 275. 'Thornton v. Davenport, 1 Scam. (111.) 296; Beed v. Eames, 19 111. 594; Constant v. Matteson, 22 111. 546; Burnham v. MuUer, 61 111. 453. 'Koplin V. Anderson, 88 111. 120; Hammers v. Dole, 61 111. 307; Green- 'baum V. Wheeler, 90 III. 296. 382 FEAUDULENT CONVEYANCES. § 545. New York Rule. — A legal presumption of fraud arises, though the mortgage is duly filed for record, when the mortgagor retains possession of the mortgaged property. The recording of the chattel mortgage is not equivalent to a change of possession and actual delivery of the chattels. This statute for recording chattel mortgages has not repealed the statute concerning fraudulent conveyances. Continued possession by the mortgagor is the highest presumption of fraudulent intent, which may be rebutted by evidence of good faith.^ § 546. Nebraska Rule. — In a controversy between the mortgagee and creditors of the mortgagor concerning the property mortgaged, found in the possession of the latter, evidence showing that the mortgage was made in good faith, without intent to defraud creditors, is imperatively required to overcome the legal presumption of fraud arising from SucIl possession.* § 547. Minnesota Rule. — The statute requiring the filing of chattel mortgages, when the mortgagor retains possession of the chattels mortgaged, does not make the filing of the mortgage legally equivalent to actual delivery and continued change of possession ; it merely adds another to the grounds on which a mortgage of personal chattels shall be void. This is in accord with the New York rule.* § 548. Prevailing Rule of Registration. — The statutes of the various States authorizing a stipulation in a chattel mort- gage for a retention of possession by the mortgagor, make such retention in compliance with the terms of the mortgage equivalent to a change of possession, and when the mortgage is duly filed or recorded it is not, per se, fraudulent, or even 'Wood V. Lowry, 17 Wend. (N. Y.) 492; Meech v. Patchin, 14 N. Y. 71; Thompson v. Van Veohten, 5 Abb, Pr. 458 ; Smith v. Acker, 23 Wend. (N. Y.) 653; Dutcher w.Swartwood, 15 Hun (N. Y.) 31; Otis v. Sill, 8 Barb. (N. Y.) 102; Gregory v. Thomas, 20 Wend. {N. Y.) 17. "Brunswick v. McOlay, 7 Nebr. 187; Pyle v. Warren, 2 Nebr. 241; Stat, ch. 25, ii 11, 14, 15. " Horton v, Williams, 21 Minn. 187. EXEMPT PKOPERTY BEING SEIZED. 383 prima fade evidence of fraud, as against creditors or subse- quent purchasers.' § 549. Agreements to Defraud. — When agreements are made by the parties to the mortgage to hinder and delay creditors, the law then imputes to such agreements fraudu- lent purposes, and therefore they are held null and void as to the creditors of the mortgagor.^ § 550. Possession of Exempt Property by the Mortgagor. — Though the possession and use of personal property, after a conveyance, constitutes a strong badge of fraud, yet if such property be exempt, from execution, the presumption of fraud is necessarily repelled.^ § 551. Exempt Property Being Seized— What Judgment Creditors May Show in Mitigation of Damages. — ^When it ap- pears that the chattels mortgaged are exempt from sale or execution, judgment creditors, or their representatives, may show as against the mortgagee, in mitigation of damages, that the mortgage was not given to secure any debt, and that nothing is due or to become due thereon. •Frankhouaer v. Ellett, 22 Kans. 127; Robinson v. Elliott, 22 Wall. 513; Guv V. Bidwell, 7 Mich. 521 ; People v. Bristol, 35 Mich. 28 ; Hughes v. Cory, 20 Iowa 399 ; Smith v. McLean, 24 Iowa 322 ; Briggs v. Parkman, 2 Met. (Mass.) 258; Jones v. Huggeford, 3 Met. (Mass.) 515; Googins v. Gilmore, 47 Me. 9; Hunter v. Corbett, 7 Upp. 0. Q. B. 75; Bullock v. Williams, 16 Pick. (Mass.) 33 ; Forbes v. Parker, 16 Pick. (Mass.) 462 ; Shurtleflf v. Willard, 19 Pick. (Mass.) 211; Miller v. Whitson, 40 Mo. 97; Harrington v. Brittan, 23 Wis. 541 ; Call v. Gray, 37 N. H. 428; Golden v. Cockril, 1 Kans. 259. » Eobinson v. Elliott, 22 Wall. (U. S.) 513 ; Collins v. Myers, 16 Ohio 547 ; Freeman v. Eawson, 5 Ohio St. 1; Harman v. Abbey, 7 Ohio St. 218; Gris- wold V. Sheldon, 4 Comst. (N. Y.) 581; Paget v. Perchard, 1 Esp. 205; Wordall v. Smith, 1 Campb. 332; Lang v. Lee, 3 Rand. (Va.) 410 ; Adding- ton v. Etheridge, 12 Gratt. (Va.) 436 ; Wood v. Lowry, 17 Wend. (N. Y.) 492 ; Stoddard v. Butler, 20 Wend. (N. Y.) 507 ; Edgell v. Hart, 13 Barb. (N. Y.) 380; Russell v. Winne, 37 N. Y. 591; Coburn v. Pickering, 3 N. H. 415; Ranlett v. Blodgett, 17 N. H. 298 ; Putnam v. Osgood, 52 N. H. 148 ; Horton V. Williams, 21 Minn. 187 ; Place v. Langworthy, 13 Wis. 629 ; Steinart v. Deuster, 23 Wis. 136 ; Bishop v. Warner, 19 Conn. 460|; Davies v. Ransom, 18 111.396; Barnett V. Fergus, 51 III. 352 ; Walter «. Wimer, 24 Mo. 63 ; Stanley V. Bunce, 27 Mo. 269 ; Armstrong v. Tuttle, 34 Mo. 432 ; Hower v. Geesa- man, 17 Serg. & R. (Pa.) 261. ' Patten v. Smith, 4 Conn. 450 ; Vaughn v. Thompson, 17 111. 78 ; Derby 1). Weyrioh, 8 Nebr. 174 ; Foster v. McGregor, 11 Vt. 595 ; Dundas v. Dutens, 1 Ves. Jr. 196; McCarthy v. Gould, 1 B. & Beat. 390; Nantes v. Corrock, 9 Ves. 182; Rider v. Kidder, 10 Ves. 360; Guy v. Pearkes, 18 Ves. 196; Bond v. Seymour, 2 Pinn. (Wis.) 105; Dreutzer v. Bell, 11 Wis. 114; Carhart v. Harshaw, 45 Wis. 340; Dart v. Woodhouse, 40 Mich. 399; Jewett v. Pink, 47 Wis. 446. 384 FRAUDULENT CONVEYANCES. Nothing is due the mortgagee. There never was any actual liability or obligation on the part of the mortgagor ta pay the debt, or if there ever was, such liability has been extinguished and discharged. The court ^ays, per Cole, J. : " In this action between the plaintiff and the creditor of the mortgagor we can see na legal objection to showing in mitigation of damages that the mortgage debt was extinguished, or did not in fact exist,^ even if the horse, when the levy was made, was exempt by law from sale on execution ; for upon what principle is the plaintiff allowed to recover more damages than he has actu- ally sustained by the levy and sale under the execution ? It being, therefore, competent to show these facts in mitigation of damages, we must assume * * * that no amount was due the plaintiff upon the chattel mortgage set up in the complaint, for principal and interest."^ § 552. Effect of Insecurity Clause. — A clause authorizing the mortgagor to retain possession until the mortgagee deems himself insecure does not render the instrument void, if exe- cuted in good faith and valid in all other respects.'' Nor does a provision in a deed of trust of personal property authorizing a sale of the property mortgaged, within a cer- tain time, at the instance of the grantor, render the deed fraudulent.^ § 553. Waiver of Purchaser's Right to Contest. — The right of a bona fide purchaser of goods to contest the validity of a prior mortgage on the ground of continuance of possession in the mortgagor, is one strictly personal to him. In a suit by the purchaser against the vendor for fraud in concealing the existence of the prior mortgage, the vendor cannot claim that the purchaser might have successfully contended against the mortgagee's demand for the goods. Thus, where one having mortgaged certain goods, afterwards sold them, ' Jewett V. Pink, 47 Wis. 446. ■•' Frost V. Mott, 34 N. Y. 251. 'Sipe V. Earman, 26 Gratt. (Va.) 668; Dubose v. Dubose, 7 Ala. 235. ACTUAL POSSESSION IS NECESSARY, 385 fraudulently concealing the existence of the mortgage, and the purchaser voluntarily surrendered them to the mort- gagee on his demanding the goods, it was held that,' in an action for the fraud, though the purchaser might have suc- cessfully contended against the mortgagee's claim by reason of possession remaining in the mortgagor, yet the omission to do so is no defense.^ A defense against a claim of a mortgagee on the ground of being a bona fide purchaser, is, in all cases, a matter of right, strictly personal to such purchaser, and cannot be thrown upon him by the mortgagor as a matter of obligation. This principle is seen in many cases ; thus, a man inno- cently becomes surety in a usurious obligation, and takes a counter security from his principal ; the surety may waive his defense of usury, pay the debt, and then recover against his principal.^ A defense • under the statute of frauds, on the ground that a collateral contract to pay was by parol, is personal to the guarantor, and he is not bound to avail himself of it as a defense for the benefit of a third person.^ And a man having a lien may waive it, and is not bound to insist upon it for the benefit of the general owner, who has sold the goods to another.* § 554. Actual Possession is Necessary. — Actual possession is necessary. Thus, if the mortgagee leaves the chattels in the possession of the mortgagor as his agent, it is not an actual change of possession within the meaning of the fifth section of the statute of frauds of New York.^ The fact that a party testifies, in a general way, that he took possession or was in possession, will have no weight when the evidence shows precisely what was done.* ' Rust V. Morse, 2 Hill (N. Y.) 655, opinion by Cowen, J. '' Bassett and Prowe's Case, 2 Leon 166 ; Eobinson v. May, Cro. Eliz. 588 ; Button V. Downham, Cro. Eliz. 643. 'Cahill V. Bigelow, 18 Pick. (Mass.) 369. * Barrow v. West, 23 Pick. (Mass,) 270. 'Hanford v. Artcher, 4 Hill (N. Y.) 271. •Steele v. Benham, 84 N. Y. 634. z 386 FKATJDTJLENT CONVEYANCES. ARTICLE IV. — FRAUD IN GENERAL AS APPLICABLE TO CHATTEL MORTGAGES, 555. Statutes Declaratory of the Common Law. 556. Statutes Avoiding Fraudulent Conveyances. 557. Twyne's Case. 558. Fraud May be Proved by Circumstances. 559. Who May Attack. 560. Eights of Creditors at Large. 561. May be Void, Although Pounded on a Valuable Consideration. 562. Fraudulent Intent of the Mortgagor Known to the Mortgagee. 563. Contrary Doctrine. 564. Trying to Protect Property. 565. Two Mortgagees, One of Whom is Innocent. 566. Proof of Fraud. 667. Extrinsic Evidence Necessary. 568. Bes Oestse. 569. Stating the Consideration More than the Debt. 570. The Mortgagee Not Affected by the Acts of the Mortgagor. 571. Rights of Junior Mortgagee. 572. A Void Mortgage Cannot be Made Valid. 673. Mortgages Given Under Duress. 574. Void When Against Public Policy. 575. When Fraudulent in Part. 576.- When Valid in Part and Void in Part. i 577. When Valid in Part— Fraudulent Intent. 578. Independent Valid Transactions. 679. When a Question for the Jury. § 555. Statutes Declaratory of the Common Law. — By the rules of the common law, all conveyances made in fraud of 'Creditors were regarded as voidable at the instance of such creditors.^ The statutes of Elizabeth/ avoiding fraudulent convey- ances, were merely declaratory of the common law.' § 556. Statutes Avoiding Fraudulent Conveyances.^-Stat- utes were passed to formulate and declare the principles of the common law, to repress fraudulent conveyances.* The statute of 13 Eliz. ch. 5, perpetuated by 29 Eliz., 1 Curtis v. Leavitt, 15 N. Y. 124; Clements v. Moore, 6 Wall. (U. S.) 299; Blackman v. Wheaton, 13 Minn. 326 ; Brice v. Myers, 5 Ohio 122 ; Baker v. Humphrey, 101 U. S. 499. » 13 Eliz. ch. 5 (1570). ' Clements v. Moore, 6 Wall. (U. S.) 312 ; Davis v. Turner, 4 Gratt. (Va.) 429. •50 Edw. IIL ch. 6 (1376); 2 Rich. II. Stat. 2, ch. 3 (1379) ; 3 Hen. VII. ch. 4 (1487) ; 13 Eliz. ch. 5 (1570) ; 29 Eliz. oh. 5 (1587). PRATTD MAY BE PROVED BY CIRCUMSTANCES. 387 has been re-enacted or copied in nearly every State of this country, and has been adopted as the basis of jurisprudence upon the subject of fraudulent conveyances. In some of the States this statute has never been enacted, but antedating, as this statute does, the settlement of this country, and being mainly, if not wholly, declaratory of the common law, which sets a face of flint against frauds in every shape, it consti- tutes the basis of American jurisprudence on these subjects, and is, when not specially enacted, a part of the unwritten law.^ By the provisions of this statute all conveyances and dis- positions of property, real and personal, made with intent to defraud creditors, are null and void as against creditors.* § 557. Twyne's Case.* — This is a celebrated case, and has a deep hold in our law. The facts of this case are these : A party owed two others, one of whom brought an action against him to collect his indebtedness. Pending the writ the debtor made a secret conveyance of all his goods and chattels to the other creditor in satisfaction of that debt, but continued in possession, and sold some of the sheep and set his mark upon others, and it was decided to be fraudulent within the act of 13 Eliz. ch. 5, (1) because the gift was gen- eral ; (2) the donor continued in possession and used the property as his own ; (3) it was made in secret ; (4) it was made pending the writ, and was not within the proviso, for though it was made on a good consideration, yet it was not bona fide. But yet the donor continuing in possession is not in all cases a mark of fraud, as where a donee lends his donor money to buy goods, and at the same time takes a bill of sale of them for securing the money.* § 558. Fraud May Be Proved By Circumstances. — Many circumstances are valuable as evidence of fraud, but these ' Story's Eq. g 553 ; (Sardner v. Cole, 21 Iowa 209. 'Drake v. Rice, 130 Mass. 410; Roberts' Fraud. Conv. 554; Wait's Fraud. Conv. 19. •3 Rep. 80; 1 Smith's L. Cas. 1. *Buller's Nisi Prius, p. 258. 388' FRAUDULENT CONVEYANCES. circumstances cannot supply the place of finding of the fact that fraud exists. It is not enough to justify a judgment in favor of one who attacks a chattel mortgage, on the ground of fraud, that some of the circumstances recited in the special finding be deemed evidence of fraud, for there is an essential difference between material facts that fraud exists and circumstances which tend to prove it.^ When the circumstances are so strong as to produce con- viction of the truth of the charge of fraud, although there may remain some doubt, it will be considered sufficient, A jury may properly consider the circumstances that a mort- gagee took his mortgage for a larger sum than was actually due him, and knew at the time that the mortgagor was in- solvent at the time of the execution of the instrument, and had obtained the goods on credit." The rule that fraud must be proved and not inferred does not mean that fraud can be proved only by positiye evidence, but that it cannot be established by circumstances that merely raise a suspicion.' § 659. Who May Attack. — Where a mortgage is executed to another, a third party not being a subsequent purchaser from the mortgagee of the mortgagor, nor a creditor of the mortgagor who has laid hold of the mortgaged property by legal process, is not in position to object to the validity of the mortgage.* Whether or not the mortgagor of chat- tels, in trespass against him by the mortgagee for wrongfully taking and conversion of the property, could show in miti- gation of damages that the mortgage was given and taken with intent to defraud creditors, it is certain that that de- fense may be made by judgment creditors or personal repre- sentatives of them.* Creditors of the mortgagor and subse- ' Jarvia v. Banta, 83 Ind. 528 ; Louthain v. Miller, 85 Ind. 161 ; Elston v. Caster, 101 Ind. 426 ; Taylor v. Duesterberg, 109 Ind. 165. ' Strauss v. Kranert, 56 111. 254. 'Bryant v. Simoneau, 51 111. 824; Sparks v. Mack, 31 Ark. 666; Bullock V. Narrott, 49 111. 62; Rothgarber v. Gough, 52 111. 436. 'Ellingboe v. Brakken,'86 Minn. 166 ; Tolbert v. Horton, 31 Minn. 518. ' Jewett V. Fink, 47 Wis. 446. FRAUDULENT INTENT OF THE MORTGAGOK. 389 quent purchasers in good faith can alone assail a chattel mortgage under which the mortgagor retains possession.^ § 560. Right of Creditors at Large. — A mortgage is invalid as against creditors if made with intent to hinder, delay or defraud them, or if not put on file when the goods remain in the mortgagor's possession. It applies to those who become creditors during the interval while the mortgage is not on file, not merely to those who have obtained judgment or levied attachments before filing. But a chattel mortgage cannot be questioned by a creditor at large, except by some process against the property, as of garnishee process. The law being that those who become creditors whilst the mort- gage is not filed are protected, and not merely those who obtain judgments or levy attachments before the filing. Still, no one as creditor at large can question the mortgage. He can only do that by means of some process or proceeding against the property. A garnishee process is such proceed- ing.'' § 561. May be Void, Although Founded on a Valuable Con- sideration. — A sale or mortgage, although upon a valuable and sufficient consideration, may be not only constructively but actually fraudulent as against creditors of the vendor or mortgagor, notwithstanding it was, as between the parties to it, a valid security for money borrowed.^ § 562. Fraudulent Intent of the Mortgagor Known to the Mortgagee. — Where it is the intention of a debtor in giving a mortgage to put his property in such a position as to de- fraud, hinder or delay his creditors, and this intention was known to the mortgagee, some courts hold that the mort- gagee is, in law, charged with a participation in the fraud, although he may pay a valuable consideration, and take im- ' Pyle V. Warren, 2 Nebr. 241 ; Wagner v. Jones, 7 Daly (N. Y.) 375 ; Frost V. Mott, 34 N. Y. 253 ; Rinchey v. Stryker, 26 How. Pr. (N. Y.) 75. ' Peary v. Oumminga, 41 Mich. 376 ; People's Sav. Bank v. Bates, 120 U. S. ■556 ; Thompson v. Van Vechten, 27 N. Y. 568. 'Braley v. Byrnes, 20 Minn. 435; Twyne's Case, 3 Kep. 80; 1 Smith's lead. Cas. 35; Bridge v. Eggleston, 14 Mass. 245; Robinson v. Holt, 39 N. H. 557. 390 FEAXTDULENT CONVEYANCES. mediate and open possession. When the mortgagee takes the mortgage with such knowledge of fraud on the part of the mortgagor, the transaction cannot be said to be bona fide, however full and valuable the consideration may be.^ § 563. Contrary Doctrine. — On the contrary, it is held that fraud on the part of the mortgagor does not affect the mort- gagee unless he is a party to such fraud, and receives the mortgage with the intent to hinder, delay or defraud the creditors of the mortgagor;^ that both parties must partici- pate in the fraud to make the mortgage void as to creditors f that where a debt is secured by a mortgage, the intent of the mortgagor being to prevent the property from being attached by other creditors, will not vitiate the mortgage, unless the mortgagee participates in the fraud.* One line of authorities holds that conveyances made by a grantor in fraud of his creditors are valid unless it be shown that the purchaser is not a purchaser for value, and in good faith. Another line of authorities states the effect of the statute to be that conveyances, fraudulent on the part of the grantor, are invalid at the suit of his creditors, unless it be shown that the purchaser is a purchaser for value, and in good faith. The authorities are uniform in declaring that one who attacks a conveyance as fraudulently made must establish the fraud ; he has the burden of proof. But there is a conflict when the question arises whether the creditor, by proof of the fraud of the grantor, has made a prima facie case against the grantee, entitling him to recover, in the ab- sence of any evidence by his adversary. The rule adopted •Kobinson v. Holt, 39 N. H. 557; Twyne's Case, 3 Rep. 80; 1 Smith's Lead. Cas. 35 ; Blodgett v. Webster, 24 N. H. 91 ; Kimball v. Thompson, 4 Cush. (Mass.) 441; Bridge v. Eggleston, 14 Mass. 245. » Cornish v. Dews, 18 Ark. 172 ; Price v. Masterson, 35 Ala. 483 ; Fifield v. Gaston, 12 Iowa 218; Smith v. Post, 1 Hun (N. Y.) 516; Prior v. White, 12 111. 261 ; Hessing v. McCloskey, 37 111. 341; Miner v. Phillips, 42 111. 123; Myers v. Kinzie, 26 111. 36 ; Rust v. Mansfield, 25 111. 338. "Meixsell v. Williamson, 35 111. 529; Herkelrath v. Stookey, 63 111. 486. * McLarren v. Thompson, 40 Me. 284. See, also. Eureka I. & S. Works v. Bresnahan, 66 Mich. 489. CONTRARY DOCTEINE. 391 in Massachusetts,' New Jersey," lowa,^ Wisconsin,* Conneeti- eut* and Maryland* is that the creiditor must not only show fraud on the part of the grantor, but participation in or notice of it by the grantee. But other authorities hold that where the fraud of the grantor is established a prima facie case is made by the creditor, which must be met by the pur- chaser by evidence that he is a purchaser in good faith and for value.'' Judge Cooper says : " We concur in the views announced by those courts which hold that proof of fraud on' the part of the grantor is sufficient to entitle his creditors to subject the property fraudulently assigned, in the absence of evi- dence showing the claimant to be a purchaser for value and in good faith. We fail to perceive why, in cases of this character, the party assailing the conveyance shall be re- quired to assume the burden of showing participation in the fraud by the purchaser, and the non-payment of value for the property fraudulently conveyed." * The .authorities holding that it is the duty of the creditor to establish the fraud of both grantor and grantee, rest upon the rule that fraud is never to be presumed, but must always be proved by the party alleging it. But it is not true that, where a transaction has been shown to be fraudu- lent on the part of one of the parties to a transfer, it is v in- cumbent on the party claiming or defending against it to show the fraud of the other party claiming under it. Good faith and legality are presumed to exist in reference to the 'Bridge v. Eggleston, 14 Mass. 245 ; Foster v. Hall, 12 Pick. (Mass.) 89. ' Insurance Co. v. looker, 35 N. J. Eq. 408 ; Tantum v. Green, 21 N. J. Eq. 364 ; Bank v. Northrup, 22 N. J. Eq. 58. 'Adams v. Foley, 4 Iowa 44; Fifield v. Gaston, 12 Iowa 218. •Mehlhop V. Pettibone, 54 Wis. 652. 'Partelo v. Harris, 26 Conn. 480. « Cpoke V. Cooke, 43 Md. 524. ' Rogers v. Hall, 4 Watts (Pa.) 359 ; Clark v. Depew, 25 Pa. St. 509 ; Lloyd V. Lynch, 28 Pa. St. 419; Starin v. Kelly, 88 N. Y. 418; Hamilton v. Black- well, 60 Ala. 545 ; Gordon v. Tweedy, 71 Ala. 202 ; Brown v Hedge, 64 Tex. 396; Miller v. Fraley, 21 Ark. 22; FuUenwider v. Roberts, 4 Dev. & B. (N. Car.) 278; Worthy i;..Caddell, 76 N. Car. 82. ' Richards v. Vaccaro, 67 Miss. 516. 392 FKAXTDULENT CONVEYANCES. ordinary business transactions of life, and the burden is upon him who asserts the contrary; it is otherwise when the transaction is itself unfair, or is shown to be, prima facie, illegal.^ Proof that the purchaser bought for value, the price being adequate, is generally held, in the absence of other evidence showing notice of the fraud, to raise the presumption of good faith.^ In suits by one whose property has been secured by the fraud of the vendee, to recover from another claiming under the fraudulent vendee, it has been uniformly held that proof of the fraud of the first vendee of the property imposes upon the party claiming under him the burden of showing he is a purchaser for value and in good faith.* § 564. Trying to Protect Property. — When it is shown that the parties to a mortgage executed and received the same for the purpose of placing the mortgaged property beyond the reach of certain creditors of the mortgagor, and the debt for which the mortgage was given was already amply secured by a mortgage on real estate, and the mortgagor did not sur- render possession, it is a strong case of fraud.* § 565. Two Mortgagees, One of Whom Is Innocent. — When a mortgage is made to two persons, to secure separate debts, the knowledge of a fraudulent intent of one of them will not affect the rights of the other. The mortgage will be void as to one and good as to the other.^ So, when the grantor, with fraudulent intent, makes a trust deed of personalty, some of the beneficiaries knowing of the grantor's fraud and others being innocent, such deed 'Whar. Ev. §§ 366, 1248; Biglow on Frauds, 130, 132. ^Starin v. Kelly, 88 N. Y. 418; Shores v. Doherty, 65 Wis. 153; Spira v. Hornthall, 77 Ala. 137. 'Bailey v. Bid well, 13 Mees. & W. 73; Fitch v. Jones, 32 Eng. L. & Eq. 134; Paton v. Coit. 5 Mich. 505; Clark v. Pease, 41 N. H. 414; Spira v. Hornthall, 77 Ala. 137; Easter v. Allen, 8 Allen (Mass.) 7; Morgan v. Morse, 13 Gray 150; Haskins v. Warren, 115 Mass. 514. ' Crapster v. Williams, 21 Kans. 109. See, also, Strohm v. Hayes, 70 III. 41 ; Phillips V. Reitz, 16 Kans. 396 ; Herkelrath v. Stookey, 63 111. 486. 'Smith V. Post, 1 Hun (N. Y.) 516. RES GEST^. 393 is invalid as to those participating in the wrong and valid as to those that are innocent.^ § 566. Proof of Fraud. — Facts and circumstances indi- cating, on the part of the parties to a mortgage,, that they intend to place the mortgaged property beyond the reach of legal process, and thereby delay, if not to defeat creditors, constitute fraud, which may overcome the denial of the mortgagee of the fraudulent motive on his part.^ § 567. Extrinsic Evidence Necessary. — If there is any in- tent, in giving the mortgage, to hinder, delay or defraud creditors, it must be established by extrinsic evidence. The intent is not to be inferred by the coilrt, but becomes a ques- tion of fact to be proved.* § 568. Res Gestae. — Declarations of the mortgagor while in possession are admissible upon the question of intent, as part of the res gestce} But where the mortgagor remains in possession, vending and applying such property to his own use, it is improper to admit in evidence the declarations of the mortgagor to defeat the rights acquired by the mortgagee in the property.^ So, also, in a trustee process, in which the trustae answers that he has no goods, effects or credits of the defendant in his hands, and that he has a mortgage from the principal defendant of some of the property attached in the action, evidence of the mortgagor's declarations subsequent to the mortgage is not admissible to defeat the title of the mortgagee.' ^Troustine v. Lask, 4 Baxt. (Tenn.) 162. • Wheeldon v. Wilson, 44 Me. 1. 'Horton v. VST^illiams, 21 Minn. 187; Ewing v. Gray, 12 Ind. 64; Maples i). Burnside, 22 Ind. 139; Allen v. Wheeler, 4 Gray (Mass.) 123; Banfield v. Whipple, 14 Allen (Mass.) 13 ; Green v. T?anner, 8 Met. (Mass.) 411 ; Bagg V. Jerome, 7 Mich. 145; Kleine v. Katezenberger, 20 Ohio St. 110; Ford v. Williams, 24 N. Y. 359; Miller v. Lockwood, 32 N. Y. 293. 'City Bank v. Westbury, 16 Hun (N. Y.) 458; Newlin v. Lyon, 49 N. Y. 661. * Donaldson v. Johnson, 2 Chand. (Wis.) 160. See, also, Bentley v. Wells, 61 111. 59 ; Herkelrath v. Stoakey, 63 111. 486; Brown v. Riley, 22 111. 46 ; Bell V. Prewitt, 62 111. 361 ; Prior v. White, 12 111. 261 ; Wheeler v. McCor- risten, 24 111. 40; Meixell v. Williamson, 35 111. 529. 'Perkins v. Barnes, 118 Mass. 484. See, also, Winchester v. Charter, 97 Mass. 140 ; Hempstead v. Johnston, 18 Ark. 123 ; Cornish v. Dews, 18 Ark. 394 FEATJDULENT CONVEYANCES. § 569. Stating the Consideration More Than the Debt. — The fact that a chattel mortgage is given for a sum slightly in excess of the real debt, is nol! sufficient to stamp it with fraud, in the absence of a fraudulent intent on the part of the mortgagee.^ It is not rendered void by the mere fact that the mortgage is given for a larger sum than is due." But when the value of the property is more than double the amount of the debt secured, or greatly in excess of it, it is, to say the least, a badge of fraud.^ When the consideration is specified, but the mortgagee claims that the mortgage was for a larger amount, the mort- gage is valid as to the mortgagor's creditors only for the sum stated in the instrument. As between the parties, such a mortgage might be con- strued as security for the entire debt.* § 570. The Mortgagee Not Affected By the Acts of the Mortgagor. — It has been held that the mortgagee is not affected by the acts of the mortgagor, even though the latter is the agent of the former. So, when the mortgagee gives the mortgagor the mortgage, to have it filed, who requested the clerk to suppress it by hiding it at the bottom ^ the pile, which was done, this was not the act of the principal and could not avoid the mortgage as to third parties.^ But if the mortgage had not been put on file the mortgage would have been invalid.* 172; Merrill v. Dawson, Hemp. C. 0. 563. The mortgagor's declarations are admissible, made at the time of the execution of the mortgage. Bushnell V. Wood, 85 111. 88 ; Potter v. McDowell, 31 Mo. 62. The burden of proof is upon him who alleges it. Washington v. Ryan, 5 Baxt. (Tenn.) 622. ' Van Patten v. Thompson, 73 Iowa 103; Frost v. Warren, 42 N. Y. 204; Weeden v. Haws, 10 Conn. 50; Willison v. Desenberg, 41 Mich. 156; TuUy V. Harloe, 35 Cal. 302 ; Butts v. Peacock, 23 Wis. 359 ; Blakeslee v. Rossman, 43 Wis. 116. ' Hoey V. Pierron, 67 Wis. 262. 'Wright V. Hencook, 3 Munf. (Va.) 521 ; Mitchell v. Beal, 8 Yerg. (Tenn.) 134; Anderson v. Hunn, 5 Hun (N. Y.) 79; Bennett v. Union Bank, 5 Humph. (Tenn.) 612; Bailey v. Burton, 8 Wend. (N. Y.) 339; Hawkins v. Alston, 4 Ired. Eq. (N. Car.) 137. * Mueller v. Provo (Mich.), 45 N. W. Rep. 498. ^ Case V. Jewett, 13 Wis. 498. « Low V. Pettengill, 12 N. H. 337. A VOID MOKTGAGE CANNOT BE MADE VALID. 395 § 571. Rights of Junior Mortgagee. — A junior mortgagee, in order to defeat a prior mortgage for fraud, must show by evidence dehors that the instrument itself is void.^ So, when he proves that a prior mortgage of the same property was fraudulent as to creditors, he is entitled to a judgment set- ting it aside.^ And a purchaser under a junior mortgage Bale may impeach the validity of the prior mortgage.^ But a junior mortgagee, as a simple creditor of the mort- gagor, not having by legal process acquired a lien upon or property in the mortgaged chattels, and not seeking relief in aid of any legal process against the property, cannot attack the prior mortgage for fraud, nor is his right as a creditor to assail the prior mortgage for fraud strengthened by the fact that he is a subsequent mortgagee.* The fact that the junior mortgagee is a ereditor gives him no property in nor lien upon the goods of his debtor. Only by legal process can he as a creditor appropriate the prop- erty to himself, or subject it to be applied to the satisfaction of his demand. Neither does an assumed conveyance of property by the debtor, whether made for the purpose of se- curity or of payment, place the junior mortgagee in a posi- tion to avail himself of the right as a creditor to assail the prior conveyance as being made in fraud of creditors; and thus defeat the title of the prior mortgagee.^ § 572. A Void Mortgage Cannot be Made Valid. — No valid use can be made of a void chattel mortgage. It may hold the parties»to it, but as to third persons it cannot be made effective.* 'Baskins v. Shannon, 3 N. Y. 310; Wray v. Freddirke, 43 N. Y. Superior Ct. 335. ' Anderson v. Hunn, 5 Hun (N. Y. ) 79. 'White V. Graves, 68 Mo. 218. 'Masseyi). Gorton, 12 Minn. 145; Southard ti. Banner, 72 N. Y. 421 ; Jones V. Graham, 77 N. Y. 628. 'Stone V. Vanheythuysen, 11 Hare 126; Liggat v. Morgan, 2 Leigh (Va.) 84 ; Fox V. Willis, 1 Mich . 321 ; Grimsley v. Hooker, 3 Jones Eq. (N. Car.) 4. "Mittnacht v. Kelly, 3 Keyes (N. Y.) 407; Harvey v. Crane, 2 Biss! C. C. 496; Smith v. Ely, 10 Bank. Reg. 260; Bank v. Hunt, 11 Wall. (U. S.) 391; Grover v. Wakeman, 11 Wend. (N. Y.) 187 ; Putnam v. Osgood, 52 N. H. 396 PEAUDtTLENT CONVEYANCES. To render a mortgage valid it must be given in good faith for an honest purpose, to secure a debt, and without any in- tent to hinder or defraud creditors. This cannot be true when the object in part, or as part of the property, is to de- fraud creditors. This unlawful design vitiates the entire instrument. The unlawful design of the parties cannot be confined to one particular parcel of the property. Entire honesty and good faith are necessary to render it valid, and whenever it indisputably appears that one object is to de- fraud creditors, the entire instrument is, in law, void. It is not analogous to a class of cases which have held that a part of the instrument is valid and not dependent upon other parts which are invalid, and inay be enforced. The fraudulent intent makes the instrument wholly void, notwithstanding it may include property as to which it would be valid if it could be regarded as a mortgage of that only.^ So, where a mortgage of personal property, which as to some portions of the debt thereby secured is in contraven- tion of the insolvent laws, it is wholly void.^ § 573. Mortgages Given Under Duress. — Mortgages given under duress are void. Thus, a creditor fraudulently ob- tained possessioti of his debtor's chattels, and, refusing to surrender possession, compelled the owner to execute a note and then a chattel mortgage to secure the note. This action was illegal, and the instruments wholly void.' § 574. Void When Against Public Policy. — When a mort- gage is given which is in contravention of the public good and against public policy, it is void. Thus, by threats of arrest, a party was induced to give a chattel mortgage. It was decided that the instrument was void, not only because 148; Coolidge v. Melvin, 42 N. H. 510; Catlin v. Currier, 1 Saw. 0. C. 7; Place V. Langworthy, 13 Wis. 629. 'Russell V. Winne, 37 N. Y. 591 ; Burke v. Murphy, 27 Miss. 167. ''Danny v. Dana, 2 Gush. (Mass.) 160. See Sections 575, 576. 'Lightfoot V. Wallis, 12 Bush (Ky.) 498. See, also, Spaids v. Barrett, 11 Am. Kep. 10. WHEN VALID IN PAET AND VOID IN PART. 397 given under duress, but also because it is against public policy to permit such an abuse of process.^ § 575. When Fraudulent In Part. — A trust deed of chattels, colorable and fraudulent as to part, is fraudulent and void as to the whole of the articles of property contained in it.'' Or, if the intent of both parties be to delay, hinder or defraud the mortgagor's creditors, it is void and cannot be effective to secure an actual debt as part of the consideration.^ When a mortgage is good in part and bad in part as against a pro- vision of the statute, it is void in toto, and no interest passes to the grantee under the part which is good.* § 576. When Valid In Part and Void In Part. — Whether a mortgage can be valid in part and void in part is a question not uniformly decided by the courts. But where there is no fraudulent intent connected with the transaction, either in law or in fact, it would seem that such a mortgage would be upheld. Thus, a chattel mortgage, otherwise valid as to part of the property described in it, is not rendered void as to such property by reason of its professing to mortgage other property, as to which it is inoperative. Accordingly, a mortgage of all the goods of a special description then in a store, or thereafter to be brought there, though void as to the latter, in New York, may be good as to the rest.^ The court says that the mortgage was not fraudulent upon its face ; that it was of all the property of a particular descrip- tion in a certain store, and that was sufficiently definite as to the property on hand. So far as it professed to convey property which the mortgagor afterwards purchased and put into the store, it was inoperative. But the circumstance that the mortgagor attempted to mortgage property which he did 'Bane v. Detrick, 52 111. 19. ''Summerville v. Horton, 4 Yerg. (Tenn.) 541; Olaflin v. Foley, 22 W. Va. 484. ' Weeden v. Hawes, 10 Conn. 50; Beall v. Williamson, 14 Ala. 55. 'Campbell v. Clarke, 14 Johns. (N. Y.) 458; Mackie v. Cairns, 5 Cow. (N. Y.) 547. A mortgage of personal property, which, as to some portions of the chat- tels thereby secured, is in contravention of the insolvent laws, is wholly void as to all. Denny v. Dana, 2 Cush. (Mass.) 160. 398 FKATJDDLENT CONVEYANCES. ' not possess, did not render invalid the conveyance of that which he owned and was entitled to mortgage/ So, a mortgage covering the fixtures and furniture of a drug store, and also the stock of drugs, will not be held void as to the fixtures and furniture, because, as to the stock of drugs, it is invalidated by the fact that the mortgagor, with the consent of the mortgagee, remained in possession and continued his usual business of selling the drugs.^ § 577. When Valid In Part — Fraudulent Intent. — But when fraudulent intent enters into the transaction and is confined to part only of the property mortgaged, it makes the mort- gage void as to all. This fraudulent intent as to part vitiates the entire instrument, even when it describes property which would make it valid if taken alone, and which is mortgaged to secure a bona fide debt. If the deed of trust of personal property is, because of its provisions, in respect of the goods and the credits, void, it is void as to every other kind of property embraced in it.' If a mortgage is made without a fraudulent intent, and the mortgagee subsequently consented to a sale of all or a part of the mortgaged property, such a sale would discharge the lien of the mortgage on the articles sold, but would not operate respectively so as to avoid the mortgage itself.* The weight of authority is, that a conveyanlte, in the absence of actual fraud, is bad to the extent only of the property out of which a trust is created to the nse of the grantor ; and the creditors have nothing to complain of with respect to the disposition of the remainder, since it does not ' Gardner v. McEwen, 19 N. Y. 123, per Denio, J. ; Van Heusen v. Rad- cliff, 17 N. Y. 580. 'Donnell v. Byern, 69 Mo. 468, per Norton, J. See, also, Weeden v. Hawes, 10 Conn. 50; Langdon v. Phelps, 52 How. Pr. (N. Y.) 387; In re Kahley, 2 Biss. C. 0. 383 ; Barnet v. Fergus, 51 111. 352 ; In re Kirkbride, 5 Dill. C. C. 116; State v. Tasker, 31 Mo. 445; Voorhis v. Langsdorf, 31 Mo. 451. 'Harman v. Hoskins, 56 Miss. 142; Eussell v. Winne, 37 N. Y. 591; Goodrich v. Downs, 6 Hill (N. Y.) 438; Goodhue v. Berrien, 2 Sand. Oh. (N. Y.) 630; Jackson v. Packard, 6 Wend. (N. Y.) 415. *Horton v. Williams, 21 Minn. 187; Eussell v. Winne, 37 N. Y. 591; Klapp V. Shirk, 13 Pa. St. 589. WHEN A QUESTION FOK THE JUEY. 399 hinder, delay or defeat them in any legal sense, unless that disposition was in the effectuation of an actual or necessarily imputed fraudulent intent which taints the whole transaction with actual fraud. So, it is held that, in the absence of an actual intent by, a chattel mortgagee to assist the mortgagor in defrauding his creditors, the mortgage covering a stock of goods and fixtures, though constructively void as to the stock, by reason of the mortgagor's right to continue in pos- session and sell the goods, is valid as to the fixtures, to which the power of sale does not apply.* § 578. Independent Valid Tra^nsactions. — Selling or taking possession of the property under an'd by virtue of a fraudu- lent mortgage cannot of necessity make it valid. The title remains fraudulent and voidable still as against creditors.^ The mortgagee's possession under the mortgage is as good or as bad as the mortgage itself, and the court cannot trans- mute a void mortgage into a valid pledge.^ But if the mort- gagee repudiates the instrument and obtains a pledge of the property, accompanied by delivery and open change of pos- session, and by a distinct agreement subsequent to and inde- pendent of the mortgage, his rights will be protected as against the other creditors.* § 679. When a Question for the Jury. — When a mortgage is colorable and the transaction is equivocal, and there is confiicting evidence as to the good faith of the parties, or its validity rests upon extrinsic facts, then its validity must be a question for the jury.^ 1 Hayes v. Westoott (Ala.), 8 South. Eep. 337. ' Smith V. Ely, 10 Bank. Keg. 563. 'Blakeslee v. Eoasman, 43 Wis. 116. See, also, In re Forbes, 5 Bias. C. C. 610; Eobinson v. Elliott, 22 Wall. (U. S.) 513 ; Stimson v. Wrigley, 86 N. Y. 332; Janvrin v. Fogg, 49 N. H. 340. But see Baldwin v. Flash, 59 Miss. 66. *Pettee v. Dustin, 58 N. H. 309; First Nat. Bank v. Anderson, 24 Minn. 435; Baldwin v. Flash, 58 Miss. 593 ; Brown v. Piatt, 8 Bosw. (N. Y.) 324. " Weaver v. Reilly, 10 N. Y. Week. Dig. 241. 400 FRAUDULENT CONVEYANCES. ARTICLE V. — FRAUDULENT CONVEYANCES UNDER THE ASSIGNMENT AND INSOLVENT LAWS. 580. Assignments in the Nature of Mortgages. 581. When the Statute of Frauds Does Not Apply. 582. The Trustee May Conduct the Business. 583. The Mortgagee May Complete the Manufacture of Unfinished Goods. 584. Mortgagor Using the Property as His Own. 585. Preferences — Fraudulent Intent. 586. In Nebraska. 587. In Kansas 588. In South Carolina. 589. In Alabama. 590. In Missouri. 591. The Mortgage May Secure More Creditors Than the Mortgagee. 592. The Assignee Cannot Divest the Lien of a Chattel Mortgage. 593. Preferences — General Rule. 594. Eights of Creditors as to an Unfiled Chattel Mortgage. 595. Fraudulent Assignment — Question for the Jury. 596. Who May Assail. 597. A Valid Assignment — Void Chattel Mortgage Cannot be Attacked. 598. Attaching Creditors. 599. Mortgage Given on Same Day of Judgment, Not a Badge of Fraud. 600. In Bankruptcy — Exchanging Security. 601. Under the Bankrupt Law. 602. Assignees Could Bring Action in State Courts. § 580. Assignments in the Nature of Mortgages. — An assignment by a debtor of his personal property, with the reservation to himself of any surplus, may be, in its effect, a chattel mortgage.^ The reservation of the surplus is no evidence of a fraudu- lent intent.^ But if such assignment contains a reservation that the property shall be used for the benefit of the debtor, and not for the benefit of his creditors, it is fraudulent pet se, and absolutely void.* § 581. When the Statute of Frauds Does Not Apply. — A mortgage upon goods and chattels designed to give a lien upon the same as security for the payment of a debt, although it necessarily creates a trust as to the surplus, yet the trust is not the object of the assignment, nor is it such a • Winner v. Hoyt, 66 Wis. 227. ^McClelland v. Eemsen, 36 Barb. (N. Y.) 622. "Owen V. Arvis, 26 N. J. L. 22; Nat. Bank v. Sprague, 21 N. J. Eq. 530: Sheldon v. Dodge, 4 Denio (N. Y.) 217. THE TEUSTEE MAY CONDUCT THE BUSINESS. 401 trust as renders the conveyance void as against creditors of the vendor. The statute of frauds does not apply to mort- gages, whether they contain the usual defeasance upon their face and thus create an open trust, or exist in the form of an absolute conveyance with the understanding that they are intended as mortgages, and thus create a secret trust.^ The statute does not prohibit the making of chattel mort- gages, nor make such mortgages void, because the mortgagee stipulates to do what the law requires him to do, that is, to ' restore the surplus after sale of as much as shall be sufficient to discharge the debt.^ The trust as to the surplus results from the nature of the security, and is not the object, or one of the objects, of the assignment. Whether expressed in the instrument or left to implication is immaterial. The assignee does not acquire the entire legal and equitable interest in the property con- veyed subject to the trust, but a specific lien on it. The residue interest of the assignor may, according to, its nature, be reached by the creditors of the assignor. The State stat- ute does not apply to cases in which conveyances are made primarily and principally for the use of the grantee, and where the reservation to the grantor is merely incidental and partial.* § 582. The Trustee May Conduct the Business. — A provi- sion in a trust deed of personal property that the trustee may continue the business and replenish the stock, if in- tended merely as a means of enforcing the security, and with a view of winding up the business, does not necessarily make the deed fraudulent, and is only prima facie fraud, the good faith of the transaction to be passed upon by the jury.* Nor ' Godchaux v. Mulford, 26 Cal. 316. ^ Margentham v. Harris, 12 Cal. 245 ; Abercrombie v. Bradford, 16 Ala. 565; Neally v. Ambrose, 21 Pick. (Mass.) 185; Stevens v. Bell, 6 Mass. 342- Halsey v. Whitney, 4 Mas. C. C. 222; Leith v. HoUester, 4 Comst. (N. Y.) 214. ' Camp V. Thompson, 25 Minn. 175. * Marks v. Hill, 15 Gratt. (Va.) 400; Woodward v. Marshall, 22 Pick. (Mass.) 468; Dunham v. Waterman, 3 Duer (N. Y.) 166. 2a 402 PEAUDULENT CONVEYANCES, will the deed be fraudulent if it provides that the grantor may conduct the business under the supervision of the trus- tee, who may at any time sell the trust property/ § 583. The Mortgagee May Complete the Manufacture of the Unfinished Goods. — Where the mortgagee undertakes to complete the manufacture of unfinished goods and prepare them for sale, such condition is not inconsistent with his rights and duties as mortgagee, and consequently such action does not render the transfer void.^ § 584. Mortgagor Using the Mortgaged Property as His Own. — A chattel mortgage given to secure a debt, and also to cover other property which is used by the mortgagor a« his own, and for his own benefit, is fraudulent against cred- itors, and the instrument is void.^ § 585. Preferences — ^Fraudulent Intent. — In Indiana a debtor may, in good faith, prefer creditors by executing a mortgage to them ; thus, a mortgage executed five days prior to a deed of assignment is valid, unless it is shown to have been fraudulently executed.* In Wisconsin chattel mortgages and assignments of ac- counts, transferring the entire property of the insolvent debtor to certain creditors with the intent that one of such creditors for himself, and as agent and trustee for the others, shall take immediate possession and convert such property into money and divide the same^ro rata among the favored creditors, are held to have been in effect a general assign- ment with preferences, and void as to the other creditors not included.^ In Michigan an honest mortgage is not affected by a prox- > Marks v. Hill, 15 Gratt. (Va.) 400; Kendall v. N. E. Carpet Co., 13 Conn. 383; De Forest v. Bacon, 2 Conn. 633. ' Smith V. Beattie, 31 N. Y. 542. ' In re Burrows, 7 Biss. C. C. 526. See,- also. Potts v. Hart, 99 N. Y. 168 Smith V. Cooper, 27 Hun (N. Y) 565 ; Southard v. Benner, 72 N. Y. 429 Brackett v. Harvey, 91 N. Y. 214; Delaware v. Ensign, 21 Barb. (N. Y.) 85 Homer v. Jones, 7 Daly (N. Y.) 375. • Stix V. Sadler, 109 Ind. 254. <> Winner v. Hoyt, 66 Wis. 227 ; Willis v. Bremner, 60 Wis. 622; Vernon v. Upson, 60 Wis. 418. See, also, Gere v. Murray, 6 Minn. 305. IN SOUTH CAEOLINA. 403 imity of an assignment made shortly after the execution of the mortgage.^ § 586. In Nebraska. — In this State a debtor has the right to secure a part of his creditors in preference to others by a conveyance or mortgage of property. The fact of such preference will not of itself render the conveyance or mort- gage fraudulent as to other creditors.^ Thus, a debtor executes a chattel mortgage to secure the payment of a bona fide pre-existing debt, and soon thereafter executes a general assignment of his property for the benefit of his creditors ; then the assignment was abandoned by the assignee and all parties interested, and the mortgagee took possession of the property. This mortgage was upheld even though it was executed on the same day and near the same time at which the assignment was executed.* § 587. In Kansas the fact that, pending the contemplated assignment for the benefit of creditors, a mortgage was given in good faith by the debtor to one of his creditors to secure , a pre-existing debt, which mortgage had long previously been promised by the debtor to such mortgagee, does not show that th^ deed of assignment subsequently executed was intended to hinder, delay and defraud creditors, nor does it render such assignment void.* Two chattel mortgages bona fide executed by an insolvent debtor for the benefit of creditors were followed the next day by a general assignment for the benefit of creditors. This was decided not to be a single transaction, and that both the mortgages and assignment were vajid." § 588. In South Carolina there is a statute^ against prefer- ences, and they cannot be made to a mortgagee. Thus, a 1 Root V. Harl, 62 Mioh. 420 ; Root v. Potter, 59 Mich. 566. See, also, Far- well V. Myers, 59 Mich. 179 ; Ohipman v. Kellogg, 60 Mich. 439 ; Angell v. Packard, 61 Mich. 564. ' Grimes v. Farrington, 19 Nebr. 44. ' Bierbower v. Polk, 17 Nebr. 268. *Dodd V. Hills, 21 Kans. 707. ^Bailey v. Kansas Manuf. Co., 32 Kans. 73. ^Statutes of 1882, §2014. 404 FBAUDULENT CONVEYANCES. debtor, while in New York, executed a mortgage on his stock of goods in South Carolina to his wife for money ad- vanced by her ; two days thereafter he executed two other mortgages to his former partner to secure demand notes which were substituted for other notes, a large part of which was then due. The parties then returned to South Carolina, and in a few days the mortgagor surrendered his goods to an agent of the mortgagees and left the State. This action was held to amount to a general assignment with preferences, and was therefore null and void,^ Where an insolvent debtor transfers all his property to one creditor by chattel mortgage, and later by bill of sale and deed for the benefit of such creditor and another, to the exclusion of all others, it is no violation of the statute for- bidding preferences." § 589. In Alabama, under the Code,^ a mortgage of all one's personal property and crops to be grown during the year, being substantially all the debtor's property, to secure advances previously made, and other advances to be made, to enable the debtor to produce the crop, is a general assign- ment which will inure to the benefit of all* the creditors equally as to such advances made and contracted for con- temporaneously with its execution.'' § 590. In Missouri the preferences forbidden by the statute ° are not given by a mortgagor who executes his mortgage before the assignment, and as a separate and independent transaction." But this provision of t^e statute does not avoid deeds of trust in the nature of mortgages, which are only securities for the payment of debts. An assignment is more than a security for the payment of debts ; it is an absolute appro- ' Meinhard v. Strickland, 29 S. Car. 491. ■' Wilks V. Walker, 22 S. Car. 108. "Code,? 1737. * Collier v. Wood, 85 Ala. 91. *Eev. Stat. § 1354. " Sampson v. Shaw, 19 Mo. App. 274. IN MISSOURI. 405 priation of property to their payment. Hence, an assignment is a conveyance to a trustee for the purpose of raising funds to pay a debt, while a deed of trust in the nature of a mort- gage is a conveyance in trust for the purpose of securing a debt, subject to a condition of defeasance. So, a deed of trust is not within the statute concerning assignments, and cannot be avoided by a creditor not named in it, except for fraud.^ While this rule is now established by the Supreme Court of Missouri, yet some of the federal courts do not accept -it. It is held by these courts, as a deed of trust on personalty does not purport to be a security for a debt, leaving an equity of redemption in the grantors, and empowering the trustee to sell only if the debts specified shall not be paid at maturity, but conveys the property absolutely to the trus- tee, to be sold for the payment of the debts named and preferred in it, it is not a mortgage security, but an assignment for the benefit of creditors. So, it has been held by these federal courts, a debtor in Missouri may, though he be insolvent at the time, prefer one or more of his creditors by securing them ; but he cannot do it by an instrument conveying the whole of his property to pay one or more creditors. Instruments of the latter class will be construed as falling within the assignment laws, and as for the benefit of all creditors, whether named in the assignment or not.^ Other judges of the federal courts within Missouri hold a deed of trust in the nature of. a mortgage of all the per- sonal property of the debtor, to be a voluntary assignment, within the meaning and effect of the Missouri statute.^ But this doctrine has not been held by other courts,* and ' Crow V. Beardsley, 68 Mo. 435. ^Martin v. Hausman, 14 Fed. Rep. 160. 'Dahlman ri. Jacobs, 16 Fed. Rep. 614; Kellog v. Richardson, 19 Fed. Rep. 70; Clapp v. Dittman, 21 Fed. Rep. 15; Perry v. Corby, 21 Fed. Rep. 737 ; Kerbs v. Ewing, 22 Fed. Rep. 693 ; Freund v. Yaegerman, 26 Fed. Rep. 812; 27 Fed. Rep. 248; State v. Morse, 27 Fed. Rep. 261; Elgin Co. v. Meyer, 30 Fed. Rep. 659; Weil v. Polack, 30 Fed. Rep. 813. * National Bank v. Sprague, 5 C. E. Green (N. J.) 13 ; Farwell v. Howard, 26 Iowa 381; Doremus v. O'Harra, 1 Ohio St. 45; Atkinson v. Tomilson, 1 Ohio St. 237; Chicago Union Bank v. Kansas City Bank, 136 U. S. 223. 406 FRAUDULENT CONVEYANCES. is not consonant with the decisions of the Missouri State courts. In a late case it was held -that " the assignment law of Missouri is not, in letter or spirit, a bankrupt or insolvent debtor's act. A debtor, whether solvent or insolvent, may, in good faith, sell, deliver in payment, mortgage or pledge the whole or any part of his property for the benefit of one or more of his creditors, to the exclusion of others, even though such transfer may have the effect of delaying them in the collection of their debts. Its terms in no way qualify the rule by which the character of this instrument is to be determined. Reading the instrument, then, as a whole, in the light of the conveyances under which it was executed, was it intended as a security or as an absolute unconditional conveyance, in presenti, to the grantee of all the grantor's interest in the property, both legal and equitable, to the ex- clusion of any equitable right of redemption?" It was accordingly adjudged that the assignment law was inap- plicable to a deed of trust, conveying all the debtor's prop- erty, real and personal, except his homestead and household furniture and a horse and buggy, to a trustee in trust to secure the payment of part of his debts, for which he was liable, either as principal or surety, which appeared to the court, upon a view of all its provisions, as applied to the facts of the case, to be " not an absolute indefeasible assign- ment of all the grantor's title, both legal and equitable, in the property, in trust for his creditors, but a deed of trust to secure the payment of debts and other liabilities, in which the grantor has an interest in the property conveyed," for the protection of which " equity gives him a right of re- demption, though no clause of defeasance was inserted in the deed." ^ So, according to the law of Missouri, there can be no doubt that a deed of trust, conveying the personal property of a party to secure the payment of his debts therein named, and reserving in the clearest terms a right of redemption to ' Hargadine v. Henderson, 97 Mo. 375. PREFERENCES — GENERAL RULE. 407 the grantor, by providing that, if he shall pay these debts, the deed shall be void, as well as by authorizing the trustee to sell the property only in case of his failing to pay those debts or any part thereof for five days after they become payable, is, according to the settled course of decisions in- the courts of Missouri, a mortgage only, and not an. assign- ment under the statute/ § 591. The Mortgagor May Secure More Creditors Than the Mortgagee. — A mortgage to a trustee to secure several creditors is not necessarily fraudulent ; the good faith of the transaction is for the jury.^ The mortgagee may hold the mortgage for his own security and that of a third party. This is not an assignment within the act requiring assignments to include all the property of the debtor and to be without preferences.^ Neither is the mortgaging of chattels exempt from execu- tion fraudulent as to creditors,* because the law gives the debtor the right of giving, selling, assigning or mortgaging any or all of his goods and chattels. So, when the transac- tion involves an adequate consideration, the mortgage will be valid.^ § 592. The Assignee Cannot Divest the Lien of a Chattel Mortgage. — -Where an assignee takes property covered with a chattel mortgage he cannot dispose of the property so as to divest the lien ; he takes it with the lien from the assignor. If he does sell, after having the property appraised, he must account to the mortgagee for the appraised value.^ § 593. Preferences — General Rule. — A debtor has the right ' Chicago Union Bank v. Kansas City Bank, 136 U. S. 223. See Section 14. 'Bagg 1). Jerome, 7 Mich. 145; Chapman v. Hunt, 14 N. J. Eq. 149. ''Morse v. Powers, 17 N. H. 286. * Patten v. Smith, 4 Conri. 450 ; Vaughn v. Thompson, 17 III. 78 ; Wash- burn V. Goodheart, 88 111. 229; Prout v. Vaughn, 52 Vt. 451. ^ Conway v. Wilson, 44 N. J. Eq. 457. * Arnett v. Trimmer, 43 N. J. Eq. 488. See, also, Wakeman v. Barrows, 41 Mich. 863 ; Flower v, Cornish, 25 Minn. 473 ; Mann v. Flower, 25 Minn. 500; Bennett v. Ellison, 23 Minn. 242; Winsor v. McLelland, 2 Story C. C. 492; Leland v. Ship Medora, 2 Woodb. & M. C. C. 92; Bentley v. Wells, 61 111. 59; Badger v. Batavia Paper Man. Co., 70 111. 302. 408 FEAITDULEWT CONVEYANCES. to prefer one creditor to others by giving mortgages or otherwise, unless such preferences contravene some provi- sions of the assignment or bankrupt laws. He can make these preferences by giving a mortgage on his chattels for a pre-existing or present indebtedness.^ And the question of the construction and effect of a statute of a State, relating to assignments for the benefit of creditors, is a question upon which the decisions of the highest courts of the State, estab- lishing a rule of property, are of controlling authority in the courts of the United States.^ The fact that similar statutes are allowed different effects in different States is immaterial. The interpretation within the jurisdiction of one State becomes a part of the law of that State, as much so as if incorporated into the body of it by the legislature. If, therefore, different interpretations are given in different States to a similar local law, that law in effect becomes by the interpretation, so far as it is a rule for the United States Supreme Court, a different law in one State from what it is in the other.^ Thus, the decision in White V. Cotzhausen,* construing a statute of Illinois in ac- cordance with the decisions of the Supreme Court of that State as understood by the United States Supreme Court, has no bearing upon a case arising under the statute of Missouri.^ § 594. Rights of Creditors as to an Unfiled Chattel Mortgage. — The general creditors of a mortgagor of chattels have no 1 Estwick V. Caillaud, 5 T. R. 420; Small v. Oudley, 2 P. Wms. 427 ; Nunn V. Wilsmore, 8 T. R. 521 ; Bennett v. Union Bank, 5 Humph. (Tenn.) 612 ; Nat. Bank v. Sprague, 20 N. J. Eq. 13 ; Prankhouser v. Ellett. 22 Kans. 127 ; Funk V. Staats, 24 111. 633; McConnell v. Scott, 67 111. 274; Prior v. White, 12 111. 261; Dance v. Seaman, 11 Gratt. (Va.) 778; McTaggart v. Rose, 14 Ind. 230; Cornish ii.Dews, 18 Ark. 172; Phippen v. Durham, 8 Gratt. (Va.) 457; M'Cullough v. Sommerville, 8 Leigh (Va.) 415. 'Brashear v. West, 7 Pet. (U. S.) 608; Allen v. Massey, 17 Wall. (U. S.) 351; Lloyd v. Fulton, 91 U. S. 479; Sumner v. Hicks, 2 Black (U. S.) 532; Jaffray v. McGehee, 107 U. S. 361 ; Peters v. Bain, 133 U. S. 670 ; Randolph's Executor v. Quidnick Co., 135 U. S. 457. 'Christy v. Pridgeon, 4 Wall. (U. S.) 196. See, also, Detroit v. Osborne, 135 U. S. 492. * 129 U. S. 329. The Illinois Supreme Court holds that the construction of law indicated in White v. Cotzhausen, 129 U. S. 329, is not the law of Illinois in the matter of what constitutes a voluntary assignment. Far- well V. Nilsson, 138 111. 45. 'Union Bank of Chicago v. Kansas City Bank, 136 U. S. 223. EIGHTS OF CKEDIT0K8. 409 right to assail the mortgage as invalid until they secure a lien thereon by a levy under judgment and execution, or in some way have acquired a legal or equitable interest therein. Thus, a party on July 8th, 1882, executed two chattel mort- gages upon personal property, which were not filed until January 4th, 1883, on which day he made a general assign- ment. The assignee, on March 15th, 1884, applied for and obtained an order directing him to sell the property mort- gaged, and to pay the debts secured thereby. Creditors who had recovered a judgment against the mortgagor on March 3d, 1883, had issued two executions thereon, one of which still remained in the hands of the sheriff, and had applied to have the order amended and to have the proceeds from the sale of the property applied toward the payment of their judgments, on the ground that the mortgages were, as to them, void, because not filed when given. Their petition was denied, because the mortgages, having been given in good faith, were valid and binding upon the mortgagor and the assignee ; that the general assignment was made before the recovery of the judgments, and the title of the mort- gaged property thereby vested in the assignee, and the as- signed property was not subject to levy or sale under the executions issued under the judgments; that the petitioners, having no lien upon the mortgaged property, sustained no such relations to the property as would permit them to maintain an action to set aside the mortgages as void.' A party executed a chattel mortgage and subsequently made a general assignment for the benefit of creditors. The assignee, with the consent of the mortgagor, surrendered the property to the mortgagee, from whose possession it was forcibly taken by the sheriff, who had executions against the mortgagor, issued upon a judgment rendered after the prop- erty came into the assignee's hands. It was decided that the invalidity of the chattel mortgage did not justify the 'Sullivan v. O'Neil, 40 Hun (N. Y.) 516; 106 N. Y. 635; Bostwick v. Menck, 40 N. Y. 387 ; Spring v. Short, 90 N. Y. 538 ; Southard v. Benner, 72 N. Y. 424; Geery v. Geery, 63 N. Y. 252. 410 FKATJDULENT CONVEYANCES. taking, as in such case the title was in the assignee, and proof of possession in him was sufficient to sustain his action to recover the property.^ § 595. Fraudulent Assignment — Question for the Jury. — Whether a chattel mortgage is fraudulent, in connection with an assignment, is a question for the jury. Thus, a plaintiff held under a chattel mortgage given to him on the 29th of May, 1866, but not filed till December 6th, 1866. The gheriff, as defendant, justified under attach- ments against the mortgagor obtained by creditors, as against whom the phattel mortgage was void for want of filing. Before the obtaining of the attachments, and after the filing of the mortgage, the mortgagor made a general assignment, giving the plaintiff a preference for the liability due him, after applying the proceeds of the property covered by the mortgage, and providing that nothing therein contained should affect their rights under the , mortgage. After the assignment and before the levy under the attachment, the plaintiff took possession of the property. It was held that the issue was whether the assignment was fraudulent, and that this was a question of fact for the jury, and that, although the object may be to prefer a debt and secure its payment, through the instrumentality of a void mortgage, that act was not, per se, fraudulent, the debt not being fictitious.^ The inference would be, that if a mortgagor, by an honest assignment, disposed of the property before the creditor ac- quired a lien, such disposition would end the right of the creditor. Were it not for the assignment an attaching cred- itor could assert his right.^ § 696. Who May Assail. — A judgment creditor who does not have judgment and execution until after a general assignment, cannot maintain an action to set aside a prior 'Wheeler v. Lawson, 103 N. Y. 40. 'McCarthy v. Kelly, 12 Week. Dig. 539. 'Siedenbach v. Riley, 111 N. Y. 560. A VALID ASSIGNMENT. 411 mortgage as fraudulent as long as the assignment is not at- tacked, it being held that the assignment constituted a prior and better title, which is entitled to a preference.^ However, it is held that a general creditor of a mortgagor of chattels has no right to assail a mortgage or other con- veyance of property made by him, as invalid, until the cred- itor has secured a lien thereon by levy under a judgment and execution or by some other method acquired a legal or equitable lien." A mortgagor, by simple contract, is within the protection of the provisions of the statute of frauds, declaring every conveyance or transfer of chattels, not followed by actual and continued change of possession, to be presumptively fraudulent^ as against the creditors of the vendor or owner ; but, until they have judgment, they have no lien or a right to a lien upon the specific property ; they are not in a con- dition to assail his rights as to creditors,* § 597. A Valid Assignment — Void Chattel Mortgage Cannot Be Attacked. — Where there is a valid assignment, a judg- ment creditor is not in a position to maintain an action to set aside a chattel mortgage, given by the assignors for a valuable consideration, but which is void as against the creditor on account of non-filing. Where the assignor prefers a valid debt secured by a chat- tel mortgage, but invalid as to a judgment creditor on account of non-filing, the creditor cannot have the assignment set aside on the ground'that it interferes with his rights to take advantage of the non-filing, and therefore as being fraudu- lent as against him. The creditor cannot impeach the mort- gage unless he can have the assignment set aside. If the assignment is valid and becomes operative before any proceedings by the creditor, there is nothing left upon which the creditor can make a claim or in which he ' Spring V. Short, 90 N. Y. 538. ^Sullivan v. Miller, 106 N. Y. 635. ' 2 Kev. Stat. p. 136, ?? 5, 6. * Southard v. Benner, 72 N, Y. 424. 412 FEATJDULENT CONVEYANCES. can acquire an interest, or upon which he has any right to a lien.* § 598. Attaching Creditors. — As against attaching cred- itors, mortgages are absolutely void, in New York, unless they, or a true copy, are filed in the proper office, or unless there is an immediate delivery of the property by the mort- gagor to the mortgagee, followed by an actual and continued possession.^ § 599. Mortgage Given On the Same Day of Judgment Not a Badge of Fraud. — Because a mortgage is given on the same day that a judgment is rendered against the mortgagor, is no badge of fraud, unless it is accompanied by circum- stances calculated to cast suspicion upon the transaction.^ § 600. In Bankruptcy — Exchanging Security. — Under the Bankrupt law, though not now in force, many decisions were made to interpret its provisions. A chattel mortgage taken within four months by the creditor in exchange.for a prior valid bill of sale of the same property and recorded pur- suant to the laws of the State where the transaction took place, before any rights of the assignee in bankruptcy ac- crued, cannot be impeached by the mortgagor's creditors as a fraudulent preference within the meaning of the act.* So, a mortgage exchanged for another form of security on the same property, will be upheld because the security for which it was exchanged was valid, and made and. delivered more than four months before proceedings in bankruptcy were commenced.* § 601. Under the Bankrupt Law. — Under the Bankrupt law, an objection that a chattel mortgage is npt in the usual 'Kitchen v. Lowry, N. Y. Sup. Ct., July, 1889 ; 22 Chi. L. News 51. = Camp -!;. Camp, 2 Hill (N. Y.) 628; Yenni v. McNamee, 45 N. Y. 614; Porter v. Parmley, 52 N. Y. 185 ; Steele v. Benham, 84 N. Y. 634. 'Thornton v. Davenport, 1 Scam. (111.) 296. See, also, Gage v. Chesebro, 49 Wis. 486. •Sawyer v. Turpin, 91 U. S. 114. ' Stevens v. Blanchard, 3 Cush. (Mass.) 169 ; Winsor v. McLelland, 2 Story C. C. 492; Clark v. Iselin, 21 Wall. (U. S.) 360 ; Cook v. TiiUis. 18 Wall (U. S.) 340 ; Watson i;. Taylor, 21 Wall. (U. S.) 378 ; Burnishisel v. Firman, 11 Bank. Reg. 505; Catlin v. Hoffman, 9 Bank. Eeg. 342. CONSTJMPTIOIir OP MORTGAGED PBOPEKTY. 413 and ordinary course of business, and is therefore fraudulent, is not applicable to such a mortgage made to secure an honest debt, wholly or partially incurred at the time of the mort- gage's execution.^ An assignee in bankruptcy may avoid a fraudulent mort- gage given by his assignor. The assignee is entitled to the possession of the chattels attempted to be mortgaged, and may enforce his right by appropriate action. Such an action is not analogous to a creditor's bill, and it is no objection to it that the claims against the bankrupt are not in judgment.^ The assignee in bankruptcy represents the whole body of the creditors, and it is his right and duty to contest the validity of any mortgage by which one creditor had obtained a preference over another.^ § 602. Assignees Could Bring Action in State Courts. — State courts had jurisdiction of actions brought by assignees to set aside chattel mortgages for fraudulent preferences within the Bankrupt act. Such suits were not matters or proceed- ings within the meaning of that act. Such actions were brought upon causes of action created by that act or exist- ing independently of it.* ARTICLE VI. — RULE AS TO CONSUMABLE PROPERTY. 603. Consumption of Mortgaged Property. 604. Indiana Rule. 605. Because the Goods are Perishable Does Not Necessarily Avoid the Mortgage. 606. Part of the Property Being Perishable Does Not Avoid the Mortgage as to the Other. 607. Farm Chattels May be Mortgaged. § 603. Consumption of Mortgaged Property. — The mort- gage of property, the use of which involves its consumption, 1 Moore v. Young, 4 Biss. C. C. 128. 2 Robertson v. Todd, 31 Conn. 555 ; Mann v. Flower, 25 Minn. 500. ^Southard v. Pickney, 5 Abb. (N. Y.) N. Cas. 184; In re Metzger, 2 Bank. Reg. 355 ; Wayne's Case, 4 Bank. Reg. 23. *Claflin V. Houseman, 93 U. S. 130; Ansley v. Patterson, 77 N. Y. 156; Wente v. Young, 12 Hun (N. Y.) 220; Mann v. Flower, 25 Minn. 500. But see Voorhies v. Frisbie, 25 Mich. 476. 414 FEATJDULENT CONVEYANCES. is aa evidence of fraud, not, indeed, conclusive, but of much weight. Unless it be explained satisfactorily, it must cause the condemnation of the instrument, and it imposes the burden of establishing this explanation upon those claiming under the instrument ; and when the right to use such per- ishable property is also reserved in the mortgage itself, it is fraudulent upon its face.^ A trust deed was given to secure a bona fide debt, evi- denced by four notes, payable in one, two, three and four years, and conveyed a tract of land, with the crops then upon it or thereafter grown upon the land, until said notes are fully paid ; all stock of horses, mules, sheep and hogs, with the increase of the same, then on the said land and others placed On the same, and all farming implements used in the cultivation of the said land. It was held that the deed was not, per se, fraudulent on its face.'' No irresistible inference of intention to defraud is deduci- ble from a provision in a deed of trust postponing the sale of the property conveyed for a reasonable length of time and reserving the use of the property to the grantor until sale, even though a portion of the property conveyed may be per- ishable in its nature and consumable in its use ; nor is such inference a necessary deduction from the omission to annex a schedule or inventory of the property to the deed, nor is the inference a necessary one when all these circumstances exist in the same case.^ § 604. Indiana Rule. — A chattel mortgage is not void be- cause the mortgagee allows the mortgagor, her husband, to use a part of the mortgaged property, in support of their family. Thus, the mortgagee allowed the mortgagor, her husband, to slaughter " twenty-two fat hogs," in support of their family. This did not "affect the mortgage in the slightest degree."* 'Farmers Bank v. Douglass, 11 8. mony of legal science. Daniel v. Morrison, 6 Dana (Ky.) 182. MASSACHUSETTS. 437 shop in pursuance thereto. A chattel mortgage giving a power to the mortgagor to sell at retail, accompanied with a duty to use the proceeds of the sale in buying other goods to supply the place of those sold, is valid.^ But a mortgage of furniture then in a dwelling-house, and that afterwards purchased, conveys a valid title to that only of which the mortgagor was then the owner. A mortgage being void as to after-acquired property, the mere delivery of the same by the mortgagor to the mortgagee, the former retaining the possession, the delivery does not transfer a valid title as against attaching creditors. In such a case the mortgagee cannot hold the subsequently-purchased property as against creditors.^ § 640. Maryland. — A clause in a chattel mortgage of goods in a store, providing for all renewals and substitutions for the same, the object being to include not only the articles then in stock but whatever may be at any time therein in course of the mortgagor's business, cannot convey subse- quently-acquired goods so as to give the mortgagee a right of action at law against a party seizing them.' That while it is well settled in this State that a party cannot convey subsequently-to-be-acquired goods, so as to give the mort- gagee a legal title thereon or a legal right of action against a party seizing them, yet such conveyance' creates in equity a valid lien upon the subsequently-acquired property.* § 641. Massachusetts. — A power to a mortgagor in a mort- gage of a stock of goods, to sell the same in the regular course of trade, does not of itself avoid the mortgage 'per se, but is, at most, only evidence of a fraudulent purpose to be sub- mitted to the jury.° A provision in a mortgage of personal property, given in fraud of creditors, that the mortgagor may use and enjoy > Deering v. Cobb, 74 Me. 332 ; Allen v. Goodnow, 71 Me. 420. 'Griffith V. Douglass, 73 Me. 532. ^Hamilton v. Rogers, 8 Md. 301. 'Butler V. Eahm, 46 Md. 541. = Fletcher v. Powers, 131 Mass. 333. 438 SALE AND REPLENISHMENT OF THE STOCK. the mortgaged property, will notj warrant the jury in finding that the assignee of the mortgage had notice of its fraudu- lent character/ A mortgage providing that the mortgagor shall remain in possession and sell until condition broken, is not necessarily fraudulent.* So, a mortgage given, providing that the mort- gagor may remain in possession of the mortgaged property and use and enjoy the same is not, per se, void ; the ques- tion of fraud should be submitted to the jury, and all facts surrounding the transaction are to be taken into account.* If the mortgaged property is perishable and cannot be kept, or if it is to be consumed by the mortgagor, the trans- a:ction must be considered as collusive and fraudulent.* Whenever the terms of the contraot are, by possibility, compatible with good faith, and upon their face have es- sential elements of a legal contract, the question of fraudu- lent intent and want of good faith is to be submitted to the jury.' A mortgage of a trader's stock in trade is not fraudulent per se, though it is provided therein that, until condition broken, he may retain in his possession ai^d use all the mort- gaged property without hindrance or interruption from the mortgagee ; and though there is no agreement of the parties at the time the mortgage is executed, that the mortgagor may sell and dispoee of the mortgaged property and apply the proceeds to his own use, he promising that "if he should Iraake larger sales thereof he would add to the mortgagee's security by other property. The presumption of fraud arising from such a mortgage and agreement may be re- pelled by satisfactory evidence.® § 642. Michigan. — A mortgage of a stock of goods with a stipulation that the mortgagor shall continue the sale of the 'Sleeper v. Chapman, 121 Mass. -404. 'Jones V. Huggeford, 3 Met. 515. ' Briggs V. Parkman, 2 Met. 258. *Eobbin8 v. Parker, 3 Met. 117. ' Jones V. Huggeford, 8 Met. 615. " Briggs V. Parkman, 2 Met. 258. MINNESOTA, 439 goods, means that the sales shall be made in the ordinary- course of business, and such a mortgage is valid.^ A mortgage of a stock of goods, where the mortgagor is allowed to hold possession and to sell in the ordinary course of trade, and to keep his stock of like goods to a specific amount as security to the mortgagee, will cover goods subse- quently purchased and added to the stock."^ A right sometimes reserved to the mortgagor of chattels to retain possession and dispose of them in the course of trade, is a conditional bailment which will be terminated by any change or enlargement of the reserved privilege without the mortgagee's consent, or by any diversion of the proceeds of sale from the designated object. The mortgagor has no right to use the proceeds for his own benefit, subject to a right in the mortgagee to take possession when he is afraid his security is in peril of diminution.^ , When a chattel mortgage is attacked as fraudulent against subsequent creditors or mortgagors in good faith, by reason of the mortgagor's being permitted to remain in possession and to prosecute his business in the ordinary way, it is the province of the jury to determine whether such fraud is proved ; but when the evidence is overwhelming, and Ifeayes no room for doubt as to what the fact is, the court may give the jury a peremptory instruction covering the issue.* A mortgage of a stock of goods, the mortgagor to hold possession and to sell in the usual course of business, is not fraudulent on its face as against the mortgagor's creditors.* § 643. Minnesota. — A mortgage of a stock of goods, left in the possession of the mortgagor, and which, by its terms, authorizes him to dispose of the mortgaged property as his own, without satisfaction of the mortgage debt, is fraudu- lent in law as against creditors of the mortgagors. But if ' Wingler v. Sibley, 35 Mich. 231. 'Leland v. Collver, 34 Mich. 418. ' Daggett V. McClintock, 56 Mich. 51. * People's Sav. Bank v. Bates, 120 U. S. 556. ^Gay V. Bidwell, 7 Mich. 519 ; People v. Bristol, 35 Mich. 28 ; Fry v. Eus- sell, 35 Mich. 229 ; Oliver v. Eaton, 7 Mich. 108. 440 SALE A^D REPLENISHMENT OF THE STOCK. the mortgage requires the proceeds of the sales to be paid directly to the mortgagee in payment of such debt, it is not necessarily fraudulent/ It is well settled in this State that a mortgage of chattels, as a stock of goods in trade, left in the possession of the mortgagor, which, by its terms, authorizes him to dispose of the mortgaged property as his own, without satisfaction of the debt, is to be deemed fraudulent in law as against the creditors of the mortgagor. If the intent that the mort- gagor may retain possession of the property and dispose of it as his own is apparent in the mortgage itself, the existence of such intent is to be determined by the court, otherwise the existence of the intent is a question for the jury. In every case, if the intention is found to exist, the law declares the mortgage fraudulent. A mortgage which is fraudulent as to any of the property covered by it is fraudulent altogether,^ If the mortgage is fraudulent it is not in the power of such mortgagee to remove the original taint of the mortgage by taking possession of the property under and by virtue of the mortgage.^ § 644, Mississippi, — A deed of trust on a stock of goods which provides for the retention of possession by the grantor, with power of sale and replenishing the goods in the usual course of his business, is, upon its face, fraudulent and void as to his creditors ; and such fact cannot be avoided by a stipulation in the deed for monthly accounting to be ren- dered to the trustee, and for payment to him of the money received, to be applied under his direction to the payment of the current expenses of the business and to make purchases to replenish the stock.* It is a general rule that where a mortgage covers an en- tire stock of goods on hand, and all goods that may be 'Bannon v. Bowler, 34 Minn. 416, 'Horton v. Williams, 21 Minn. 187; National Bank v. Anderson, 24 Minn. 435; Stein v. Munch, 24 Minn. 390. 'Stein V. Munch, 24 Minn. 390. 'Joseph V.Levi, 58 Miss. 843. MISSOURI. 441 bought and put into the store from the time of the execution of the mortgage till the debt secured shall become due, and the mortgagor is allowed to remain in possession of the goods, selling and making purchases to replenish his stock, in the usual course of business, it is fraudulent as to credit- ors affected thereby.^ § 645. Missouri. — A stipulation in a chattel mortgage that the mortgagor shall remain in possession with power to sell and apply the proceeds not for his own benefit, but to pay on the mortgage debt, does not render the mortgage fraud- ulent or void.^ But a mortgage of chattels not in esse, or not owned by the mortgagor at the execution of the mortgage, will not pass a legal title to such after-acquired property, and the mortgagee, to render his lien effectual, must assert it in a court of equity.^ A trustee in a deed of trust of personalty, a stock of goods in trade, who takes possession before levy by an attaching creditor, is entitled to hold the property for the purpose of the trust, notwithstanding a previous agreement between the cestui que trust and the debtor that the debtor might sell the property in the usual course of trade, for his own benefit.* Where a mortgagee of a stock of goods, in good faith, takes actual possession of the same prior to a levy of an attachment by another creditor of the mortgagor, for the pur- pose of securing a debt due him, and continues to hold the actual possession up to the time of the attachment levy, he will be protected and hold the property as against the attaching creditor, and it is immaterial that the mortgage ' Harman v. Hoskins, 56 Miss. 142. The question whether there was a fraudulent intent in such case is a question for the jury. Such mortgage is voidable only by the creditors who obtain liens upon the property before the mortgagee in fact takes posses- sion. Summers v. Roos, 42 Miss. 749. The intention of the parties in making the instrument may be shown to be in good faith. The fact of the mortgagor's possession of the property, and use of it, with the consent of the mortgagee, is only evidence of fraudulent intent. Ewing v. Cargill, 13 S. & M. 79. 'Hubbell V. Allen, 90 Mo. 574. 'France v. Thomas, 86 Mo. 80. *Dobyns v. Meyer, 95 Mo. 132. 442 SALE AND REPLENISHMENT OP THE STOCK. contained a stipulation which rendered it void except as be- tween the pg,rties/ § 646. Montana. — A mortgage of a stock of goods, pro- viding that the mortgagor is to continue to sell the goods in the usual course of trade, accounting to the mortgagee as requested, when it appears that the mortgagor, by consent of the mortgagee, received a portion of the sale, is void ; such provisioif is incompatible with the idea of security by a lien upon the goods. The only security that the mortgagee has is the personal integrity of the mortgagor in possession. Under the law of this State such a provision is fraudulent, and, whether a question of fact, and not of law, does not apply to a case like this, arising upon the face of the written instrument itself, in such a way as to require its submission . to a jury. Judge McLeary holds that a mortgage of a stock of goods in trade, in which the mortgagor is permitted by the mort- gagee to sell the goods at his discretion, in the usual- course of his business, is inherently and essentially fraudulent as to the creditors of the mortgagor. And this is so, even though the agreement or understanding between the mort- gagor and the mortgagee permitting such sales is not shown upon the face of the mortgage, but is proven by extrinsic evidence.^ ' Petring v. Chrisler, 90 Mo. 649. See Knoop v. Nelson Dist. Co. (Mo.), 14 S. W. Rep. 822. No matter what may be the character of the property or the business of the grantor, the very stipulations of the deed that the property shall be held to secure the debt, and that upon default in payment the mortgagee may take possession thereof and sell the same, are in efifect stipulations that the grantor will not sell it; and unless there are other provisions in the.deed expressly authorizing the grantor to sell, or from which it must necessarily be implied that he has a power to sell, the deed cannot be held void upon its face. Weber v. Armstrong, 70 Mo. 217, overruling Lodge v. Samuels, 50 Mo. 204. When by the terms of the mortgage the mortgagor is not allowed to dis- pose of the goods for his own use, but is required to apply the proceeds to the discharge of the debt secured by the mortgage, the mortgage is not void as being for the use of the mortgagor. Metzner v. Graham, 57 Mo. 404. An agreement to apply proceeds of sales to replenishing the stock, does not vitiate the instrument. Walter v. Wimer, 24 Mo. 63. See Voorhis v. Langsdorf, 31 Mo. 451. ' Leopold V. Silverman, 7 Mont. 266. NEBRASKA. 443 § 647. Nebraska. — A chattel mortgage of a stock of goods containing a clause by which the mortgagor is given posses- sion with power to sell in the usual course of trade, the proceeds to go in satisfaction of the mortgage debt, although made by statute presumptively fraudulent, is not conclu- sively so, and may, by satisfactory evidence, be shown to have been made in good faith.' While the legal presump- tions are agaiiist the good faith of such mortgages, they are not conclusively so, and it may be shown by competent evi- dence that the mortgage was in fact made in good faith and without fraudulent intent.^ But if no evidence of good faith is shown, the presump- tion of fraud becomes conclusive as to creditors and bona fide purchasers.^ And a mortgage which does not in terms or by necessary implication permit the mortgagor to sell the prop- erty, but merely provides that he may retain the use of the property, is not fraudulent in law. The question of fraudu- lent intent in making it is a question of fact for the jury to decide.* A mortgagor was permitted to remain in possession of the mortgaged property and sell the same for two or three years, at the expiration of which time attachments were levied on the property, whereupon the mortgagee brought an action of replevin under his mortgage, and, the goods having been converted into money, recovered the full amount claimed. It appeared that a considerable part of the stock upon which the mortgage lien existed had been sold and replaced, to some extent, by other goods. Judge Maxwell, speaking for the court, held that in no event could the mortgagees recover anything but the stock, or its value, upon which they had a lien, and that the question of fraudulent intent was not in- volved in the case. He says : " This court, by a long series of decisions, has held that a mortgage of goods in this State * Davis V. Scott, 22 Nebr. 154. 'Turner v. Killian, 12 Nebr. 580; Pyle v. Warren, 2 Nebr. 241; Comp. Stat. p. 288, i 12. 'Brunswick v. McClay, 7 Nebr. 137; Pyle v. Warren, 2 Nebr. 241. * Williams v. Evans, 6 Nebr. 216 ; Hedman v. Anderson, 6 Nebr. 392. 444 SALE AND REPLENISHMENT OF THE STOCK. is a specific lien, which attaches to the goods mortgaged and not to goods in general."^ § 648. Nevada. — No mortgage of personal property is valid against other creditors, when the mortgage is not re- corded, unless possession of the mortgaged property be deliv- ered to the mortgagee. If property mortgaged could be transferred to the mortgagee by a mere constructive delivery, when actual delivery can be readily made, then there would be no means by which the public could ascertain whether the personal property is mortgaged or not ; there must be a change of possession, for the person in possession and exer- cising ownership over it is presumed to be the owner. If, after being mortgaged, it was allowed to remain in the pos- session of the mortgagor, mortgage after mortgage could readily be placed upon it ; this being the very thing sought to be remedied by the statute. There must not only be a transfer of the right of property, but, when the mortgage is not recorded, the possession must accompany it.'' The failure to deliver and retaining possession of the mortgaged property is conclusive evidence of fraud in law. In such case courts of law will not stop to inquire whether there is actual fraud or not ; the law will impute it, because the statute does not permit this conclusion of fraud to be overcome by evidence of the honesty of intent. It would be dangerous to do it, and the result would be an open infrac- tion of the law plainly written.' § 649. New Hampshire. — Under an agreement by which a. mortgagor is allowed by the mortgagee to sell the mort- gaged chattels and apply the proceeds on the mortgage debt, his wrongful appropriation of money so received to his own use without the knowledge, consent or fraud of the mortgagee, will not make the mortgage void as against cred- ' Wedgwood v. Citizens Bank, 45 N. W. Rep. 289 ; and see Tallon v. Elli- son, 3 Nebr. 63 ; Williams v. Evana, 6 Nebr. 216 ; Hedman v. Anderson, 6 Nebr. 392; Gregory v. Whedon, 8 Nebr. 873. "Doak V. Brubaker, 1 Nev. 218; Gray v. Sullivan, 10 Nev. 416. ' Lawrence v. Burnham, 4 Nev. 361 ; Wilson v. Hill, 17 Nev. 401. NEW YOEK. 445 itors of the mortgagor/ But where, on a mortgage of a stock of goods, it was agreed that the mortgagor should con- tinue in possession of the goods, and sell them as before for his own benefit, and he did so, it was held that such an arrangement was inconsistent with the avowed object of the mortgage, rendering it fraudulent and void as to the mort- gagor's creditors.^ The permission to sell raises a presumption, prima facie, of a secret trust, and the secret trust being shown the fraudu- lent intent is conclusively presumed. The intention may be explained in the case of retention of property by the vendor after sale ; so may the sale of goods by the mortgagor. The explanation need not be expressed in the written consent pro- vided by the statute. There is no secret trust when it ap- pears from all the evidence that the permitted sale is honestly made for the purpose of extinguishing the mort- gage debt, and not, except, incidentally, for the benefit of the mortgagor. Such a sale and such an application of the proceeds have no tendency to hinder, delay or defraud the unpreferred creditors.^ § 650. New Jersey. — A mortgage of a stock of goods, with permission to the mortgagor to remain in possession and sell and dispose of the stock without restriction, in the ordinary course of trade, is only evidence of fraud to go to the jury to say whether it was given for fraudulent purposes.* Where there is a mortgage of goods to be thereafter ac- quired by the mortgagor, an execution levied upon the goods after they are so acquired will, in a court of law, prevail over the mortgage.^ § 651. New York. — A chattel mortgage is fraudulent and void as to creditors, where it is given with the tacit under- standing and arrangement that the mortgagor may sell and ^Gibba v. Parsons, 64 N. H. 66. ' Putnam v. Osgood, 51 N. H. 192. 'Wilson V. Sullivan, 58 N. H. 260. • Miller «. Shreve, 29 N. J. L. 250; In re Bloom, 17 Bank. Reg. 425. 'Looker v. Peckwell, 38 N. J. L. 253. 446 SALE AND REPLENISHMElirT OF THE STOCK. dispose of the mortgaged property and apply the avails to his own use. Such an agreement may be inferred from the fact that the mortgagor does, with the knowledge and assent of the mortgagee, so sell and dispose of the property.^ So, where a provision in the mortgage stipulates that the mort- gagor shall remain and continue in the quiet and peaceable possession of the goods and chattels, and have the full and free enjoyment of the same until default was made in the payment, the following facts were shown : There was evi- dence to the effect that the mortgagee was a brother of the mortgagor ; the business consisted of the sale of the mort- gaged goods, and if they could not be sold, the mortgagor could not well continue the business. The mortgagor did continue business in the usual way. It was decided that the jury had the right to infer from these facts that it was naturally understood between the parties that, the mortgagor should have the right to sell and dispose of the merchandise embraced in the mortgage, for and on his own account, and that the mortgage was consequently void as against creditors.* If the stipulation is contained in the mortgage that the mortgagor may continue in possession and sell and dispose of the goods for his own benefit, the mortgage is void as to the mortgagor's creditors.' When such agreement is not contained in the mortgage, the question of its existence and of the badge of fraud arising from it and the conduct of the parties, is one for the jury.* A chattel mortgage is not rendered void as to creditors of the mortgagor by a provision authorizing him to sell the mortgaged property and apply the proceeds of the same toward the payment of the mortgage debt. Nor does the ' Potts V. Hart, 99 N. Y, 168 ; Southard v. Benner, 72 N. Y. 424 ; Griswold u Sheldon, 4 N. Y. 581 ; Wood v. Lowry, 17 Wend. 492 ; Chatham Nat. Bank V. O'Brien, 6 Hun (N. Y.) 231 ; Gardner v. McEwen, 19 N. Y. 123: Russell V. Winne, 37 N. Y. 591. ° Hangen v. Hachenmeister, 114 N. Y. 566'. 'Edgell V. Hart, 13 Barb. (N. Y.) 880; 9 N. Y. 213; Delaware «. Ensign, 21 Barb. (N. Y.) 85; Ford v. Williams, 13 N. Y. 577 ; Southard «. Benner, 72 N. Y. 424. •Gardner v. McEwen, 19 N. Y. 123 ; Southard v. Pickney, 5 Abb. N. C. 184. NOKTH CAROLINA. 447 authority to the mortgagor to sell on credit, taking good business paper which the mortgagee agrees to accept and apply on the debt, affect the validity of the mortgage. The permission to use a portion of the proceeds of sale to purchase other property does not vitiate the mortgage, when it is coupled with a condition that the property so purchased shall be brought in and be subject to the mortgage lien, but an agreement, although outside of the mortgage and oral simply, that the mortgagor may use a portion of the proceeds of sales for his own benefit, avoids the mortgage. Such an agree- ment, however, must be proved. A mere expectation of one of the parties is not sufficient ; it must appear that it had the conscious, concurrent assent of both.^ A chattel mortgage is not, per se, void because of the pro- vision in it allowing the mortgagor to sell the mortgaged property, but accounting to the mortgagee for the proceeds and applying the avails to the mortgage debt.^ Where the mortgagor, who was a manufacturer, was to re- main in possession, and continue the manufacture and sell, either for cash or on credit, in his discretion, the cash and the accounts to be transferred to the mortgagee and applied on the debt, the mortgage is fraudulent and void as to cred- itors, because such an agreement enables the mortgagor to sell his entire stock on credit and keep his other creditors at bay.* § 652. North Carolina. — A mortgage of a stock of goods, which contains a provision that the mortgagor is to remain in possession for at least nine months, and a further stipula- tion that, in case of 'removal or attempt to remove the same from the town and an unreasonable depreciation in value, or ■ for any other cause, the security should become inadequate, ' Brackett v. Harvey, 91 N. Y. 214. 'Ford V. Williams, 24 N. Y. 359; Conkling v. Shelley, 28 N. Y. 360; Miller v. Lock wood, 32 N. Y. 293 ; Frost v. Warren, 42 N. Y. 204; Caring v. Richmond, 22 Hun (N. Y.) 369; Dolson v. Saxton, 11 Hun (N. Y.) 565. "City Bank v. Westbury, 16 Hun (N. Y.) 458. 448 SALE AND EEPLENISHMENT OF THE STOCK. the mortgagee may take possession, affords the most cogent extrinsic evidence of fraud/ The presumption of fraud, arising upon a deed of trust executed by an insolvent person to secure one of his cred- itors, conveying a store, lot and stock of goods and the in- crease of such stock, and containing a provision that the trustor shall have the privilege of continuing his business, is not rebutted by proof that the debt secured by the trust deed is a bona fide debt, and that the insolvency of the trustor was known to the trustee and cestui que trust at the time of the execution of the deed. In such case, the pre- sumption of fraud arises from the fact of the debtor's insol- vency, and the further fact that the trustee and cestui que trust are parties to the deed of trust which secures the bene- fits to the maker and which conflicts with the rights of the creditors.^ A mortgage given on a stock of goods, the goods to re- main in the possession of the mortgagor, who was to sell them and apply the proceeds on the debt in a reasonable time, nothing showing that the mortgage was executed in bad faith, or to secure antecedent debts, and within a few months the mortgagor made a payment on the debt, it was decided sufficient evidence to rebut any presumption of fraud be- cause the mortgagor had possession of, and sold the goo'ds, and any violation of his agreement, as buying other goods and intermingling them with those mortgaged, does not affect the mortgagee.^ § 653. Ohio. — A stipulation in a mortgage that the mort- gagor shall retain possession and sell the goods in the usual course of retail trade, paying over the money received there- for to the mortgagee, as the goods are sold, does not render the mortgage, per se, fraudulent and void as against other creditors of the mortgagor. The question of good faith upon 'Cheatham v. Hawkins, 80 N. Car. 161. ' Holmes w. Marshall, 78 N. Car. 262. ' Kreth ■». Rogers, 101 N. Car. 263. OREGON. 449 such stipulation is one of fact for tlie determination of the jury-' But a mortgage of personal property where the mortgagor retains possession by virtue of the mortgage, with power of sale, is void as against subsequent purchasers and execution creditors. But when possession is taken by the mortgagee, the mortgage becomes valid so as to protect the mortgaged property from execution creditors not having made a levy, and against subsequent purchasers from the mortgagor.* § 654. Oregon. — When it appears on the face of a chattel mortgage, or by parol evidence, that the mortgagee of per- sonal property has given to the mortgagor unlimited power to dispose of the property mortgaged for the use of the mortgagor, the mortgage is void as to purchasers and attach- ing creditors. In such case there is no lien as against inno- cent purchasers, and where there is no lien there is no mortgage.' Upon the execution of a chattel mortgage on a portion of a stock of goods in a store, by a retail merchant, it was verbally agreed between the parties that the mort- " Kleine v. Katzenberger, 20 Ohio St. 110. See, also, Kilbourne v. Fay, 2a Ohio St. 264. = Brown v. Webb, 20 Ohio 389 ; Collins v. Myers, 16 Ohio 547; Freeman v, Bawson, 5 Oh^o St. 1 ; Harman v. Abbey, 7 Ohio St. 218. In Kleine v. Katzenberger, 20 Ohio St. 110, the court distinguishes Harman V. Abbey, 7 Ohio St. 218, and Collins v. Myers, 16 Ohio 647, by saying: « * * * ijijg mortgagor was permitted in each case to sell on his own account and to replenish the stock, with the agreement that the mortgage lien should attach to and cover all subsequent additions to the stock. This was held to be inconsistent with the idea of certain security upon specific property. In the case of Harman v. Abbey, the mortgagor was allowed, by the terms of the mortgage, to continue selling the goods at retail, and the only restriction upon his power to dispose of the proceeds at his pleasure was that he was not to withdraw any portion thereof from the business be- yond the amount of necessary expenses. * * * When it is said, there- fore, in those cases that the mortgage of personal property, with possession and a power of disposition reserved to the mortgagor, is fraudulent and void as against his other creditors, we are to understand this as referring to the power of disposition for the mortgagor's own benefit. It is only where the power of sale is such as to leave in the mortgagor a dominion over the groperty, inconsistent with the alleged lien of the mortgage, that the latter as been held per se fraudulent and void." In none of these cases was it necessary to go further. This is the extent of the authorities cited in their support. 'Orton V. Orton, 7 Oreg. 478. 2d 450 SALE AND REPLENISHMENT OP THE STOCK. gaged goods which remained in the mortgagor's possession should form part of his stock in trade, and that he should have full power to sell and dispose of the same in the usual course of his business, and the mortgagor did retain possession and sell goods in accordance with such agreement ; held, that the mortgage was fraudulent and void as to the other creditors of the mortgagor, and created no lien on the goods/ § 665. Pennsylvania. — In this State the rule prevails that one man shall not have a lien on personal property owned by and in possession of another, as against creditors and in- nocent purchasers.^ The security by mortgage of personal property to a mort- gagee or pawnee depends on the right of the mortgagor or pawnor, on the delivery of the chattel mortgaged or pledged. Delivery is necessary. Every chattel mortgage, when the parties stand in the relation of creditor and debtor, unaccom- panied with such possession as the subject-matter is capable of, is fraudulent and void as to all other creditors.* § 656. Rhode Island. — ^The question whether a mortgage which allows a mortgagor to retain possession of the mort- gaged personalty, or to sell and replace the same, is or is not fraudulent as against his creditors, should be determined by a jury, from the circumstances attending the execution of the mortgage.* If the mortgagee takes possession under the mortgage of the after-acquired property, the title vests in him, both at law and in equity.^ A mortgage of a trader's stock of goods, together with all additions to the same or renewals of it that might afterwards be made, is in itself ineffectual to vest in the mortgagee a legal title to the after-acquired property.* § 657. South Carolina. — ^Where the language clearly shows ' Jacobs V. Ervin, 9 Greg. 52; Aiken v. Pasoall, 24 Pac. Rep. 1039. ' Burner v. Van Giesen, 6 Week. N. Gas. 363. ' Glow V. Woods, 5 S. (S R. 279. See, also, Hower v. Geesaman, 17 S. & R. 251 ; MoKibbin v. Martin, 64 Pa. St. 352. 'Williams v. Winsor, 12 R. I. 9. "Cook V. Gorthell, 11 R. I. 482. > •Williams v. Briggs, 11 R. I. 476. TENNESSEE. 451 the intention to give a lien, not only upon the property em- braced in the description of the mortgage, then in possession of the mortgagor, but also upon all he may produce or pre- pare for market or otherwise acquire, the mortgage will cover not only the property which might be the product mentioned in the mortgage, but also any that the mortgagor might pro- duce or otherwise acquire; and the property subsequently bought by the mortgagor, subsequent to the execution of the mortgage, according to the principles of equity, the mort- gagee was entitled to an equitable lien thereof as soon as it was acquired by the mortgagor, although he could not be said to have a legal right thereto until it was delivered to or taken possession of by the mortgagee under the mortgage. Thus, when a mortgage has been executed, and an antece- dent creditor subsequently obtains judgment against the mortgagor and liens upon property before it is delivered to the mortgagee, the mortgagee is entitled to recover its pos- session from the officer making the levy. A mortgagee fail- ing to show a legal right to the possession of the property in dispute may yet succeed in showing an equitable right to such possession, and can therefore have his protection based upon the equitable and not upon the legal right.^ A chattel mortgage is not, as a matter of law, fraudulent and void because it covers such goods, wares and merchan- dise as may from time to time thereafter be acquired in lieu and place thereof, in the current business of the said mercan- tile establishment.^ § 658. Teimessee. — Where a' trustee is not required to take possession of the goods mentioned in the trust deed, without limiting the debtor in his discretion as to the appropriation of the proceeds of sales, no distinction made as to goods to be bought for replenishing the stock, whether for cash or on credit, but the entire stock is to be held under trust con- veyances, the same is void. If the amount mentioned in the deed is to stand as security for future advances to enable the " Parker v. Jacobs, 14 S. Car. 112. 'Hirshkind v. Israel, 18 S. Car. 157. 452 SALE AND EEPLENISHMENT OF THE STOCK. debtor to trade upon the goods in his possession, and such others as he may bring into the stock, the conclusion is irre- sistible that the conveyance was made to hinder and delay creditors, and is therefore fraudulent in fact and absolutely void/ The object of a mortgage is to obtain security beyond a mere reliance upon the honesty of the debtor, and to avoid the risk of other creditors taking all his property by fasten- ing a specific lien upon that covered by the deed. Where the mortgagor retains possession of the stock and replenishes it, there is no specific lien, but a floating one, which attaches, swells and contracts as the stock in trade changes, increases and diminishes, or wholly expires by the entire sale and dis- position, at the will of the mortgagor. Such a mortgage is void.^ § 659. Texas. — A chattel mortgage by which it is cont;em- plated that the goods shall be exposed for sale at retail by the mortgagor in the ordinary way is void as to creditors. Thus if, at the time of the execution of a mortgage, there was a secret agreement that the mortgagor should remain in pos- session of the goods and sell them, and he did so remain in possession, with the consent of the mortgagee, and they were exposed to sale, it was held that the instrument, taken in connection with the contemporaneous verbal agreement and conduct of the parties in accordance therewith, was clearly void as to the creditors of the mortgagor." So, a mortgage, taken in connection with a verbal agree- ment attending which, that the mortgagor remain in posses- sion of the goods and control of the mercantile business as before, is wholly void and passes no title to the mortgagee.* ' McCrasly v. Hasslock, 4 Baxt. 1. 'National Bank v. Ebbert, 9 Heisk. 153, overruling Hickman v. Perrin, 6- Coldw. 135. Such a mortgage is fraudulent per se, because such a transaction, irre- spective of fraud, is against public policy, throwing open wide the door for possible fraud, and the contract does not fall within the province of equity.. Phelps V. Murray, 2 Tenn. Ch. 746. •National Bank v. Lovenberg, 63 Tex. 506. 'Duncan v. Taylor, 63 Tex. 645. VERMONT. 453 Where it is stipulated in the mortgage that the mortgagor shall be permitted to remain in quiet and peaceable posses- sion of the goods until he makes default in any of the terms of the mortgage, but in the event that the stock should be threatened by any process of law from any third party, then the mortgagee shall be at liberty to take possession of the said stock and dispose of the same according to his discre- tion, and pay himself from the proceeds of such sale, it was decided that such mortgage was void as to creditors/ A mortgage upon a stock of goods, with the power in the mortgagor to retain possession and sell in the usual course of trade, and to apply the proceeds to replenish the stock, is fraudulent in law as to creditors. There is a well-defined distinction between a mortgage with power simply to retain possession and one with power to retain possession and sell the property and replenish the stock.^ § 660. Vermont. — The Vermont statute^ requires, for the validity of chattel mortgages, a change in the possession of the goods to the mortgagee, or that the mortgage shall be recorded and be given to secure a specific debt, to which the parties shall make oath, and that the mortgagor shall not have power to sell except by written consent of the mort- gagee, indorsed on the mortgage or on its record. A mortgage on a stock of goods, which is left in the pos- session of the mortgagor, who covenants to keep the value of the stock up to the amount of the debt secured, contain- ing a provision against sale of the goods without written consent of the holder, is not rendered invalid, per se, as against the mortgagor's creditors, by the mortgagee's subse- quent consent to the sale of the goods in the usual course of business by the mortgagor. The provision that after-acquired goods placed in the stock by the mortgagor shall be covered by the mortgage is valid, and on taking possession of the goods under the mort- • Wilbersv. Kray, 73 Tex. 533. ^ Peiser v. Peticolas, 50 Tex. 638. 'Eev. Stat. §§1966, 1972. 454 SALE AND EEPLENISHMEJiTT OF THE STOCK. gage, with the consent of the mortgagor, such after-acquired goods pass to the mortgagee as against the mortgagor's as- signee in insolvency, appointed shortly thereafter, when it does not appear that the mortgagee knew of the mortgagor's insolvency at the time of taking possession of the goods. Such a mortgage of goods is not, per se, fraudulent. Be- cause such mortgages furnish an opportunity to defraud the other creditors is no reason why a court should adjudge them prima facie, much less conclusively, fraudulent, until it is established that the oath thereto is false, and that such mort- gage was made by the parties to hinder and delay their other creditors in collecting their debts against the mortgagor.^ § 661. Virginia. — The provisions of a n^ortgage or deed of trust may be of such a character as of themselves to furnish evidence suflBcient to justify the inference of a fraudulent intent. Such is the case where a grantor reserves a power over the property conveyed incompatible with the known purpose of the trust and adequate to the defeat thereof.^ It is also well settled in this State that no irresistible in- ference of intent to defraud is deducible from a provision in a deed of trust postponing the sale of the property conveyed a reasonable length of time, and reserving the use of the prop- erty to the mortgagor or grantor until sold, even although a portion of the property conveyed may be perishable in its nature and consumable in its use ; nor is such inference a necessary deduction from the omission to annex a schedule or inventory of the property to the deed, nor is the inference a necessary one where all these circumstances exist in the same case.^ Judge Daniel says that a provision in a deed that the grantor shall attend to the business but shall be under the • Peabody v. Landon, 61 Vt. 318. ' Lang V. Lee, 3 Band. 410 ; Sheppards v. Turpin, 3 Gratt. 373 ; Spence v. Bagwell, 6 Gratt. 444; Brockenbrough v. Brockenbrough, 31 Gratt. 580; Addington v. Etheridge, 12 Gratt. 486 ; Quarlea ». Kerr, 14 Gratt. 48 ; Perry V. National Bank, 27 Gratt. 755. ' Lewie v. Caperton, 8 Gratt. 148 ; Cochran v. Paris, 11 Gratt. 348 ; Sipe v. Earman, 26 Gratt. 563. WEST VIKGINIA. 455 control of the trustee, who may, at any time, on his own motion, and the general request of creditors, sell the prop- erty at auction, is not fraudulent per se, so as to avoid the deed.^ § 662. Washington. — Where a mortgage provides that the mortgagor shall retain possession and carry on the business, and keep up the stock of goods, the proceeds to be used for the sole use and benefit of the mortgagee, either by apply- ing the money so obtained in payment of the mortgage debt, or in keeping up the security, or adding to the stock, it was decided that the mortgage was void for indefiniteness and as being a fraud on creditors of the mortgagor.^ Such an arrangement may be prolonged indefinitely, and would be from the first and all the time palpable injustice to the other creditors ; for it would enable the mortgagor, so long as the mortgagee should not press the payment of the mortgage debt, to sell the goods as his own, and within a certain range to appropriate the proceeds to his own pur- poses for an indefinite length of time, and is void as to creditors.* But a mortgage of a stock which allows the property to be retained by the mortgagor, and sold by him at retail for the sole purpose of applying the proceeds to the payment of the mortgage debt, is valid as against the creditors of the mort- gagor." § 663. West Virginia. — A trust deed was made to secure a certain debt, and stipulated that the grantor obligated him- self to keep always on hand a stock of goods equal in quan- tity, description and value to the personal property herein- above mentioned, until the debt which the deed was drawn to secure was paid in full. The court, by Judge Moore, held that the inferences were fairly deducible from the stipulation that the grantor should retain possession of the goods, and 'Marks v. Hill, 15 Gratt. 400. ^ Byrd v. Forbes, 3 Wash. St. 318. ^ Wineburgh v. Schaer, 2 Wash. St. 328. *Langert v. Brown, 3 Wash. St. 102. 456 SALE AND KEPLENISHMENT OF THE STOCK. has an absolute power of sale thereof. This stipulation is inconsistent with the security for the debt or object of the trust and adequate to defeat thereto, being equivalent to a power of revocation ; and the deed is therefore fraudulent and void as to creditors.^ § 664. Wisconsin. — A chattel mortgage is fraudulent as to creditoi-s when there is an agreement between the cred- itors secured thereby and the mortgagor, that the mortgagor may use and dispose of the goods mortgaged in the regular course of trade, and will be ground for an attachment, by any creditor, of the goods mortgaged.^ While it is the settled law of this State that an agreement in or contemporaneous with a chattel mortgage, that the mortgagor may remain in possession, sell the goods and apply the proceeds on the debt, may be valid, yet, if he applies even a part of the proceeds to his own use, it renders the instru- ment void as against creditors.* Yet the mere fact of leaving a stock of goods in the mortgagor's possession with instruc- tions to go on and sell as usual and make remittances to the mortgagee, though proper evidence to go to the jury in con- nection with other facts upon the question of fraudulent intention, does not of itself amount to fraud.* An oral agreement between the mortgagor and the mort- gagee, that the mortgagor was to remain in possession of the goods and sell the same in the regular course of trade, as if no mortgage had been executed, and apply the proceeds to his own use, in the support of his own family and otherwise, renders the mortgage fraudulent and void in law as to the creditors, the same as if the agreement had been made a part of the mortgage itself.* A mortgagee of a stock of goods took possession thereof ' Garden v. Bodwing, 9 W. Va. 121. See, also, Kuhn v. Mack, 4 W. Va. 186. ' Anderson v. Patterson, 64 Wis. 557. ' Blakeslee v. Bossman, 43 Wis. 116. ■•Cotton V. Marsh, 3 Wis. 221; Fisk v. Harshaw, 45 Wis. 665. ' Steinart v. Deuster, 23 Wis. 186. See, also, Oliver v. Town, 28 Wis. 828. "WISCONSIN. 457 and continued the business, making sales, and replenishing the stock from time to time by the purchase of new goods. Judge Lyon says such additions became in equity, and as between the parties, part and parcel of the mortgaged stock, to be treated and accounted for as such.^ The fact that a chattel mortgage authorizes a mortgagor to sell the goods and replenish them with others, to be paid out of the proceeds of such sales, does not affect the validity of the security, there being no agreement or understanding that he may dispose of the proceeds of the sales for his own use and benefit ; but, says Judge Lyon, the attempt to ex- tend the security of the mortgage over the after-acquired goods is probably unavailing, except, perhaps, as a license to seize such goods.^ 1 Burr V. Dana, 72 Wis. 639. ' Roundy v. Converse, 71 Wis. 524. See, also, Allen v. Kennedy, 49 Wis. 649. Where the mortgagor remains in possession of any stock of goods or stock in trade, with permission from the mortgagee to make sales and apply proceeds upon the mortgage debt, the mortgagor !nust, at the end of every sixty days from the date of the mortgage, file in the oflSee where the mort- gage is filed, a true and correct verified statement in writing of all sales made, the amount to be applied on the debt, and the total valuation of all stock added to the original stock. A failure to file such statement makes the mortgage due, and makes it void as to third parties after fifteen days from the time such statement should have been filed. After payment of any chattel mortgage, the mortgagor may demand of the mortgagee, his personal representative or asiignee, a certificate of such payment, and within ten days after receiving such certificate the mortgagor must file it in the office where the mortgage is filed and remove the mortgage from the files. Eev. Stat. U 2313-2317. 458 EELATIVE EIGHTS OP THE PARTIES, Paet V. — Rights of Paeties Befoee Default. CHAPTER XIV. EELATIVE EIGHTS OF THE PAETIES. AETICLE I. — EIGHTS OF THE MORTGAGEE. 665. When Entitled to Possession. 666. Use of Violence by Mortgagee or his Agent. 667. What is Delivery and Possession. 668. EflFect of Garnishment of Mortgagor. 669. Seizure Before Maturity of Debt. 670. Insecuritjr Clause. 671. Presumption Under the Insecurity Clause. 672. Illinois Rule. 673. Minnesota Rule. 674. As Against Creditor! of the Mortgagor. 675. Purchaser Takes the Place of the Mortgagor. 676. Legal Title. 677. Michigan Rule. 678. Washington Rule. 679. Oregon Rule. 680. Action by Mortgagee. 681. When Replevin Will Lie Before Maturity. 682. When Demand for the Property Must be Made. 683. When Trover Will Lie. 684. Possession in Case of Indemnity Mortgage. 685. Execution Creditor and Officer are Both Liable. 686. Rights Under Conditional Sales. 687. As to Receivers. 688. Appointment Before Default. 689. May Avoid a Chattel Mortgage. 690. Evidence. 691. Parol Evidence. 692. Loss of Note. 693. Arrangement Made Prior to the Levy of an Attachment — Evidence of. 694. Pleadings. 695. Measure of Damages. 696. Injunctions. 697. As to Other Creditors. 698. Judicial Sales of Property Not Enjoined. 699. When Allowed. 700. Where Consideration Fails. 701. Estoppel. 702. Standing By and Making no Objection. 703. Giving Preference to a Second Mortgagee. § 665. When Entitled to Possession. — As has already been stated, the mortgagee is entitled to possession when the WHAT IS DELIVERY AND POSSESSION. 459 mortgage is executed, unless the instrument stipulates to the contrary. Upon default in any of the terms of the mort- gage the mortgagee is entitled to take possession of the prop- erty, when in the hands of the mortgagor. Thus, a deed of trust or mortgage, with power of sale, of personal property, given to secure a valid indebtedness, though the plossession is not given until the day after the execution of the instru- ment, vests the legal title and right of possession in the mortgagee, so long as the debt remains unpaid.^ So the mortgagee, after condition broken, is entitled to possession of the entire property, though a part of it is cov- ered by a junior mortgage, though he may have other secur- ity, or have relinquished his lien on a part, of the property not embraced in the junior mortgage." When no right has accrued to the mortgagee to take possession of the mortgaged property, he has no right to enter the mortgagor's house in his absence and take away the property without license, ex- pressed or implied, from the mortgagor, although he believed he had cause to think the mortgagor would not return.^ § 666. Use of Violence by the Mortgagee or His Agent. — The mortgagee or his agent has no right to use violence in taking possession of the property, as the law furnishes means to gain possession. And a stipulation which authorizes the mortgagee or his agent to enter the premises of the mort- gagor and take therefrom the mortgaged property, conveys no right to enter, and by force and violence dispossess the mortgagor, when he is in peaceable possession, and especially when the mortgagee knows that the validity of the mortgage is denied by the mortgagor.* § 667. What is Delivery and Possession.. — When a mort- gagor makes a shipment of mortgaged property, such as grain, and it is lost, the question arises, who is to assume the loss, as between the mortgagor and mortgagee ? An inter- ' Jacoby v. Brigham (Tex.), 7 S. W. Rep. 366. ' Norris v. Hix, 74 Iowa 524. ^ McLeod V. Jones, 105 Mass. 403. * State V. Boynton, 75 Iowa 753. 460 EELATIVE RIGHTS OF THE PARTIES. esting case occurred in California. By the terms of the chattel mortgage of wheat the mortgagor was to harvest the same and deliver it into possession of the mortgagee. A portion of the wheat was lost in shipment by railroad to the place of destination agreed upon by the parties. The lower court instructed the jury to the effect that if the wheat re- ferred to was shipped in the name of the mortgagee, and the bill of sale taken in his name, with his knowledge and con- sent, then he was in possession and owner thereof, and was liable for any loss resulting from his own negligence or care- lessness from those in his employ. The Supreme Court held, on'appeal to it, that this instruction did not state the law, and was therefore erroneous.^ § 668. Effect of Garnishment of Mortgagor. — The mort- gagee's right to the possession of mortgaged chattels is not affected by a garnishment instituted against the mortgagor. The court says, per Cooley, C. J.: "We have serious doubts of the right to take from the mortgagee of chattels or the property upon which he has a lien, excepting where, for the protection of the rights of others, the necessity shall appear. It is a serious interference with his contract rights. It is a part of his security that the mortgage given him authorizes to take the property into his own possession ; nothing which may subsequently be done by or against the mortgagor can right-fully diminish or affect his security. When a resort to legal remedies becomes essential, all parties concerned may be required to submit to some inconvenience and some loss, but in a case where, as in this case, the legal remedy is only sought for the purpose of reaching the sur- plus after a lien is satisfied, and the lien-holder is not con- cerned in the controversy, it cannot be rightful to make the burden or the costs of the litigation fall upon him, or to take from him substantial rights, for the convenience of the parties litigant."^ But after obtaining a judgment the creditor may have ' Perkins v. Eokert, 55 Cal. 400. " Smith V. Menominee, 53 Mich. 560. SEIZURE BEFORE MATURITY OP DEBT. 461 sold on execution the interest of the mortgagor in the prop- erty mortgaged, and for this purpose of levy might have taken possession temporarily.* § 669. Seizure Before Maturity of Debt. — If a mortgagee avails himself of the stipulation in a chattel mortgage and takes possession of the property, or is about to do so before the debt falls due, he thereby confers upon the mortgagor the right to pay the debt and keep the property. The court, per Lyon, J., holds : " We hold that the tender divested the title of the mortgagee to the property just as effectually as a payment of the debts secured by the mortgages would have divested it; and if they took, carried away and sold the same after tender, against the remonstrance of the owner, they are guilty of conversion thereof, and the plaintiff (the owner) may maintain trover against them and recover the value of the property. We do not regard the fact of any importance that the most of the mortgage debts were not due at the time the property was seized. If a mortgagee avails himself of a stipulation in the mortgage to that effect, and takes possession of the mortgaged property, or is about to do so, before the debt secured by the mortgage falls due, he thereby confers upon the mortgagor the right to pay the debt and keep his property."^ And a mortgagee of chattels whose mortgage authorizes him, upon neglect or failure of the mortgagor to pay the debt secured, with interest, or to perform any of its cove- nants therein expressed, to " sell the said property or any part thereof, at public or private sale, and from the pro- ceeds retain the amount of said debt and interest due at the time of such sale," and all costs, &c., rendering the surplus to. the mortgagor, and also authorizes him, " for further se- curity," to take the property into his possession at any time he thinks proper, commits a tort if he takes the property under the latter clause, before any default or breach of con- ' Gary v. Hewitt, 26 Mich. 228 ; Maoomber v. Saxton, 28 Mich. 516 ; Nelson II. Ferris, 30 Mich. 497 ; Haynes v. Leppig, 40 Mich. 602. 'Rice V. Kahn, 70 Wis. 323. 462 RELATIVE EIGHTS OF THE PAETIES. dition oa the part of the mortgagor, and sells the same after refusing to accept payment of the amount due; and an action for the conversion thereof will lie in favor of the mortgagor. "The defendant as mortgagee took possession of the mortgaged property with the intention of selling it, and did so sell it without any right whatever to do so. His pretense that he took possession of the property and sold it under the mortgage, or by virtue of the mortgage, can avail him nothing. The mortgage gives him no such right. So far as the defendant's conversion of the property is concerned, he was and is a stranger to the mortgage. * * * The defendant converted the property by refusing a tender of the mortgage-money, and threatening to sell the property, and selling it."' The temporary loan of a mortgaged horse is not such a breach of a condition of the mortgage that the mortgagor shall not remove the horse " from the place where it now is " without the consent of the mortgagee, as will entitle the mortgagee to the possession. Judge Elliott says the tempo- rary loan of a horse to a neighbor is no such breach of the condition of the mortgage as entitles the mortgagee to take the property from the mortgagor. The nature of the prop- erty embraced in the mortgage is to be considered in deter- mining what use may be made of it by the mortgagor, and, if the use is a reasonable one, there is no breach of the con- dition of the mortgage.^ Under such mortgage the provision cannot be so con- strued as to prohibit the mortgagor from using the horse and wagon which were embraced in the mortgage, in making a brief visit to her mother outside of the State. The removal, in order to constitute a breach, must place the mortgagee's rights in jeopardy, and it must be inconsistent with a legiti- mate use of the property by the mortgagor.* § 670. Insecurity Clause. — "Where a chattel mortgage pro- ' Harder v. Hoap, 69 Wis. 288, opinion by Orton, J. 'Jones «. Smith, 123 Ind. 585. " Walker v. Eadford, 67 Ala. 446. PBESUMPTIONS UNDER THE INSECTJEITY CLAUSE. 463 vides that the debt shall draw interest and to be paid at a certain time named, there is an implied agreement that the mortgagor shall remain in possession of the property until default in the payment of the money, or some part thereof. The provision that if the mortgagee shall, at any time, feel ( unsafe or insecure he may seize and sell the aforesaid prop- erty, will not authorize the mortgagee to seize and sell the property before the debt becomes due, unless the mortgagor is about to do it, or has done something to impair the se- curity.^ Under such a clause the levy of an execution upon the mortgaged chattels as the property of the mortgagor gives the mortgagee a clear right to treat the condition of the mortgage as broken, and to reclaim possession by action at law if necessary, both as against the mortgagor and the officer making the levy.^ Or, if the mortgagor sell the property without the consent of the mortgagee, the latter, under the insecurity clause, • may maintain an action of trover against the vendee.^ And if the mortgage covers other property not sold, it is not necessary to the right of recovery that the mortgagee shall show that the unsold property was insufficient to satisfy the mortgage debt.* Under this clause, if the mortgaged property be seized under a distress warrant for rent, it entitles the mortgagee to immediate possession,^ or a levy of an execution upon the property entitles the mortgagee to an immediate possession.® § 671. Presumption Under the Insecurity Clause. — This clause generally provides that the mortgagee shall take pos- session when, in his judgment, he deems himself insecure. Upon his taking possession before the debt is due, because ^Newlean v. Olson, 22 Nebr. 717. = Welsh V. Sackett, 12 Wis. 243; Lewis v. D'Arcy, 71 111. 648; Frisbee v. Langworthy, 11 Wis. 875 ; Beach v. Derby, 19 III. 617. 'Bailey v. Godfrey, 54 111. 507. . * Bailey v. Godfrey, 54 111. 507. "^Conkey v. Hart, 14 N. Y. 22; Eussell v. Butterfield, 21 Wend. (N. Y.) 800. "Ashley v. Wright, 19 Ohio St. 291. 464 RELATIVE EIGHTS OF THE PARTIES. he considered himself insecure, the legal presumption is, as held by many courts, that such was the fact. He is the sole judge, and it lies in his own discretion, and no matter if his apprehensions are not well founded.* § 672. Illinois Rule. — In this State the mortgagee must have a reasonable apprehension of insecurity, such as the danger of losing his debt by delaying its collection until maturity or danger of waste or removal of mortgaged prop- erty by the mortgagor.^ He may take possession when he believes he has reasonable grounds to believe that he is in danger of losing his security from any cause arising after execution of the mortgage,* and when sued in replevin for seizing the property he must proye he believed there was such danger.* If goods are attached in possession of the mortgagor, the mortgagee may replevy them from the oflScer.* His omission to take possession of the mortgaged prop- erty, under the insecurity clause, does not release his lien,* and mort^gee's assignee succeeds to the mortgagee's rights under the unsecurity clause.' § 673. Minnesota Rule. — Where a chattel mortgage con- tains an express or implied stipulation that the mortgagor shall remain in possession of the property until default, and likewise a provision, "whenever he deems himself insecure," the mortgagee has no right arbitrarily to take possession of the property before default of the mortgagor, but can only take it for just cause, based upon the actual existence of facts con- stituting a reasonable ground for believing himself insecure.* § 674. As Against Creditors of the Mortgagor. — A levy on ' Huebner v. Koebke, 42 Wis. 319; Cline v. Libby, 46 Wis. 123; Smith v. Post, 1 Hun (N. Y.) 516. » Furlong v. Cox, 77 111. 293; Davenport v. Ledger, 80,111. 574. »Eoy V. Goings, 96 111. 361. * Furlong v. Cox, 77 111. 293. 'Lewis V. D'Arcy, 71 111. 648. ' Wilson V. Rountree, 72 111. 570. ' Beach v. Derby, 19 111. 617. 'Gen. Laws 1879, ch. 65, | 2;' Deal v. Osborne, 42 Minn. 102. PURCHASER TAKES THE PLACE OF MORTGAGOR. 465 mortgaged property attaches only to the mortgagor's inter- est, and on default of payment of the mortgage debt, termi- nates the mortgagor's right of possession, and the mortgagee may maintain replevin against the officer.^ Where a father and a son make a contract for the son's services to be rendered after he reaches the age of twenty-one years, at an agreed compensation, and the father afterwards executes to the son a chattel mortgage for wages accruing after such contract, a sheriff may be restrained at the suit of the son from selling the entire title to the mortgaged prop- erty under execution against the father.^ Where a mortgagor of chattels has the right to the posses- sion of the mortgaged property until default, and an execu- tion against him, and in favor of a third party, is levied by an officer upon the property, the leyy attaches to and covers only the title of the mortgagor, and the mortgagee, after de- fault, has the right to take possession of the property a,s against the officer.^ While the mortgaged chattels are in the custody of the mortgagee, he may lend or hire them to the mortgagor for occasional temporary use. Judge Hemingway says that there is nothing in the relation which the mortgagee sustains to the mortgagor that forbids to him the offices of ordinary kindness or of good neighborhood. " Therefore, the mort- gagee may lend the mortgaged chattels to the mortgagor for occasional temporary use, without prejudice to his security." * § 675. Purchaser Takes the Place of the Mortgagor. — A purchaser claiming title to chattels bought from the mort- gagor thereof stands in the place of the mortgagor, and can- not take advantage of a reservation in the mortgage in favor of the mortgagor, on the ground that such reservation is fraudulent, and renders the mortgage void.^ ' Rankine v. Greer, 38 Kans. 343. 'Stratton v. Packer (N. J.), 14 At. Rep. 587. 'Eankine v. Greer, 38 Kans. 343. * Garner v. Wright, 52 Ark. 385. See, also, Farnsworth v. Shepard, 6 Vt. 621. ^ National Bank v. Davidson, 18 Oreg. 57. 2e 466 RELATIVE EIGHTS OF THE PARTIES. § 676. Legal Title. — ^The legal title to the mortgaged property, with the right of possession, is in the mortgagee, and his right becomes absolute after the condition is broken; the mortgage vests a present title, defeasible upon a con- dition subsequent,* § 677. Michigan Rule. — A chattel mortgage is a mere se- curity and not a transfer of title. The legal title only vests in the mortgagee after foreclosure and sale. The mortgagee is only secured by a lien on the property mortgaged.^ § 678. Washington Rule. — In this State a chattel mortgage is a mere security, under which no title can pass except by foreclosure and sale.^ § 679. Oregon Rule. — Formerly, in this State, a chattel mortgage created a lien upon the property mortgaged, and did not pass any title until foreclosure.* But this rule has been changed, and, after condition broken, the mortgagee may begin action to recover possession, if withheld by the mortgagor.^ Now, a chattel mortgage is held to be a con- ^Musgat V. Pumpelly, 46 Wis. 669; Byron v. May, 2 Pin. (Wis.) 443; Judson V. Easton, 58 N. Y. 664 ; Bragelman v. Dane, 69 N. Y. 69 ; Langdon V. Buel, 9 Wend. (N. Y.) 80; Brown v. Bement, 8 Johns. (N. Y.) 98; Tal- man v. Smith, 89 Barb. (N. Y.) 390; Blodgett v. Blc/dgett, 48 Vt. 32; Leach ■!). Kimball, 34 N. H. 568; Williams v. Dobson, 26 S. Car. 110; Wolflf v. Far- rell, 3 Brev. (S. Car.) 68; Reese v. Lyon, 20 S. Car. 17; Heyland v. Badger, 35 Cal. 411 ; Landon v. Emmons, 97 Mass. 37 ; Well v. Connable, 138 Mass. 513 ; Tompkins v. Batie, 11 Nebr. 147 ; Tallon v. Ellison, 3 Nebr. 63 ; Adams v. Nat. Bank, 4 Nebr. 370 ; Hill v. Merriman, 72 Wis. 483 ; Fletcher v. Neu- deck, 30 Minn. 125 ; Manson v. Phcenix Ins. Co., 64 Wis. 28 ; Pickard v. Low, 15 Me. 48 ; Nelson v. Wheelock, 46 111. 25 ; Frank v. Miner, 50 111. 444 ; Chipron v. Freikert, 68 111. 284 ; Broadhead v. McCay, 46 Ind. 595 ; Hamlyn V. Boulter, 15 Kans. 376; Pease v. Odenkirchen, 42 Conn. 415; Clark v. V^^hitaker, 18 Conn. 543; Woodman v. Chesley, 39 Me. 45; Ellinton v. Charleston, 51 Ala. 166; Kannady v. McOarron, 18 Ark. 166; Miller v. Pan- coast, 29 N. J. L. 250; Robinson v. Campbell, 8 Mo. 365; MoGuire v. Benoit, 33 Md. 181; Wilson v. Brannan, 27 Cal. 258; Ferguson v. CliflFord, 37 N. H. 86; Bean v. Barney, 10 Iowa 498; Wolfley v. Rising, 12 Kans. 535; Thorn- hill V. Gilmer, 4 8. & M. (Miss.) 153 ; Bates v. Wiles, 1 Handy (Ohio) 532 ; Barnett *. Timberlake, 57 Mo. 499. •People V. Bristol, 85 Mioh. 28; Kohl v. Lynn, 34 Mich. 360; Gary v. Hewitt, 26 Mich. 228; Flanders v. Chamberlain, 24 Mich. 305; Randall v. Higbee, 37 Mich. 40. 'Byrd v. Forbes, 3 Wash. St. 318. * Chapman v. State, 5 Oreg. 432. » Case 1). Campbell, 14 Oreg. 460. WHEN REPLEVIN WILL LIE BEFOKE MATURITY. 467 ditional sale with defeasance, and the common-law definition has been accepted.^ § 680. Action By Mortgagee. — ^When the mortgagee is entitled to possession he may maintain action for the posses- sion of the property against any one who detains it^ or trover for the conversion of it.^ In Illinois, if the mortgagee takes possession under the insecurity clause, when he has no reasonable grounds for his apprehension, he will be liable to the mortgagor in trespass ; or the mortgagor can bring replevin and be entitled to damages. If the taking is malicious, the jury may award exemplary damages.* § 681. When Replevin Will Lie Before Maturity. — The mortgagee may maintain replevin against the mortgagor for the property before maturity of the debt, if there be no stipulation that the mortgagor may retain possession.^ So, also, he may bring replevin, if the agreement empowers him to take possession and sell the property, whenever he deems himself insecure and a reasonable cause exists for such apprehension.^ Under a like clause he may bring replevin if the mortgagor, without his consent, sells or re- moves the property contrary to stipulations.' But when the mortgage entitles the mortgagor to the pos- session until the maturity of ,the debt, the mortgagee cannot maintain replevin for the property, because he has not the immediate right to its possession.* Otherwise, if the mort- gagor has no agreement for his possession.' If the mortgagor makes a breach of any of the conditions, ' Hembree v. Blackburn, 16 Oreg. 153. ^ Frisbee v. Langworthy, 11 Wis. 375 ; Welch v. Sackett, 12 Wis. 243. ' Harvey v. MoAdams, 32 Mich. 472 ; Grove v. Wise, 39 Mich. 161. * Davenport v. Ledger, 80 111. 574. 'Ferguson D. Thomas, 26 Me. 499. "Lewis V. D'Archy. 71' 111. 648; Chadwick v. Lamb, 29 Barb. (N. Y.) 518. 'Eussell V. Butterfield, 21 Wend. (N. Y.) 300. 'Simmons v. Jenkins, 76 111. 479; Curd v. Wunder, 5 Ohio St. 92; Hatha- way V. Brayman, 42 N. Y. 322. "Pickard v. Low, 15 Me. 48. 468 RELATIVE RIGHTS OF THE PARTIES. the mortgagee has a right to bring replevin for the property.^ If there be a clause in the mortgage that the mortgagee may- take possession and sell the property whenever he deems himself insecure, he has no constructive possession until he has done some act asserting his right under the stipulation.^ § 682. When Demand for the Property Must be Made. — In Arkansas, when the mortgagee has the right of immediate possession of the property, no demand is necessary before bringing an action to recover for its conversion.^ An un- lawful taking requires no demand, but the general rule is that an unlawful detention by the mortgagor requires a de- mand to be made before suit,* ,When the mortgagee has the immediate right of posses- sion no demand is necessary in order to maintain an action of replevin against a subsequent purchaser from the mortgagor.* In Michigan a demand is necessary both for a tortious taking and for a wrongful detention.* § 683. When Trover Will Lie. — A refusal to yield posses- sion to the mortgagee when he has a right of possession is equivalent to a conversion, and he may bring trover.' And whenever the mortgagee is entitled to possession he may bring trover as well before default as after.* The mortgagee, after condition broken, has the legal title to the property, and the right to the possession thereof against everybody ; and his right to recover against every person unlawfully ' Quinn v. Schmidt, 91 111. 84 ; Ashley v. Wright, 19 Ohio St. 291. ^ Skiff II. Solace, 23 Vt. 279. 'Nordman v. Wilkins, 28 Ark. 191. *Monnot v. Ibert, 33 Barb. {N. Y.) 24; Roberts v. Norris, 67 Ind. 386,- Henby v. Forgy, 7 Ind. 284. ^Braley v. Byrnes, 20 Minn. 435; Partridge v. Swazey, 46 Me. 414; Pease V. Odenkirchen, 42 Conn. 415. * Cad well v. Pray, 41 Mich. 307. In Michigan a chattel mortgage is con- sidered as a security and not a sale. The contrary doctrine belongs to the old theory of chattel mortgages, which treated them as sales and not as securities. ' Badger v. Batavia Paper Mfg. Co., 70 111. 802 ; Cutter v. Copeland, 18 Me. 127 ; Brown v. Cook, 3 E. D. Smith (N. Y.) 123 ; Cotton v. Marsh, 3 Wis. 221 ; Bates v. Wilbur, 10 Wis. 415 ; Wright v. Starks, 77 Mich. 221 ; Mont- gomery V. Kerr, 1 Hill (8. Gar.) 291 ; Howard v. Burns (Kans.), 24 Pac. Rep. 981. ° Spriggs V. Camp, 2 Spears (S. Car.) 181. POSSESSION IN CASE OF INDEMNITY MORTGAGE. 469 converting the same in hostility to his rights as mortgagee, is just as perfect as if he had been the absolute owner thereof; the only diflference being that, as against persons claiming under the mortgagor or his assignees, his right to damages would be limited to the amount due upon the mortgage.' In Kansas, if the party taking the mortgaged property has actual notice of the mortgage, and takes possession of the property in violation of the mortgagee's rights, he is guilty of conversion, and especially when all transpires within less than one year after the execution of the mortgage. This cause of action is not satisfied, annulled or barred by any failure on the part of the mortgagee afterwards to file a re- newal affidavit." In general, a second mortgagee of a chattel, who takes the property from the mortgagor and sells it,' and receives the full consideration of the sale, without regard to the rights of the senior mortgagee, is liable to the latter in an action for the conversion of the property.* § 684. Possession in Case of Indemnity Mortgage. — Under a mortgage of personalty to indemnify the mortgagee as se- curity of the mortgagor, the mortgagee is, not entitled to pos- session, in the absence of a provision in the mortgage, until he has paid the mortgage debt or part of it.^ But a mort- gage given as indemnity, providing that if the note is not paid at the expiration of the time designated, the mortgagor shall deliver possession of the chattels, does not give him the right to continue in possession until the mortgagee is damni- fied as surety. In Illinois, if possession is retained after de- ' Smith V. Konst, 50 Wis. 360. ^Corbin ■;;. Kincaid, Z3 Kans. 649. ^Lowe V. Wing, 56 Wis. 31; Bailey v. Godfrey, 54 111. 507; Welch v. Sackett, 12 Wis. 245; Frisbee v. Langworthy, 11 Wis. 375; Gregory v. Thomas, 20 Wend. (N. Y.) 19; Frank v. Playter, 73 Mo. 672; Briggs v. Mette, 42 Mich. 12. The mortgagee may also maintain trespass for an injury to his property. Cotton V. Watkins, 6 Wis. 629; Bates v. Wilbur, 10 Wis. 415; Cotton v. Marsh, 3 Wis. 221 ; Woodruff v. Halsey, 8 Pick. (Mass.) 333 ; Volney Stamps V. Gilman, 43 Miss. 456 ; Hotehkiss v. Hunt, 49 Me. 213 ; Moore v. Murdock, 26 Oal. 514; Simmons v Jenkins, 76 111. 479 ; Jones v. Webster, 48 Ala. 109. *Stonebraker v. Ford, 81 Mo. 532. 470 RELATIVE EIGHTS OF THE PARTIES. fault in payment, the property is liable to be taken on a judgment creditor's execution against the mortgagot.^ A party indorsed notes for the accommodation of another, who gave him a chattel mortgage as indemnity against loss, in case the mortgagee had to pay the notes. The notes were protested, and the mortgagee paid them. The property was levied upon and sold under execution. The mortgagee made a demand upon the officer levying the execution for the amount due. It was decided that the mortgagee could main- tain an action for conversion of the property.^ § 685. Execution Creditor and Officer are Both Liable. — Under the South Carolina law, when mortgaged property in the mortgagor's possession is, after default in payment, levied upon and sold, under a judgment against the mort- gagor, both the execution creditor and the officer are liable to a personal action by the mortgagee for the conversion of the property.* § 686. Rights Under Conditional Sale. — A. party was in possession of property under a conditional sale, thfe condition of which had been broken, leaving in dispute the vendee's title to the property. While in possession the vendee sold the property to another, taking back from him a conditional contract to resell the property. The original vendor removed the property from his ven- dee's possession under claim of title. Then the subsequent or second vendee brought an action of conversion against him. It was decided that the transaction between the vendee and the last purchaser amounted merely to a mortgage to se- cure an indebtedness of vendee to the last purchaser, and an action would not lie if the removal was with the vendee's consent, since he had the right of a mortgagor in possession to transfer possession of the mortgaged property.* • Dunlap V. Bpler, 88 111. 82. 'Bigelow V. Capen, 145 Mass. 270. 'Williams v. Dobson, 26 8. Car. 110. * Jones V. Goodwillie, 143 Mass. 281. As to the rule in conditional sales concerning delivery of possession, see Harkness v. Russell, 118 U. S. 663. This case is a resumi of this subject. AS TO RECEIVERS. 471 § 687. As to Receivers. — The rightful possession of a mortgagee of chattels, after default, cannot be molested by a receiver appointed over the estate of the mortgagor.^ The fact that there are unsettled accounts between the par- ties, or that the mortgagor has a claim, which if valid might be set off against the sum due on the mortgage, will not en- title him to an injunction against the mortgagee's selling, or to the appointment of a receiver to make the sale and keep the proceeds until the accounts are settled between the par- ties, so long as the mortgagor's claims are not established, or the amount thereof adjusted.^ The appointment of a receiver of mortgaged property in possession of the mortgagee, will only be made in case of pressing and apparent necessity, in order to secure the rights of the mortgagor or others claiming under him. To make the appointment in any other case would impair the obliga- tion of the contract between the parties, and would be beyond the constitutional power of the court.^ It will not be made over a mortgagee in possession when he claims upon oath a balance due him, much less where the debtor himself states such a balance, and admits that the property is inade- quate to pay such balance.* In general, when a receiver is appointed to take possession of the chattels mortgaged by the principal debtor, but in the hands of the mortgagee, he may be empowered to examine and inventory the property for the purpose of an intelligent sale ; but his proceedings must be at the expense of the fiind realized on the sale, and not at that of the mortgagee. And no sale can be made unless more than the mortgaged security can be realized ; and if made at all, it must be a sale in gross, subject to the mort- gagee's lien, and not sold in parcels.^ A receiver derives his authority from the act of the court 'Hammond v. Solliday, 8 Colo. 610. 'Bayaud v. Fellows, 28' Barb. (N. Y.) 451. 'Patten v. Accessory Trans. Co., 4 Abb. Pr. (N. Y.) 285. 'Bayaud v. Fellows, 28 Barb. (N. Y.) 451; Quinn v. Brittain, 3 Edw. (N. Y.) 314. * Smith V. Menominee, 53 Mich. 560. 472 RELATIVE EIGHTS OF THE PARTIES. appointing him, and not from the act of the parties at whose suggestion or by whose consent he is appointed ; and the utmost effect of his appointment is to put the property from that time into his custody as an officer of the court, for the benefit of the party ultimately proved to be entitled to it, but not to change the title, or even the right of possession in the property.' § 688. Appointment of Receiver Before Default. — When the mortgagee apprehends danger of loss of the mortgaged property, he may have a receiver appointed, even before his right to foreclose has accrued.^ A receiver will be appointed when it is shown that such action is necessary for the mort- gagee's protection, although the time of payment has not arrived.'' § 689. May Avoid a Chattel Mortgage. — A receiver of the property of a corporation may avoid a chattel mortgage upon property of the corporation on the ground that it was not filed as required by law. A receiver has the power to enforce the rights which the creditors, but for the proceed- ings, might have enforced in their own behalf The ap- pointment of a receiver is intended to facilitate and not to hinder a complete remedy to creditors ; this cannot be done unless such appointment is to apply, to the satisfaction of the creditor's debts, all the property of the corporation applicable to that purpose — that is, all the property which, but for the proceedings, they could have so applied. For these reasons a receiver may avoid any transfer void as to creditors.* § 690. Evidence.— In conversion for property taken by the mortgagee, the chattel mortgage authorizing him to take possession when he should deem himself insecure, the mort- ' Skip V. Harwood, 3 Atk. 564 ; Anon., 2 Atk. 15 ; Wiswall v. Sampson, 14 How. (U. S.) 52; Ellis v. Boston, &c., K. R. Co., 107 Mass. 1; Maynard v. Bond, 67 Mo. 315; Herman v. Fisher, 11 Mo. App. 275. ' Rose V. Bevan, 10 Md. 466 ; Claggett v. Salmon, 5 G. & J. (Md.) 314. » Long Dock Co. v. Mallery, 12 N. J. Eq. 93. * Farmers Loan and Trust Co. v. Minneapolis Eng. and Mach. Works, 35 Minn. 643. An assignee in bankruptcy may avoid a chattel mortgage, void as to creditors for want of filing. Bank v. Hunt, 11 Wall. (U. S.) 891. LOSS OF KOTES. 473 gage is admissible in evidence without producing the note it was given to secure, or accounting for its absence.^ A general objection to a chattel mortgage as evidence, without specifying any ground, will not reach an objection that, presumably, might have been obviated if specifically pointed out. When a particular objection might be obviated if made, and is not, it will be deemed to have been waived. In Illinois the Circuit Court of one county will not take judicial knowledge of the official character of the justice of the peace of another county before whom the chattel mort- gage was acknowledged.^ § 691. Parol Evidence. — Whether parol evidence is ad- missible to prove that, at the time of making the mortgage, it was agreed that the mortgagor should continue in possession until default in some of the conditions, is a question upon which the decisions are in conflict. Some declare such evi- dence to be admissible, because such an agreement does not contradict the written mortgage.^ § 692. Loss of Notes. — The loss of the notes given with the chattel mortgage, after the property has been sold by an officer in behalf of the mortgagee, does not affect the legality of the seizure, and in an action by an innocent purchaser, involving the title to the property, the mortgage is admis- sible, and also testimony as to the loss.* When the action is against a third person, and the mort- gage fully describes the debt, it is not necessary to prove the contents of the note by producing and proving the note itself in order to sustain the mortgage.® The nature of the mortgagee's title and the evidence of it are matters of evi- dence only." ' Hill V. Merriman, 72 Wis. 483. ' Weber v. Mick, 131 111. 520. 'Colman v. Packard, 16 Mass. 39; Case v. Winship, 4 Blackf. (Ind.) 425; Pierce v. Stevens, 30 Me. 184. < Howard v. Witters, 60 Vt. 578; Smith v. Johns, 3 Gray (Mass.) 517; Brooks V. Briggs, 32 Me. 447. ^Quinn v. Schmidt, 91 111. 84. 'Harvey v. Mc Adams, 32 Mich. 472. 474 RELATIVE EIGHTS OF THE PARTIES. § 693. Arrangement Made Prior to the Levy of an Attach- ment — Evidence of. — In replevin for attached chattels by one claiming under a chattel mortgage from the debtor, which authorized him to take possession after the default of thirty days, it is error to overlook evidence of an arrange- ment made prior to the levy of the writ, between the debtor and the mortgagee, by which the latter was to have imme- diate possession of the goods, and to charge that the plaintiff could not recover unless some of the debt secured had be- come due thirty days prior to the suit.^ § 694. Pleadings. — A complaint by a mortgagee for wrong- ful seizure of the mortgaged goods which shows that the mortgage debt was not due when the complaint was filed, need not allege its non-payment.* A prayer of a petition asked for an injunction restraining a party from seizing the mortgaged goods under a writ of attachment without first paying or depositing the amount of the mortgage debt, and for general relief. The mortgagee had the right, under the mortgage, to take possession whenever he deemed it necessary, and the mort- gage was alleged to have been given to secure a valid debt, and to have been recorded before the attachment. Held, that the petition was not demurrable as to whether or not the mortgagee was entitled to the particular relief demanded. His right to possession might have been determined under the general prayer. Questions as to the right of possession of personal prop- erty are within the jurisdiction of courts of law, and it makes no difference, as an error in the kind of proceedings adopted and is no ground of demurrer.^ A complaint alleged the execution of a chattel mortgage, and the wrongful conversion of the property covered thereby, being based, not on the mortgage, but on the conversion ; held, that the mortgage is not made a part of the complaint ' Hyde v. Shank, 77 Mich. 517. ^ Morcum v. Coleman, 8 Mont. 196. ' Thomas i;. Farley, 76 Iowa 735. INJUNCTIONS. 475 by filing a copy with it. And where a complaint shows a sale by the mortgagor of mortgaged chattels, a removal by the purchaser and their destruction by fire while in the pur- chaser's hands, it is sufiicient, though it does not allege directly a conversion by him.' § 695. Measure of Damages. — The damages which a mort- gagee can recover is the full value of the property converted at the time of the wrongful detention. He is not obliged to look to the personal responsibility of the mortgagor, or to show his insolvency, before recovering from the wrong-doer. Neither is he obliged to look to any other security he may hold.'^ But he cannot have full value of the property if that exceeds the mortgage debt and costs. He can recover, when the property has been wrongfully replevied from him, all damages suffered from the taking, up to the amount of the mortgage debt.* § 696. Injunctions. — The mortgagee is not entitled to an injunction restraining a sale of the mortgaged property under execution by a creditor of the mortgagor, when the property was in the possession of the mortgagee when it was seized, provided the property be such that its value is ascertainable and measurable in money ; for in such case the remedy at law is suflScient.* The mortgagor can be restrained from disposing of after-acquired property, if it would injure the mortgagee's security to a great extent, and be irreparable.* After default the absolute title vests in the mortgagee, and he has a legal remedy sufficient to protect his interest, and an injunction will not lie.^ But before default a mortgagor may be restrained from removing the property beyond the reach of the mortgagee, or from placing it where it will not be forthcoming for the satisfaction of the debt.'' iRoss V. Menefee (Ind.), 25 N. E. Eep. 545. ' Worthington v Hanna, 23 Mich. 530. ■'Smith V. Phillips, 47 Wis. 202. *La Mothe v. Pink,* 12 Chi. Leg. N. 152; 8 Biss. 493. 'Wood V. Eowcliffe, 3 Hare 308. « Adams v. Nat. Bank, 4 Nebr. 370. 'Claggett V. Salmon, 5 G. & J. (Md.) 814. 476 EELATIVE RIGHTS OF THE PARTIES. § 697. As to Other Creditors. — A mortgagee of chattels may enjoin proceedings against the property by other credi- tors, where, by the terms of the mortgage, possession is to be retained by the mortgagor until condition broken.^ § 698. Judicial Sale of the Property Not Enjoined. — When the mortgagee has taken possession with a view of selling the property in satisfaction of the debt, he is not entitled to an injunction to prevent a judicial sale of the chattels under execution sgainst the mortgagor. In such case, the prop- erty having no especial value, and its real money value being readily ascertainable, whatever damages may be sus- tained by the mortgagee by reason of the sale under execu- tion may be readily determined and compensated by an action at law. Nor does the fact that the mortgagee, in such case, cannot avail himself of all possible legal remedies, enti- tle him to relief by injunction, if any form of action at law is open to him in which a complete and adequate remedy may be had. Justice Dyer, of the United States District Court of Wisconsin, said : "Accepting the allegations of the bill as true, and admitting that complainant was in posses- sion and held the legal title to the property when it was seized, the question is whether there is such want of adequate remedy at law as entitles complainant to come into a court of equity for relief by injunction to restrain the threatened disposition of the property at execution sale. There is a familiar class of cases cited in the elementary works, in which, on account of antiquity or historical character or other peculiar value, jurisdiction in equity was entertained to prevent the transfer, or defacement, or other injury of arti- cles of personal property, or to compel their specific deliv- ery. But it is stated that these were cases where the articles were of peculiar value and importance, and the loss of which could not be fully compensated in damages. Such was the case of the silver altar-piece bearing a Greek in- scription, and of curious antiquity, and which could not be 'Smithurst v. Edmunds, 14 N. J. Eq. 408. JUDICIAL SALE OF THE PROPERTY WOT ENJOINED. 477 replaced in value, Somerset v. Cookson, 3 P. Will. 390 ; and of the horn which constituted the tenure by which an estate was held, Pusey v. Pusey, 1 Vern. 273 ; and of the silver tobacco-box, Fells v. Read, 3 Ves. 70 ; and of the masonic dresses and decorations, Lloyd v. Loaring, 6 Ves. 773. Other similar cases involving articles of property which were family relics or heirlooms, are reported in 13 Ves. 95 ; 3 Ves. & B. 16, 17, 18, and 10 Ves. 140, 148, 163. All these were cases where the chattels were articles of antiquity or curiosity, or were memorials of affection, or constituted insignia of oflBce, and equitable interposition to preserve them to the owner in specie was sustained on the ground that they were of peculiar character and value, and that the recovery of their intrinsic value in money would not be ade- quate satisfaction to the owner. There is another class of cases in which courts of equity have interposed to protect the owner of specific chattels in the beneficial enjoyment and use of them in specie. As where certain articles of property were placed in the hands of an agent to be held for the owner, and the agent has threatened to dispose of them to a third party, in violation of his trust. The ground upon which equitable relief in such cases has been afforded is found to be in the fiduciary relation which existed between the parties, together with the threatened mischief. Wood v. Eowcliffe, 3 Hare 308. "The principle upon which jurisdiction may be invoked to grant relief by injunction or decree for specific delivery of personal property in the classes of cases mentioned, is plainly not applicable to the case at bar, for here the case is simply that of seizure and threatened sale upon execution of ordi- nary personal property, the entire and actual value of which for all purposes is ascertainable, and is wholly measurable by money, and which the alleged owner holds only for pur- poses of sale and conversion into money, to satisfy a debt. * * * Now, bearing in mind that the application to a peculiar case of the principle that the absence of a plain and adequate remedy at law offers the only test of equity 478 RELATIVE RIGHTS OF THE PARTIES. jurisdiction, must wholly depend upon the character of the case itself, it must be said of the case at bar that it presents no peculiar or extraordinary features, and that it is plainly distinguishable from the cases that have been noticed, in which relief by injunction was successfully invoked. "Why is not complainant's remedy at law, taking the facts as averred in the bill, plain and adequate ? She al- leges that she took possession of the property in question under her mortgage. She in effect claims legal title. She took possession and held the property for one purpose only, namely, to sell and convert it into money for satisfaction of her debt. The property is not of peculiar character or value. Its value is readily ascertainable. It has only for her a money value. A recovery of its value affords com- plete compensation. Whatever damages she may sustain by execution sale of the property can be completely ac- quired at law. * * * Plain, and adequate remedy at law does not mean an ability to resort to every remedy which the forms of legal procedure give. If any form of action at law will give a complete and adequate remedy, then she is within the principle which tests the right to re- quest equity. " In an action at law for the alleged trespass, or for con- version, or for conversion of the property, the measure of damages would be the value of the property when taken, with interest from the time of the taking to the time of the trial, and this would, under the facts as averred in the bill, cover all damages sustained. " Moreover, in determining value, the complainant would not be restricted to amounts realized for the property by the marshal on execution sale. She would be at liberty to recover actual value, though the marshal might not have realized one-half such value." Injunction was denied.^ § 699. When Allowed. — An injunction will be allowed to 'La Mothe v. Fink, 8 Bias. C. 0. 493. ESTOPPEL. 479 restrain a sheriff from selling the interest of the mortgagee upon execution issued in favor of the creditors of the mort- gagor. Thus, where a father and son make a contract for the son's services, to be rendered after attaining the age of twenty-one years, at an agreed compensation, and the father afterwards executes to the son a chattel mortgage for wages accruing after such contract, the sheriff may be restrained, at the suit of the son, from selling the entire property under execution against the father. The court says, per Bird, Vice Chancellor : " Has the court the power to enjoin the sheriff in such cases ? It has. First, because the sheriff proposes to sell not only the equity of the mortgagor, but also the interest, so far as possible, of the mortgagee. Clearly enough it was, and is, lawful for him to seize upon and sell the former. But it is equally clear that he could not sell the latter if the mortgage be valid and free from fraud. Secondly, because such sale by the sheriff would involve the complainant in litigation with every purchaser to whom the sheriff should deliver the goods, and compel him to institute a great many suits. These things, however, are all predicated upon the condition that the chattel mortgage is itself lawful in all respects."^ § 700. Where Consideration Pails. — When a promissory . note, secured by a chattel mortgage, is given to one as trustee for another, and the real owner becomes insolvent, the maker may maintain a bill for an injunction to restl-ain the payee from transferring the note before maturity and from foreclosing the mortgage, upon the ground of failure of consideration in the original transaction.^ § 701. Estoppel. — A mortgagee is not, in the absence of fraud, precluded from recovering upon a mortgage debt, because he permits the property covered by the mortgage to be sold under an inferior claim or lien. His failure in such 1 Stratton v. Packer (N. J.), 14 At. Kep. 587. 'Belohradsky v. KUhn, 69 111. 547. 480 RELATIVE EIGHTS OF THE PARTIES. case to assert his right under the mortgage does not estop him from recovering the indebtedness secured thereby in an action against the mortgagor/ A second mortgagee, by consenting to a sale of the prop- erty by the mortgagor discharged of his mortgage, does not estop himself from setting up against the purchaser a title subsequently acquired by assignment of the first mortgage.^ And if the mortgagee consents to the sale of a portion of the mortgaged property to one who undertakes to pay part of the debt, with the understanding that the mortgage lien shall continue, and such person sells to one who knows nothing of this agreement, the mortgagee may follow the property into the hands of the last purchaser.* § 702. Standing By and Making No Objection. — A mort- gagee of personal property does not release the property from a lien of his mortgage by his mere silence, or being informed that a part of the property has been disposed of by the mortgagor and delivered to another creditor. His assent to the delivery or other disposition of the mortgaged property might operate to release it so as to protect a third party.* Where the owner of goods stands by and, without objec- tion, allows another to treat them as his own, and a third party is thereby led to purchase them in good faith, the ownter cannot recover such goods or their value from the purchaser.^ But a mere declaration, by the mortgagee of personal property, on learning from the mortgagor that he had sold it, that he cared nothing about the property, and did not want it, does not preclude him from asserting his title under the mortgage.® But if the mortgagee should buy ' Jones V. Turck, 33 Iowa 246. ^ Clark V. Hale, 8 Gray (Mass.) 187. " Oswald V. Hayes, 42 Iowa 104. * Patterson D.Taylor, 15 Fla. 336. » Thompson v. Blanchard, 4 N. Y. 308; Gregg v. Wells, 10 Adol. & El. 90; Demeyer v. Souzer, 6 Wend. (N. Y.) 436; Dezell v. Odell, 3 Hill (N. Y.) 215; Pickard v. Sears, 6 Adol. & El. 469. "White V. Phelps, 12 N. H. 882. See, also, Eice v. Chase, 9 N. H. 179. GIVING PKEFERENCB TO A SECOND MORTGAGEE. 481 at a sale under execution, at the suit of a third person, he extinguishes his lien. He cannot afterwards maintain an action on the mortgage debt against the mortgagor. His title as mortgagee has become merged with his title as gen- eral owner. ^ § 703. Giving Preference to a Second Mortgagee. — ^A mort- gagee of personal property may, by representation made in procuring the mortgage, give preference to the claim of another over his own, but he cannot use his mortgage to protect other creditors against a subsequent mortgagee.^ When the mortgage does not reserve any benefit to a third party, it cannot be made to cover indebtedness owing by the mortgagor to others besides the mortgagee. Any verbal agreement to that effect by the parties, unknown to a subse- quent mortgagee, will not bind him. When the first mort- gagee's debt is paid, no secret trust in favor of a third party can defeat the rights of the subsequent mortgagee. So, if a third party, with knowledge of the junior mort- gagee's rights, takes the mortgaged property and converts it to his own use, he is liable to the subsequent mortgagee for his debt, it being proved that the property is, at least, of that value. If the first mortgage is satisfied the junior mort- gagee will have the right to the possession of the property against one not claiming rightfully under the first mortgage, nor by virtue of a better title. ' Merritt v. Niles, 25 111. 282. ^ Hunt V. Daniels, 15 Iowa 146. See, also, Poland v. Railroad Co., 52 Vt. 144. 2f 482 RELATIVE RIGHTS OF THE PARTIES. ARTICLE II. — RIGHTS OF THE MORTGAGOR. 704. Mortgagor in Rightful Possession. 705. Action by Mortgagor. 706. Mortgagor's Defense. 707. Execution Levied on Remaining Interest of the Mortgagor. 708. Measure of Damages. 709. Injunctions. 710. Selling Mortgaged Property. 711. Grain Merchant — Buying Mortgaged Crops after Harvest. 712. The Weight of Authority. 713. Sale by Oral Consent. 714. Implied Authority. 715. Proof. 716. The Lien Follows the Goods. 717. Conveying Mortgaged Property Without Giving Notice. 718. Wrongful Seizure. 719. Waiver of Mortgagee. 720. Ordering Assignee to Sell — Must Bear the Expense Incurred. 721. Forfeiture Under the Internal Revenue Law. 722., Mortgagor's Power to Create Liens. 723. As Against an Execution. 724. Mortgagee's Becoming Administratof of the Mortgagor's Estate. 725. Secret Lien. 726. Mortgaging Under an Assumed Name. 727. Implied Authority. 728. Statutory Liens. 729. Substitution. 730. Lien of Livery Stable Keepers and Agisters. 731. Contrary Doctrine. 732. A Mortgagor Cannot Set up Title in Another. 733. Purchase-Money. 734. Vendor's Lien. 735. Selling the Property by the Mortgagor — New Mortgage. 736. Duration of Lien. § 704. Mortgagor in Rightful Possession. — The mortgagor may defend his possession against the mortgagee when the latter disturbs his rightful possession. So, when a mortgage, by its terms, preserves the right of possession in the mort- gagor until default is made, the mortgagor can protect his right against the mortgagee.^ And when the instrument specifically defines the circum- stances under which the right of possession is to vest in the mortgagee, the law implies an intent that right of possession is to remain in the mortgagor.* >Ford V. Ramson, 39 How. Pr. (N. Y.) 429; Pierce v. Hasbrouck, 49 111. 23. 'Hall V. Sampson, 35 N. -Y. 274. ACTION BY MOKTGAGOE, 483 A mortgagor retaining possession has a right to sue a turnpike company for damages to the chattels by its defec- tive road. Thus, a mortgagor sued the company for injuries to horses, resulting in the death of one of them, and destruc- tion of a separator, alleged to have been occasioned by defec- tive and improperly-constructed road. The defendant plead the want of property in the mortgagor. The horse killed and the one injured belonged, at the time of the accident, to the mortgagor, but the separator had been bought by the mortgagor and another party, who gave their notes for it. It appeared that in May, 1887, the accident being in July following, the mortgagor and the other vendee had mortgaged the separator. The court said, per Snodgrass, Justice, that it was intended, on a fair con- struction of the mortgage, that the mortgagors were to retain possession and use of the property ; while so doing it was destroyed, or so wrecked as to be entirely ruined in the accident. The defendants insisted that the title was in the mortgagee, who alone could sell, but the court thought that the defense was not well founded, the mortgagor being law- fully in possession until default.^ § 705. Action by Mortgagor. — A mortgagor cannot main- tain trover against a mortgagee rightfully in possession, be- cause he has no title, either general or special ; his only right is to redeem in equity where that right is recognized.^ Neither can he maintain trespass against a mortgagee right- fully in possession of the property, for he has neither the property nor any right of possession. His remedy is by an action on the case or by a bill to redeem.* Neither can he maintain replevin against a mortgagee who has obtained possession of the property for a breach of a condition, upon 'Turnpike Co. v. Pry, 88 Tenn. 296; and see Orser v. Storms, 18 Am. Dec. 547-552, note. 'Holmes d. Bell, 3 Cash. (Mass.) 322; Heyland v. Badger, 35 Cal. 404; Brown v. Bement, 8 Johns. (N. Y.) 96; Burdick v. McVanner, 2 Denio (N. Y.) 170. = Leach v. Kimball, 34 N. H. 568. 484 RELATIVE EIGHTS OF THE PARTIES. the ground that the consideration of the mortgage was illegal/ § 706. Mortgagor's Defense. — The payment of a debt, although it be made by one who is not a party to the con- tract, and although the assent of the debtor to such payment does not appear, is still an extinguishment of the demand. The title will then vest in the mortgagor, and he may plead payment in an action of trover against him by the mort- gagee. The court says that a payment and discharge of a debt, no matter by whom effected, can be nothing more nor less than its extinguishment as a demand, ^As between the parties who paid it and him for whose benefit it was intended, a question might arise whether it was purely voluntary or not, which would depend on the circumstances of previous re- quest or subsequent assent, either express or implied.^ So, although the debt be not paid, the mortgagor may plead in bar to such action a parol release of the mortgage, either by an agreement by the mortgagor to do certain things, or the performance of those things by him.' A mortgage, although under seal, is a security for the pay- ment of a debt. So far as it conveys to the mortgagee title to personal property, he may release or discharge it by a sufficient parol agreement — by a "subsequent valid verbal agreement.* Eice, C. J., says : "A man may always waive a condition in his own favor and dispense with its performance. Every verbal contract is to be interpreted in connection with the surrounding circumstances ; and the conduct and acts of the parties, in carrying out the engagement they have entered into, may be regarded in order to see what interpretation * Fikes V. Manchester, 43 111. 379 ; Dougherty v. Bonavia, 124 Mass. 210. * Harrison v. Hicks, 1 Port. (Ala.) 423. See, also, Bellamy v. Doud, 11 Iowa 285; Davis v. Hubbard, 38 Ala. 185. ' Cartwright v. Cooke, 3 Barn. & Ad. 701 ; Bradley v. Gregory, 2 Camp. 383; Evans v. Powis, 1 Exch, 601. *Wallis V. Long, 16 Ala. 738; Deshazo v. Lewis, 5 S. & P. (Ala.) 91. MEASURE OF DAMAGES. 485 they have themselves put upon it, and what conditions have been waived or performed.* § 707. Execution Levied on Remaining Interest of Mort- gagor. — After a party had given a chattel mortgage upon a stock of goods, the goods were seized by a constable under an execution issued upon a judgment against the mortgagor. The owners of the chattel mortgage brought an action of replevin against the constable and took the goods from him. It was decided by the court that after the levy made by the constable, the mortgagor had neither the possession nor the right to the possession of the goods, and that he could not maintain an action against the owners of the mortgage to recover any balance that might remain after deducting the amount due upon the mortgage and the execution held by the constable;^ that the constable holding the execution was entitled to recover of the owners of the mortgage the full amount of the mortgagor's special interest in the goods levied upon and not merely the amount named in the exe- cution ; that, consequently, the owners of the mortgage were not liable to the plaintiff for the same special interest.^ § 708. Measure of Damages. — In such case, the measure of damages for the mortgagee's wrongful interference is the value of the right of possession until forfeiture of the condition of the mortgage, and the value of the property after payment of the debt.^ In case of a mortgagee's taking unlawful possession of the mortgaged goods after they have been law- fully attached by a creditor of the mortgagor, the measure 'Acker v. Bender, 33 Ala. 230; Morgan v. Smith, 29 Ala. 283 ; Banker v. Bell, 37 Ala. 354. No one but the mortgagor, or some one having his title, can object to the mortgagee's taking possession before he has a right to under the mortgage. Strangers cannot make any valid objection. Gaar v. Hurd, 92 111. 315: McConnell v. Scott, 67 111. 274. A sale of the mortgaged property before foreclosure, by the mortgagee, is a conversion, and he becomes liable to the mortgagor. Matthews v. Fisk, 64 Me. 101 ; Spaulding v. Barnes, 4 Gray (Mass.) 330. ''Michelson v. Fowler, 27 Hun (N. Y.) 159, opinion by Landon, J. 'Buck V. Bemsen, 34 N. Y. 383. •Blodgett i;. Blodgett, 48 Vt. 32; Brown d. Phillips, 3 Bush (Ky.) 656; Russell V. Butterfield, 21 Wend. (N. Y.) 300. 486 EELATIVE EIGHTS OF THE PARTIES. of damages in replevin by the oflScer is the value of the property over and above the mortgage debt.^ If special damages are sought to be recovered, they must be alleged and claimed in the declaration or complaint.^ The Iowa court lays down the rule that where a mortgagee of chattels takes possiession under a clause allowing him to do so, and, then wrongfully sells them before the maturity of the note se- cured, the measure of damages against him for the conver- sion is the difference between the price obtained and the market price at the time of the sale. Judge Granger says : " The rule of damages in cases of sales of property and a failure to deliver is differently applied in Ihe United States. * * * In Brown v. Allen ^ the question arose as to the measure of damages for wrongfully entering a warehouse and removing corn. * * * 'The market value is the measure of damages.' There is certainly no reason for hold- ing to such a rule in that case and a different one in this. * * * Adopting as applicable to the facts of this case, the rule in that, the market value of the property at the time of sale is a correct one."* § 709. Injunctions. — The mortgagor may, in proper cases, have the mortgagee enjoined from taking possession. If he has a right to possession for a time certain he may hold the property until expiration of that period." . But when the mortgage contains an insecurity clause, the court will not enjoin the mortgagee from taking possession.* And gen- erally, an injunction to restrain the mortgagee from exer- cising the power of sale conferred by the chattel mortgage will not lie, because the mortgagor has ample remedy at law.' § 710. Selling Mortgaged Property. — The mortgagor, be- 'Saxton V. Williams, 15 Wis. 292. ^ Brink v. Freoff, 44 Mich. 69. = 35 Iowa 306. * Gravel v. Clough (Iowa), 46 X. W. Kep. 1092. " Ford V. Ramson, 8 Abb. Pr. (N. Y.) N. S. 416. «Clinei). Libby, 46Wis. 123. 'Lawson v. Barton (Ark.), 7 8. W. Eep. 387. GEAIN MERCHANT BUYING MORTGAGED CROPS. 487 fore forfeiture, no statute to the contrary, may sell the mort- gaged property, subject to the mortgage lien/ Such a sale does not amount to a conversion, either as to the mortgagor or to the purchaser.^ The purchaser from the mortgagor obtains his rights only and no other,^ and a purchaser from a subsequent mortgagee acquires his interest and nothing else.* But a purchaser from the mortgagor, with notice of a stipulation by him not to sell or dispose of the property, becomes liable to the mortgagee for conversion.^ § 711. Grain Merchant^Buying Mortgaged Crops After Harvest. — A Nebraska case, 'though not in accord with the weight of authority, holds that the mortgagor of chattels, in his possession until foreclosure, possesses a benejficial in- terest in the property mortgaged, and can convey a good title by a sale of such property to one who purchases in the open market in good faith, and without notice, actual or constructive, of the mortgage. Thus, a chattel mortgage upon growing grain is not con- structive notice to third parties of the mortgage on the grain thereafter lawfully placed in crib or bin ; and a dealer in grain who, in good faith, in open market, buys the grain, is not liable to the mortgagee. The court says, if the mort- gage lien continues on the grain after harvest, as notice to third parties, why may not the mortgagee follow the grain to Chicago, New York, or, in case of its shipment, to Eng- land or France, to the parts of either country ? No one could contend for such a rule, yet, if the first purchaser is chargeable with notice of a secret lien, why is not the second, third, or more remote purchaser? The mere statu- tory rule, no doubt, is to require the mortgagee to look after his security, and, if change is made in its character, to see ' Chapman v. Hunt, 13 N. J. Eq. 370 ; Cadwell v. Pray, 41 Mich, 307 ; Davis V. Blume, 1 Mont. 463 ; Daly v. Proetz, 20 Minn. 411. = Hathaway i;. Brayman, 42 N. Y. 322. 'Hammond v. Plimpton, 30 Vt. 333; Arnold v. Stock, 81 111. 407. ''Hale V. Nat. Bank, 39 N. Y. Supr. Ct. 207. ^ Fisher v. Friedman, 47 Iowa 443. 488 RELATIVE EIGHTS OF THE PARTIES. that his mortgage still imparts notice of his lien on the property to third parties.' This case is in accord with the weight of authority as to the rights of a landlord to seize his tenant's crop. The principal difference is that the lien of a mortgagee is the result of contract, while that of the landlord is expressly and specifically given by the statute, without reference to the contract of the parties, and this difference does not affect the question under consideration.^ In Illinois it is held in one case that the landlord's statutory lien upon crops grown on the land demised does not follow such crops into the hands of a bona fide purchaser without no- tice,* and this decision follows the great weight of authority.* § 712. The Weight of Authority. — The weight of authority is opposed to the Nebraska case. Thus, in Indiana, the de- cision is most emphatically opposed to this doctrine. Ac- cordingly, where growing wheat was mortgaged, and the mortgage duly recorded, and afterwards the mortgagor, without the consent or knowledge of the mortgagee, har- vested, threshed, removed and sold the wheat, and the grain merchant converted it to his own use by mixing it with other, it was held, first, that the title to the grain was vested in the mortgagee, and the recording of the mortgage was constructive notice to the purchaser ; second, that the mort- gagee could recover the value of the wheat of the purchaser by identifying the wheat purchased as the wheat that was mortgaged, though the purchaser bought the wheat in the usual course of trade and without actual notice." So, in New York, a party executed a mortgage upon growing grass, which the mortgagor cut and stacked upon other land occupied by him, and was retained in his posses- ' Gillilkn v. Kendall, 26 Nebr. 82, opinion by Maxwell, J. = Kennard v. Harvey, 80 Ind. 37. ' Howe V. Clark, 23 111. App. 145 ; contra, Finney v. Harding, 32 111. App. 98. * Nesbitt V. Bartlett, 14 Iowa 485 ; Westmoreland v. Wooten, 51 Miss. 825 ; Soaife v. Stovall, 67 Ala. 237 ; Fowler v. Eaply, 15 Wall. (U. S.) 328: Webb v. Sharp, 18 Wall. (U. S.) 14; Beall D.White, 94 U. S. 382. 'Duke V. Strickland, 43 Ind. 494. SALE BY OEAL CONSENT. 489 sion for several months, when it was levied on by an exe- cution against the mortgagor. It was held that the hay was subject to the mortgage.' And, in California, a chattel mortgage upon growing crops, as against an attaching creditor, continues to be a lien upon the crop in the possession of the mortgagor after it is severed and removed from the land ; that a chattel mortgage holds the property mortgaged, not only during the growing of the crop and after its severance, but until released by the mortgagee or until barred by the statute of limitations.^ The Illinois case makes a difference between a landlord's lien and a chattel-mortgage lien. It holds that in the case of a chattel-mortgage lien the purchaser is charged with constructive notice.^ And other cases hold that a landlord's lien does hold the crop after harvest even though sold in open market.* In Oregon, the courts hold that the mort- gage is a lien on the money received for the crop after sale.® In Kansas* the grain merchant, as to mortgaged grain, would be responsible to the mortgagee. The same doctrine is held in Minnesota'' and Dakota.* § 713. Sale by Oral Consent. — The mortgagor can make a valid sale of the mortgaged property with the oral consent of the mortgagee.' Some of the States have a law whereby the consent of the mortgagee must be in writing ; but then, if the mortgagee consents orally to the sale, the purchaser in possession will 'Smith «. Jenks, 1 Denio (N. Y.) 580. See, also, Kimball r. Sattley, 55 Vt. 285. ^Eideri). Edgar, 54 Cal. 127; DeCoatav. Comfort, 80 Cal. 507. Otherwise if the statute provides that the mortgagee shall take possession of the grain when harvested. Goodyear v. Williston, 42 Cal. 11. 'Howe V. Clark, 23 111. App. 145. * Matthews v. Burke, 32 Tex. 419 ; Kennard v. Harvey, 80 Ind. 37 ; Finney V. Harding, 32 111. App. 98. ^ Keel V. Levy, 24 Pac. Kep. 253. Compare Waters v. Bank, 65 Iowa 234. "Muse D. Lehman, 30 Kans. 514. 'Close V. Hodges (Minn.), 46 N. W. Rep. 335. ' Philip Best Brewing Co. v. Pillsbury, 5 Dak. 62. See, also, Nichols v. Barnes, 3 Dak. 148. 'Patrick v. Meserve, 18 N. H. 300; Gage v. Whittier, 17 N. H. 312; Pratt V. Maynard, 116 Mass. 388. 490 RELATIVE EIGHTS OF THE PARTIES. be protected from suit in trover for the conversion.^ So, when the mortgagor has authority to sell or exchange the property, the mortgagee is estopped to claim the property so disposed o£^ If the purchaser surrenders the mortgaged property to the mortgagee on demand, he cannot replevy from the mortgagor chattels given in exechange.^ § 714. Implied Authority. — Where a mortgagor is au- thorized and directed by the mortgagee to prepare a house for marketing the mortgaged crop, and in pursuance of such directions, and in order to obtain money for such purpose, sells cotton included in the mortgage to a person who ships it to a merchant, the mortgagee having received the benefit of the acts of the mortgagor, his agent, in selling the cotton, cannot maintain an action for conversion of such cotton.* The mortgagor's authority to sell may be implied from his covenants to account to the mortgagee for the proceeds of sales,° or from the general course of dealing of the parties.® As to whether there was such an intent of the parties is a question for the jury.'' But authority to sell, given by the mortgagee, involving the exercise of judgment and discretion, cannot be delegated.' § 715. Proof. — Where, on action for the conversion of cotton claimed under a mortgage, there was conflicting evi- dence as to whether the cotton claimed was part of the mort- gagor's crop, an instruction that it was incumbent on the mortgagee to satisfy the jury that the cotton in question was ra,ised by the mortgagor, was proper.® A mortgagee claimed possession of certain chattels under a mortgage. There was testimony that the mortgagor sold •Gage V. Whittier, 17 N. H. 312. = Carter v. Fately, 67 Ind. 427. 'Carter v. Fately, 67 Ind. 427. * Etheridge v. Hilliard, 100 N. Car. 250. 6 Abbott V. Goodwin, 20 Me. 408. » Pratt V. Maynard, 116 Mass. 388. ' Jenckes v. Goflfe, 1 R. I. 511. 8 Drum V. Harrison, 88 Ala. 384. ' Woolsey v. Jones, 84 Ala. 88. THE LIElsr FOLLOWS THE GOODS. 491 them, after the mortgage debt was due, to a person who knew of the mortgage ; that the purchaser inquired of the mortgagee as to the right of the mortgagor to sell, and he said : " I guess it is all right ; I gave leave to sell her, pro- vided he gave me a mortgage on a team as good as the one I sold him." Soon afterwards the mortgagor mortgaged the mortgagee another team. The waiver of the first mortgage and the taking of the second was denied by the mortgagee. Held, that the weight of evidence showed his waiver, and the mortgagee could not recover.^ § 716. The Lien Follows the Goods. — The general rule is, that the lien of the mortgagee follows the goods, and, although a chattel mortgage provides that, until condition broken, the mortgagor may remain in possession, if the chat- tels are sold on an execution against them, the mortgagee may recover them.^ Under the Code of Alabama,* which makes it an offense fraudulently to remove property on which one has a lawful, valid claim, it is held to embrace a mortgage on crops not yet planted. The court says the mortgage in question was executed before the crops were planted, or could have been in esse; that the rule is now firmly settled in this State that an equitable lien is created by such conveyances where the thing mortgaged has a potential existence, by which is meant a present interest in property of which the thing sold or conveyed is the product, growth or increase, as opposed to a mere possibility or expectancy not coupled with such interest.* In Iowa a lien follows the goods, when sold by the mort- gagor, but does not attach itself to the purchase-money.® In Oregon the lien of a chattel mortgage on growing crops ' Littlejohn v. Pearson, 23 Nebr. 192. ^Levi V. Legg, 23 S. Car. 282. ' Code, i 4253. * Varnum v. State, 78 Ala. 28 ; Mayer v. Taylor, 69 Ala. 403 ; 44 Am. Rep. 522. * Waters v. Bank, 65 Iowa 234. 492 RELATIVE BIGHTS OP THE PARTIES. follows the grain after severance and removal, and the pur- chase-money after sale.^ § 717. Conveying Mortgaged Property Without Giving Notice. — If a mortgagor in possession mortgages the property to another without giving notice of the first mortgage, and gives the second mortgagee possession, he is guilty of con- version.^ He may sell his equity of redemption or mort- gage it, but he cannot handle the property as his own.^ § 718. Wrongful Seizure. — In an action by a mortgagor against the mortgagee for an alleged peremptory and wrong- ful seizure taken by the latter, the value of the property should be assessed, subject to the liens thereto, and the mortgagor can only recover value of his interest or equity.* A mortgagee of personal property who takes possession of the mortgaged property for breach of condition is not liable in trespass to the mortgagor for the mere fact that, in taking possession, he was accompanied by a constable or other officer,- who had no writ or other process, if it does not appear that any force or threats were used, or that the agent having the property in charge made no objection, and if nothing was done colore officii.^ In an action of trespass on the case for unlawfully fore- closing a chattel mortgage, when the declaration alleges that the mortgagee not only took possession of the mortgagor's lumber-yard, where the mortgaged property was located, but wrongfully and maliciously, and to injure him, took charge of the entire business and premises, contrary to the mortgagor's will, and so held the same, entirely exclud- ing him, and prevented his carrying on the business, dam- ages for such wrongful holding should be allowed.* In an action of trover by a purchaser of a mortgaged chat- ' Keel V. Levy (Oreg.), 24 Pao. Rep. 253. ^ Millar v. AUea, 10 R. I. 49 ; Ashmead v. Kellogg, 23 Ooaa. 70. 'Miliars. Allen, 10 R.I. 49. *Torp V. Gulseth, 37 Minn. 135. ' Holloway «j.' Arnold, 92 Mo. 293. ' Bearss ti. Preston, 66 Mich. 11. ORDERING ASSIGIJ^EE TO SELL. 493 tel, against an assignee, for value of the mortgaged chattel, who had bought in the chattel at a defective foreclosure sale, the defendant, where judgment is given plaintiff for the value and hire of the chattel, is entitled, under an equitable plea, to set off against the judgment the value of the chattel.^ § 719. Waiver of Mortgagee. — A sale of a chattel by the mortgagor, with the consent of the mortgagee, will convey a good title to the purchaser, even though such consent was not in writing, as provided by statute.^ If a mortgagee of a chattel orally authorizes the mort- gagor to sell it, a sale by the latter passes title to the purchaser.^ Where a party who holds a chattel mortgage on certain property issues a distress warrant and causes his bailee to take possession of the property under the authority of the distress warrant, the possession thus acquired is clearly the possession of the landlord and mortgagee, and he does not thereby release any lien which he has upon the property by virtue of his chattel mortgage; the act is good as against the rights of all but third parties, whose interests had at- tached before the property was so taken, subjecting the same to the payment.* § 720. Ordering Assignee to Sell — ^Must Bear the Expense Incurred. — The mortgagee of chattels permitted the assignee under an assignment for the benefit of creditors, executed subsequent to the mortgage, to begin to sell, and then stopped him. Held, that the expense incurred in selling was chargeable to the mortgagee.^ ^ Rogers v. Lawrence, 79 Ga. 185. ^Roberts v. Crawford, 54 N. H. 532; Gage v. Whittier, 17 N. H. 312; Patrick v. Meserve, 18 N. H. 300. 'Pratt V. Maynard, 116 Mass. 388; Stafford v. Whitcomb, 8 Allen (Mass.) 518. * Atkins V. Byrnes, 71 111. 327. Under the rule of Illinois that the power of sale in the mortgagor makes the mortgage fraudulent, yet if the mortgagee knowingly permits the mort- gagor to make sales in the ordinary course of business, he will be con- sidered to have consented to such sales by implication and cannot object to it, as to third parties. Ogden v. Stewart, 29 111. 122; Barnet v. Fergus, 51 111. 352. '^ Arnett v. Trimmer, 43 N. J. Eq. 488. 494 RELATIVE EIGHTS OF THE PARTIES. § 721. Forfeiture Under Internal Revenue Laws. — When the owner of personal property, mortgaged by him to another, is allowed to retain possession of it after giving the mortgage, and comipits acts in respect of such property which work a forfeiture of it to the United States under the internal revenue laws,^ it will be condemned, even though the mort- gagee is not shown to have been concerned in such acts. In this case it is said : " But if only the interest of the mortgagor be forfeited, how can anything more than his interest be sold; or if the court decrees a forfeiture of the res, and sells it as forfeited to the government, under what provision of law is the court authorized to pay the proceeds of sale to other parties than the government ? It is clear that the court has no power to exempt a portion of the pro- ceeds of the sale from the effect of the condemnation." The mortgagee must apply to the secretary of the treasury for satisfaction.^ § 722. Mortgagor's Power to Create Liens. — The mortgagor of chattels has no right to pledge the mortgaged property to any person or otherwise to create a lien upon it to the preju- dice of the mortgagee's rights.* In a lease for a term of years it was stipulated that the furniture s-hould not be removed while any of the rent was due, and should be security for the rent. The lease was not deposited as required by the law relating to chattel mortgages. Afterwards the lessee mortgaged the property for a pre-ex- isting debt and delivered the property to the mortgagee,, and the mortgage was filed. The mortgagee had no notice of the stipulation in the lease, and the court decided his lien superior to that of the lessor.* Under the law of New Hampshire a mortgagor of horses cannot, without the knowledge and acquiescence of the mortr gagee, express or implied, entrust the horses to be boarded, 1 Acts of 1867, I 25 ; 14 U. S. Stat, at L. 483. ' United States v. Seven Barrels of Dist. Oil, 6 Blatchf. C. 0. 174. ' Bissell 1). Pearoe, 28 N. Y. 252. ''Smith V. Worman, 19 Ohio St. 145. See, also, Lanphere «. Lowe, 3 Nebr. 131. AS AGAINST AN EXECUTION. 495 SO as to subject them to the lien of their keeping,^ because the title of the true owner cannot be divested without his own free will and consent.^ § 723. As Against an Execution. — Where foreclosure pro- ceedings were instituted before the expiration of the time named for payment of the debt, according to Utah law, the mortgagor to remain in possession, the mortgagee's lien will be superior to that obtained by a levy and execution made after the expiration of the time, and while the property still remains in the mortgagor's possession.^ § 724. Mortgagee's Becoming Administrator of the Mort- gagor's Estate. — In Pennsylvania the property in the hands of the decedent at the time of his death, for which he has executed, to one who afterwards becomes his administrator, a bill of sale as security for the payment of the debt, passes into the custody of the law for administration, and the holder of the bill of sale is entitled to no preferences over other creditors of the decedent.* In this State possession on the part of the mortgagee is essential to the validity of his lien as against other creditors, where the subject of the mortgage is personal property capable of actual corporeal occupation ; the death of the debtor gives the general creditors the right to deny the validity of such a mortgage when posses- sion has not been taken in the mortgagor's lifetime. By the death of the mortgagor his personal estate in possession passes into the custody of the law for administration, and a mortgagee has no right to undertake to administer any part of it for the satisfaction of his own debt. Even if there is enough to satisfy all the creditors, he cannot decide the ques- tion, but must leave it to the proper court. If there is not enough, his mortgage without possession becomes void as to creditors by the death of his debtor, for then the law takes 'Sargeant v. Usher, 55 N. H. 287. 'Kingsbury v. Smith, 13 N. H. 109; Farley v. Lincoln, 51 N. H. 577; Saltus V. Everett, 20 Wend. (N. Y.) 267. 'Armstrong v. Broom (Utah), 13 Pac. Eep. 364. * Heft's Appeal (Pa.), 9 Atl. Eep. 87. 496 RELATIVE BIGHTS OP THE PARTIES. hold of the estate for the benefit of all. If there is not enough he cannot suffer much by waiting the due course of administration.' This principle, that the pledgee must take immediate pos- session, does not apply in the case of a pledge of an intangible interest, incapable of delivery or manual occupancy of all ; or in the case of an expectancy to come into existence after the contract to pledge is made, and when a personal effort of pledgor is necessary both to its subsequent existence and its actual maintenance.^ § 726. Secret Lien. — A mortgage executed by a party in possession of the property as owner, although the legal title was not to pass to him until the chattel was paid for, where such contract of conditional sale is not filed for record, will take precedence over the secret lien of the party claiming to be the real owner of the property.^ § 726. Mortgaging Under an Assumed or Fictitious Name. — If the true owner conveys property by any name, the con- veyance as between the grantor and grantee will transfer the title.* And when a mortgagor mortgages chattels under an assumed name, and then sells them to another party, the mortgagee can recover them. Thus, a party bought personal property and gave back a mortgage under an assumed name. The mortgagee duly filed the mortgage and fully complied with the law. After- wards the mortgagor sold the property under his right name to an innocent purchaser, who searched the records and found no incumbrance against the property. In an action of re- plevin against the purchaser by the mortgagee it was held that the latter could recover the property.* § 727. Implied Authority to Create Lien. — While a mort- • Kater v. Steinsuok, 40 Pa. St. 501. ' Collins' Appeal, 107 Pa. St. 590. ' Manning v. Cunningham, 21 Nebr. 288. * Wilson ■O.White, 84 Cal. 289; Garwood «. Hastings, 38 Gal. 222; An- drews V. Dyer, 81 Me. 104; Hommel v. Devinney, 89 Mich. 522; Staak v. Sigelkow, 12 Wis. 234; Nixon v. Cobleigh, 52 111. 887. ^Alexander v. Graves, 25 Nebr. 453. STATUTOBY LIENS, 497 gagor is permitted to go ou and finish an article that he has mortgaged, it does not giye him a lien as against the mort- gagee for work done by him thereon, when he has no right on his part to work in such a manner as to create a lien for such work.^ In order to constitute such a lien the work must be done under agreement with the owner, or with some one authorized by him to make such an agreement.^ At common law, as well as by admiralty courts, it is held on general principles, independently of any provision of statutes, that liens for repairs, made by mechanics upon ves- sels in their possession, take precedence of prior creditors.* On the same principle a hack mortgaged, to be run by the mortgagor, the person making the necessary repairs on it has a lien therefor as against the mortgagee, because' it was the manifest intention of the parties that the hack should continue to be driven for hire, and should be kept in a proper state of repair for that purpose.* § 728. Statutory Liens. — Where a farmer executes a mort- gage on his crop, under Mississippi statute, for supplies to enable him to make the crop, and hires a laborer to assist him in making the crop, the laborer has a paramount lien, though his contract be verbal, and the mortgage be duly re- corded. The laborer's lien is implied by law. It exists w pais. It requires no writing and rests upon no record to uphold it.^ So, in Arkansas, the mortgagee may, after the maturity of his rights under a mortgage, maintain trover against the owner of the land, who took possession of the crop and con- verted it for the rent. The mere ownership of land confers 1 Globe Works v. Wright, 106 Mass. 207. ^Hollingsworth v. Dow, 19 Pick. (Mass.) 228. 'Williams v. AUsup, 10 C. B. (N. S.) 417; The Granite State, 1 Sprague D, 0. 277 ; Donnell v. The Star Light, 103 Mass. 227 ; The Soio, L. E., 1 Adm. & Eccl. 353: The St. Joseph, 1 Brown Adm. 202; Beall v. White, 94 U. S. 382. * Hammond v. Danielson, 126 Mass. 294. 'Buck V. Payne, 52 Miss. 271'. 2g 498 RELATIVE EIGHTS OF THE PARTIES. no right to the possession and disposal of the crop raised on it by the tenant.' A lien of a mortgagee of chattels, whose mortgage is duly recorded, is prior to that of a landlord upon whose premises they may be afterwards used by the mortgagor as his tenant, although the mortgagee may have actual notice that such chattels were being used upon the premises.'^ A landlord who has a lien by statute, does' not lose it by taking a mort- gage and omitting to record it.^ In the absence of statutory provisions, a landlord has no lien" upon the crops raised by his tenant, by virtue of ownership.* § 729. Substitution. — ^A chattel mortgage contained cove- nants that the mortgagor would not trade any of the prop- erty without written consent of the mortgagee, and that, in case he did, the property so obtained should be held and taken in place of that disposed of; it was held that the mort- gagor could not be required to substitute -like property for animals which had died or for articles used or consumed by him.^ Cotton subject to mortgage was exchanged for seed cotton, which was delivered to the mortgagee, and its proceeds cred- ited on fhe amount secured by the mortgage. It was de'cided that the mortgagee could not, after having been advised of the transaction, reclaim the cotton without surrendering the seed cotton or accounting for its proceeds.* § 730. Lien of Livery Stable Keepers and Agisters. — ^Upon 1 Robinson v. Kruse, 29 Ark. 575. ' Jarohow v. Pickens, 51 Iowa 381. ' Pitkin V. Fletcher, 47 Iowa 53. * Tison V. People's Sav. and Loan Ass'n, 57 Ala. 323. The case of Finney v. Harding, cited in Sections 711 and 712, was over- ruled by the Illinois Supreme Court, March 30th, 1891 ; but such decision does not change the doctrine enunciated in those sections. A lien is not waived or lost by taking security not enforceable against third persons. If a landlord takes a chattel mortgage and does not record it as required by law, this does not waive his landlord's lien. Pitkin v. Fletcher, 47 Iowa 53. » Hulsizer v. Opdyke (N. J.), 18 At. Eep. 669. •Hicks V. Koss, 71 Tex. 358. LIEN OF LIVERY STABLE KEEPERS AND AGISTERS. 499 this question of which lien takes precedence, when the chat- tel mortgage is first executed, there is a conflict of authority. The weight of authority is in favor of the lien created by the chattel mortgage. Thus, a recorded chattel mortgage on a horse is superior to a subsequent lien of a livery stable keeper, acquired under the statute when the horse is placed in the stable, after the making and recording the mortgage, without the knowledge of the mortgagee, though the stable- keeper has no notice in fact of the mortgage. In this case the court, per Folkes, J., says : "Upon the question thus presented there is a conflict of opinion to be found in the books, while it has never been decided in this State. We are to ascertain which of the antagonistic views is more in keeping with sound principles, and the better sustained by authority. In arriving at the intention of the legislature in the passage of the act conferring the stable-keeper's lien, we should regard the object and policy of our legislature with reference to the registration laws. The mortgage, being reg- istered, amounts in law to actual notice to all parties dealing with the property, as fully, to all intents and purposes, as if the fact were placarded on the property itself, so far as the rights of the mortgagee therein are concerned. To permit the mortgagor to incumber it to its full value, and consequent destruction to the mortgagee, is as fatal to the latter's rights, and defeats as effectually the policy of our registration laws, as if the former were allowed to sell it to a purchaser who was in fact ignorant of the mortgage. . Nor are we able to appreciate any considerations of public policy which lead us to extend to the livery stable keeper any immunity from the fate of all who deal with property the title to which is matter of record with which they are not only chargeable with knowledge in law, but with which they can, through the registry laws, acquaint themselves in fact. " This being so, it is not for the courts to give to the stat- utes in question any such effect, unless constrained to do so by the language or manifest intention of the legislature." In speaking of the opposite reasoning of some other courts. 500 RELATIVE RIGHTS OF THE PARTIES. the judge says : " But their reasoning does not commend them to us sufficiently to shake our convictions that the other view is the sounder and better. Nor do we think that the rule which prevails with reference to railroad mortgages, that claims for fuel, rails, cross-ties, labor. and repairs have precedence over such mortgage, furnishes any analogy to the case at bar. They rest upon the principle or presumption of implied agency in the company to construct such liabili- ties, and discharge them out of the earnings of the mort- gaged property, as contemplated by the mortgagee, and necessary to the operation and preservation of the property."^ So, the fact that mortgagees allow cattle to remain with a party other than the mortgagor, after learning that they had been placed in his care by the mortgagor, does not render their lien subordinate to that of the keeper for feeding the cattle, as created by statute. In order to maintain a lien for keeping the cattle, the party must show that the cattle were placed in his hands by the consent of the mortgagees. Boyce, C. J., says : " The title to the property was in the mortgagees at the time it was placed by the mortgagor in charge of the defendant ; and, to maintain a lien under the statute, the latter should be required to show that the property was brought to his premises or placed in his care by or with the consent of the owner. It is contended that such consent should be inferred from the fact that plaintiffs allowed the stock to remain in defendant's care and keeping after learn- ing that it had been placed there by the mortgagor. It is possible that such consent might be inferred from this fact, as would constitute the basis of a personal claim against them for the price of such keeping ; but to- say that it should operate to create the statutory lien, to the impairment of the mortgage security, would be to give the statute a forced and liberal, not by any means a strict, construction. * * * The mortgagees cannot be held to have consented, from the 'McGhee v. Edwards, 87 Tenn. 506 ; and see Jackson v. Kasseall, 30 Hua (N. Y.) 281 ; Bissau v. Pearoe, 28 N. Y. 252 ; Charles v. Neigelsen, 15 111. App. 17 ; Sargent v. Usher, 55 N. H. 287 ; Bank v. Lowe, 22 Nebr. 68. LIEN OP LIVEEY STABLE KEEPERS AND AGISTERS. 501 circumstances of the transaction, to the stock being put in the charge of the defendant or anybody else, to be wintered, and defendant has no lien, as against the plaintiffs."^ But the circumstances may be such as to indicate the mortgagee's consent to the action of the mortgagor in placing the property in the keeping of a third party, in which case the lien will be established. An implied agency may arise out of the terms upon which the mortgagor was left in pos- session, which will authorize the mortgagor to contract with a mechanic for repairs of a hack, a lien that would, in the particular case, be superior to the claim of the mortgagee.^ On this questiob Knowlton, J., says : " It is not con- tended that the plaintiff expressly agreed to the horses being placed in the defendant's care. But undoubtedly an implied consent will answer the requirements of the law ; and in every case of this kind the inquiry is whether such implied consent is found. That depends, when animals are left with a mortgagor by a mortgagee, not only upon the terms of the express contract relating to them, but also upon all the cir- cumstances surrounding the transaction, including the ex- pectation of the mortgagee as to the management of them by the mortgagor. If, from these, the mortgagee may be presumed to have understood that the mortgagor would take them to a stable-keeper to be boarded, and no objection was made, such consent should be implied. Otherwise it should not. It should be kept in mind that the purpose of a mort- gage is to furnish security, and that the property is usually left with the mortgagor for his convenience, with an under- standing that nothing shall be done or permitted by him to impair the security. An agreement which will defeat the purpose of the transaction should not be inferred or implied against a mortgagee without cogent evidence. A mortgage of horses, given to secure performance of an act in the dis- tant future, is worthless if the mortgagor may create a lien upon them by putting them out to be boarded. It is true ^Ingalls V. Vance, 61 Vt. 582; Hanch v. Eipley (Ind.), 26 N. E. Rep. 70. ' Hammond v. Danielson, 126 Mass. 294. 502 KELATIVE EIGHTS OF THE PAETIES. the mortgagee must know they are to be fed and that it will cost something to feed them ; but that in itself is' immateriaL The real question is whether he has reason to believe, and does believe, that they are to be boarded at a livery stable or kept by anyone else than the mortgagor.' § 731. Contrary Doctrine. — The doctrine as stated in the last section is in accord with the current of authority, but there is an antagonistic view of great weight. A notable case was decided by the Kansas Supreme Court under the following facts : A mortgagor, after making a chattel mort- gage on some cattle, of which he was to retain possession,, and "take care of at his proper cost and expense," then turned the cattle over to a third party to winter, and agreed to pay him for such wintering. The mortgagor never paid for this expense of wintering. The mortgagor had placed ' the cattle with the agister without the consent or knowledge of the mortgagee; It was decided that the agister had a lien on the cattle for his reasonable charges, which was para- mount to the lien of the mortgage. Brewer, J., gave the opinion of the court and said : " The lien of the mortgage was prior in time, was created by contract, while that of the agister, later in time, arises out of the statute. Though the amount in controversy is small, yet the question is of some importance. It affects a great many of the smaller transac- tions of business. A buggy is taken to a shop for repairs ; a horse is driven to a livery stable and left over night ; a traveler brings his trunk and stops at a hotel ; in all these cases a lien is given by statute. Suppose a prior chattel mortgage exists ; must the statutory lien give way to the prior contract lien? Must a mechanic, a livery stable or hotel-keeper always examine the register's office to see whether there be a chattel mortgage upon the property before receiving it for repairs or keeping ? * * * ipj^^ express stipulation in the mortgage th,at the keeping of the mortgaged property should be at the expense of the mort- ' Howes V. Newoomb, 146 Mass, 76 ; Easter v. Goyne, 51 Ark. 222. CONTKAKY DOCTRINE. 503 gagor is no more than the law would imply, in the absence of any express agreement. The mortgagor, retaining pos- session, must, of course, pay the expenses of the keeping. He is not simply an agent of the mortgagee. He can make no contract on behalf of, or which will create any liability against the mortgagee ; he acts on his own behalf. He is the owner, with the duties of owner and the powers of owner, except as limited by the restrictions of the mortgage. Unless the mortgagee, by express contract, assumes the expense of the keeping of the property, it rests upon him. " Now, the lien of the agister is not the mere creature of contract ; it is created by statute from the fact of the keep- ing of the cattle. The possession of the agister was rightful, and the possession being rightful, the keeping gave rise to the lien ; and such keeping was as much for the interest of the mortgagee as the mortgagor. The cattle were kept alive thereby ; and the principle seems to be that where the mort- gagee does not take the possession, but leaves it with the mortgagor, he thereby assents to the creation of a statutory lien for any expenditure reasonably necessary for the pres- ervation or ordinary repair of the thing mortgaged. Such indebtedness really inures to his benefit. The entire value of his mortgage may rest upon the creation of such indebt- edness and lien, as in the case at bar, where the thing mort- gaged is live stock, and the lien for feed."^ So, in Minnesota, a person who keeps horses at the request of the owner or lawful possessor takes preference of a chattel mortgage executed before such keeping. This rule applies against a mortgagee in a case in which the request for keep- ing is made by the mortgagor, who was in lawful possession of the horses kept. Berry, J., says : "A mortgagee, when he takes a mortgage, takes it, in legal contemplation, with full knowledge of and subject to the right of a person keeping the property at the request of the 'Case V. Allen, 21 Kans. 217; Vose v. Whitney, 7 Mont. 385. 504 RELATIVE EIGHTS OP THE PARTIES. mortgagor or other lawful possessor to the statutory lien, as he would do to a common-law lien." '■ § 732. A Mortgagor Cannot Set Up Title in Another. — The mortgagor cannot defeat the mortgagee's title by setting up title in a third person; neither can a purchaser from the mortgagor defeat the mortgagee's title* — that is, by setting up an older mortgage with which he does not connect himself. In trover, when there is nothing in the relation of the parties to prevent it, it is a good defense to the action that the mortgagee has no title to the property sued for. It is necessary to the maintenance of this action that the plaintiff proves property in himself, general or specific, and a right to immediate possession ; a disproof of this by the subse- quent purchaser is not only, as a general rule, admissible, but it defeats the action. It may generally be proved by showing title in a stranger, called jus tertii? When, however, as in a suit by the mortgagee against one Tvho has only the title and authority of the mortgagor, con- ferred after the mortgage was executed, the rule is different. He cannot depend on the outstanding title of a stranger, unless he connects himself with such outstanding title.* So, in an action of replevin by the mortgagee of goods, against the mortgagor, it is no defense that the goods are subject to a prior mortgage, if the prior mortgage provides that the mortgagor may retain possession until breach of condition, and there is no evidence that the prior mortgagee has made any claim upon the mortgagor.^ 'Smith V. Stevens, 36 Minn. 303. See, also, Colquitt v. Kirkmam, 47 Ga. 555 ; Brown v. Holmes, 13 Kans. 492. A party who had taken a horse and held it by wrongful possession, took it to a livery stable and left it, and it was held that a Tien existed in favor of the livery stable keeper against the owner. Johnson v. Hill, 3 Starkie 172. 'Thompson v. Spittle, 102 Mass. 207; Marks v. Robinson, 82 Ala. 69; Denby v. Mellgrew, 58 Ala. 147 ; Comer v. Sheehan, 74 Ala. 452 ; Burrows i'. Waddell, 52 Iowa 195. 'Dermott v. Wallach, 1 Black (U. S.) 96; Dickinson v. Lovell, 35 N. H. 9 ; Leake v. Loveday, 4 M. & Gran. 972. * Denby v. Mellgrew, 58 Ala. 147 ; Harker v. Danent, 52 Am. Dec. 670. "Adams v. Wildes, 107 Mass. 123. DURATION OF LIEN. 505 § 733, Purchase-Money. — A judgment creditor bought a chattel and executed a mortgage for the price, which, on non-payment, was foreclosed. The proceeds were claimed by a judgment creditor under a fieri facias issued a year before. It was decided that the proceeds were subject to the mortgagee's claim, rather than to the judgment, as the chat- tel was still subject to the mortgage.^ § 734. Vendor's Lien. — A mortgagee takes the title unaf- fected by any lien of the vendor for the purchase-money, of which there is no notice, unless such is evidenced by writing, acknowledged and recorded, under the Iowa law.^ If the mortgagee purchases the entire interest of the mort- gagor, then the entire title vests in him.^ § 735. Selling the Property by the Mortgagor — Giving New Mortgage. — When the mortgagor sells the mortgaged prop- erty left in his possession, and afterwards gives to his mort- gagee a second mortgage on other property in lieu thereof, the second mortgage is a sufficient consideration for the sur- render of the first lien, and constitutes the second a valid contract. Judge Stone says that if the mortgagee accepted the second security, it was a sufficient consideration for the surrender of his first lien of the property sold, and consti- tuted a second valid substitutionary contract, healing the breach of the first.* § 736. Duration of Lien. — A chattel mortgage given by a landlord to his tenant, in Illinois, and containing a provi- sion that the note secured is extended two years from matur- ity on condition that the rent of the leased land shall be applied to pay interest and principal of the note, so long as any portion remains unpaid, does not create a lien on *the land, nor give the mortgagee the right to retain rents after the expiration of the two years.^ 'Rasin v. Swann, 79 Ga. 703. See, also, Scott v. Warren, 21 Ga. 408. ^ Manny v. Woods, 33 Iowa 265. 'Colton v. Colton, 3 Phil. (Pa.) 24; Klock v. Cronkhite, 1 Hill (N. Y.) 107; Shaver v. Williams, 87 111. 469. *Cobb V. Malone, 86 Ala. 571. ^Bowen v. McCarthy, 127 111. 17. 506 EELATIVE RIGHTS OF THE PARTIES. ARTICLE III. — RIGHTS OF SUBSEQUENT MORTGAGEES. 737. The Same as a Purchaser. 738. His Title. 739. His Eights to the Property. 740. Continuation of the Right. 741. Selling the Property. 742. Second Mortgagee in Possession -^Replevin by First Mortgagee. 743. First Mortgagee can Waive his Rights. 744. Second Mortgagee's Right of Action. 745. Assumption of Prior Mortgage. § 737. The Same as a Purchaser. — A person taking a. second chattel mortgage upon property before the maturity of a prior mortgage, stands substantially in the same position as a purchaser, and should be governed by the same princi- ples ;^ and, although the mortgagor obtains possession of the goods by means of fraudulent representations, his mort- gagee, without notice, in Illinois, is not affected by it." § 738. His Title. — A second mortgagee takes his mortgage subject to all the existing rights of the prior mortgagee ;' he must hold in subordination to the prior conveyance.* § 739. His Rights to the Property. — The second mortgagee has the right to redeem the property from the sale of the first mortgagee ;^ and a mortgage subject to a prior mortgage conveys only the right to redeem the property, though re- corded first.® § 740. Continuation of the Right. — The right of the second mortgagee to redeem the mortgaged property continues until the foreclosure of the first mortgage, unless defeated by the goods being taken and sold by a third party.' § 741. Selling the Property. — A second mortgagee wha ' Cunningham v. Nelson Man. Co., 17 111. App. 510 ; Arnold v. Stock, 8L 111. 407. ^Kranert v. Simon, 65 111. 344. ' Schoenberger v. Mount, 1 Handy (Ohio) 566. * Norman v. Craft, 90 N. Car. 211 ;' Smith v. Smith, 24 Me. 555. ' Howard v. Chase, 104 Mass. 249 ; Tuite v. Stevens, 98 Mass. 305. " Pecker v. Silsby, 123 Mass. 108. 'Treat v. Gilmore, 49 Me. 34. SECOND mortgagee's EIGHT OF ACTION. 507 takes tlie property from the possession of the mortgagor, and sells it and receives the full consideration of the sale without regard to the rights of the senior mortgagee, is liable to the latter in an action for the conversion of the property.^ But if the second mortgagee sells the property with the consent of the first mortgagee, the latter cannot maintain an action against him for conversion, although such consent is given under a mistaken impression as to the respective rights to the proceeds. The consent operates as a waiver of the first mortgagee's rights to the property.^ § 742. Second Mortgagee in Possession — Replevin by First Mortgagee. — The first mortgagee of chattels who had the right to their immediate and exclusive possession, took them on a replevin writ from the second mortgagee in possession. The second mortgagee, by way of defense, set up equities,, and, moreover, equities which had arisen since the com- mencement of the suit ; it was held that such a defense could not avail him, his remedy being by a suit in equity to redeem.* § 743. First Mortgagee Can Waive His Rights. — The first mortgagee can waive his right to the property and let a second party in on the same footing as himself,* so that, in taking possession on default, they become tenants in common of the goods therein specificjd, and the two instruments be- come of the same legal effect as if they had been executed at the same time; the mortgagees become, after default and taking possession, tenants in common of the security to the property therein specified." § 744. Second Mortgagee's Right of Action. — A second mortgagee of personal property, who is not in possession^ cannot maintain an action in the nature of trover for its ' Lowe V. Wing, 56 Wis. 31. 'Anderson v. Case, 28 Wis. 505. 'Roberts v. White, 146 Mass. 256. * Densmore v. Mathews, 58 Mich. 616. 'Howard v. Chase, 104 Mass. 250; Welch v. Sackett, 12 Wis. 243; Phillips V. Cummings, 11 Cush. (Mass.) 469 ; Gilmore v. Wilbur, 12 Pick. (Mass.) 120. 508 KELATIVE BIGHTS OP THE PARTIES, conversion.^ If his mortgage declares that he may, at any- time, take possession of the property, he is entitled to pos- session as against all the world, except the first mortgagee, whose debt remains unpaid, and may maintain an action for any taking of it which is not in pursuance of the first mort- gage but in defense of his rights.* § 745. Assumption of Prior Mortgage. — An agreement in a second chattel mortgage, by the mortgagee, to secure to the first mortgagee the payment of his lien, and to charge the account to the mortgagor — the amount of the said lien — and out of the first moneys which may be passed to his credit, from any source whatever, to set aside the said amount as an indemnity against the first mortgage, is not such a contract as will support a judgment against the second mortgagee for the amount of the first mortgage.^ ARTICLE IV. — CONFUSION OR INTERMINGLING OF GOODS. 746. General Rule. 747. Burden of Distinguishing. 748. Eight of Action. 749. New Goods. 750. Under a Lease. 751. As to Logs. 752. Maryland Doctrine. § 746. General Rule. — The general rule that he who pro- duces the confusion of goods shall lose his own, is carried no further than necessity requires, and applies only to cases where it is impossible to distinguish what belongs to one from what belongs to another. When the articles can be easily distinguished and separated, no change of property 'Ring V. Neale, 114 Mass. Ill; Landon v. Emmons, 97 Mass. 37; Rugg V. Barnes, 2 Gush. (Mass.) 591; Clapp v. Campbell, 124 Mass. 50; Goodrich V. Willard, 2 Gray (Mass.) 204. * Newman v. Tymeson, 18 Wis. 172. See, also, Hume v. Breck, 4 Litt. (Ky.) 285. "Clapp V. Halliday, 48 Ark. 258. • BUEDEN OF DISTINGUISHING. 509 takes place, but the burden is oa the guilty party to distin- guish his property or lose it.^ So, it is held that if the mortgagor of goods who is entrusted with their possession, intermixes them purposely, or through want of care, with his own goods, so that they cannot be distinguished, and consigns them for sale to a third party, who sells them, the mortgagee is entitled to recover from the consignee the value of the whole.* If the intermingled goods can be easily distinguished and separated no change of property takes place, and each party may claim his own. If the goods are of the same nature and value, although not capable of an actual separation by identifying each particular, if the portion of each owner is known, and a division can be made of equal proportionate value, as in the case of mixture of coi:n, coffee, tea, wine, or other articles of the same kind and quality, then each may claim his aliquot part ; but if the mixture is indistinguish- able because a new ingredient is formed not capable of a just appreciation and division according to the original rights of each, or if the articles mixed are of different values or quantities, and the original values or quantities cannot be determined, the party who occasions or through whose fault or neglect occurs the wrongful mixture must bear the whole loss.* § 747. Burden of Distinguishing. — Where the goods of the mortgagee are intermixed with like goods of the mortgagor^ the burden of proof is on the vendor of the new goods sold the latter, to designate his goods, because, in selling goods to the mortgagor with knowledge that he would probably intermix them with those he had already mortgaged, makes ^ Queen v. Wernwag, 97 N. Car. 383. ' Williard v. Bice, 11 Met. (Mass.) 493 ; Hart v. Ten Eyck, 2 Johns. Ch. (N. Y.) 108. See, also, Dunning v. Stearns, 9 Barb. (N. Y.) 630 ; Brackenridge V. Holland, 2 Blackf. (Ind.) 383; Hasseltine v. Stockwell, 30 Me. 237; Schulenberg v. Harriman, 2 Dill. 398; Eldred v. Oconto, 33 Wis. 133. ^ Robinson v. Holt, 39 N. H. 557. See, also, Lupton v. White, 15 Ves. 432 ; Bond V. Ward, 7 Mass. 123; Shumway v. Butter, 8 Pick. (Mass.) 443^ Armory v. Dalmire, 1 Str. 505; Panton v. Panton, 15 Ves. 439; Gilman v. Hill, 36 N. H. 311. 510 RELATIVE EIGHTS OP THE PAETIES. the vendor guilty of laches and the indistingaishable goods become the property of the mortgagee.^ The guilty party has the burden of proof to distinguish it or lose it.^ § 748. Right of Action. — If the mortgagor confuses the mortgaged goods with his own so that they cannot be separ- ated by the mortgagee, and refuses to distinguish them him- self, the mortgagee may take the goods without becoming a trespasser." So, the mortgagee may replevy the goods in the hands of a purchaser upon failure to identify the specific articles not mortgaged.* § 749. New Goods. — Where a mortgagor, having added new purchases to the mortgaged stock, refuses on demand to identify and separate the new goods from the old, when the mortgagee has rightfully taken possession, though there be no such confusion of goods as to absolutely destroy their separate identity, yet, if they could not be separated without the mortgagor's aid, the sole mischief would thereby be pro- duced by the confusion of the goods, and the mortgagee can take the whole amount.® § 750. Under a Lease. — A lessee of a mill, whose lease includes a commissary store attached to the mill, is not bound to keep the original stock of goods contained in the store when he took the lease, distinct from subsequent ad- ditions made by him, and does not lose any rights by inter- mingling the two.* § 751. As to Logs. — A mortgagor, by indiscriminately mixing logs cut afterwards with those mortgaged, cannot defeat the mortgagee's claim.'' § 752. Maryland Doctrine. — A mortgage of a stock of ' Kreth v. Rogers, 101 N. Car. 263. ' Queen v. Wernwag, 97 N. Car. 883. •Fuller V. Paige, 26 111. 358. * Adams v. Wildes, 107 Mass. 123 ; Kreuzer v. Cooney, 45 Md. 582. ' People V. Bristol, 35 Mich. 28 ; Stephenson v. Little, 10 Mich. 433 ; Ryder V. Hathaway, 21 Pick. (Mass.) 298 ; Robinson v. Holt, 39 N. H. 557. • Liberty Co. Land and L. Co. v. Barnes, 77 Ga. 748. 'Jenkins v. Steanka, 19 Wis. 126; Mowry v. White, 21 Wis. 417. PURCHASEKS m GOOD FAITH. 511 goods containing a stipulation embracing after-acquired goods, is ineffectual at law to convey the after-acquired goods, ■which are subject to seizure upon execution by a judgment <;reditor of the mortgagor. Under such a mortgage, where property is commingled with subsequently-acquired goods by the mortgagor, it is presumed to be done with the mort- gagee's permission, and if it be so intermingled as to prevent separation or identification, the rights of third parties can- not be affected thereby;^ AKTICLE V. — EIGHTS OF BONA FIDE PUKCHASEES. 753. Purchasers in Good Faith. 754. Purchasing With Notice. 755. Not a bona fide Purchaser. 756. Sale Subject to Prior Mortgage — Rights of Purchaser. 757. Return of Note and Mortgage. 758. When Purchaser Cannot Set up Defect in the Mortgage. 759. Cannot Set up Usury. 760. What the Purchaser May Show in Defense. 761. Sale With Oral Consent of Mortgagee. 762. Estoppel of Purchaser. 763. Conversion by Purchaser. 764. Measure of Damages for Conversion of Property. 765. Buying at Auction Sale — Liability. 766. Right of Action by Mortgagee. § 753. Purchasers in Good Faith. — One who purchases per- sonal property in good faith for value, of the general owner in possession, without notice, actual or constructive, that it is incumbered, will hold it discharged of any prior liens.^ Thus, when a party without notice purchases at an exe- cution sale property subject to an unrecorded mortgage, his title will be protected.^ And a creditor who receives goods in payment of his debt is a purchaser in good faith within the purview of the New York statute,* which declares that an unfiled chattel mortgage is void as against subsequent purchasers in good faith.° 'Hamilton v. Rogers, 8 Md. 301. ' Andrews v. Jenkins, 39 Wis. 476. 'McKnight V. Gordon, 13 Rich. Eq. (S. Car.) 222. *4 Rev. Stat. (8th ed.) 2508. * Button V. Rathbone, 118 N. Y. 666. 512 EELATIVE RIGHTS OF THE PARTIES. § 754. Purchasing With Notice. — A purchaser from a mortgagor, with notice of the incumbrance, has only the rights of the mortgagor. The mortgagee in possession is not a naked depositary, but has possession coupled with an interest, and his damage by an unlawful conversion of the property is to the extent of his interest ; he can recover for such conversion against a mortgagor or his vendee.^ And a chattel mortgage, filed or registered as required by law, is constructive notice to the purchaser of the mortgaged prop- erty of the mortgagee's lien, though a search of the oflBce, timely made, failed to disclose the existence of the mortgage." § 755. Not a Bona Fide Purchaser. — One who has con- verted the mortgaged property and has acquired title by pay- ment of a judgment for the value of the property, obtained against him by the mortgagor or his assigns, because of the conversion, is not a bona fide purchaser, within the meaning of the statute of New York.' When one buys at a voluntary sale from his debtor and pays no money, but merely credits the amount on the pur- chase-money upon a pre-existing debt, he is not a hona fide purchaser for value, within the meaning of the Chattel Mortgage act of Texas.* § 756. Sale Subject to Prior Mortgage — Rights of Pur- chaser. — If the owner of chattels which he has mortgaged sells the same subject to the mortgage, and the purchaser re- covers their value in an action against the sheriff, who has levied upon and sold the same under execution against the mortgagor, such purchaser, as against the mortgagee, cannot retain any more of the proceeds of his recovery than the excess from the same due on the mortgage. Such judgment against the sheriff for the full value of the property is con- clusive that such execution creditor has no right to hold any ^McCandless v. Moore, 50 Mo. 511; Hall v. Sampson, 35 N. Y. 274; Hathaway v. Brayman, 42 N. Y. 322. "Kribbs v. Alford, 120 N. Y. 519. 'Marsden v. Cornell,' 62 N. Y. 215. *Overstreet v. Manning, 67 Tex. 657. WHAT THE PUKCHASEE MAY SHOW IN DEFENSE. 513 portion of the mortgaged property by virtue of his execu- tion/ § 767. Return of Note and Mortgage. — Where a mortgagor turned over to the mortgagee cotton sufficient to pay the debt, and received from him the mortgage and note, and sold the property mortgaged to a third party, to whom he showed the note and mortgage, and stated it had been paid, such vendee is protected, though the cotton turned over to the mortgagee was taken from him by one holding a prior lien, and the mortgage was not satisfied on the record.'' § 768. When Purchaser Cannot Set Up Defect in the Mort- gage. — A chattel mortgage was executed by the president of a certain company without the knowledge of the directors. The property was subsequently purchased by a second company, who assumed the debt. The purchaser could not set up any invalidity of the inception of the mortgage as against the mortgagee.' So, when a subsequent purchaser has purchased mortgaged property, assuming the payment of the debt, he cannot, in a proceeding to foreclose, object to the mortgage on the ground of an alleged defect in manner of execution, when the mortgagor does not interpose any objection upon that ground.* § 759. Cannot Set Up Usury. — A purchaser of mortgaged property cannot set up usury in a proceeding to foreclose the mortgage,* because the defense of usury is personal to the mortgagor, his heirs and representatives.* Neither can a junior mortgagee avail himself of the usury in the consid- eration of a prior mortgage.' § 760. What the Purchaser May Show in Defense. — But a ' Magill V. Dewitt Co. Sav. Bank, 126 111. 244. 'Wilkinson v. Solomon, 83 Ala. 438. ^Dwight V. Scranton and W. Lum. Co., 69 Mich. 127. * Greither v. Alexander, 15 Iowa 470. 'Perry v. Kearns, 13 Iowa 174 ; Powell v. Hunt, 11 Iowa 430. •Stephens v. Muir, 8 Ind. 352; Campbell v. Johnston, 4 Dana (Ky.) 177. 'Powell V. Hunt, 11 Iowa 430. 2h 614 BELATIVE RIGHTS OP THE PARTIES. purchaser of mortgaged property may show that the prior deht has been paid/ or that it is absolutely void, so that the mortgagee could not enforce it, although the mortgagor was willing to make it good.^ § 761. Sale With Oral Consent of Mortgagee. — A sale of mortgaged property by the mortgagor, with oral consent of the mortgagee, will convey a good title to the purchaser, although the latter was not informed of the existence of the mortgage at the time of the sale.* § 762. Estoppel of Purchaser. — Where a chattel is adver- tised for sale and sold, subject to a mortgage, the purchaser has a sufficient notice of the mortgage to estop him from contesting it on the ground that it was not duly placed on file.* § 763. Conversion by Purchaser. — ^A purchaser who buys mortgaged property and sells or consumes it, is personally liable to the mortgagee for the damages incurred, even if he contends that the mortgage is invalid, and that he has a lien superior to the mortgagee's, and had constructive or actual • notice under the New York law.* The renewal affidavit can only be material in case of sub- sequent purchasers or mortgagees in good faith. But in many jurisdictions there are no subsequent purchasers, and subsequent riiortgagees in good faith, when they have actual notice of a mortgage;" and complying with the statute in filing the renewal certificate, is not necessary as to intermediate purchasers or mortgagees — that is, purchasers or mortgagees who purchase or whose mortgages were taken intermediate to the time of filing such mortgage and the end of the year during which it remained in force without renewal affidavit — but means only purchasers and mortgagees who purchased or took their mortgages after the expiration of the year, and 'Barry v. Bennett, 7 Met. (Mass.) 354. 'Housatonic and Lee Bank v. Martin, 1 Met. (Mass.) 294. 'Stafford V. Whitcomb, 8 Allen (Maas.) 518. 'Kellogg V. Secord, 42 Mich. 818. 'Beers v. Waterbury, 8 Bosw. (N. Y.) 396. 'Gregory v. Thomas, 20 Wend. (N. Y.) 17. CONVERSION BY PURCHASEE. 515 after it became necessary to file a renewal afl&davit to con- tinue the mortgage in force. He who purchases after the statutory time has expired during which a mortgage remained in force, has a right, in the absence of the renewal affidavit, to suppose the mortgage has been paid, even though not released on the record, and is not liable to the mortgagee for conversion or other action. But he who purchases before the time expires takes with notice of the mortgage and the rights of the mortgagee under the same.* "Subsequent" means after the time when the mortgage ought to be again filed to preserve its validity.* The omission to refile a chattel mortgage, pursuant to the statute, does not render it invalid against purchasers or mortgagees intermediate the original filing and the ending of the year. " Subsequent " means after the expiration of the time — that is, after the time of refiling has elapsed.^ If property covered by a chattel mortgage, properly filed, is taken and converted within the year after the filing to give the mortgagee a good cause of action for such taking, it is not necessary, to preserve his right to recover, that the action should be commenced within the year from such filing, or that the mortgage should be renewed at the end of the year.* The Wisconsin court, as to the construction of the renewal of chattel mortgages, follows the rule of the New York courts and holds that the clear intent, in case of fail- ure to make the affidavit, is that the mortgage should cease to be valid as against creditors who should thereafter seize the property, or purchasers who should thereafter purchase it." In a case in Minnesota more than one year elapsed be- tween the filing of the mortgage and the commencement of the action to recover for the conversion, and no copy and statement having been filed as provided for in the statute, it was insisted that the mortgagee could not recover, because ' Howard v. Nat. Bank (Kans.), 24 Pao. Rep. 983. 'Meech v. Patchin, 14 N. Y. 71. •Dillingham v. Bolt, 37 N. Y. 198. 'Newman v. Tymeson, 12 Wis. 448; Case v. Conroe, 13 Wis. 498. 'Lowe V. Wing, 56 Wis. 33; Frank v. Playter, 73 Mo. 672. 616 BELATIVE RIGHTS OF THE PAKTIES. the mortgage was not, as against the attaching creditors, in life at the time of the commencement of the action ; in other words, because the mortgagee had ceased to have any rights under the mortgage, as against such attaching creditors. But the court held that this position could not be sustained. " The goods were taken and sold by the defendant before the expiration of one year from the filing of the mortgage. Whether, since the conversion, he has kept his mortgage on foot by complying with the statute, is unimportant."' On setting aside a chattel mortgage, the fraudulent pur- chaser should be charged only with that he receives or that which, with reasonable diligence, he might have received for the property that actually came to his hands.** And when a chattel mortgage is duly recorded, a pur- chaser of the mortgaged property is guilty of conversion, though he bought and removed it in good faith, and it was destroyed without his fault or negligence. Thus, a subse- quent purchaser bought of the mortgagor property mort- gaged, and carried it into another county, where it was con- sumed by fire, without the negligence of the purchaser; held, that he was guilty of conversion.' § 764. Measure of Damages for Conversion of the Property. — In trover by the mortgagee of property against one who purchases it of the mortgagor after it was mortgaged and sold to a third party, the damages are the value of the prop- erty and interest thereon from the time of the sale by the mortgagor, and not from the time of the purchase by the second vendee.* § 765. Buying at Auction Sale — Liability. — An announce- ment at an auction sale of personal property that the prop- erty was subject to a chattel mortgage, and that the purchaser will have to comply with the -conditions, does not impose a > Edson V. Newell, 14 Minn. 228. ' Hurd V. Ascherman, 117 111. 504. •Ross V. Menefee (Ind.), 25 N. E. Rep. 545. See Campodonico v. Oregoa Imp. Co. (Cal.), 25 Pao. Rep. 768. •Barry «. Bennett, 7 Met. (Mass.) 354. EIGHT OF ACTIOSr BY MORTGAGEE. 617 personal obligation upon the purchaser who hears and assents to the announcement. An action cannot be main- tained against him to recover the amount secured by the mortgage, because he came uqder no contract of any nature whatever by consenting to or hearing such announcement.' § 766. Right of Action by Mortgagee. — In New York a mortgagee of chattels cannot recover, in an action for an alleged, conversion against a purchaser, from the mortgagor in possession, when such purchaser has sold and delivered the property to another person before default in payment of the mortgage, and before demand of possession by the mort- gagee, although such mortgagee is empowered by the terms of the mortgage, which is duly filed, to take possession of the property at any time he deemed himself unsafe." The interest of the mortgagor may be levied on and sold by the officer without reference to the mortgage, and the remedy of the mortgagee in such case is to follow the prop- erty and recover it from the purchaser, or compel him to pay the m^tgage debt.' ' Hamill v. Gillespie, 48 N. Y. 556. 'Hathaway v. Brayman, 42 N. Y. 322. » Hall V. Sampson, 35 N. Y. 277 ; Hull v. Carnley, 11 N. Y. 501. 518 ASSIGNMENT OF MOKTGAGE. CHAPTER XV. ASSIGNMENT OF MORTGAGE. ARTICIiE I. — THE ASSIGNMENT — BEQUISITES 0¥. 767. Effects of Assignment. 768. An Assignment Need Not be Becorded. 769. The Assignment Needs No Seal. 770. Payment by Creditor^Equitable Assignment. 771. After Tender — Bight of Mortgagee. 772. Bevesting Title. 773. Assignment of Mortgage Without the Debt. 774. Warranty of Title to the Mortgaged Property Cannot be Implied. § 767. Eflfect of Assignment. — ^The assignment of a note and the chattel mortgage securing it, by the mortgagee, prima facie transfers his interest in the property mortgaged to the assignee. If the mortgagee was in possession of the property, his assignment is legally the same as if he had sold and delivered the property to the assignee. The rights of the assignee are to be wrought out through the mortgagee. "A chattel mortgage in the usual form conveys to the mort- gagee the property mortgaged, and he thereby becomes the general owner of it, and in the absence of a reservation of the right of possession in the mortgagor, he is entitled to the immediate possession of it. If there be such a reserva- tion in favor of the mortgagor, such reservation only affects the possession according to the terms of the reservation, the title to the property remaining in the meantime in the mort- gagee, who becomes entitled to the immediate possession on breach of the condition;" that the effect of assigning the note and mortgage securing it by the mortgagee, to the as- signee, is a transfer by the former of his entire interest in the property mortgaged to the latter, who thereby, prima facie, becomes entitled to all the rights of the mortgagee under the mortgage, which are those of a general owner, en- EFFECT OF ASSIGNMENT. 619 titled to the immediate possession of the property. In other words, the legal effect of the assignment is the same as if the mortgagee had been in possession of the property mort- gaged and had sold and delivered it.^ But before the assignee becomes entitled to the immediate possession the debt must be due, or the mortgagor must have broken the conditions set forth in the mortgage, when he is allowed to retain possession of the property." A recital in a chattel mortgage that there is due on the property in question a certain amount, which the mortgagor assumes and agrees to pay, is not constructive notice to an assignee of the mortgage of a lien for the purchase- price ; it being found as a fact that the assignee took the mortgage in good faith, without knowledge or notice of the lien. The court, per Allen, J., said : " Whether a man in the exercise of ordinary care and diligence, under the same cir- cumstances, would have made the inquiry and learned of the existence of the lien, is a question of fact ; it is not found in the case that the plaintiff was charged with the duty of making the inquiry, or that he was in any fault or negli- gence in making it. The finding that he took the mortgage in good faith, without knowledge or notice of the defend- ant's lien, is a finding that he had neither actual nor constructive notice of it. There being no record of the memorandum of the conditional sale in which a lien was reserved, and the plaintiff, being a subsequent purchaser without actual or constructive notice, the lien is not valid against him, and cannot be made a defense against his right and title."' The mortgagee's right to recover the value of the mort- gaged property which has been seized under an attachment and sold, is not affected by the fact that he has assigned the ' Robinson v. Fitch, 26 Ohio St. 659, opinion by Gilmore, J. 'Bond V. Mitchell, 3 Barb. (N. Y.) 304; Mclsaacs v. Hobbs, 8 Dana (Ky.) 270; Ingraham v. Martin, 15 Me. 373; Wheeler v. Train, 3 Pick. (Mass.) 255; Collins v. Evans, 15 Pick. (Mass.) 63 ; Vandenberg v. Van Valkenberg, 8 Barb. (N. Y.) 217; Pattison v. Adams, 7 Hill (N. Y.) 126. " McNally v. Bailey (N. H.), 18 At. Eep. 745. 520 ASSIGNMENT OF MORTGAGE. mortgage as collateral security for a debt, if, before suit is brought, the mortgage is surrendered to him by the assignee/ § 768. An Assignment Need Not Be Recorded. — No deed or writing is made essential by law to the transfer .of title to personal property. A purchaser must take it upon his vendor's warranty of title. A mortgage duly recorded gives certain rights to the mortgagee, created and defined by the statute, but the statute does not change the nature of the property nor require that all subsequent changes in title shall be shown upon the record. Thus, an assignment or release of the mortgage is not required to be recorded. The mortgagor and mortgagee may join in the sale, which will give perfect title to the chattel sold, and the record furnishes no evidence of it.'' § 769. The Assigrnment Needs No Seal. — Where a mortgage is given upon personal property to secure the payment of a debt due by note, the assignment of the note and mortgage, whether the assignment be under seal or not, vests in the assignee the right of action in the mortgagee.^ It is not necessary that the assignment of tbe note or mortgage should be under seal.* The assignment of the note need not be under seal, since the mortgage itself is not required to be sealed. As to per- sonal estate, no instrument under seal is necessary. In order to record a mortgage of personal property it must of course be in writing, but a seal is not essential to tbe validity of the mortgage.* § 770. Payment by Creditor — Equitable Assignment. — When a creditor of a mortgagor attaches a part of the prop- erty, and tenders the mortgagee the amount due to him, and ' Eddy V. McCall, 77 Mich. 242. ' Bigelow V. Smith, 2 Allen (Mass.) 264; Baxter v. Gilbert, 12 Abb. Pr. (N. Y.) 97. ' Southerin v. Mendum, 5 N. H. 420 ; Kigney v. Lovejoy, 13 N. H. 247 ; Jackson v. Blodget, 5 Cow. (N. Y.) 202. * Gilchrist v. Patterson, 18 Ark. 575. 'Despatch Line of Packets v. Bellamy Co., 12 N. H. 205. See, also, Milton V. Mosher, 7 Met. (Mass.) 244. REVESTING TITLE. 521 lie accepts it and delivers the note and mortgage to the cred- itor, it effects an equitable assignment of the debt and mort- gage. If the creditor afterwards obtains an execution against the mortgagor and delivers it with the note and mortgage to an officer, who, under the creditor's direction, takes the property, the part attached and a part not in his possession, the mortgagor cannot maintain replevin for that which was exempt,^ § 771. After Tender — Right of Mortgagee. — An attaching •creditor of personal property who, after a demand by the mortgagee of the amount due him upon his mortgage, which includes said property and other articles exempt by law from Attachment, tenders the amount due the mortgagee, cannot maintain a bill in equity to compel the mortgagee to assign the mortgage to him. If the mortgage should be assigned to the attaching creditor, he could not hold the mortgage and preserve his attachment. It would be necessary that one of the securities should yield. Either the lien upon the property secured by the mortgage would be void, or the lien by attachment would be void. The assignment, therefore, could not aid the creditor in securing his debt legitimately. The statute has made no provision for such an assignment of the mortgagee, but contemplates the survival of the mortgage or its discharge. There is no reason in equity why the mortgage shall be assigned to the attaching creditor.^ § 772. Revesting Title. — A note secured by a mortgage before an indorsement will not defeat an action to enforce the mortgage, where it appears that the assignment was made to secure the owner of the debt. Thus, the note had been indorsed over as conditional security and payment of the debt, and had been delivered back to the mortgagee. By such delivery the title to the note and the mortgage became revested by such delivery.* ' Denno v. Nash, 60 Vt. 334. ' Cochrane v. Rich, 142 Mass. 15. ' Norris v. Hix, 74 Iowa 524. 522 ASSIGNMENT OF MORTGAGE. § 773. Assignment of Mortgage Without the Debt. — An assignment of the mortgage without the debt is a nullity.' A party loaned money and took back as security an assignment of a mortgage which was past due. The assign- ment was made, but the note was not transferred. It was held that if essential to give effect to the assignment, it might be held that the assignee acquired an interest in the debt, for which both the note and the mortgage were secur- ity ; that the mortgage being incident to the debt, not to the note, the retention of the latter by the assignor did not con- clusively establish that the assignor did not intend to trans- fer the debt with the mortgage, but the legal effect of the transaction was to transfer the property embraced in the mortgage as security for the money loaned by the assignee. When a mortgagee assigns a mortgage he transfers the prop- erty itself. The mortgage is the muniment of the title and stands as its representative, and the assignee acquires by the assignment the mortgagee's title to the property, and what- ever right the mortgagee has against the mortgagor can be asserted by the assignee. And if suit is begun by the assignee he stands in the same place in respect to the prop- erty as the mortgagee would occupy if there had been no assignment, and was claiming the property under the mort- gage." § 774. Warranty of Title to the Mortgaged Property Cannot be Implied. — No warranty to the title of the mortgaged property can be implied by the assignment of the debt. Thus, in an assignment, the clause "* * * all of my interest in the within instrument" contains no expressed warranty and does not include an implied one, and leaver the assignor without any legal interest that can be affected by the result of personal action.' 'Jackson v. Willard, 4 Johns. (N. Y.) 43; Jackson v. Bronson, 19 Johns. (N. Y.) 325; Wilson v. Troup, 2 Cow. (N. Y.) 231; Polhemus v. Trainer, 30 Cal. 685; Merritt v. Bartholick, 47 Barb. (N. Y.) 253; 36 N. Y. 44; Carpen- ter V. Longan, 16 Wall. 271. ' Campbell v. Birch, 60 N. Y. 214. See Hill v. Beebe, 13 N. Y. 556. ° Jones V. Huggeford, 3 Met. (Mass.) 515. STATUS. 623 AE.TICLE n. — EIGHTS OF THE ASSIGNEE. 775. Status. 776. Assignment of Lease to Assignee of Mortgage, 777. Assignee pro tanto. 778. Riglits of Assignee of Mortgage and Assignee for Benefit of Creditors.. 779. Part Assignment of the Debt. 780. Right to Protect his Interest. 781. The Security Follows the Debt. 782. Illinois Rule. 783. Pennsylvania Rule. 784. Non-Negotiable Instruments. 785. Future Advances. 786. Right of Possession. 787. Release of Mortgage by Mistake. § 776. status. — A mortgagee is pro tanto a purchaser, and the assignee of a mortgage- without notice is on the same footing as a bona fide mortgagee. He is entitled to rely upoH the record, and when that shows that he has a valid title he will be protected against unknown liens and against latent defects. The mortgagee is entitled to protection as a bona fide grantee. So, the assignee of a mortgage without notice is on the same footing with the bona fide mortgagee. In all cases the reliance of the purchaser is upon the record, and when that discloses an unimpeachable title he receives the protection of the law as against unknown and latent defects.^ So, a bona fide purchaser before maturity of a promissory note, secured by a chattel mortgage, takes it as he takes the note, free from any equities which existed in favor of third parties, while it was held, by the mortgagee.^ So, when a mortgage given at the same time with the exe- cution of a negotiable note and to secure payment of it, is subsequently, but before maturity of the note, transferred bona fide for value, with the note, the holder of the note, when obliged to resort to the mortgage, is unaffected by any equities arising between the mortgagor and the mortgagee ' Pierce v. Faunce, 47 Me. 507. 'Gould V. Marsh, 1 Hun (N. Y.) 566 ; Jackson v. Blodget, 5 Ctow. (N. Y.> 202; Jackson v. Willard, 4 Johns. (N. Y.) 43. S24 ASSIGNMENT OF MOETGAGE. subsequently to the transfer, and of which he, the assignee, had no notice at the time it was made. He takes the mort- gage as he took the note, free from the objections to which it was liable in the hands of the mortgagee.' The contract as regards the note was that the maker should pay it at maturity to any bona fide indorsee, without reference to any defenses to which it might have been liable in the hands of the payee. The mortgage was conditioned to secure the fulfillment of that contract. To let in such a defense against the assignee would be a clear departure from the agreement of the mortgagor and the mortgagee, to which the assignee subsequently, in good faith, became a party. If the mortgagor desired such an advantage he should have given a n on- negotiable instrument,^ because if one of two innocent persons must suffer by a deceit, it is more conso- nant to reason that he who puts trust and confidence in the deceiver should be a loser rather than a stranger.' The assignment of the note carries the mortgage with it.* The Ohio Supreme Court holds a different opinion. It holds that negotiable notes are made by the statute, while there is no such statutory provision as to mortgages, and that hence the assignee takes the mortgage as he would any other chose in action, subject to all equities which subsisted against it while in the hands of the original owner.^ In reviewing the Ohio decision, the United States Su- preme Court, per Swayne, J., says : " To this view of the subject there are several answers. The transfer of the note carries with it the security, without any formal assignment or delivery, or even mention of the latter. If not assignable 'Reeves v. Scully, Walk. Ch. (Mich.) 248 ; Fisher v. Otis, 3 Chand. (Wis.) 83; Martineau v. McCollutn, 4 Chand. (Wis.) 153; Bloomer v. Henderson, 8 Mich. 395; Potts v. Blackwell, 4 Jones (N. Car.) Eq. 58; Cicotte v. Gagnier, 2 Mich. 381 ; Palmer v. Yates, 3 Sand. (N. Y.) 137 ; Taylor v. Page, 6 Allen (Mass.) 86; Croft v. Bunster, 9 Wis. 503; Cornell v. Hilchens, 11 Wis. 853. 'Carpenters. Longan, 16 Wall. (U. S.) 271. "Hern v. NiohoUs, 1 Salk. 289. 'Jackson v. Blodget, 5 Cow. (N. Y.) 202; Jaoksoli v. Willard, 4 Johns. (N. Y.) 48. ' Baily v. Smith, 14 Ohio St. 396. . STATUS. 525 at law it is clearly so in equity. When the amount due on the note is ascertained in the foreclosure proceeding, equity recognizes it as conclusive, and decrees accordingly. Whether the title of the assignee is legal or equitable is immaterial. The result follows irrespective of that question. The process is only a mode of enforcing a lien. "All the authorities agree that the debt is the principal thing and the mortgage an accessory. Equity puts the principal and accessory upon a footing of equality, and gives to the assignee of the evidence of the debt the same rights in regard to both. There is no departure from any principle of law or equity in reaching this conclusion. There is no analogy between this case and one where a chose in action standing alone is sought to be enforced. The fallacy which lies in overlooking. this distinction has misled many able minds, and is thie source of all the confusion that exists. The mortgage can have no separate existence. When the note is paid the mortgage expires. It cannot survive for a moment the debts which the note represents. This depend- ent and incidental relation is the controlling consideration, and takes the case out of the rule applied to choses in action, where no such relation of dependence exists. Accessorium non ducit, sequitur principale. * * * Matthews v. Wall- wyn^ is usually much relied upon by those who maintain the infirmity of the assignee's title. In that case the mort- gage was given to secure the payment of a non-negotiable bond. The mortgagee assigned the bond and mortgage fraudulently, and thereafter received large sums which should have been credited upon the debt. The assignee sought to enforce the mortgage for the full amount specified in the bond. The Lord Chancellor was at first troubled by the consideration that the mortgage deed purported .to con- vey the legal title, and seemed inclined to think that might take the case out of the rule of liability which would be ap- plied to the bond if standing alone. He finally came to a different conclusion, holding the mortgage to be a mere se- '4Veseyll8. 526 ASSIGNMENT OP MORTGAGE. «urity. He said, finally : ' The debt, therefore, is the prin- cipal thing, and it is obvious that, if an action was brought on the bond in the name of the mortgagee, as it must be, the mortgagor shall pay no more than what is really due upon the bond ; if an action of covenant was brought by the covenantee the account must be settled in that action. In this court the condition of the assignee cannot be better than it would be at law in any mode he could take to recover what was due upon the assignment.' " The principle is distinctly recognized that the measure of liability upon the instrument secured is the measure of the liability chargeable upon the security. The condition •of the assignee cannot be better in law than it is in equity. So, neither can it be worse." ' In case of partnership, an assignment by one of the firm of all the interest he has in, on and to the stock of goods, notes and accounts due to the firm, vests the assignee with the interest of the assignor in a mortgage held by the firm to secure a note due to it, and the assignee must be joined with the other partners in an action for the conversion of the mortgaged property." § 776. Assignment of Lease. — An assignment of a lease of the mortgaged property, by a chattel mortgagor to an assignee of the mortgage, with authority to collect the rents accruing under such lease, does not constitute such a change of possession as -to dispense with filing and renewing the mortgage, as required by statute, where the lessee is allowed to remain in actual possession of the mortgaged property.* When a lease provides that fixtures placed on land by the lessee shall retain their character of personalty, and the lessee mortgages to a third person his interest in the lease, and in all fixtures then on the land, or to be placed there by him, and thereafter assigns his interest in the lease, the mortgage will, in equity, operate to create a lien on fixtures 'Carpenter v. Longan, 16 Wall. (U. S.) 271. 'Keith V. Ham (Ala.), 7 South. Rep. 234. ' National Bank v. Summers, 76 Mich. 107. ASSIGNEE PKO TANTO. 527 purchased and placed on the land by the mortgagor subse- quent to its date, which may be enforced in the hands of the assignee, who took with notice of the mortgage. But such lien cannot be enforced against property placed on the land by the assignee, since his acceptance of the lease could not bind him to make good the personal covenants given by the mortgagor for his indebtedness. Judge Parker says the assignees did not contract that the machinery to be placed upon the property by them should be subject to the provi- sions of the mortgage ; that they did not assume or agree to pay the mortgage, or to carry out its provisions, and could not be personally held under it.' § 777. Assignee Pro Tanto. — A transfer of part of the notes' secured by a chattel mortgage is an assignment of the mortgage pro tanto. Thus, a party executed a number of promissory notes, and secured the same by chattel mort- gage on certain property, and the mortgagee, after receiv- ing the notes, transferred a part of them as collateral secur- ity ; the notes transferred were an assignment pro tanto of the mortgagee, and the party receiving the notes as collate- rals had an equitable assignment of so much of the chattel mortgage in question as was necessary to secure the notes held by him.^ The assignment of one of a series of notes secured by a mortgage, without any accompanying transfer of the mort- gage, is an assignment pro tanto of the mortgage. Each, assignee is, through the mortgage, chargeable with notice of the equitable interests of all the assignees, and the holder of a part of the notes, with a formal assignment of the mort- gage, acquires no precedence from the fact that he is holding the mortgage.* ' Kribba v. Alford, 120 N. Y. 519. • Harman v. Barhydt, 20 Nebr. 625. •Studebaker v. McCargner, 20 Nebr. 500. See, also, Walker v. Schreiber, 47 Iowa 529; Sargent v. Howe, 21 III. 148; Hough v. Osborne, 7 Ind. 140; Anderson v. Baumgartner, 27 Mo. 80 ; Cullum v. Erwin, 4 Ala. 452; Nelson V. Dunn, 15 Ala. 501; Henderson v. Herrod, 10 Sm. & M. (Miss.) 631; Gwathmeys «. Eagland, 1 -Rand. (Va.) 466; Phelon «. Olney, 6 Cal. 478; Stevenson ■». Black, Saxt. Oh. (N. J.) 838; Zeyes v. Wood, 21 Vt. 331. 528 ASSIGNMENT OF MORTGAGE. The mortgagee will be bound, when he agrees to assign the mortgage with one of the notes sold, though after selling the note he refuses to assign the mortgage. Thus, a mort- gagee sold one of the secured notes to a party who was under no prior obligation to pay it, and agreed to assign the mortgage to him. This he afterwards refused to do, and took possession of and sold the mortgaged goods, which were sufficient to pay all the notes. It was held that the party who had taken and paid the note acquired, to that extent, an interest in the mortgage, and was entitled in equity to re- cover of the mortgagee the amount of such payment.^ And generally a party taking a note from the mortgagee, secured by mortgage, acquires an equitable interest in the mortgaged goods to the extent of his investnient in the mortgage debt. He is entitled to share pro tanto in the security.^ § 778. Bights of Assignee of Mortgage and Assignee for Benefit of Creditors. — An assignee of a mortgage by assign- ment of date earlier than the mortgagor's petition in insol- vency and the mortgagor's assignee for benefit of creditors stand in the same position as the original parties to the mort- gage. The assignee of the mortgage has rights, therefore, pre- cisely like those of the original mortgagee. And the rights of the assignee in insolvency are only those of the insolvent him- self. He stands in the same place as the debtor and takes only the property and interest which he had, subject to all valid claims existing in reference to such property. His rights are only those which the insolvent himself had and could assert at the time of the insolvency, except in case of fraud.* § 779. Part Assignment of the Debt. — The transfer of any distinct part of an indebtedness secured by a mortgage carries with it the mortgage security pro tanto, and a satis- faction of such part extinguishes the mortgage so far as it pertains to the part so transferred and satisfied, leaving it •Holway w. Gilman, 81 Me. 185. ' Moore v. Ware, 38 Me. 496. 'Hutchinson v. Murchie, 74 Me. 187; Williamson v. Nealey, 81 Me. 447. See, also. Perry v. Hadley, 148 Mass. 48 ; Millikeu v. Hathaivay, 148 Maes. 69, PAET ASSIGNMENT OP THE DEBT, 529 operative in regard to the amount remaining unpaid. So, when an assignee is authorized to dispose of such a part of a stock of goods, as might be necessary to pay a certain amount, and he does so, the transaction is valid. Thus, the power to take possession of the mortgaged property and to dispose of it after a certain notice of sale, conferred upon this mortgagee by the terms of the mortgage, was transferred by an assignment, so far as it was necessary to enable the assignee to realize his debt by a sale of the property, and if it required the disposition of the whole property to make the amount, the assignee could dispose of the whole, because he had a priority in payment secured to him ; but when the object of the assignment was accomplished, when the debt of the assignee with the expense incurred by him in the sale has been satisfied, if any part of the property remains un- sold, the mortgagee is entitled to a return of it, and the as- signee can have no claim to it. An assignment to the assignee of only part of the mortgage debt, to that extent the assignee may be said to become the mortgagee of the mortgagor. So far as a residue is concerned, the mortgagee continues to be the mortgagee of the mortgagor, and respon- sible to him, after the whole mortgage debt is paid, if any surplus remains. When the assignee has realized his claim, under such cir- cumstances, he has no right to retain the surplus property for any purpose, because his interest is extinguished. The mprtgagor cannot be entitled to such property, because the whole mortgage debt has not been satisfied, but the mort- gagee still holds the unsatisfied part of the debt to which the mortgage was incident, and by virtue of the mortgage, and under the terms of his assignment, he alone is entitled to the surplus property, after the payment of the assignee's claim.^ And when the assignee or the mortgagee has sold enough to satisfy his claim, all the right to the surplus, if ' Emmons v. Dowe, 2 Wis. 322. 2i 530 ASSIGIfMENT OF MORTGAGE. any remains, is necessarily extinguished, and the power to sell becomes ipso facto void.' § 780. Rig^ht to Protect His In;terest. — Where part of the notes secured by a chattel mortgage has been assigned, the assignee is entitled to intervene inan action of replevin brought by the mortgagee to recover possession of the property.* § 781. The Security Follows the Debt. — The security, whether it consists of real or personal properly, equitably follows the debt secured, and the purchaser of the debt may avail himself of it in equity without any assignment thereof except that acquired by the purchase of the debt.' The assignment of the debt passes all of the mortgagee's interest in the property mortgaged.* If the debt be in the form of a negotiable note, but it be not indorsed to the assignee, he acquires an equitable interest.® But if the debt be in the form of a negotiable promissory note, which is in- dorsed over to the assignee before maturity, he takes it free from any equities which existed in favor of third persons while it was held by the mortgagee.' § 782. Illinois Rule. — The assignee takes the mortgage subject to all equities between the mortgagor and mortgagee,' though he does not take subject to the latent equities of third parties.* § 783. Pennsylvania Rule. — The assignee of a mortgage, unless the mortgagor has estopped himself, holds it subject to all the equities to which it was liable in the hands of the assignor.' ' Charter v. Stevens, 3 Den. (N. Y.) 33. ' Harman v. Barhydt, 20 Nebr. 625. 'Batchelder v. Jenness, 59 Vt. 104. •Gafft). Harding, 48.111. 148; Woodru£f v. King, 47 Wis. 261; Langdon v. Buel, 9 Wend. {N. Y.) 80; Johnson v. Hart, 3 Johns. (N. Y.) 822; Tison v. People's Sav. and Loan Ass'n, 57 Ala. 823; Rice v. Cribb, 12 Wis. 179. ' Nelson v. Ferris, 30 Mich. 497. "Carpenter v. Longan, 16 Wall. (U. S.) 271; Judge v. Vogel, 38 Mich. 568; Gould V. Marsh, 1 Hun (N. Y.) 566. ' Bryant v. Vix. 83 111. 11 ; Brooks v. Record, 47 111. 30. 'Barbour v. White, 37 111. 164; Brooks v. Record, 47 111. 30. " Ashton's Appeal, 73 Pa. St. 158. FUTURE ADVANCES. 531 § 784. Non-Negotiable Instruments. — The assignee of a non-negotiable instrument has no greater rights under the instrument than his assignor ; if a mortgage secures a non- negotiable note, the assignee acquires no greater -rights than the mortgagee had against the mortgagor.^ A mortgage, like a note payable to tbe payee only, is not ^ negotiable, and is always subject to the defenses existing between the original parties. This is well settled and upon principle. The assignee of such a mortgage takes no greater title than his assignor." § 785. Future Advances. — When a chattel mortgage that is given for a fixed amount, but really to secure future ad- vances, of which none are made, is assigned in good faith and for value, to one who supposes it to be given for an actual indebtedness, the assignee obtains no greater rights than the mortgagee had, unless it is given to secure negotiable paper, when, if the assignment is made before maturity, he holds the paper and the mortgage discharged of pre-existing equities.^ If the mortgage is given to secure negotiable paper, the assignee of this paper and of the mortgage, if he becomes such in good faith for value and before maturity, may hold them discharged of pre-existing equities.* But where it does not secure negotiable paper the rule is the other way, -and he takes the paper subject to the same rights and equities as in the hands of the assignor.' ' Beebe v. Bank, 1 Johns. (N. Y.) 529 ; Clute v. Robinson, 2 Johns. (N. Y.) 595. See, also, Davies v. Austen, 1 Ves. Jr. 247; Matthews v. Wallwyn, 4 Ves. 118; Bock well v. Daniels, 4 Wis. 432; Scott d. Shreeve, 12 Wheat. (tJ. S.) 605; Walker v. Johnson, 13 Ark. 522; Timms v. Shannon, 19 Md. 29fi; Ouerry v. Ferryman, 6 Ga. 119 ; Willis v. Twambly, 13 Mass. 206 ; Joht)- aon V. Pryor, 5 Hayw. (Tenn.) 243 ; Sharp v. Eccles, 5 T. B. Mon. (Ky.) 72; Conover v. Van Mater, 18 N. J. Eq. 481; FauU v. Tinsman, 36 Pa. St. •108; Ketchum v. Foot, 15 Vt. 258; Smith v. Rogers, 14 Ind. 224; Shotwell V. Webb, 28 Miss. 375; Kleeman v. Frisbie, 63 111. 482; Warner v. Whitta- ker, 6 Mich. 133. 'Ingraham v. Disborough, 47 N. Y. 421; Trustees v. Wheeler, 61 N. Y. 88. •Judge V. Vogel, 38 Mich. 568; Carpenter v. Longan, 16 Wall. (U. S.) 271. * Reeves v. Scully, Walk. Ch. (Mich.) 248; Button v. Ives, 5 Mich. 515. 5 Russell V. Waite, Walk. Ch. (Mich.) 31; Nichols v. Lee, 10 Mich. 526; Trustee's v. Wheeler, 61 N. Y. 88. 532 ASSIGNMENT OF MORTGAGE. § 786. Right of Possession. — The assignee acquires the same right to possession that the mortgagee had before the assignment, under a safety clause, or under a clause pro- viding for taking possession if any attachment or execution should be levied upon the property.^ So, when the mort- gagor voluntarily surrenders the property to the mortgagee, who sells it, it entitles the vendee to take and retain posses- sion as against the mortgagor, at least until the debt is paid.* § 787. Release of Mortgage by Mistake. — Where a mort- gage of chattels, given to secure several notes, was released by mistake by the mortgagee, who had previously assigned the notes, supposing them to have* been paid, such release will not discharge the property in the hands of a purchaser having notice of such assignment, as to any one of the notes remaining unpaid.^ ARTICLE III. — EIGHT OF ACTION. 788. HisRight of Action. 789. Fraudulent Mortgage. 790. Bill of Discovery. 791. Mortgagee Beipg Surety. 792. Accommodation Notes. 793. Defense to Such Mortgages. § 788. His Right of Action. — An assignment invests the assignee with all the rights of the mortgagee to the property. But he has no right to sue for injuries to the property be- fore the assignment. To maintain such a suit the assignee must have been the owner or entitled to the possession of the property, or had some right or interest in it, at the time of the wrongful act complained of.* After a mortgage of property has been attached, in au action against the mortgagor, and the mortgagee assigns his record title and records the assignment, he cannot afterwards 'Beach v. Derby, 19 111. 617. " Sirrine v. Briggs, 31 Mich. 443. ' Martindale v. Burch, 57 Iowa 291. * Bowers v. Bodley, 4 111. App. 279, MORTGAGEE BEING A SURETY. 533 maintain an action against the officer for unlawful conver- «ion of the property. The legal title to the property would pass to the mortgagee subject to the lien ; so it would, on the same ground, pass to the assignee of the mortgagee.^ § 789. Fraudulent Mortgage. — An assignee in insolvency who has taken possession of personal property which had been mortgaged by the debtor in fraud of creditors, and filed a bill in equity to prevent the transfer of the mortgage by the mortgagee, may hold the property against one to whom the mortgage and note which it was given to secure were subsequently assigned for a good consideration and without notice. If the assignee had acquired title in good faith and for a valuable consideration, before any act had been done to avoid the mortgage, he would have stood on different ground.^ § 790. Bill of Discovery. — A judgment creditor of a mort- gagee may file a bill of discovery against an alleged fraudu- lent assignee of the mortgage, and upon proof of the fraudulent character of the assignment, may have the mort- gage fundappliedto the payment of the judgment.' § 791. Mortgagee Being a Surety. — A mortgage founded on a valuable and adequate consideration will not be de- clared void for fraud when assailed by a subsequent pur- chaser afan execution sale against the mortgagor, on proof of the mortgagor's embarrassed condition and relationship to the mortgagee. Such mortgage will inure to the benefit of the creditor to whom the surety is bound,* and one who takes such a mortgage by assignment has notice of such trust and the mortgage is subject to it. Such assignment, in equity, is void, and the assignee will be regarded as holding the legal title to the property in place of the originaL trustee.* ' Home V. Briggs, 98 Mass. 510. 'Bigelow V. Smith, 2 Allen (Mass.) 264; 'Doughten v. Gray, 2 Stock. (N. J.) 323. * Troy v. Smith, 38 Ala. 469. ' Ex parte White, 2 Low. D. C. 343. 534 ASSIGNMENT OP MORTGAGE. § 792. Accommodation Notes. — A party executed and de- livered two notes and a mortgage of personal property to secure them, to indemnify the mortgagee for indorsements made and to be made for the mortgagor's accommodation,, with power to dispose of the property if the notes indorsed were not paid. The mortgagee indorsed these notes to the full amount of the security, but before he had become liable on any of his indorsements he assigned the mortgage and the notes secured to a third party, with the same power of disposal. This assignment was valid and conveyed to the assignee the interest of the mortgagee in the notes and mortgage. The mortgagee afterwards paid a large amount of his indorsed paper, and it was held that the assignee at once took the benefit of these payments, and acquired to that extent a definite interest in the mortgaged property.^ § 793. Defense to Such Mortgage. — Because a mortgage is made for a temporary accommodation is no defense, when in the hands of an assignee who took it in good faith, even if the mortgagee falsely represented himself as solvent, nor can a defense be made because the mortgagee agreed to use the mortgage only as collateral security, but instead of this raised the money upon it.'^ ARTICLE IV. EXTINGUISHMENT. 794. No Revival. of Mortgage. § 794. No Revival of Mortgage. — After a fulfillment of the condition of a mortgage, and it is extinguished, the assign- ment of it could not resuscitate it, although the assignment be upon a valuable consideration.* Thus, where the condi- tion of a mortgage is that the mortgagor shall save harmless the mortgagee against liability as his surety on a note due ' Potter V. Holden, 31 Conn. 385. ' Jaoobsen v. Dodd, 32 N. J. Eq. 403. ' Bonham v. Galloway, 18 111. 68 ; Mead v. York, 2 Sel. (N. Y.) 449 ; Abbott V. Upton, 19 Pick. (Mass.) 434. wo REVIVAL OP MORTGAGE. 635 to a third person, the condition is performed when the mort- gagor procures the cancellation of the note, and the substi- tution of a new note in its stead, with a different surety ; the mortgage being thus extinguished, it cannot then be assigned to the surety on the new note, for his indemnification, even though the assignment be made with the assent of the mort- gagor, for valuable consideration and contemporaneously with the cancellation and substitution of the notes. The court said, per Walker, C. J. : " The mortgage in this case was an assignment upon a specified condition ; and upon the performance of the condition the mortgage was extin- guished, and the title revested in the mortgagor. This proposition necessarily results from the fact that the mort- gage is but a security for the discharge of a particular debt or duty. * * * The condition of the mortgage was to save harmless the surety of the mortgagor. This the mort- gagor unquestionably did when he obtained a cancellation of the note upon which the mortgagee was the surety, and sub- stituted a bill of exchange, with a different surety^^ and ob- tained a discharge of the mortgagee. The mortgage was thus extinguished; and being extinguished, the assignment of it could not resuscitate it, although the assignment might be upon a valuable consideration, * * * Even the con- sent of the mortgagor that it should be assigned could not of itself revive it." ^ Although the title to personal property conveyed in a mortgage becomes absolute in the mortgagee upon failure to perform the condition, yet if the mortgagee or his assignee afterwards accept payment of the debt, or discharge the lia- bility secured by the mortgage, the title revests in the mort- gagor, without a redelivery or resale and without a cancel- lation of the mortgage.* It is true that the introduction of •Brooks V. Kuff, 87 Ala. 371. 'Butler V. Tufts, 13 Me. 302; Flanders «. Barstow, 18 Me. 357; Paul v. Hayford, 22 Me. 234; Greene v. Dingley, 24 Me. 131; Leighton v. Shapley, 8 N. H. 359; Parks v. Hall, 2 Pick. (Mass.) 206; Barry v. Bennett. 7 Met. (Mass.) 354; Patchin v. Pierce, 12 Wend. (N. Y.) 61; Harrison v. Hicks, 1 Port. (Ala.) 423. 536 ASSIGNMENT OF MORTGAGE. a mortgage made to indemnify a surety, after proof of its execution, is prima fade evidence of title. But such title may be avoided by proof introduced in defense that the debt has been paid, or the liability of the surety discharged.^ And generally a mortgage of personal property, given to sureties to protect them against their suretyship, is not in force after the creditor has discharged the sureties. Thus, where a debtor gave to his sureties such a mort- gage to secure them against their suretyship upon a note, and they assigned the mortgage to the creditor for his security, taking from him a discharge, under seal, of their liability on the note, the mortgage is no longer in force. Because the design of such a mortgage being merely to pro- tect the sureties against the note, and that protection having been given by the creditor's discharge, the condition of the mortgage is fulfilled, and the mortgage is extinguished.* 'Davis V. Mills, 18 Pick. (Mass.) 394. ' Sumner v. Baohelder, 30 Me. 35. AT COMMOIT LAW. 537 CHAPTER XVI. EIGHTS OF ATTACHMENT AND EXECUTION CEEDITOES. ARTICLE I. — AS TO MOETGAGOE S INTEREST. 795. At Common Law. 796. Under Statutory Enactment. 797. In Equity. 798. Equitable Eule Adopted. 799. Right of Possession Until Demanded by Mortgagee. 800. Fraudulent Mortgage. 801. Eight of Action by Mortgagee. 802. When Assignee Surrenders Mortgage to Mortgagee. SOS. After Default. 804. Taking Possession Under the Safety Clause. 805. Liability of Officer for Taking Wrongful Possession. -806. Seizure and Sale Without Recognizing the Mortgage Lien. 807. Contrary Doctrine. SOS. Mortgagee May Waive his Lien by Attachment. 509. Giving an Accountable Receipt. § 795. At Common Law. — At common law the mortgagor of personal property has no interest subject to levy and sale.' And the chattel-mortgage property or pawn is not liable to attachment in action against the pawnor or mortgagor. If goods be pawned and afterwards a judgment is recovered against the pawnor, the goods cannot be taken in execution until the money is paid or tendered to the pawnee." At common law, mortgaged personalty could not be taken on an execution against the mortgagor, because the legal title was not in him. Equities and right to redeem are not subject to execution at common law, because there is no legal right, and therefore no legal remedy.* ' Vanslyck v. Mills, 34 Iowa 375 ; Scott v. Scholey, 8 East 501; Metcalf v Scholey, 5 B. & P. 461 ; The King v. Hanger, 3 Bulst. 17 ; Badlam v. Tucker 1 Pick. (Mass.) 389. 'The King v. Hanger, 3 Bulst. 17 ; Badlam v. Tucker, 1 Pick. (Mass.) 389 Jennings v. MoUroy, 42 Ark. 236. ' Sherman v. Davis, 137 Mass. 132. See, also. Haven ». Low, 2 N. H. 16 , Marsh v. Lawrence, 4 Cow. (N. Y.) 467 ; Mattison v. Baucus, 1 Comst. (N. 538 ATTACHMENT AND EXECUTION CBEDITOKS. § 796. Under Statutory Enactment. — By statute, in many States, the interest of the mortgagor can be reached by attachment or execution. But such enactment does not now permit the mortgagor's interest to be taken on execution or attachment unless it be done in a manner provided by statute.^ § 797. In Equity. — It is only by statute that equities or rights to redeem are subject to attachment by ordinary pro- cess; and when no statute has authorized the attachment of such interest in personal property, a creditor can reach such interest of his debtor only by resorting to a court of equity, where he may be let in to redeem the rncumbrance.* § 798. Equitable Rule Adopted, — In some of the States, irrespective of statutory enactments, when the mortgagor holds possession by the terms of the mortgage, he has an interest which may be reached and sold on execution.* Thus, in New York, while the property remains in the pos- session of the mortgagor, and the conditions are unbroken, he has an interest subject to his control and disposition. He can sell and deliver such title as remains to him. The pur- chaser takes it, in case of a sale, subject to the lien of the mortgage, whether its existence was ascertained by the pur- chaser or not, or whether the mortgagor mentions it. It follows, of course, that the interest of the mortgagor is clearly subject to levy and sale by an execution creditor, and the purchaser would obtain at such sale the same title as that of which the mortgagor is possessed, and no more nor less.* Y.) 295; Ballune v. Wallace, 2 Rich. (S. Car.) 80; Conrad v. Atlantic Ina. Co., 1 Pet. (U. S.) 440. See, also, Emery v. Seavey, 148 Mass. 566. 'Sherman v. Davis, 137 Mass. 132; Evans v. Warren, 122 Mass. 303; Prout V. Root, 116 Mass. 410; Hunt v. Helton. 13 Pick. (Mass.) 216; Bar- rows V. Turner, 50 Me. 127 ; Bearing v. Lord, 45 Me. 293 ; Haven v. Low, '.i N. H. 13; Marsh v. Lawrence, 4 Cow. (N. Y.) 461; Wolfe v. Dorr, 24 Me. 104. 'Shirley v. Watts, 8 Atk. 200. »Hall V. Sampson, 35 N. Y. 274 ; Hamill v. Gillespie, 48 N. Y. 556; More V. Bennett, 48 N. Y. 472. ♦Bailey v. Burton, 8 Wend. (N. Y.) 839; Hull v. Carnley, 11 N. Y. 501 p Gould V. Asseler, 22 N. Y. 225 ; Hanning v. Monaghan, 28 N. Y. 585 ; Hatha- way V. Brayman, 42 N. Y. 322. EQUITABLE RULE ADOPTED. 539 This rule obtains in New Jersey, where a chattel mort- gage is regarded as a mere security for the debt, and does not entirely divest the property of the mortgagor. This interest in the chattels mortgaged is such an interest as may be seized and sold under the ordinary process of law against the mortgagor. The court, per Depue, J., says : " The legal estate of the mortgagee, after breach of condition, has all the incidents of a common-law title for the purpose of an action of eject- ment, but its existence is, nevertheless, regarded as com- patible with the legal estate, at the same time, in the mort- gagor. This legal estate of the mortgagor is capable of conveyance, mortgage, or a sale under execution against him, at any time before his estate is divested by foreclosure. The cases clearly recognize the equity of redemption of a mort- gagor as a legal estate, and as such it must subsist until ex- tinguished in the manner in which legal estates are by law extinguishable." ' Under the equitable rule, an execution creditor who has levied on a chattel interest covered by a mortgage may go into equity for the redemption of the mortgage, the same as a judgment creditor at law is entitled to redeem an incum- brance upon land, and by his levy on the chattels mortgaged will acquire a preference according to his legal priority.'' By the adoption of the equitable rule the entire property in the chattel mortgaged does not pass to the mortgagee, eo instante, on the execution of the mortgage, and the mortgagor, notwithstanding the mortgage, has a property in the chattels remaining in him, which is subject to execution and sale before breach of the condition. It is argued that, having the continuance of the possessionary right of the mortgagor, the rights of the mortgagee and mortgagor cor- respond with those of the lessor and lessee of chattels during the term of the demise. A lessee of chattels during 'Wooddde ■«. Adams, 40 N. J. L. 417. 'McDermutt v. Strong, 4 Johns. Ch. (N. Y.) 687; Disborough v. Outcalt, Saxt. (N. J.) 299; Herbert v. Mechanics, &o., 2 C. E. Green (N. J.) 497. 540 ATTACHMENT AND EXECUTION CREDITOKS. his term has such property in them as may be seized and sold under execution against him, if the seizure and sale be of his estate therein only, and no substantial injury be done to the rights of the lessor.^ Lord Kenyon, speaking of an action by the lessor against an officer selling goods leased to a tenant, under an exe- cution against the lessee, says : " No doubt could have been made but that the sheriflf might have seized them under an execution against the tenant, and the creditor would have been entitled to the beneficial use of the property during the term."^ So, under a bill of sale of chattels, with a condition of redemption on payment of debt and interest on demand, and a further proviso that the mortgagor should continue in possession until default, under the equitable rule the mort- gagee had no such a right of possession as would enable him to sue in trover an officer selling them under execution against the mortgagor.* A like decision was made where the mortgage contained no stipulation for possession by the mortgagor, and his right to possession until default was inferred from the naming of a future day for payment of the mortgage-money.* § 799. Right of Possession Until Demand by Mortgagee. — Where a chattel mortgage gives to the mortgagor the right of possession until payment of the mortgage on demand, he has an interest in the mortgaged property that may be levied upon and sold." Where a chattel mortgage provides that the mortgagor may retain possession, but he surrenders pos- 'DuffiU V. Spottiswoode, 3 C. & P. 435; Dean v. Whitaker, 3 C. & P. 347; Tanored v. Allgood, 4 H. & N. 438 ; Van Anwerp v. Newman, 2 Cow. (N. Y.) 543 ; Grafilin li. Jackson, 40 N. J. L. 440. 'Gordon v. Harper, 7 T. E. 9. "Bradley v. Copeley, 1 C. B. 685. •Wheeler v. Montefiore, 2 Q. B. 133. See, also, Nelson v. Ferris, 30 Mich. 497 ; Doughten v. Gray, 10 N. J. Eq. 323 ; Curd v. Wunder, 5 Ohio St. 92; Harbinson v. Harrell, 19 Ala. 753. 'Lyman v. Rowe, 66 How. Pr. (N. Y.) 481; Wisaer v. O'Brien, 44 How. Pr. (N. Y.) 209; Newsan v. Finch, 25 Barb. (N. Y.) 175; Livor v. Orser, 5 Duer (N. Y.) 501 ; Hull v. Carnley, 11 N. Y. 501. Contra, Brown v. Cook, 3 E. D. Smith (N. Y.) 123; Howland v. Willett, 3 Sandf. {N. Y.) 607; Norris V. Sowles, 57 Vt. 360. AFTER DEFAULT. 541 session, he then has no longer an attachable interest in the chattels.' And the interest of a mortgagor in a chattel of which he retains possession only at the will of the mortgagee is not attachable.'' § 800. Fraudulent Mortgage. — If a mortgage is fraudulent and void as to creditors, they can levy an execution upon the property as if the mortgage had not existed. The mort- gage may be good as between the parties, yet voidable by creditors of the mortgagor.^ § 801. Right of Action by Mortgagee. — Where a mortgagor is permitted to retain possession, as a general rule, such pos- session is, in law, the possession of the mortgagee, who may at any time maintain trespass, trover or replevin for any intermeddling with, or taking the property by a third party ; this right of action exists where the property is»taken by an officer under color of legal process, as well as when taken without authority of law.* § 802. When Assignee Surrenders Mortgage to Mortgagee. — ^A mortgagee's right to recover the value of the mortgaged property, which has been seized under an attachment and sold, is not affected by the fact that he has assigned the mortgage as collateral security for a debt, if before suit is brought the mortgage is surrendered to him by the assignee.* § 803. After Default. — After default, mortgaged property is not subject to be levied on, for then the mortgagee has the right to enter, or in case of* a trust deed, the trustee has the right to possession of the property, and the right of the grantor or mortgagor is purely the right to redeein — an 'Powers V. Elias, 53 N. Y. Supr. Ct. 480. 'Sams V. Armstrong, 8 Mo. App. 573; Perkins v. Mayfield, 5 Port. (Ala.) 182; Tannahill d. Tuttle, 3 Mich. 104; Eggleston w. Mundy, 4 Mich. 295; Bacon v. Kimmel, 14 Mich. 201 ; Hopkins v. Scott, 20 Ala. 179 ; Hawkins v. May, 12 Ala. 673. » Shurtleff v. Willard, 19 Pick. (Mass.) 202 ; Pratt v. Wheeler, 6 Gray (Mass.) 520; Eussell v. Dyer, 33 N. H. 186; Brown v. Snell, 46 Me. 490. 'Tannahill v. Tuttle, 3 Mich. 104; Pickard v. Low, 3 Shep. (Me.) 48; Welch V. Whittemore, 25 Me. 87 ; Braokett v. Bullard, 12 Met. (Mass.) 308. 'Eddy V. McCall, 77 Mich. 242. See 71 Mich. 497. 542 ATTACHMENT AND EXECUTION CEEDITOKS. equitable right, whicb, being disconnected from the legal right of possession, is not subject to be levied on by legal process/ After forfeiture the mortgagor has no interest capable of being seized and sold.^ § 804. Taking Possession Under the Safety Clause. — When the mortgage contains a stipulation that in case the mort- gagee shall deem himself unsafe he may take possiession of the property, and he has done so, then the mortgagor has no interest that can be levied on or attached. His mere equity of redemption is not subject to sale on execution.' § 805. Liability of Officer for Taking Wrongful Possession. — If an officer takes the mortgaged property while in the mortgagor's possession, the general rule is, that the mort- gagee, being entitled to possession, may sue the officer for the conversibn of the property.* Whenever the mortgage gives the mortgagee right of possession in case he should deem himself insecure, and an attachment has been made, after forfeiture, in New York, he can take the property and the attachment becomes invalid ; and if the sheriff does not surrender the property upon de- mand, he becomes liable in trespass to the mortgagee.® If the grounds for the attachment are put in issue by plea in abatement, this will raise other issues, as, for instance, the fact whether the defendant, within two years before the suit, fraudulently conveyed his property to hinder or delay his creditors.* 'Thompson v. Thornton, 21 Ala. 808. "Eggleston v. Mundy, 4 Mich. 295; Boltes v. Bipp, 3 Keyes (N. Y.) 210; Baxter v. Gilbert, 12 Abb. Pr. (N. Y.) 97 ; Porter v. Parmly, 34 N. Y. Supr. ■Ct. 398; Stewart v. Slater, 6 Duer (N. Y.) 83; Champlin v. Johnson, 39 Barb. Denno v. Nash, 60 Vt. 334. ^ Gen. Laws, p. 105, ^ 5. ' Cotton V. Marsh, 3 Wis. 221 ; Cotton v. Watkins, 6 Wis. 629. * Frisbee v. Langworthy, 11 Wis. 375. 564 WKONGFUX SALE AND REMOVAL OF PEOPERTY. CHAPTER XVII. WEONGFUL SALE AND EEMOVAL OF THE PEOPEETY. ARTICLE I. — STATUTORY PROVISIONS. 848. In General. 881. Instances. 849. Alabama. 882. Missouri. 850. Instances. 883. Instances. 851. Burden of Proof. 884. Montana. 852. Unplanted Crops. 885. Nebraska. 853. Arkansas. 886. New Hampshire. 854. Instances. 887. Instances. 855. California. 888. New Jersey. 856. Colorado. 889. Instances— Waiver of Forfeit- 857. Connecticut. ure. 858. Trover. 890. New York. 860. Delaware. 891. Instances. 861. Florida. 892. North Carolina. 862. Georgia. 893. Instances. 863. Instance. 893a. North Dakota. 864. Illinois. 894. Ohio. 865. Indiana. 894a. Oklahoma Territory. 866. Iowa. 8946. Oregon. 867. Instances. 895. Pennsylvania — Instance. 868. Purchasing Mortgaged Chattels. 896. Rhode Island — Instance. 869. Kansas. 897. South Carolina— Instance. 870. Louisiana. 897a. South Dakota. 871. Maine. 8976. Tennessee. 872. Maryland. 898. Texas. 873. Massachusetts. 899. Instances. 874. Instances. 900. Validity of Bail-Bond. 875. Michigan. 901. Utah Territory. 876. Instances— Eeplevin. 902. Vermont. 877. Minnesota. 903. Washington. 904. Wisconsin. 878. Instances. 879. Removing out of the State. 905. Wyoming. 880. Mississippi. § 848. In General. — In most of the States statutes have been enacted making it a penal offense to sell or remove mortgaged property without the consent of the mortgagee. The penalty is generally by fine or imprisonment. § 849. Alabama. — Any person who sells or conveys any personal property upon which he has given a written mort- gage, lieu or deed of trust, and which is then unsatisfied in INSTANCES. 665 whole or in part, without first obtaining the consent of the lawful holder thereof to such sale or conveyance, is guilty of a misdemeanor, and upon conviction shall be fined not exceeding $500, and may also be imprisoned in the county jail or sentenced to hard labor for the county not exceeding six months, one or both, at the discretion of the jury.^ Though a mortgagee is bound civilly by an assignment of the mortgage, executed by another as his agent, his silent partner being present at the time, and by the representations of the partner that the mortgage debt was the only claim held by the firm against the property, he cannot be held criminally unless it be shown that he knew or had knowl- edge of the transfer and representations.'' An indictment for removing mortgaged property charged that the mortgage lien covered two cows and two calves ; the mortgage was given for two cows ; it was held no variance, as the offspring of mortgaged animals, which are born after the making of the mortgage, are subject to the lien of such incumbrance.^ § 850. Instances. — Under the Code, Sec. 4353, a convic- tion cannot be had for selling or removing mortgaged prop- erty, unless the mortgagor sells or removes the property for the purpose of hindering, delaying or defrauding the mort- gagee. If he removes and sells it for the purpose of raising money to pay the mortgage debt, honestly believing that the mortgagee assents to such removal and sale, and having a just cause so to believe, he is not guilty.* The word " convey," as used in the Code, Sec. 4354, making it a misdemeanor to sell or convey personal prop- erty upon which there is a written lien or mortgage, includes a transfer of property by exchange." Valid equitable liens and mortgages are as much within iCivilCode, ?H353, 4354. ■' Poster V. State, 88 Ala. 182. *Dyer v. State, 88 Ala. 225. •Atwell V. State, 63 Ala. 61. * Johnson v. State, 69 Ala. 593. 566 WKONGFUL SALE AND REMOVAL OP PKOPERTY. the provisions of the statutes which make it criminal — the removal or sale of property on which one has a lien — as are those valid at law.^ § 851. Burden of Proof. — Where, in an action for the con- version of cotton claimed under a crop mortgage, there was conflicting evidence as to whether the cotton claimed was part of the mortgagor's crop, an instruction that it was in- cumbent with the plaintiff to satisfy the jury that the cotton in question was raised by the mortgagor was proper.^ § 852. Unplanted Crops. — A mortgage of an unplanted crop conveys an equitable title which will support an action on the case by the mortgagee against a third person, who, having actual or constructive notice of the mortgage, receives and sells the crop.^ § 853. Arkansas. — Any person or persons who shall re- move beyond the limits of the State, or of any county wherein the lien is recorded, property upon which there is a lien, by virtue of a mortgage, deed of trust, or who shall sell, barter or exchange, or otherwise dispose of any such prop- erty without the consent of the person who has the lien, or shall secrete the same or any portion thereof, shall be deemed guilty of felony and subject to an indictment, and upon conviction thereof shall be sentenced to hard labor in the county jail k.nd penitentiary-house of the county for a period of not less than one nor more than two years, at the discretion of the jury trying the same.* § 854. Instances. — Actual recording of the instrument cre- ating the lien is not necessary to make it a felony for one to remove, sell, barter, or otherwise dispose of the mortgaged property. Filing in the recorder's office as required by the statute is sufficient. An indictment charging that the accused did sell, barter, or otherwise dispose of the mortgaged prop- • Varnum v. State, 78 Ala. 28. ' Woolsey v. Jones, 84 Ala. 88. 'Leslie v. Hinson, 88 Ala. 266; Whittleshoflfer v. Strauss, 83 Ala. 517. * Acts of 1874r-5, pp. 129, 130. COLOBADO. 567 erty is bad for uncertainty. The manner of the disposal must be specified/ Tiie mortgagee may, by proper action, subject the pro- ceeds of the sale of the mortgaged property, sold by one who has purchased it from the mortgagor and sold it, to the pay- ment of his mortgage debt.^ A cropper on shares has such an interest in the crop as is a subject of mortgage, and for the selling of which when mortgaged, and the mortgage being recorded, he may be guilty of a felony. To find him guilty it is not necessary that the jury find that he sold it with the felonious intent to deprive the mortgagee of his debt.' The indictment for sell- ing mortgaged property must show not only that the mort- gage was recorded or filed with the clerk as required, but also that it has been acknowledged ; and it would be better to state the name of the purchaser, or that his name was un- known.* § 855. California. — If a mortgagor voluntarily removes or permits the removal of the property mortgaged from the county in which it was situated at the time of the execution of the mortgage, the mortgagee may take possession and dis- pose of the property as a pledge for the payment of the debt, though the debt be not due.^ § 856. Colorado. — If the mortgagor sells, transfers or in- cumbers the mortgaged property during the existence of the mortgage, it is deemed a larceny of such property, unless he shall fully advise the person with whom he is nego- tiating of the fact of the prior lien, and also fully apprise the mortgagee of the intended sale. If the mortgagor transfers, conceals or carries away the mortgaged property without the written consent of the mortgagee, he is deemed guilty of a misdemeanor, and may be fined not less than twice the value ' Cooper V. State, 37 Ark. 412. ^Titsworth v. Spitzer, 42 Ark. 310. 'Beard v. State, 43 Ark. 284. * State V. Harberson, 43 Ark. 378. 'Code of 1876, §7966. 568 WRONGFUL SALE AND REMOVAL OF PROPERTY. of the property, or by imprisonment in tlie county jail not exceeding one year, or both, at the discretion of the court. Any person having conveyed any chattels to another by mortgage, who shall, during the lien, sell the said property to a third person for a valuable consideration, without in- forming him of the prior lien, shall forfeit and pay to the purchaser twice the value of such property so sold, which forfeiture may be recovered in an action of ' debt in any court having jurisdiction.^ § 857. Connecticut. — ^Whoever, with a fraudulent intent to place mortgaged personal property beyond the control of the mortgagee, removes or conceals, or aids or abets in re- moving or concealing the same, and mortgagor of such prop- erty who assents to such removal or concealment, shall be punished by a fine not exceeding five hundred dollars, or by imprisonment in jail not exceeding six months. If any mortgagor of personal property sells or conveys the same, or any part thereof, without the written consent of the mort- gagee, and without informing the person to whom he sells or conveys that the same is mortgaged, he shall be punished by a fine not exceeding one hundred dollars, or by imprison- ment in jail not exceeding six months.^ § 858. Trover. — Where personal property mortgaged to secure the payment of a debt payable on demand is left in the possession of the mortgagor, an unqualified sale by him of the entire property is a wrongful conversion, for which trover will lie.* § 860. Delaware. — If any mortgagor, without the consent of the mortgagee, removes the mortgaged property from the county where it is situated, or in which it was at the time of the execution of the mortgage, he shall be guilty of a misdemeanor, and upon conviction thereof shall be fined in a sum equal to the value of the property removed, and 'Gen. Laws of 1877, p. 123, |? 129, 131, 132. ''Lawsofl877, ch. 53. ' Aahmead v. Kellogg, 23 Conn. 70. GEOEGIA. 569 shall also be imprisoned for a term not exceeding one year.^ § 861. Florida. — If any mortgagor of personal property, or other person, shall, with fraudulent intent, make arrange- ments, endeavor or attempt to remove the same beyond the limits of the judicial circuit in which the property was at the time of the execution of the mortgage, so as to impair the rights, interests, or remedies of the mortgagee, or the assignee of such mortgage, it shall be competent for the mortgagee, or any person interested in the mortgage, upon making an affidavit of the fact before a judge of the Circuit Court, or before any justice of the peace, or the clerk of the Circuit Court, to obtain a writ of attachment, to be directed to any constable or sheriff, requiring him to attach and take into his custody the property so removed or attempted to be removed ; or, if such constable or sheriff cannot be had, then any other indifferent person specially delegated under the hand and seal of the judge, justice or clerk issuing such attachment ; such attachments shall run and have full force and effect in every county of the State. When the jury find that a removal was intended, they shall ascertain the amount of damages and render a verdict for the same, whether the debt is due or not, and execution issued as in other cases. Such a mortgagor so offending may be deemed guilty of felony, and upon conviction be confined in the State prison at hard labor for not less than three nor more than twelve months, or fined not less than five hundred nor more than one thousand dollars, at the diiscretion of the court.^ § 862. Georgia. — No person, after having executed a mortgage deed to personal property, shall be permitted to sell or otherwise dispose of the same with intent to defraud the mortgagee, unless the consent of the mortgagee be first obtained, before payment of the indebtedness for which the mortgage deed was executed ; and if any person shall violate ^Laws of 1877, ch. 477, ? 4; Gen. Laws, vol. 15, eh. 477, ? 4. ' Gen. Laws, ? 3015. 570 WKONGFUL SALE AND EEMOVAL OF PKOPERTY. the provisions of this section, and loss thereby is sustained by the holder of the mortgage, the offender shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine in double the sum or debt which said mortgage was given to secure ; and upon the failure to pay said fine immediately, the person so convicted shall be im- prisoned in the common jail for a period of not less than six months nor more than twelve. When the fine has been im- posed and collected, one-half shall be paid to the holder of the mortgage, and the payment shall extinguish the debt to secure which the mortgage was executed, and the remaining half shall be paid over to the county treasury of the county in which such conviction was had/ § 863. Instance. — The loss mentioned in the statute does not necessarily refer to the loss of the debt, or any part of it ; but if there be a fraudulent disposition of the property mortgaged, and a loss of the mortgagee's security or of the value of his security results from it, the fraud is an offense ; or if the mortgagee sustains loss by reason of having to incur expense to follow the property to discover it in consequence of the fraudulent sale or fraudulent disposition, is all the loss the statute requires in order to make the mortgagor punish- able. If the mortgagor had other property, there would be a violation of the law.^ § 864. Illinois. — Any person so conveying any personal property who shall, during the existence of the title or lien created by such instrument, sell the same or any part thereof to another person for a valuable consideration, without in- forming him of the existence of such conveyance, shall for- feit and pay to the purchaser twice the value of the property so sold, which sum may be recovered by such purchaser, in. an action of debt, in any court of competent jurisdiction, or before a justice of the peace, if within his jurisdiction.* ' Code, ? 4600. ^Coleman v. Allen, 79 Ga. 637. 'Rev. Stat. oh. 95, § 6. IKSTANCJ^S. 571 Any person having so conveyed any personal property who shall, during the existence of such title or lien, sell, transfer, conceal, take, drive or carry away, or in any man- ner dispose of such property or any part thereof, or cause or suffer the same to be done without the consent of the holder of such incumbrance, shall be guilty of a misdemeanor, and on conviction may be fined in a sum not exceeding twice the value of the property so sold or disposed of, or confined in the county jail not exceeding one year, or both, at the dis- cretion of the court.^ § 865. Indiana. — Any person having mortgaged his per- sonal property, who shall, during the existence of the lien, sell or transfer to any person, without informing him of the lien, or who shall take, drive or carry away, in violation of his agreement contained in the mortgage, and without the consent of the mortgagee, any of the property, shall be guilty of a misdemeanor, and on conviction thereof shall be fined in any sum not to exceed two hundred dollars, in the discretion of the court or jury trying the cause.'^ § 866. Iowa. — If any mortgagor of personal property, while his mortgage of it remains unsatisfied, willfully de- stroys, conceals, sells, or in any manner disposes of the property covered by such mortgage, without the corisent of the then holder of such mortgage, he shall be deemed guilty of larceny and be punished accordingly.' § 867. Instances. — Under the statute the mortgagor may fully use and control the property, provided he does not impair the security of the mortgagee ; and the sale of the equity of redemption, or the execution of a subsequent mort- gage, which, in legal contemplation, amounts to the same thing, does not render such transaction void. So, a second mortgage upon chattels, though made without the consent of the first mortgagee, is not rendered void by the statute ^Kev. Stat. ch. 95, ? 7. ''Rev. Stat. §1954. 'Eev. Code 1880, §3895. 572 WKONGFUL SALE AND REMOVAL OF PROPERTY. which makes the mortgagor guilty of larceny for disposing of such property without the consent of the mortgagee.^ When a mortgagor sells mortgaged property, the mort- gagee's lien is not impaired thereby, and he can follow the property and recover it. This lien cannot be divested by any payment short of a payment of the mortgage debt. The mortgagee's remedy is against the mortgagor and against the property.^ An indictment for larceny growing out of the sale of mortgaged property must aver that the mortgage was un- satisfied at the time of the offense charged.' § 868. Purchasing Mortgaged Chattels. — To purchase mort- gaged chattels is not a criminal offense.* § 869. Kansas. — Any mortgagor of personal property who shall injure, destroy, sell or dispose of such property, or any part thereof, for the purpose of defrauding the mortgagee or his or her assigns, or shall conceal such property, or any part thereof, with the intent to hinder, delay or defraud such mortgagee or his or her assigns, shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by imprisonment in the county jail for a period not to exceed six months or by a fine of not less than fifty dollars nor more than five hundred dollars, or by both such fine and imprisonment.^ § 870. Louisiana. — Chattel mortgages are not known to the law of Louisiana. Machinery attached to a plantation and used for planta- tion purposes, though included in a mortgage, if purchased and removed, even during the pendency of a suit to enforce the mortgage, is withdrawn from the operation of the mort- gage. When machinery is removed from a plantation it again becomes a movable, and as such could not be suacep- ' Tootle V. Taylor, 64 Iowa 629. ' Waters v. Bank, 65 Iowa 234. ' State V. Gustafson, 50 Iowa 195. * McDonald v. Norton, 72 Iowa 652. '^ Com. Laws, ? 2036. INSTANCES. 573 tible to a mortgage, even if the purchase was in bad faith — that is, purchased with knowledge of the mortgage.' § 871. Maine. — Any person having executed a chattel mortgage who shall, during the existence of such instru- ment, sell, transfer, conceal, remove, or carry, or drive away said mortgaged property, or any part thereof, or cause the same to be done, without the consent of the mortgagor or his assigns, and with the intent to defraud, shall be punished by fine and imprisonment.^ § 872. Maryland. — Any person who, after having con- veyed any chattels to another by chattel mortgage, shall, during the existence of such conveyance or lien created by such mortgage, sell the said property or conceal it, or any part thereof, without first obtaining the consent of the mort- gagee of the property to such sale or removal, shall be guilty of a misdemeanor.^ § 8f3. Massachusetts. — Whoever, with a fraudulent intent to place mortgaged personal property beyond the control of the mortgagee, removes or conceals, or aids or abets in re- moving or concealing the same, and any mortgagor of such property who assents to such removal or concealment, shall be punished by a fine not exceeding one thousand dollars, or by imprisonment in the jail not exceeding one year. If a . mortgagor of personal property sells or conveys the same, or any part thereof, without the written consent of the mort- gagee, and without informing the person to whom he sells or conveys that the same is mortgaged, he shall be punished by fine not exceeding one hundred dollars or by imprison- ment in the jail not exceeding one year.* § 874. Instances. — A person who, at the request of the mortgagor in possession, merely removes certain mortgaged chattels from one place to another, against the orders of the 1 Weill V. Thompson, 24 Fed. Eep. 14 ; Bank v. Knapp, 22 La. Ann. 117. ^Eev. Stat. ch. 126, ?^ 1-4. 'Codeofl888, art. 27, §111. * Gen. Stat. ch. 161, §§ 61, 62. 574 WRONGFUL SALE AND REMOVAL OF PKOPEETY, mortgagee, is not guilty of conversion, although the mort- gage provides that the chattels should not be removed with- out the consent of the mortgagee, and such consent was not given/ Where the indictment describes the property as having been mortgaged by the defendant to a person named, and by a deed of specific date, and alleges that the jurors cannot more particularly describe it, this last allegation includes the one of greater particularity in the description, if it would otherwise have been required.^ A mortgagor of personal property, who sells it, either with the written consent of the mortgagee or after inform- ing the buyer that it is mortgaged, is not punishable under the statute.^ An indictment which avers in one count that the defend- ant removed, concealed, aided and abetted in removing and concealing the mortgaged personal property with fraudulent intent to place it beyond the control of the mortgagee, the averment of aiding and abetting is superfluous, and no evi- dence can be introduced or conviction had on such, an in- dictment, which would not be competent, if that averment were omitted.* § 875. Michigan. — If any person who shall have made or executed any mortgage or conveyance intended to operate as a mortgage of goods and chattels, shall fraudulently embez- zle, remove, conceal or dispose of any such goods and chat- tels mortgaged or conveyed as aforesaid, with intent to injure or defraud the mortgagee or assignee of said mortgage or conveyance, he shall be guilty of a misdemeanor, and punished by fine not exceeding one hundred dollars, or by imprisonment in the county jail not exceeding three months, or beth, in the discretion of the court.* '■ Metcalf V. McLaughlin, 122 Mass. 84. ' Commonwealth v. Strangford, 112 Mass. 289. ' Commonwealth v. Bamon, 105 Mass. 581. ' Commonwealth v. Wallace, 108 Mass. 12. "How. Stat. 2 9187. INSTANCES. 575 § 876. Instances — Replevin. — A chattel mortgagee's agent, for the purpose of foreclosing, who has taken possession of the mortgaged goods with the mortgagor's consent, and kept them at his own expense while arranging for their sale, may replevy them in his own name from the mortgagor who sur- reptitiously takes them from his possession.' In replevin by mortgagees of lumber sold by them to partners as individuals, and. turned in to the firm in pay- ment of the purchase-price of an interest in the partnership and accepted as such, it is immaterial what disposition the partners made between themselves of the business of the firm subsequent to the bringing of the suit, and testimony to that point is properly rejected.^ § 877. Minnesota.— If any person, having conveyed any article of personal property by mortgage, shall, during the existence of the lien or title created by such mortgage, sell, transfer, conceal, take, drive or carry away, or in any way or manner dispose of said property, or any part thereof, with intent to defraud, or cause or suffer the same to be done without the written consent of the mortgagee of said prop- erty, he shall be deemed guilty of a misdemeanor, and shall be liable to indictment ; and on conviction thereof shall be punished by fine not less than twice the value of the prop- erty so sold or disposed of, or confined in the county jail not exceeding one year, or both, at the discretion of the court, and until the fine and all costs of such prosecution are paid.* § 878. Instances. — The intent to defraud under the statute is an intent to defraud the mortgagee therein named. Such intent is an essential ingredient in the offense defined by that section, so that an indictment under it, alleging no intent to defraud, except one to defraud some third person other than the mortgagee, is fatally defective,* The allegation that the defendant sold and disposed of the 'Eldridge v. Sherman, 70 Mich. 266. ' Cass V. Gunnison, 68 Mich. 147. 'Gen. Stat. oh. 39, §14. * State V. Buhnke, 27 Minn. 309. 576 WRONGFUL SALE AND REMOVAL OF PROPERTY. property to one party named, and divers other persons whose names were to the grand jury unknown, charges only one offense. A growing crop of grain is personal property within the meaning of the statute.^ § 879. Removing Out of the State. — To take mortgaged property out of the State is a breach of the condition pro- hibiting removal.^ § 880. Mississippi. — If any person shall move or cause to be removed to any place beyond the jurisdiction of this State any personal property, which shall, at the time of such re- moval, be under written pledge, or mortgage, or deed of trust, or lien by judgment in this State, with intent to de- fraud the pledgee, mortgagee, trustee, cestui que trust, or judgment creditor, said person shall be deemed guilty of a misdemeanor ; and upon conviction thereof before a court of competent jurisdiction shall be fined not more than one thousand dollars, or imprisoned in the county jail not more than twelve months, or punished by both such fine and im- prisonment, at the discretion of the court. Any person who shall remove or cause to be removed, or aid or assist in removing from the county in which it may be, any personal property which may be the subject of a pledge, mortgage, deed of trust, lien of a lessor of lands, or lien by judgment or otherwise, of which such party has notice, without the consent of the holder of such incum- brance or lien, or who shall conceal or secrete such property, and shall not immediately discharge such incumbrance or lien, shall, upon conviction, be imprisoned in the county jail not more than one year, or be fined not exceeding the value of the property, or both.^ § 881. Instance. — The offense of removing from the county property subject to a lien, without immediate discharge of ' State V. Williams, 32 Minu. 537. ' King V. Wright, 36 Minn. 128. ^Code of 1880, ?? 2908, 2909. MONTANA. 577 same as defined under the Code, is not committed by a mere sale to one who afterwards removes the property from the .county. Under the Code defining the offense of removing from the county property subject to an incumbrance without imme- diate discharge of the same, an affidavit which fails to state that defendant did not immediately discharge the lien charges no offense.' § 882. Missouri. — Every mortgagor or grantor in any chattel mortgage or trust deed of personal property who shall sell, convey or dispose of the property mentioned in said mortgage or trust deed, or any part thereof, without the written consent of the mortgagee or beneficiary, and without informing the person to whom the same is sold or conveyed that the property is mortgaged or conveyed by such deed of trust ; or who shall inj ure or destroy such property, or any part thereof, or aid or abet the same, for the purpose of de- frauding the mortgagee, trustee or beneficiary, or his heirs or assigns, or shall remove^or conceal, or aid or abet in re- moving or concealing such property, or any part thereof, with intent to hinder, delay or defraud such mortgagee, trustee or beneficiary, his heirs or assigns, shall be deemed guilty of a misdemeanor.'' § 883. Instance. — If a mortgagor of chattels sends them out of the State to one who sells them with knowledge of the mortgage, the mortgagee may maintain trover against the person selling.^ § 884. Montana. — Any mortgagor or agent, servant or employe of any mortgagor of personal property, who shall, during the time such mortgage remains in force and virtue, destroy, conceal, sell, or otherwise dispose of the property mortgaged, or who shall remove said property from the county in which said mortgage is recorded, without the 'Polk V. State, 65 Miss. 433. »Eev. Stat. ? 1341. " Lafayette Co. Bank v. Metcalf, 29 Mo. App. 384. 2m 578 WRONGFUL SALE AND REMOVAL OP PROPERTY. written consent of the mortgagee or assignee of the mort- gagee, shall be deemed guilty of a misdenieanor, and on con- viction thereof shall be punished by fine of not less than fifty dollars nor more than five hundred dollars, or by im- prisonment in the county jail not less than thirty days nor more than six months, or by both such fine and imprison- ment, at the discretion of the court/ Any person having conveyed goods or chattels, or any article of personal property, to another, by mortgage, who shall, during the existence of the lien or title created by such mortgage, sell the said goods, chattels or personal prop- erty, or any part thereof, to a third person, for a valuable consideration, without informing him of the existence and effect of such mortgage, shall forfeit and pay to the pur- chaser twice the value of such property so sold, which for- feiture may be recovered in an action of debt in any court having jurisdiction thereof, or if the amount claimed does not exceed one hundred dollars, before any justice of the peace.^ §^885. Nebraska. — Any person who, after having con- veyed any article of personal property to another by mort- gage, shall, during the existence of the lien or title created by such mortgage, sell, transfer, or in any manner dispose of the said personal property, or any part thereof so mort- gaged, to any person or body corporate, without first pro- curing the consent of the mortgagee of the property to such sale, transfer or disposal, or shall remove, permit or cause to be removed, said mortgaged property, or any part thereof, out of the county within which such property was at the time such mortgage was given on it, with intent to deprive the mortgagee of his property, without first obtaining the consent in writing of the mortgagee of such property to such removal, shall be deemed guilty of a felony, and upon conviction thereof shall be imprisoned in the penitentiary for a term not less than one year and not exceeding ten ' Laws of 1876, p. 36, ? 1. ■' Code of 1872, ch. 48, p. 52, | 6: NEW JERSEY. 579 years, and fined in a sum not less than one hundred dollars, or both.' § 886. New Hampshire. — No mortgagor of personal prop- erty shall sell or pledge any property by him mortgaged, witbout the consent of the mortgagee, in writing, upon the mortgage, and on the margin of the record thereof, in the office where it is recorded. No mortgagor shall execute any second or subsequent mortgage of personal property while the same is subject to a previously-existing mortgage, given by such mortgagor, unless the fact of the existence of such mortgage is set forth in the subsequent mortgage. If any mortgagor shall be guilty of any offense against either of the above provisions, he shall be fined double the value of the property so wrongfully sold, pledged or mort- gaged, one-half to the use of the party injured and the other half to the use of the county." § 887. Instances. — In a prosecution for the sale of mort- gaged property contrary to the provisions of the statute, the value of the property sold at the time of the sale must be alleged in the indictment and found by the jury .^ The sale of chattels by the mortgagor, with the consent of the mortgagee, will convey a good title to the purchaser, even though such consent be not in writing, or if it be so, though it be not entered or indorsed upon the margin of the record of the same.* The statute requires the written consent of the mortgagee of chattels to justify their sale by the mortgagor; so, a verbal consent of the former is no answer to an indictment, under the statute, against the mortgagor, for sale of such property.* § 888. New Jersey. — Every chattel mortgage shall vest in the mortgagee or owner thereof the right to the. possession ' Laws of 1889, p. 383 ; Laws of 1885, p. 108. The laws of 1877 are uncon- stitutional. Ex parte Tromason, 16 Nebr. 268. ' Gen. Stat. ch. 187, §? 13, 14, 15, 16. 'State V. Ladd, 32 N. H. 110. * Roberts v. Crawford, 54 N. H. 532. 'State V. Plaisted, 43 N. H. 413. 580 WRONGFUL SALE AND KEMOVAL OF PROPERTY. of the chattels therein described, so far as may be necessary for the purpose of preventing the removal thereof out of the county wherein they did lie at the time of the execution or delivery of such mortgage, and of recovering such chattels in case the same shall have been removed out of such county. When such chattels shall be so reinoved by any party and recovered by the mortgagee or owner of the mortgage by means of legal proceedings, the court in which such pro- ceedings are had may regulate the disposition of such chat-, tels and prescribe such terms for the possession thereof by the mortgagee or other person interested therein as will pro- tect the rights of such mortgagee or owner of such mortgage.^ § 889. Instance — Waiver of Forfeiture. — One in possession of certain premises, as lessee, executed to his lessor a chattel mortgage on a quantity of goods on the leased premises to secure a debt payable in two years, the mortgage providing that if any goods were removed from the premises the mort- gagee might enter and take possession and sell the same. During the first year of the tenancy the lessor gave notice to the lessee to quit at the end of the year, and at that time the lessee left the premises, taking with him the goods mort- gaged, the mortgagee standing by and making no objection. It was decided that, by such acquiescence, the mortgagee had lost his right to insist on the forfeiture for the removal. When mortgaged chattels are removed from the county in which the mortgage is recorded, the mortgagee having lost by his laches the right to insist on a forfeiture for such removal, the lien of the mortgage still subsisting, the mort- gagor, as a condition of enjoining enforcement, may be required to execute a, new mortgage precisely like the old, to be recorded in the county to which the property is removed, but may recover costs against the mortgagee.'^ § 890. New York. — Any mortgagor of personal property who shall hereafter, with intent to defraud a mortgagee or ' Rev. Stat. §§ 36-48. 'Grinlee y. Rockhill, 13 Atl. Rep. 609. INSTANCES. 581 purchaser of such property, sell, assign, exchange, secrete, or otherwise dispose of any personal property upon which he shall have given or executed a mortgage, or any other instrument intended to operate as a mortgage, which, at the time, is a lien thereon, shall be deemed guilty of a misde- meanor, and upon conviction thereon shall be punished by a fine not exceeding three times the value of such property so sold, assigned, exchanged, secreted, or otherwise disposed of, or by imprisonment in the county jail of the county in which such offense is committed not exceeding one year, or by both such fine and imprisonment.' § 891. Instances. — An action may be maintained against an auctioneer who sells mortgaged chattels, whereby they are scattered and lost to the mortgagee. It need not be shown as a prerequisite to the action that the mortgagor is irresponsible.^ A party executed a mortgage upon a team of horses, three acres of wheat, four acres of potatoes, twenty acres of oats. At the time of giving the mortgage the potatoes were not in existence. Afterwards two and one-half acres of potatoes were planted by the mortgagor, who died soon after. After- wards the plaintiff, his widow and executrix, with knowledge of the mortgage, sold the potatoes to the defendant. It was held that the mortgagee acquired no title to the potatoes, and that the fact that he claimed them from the defendant, and forbid him to pay plaintiff, the administratrix, was no de- fense to the action by the vendee.' When the answer in an action for conversion sets up that the title of the plaintiff in the property is that of the mort- gagee only, and that defendant is entitled, upon making payment to the mortgagee, to a proportionate part of the hypothecated property, and that he has made such a pay- ment, for which, in making demand of the goods, the plain- tiffs have made no allowance, this is an admission of a valid '3 Rev. Stat. p. 978, ? 73; Laws of 1871, ch. 77. * Malenghney v. Hegeman, 9 Abb. N. Cas. 403. 'Cressey v. Sabre, 17 Hun (N. Y.) 120. 582 WRONGFUL SALE AND EEMOVAL OF PROPERTY, transfer of an interest in the goods to plaintiffs, and of their right to recover for a proportionate part, as well as of a de- mand for the goods.^ §892. North Carolina. — If any person who has executed a chattel mortgage or deed in trust, or given a lien, shall, after the execution of the same and while it is in force, make any disposition of any personal property embraced in said chattel mortgage, deed in trust, or lien, with intent to hinder, delay or defeat the rights of the person or persons to whom the said chattel mortgage, deed in trust, or lien was made, such person or persons so offending, and each and every person with a knowledge of the existence of the lien, buying the property embraced in said mortgage, deed in trust or lien, and every person assisting, aiding or abetting the mort- gagor in disposing of such property with like intent to hinder, delay or defeat the rights of the person or persons to whom the said mortgage, deed in trust or lien was made, shall be guilty of a misdemeanor, and upon conviction shall be punished by a fine not exceeding fifty dollars, or impris- onment not exceeding one month, but the fact of the regis- tration of such mortgage, deed in trust, or lien shall not be evidence against the defendant upon any trial of the knowl- edge of said defendant of the existence of the same. Grow- ing crops shall' be considered personal property within the meaning of this act.^ § 893. Instances. — The indictment under this section must set forth the manner in which the property was disposed of, and the name of the person who received it, or it will be fatally defective. The transaction must be particularly identified.* It must also set forth that the lien was in force at the time of the sale.* Where one who had mortgaged a matured crop, and was indicted under the statute for wrongfully selling, &c., a part ' Gomez v. Kamping, 4 Daly 77. 'Code, § 1089. 'State V. Pickens, 79 N. Car. 652. 'State V. Burns, 80 N. Car. 376. NOETH DAKOTA. 583 of the mortgaged property with intent to hinder the mort- gagee, evidence that it took all the crop raised to discharge his landlord's prior lien for rent and advances, is competent as tending to disprove criminal intent.^ Where the mortgagor is authorized and directed by the mortgagee to prepare and house for market the mortgaged crop, and in pursuance of such directions, and in order to obtain money for such purpose, sells cotton included in the mortgage to a person who ships it to defendants, the mort- gagee having received the benefits of the acts of the mort- gagor, his agent in selling the cotton cannot maintain an action for conversion of such cotton.^ An indictment charged that the mortgagor of a certain mare executed the mortgage to secure a specified debt to the mort- gagee ; that after the execution of that mortgage, and while the same was in force, the mortgagor " unlawfully and will- fully, and with intent to hinder, delay and defeat the rights of said T., sold and disposed of said mare, which was embraced in said mortgage; he, the said W. [defendant], then and there having knowledge of said lien on said mare," &c. It was held that the indictment failed to charge a criminal ofiense.* v § 893a. North Dakota. — Every mortgagor of personal property, or his legal representative, who, while his mort- gage remains in force and unsatisfied, willfully destroys, removes, conceals, sells, or in any manner disposes of or materially injures the property, or any part thereof, covered by such mortgage, without the written consent of the holder of such mortgage, shall be deemed guilty of felony, and shall, upon conviction, be punished by imprisonment in the penitentiary for a period not exceeding three years, or in the county jail not exceeding one year, and be fined not exceed- ing five hundred dollars.* If the mortgagor voluntarily removes or permits the re- ' State V. Ellington, 98 N. Car. 749. "Etheridge v. Hillard, 100 N. Car. 250. ' State V. Woods, 104 N. Car. 898. * Penal Code, ? 579. 584 WRONGFUL SALE AND REMOVAL OF PROPERTY. moval of the mortgaged property from the county in which it was situated at the time of the execution of the mortgage, the mortgagee may take possession and dispose of the prop- erty as a pledge for the payment, though the debt is not due/ § 894. Ohio. — A mortgagor of personal property, in pos- session of the same, who, without the consent of the owner of the claim secured by the mortgage, removes any of the property mortgaged out of the county where it was situated at the time it was mortgaged, or secretes or sells the same, or converts the same to his own use, with intent to defraud, shall be fined not more than five hundred dollars or be im- prisoned not more than three months, or both." § 894a. Oklahoma Territory. — If the mortgagor shall sell the mortgaged property while the lien is in force, without the consent of the mortgagee, upon conviction he shall be punishable by imprisonment in the penitentiary ; or if he shall fraudulently conceal or remove the mortgaged prop- erty from the county, it shall be deemed a ' felony and pun- ishable by imprisonment in the penitentiary.^ § 8943. Oregon. — If any person shall give a chattel mort- gage on personal property and shall then remove the same or sell it, or any part thereof, or otherwise dispose of it, with intent to defraud the mortgagee, or if he shall execute a mortgage upon chattels not owned by him, he shall be guilty of a penal offense.* § 895. Pennsylvania — Instance. — If personal property em- braced in a mortgage of a leasehold, under the act of 1855, is removed by the lessee and mortgagor, it may be followed by the mortgagee and recovered by action of trover, and this although the mortgage is not due.^ § 896. Rhode Island — Instance. — A mortgagor of personal property left in possession thereof, who again mortgages the ' Civil Code. § 1752. » 2 Rev. Stat. ? 6849. 'Gen. Laws, tit. "Mortgages." •Rev. Code, ?n771-l 777. 'Gill V. Weston, 110 Pa. St. 312. SOUTH DAKOTA. 585 entire property without giving notice of the existing mort- gage, and afterwards gives the second mortga.gee possession, or permits him to take possession thereof, is guilty of tortious conversion and is liable to the first mortgagee in an action of trover/ § 897. South Carolina — Instance. — A chattel mortgage in this State is a transfer of title, and a stipulation permitting the mortgagor to retain possession until condition broken is personal to him and cannot be assigned ; hence, the mort- gagee, before condition broken, may maintain action for recovery against the purchaser at sheriff's sale of the mort- gaged chattels.^ The mortgagor obtained the verbal permission of the mortgagee to exchange the mortgaged property for a mule, providing that a lien should be given on the property taken in exchange. The exchange was made after the condition of the mort- gage was broken. The mortgagor never gave to the mort- gagee the lien promised on the mule, which died. Under these circumstances the mortgagee could not recover the property which his mortgage covered at first.^ § 897a. South Dakota. — Every mortgagor of personalty who, while the lien remains in force and unsatisfied, willfully destroys, removes, conceals, sells or in any way disposes of, or materially injures the property or any part thereof cov- ered by such mortgage, without the written consent of the holder of such mortgage, shall be deemed guilty of felony, and shall, upon conviction, be imprisoned in the penitentiary for a period not exceeding three years, or in the county jail not exceeding one year, and be fined not exceeding five hun- dred dollars.* If the mortgagor voluntarily removes or permits the re- moval of the mortgaged property from the county in which ' Millar v. Allen, 10 R. I. 49. • Levi V. Legg, 23 S. Car. 282 ; Spriggs v. Camp, 2 Spears 181. ' Bellune v. Wallace, 2 Kioh. 80. ♦ Penal Code, ? 579. 586 WRONGFUL SALE AND REMOVAL OF PROPERTY. it was situated at the time of the execution of the mortgage, the mortgagee may take possession and dispose of the prop- erty as a pledge for the payment of the debt, though the debt is not due.^ § 897b. Tennessee. — If the mortgagor of personal prop- erty, the mortgage having been registered according to law, shall remove, sell or conceal the property covered by the mortgage, with the intent and purpose to deprive the bene- ficiary of the same, he shall be punished by imprisonment.^ § 898. Texas. — If any person has given or shall hereafter give any deed, or other lien in writing, upon any personal or movable property, and shall remove the same or any part thereof out of the State, or shall sell or otherwise dispose of the same, with intent to defraud the person having such lien, either originally or by transfer, he shall be punished by .im- prisonment in the penitentiary not less than two nor more than five years.^ § 899. Instances. — If the property sold or otherwise dis- posed of while subject to an existing written lien be personal, though not movable property, the sale and disposition of it bring the offense within the meaning of the Code. But to be sufficient to charge the offense, the indictment must allege that the property was personal property. An ungathered crop still appendant to the ground can, under no circum- stances, be held movable property, and cannot partake of the character of personal property until ready for harvest. An indictment charging in substance that having executed a valid mortgage lien in writing upon eighteen acres of cotton then and there being movable property, the defend- ant subsequently selling the same with intent to defraud the mortgagee, is insufficient to charge any offense agaiust the laws of this State.* The Code providing that if a mortgagor of a growing crop ' Civil Code, ? 1752. ' Code, ? 2809 et seq. ' Penal Code, art. 797. This article also includes growing crops. * Hardeman v. State, 16 Tex. App. 1. INSTANCES. 587 of farm produce shall sell or otherwise dispose of the same with intent to defraud the mortgagee, shall be punished, &c., the requisite allegations in an indictment where the mort- gage was executed on a crop not yet planted are, that the accused executed such a mortgage ; that such crop was after- wards planted by him, and that when the same was growing or grown the said mortgage became a lien upon the same, and the accused fraudulently disposed of the same.' An indictment which charges the defendant with selling- property conditionally mortgaged with intent to defraud, which fails to charge that the mortgage had become absolute by the happening of the condition before the selling, is bad.^ An indictment alleging that the mortgagor of certain horses did " run " the mortgaged property out of the State, instead of using the statutory word " removed," is suflBcient. Wilson, J., says : " This is a conviction under Article 797 of the Penal Code, Instead of alleging, in the language of the statute, that defendant did ' remove ' the property out of the State, the indictment alleges that he did ' run ' it out of the State. The word ' run,^ in the connection in which it is used in the indictment, is, we think, equivalent to the statu- tory word ' removed,' and we therefore hold that the use of * run ' instead of ' remove ' does not render the indictment bad." = But an indictment for fraudulently disposing of mortgaged property must allege the name of the person to whom it was disposed of, or that the name is unknown to the grand jury. White, P. J., says : "Appellant in each of the above cases has been convicted of fraudulent disposition of mortgaged property. An indictment, to be sufficient to charge an offense of selling or disposing of mortgaged property with intent to defraud, must allege the name of the person to whom the mortgaged property was disposed of or sold, or ' Mooney ti. State, 25 Tex. App. 31. '' State V. Devereux, 41 Tex. 383. ' Williams v. State, 27 Tex. App. 258. 588 WRONGFUL SALE AND REMOVAL OF PROPERTY. that the name of such person was unknown to the grand jury.'" § 900. Validity of Bail-Bond. — A bail-bond which recites that the principal is charged with unlawfully selling mort- gaged property, does not state any offense known to the laws of Texas.^ § 901. Utah Territory. — Any mortgagor who, pending the existence of the mortgage, shall destroy, conceal, sell, or otherwise dispose of all or any part of the mortgaged prop- erty, or who shall remove the same, or any part thereof, from the Territory, without the written consent of the mort- gagee, shall be deemed guilty of obtaining money under false pretences and be punished by fine not exceeding three times the value of the property, or imprisonment for six months, or by both.* § 902. Vermont. — No mortgagor of personal .property shall sell or pledge any such property by him mortgaged, without the consent of the mortgagee, in writing, upon the back of the mortgage, and on the margin of the record thereof in the office where such mortgage is recorded. No mortgagor shall execute any second or subsequent mortgage of personal property while the same is subject to a pre- viously-existing mortgage or mortgages given by such mort- gagor, unless the fact of the existence of such previous mortgage or mortgages is set forth in the subsequent mort- gage. If any mortgagor shall be guilty of any offense against either of the two sections preceding, he shall be pun- ished by fine equal to double the value of the property so wrongfully sold, pledged or mortgaged, one-half to the use of the party injured, and the other half to the use of the town where the mortgage is recorded.* § 903. Washington. — Any person having mortgaged per- ' Armstrong v. State, 27 Tex. App. 462 ; Presley v. State, 24 Tex. App. 494 ; Alexander v. State, 27 Tex. App. 94 ; Smith v. State, 26 Tex. App. 577. "Cravey v. State, 26 Tex. App. 84. ^ Laws of 1884, pp. 28-32. ♦Laws of 1878, pp. 58, 59, U 8, 9, 10; Rev. Stat. ^ 1965-1979. WYOMING. 589 sonal property, who shall remove the same from the county where it was situated at the date of the mortgage before it is duly released, or without the consent in writing of the mort- gagee, or who shall sell or dispose of the same, or any inter- est therein, where he parts with the possession thereof, or who shall secrete the same, shall be deemed guilty of a mis- demeanor, and on conviction shall be punished by imprison- ment in the county jail for a term not exceeding three years.' § 904. Wisconsin. — Any person having conveyed any per- sonal property mortgaged, who shall, during the existence of the lien or title created by such mortgage, sell, transfer, con- ceal, remove or carry, or drive away said property, or any part thereof, or cause the same to be done without the con- sent of the mortgagee or his assigns, and with the intent to defraud, shall be punished by imprisonment in the county jail not more than six months, or by fine not exceeding one hundred dollars.^ § 905. Wyoming. — Any person who, after having con- veyed any goods, chattels or personalty to another by mort- gage, or conveyance intended to operate as a mortgage, shall, during the existence of the lien or title created by such mortgage or conveyance, sell the said property or any part thereof so mortgaged to any person or persons, or body cor- porate, without first procuring the consent of the mortgagee of the property to such sale, or shall remove said mortgaged property or any part thereof out of the jurisdiction of the District Court of the county within which such property was at the time such mortgage was given on it, with intent to de- prive the mortgagee of his security, without first obtaining the consent of the mortgagee of such property to such re- moval, shall be deemed guilty of a felony ; and on conviction thereof shall be imprisoned in the penitentiary for a term not exceeding ten years, and be fined in a sum not exceeding five hundred dollars.^ 'Code, I 1999. ' Rev. Stat. ch. 182, ? 4467. 'Rev. Stat. ? 91. 590 SATISFACTION OF DEBT. CHAPTER XVIIl. SATISFACTION OF DEBT. ARTICLE I. — PAYMENT OF DEBT. 906. Effect of Payment. 907. Extinguishment and Subsequent Assignment of Mortgage. 908. Payment as to Sureties. 909. Substituting New Note. 910. Revesting of Title. 911. Effect of Taking Second Mortgage on Same Property. 912. Mortgage Remains Security for New Note. 913. Subsequent Mortgagee — Purchase of Equity of Redemption. 914. Subsequent Purchaser — Payment of Mortgage Lien. 915. Purchasing with Mortgagor's Money. 916. Extinguishment — Buying the Title of Both Parties. 917. Successive Mortgages — Paying off Prior Mortgage. 918. Cenversion by Mortgagee. 919. Accepting the Property in Pull Payment. 920. Presumptive Payment. 921. Effect of Mortgagor's Discharge in Bankruptcy. 922. Debt Barred by Statute of Limitations. 923. Mortgagor as Executor of Mortgagee's Estate. 924. Mortgagor as Legatee of Mortgagee. 925. Agreement to Release. 926. Release by Receiver. 927. Action for Refusal to Discharge. 928. Satisfaction — Contradicting Record. 929. Effect of Recital of Payment in a Deed of Trust or Other Instrument. § 906. Effect of Payment. — When the debt is wholly paid, the right of the mortgagee to take possession is discharged and the mortgage lien divested.^ So, where personal prop- erty was mortgaged to enforce delivery of articles on a given day, and the articles were not delivered at the stipulated time, but were afterwards delivered and accepted, the lien created by the mortgage was thereby discharged.^ And, in general, the payment of the debt secured by a mortgage of personaL property operates as a satisfaction of ' Bradley v. Doud, 11 Iowa 280. 'Butler V. Tufts, 13 Me. 302. EFFECT OF PAYMENT. 591 the mortgage and extinguishes the title conveyed by the mortgage.^ So, when a mortgagee appoints the mortgagor as his agent to sell the mortgaged property, a sale by the mortgagor or agent of the mortgagee of property sufficient to discharge the debt, is, in fact, a discharge. And if the mortgagor, as. agent, uses the money with the consent of the mortgagee, it constitutes a new debt, and is not embraced in the mort- gage, and cannot be collectible under it. Neither can this new debt be a renewal of the mortgage, for it has already been discharged, and the money received by the mortgagor as agent is, in legal effect, received by the principal, the mortgagee." Such an agreement made the mortgagor agent of the mortgagee. His possession and sale were, in effect, those of the mortgagee. It was as if the latter had taken possession and placed a third party in charge to sell and account to the mortgagee, and he cannot escape from crediting on his indebtedness the proceeds of the sales made by 'such an agent, because he might fraudulently or dishonestly misapply or employ the money. " It is not a question between the mortgagees and mortgagors, who, of course, could not take advantage of their own wrong, and who remain liable to the plaintiffs for the money received and misapplied by them. But the' question here is between mortgagees and the cred- itors, who have obtained a lien or an interest in the mort- gaged property after the satisfaction of the mortgage. The mortgagees have made the mortgagors their agents, and their dealings with the property under the agreement con- stituting them such must be considered as the acts of agents and not of mortgagors, and will affect their principals ac- cordingly. The moneys received by them from sales were, in legal effect, received by the mortgagees."* 'Shiver v. Johnston, 62 Ala. 37; Harrisoni;. Hicks, 1 Port. (Ala.) 423; Deshazo v. Lewis, 5 St. & Port. (Ala.) 91. ' Weill V. Bank, 106 N. Car. 1. 'Gonkling v. Shelley, 28 N. Y. 360; Hunt v. Nevers, 15 Pick. (Mass.) 500. 592 SATISFACTION OF DEBT. § 907. Extinguishment and Subsequent Assignment of Mort- gage. — Where the condition of the mortgage is that the mortgagor shall save harmless the mortgagee against liahility, as his surety on a note due to a third party, the condition is performed when the mortgagor procures the cancellation of the note and the substitution of a new note in its stead, with a different surety. The mortgage being thereby extinguished, it cannot be assigned as security on a new note for the surety's indemnification, even though the assignment be made with the assent of the mortgagor for valuable consideration, and contemporaneously with the cancellation and substitution of the notes.^ § 908. Payment as to Sureties. — A mortgage of personal property given to sureties to protect them against their suretyship is not in force after the mortgagor has paid the debt. Thus, where a debtor gave his note and mortgage to his sureties, to secure them against their suretyship upon a note, and they assign the mortgage to the creditor for his security, taking from him a discharge, under seal, of their liability on the note, the mortgage is no longer in force, be- cause the design of such a mortgage being merely to protect the security against the note, and this protection having been given by the creditor's discharge, the condition of the mortgage has been fulfilled.* Where the surety has indorsed a note of the mortgagor, the mortgage lien is discharged on payment of the note by the principal.^ § 909. Substituting New Notes. — When the indemnitors have not been saved harmless for their indorsements, the mortgage is not discharged. The substitution of new notes will not pay the original debt.* Neither the taking of a new 'Brooks V. Ruff, 37 Ala. 371. See, also, Bonham v. Galloway, 13 111. 68; Abbott V. Upton, 19 PLck. (Mass.) 434; Mead v. York, 2 Seld. (N. Y.) 451. ''Sumner v. Bachelder, 30 Me. 35. 'Franklin Bank v. Pratt, 31 Me. 501. See, also, Packard v. Kineman, 11 Iowa 219 ; Hill v. Beebe, 13 N. Y. 556. •Oloott V. Rathbone, 5 Wend. (N. Y.) 490. See, also, Higgins v. Packard, 2 Hall (N. Y.) 547 ; Raymond v. Merchant, 3 Cow. (N. Y.) 147 ; Cromwell V. Lovett, 1 Hall (N. Y.) 56 ; Smith v. Prince, 14 Conn. 472. SUBSTITUTING NEW NOTES. 593 note and mortgage on personal property to secure an indebt- edness, already evidenced by a note and secured by a mort- gage on the same property, even where the first note and mortgage are canceled, will operate to discharge the lien of such first mortgage.' Taking a second mortgage on the same property is no waiver of the first one made for the same debt. Neither is the taking of personal security for the debt a waiver of the mortgage.^ So, where a mortgage was given to secure a note, and the assignee of the mortgagee took a new note from the mortgagor in .exchange for the old, it not being intended as payment, it was held that the mortgage debt was not thereby paid, but that the mortgage remained good to satisfy his security for the amount due on the new note.' In general, a second mortgage for the same debt, on the same property, does not extinguish the first, and to render the second security a bar to the first, there must be a release, express or, at least, implied frorh a covenant not to sue.^ "Where the first mortgage was to secure a debt evidenced by a note of the mortgagor, and after default the note was surrendered and a new note given for this amount and some additional indebtedness, and a second mortgage on the same pro{)erty executed to secure the amount, it was held the first mortgage was not extinguished. Wright, J., says : " Sur- rendering the old note and taking a new one could not be a satisfaction or payment of the debt, and the mortgage being a security for the latter, would not be extinguished short of such payment. The debt was not merged in the first note, 'so that, by operation of law, the note being surrendered and a new one substituted, the debt was satisfied. The transac- tion was but taking another security of equal degree with the former one for the debt, which had not the legal efiect of ' Packard v. Kingman, 11 Iowa 219> 'Burdett v. Clay, 8 B. Mon. (Ky.) 287. ^'Watkins v. Hill, 8 Pick. (Mass.) 522. 'Gregory v. Thomas, 20 Wend. (N. Y.) 17. 2n 594 SATISFACTION OF DEBT. extinguishing the first. Nor would an express parol agree- ment at the time of giving and receiving the second mort- gage that the first should be deemed satisfied, have the operation to extinguish the first mortgage."^ § 910. Revesting of Title. — Where the mortgagee or his assignee afterwards accepts payment of the debt or dis- charges the liability secured by the mortgage, the title re- vests in the mortgagor without a redelivery or resale, and without a cancellation of the mortgage,^ After condition broken, if a mortgagee of personal property receives the Tvhole money from the mortgagor, that is a waiver of the forfeiture, and re-invests the title in the mortgagor, without any formal delivery. And if the mortgagee afterwards re- tains the property without suflScient reason, he will be liable in trover.' But a tender and acceptance of part of the debt does not extinguish it.* § 911. Effect of Taking Second Mortgage on Same Property. — A chattel mortgage is not extinguished by a second mort- gage on the same property to secure the debt mentioned in the first. The two mortgages are but collateral security for the debt. The debt was not paid, and, until that is done, all collateral securities should stand." This is on tHe principle that a subsequent security for a debt of equal degree with the former, for the same debt, will not by operation of law extinguish it.* Neither is a mortgage of personal property, made to secure an indorser of a note, discharged by the indorser lending to the mortgagor money, which is applied to the ■Hilli;. Beebe, 13N. Y. 556. ' Butler V. Tufts, 13 Me. 302 ; Flanders v. Barstow, 18 Me. 357 ; Paul v. Hayford, 22 Me. 234; Greene v. Dingley, 24 Me. 131 ; Parks v. Hall, 2 Pick. (Mass.) 206; Barry v. Bennett, 7 Met. (Mass.) 354, ' Leighton v. Shapley, 8 N. H. 359. * Patchin v. Pierce, 12 Wend. (N. Y.J 61. ' Butler V. Miller, 1 Comst. (N. Y.) 500; Gregory v. Thomas, 20 Wend. (N. Y.) 17. ' Manhood v. Crick, Cro. Eliz. 716 ; Higgins' Case, 6 Rep. 45 ; Phelps v. Johnson, 8 Johns. (N. Y.) 54; Preston v. Perton, Cro. Eliz. 817; Cornell v. Lamb, 20 Johns. (N. Y.) 407. SUBSEQUENT PURCHASER. 595 « payment of the note, unless the parties intend that the mort- gage should be thereby discharged.^ But where a mortgagor sells the mortgaged property, the lien will be discharged, if he executes afterwards a mortgage on other property, which is accepted by the mortgagee as a substitute for the security of the property sold.'^ § 912. Mortgage Remains Security for New Note. — Unless there is a showing to the contrary, a mortgage made to secure a note will remain security for any new note in payment of the former one.^ Thus, where a mortgage is given to secure payment of a note, and the assignee of the mortgage takes a new note from the mortgagor in exchange for the old one, it not being intended as payment, the mortgage debt is not thereby paid, but the mortgage remains good as security for the amount due on the new note, as against the mort- gagor himself.* § 913. Subsequent Mortgagee — Purchase of the Equity of Redemption. — If a subsequent mortgagee purchases the«quity of redemption at an executiou sale, and pays off the prior mortgage, he thereby extinguishes his own mortgage, for he cannot subject the property in his own hands to its payment. He cannot foreclose against himself or sell the property to pay himself. He is paid by the operation of law." § 914. Subsequent Purchaser — Payment of Mortgage Lien. — Where one buys property at a sheriff's sale on execution embraced in a chattel mortgage previously executed by the judgment debtor, the sale being subject to the mortgage, and subsequently purchases and takes an assignment of the mortgage, this will not operate as a payment or satisfaction of the mortgage. And if the mortgage has not been paid 'Bryant v. Pollard, 10 Allen (Mass.) 81. See, also, Draper v. Saxton, 118 Mass. 427. 'Cobb V. Malone, 87 Ala. 514. * Hadlock v. Bulfinch, 31 Me. 246. See. also, Morse v. Clayton, 13 Sra. & M. (Miss.) 373 ; Bank v. Pinch, 3 Barb. Ch. (N. Y.) 293 ; McCormick r.,Digby, S Blackf. (Ind.) 99; Teed v: Carruthers, 2 Y. & C. 31; Hugunin v. Stark- weather, 5 Giltn. (111.) 422. 'Watkins v. Hill, 8 Pick. (Mass.) 522. 'Merritt v. Niles, 25 111. 282. 596 SATISFACTION OF DEBT. a or foreclosed, nor any power contained in it exercised, at the time of the transfer, it will be a valid, subsisting, unsatisfied mortgage. The purchaser can either pay off the chattel mortgage, and thus protect his purchase under the execution, or pur- chase it and take an assignment, and protect himself in that manner. But if he pays off the mortgage it will be extin- guished, and cannot be enforced against ^ny other property contained in it. If he does not pay it, but takes it by pur- chase and assignment, it is an operative and valid instru- ment in his hands.* But had the sale under which the purchase was made, been under the mortgage instead of an execution, and the property had been bid off at a sum equal to the amount due thereon, that would have satisfied the mortgage and extin- guished it.^ § 915. Purchasing with Mortgagor's Money. — If the assignee of a mortgage invests in it purchase-money fur- nished to him by the mortgagor, the mortgage is pro tanto discharged. When the assignee seeks to foreclose, the mort- gagor is entitled to a credit for the money thus advanced by him.' \ A chattel mortgage is extinguished by payment made with the mortgagor's money by one who purchases the property at sheriff's sale, to aid the debtor in defrauding his creditors. There can be no subrogation of the purchaser of the equity of redemption to the mortgaged security through such a payment. Neither is there any merger of the mort- gage in the equity of redemption upon an assignment oi. it to such purchaser, for there is no union in him of the prop- erty in the chattel and the charge upon it, because the charge was extinguished by payment before it wias in form assigned to the purchaser.* ■ Brown v. Rich, 40 Barb. (N. Y.) 28. 'Charter V. Stevens, 3 Denio (N. Y.) 33. 'McLemore v. Pinkston, 31 Ala, 266. * Thompson v. Van Veohten, 27 N. Y. 668. ACCEPTING THE PROPERTY IN FULL PAYMENT. 597 § 916. Extinguishment — ^Buying the Title of Both Parties. — Where chattels are mortgaged by the owner, a purchaser who takes a bill of sale from both mortgagor and mortgagee acquires the title discharged of the mortgage.^ § 917. Successive Mortgages — ^Paying Oflf Prior Mortgage. — In equity, if there be successive mortgages upon property, real or personal, and the debtor or any person standing in his place, with notice of the second incumbrance, pays off the earlier one, it is extinguished as against the second in- cumbrance, and as against any person subsequently deriving title after the owner of the equity of redemption." § 918. Conversion by Mortgagee. — Wbere one holding property in a mortgage -converts it to his own use, the mort- gage debt is thereby satisfied to the extent only of the value of the property.' Or, if the mortgagee appropriates suffi- cient of the mortgaged property before the mortgage becomes due to satisfy the debt, the debt is extinguished, and the mortgagee's title to the surplus is discharged.* § 919. Accepting the Property in Full Payment. — If the payment of a note be secured by a mortgage of personal property, a demand of payment of the amount due on the note, after it becomes payable, is a waiver of forfeiture of the mortgaged property. The mortgagee may, however, in such case take the property into his possession as his own, unless he has relinquished the power so to do, and hold it subject to redemption. If the mortgagee takes the mortgaged prop- erty into his possession after the money has Ireeome payable, with the full understanding of the parties that the same shall be taken in full discharge of the note secured by the mortgage, his title becomes perfect.^ In Georgia the absolute title, after default, vests in the ' Bangs V. Friezen, 36 Minn. 423. 'Otto V. Lord Vaux, 39 Eng. Law & Eq. 611. 'Davis V. Rider, 5 Mich. 423. •Place v: Grant, 9 Mich. 42; 'Charter v. Stevens, 3 Denio (N. Y.) 33; Fuller V. Parrish, 3 Mich. 211; Thurber v. Jewett, 3 Mich. 295; Clark v. Griffith, 2 Bosw. (N. Y.) 558. 'Greene v. Dingley,,24 Me. 131. 598 SATISFACTION OF DEBT. mortgagee only for specific purposes, and it does not, there- fore, operate as a payment of the debt ; if the property is lost before such application it must fall upon the mortgagor. Fleming, J., says : " The legal title is vested in the mortgagee for the purpose of enabling him to collect his debt. He is bound to account to the mortgagor for such amount as he may realize from the property. I care not whether this accountability is at law or in equity ; it is enough for my argument that he is accountable. If the property more than pays his debt, he is liable for the excess. If it falls short of paying his debt, the mortgagor is still liable for the deficiency. This must be law, for it is justice. " I grant that if loss occurs by reason of the neglect or fault of the mortgagee, he is responsible. But nothing of the kind has been shown in this case. Neither party is at fault. True, the mortgagee did not assert his legal right immediately on condition broken ; but it is also true that the mortgagor earnestly appealed to him for indulgence. The negroes were allowed to remain with the mortgagor at his own request, and were in his possession when emancipation came. The result, to my mind, is very clear ; the mortgagee has lost his security, the mortgagor his means of payment, so far as that security or those means depended on the negroes mentioned in the mortgage."* § 920. Presumption of Payment. — Possession by the mort- gagor, after tfe maturity of the mortgage of the property pledged, is not presumptive evidence of the satisfaction of the mortgage debt, without proof that the property had once been delivered to the mortgagee ; aliier, where the property had been in the mortgagee's possession and redelivered by him to the mortgagor.^ § 921. Effect of Mortgagor's Discharge in Bankruptcy. — A discharge in bankruptcy does not discharge the mortgage * Tucker v. Toomer, 36 Ga. 138. ' Carpenter v. Bridges, 32 Miss. 265. MORTGAGOR AS EXECUTOR OF MORTGAGEE'S ESTATE. 699 debt, so far as it is necessary to uphold the mortgage, although it relieves the debtor from personal liability/ § 922. Debt Barred by Statute of Limitations. — If a note secured by a mortgage of personal property becomes barred by the statute of limitations, the mortgagee's title to the property is not thereby defeated. The security is not im- paired for the reason that the statute of limitations, in case of contracts, affects the remedy ouly, without discharging the debt. It does not make the slightest difference that the note is barred by the statute of limitations, so far as the security is concerned.^ In general, if a note secured by a mortgage of personal property becomes barred by the statute of limitations, the mortgagee's title to the property is not thereby defeated.^ § 923. Mortgagor as Executor of Mortgagee's Estate. — The mortgagee, by making his debtor an executor of his estate, does not thereby extinguish the mortgage. The court, per Avery, J., says : " This is not a payment in fact of the debt. The administrator cannot sue himself, yet the debt is justly due from him to the estate. He is bound to collect, or endeavor to collect, all debts ; and as he cannot bring a suit for this, he is treated as having the money already in his hands. In this respect, a fiction is employed to accomplish a useful result under that decision of the court. But a fiction will never be allowed to work injustice when it may be avoided. Nor does it follow, be- cause an action at law will not lie for the debt, that proceed- ings in chancery cannot be maintained to subject the land according to the terms of the mortgage. A remedy upon the mortgage exists independently of the right to sue at law."* 'Chamberlain v. Meeder, 16 N. H. 381 ; Hamilton v. Bredeman, 12 Rich. (S. Car.) 464; Eoden v. Jaco, 17 Ala. 344; Stewart v. Anderson, 10 Ala. 504. ' CuUum V. Bank, 23 Ala. 797 ; Duval v. McLoskey, 1 Ala. 710 ; Jonep v. Jones, 18 Ala. 248. 'Grain v. Paine, 4 Gush. (Mass.) 483; Thayer v. Mann, 19 Pick. (Mass.) 535. 'Miller v. Donaldson, 17 Ohio 264; Winship v. Bass, 12 Mass. 199. 600 SATISFACTION OF DEBT. Proof of a debt against the estate of a deceased mort- gagor, and receipt of a dividend from the assets of the same, do not extinguish the mortgage given to secure a part of such debt/ § 924. Mortgagor as Legatee of Mortgagee. — A bequest of money by mortgagee to mortgagor does not extinguish the mortgage fro tanto, unless there is something in the terms of the bequest to show such intention in the testator.^ § 925. Agreement to Release. — When a mortgagee has agreed to release one of several chattel mortgages on pay- ment of a specific poftion of the debt, an agreement made by him on payment of a lesser portion of the debt, to re- lease one of the mortgaged chattels, is without consideration and void.* § 926. Release by Receiver. — A receiver appointed under a chattel mortgage contracted with the mortgagor that cer- tain property covered by the mortgage should be the mort- gagor's, in payment for services rendered ; this contract was binding on the mortgagor.* § 927. Action for Refusal to Discharge — Usury. — Evidence of usury in a mortgage note is admissible on the question whether the amount legally due had been paid before the mortgagor was called on to discharge the mortgage, and that such evidence becoming immaterial in the course of the trial does not render its admission error.' And when a mort- gagee takes a renewal mortgage, in Minnesota, and notes which- are usurious, he cannot recover the property under such junior mortgage, nor can he resort to the senior mort- gage in the same action to recover the property.* § 928. Satisfaction^ — Contradiction of Record — Bu3dng Mort- gage. — An imperfect entry of satisfaction of a mortgage may ' Sohuelenburg v. Martin, 1 MoCrary C. C. 348, opinion by McCrary, J. ' Harrington v. Brittan, 23 Wis. 541. 'Clark V. Griffith. 2 Bosw. (N. Y.) 558. ' Ayers v. Hawk (N. J.), 11 At. Eep. 744. 'Giflfen V. Barr, 60 Vt. 599. •Barrows v. Thomas, 43 Minn. 270. WHEN MADE BY THE LAW. 601 be shown by parol evidence to have been made by mistake, there being no pretense that the adverse parties have been misled by the mistake.' When one who has contracted to purchase property and pay off a mortgage on it as part consideration for the sale, rescinds the contract for a good cause, his subsequent pur- chase of the mortgage does not extinguish it.* § 929. Effects of Recital of Payment in a Deed of Trust or Other Instrument. — A recital of the payment of purchase- money in a deed, or of a receipt of a mortgage debt, in a re- lease, is not always conclusive upon the parties.' To consti- tute an estoppel in pais there must be actions or admissions intended and designed to influence the conduct of another ; the actions or admissions must come to the knowledge of the party, and his conduct must be influenced by them, and a denial of them must operate to the injury of the party whose conduct is influenced by them.*' ARTICLE II. APPLICATION OF PAYMENTS. 930. When Made by the Law. ■931. Diflferent Rule. 932. In the Discretion of the Court. 933. The Eight to Appropriate the Payments. 934. Proceeds of Sale — Right of Mortgagee and Payee. 935. Proceeds Derived from Mortgaged Personalty. § 930. When Made by the Law. — When the law makes the application of payment it will make it in the manner most equitable ; and in doing so the law will generally apply the payment to the eldest debt, or to the earliest item of the same debt, or to the debt that is due, in preference to the one that is not due. Generally, where one debt is secured and ' Boykin v. Rosenfield, 69 Tex. 115. ' Kuhlman v. Wood (Iowa), 46 N. W. Rep. 738. 'Homer v. Grosholz, 38 Md. 520; Wolfe v. Hauver, 1 Gill (Md.) 84; Daingerfield v. May, 31 Md. 340. • Welland v. Hathaway, 8 Wend. (N. Y.) 483 ; Alexander v. Walter, 8 Gill (Md.) 249. 602 SATISFACTION OF DEBT. the other is not, the law will apply the payment to the debt which is not secured.^ And thus, when neither party avails himself of his power, in consequence of which it devolves upon the court to apply the payments, it would seem reasonable that an equitable application should be made. It being equitable that the older debt should be paid, it cannot be inequitable to extin- guish first those debts for which the security is most preca- rious.^ § 931. Different Rule. — A different rule prevails in some courts, and where the debtor has given no direction, and the creditor has made no particular application, the court should presume in favor of the debtor, that he intended to extin- guish that debt which would bear most heavily upon him ; as, for example, a mortgage or judgment.^ § 932. In the Discretion of the Court. — Where money has been received in part payment of a running account, and no specific application has been made of the same, the Chan- cellor can, in his discretion, apply such mflney to that por- tion of the account which remains unsecured, without regard to the order of time in which the indebtedness for the several items of account was incurred.* § 933. The Right to Appropriate the Payments. — Where different debts are due from the same party, the rule is well settled that he who makes the payment must declare on what account he pays it ; if the payment is general, the right of appropriation is in the creditor.* If the debtor does not apply the payments, the creditor may do so. If neither debtor nor creditor has made appli- cation of the payments, the court of equity will apply it to- ' Shallabarger v. Binns, 18 Kans. 345. 'Field V. Holland, 6 Cranch (U. S.) 8. See, also, Mayor v. Patten, 4 Cranch (U. 8.) 317 ; United States v. January, 7 Cranch (U. S.) 572. •Pattison v. Hull, 9 Cow. (N. Y.) 747; The Antarctic, 1 Sprague C. C. 206. ' Schuelenburg v. Martin, 1 McCrary C. C. 348, opinion by McCrary, J. ' Bell V. Radcliflf, 32 Ark. 645 ; Wickerson v. Sterne, 9 Mod. 427 ; Manning: V. Wortram, 2 Mod. 606. PROCEEDS DERIVED FROM MORTGAGED PERSONALTY. 603 the note to which there is no security in preference to apply- ing it to a note secured/ § 934. Proceeds of Sale — Right of Mortgagee and Payee. — Where, by the consent of the parties, mortgaged chattels are sold and the money paid to the mortgagee, he has the abso- lute right to apply it to the payment of the mortgage debt, and the mortgagor cannot direct its application to the pay- ment of another debt due the mortgagee.^ The payee of a promissory note payable in installments has the right to apply the proceeds of personal property held by him under a mortgage as collateral security, and sold under a power of sale contained in the mortgage, towards the payment of any installment which may be due, at his option, if there is no agreement or direction to the contrary.^ § 935. Proceeds Derived from Mortgaged Personalty. — The proceeds derived from the sale of the mortgaged property must be applied to the extinguishment of the mortgage debt, and not otherwise, if no agreement controls the appropria- tion. Whatever money may be realized from the sales of the property covered by the mortgage, the mortgagee is bound, in the absence of agreement to the contrary with the mortgagor, to apply it to the payment of the mortgage debt. While the general rule is that a creditor has the right to apply a general payment, unless the debtor when making it specifically directed its appropriation, the rule is that the payment derived from the security for a particular debt must be applied to its satisfaction.* ' Burks V. Albert, 4 J. J. Marsh. (Ky.) 98; Heyward v. Lemax, 1 Vern. 24; Bacon v. Brown, 1 Bibb (Ky.) 334; Bird v. Davis, 14 N. J. Eq. 467. ' Hasten v. Cummings, 24 Wis. 623. 'Saunders v. McCarthy, 8 Allen (Mass.) 42; Allen v. Kimball, 23 Pick. (Mass.) 473. * Sanders v. Knox, 57 Ala. 80. 604 SATISFACTION OF DEBT. ARTICLE III. — CHANGE IN THE FORM OF THE DEBT. 936. Reducing to Judgment. 937. Identification of Debt. 938. Effect of Taking Higher Security. 939. Substituting Securities of Equal Degree. 940. Waiver of Security. 941. Taking Second Security of Equal Degree. 942. An Agreement will Control. § 936. Reducing to Judgment. — The commencement of a suit upon a promissory note does not extinguish the lien of the chattel mortgage held as collateral security to the note. But the commencement of such suit is a waiver of the for- feiture of the condition of the mortgage.' The mortgage is wholly distinct from and collateral to the note, and a creditor has a distinct remedy on each security. Thus, after judgment on a note in a suit, the note un- doubtedly merges in the judgment, and no further proceed- ings can be had directly upon the note, but it does not destroy the debt, and therefore does not defeat or release the mortgage, for the condition of the mortgage is, that the mortgagor shall pay the debt ; and until the debt is actually satisfied, the mortgage remains in full force. As well might it be said that a renewal of a note secured by mortgage would have the eflfect to discharge the mortgage, but this is not its effect.'' A chattel mortgage was given to secure a number of notes. Subsequently, and after condition was broken, the mortgagor gave a bond and warrant of attorney for the same amount, and judgment was rendered on the bond. Another judgment had been recovered in favor of a third party and levi,ed on the mortgaged property ; the judgment was rendered in favor of the mortgagee on his bond and warrant the same day he received it, and he placed his exe- 'Thurber v. Jewett, 3 Mich. 295. 'Pomroy v. Rice, 16 Pick. (Mass.) 22; Watkins v. Hill, 8 Pick. (Mass.) 522; Dunham v. Dey, 15 Johns. (N. Y.) 554. REDUCING TO JUDGMENT. 605 cution in the hands of the same officer who had previously levied in behalf of the third party. The goods were sold on the first execution and did not satisfy it. The mortgagee then undertook to resort to his mortgage for the payment of his debt. Jewett, J., gave the opinion of the court, and said : " In general, the acceptance of a higher security than the mortgagee had, is an extinguishment of the debt. Does not the law presume this judgment was taken as a satisfac- tion of the original debt ? I am of the opinion that it was ; the mortgagee took a new security for the old one, and the assent of the defendant to the judgment forces me to believe the parties did intend a satisfaction."^ On appeal, Johnson, J., said : " It will scarcely be contended that, in case the notes in question had been secured by a mortgage upon real estate, a judgment upon them would have extinguished the mortgage, and yet a mortgage on real estate is a mere se- curity and incumbrance on land, and gives the mortgagee no title therein whatever, whereas a personal mortgage is more than a mere security. It is a sale of the thing mortgaged, and operates as a transfer of the whole legal title to the 'mortgagee, subject only to be defeated by the performance of the condition. And if it be conceded that a judgment upon the original indebtedness would not extinguish a col- lateral security for its payment, upon real estate, I do not see how it could divest a title to personal property acquired by purchase. A vested legal title, whether in real or per- sonal property, is the highest of all securities. Certainly higher than the mere lien of a judgment upon land, or the right of a plaintiff to personal property acquired by levy under execution. It is clear that the notes were merged in the judgment by operation of law, but it does not certainly follow that all the collateral securities would be extinguished. The debt is not yet satisfied, and until that is done, all mere collateral security, whether upon real or personal property, should be allowed to stand. Especially titles to property ' Butler t). Miller, 1 Denio (N. Y.) 407. See Cleverly v. Brackett, 8 Mass. 150. 606 SATISFACTION OF DEBT. acquired under instruments where the parties stand in the relation of vendor and purchaser without fraud," thus holding differently from the lower court and reversing its judgment/ But it is obviously true that if the mortgagee recovers judgment on a note secured by mortgage, and takes the mortgaged property in execution, he waives his mortgage and the lien thereby created.^ In the case of a pledge as well as a mortgage, the creditor may, at common law, proceed against the debtor in the same manner as if there was no pledge or niortgage, and is not bound to restore the pledge until the debt is paid.^ Judge Story says :* " Upon principle, there would seem to be no reason to restrain the mortgagee from every remedy in rem and in personam until he has obtained full satisfac- tion of his debt. The debt ought to retain its original validity, it being independent of the mortgage or pledge, and if equity should interfere to enlarge the time of redemp- tion or to prevent a double satisfaction, it is the utmost exercise of its authority which justice and conscience would seem to require. To deprive a creditor of a single satisfac- ' tion of his debt in favor of a negligent or fraudulent debtor would not comport with the maxims which usually govern courts." The recovery of a judgment without satisfaction thereof upon a simplp contract debt, will not discharge a pledge given as collateral security for the debt.* § 937. Identification of Debt. — If, after judgment has been given on the note, the mortgagor brings suit to redeem, he ' Bntler v. Miller, 1 Comst. (N. Y.) 496. 'Buck V. Ingersoll.ll Met. (Mass.) 226. 'EatcliEf V. Davis, Yelv. 178, note; Thurber v. Jewett, 3 Mich. 295. * Hatch V. White, 2 Gall, C. C. 152. ' Fisher v. Fisher, 98 Mass. 303 ; Butler v. Miller, 1 N. Y 496 ; Burton v. Tannehill, 6 Blackf. (fad.) 470; Holmes v. Hinkle, 63 Ind. 518. The rendition of judgment on a note is no bar to an action of foreclosure. O'Leary v. Snediker, 16 Ind. 404; Jenkinson v. Ewing, 17 Ind. 505 ; Duck v. Wilson, 19 Ind. 190. SUBSTITUTING SECURITY OF EQUAL DEGREE. 607 must identify the debt upon which the judgment was ob- tained as the mortgage debt.^ A mortgagee, when he brings a suit tQ foreclose, after having obtained judgment on the note, must identify the two as the same debt.^ But if the judgment is not collateral to the note and mortgage, and the original debt was merged or extinguished by the judgment, such will be held to be the effect of the judgment.' § 938. Effect of Taking Higher Security. — There can be no doubt that, as a general rule, where the creditor accepts from the debtor a higher security than he before had, it is an extinguishment of the first, and the law prima facie pre- sumes it intended as an extinguishment.* The general principle of law governing in cases of this kind, and which applies to all securities, is that a security of a higher nature extinguishes inferior securities, but not securities of equal degree.^ § 939. Substituting Security of Equal Degree. — Where a mortgage is given to secure payment of a note, and the assignee of the mortgage takes a new note from the mort- gagor in exchange for the old one, it not being intended as payment, the mortgage debt is not thereby paid, but the mortgage remains good as security for the amount due on the new note as against the mortgagor himself.* A renewal of the note does not affect the securityj although no expressed understanding is made in words to its continu- ance.^ A renewal of a note or a bill of exchange, secured by a mortgage is neither a payment nor a discharge of the 'Hall V. Forqueran, 2 Litt. (Ky.) 329. " Holmes v. Hiukle, 63 Ind. 518. 'Butler V. Miller, 1 Deaio (N. Y.) 407. This case holds that whether a subsequent security of a higher nature is intended as collateral to a prior debt, or as a satisfaction and extinguishment of it, depends upon the inten- tion of th^ parties; but in the absence of any evidence of intention, the law regards the higher security as the extinguishment of the prior one. * United States v. Lyman, 1 Mason C. C. 482. 'Andrews v. Smith, 9 Wend. (N. Y.) 53; Higgins' Case, 6 Co. 44b. • Watkins v. Hill, 8 Pick. (Mass.) 522; Pomroy v. Rice, 16 Pick. (Mass.) 22; Smith v. Prince, 14 Conn. 472; Packard v. Kingman, 11 Iowa 219. ' Cullum V. Bank, 23 Ala. 797. 608 SATISFACTION OF DEBT. lien of the mortgage.^ Nor is a chattel mortgage discharged hy merely taking a new note.^ But where there is any doubt as to the intention of the parties, it is a question for the jury to solve and not for the court." § 940. Waiver of Security. — Where a mortgagor, after the delivery of the mortgage, gives his promissory note for the debt, an acceptance of such note by the mortgagee is not a waiver of the mortgage security. A creditor has a right to take as many securities as his debtor is willing to give.' When the holder of one of several notes secured by mort- gage delivered up the note to the mortgagor and maker, and took a new note for a different amount, payable at another date, and without any agreement that it should be secured by the mortgage, it was held that the holder lost his right to the security as against the holder of the other notes se- cured by the mortgage.'* § 941. Taking Second Security of Equal Degree. — The taking of a new note and mortgage on personal property to secure an indebtedness already evidenced by a note, and se- cured by a mortgage on the same property, does not, even when the first note and mortgage are canceled, operate to discharge the lien of such first mortgage." Nothing but payment in fact of the debt, or the release of the mortgage, will discharge a mortgage.' "But it is said that the defendant's second mortgage extinguished the first ; and consequently, being put to stand exclusively on the last, which was in 1835, the plaintiff''s mortgage of the previous September is let in. The argu- • Boyd V. Beck, 29 Ala. 703. 'Hill V. Beebe, 13 N. Y. 556; Flower v. El wood, 66 111. 438; Choteau v. Thompson, 3 Ohio St. 424 ; Boswell v. Goodwin, 31 Conn. 74 ; Darst v. Bates, 51 111. 439. 'Cadwell v. Pray, 41 Mich. 307. • Wesoott V. Gunn„4 Duer (N". Y.) 107. ' Wilhelmi v. Leonard, 13 Iowa 330. ' Packard v. Kingman, 11 Iowa 219. ' Crosby v. Chase, 17 Me. 369 ; Hadlook v. Bulfinch, 31 Me. 246. AN AGREEMENT WILL CONTKOL. 609 ment is against all the books, ancient and modern. Adjudi- cations of several centuries upon such cases, of every variety of form, in England, in this State and in neighboring States, settle the proposition that a subsequent security for a debt of equal degree with a former, for the same debt, will not, by operation of law, extinguish it."^ There is no limit to the lifetime of a chattel mortgage, except such as is put upon it by the st&,tute; otherwise it will remain until the debt is paid or barred.^ Taking a second chattel mortgage upon the same property covered by the first, to secure the same debt, is not of itself a cancellation of such first mortgage ; ^ when a debt is se- cured by two mortgages it should also have the benefit of the lien of tbe first mortgage.'' § 942. An Agreement Will Control. — If a mortgagee in a chattel mortgage, after default in payment by the mortgagor, but before the mortgagee has taken the property, but no other proceedings under the mortgage, takes a new note pay- able at a later day than the first, and a new mortgage upon the same property, with the understanding and agreement between himself and the mortgagor that the new note and mortgage shall be a payment and satisfaction of the first note and mortgage, they are thereby extinguished.® A mortgagee taking a new mortgage on the same and other property for tbe same debt, extending the time of pay- ment, impliedly covenants that the first is thereby dis- charged and extinguished.^ When the agreement is that the new security shall take the place of the old, this is an extinguishment of the old. But otherwise, where the new security is only an additional 1 Gregory v. Thomas, 20 Wend. (N. Y.) 19. 'Morse v. Clayton, 13 S. & M. (Miss.) 381. 'Shuler v. Boutwell, 18 Hun (N. Y.) 171; Hill v. Beebe, 13 N. Y, 556.' * Drury v. Briscoe, 42 Md. 154. *Daly V. Proetz, 20 Minn. 411. See, also, Paul v. Hayford, 22 Me. 234; Butler V. Miller, 1 Denio (N. Y.) 407 ; Chapman v. Jenkins, 31 Barb. (N, Y.j 164. 'Billingaley v. Harrell, 11 Ala. 775. 2o 610 SATISFACTION OF DEBT. mortgage on the same property; it is then a cumulative security in connection with the prior mortgage, on the same property, to the same person, both to continue in force.^ ARTICLE IV. — DISCHAKGE BY AGREEMENT. 943. Withdrawal of Mortgage from the Files. 944. Release by Parol. 945. Waiving of Mortgage Security. 946. Sale — Mortgagor as Agent. . 947. Valid Discharge by Written Instrument. § 943. Withdrawal of Mortgage from the Files. — Where a mortgagee gives authority to the mortgagor, in writing, to withdraw the mortgage from the files, and he does it, the mortgage is thereby extinguished. The lien of the mort- gage was lost when the mortgage was taken from the files and destroyed by the authority of the mortgagee.^ But if an agent exceeds his authority in taking the mort- gage from the files, the lien is not thereby lost. Thus, where the mortgagee of a chattel mortgage sent a party to the clerk's office to see whether the mortgage had been properly filed, and the agent misunderstood the order of the mortgagee, and took it and carried it to his principal, who thereupon used due diligence to cause it to be refiled, the lien thereof remains as against one who, with knowledge of the facts, attached the property while the mortgage was absent from the files.* The filing, in some States, takes the place of recording, and the instrument is no more to be removed from the clerk's office during the existence of the lien than the records of such office. Every person who has or may acquire an interest in the property has a right to have the instrument remain on file and open to inspection, and this applies with much greater force when the mortgage contains peculiar or unusual provisions.* ' Paine v. Waite, 11 Gray (Mass.) 190. ' Gruner v. Star Print Co., 40 Wis. 523. 'SwiftD. Hall, 23Wis.532. * Ward V. Watson, 24 Nebr. 592. SALE — MORTGAGOR AS AGENT. • 611 § 944. Release by Parol. — A mortgage of personal prop- erty, so far as it conveys the title to the property to the mortgagee, may be released or jiischarged by a subsequent verbal contract. Either an agreement by the mortgagor to do certain things, or the performance of those things by him, may be made the ground of settlement or discharge.' The right of a mortgagee to personal property may be agreed to be settled or discharged in one of two ways : Either an agreement to do certain things may itself be the ground of settlement or discharge, or a doing of these things may be the ground of settlement or discharge.^ § 945. Waiver of Mortgage Security.— A waiver of the mortgage security is not necessarily or usually a waiver of the debt secured. If the mortgagee permits the property to be sold upon an inferior lien, he is not precluded from recover- ing upon the mortgage debt.^ He can absolve the mortgagor from personal obligation and have recourse to the security alone for payment.* § 946. Sale — Mortgagor as Agent. — It has been decided in New York that the mortgagee can make the mortgagor his agent to sell the goods mortgaged. The sales made and proceeds received by the mortgagor under such an arrange- ment must be applied in payment and satisfaction of the mortgage, whether the money is ever actually paid over to the mortgagee or not. The court holds that when the mort- gagee agreed to this arrangement he made the mortgagor. his agent, and if done in good faith it was a lawful transaction. But if the mortgagor had been allowed to remain in posses- sion and sold the goods for his own benefit, it would have been unlawful. But this doctrine is not accepted by many ' Acker v. Bender, 33 Ala. 230 ; Wallis v. Long, 16 Ala. 738 ; Deshazo v. Lewis, 5 St. & Port. (Ala.) 91. ' Flockton V. Hall, 14 Ad. & E. (N. S.) 380 ; Babcock v. Hawkins, 23 Vt. 561 ; Cartwright v. Cooke, 3 Barn. & Ad. 701 ; Bradley v. Gregory, 2 Camp. 383; Very v. Levy, 13 How. 345. ' Jones V. Turck, 33 Iowa 246. 'Ball B. Wyeth, 99 Mass. 338. 612 SATISFACTION OF DEBT. courts, and the mortgagor cannot become the agent of the mortgagee in the sale of mortgaged goods/ § 947. Valid Discharge by Written Instrument. — A mort- gagee of personal property having made an agreement with the mortgagor for the benefit of a purchaser, subsequently signed and sent the mortgagor a written instrument agreeing to discharge the mortgage and to hold the purchaser harm- less in relation to it. The mortgagor delivered the same to the purchaser, by whom it was carried to the office of the recorder, who thereupon made an entry, signed and attested by him, on the margin of the record of the mortgage as follows : " This mortgage having been duly canceled by the mortgagor, and an order for discharge given by the mort- gagee, therefore this record is made." It was held that these facts were evidence from which the jury might find that there had been a bona, fide discharge of the mortgage.* ARTICLE V. — CONSTRUCTIVE PAYMENT. 948. Tender. 949. At Law— After Forfeiture. 950. A Valid Tender. 951. In Equity and Under the Codes. 952. Trover by Mortgagor. 953. Destruction of Property After Proper Tender. 954. Re-investment of Title. 955. After Default the Tender Must be Kept Good. 956. Michigan Rule. 957. Oregon Rule. 958. Mortgagor's Right. § 948. Tender. — The general rule is, though many courts- have modified it, that a tender of the amount secured by a chattel mortgage to the creditor on the day fixed for payment, although not accepted nor kept good, has the effect to release the property from the lien of the mortgage. But if the tender be made after default of payment at the stipulated time, it must be kept good or it will be entirely unavailing. ' Conkling v. Shelley, 28 N. Y. 860. See, also, Whitney v. Heywood, 6- Cush. (Mass.) 82. 'Stowell V. Goodale, 6 Cush. (Mass.) 452. TENDEE. 613 And to be available it must be without qualifications — that is, there must not be anything raising the implication that the debtor intends to cut ofi" or bar a claim for any afmount beyond the sum tendered. Thus, when the mortgagor, at the stipulated time, showed the mortgagee $500, and told him he could have it for his claim, it was a conditional offer, and therefore unavailing as a tender. Judge Lake says : " The act of tender here referred to took place long after the maturity of the note which the mortgage was given to secure, and the question is, whether the last proposition of this instruction states the law cor- rectly." This proposition reads : "And in order to dis- charge the lien of the mortgage, such tender, if refused, need not be kept good or the money brought into court." The judge continues : " From the cases cited it is certain that there is much conflict in the more recent decisions as to the effect of a tender upon a security, if made after what is termed the ' law day ' has passed, while probably there is none as to the fact that, if made on that day, it will release the property from the lien. At the common law, to have this effect, the tender must be made on the day the debt falls due, but need not be kept good."^ The most wholesome rule is, that a tender of the amount due after the time agreed upon, unless kept good, will not operate to release the lien of a mortgage given to secure it.* The rule that a tender after default, if not kept good, will release the lien, is more applicable to mortgages which are regarded as a mere security for a debt, and the mortgagor is regarded as the owner of the property until his right of re- demption is foreclosed. But in those States where a mortgage is a conditional sale, with a defeasance, and the legal title passes to the mortgagee, subject to the mortgagor's right to perform the condition, and after default the legal title becomes absolute in the 1 Tompkins v. Batie, 11 Nebr. 147. « Grain v. McGoon, 86 111. 431. 614 SATISFACTION OF DEBT. mortgagee, the rule of the common law applies. According to this rule, a mortgagor who failed to perform the con- ditions in the mortgage would forfeit his right to the land or to redeem it by subsequently tendering the amount due upon the mortgage.^ In case of such a forfeiture the mort- gagor could obtain relief only in a court of equity, wherein the land mortgaged was treated as a mere pledge which the mortgagee held as security for the debt due him. Under this rule of the common Jaw a tender after the law day must be kept good or it will be entirely unavailing a^ such. § 949. At Law-^After Forfeiture. — As to chattel mortgages a tender by the mortgagor after forfeiture will not restore him to his former title, unless the mortgagee accepts the money. The tender of the amount due after the law day has passed, unaccepted, does not divest the mortgagee of his legal title to the property mortgaged ; to get redress he must apply to a court of equity. Judge Eoyce says : "A tender of the amount due upon the mortgage after default in pay- ment would not, at law, re-invest the mortgagor with his former title to the property. Nothing short of an accept- ance of the sum tendered would, as between mortgagor and mortgagee, extinguish the legal title of the latter in the property mortgaged."^ In California a tender of the money due on a bond and mortgage, after the law day of the mortgage, and a refusal to accept it, do not discharge the lien of the mortgage. Judge Baldwin said : " The debtor is as much in default for not paying when the debt is due as the creditor is in default for not receiving the money afterwards when offered. It would be very harsh to hold that the debt is lost — the general effect of losing the security by a mere refusal, at a particular moment, to receive it — that refusal induced, too, as it might be, by a variety of circumstances morally excusing it, or, at ' Broom & Hadl. Com. (Am. ed.) 612, n. 288. ^ Blodgett V. Blodgett, 48 Vt. 32 ; Smith v. Kelley, 27 Me. 237 ; Hill v. Pay- son, 3 Mass. 559; Parsons v. Welles, 37 Mass. 419: Jouea v. Smith, 2 Ves. Jr. 378. AT LAW — AFTER FOEFEITUEE. 615 least, not grossly violative of any positive duty, and pro- ductive of little or no injury to any one."^ In New York it has always been held, in reference to real-estate mortgages, that a tender on the law day discharges the lien of the mortgage.; and, although a clear departure from the old law, it is fully settled that a tender after the law day will have the same effect. And generally a tender of money due upon a real-estate mortgage, at any time before foreclosure, discharges the lien, though made after the law day and not kept good,^ But as to chattel mortgages the rule is different, because of the difference in structure and effect between such a security and a mortgage upon real estate ; the latter being a lien only, and conveying no title to the land, while the former transfers the title at once, sub- ject to a defeasance by performance of the condition annexed, the payment of the debt.'' This rule of the New York courts is consonant with the weight of authority as to tender in payment of the debt secured by a chattel mortgage. In Massachusetts the equitable rule is adopted as to tender, the court stating that the rule applies to mortgages of per- sonal property as well as to mortgages of real estate. The mortgagor has a right to redeem by statute. " The mort- gagor redeems when he pays or tenders the sum due, or per- forms or offers performance of the thing . to be done. His right of property then becomes complete and absolute. By the terms of the statute a tender of the payment is equiva- lent to payment, and an offer of performance is as effectual as performance. He becomes entitled to have the property ' forthwith restored,' and upon a failure to restore he has a perfect legal remedy," and the mortgagor need not make ' terre v. Castro, 14 Cal. 519. See, also, Himmelmann v. Fitzpatrick, 50 Cal. 650. "Jackson v. Crafts, 18 Johns. (N. Y.) 110; Edwards v. Farmers, 21 Wend. (N. Y.) 467 ; Arnot v. Post, 6 Hill (N. Y.) 65 ; Kortright v. C«dy, 21 N. Y. 343. See, also. Charter v. Stevens, 3 Den. (N. Y.) 33 ; Patchin v. Pierce, 12 Wend. (N. Y.) 61 ; Brown v. Bement, 8 Johns. (N. Y.) 96 ; Ackley v. Finch, 7 Cow. (N. Y.) 290; Rogers v. Travelers Ins. Co., 6 Paige (N. Y.) 583; Mer- ritt V. Lambert, 7 Paige (N. Y.) 344. ^Noyes v. Wyckoff, 30 Hun (N. Y.) 466; affirmed in 114 N. Y. 204, though on another point. 616 SATISFACTION OF DEBT, profert of the money, or renew the tender at the trial. Judge Knowlton says : " This statute gives the payment or tender of payment of the debt, and all proper charges at any time before foreclosure, the same effect upon the rights of the parties in the property which it' would have had if made when the debt was due. In either case, if the mortgagee re- fuses the tender, he may afterwards sue for his debt, but loses his security." ^ In this case the citations of the New York cases are those pertaining to real-estate mortgages, and, as held by New York courts, do not apply to chattel mortgages. So, in Minnesota, the tender of the amount due, even after maturity of the debt upon a chattel mortgage, extin- guishes and discharges the lien- of the mortgage, and it is not necessary to keep the tender good by bringing the money into court in case an action is thereafter brought by the mortgagee to obtain possession of the property. The court accepts the rule adopted in New York in reference to real- estate mortgages. Collins, J., speaking for the court, says : " This doctrine in regard to real-property mortgages has been steadily ad- hered to in the State of New York, and with the common law correctly stated, as it has been, in respect to the sweep- ing effect of a tender made upon law day, it is difficult to see what distinction can now be suggested, when considering the force and effect of a tender made upon the law day and one made thereafter. We are positive none can be pointed out which possesses any real merit." ^ § 950. A Valid Tender. — ^A tender of money in payment of a debt must be, to be available, without qualifications — that is,^ there must not be anything raising the implication that the debtor intends to cut off or bar a claim for any amount beyond the sum tendered.^ Thus, although a party who tenders money has a right to exclude any presumption ' Weeks v. Baker (Mass.), 24 N. E. Kep. 905. ' Moore v. Norman, 43 MLnn. 428. "Tompkins v. Batie, 11 Nebr. 147. IN EQUITY. 617 against himself, that the sum tendered is in part payment of the debt, yet, if he adds a condition that the party who re- ceives it shall acknowledge that no money is due, this will invalidate the tender.^ The tender must be without qualifi- cations, so that there can be no implication that the debtor intended to bar a claim for any amount beyond me sum tendered. Thus, a tender of a sum in full discharge of all demands is not valid, because, if the tender of a sum as all that is due, that being disputed, and the creditor receives it, under the circumstances it might compromise his rights in seeking to recover more, whereas, if the same sum was tendered unconditionally, no such effect could follow.^ So, a tender is not valid if it be accompanied with a de- mand of a discharge of the party by whom or for whom the money is tendered.^ § 951. In Equity. — Many courts, by provision of the stat- ute, or by the principles of equity, hold that after condition broken, the mortgagor has an equity of redemption which may be asserted, if he brings his bill in a reasonable time, when the time is not specified by statute.* And the general rule is, that when the mortgagor of chattels, which are to be taken under the mortgage after condition broken, tenders an amount of money sufficient to pay the debt, and which ten- der is kept good until trial, when it is paid into court, it divests the title of the mortgagee as effectually as would a payment of the debt; and the mortgagee, by taking and selling the mortgaged property, is guilty of conversion.* ' Chitty on Cont. 699, note. "Wood V. Hitchcock, 20 Wend. (N. Y.) 47. ' Bicbardson v. Boston Ohem. Laboratory, 9 Met. (Mass.) 42. See, also, Thayer v. Brackett, 12 Mass. 450; Loring v. Cooke, 3 Pick. (Mass.) 48; Bank v.De Grauw, 23 Wend. (N. Y.) 342; Griffith v. Hodges, 1 Car. & P. 419; Peacock v. Dickerson, 2 Car. &P. 51, note; Strong v. Harvey, 3 Bing. 304; Ryder v. Townsend, 7 Dowl. & Ryl. 119; Glasscott v. Day, 5 Esp. 48. *Kemp V. Westbrook, 1 Ves. 278; Hart v. Ten Eyck, 2 Johns. Ch. (N. Y.) 100; Charter v. Stevens, 3 Den. (N. Y.) 83; Patchin v. Pierce, 12 Wend. (N. Y.) 61; Hinman v. Judson, 13 Barb. (N. Y.) 629; Blodgett v. Blodgett, 48 Vt. 32. 'Rice V. Kahn, 70 Wis. 328. 618 SATISFACTION OF DEBT. The tender being made after the maturity of the debt, must be kept good in order to divest the lien.' § 952, Trover by Mortgagor. — A tender must be made before condition broken, in order that the mortgagor may maintain trover against the mortgagee for the property,^ After condition broken and tender made, the mortgagor's remedy, in Missouri, is by suit in equity to redeem.^ § 953. Destruction of Property After Proper Tender. — If a mortgagee of a mortgage, after proper tender of the amount of the debt, refuses the money, and then the property is lost or destroyed, he must lose it.* § 954. Re-Investment of Title. — If the mortgagee of per- sonal property, after condition broken, receives the money from the debtor, that is a waiver of the forfeiture and re- invests the title in the mortgagor without any formal de- .livery.^ Whenever the mortgagee receives a satisfaction of the debt the mortgagor's title is re-invested in him.® Where personal property was mortgaged to insure the delivery of chattels on a given day, and they were not de- livered at the stipulated time, but they were afterwards ' Knox V. Williams, 24 Nebr. 630 ; Grain v. McGoon, 86 111. 431. See, also, Cheminant v. Thornton, 2 Carr. & P. 50; Mitchell v. King, 6 Carr. & P. 237 Sutton V. Hawkins, 8 Carr, & P. 259 ; Strong v. Harvey, 3 Bing. 304 Glassoott i;..Day;5 Esp. 48; Bichardson v. Boston Chem. Lab., 9 Met. (Mass.) 42; Perre v. Castro, 14 Cal. 519; Maynard v. Hunt, 5 Pick. (Mass.) 240. When the debt is fully paid, no tender is necessary before beginning action. Bank v. Marshall, 11 Fed. Rep. 19; Walker v. Staples, 5 Allen (Mass.) 34; Whitaker v. Sumner, 20 Pick. (Mass.) 399; Hazard v. Loring, 10 Cush. (Mass.) 267 ; Kimball v. Hildreth, 8 Allen (Mass.) 167 ; Bright v. Wagle, 3 Dana (Ky.) 252 ; Ely v. Hooper, 1 Pennypacker (Pa.) 175; Dewey V. Bowman, 8 Cal. 145 ; United States v. New Orleans, 98 U. S. 381 ; Matthews V. Sheehan, 69 N. Y. 585; Lary v. Nat. Trust Co., 4 Week. Dig. 56; Briggs V. Bryan, 8 Week. Dig. 259. " Heyland v. Badger, 35 Cal. 404. 'Jackson v. Cunningham, 28 Mo. App. 354. ' (Soodman v. Pledger, 14 Ala. 114. ^ Leighton v. Shapley, 8 N. H. 359. "Patchin v. Pierce, 12 Wend. (N. Y.) 61; Charter v. Stevens, 3 Denio (N. Y.) 33; Barry v. Bennett, 7 Met. (Mass.) 354; West v. Crary, 47 N. Y. 423 Harrison v. Hicks, 1 Port. (Ala.) 423; Parks v. Hall, 2 Pick. (Mass.) 206 Moak V. Bourne, 13 Wis. 514; Thompson v. Van Vechten, 27 N. Y. 568, Sumner v. Bachelder, 30 Me. 35 ; Porter v. Parmley, 52 N. Y. 185 ; Flanders V. Barstow, 18 Me. 357; Greene v. Dingley, 24 Me. 131. moktgagor's eight. 619 delivered and accepted by the mortgagee, this discharged the lien of the mortgage.^ § 955. After Default the Tender Must be Kept Good to be Set Up as a Defense. — The rule generally is, that a tender made after default in the terms of the mortgage must be kept good and paid into court in order to be a good defense in an action by the mortgagee for possession.'' § 956. Michigan Rule. — In those States where a chattel mortgage is considered only a lien and not a sale, the tender need not be kept good and paid into court on trial in order to discharge the lien. Thus, in Michigan, after tender, the mortgagor can maintain replevin against the mortgagee for possession of the goods, whether the money is paid into court or not.' The mortgagor is immediately entitled to the possession of the property after tender, and may bring trover for its value, when not returned, and the mortgagee cannot recoup for his debt.* § 957. Oregon Rule.— rFormerly a chattel mortgage in Oregon was considered a security only for a debt and not a sale. Under that rule it was decided that a tender need not be kept good and paid into court at the trial. Even an offer, in writing, to pay, when not accepted, is a sufficient tender of money under the Code, and such tender will dis- charge the lien of the property covered by a chattel mort- gage.^ § 958. Mortgagor's Right. — If a mortgagee, availing him- self of the stipulation in a chattel mortgage, takes possession of the property, or is about to do so, before the debt is due, he thereby confers on the mortgagor the right to pay the debt and keep his property. In such case, if the tender is kept good, it divests the title of the mortgagee, and if, ' Butler V. Tufts, 13 Me. 302. ' Musgat V. Pumpelly, 46 Wis. 660. ' Flanders v. Chamberlain, 24 Mich. 305. * Fuller V. Parrish, 3 Mich. 211. *Bartel v. Lope, 6.0reg. 321. ■620 SATISFACTION OF B^EBT. thereafter, he takes the property away a,nd sells it, against the remonstrance of the owner, he is liable for conversion.^ ARTICLE VI. — MERGER AND SUBROGATION. •959. Merger. 960. When the Mortgagee Buys the Equity of Kedemption. 961. Subrogation. 962. Rights of Surety. 963. Execution Creditor. 964. Payment by Third Party. § 959. Merger. — A mortgagee who takes judgment for the amount of his debt does not merge the mortgage nor lose his right to subsequent foreclosure ; but he may, on a sub- sequent day of the term, take a decree of foreclosure of the mortgage.^ § 960. When the Mortgagee Buys the Equity of Redemption. — When the mortgagee purchases or takes a release of the equity of redemption the whole estate is then vested in him, and the mortgage and the mortgage debt are extinguished, unless it is expressly or impliedly apparent that the parties intended otherwise ; or if the mortgagee takes a conveyance of part of the mortgaged property it operates to extinguish the mortgage debt pro -tanto.^ § 961. Subrogation. — A creditor is entitled to the benefits of a mortgage placed by his debtor in the hands of a security for indemnifying or securing against a debt, and may enforce it for his own benefit.* But to give a creditor the right to be substituted to the place of a surety who holds a mortgage given to indemnify him against his liability to the creditor, the creditor's claim must be valid, binding and capable of being enforced immediately against him. If the relation of debtor and creditor has never existed between them, or having 'Rice V. Kahn, 70 Wis. 323. ^ Muncie Nat. Bank v. Brown, 112 Ind. 474. See, also, Teal v. Hinchman, 69 Ind. 379 ; Evansville, &c., v. State, 73 Ind. 219 ; Pence v. Armstrong, 95 Ind. 191 ; Curtis v. Gooding, 99 Ind. 45. » Wilhelmi v. Leonard, 18 Iowa 330. *Troy V. Smith, 33 Ala. 469. EIGHTS GF SURETY. 621 existed it has been terminated by release, or payment, or in any other mode, there can be no substitution.^ Where a creditor of a mortgagor of chattels, who has levied on and sold the property, is compelled, by order of court in which he has filed a bill, to bring into court the amount se- cured by the mortgage, and the mortgagee, by leave of courts withdraws the same, then, even though such order was er- roneously made, the creditor will have the right, in equity, to be subrogated to the rights of the mortgagee under thfr mortgage.^ § 962. Rights of Surety. — When a surety is compelled ta pay the d.ebt of his principal he is entitled to be subrogated to the right of the creditor against the principal debtor.^ Thus, the surety being subrogated, upon receiving the assignment of the chattel mortgage, is entitled to enforce it for his reimbursement.^ And the surety will be entitled to- every remedy which the creditor has against the principal debtor to enforce every security transferred to him, and to avail himself of those securities against the debtor.* So,, where the principal and surety each mortgages his own property as security for the debt of the principal, and th& surety pays the debt, the principal's mortgage, given to secure such debt, passes to the surety by operation of law, and he is subrogated to all the rights of such creditor;* and the surety is entitled .to have the property of the principal sold first, and applied in satisfaction of the debt.^ If the surety pays the debt of the principal before matur- ity, he cannot maintain an action against him until the time for payment has expired; but if he is not repaid. at that ' Constant v. Matteson, 22 111. 546. ^Magill V. Dewitt Co. Sav. Bank, 126 111. 244. 'Lewis V. Palmer, 28 N. Y. 271. See, also, Clason v. Morris, 10 Johns. (N. Y.) 524; Matthews v. Aiken, 1 Comst. (N. Y.) 595; Hodgson v. Shaw, a Myl. & K. 183 ; Bowditoh v. Green, 3 Met. (Mass.) 360. * Hayes v. Ward, 4 Johns. Ch. (N. Y.) 130. 'Fields V. Sherrill, 18 Kans. 365; Low v. Smart, 5 N. H. 353; Muir v. Berkshire, 62 Ind. 149. 'Neimcewicz v. Gahn, 3 Paige (N. Y.) 614; James v. Jacques, 26 Tex.. 320 ; Keel v. Levy (Oreg.), 24 Pac. Rep. 253. 622 SATISFACTION OF DEBT. time there is no reason why he may not sue to recover the amount which he paid in discharge of the debt.^ § 963. Execution Creditor. — When a chattel mortgage is considered as a mere security, an execution creditor, upon payment of the chattel mortgage, which is a prior incum- brance upon the chattels on which his execution has been levied, is entitled to be subrogated to the rights of the mort- gagee, after he pays the debt to the latter ; and to that end he has a right to demand an assignment of the mortgage.^ § 964. Payment by Third Party. — ^A payment to a mort- gagee by a third party, who is under no obligation by con- tract to pay the mortgage debt, will not operate as a satisfac- tion of it, unless it be manifestly so intended by the party making the payment. Though the sale made by the mort- gagee is irregular, and not such as effectually to foreclose the mortgage, it will have the effect of transferring to the purchaser the mortgage claim.^ In order to subrogate such third party to the mortgagee's interest, he must have an interest which entitles him to redeem. If he has no such interest, although he may take possession of the property, upon paying the mortgage debt, the property is liable to attachment or execution in his hands, upon the suit of a creditor of the mortgagor.* ARTICLE VII. — STATtJTOKY PKOVISIONS. 965. Release. § 965. Release. — In most of the States it is provided by statute that the mortgage shall be released after satisfaction, by entry upon the record or margin of the recording-book. Penalties are imposed upon the mortgagee who neglects or refuses to make these entries, by the laws of the States. >Ross V. Menefee (Ind.), 25 N. £. Sep. 545. ^ Lueking v. Wesson, 25 Mich. 443. 'Walker v. Stone, 20 Md. 195. 'Woods V. Gilson, 17 111. 218. RELEASE. 623 In Alabama any mortgagee, transferee or assignee of such mortgage wlio has received satisfaction of the amount se- cured by such mortgage, must, at the written request of the mortgagor, enter satisfaction upon the margin of the record thereof, which operates as a release of such mortgage, and a. bar to all actions thereon ; and must, at the written request of a bona fide creditor of the mortgagor, enter the amount received by him thereon and date thereof. Failing for three months to make such entry, either in person or by attorney, after such payment and request, he forfeits to the party aggrieved |200, unless, where demand is for entry of satis- faction, at the time of such request, or within said three months, there shall be a pending suit between said parties, involving the question whether such mortgagee, transferee or assignee has received satisfaction of such mortgage. The payment of the debt secured by mortgage has the effect to divest the title of the mortgagee or his assigns, and re-invest the same in the mortgagor or his assigns.' In Arkansas the mortgagee, after request, must release the mortgage within sixty days, or forfeit to the party aggrieved any sum not exceeding the amount of the mort- gage debt, which may be recovered by civil action in any court of competent jurisdiction. The mortgage may be released by entry of satisfaction on the margin of the record of the mortgage in the recorder's office, by the mortgagee." In California the mortgagee must, upon request, discharge the mortgage at once, either by a satisfaction-piece, duly proved or acknowledged and recorded, or by an entry of satisfaction on the margin of the record, signed by the mort- gagee and witnessed by the recorder. If the mortgagee neglects or refuses to discharge the mortgage after satisfac- tion, he becomes liable for all damages to the mortgagor, and also forfeits to him |100.' 'Code, ? 1869. 'Digest of Stat. ch. 110, ?? 4745-4748. 'Civil Code, §2 2938-2941. 624 SATISFACTION OF DEBT. In Colorado entry of satisfaction or receipt on mortgage or record thereof operates as a release and reconveyance of title.' The law of Florida provides that the mortgage may be discharged by acknowledging satisfaction thereof before the clerk of the Circuit Court, when recorded, and proper entry upon the record, or by a satisfaction-piece, either indorsed upon the mortgage or separate therefrom, duly proved or acknowledged for record before some officer authorized by the laws of Florida to take acknowledgments of deeds.^ In Georgia it is customary to discharge recorded mort- gages, when satisfied, by a written certificate entered upon the record by the derk.^ The law of Illinois provides that the mortgagee must release the mortgage after satisfaction within one month, upon request of the mortgagor and tender of his reasonable charges. For refusal to release, he forfeits to the party ag- grieved the sum of $50, to be recovered in an action of debt before a justice of the peace. The release may be entered upon the margin of the record of such mortgage in the recorder's office. The mortgage can also be released by an instrument in writing executed by the mortgagee, acknowl- edged or proved in the same manner as deeds for the con- veyancs of land.* Such entry of satisfaction re-invests the mortgagor with title without reconveyance.^ In Iowa, when the mortgage debt is paid, the clerk enters satisfaction in the margin of such mortgage record.® So, in Kansas, a mortgage may be released on the margin of the record in presence of the register,'' In Kentucky the satisfaction of the debt may be entered 'Gen. Stat. ? 160 et seq. 'Laws of 1874, p. 75; Dig. Laws, 1881, p. 769. »Aotsofl884-5, p. 129. *Rev. Stat. ch. 95, §? 8-10. 5 Cottingham v. Springer, 88 111. 90. "Code, §§277-8. ' Laws of 1889, ch. 173, § 3910. RELEASE. 625 on the margin of the record of the mortgage bj the holder of such debt, attested by the clerk of the county.^ The Maine statute provides that a mortgage may be dis- charged by an entry in the margin of the record, signed by the mortgagee personally or by an attorney-at-law authorized in writing or by a deed of release.'^ In Minnesota a chattel mortgage is satisfied by filing in the same office a written certificate to that effect.' In Montana a chattel mortgage is discharged by acknowl- edgment of satisfaction signed by the mortgagee, his legal representatives or assigns, indorsed upon the mortgage or copy thereof, filed as aforesaid.* In Mississippi the mortgagee must release the title within three months, after satisfaction of the mortgage debt, upon request, and tender made for his reasonable expenses. For neglecting such duty he forfeits to the aggrieved party any sum not exceeding the mortgage-money.* The Missouri law provides that in case of failure to release the mortgage after satisfaction, within thirty days, upon re- quest of the mortgagor, the mortgagee shall forfeit ten per cent, upon the amount of the mortgage and any other dam- ages the party aggrieved may have sustained.* In Nebraska, when a chattel mortgage is satisfied, it may be discharged by an entry by the mortgagee, his agent or assigns, on the margin of the index, which shall be attested by the clerk ; or by the clerk on the presentation or receipt of an order in writing, signed by the mortgagee and attested by a justice of the peace or some officer with a seal. If the mortgagee, his assigns or representatives, shall neglect, for the space of ten days, after being requested, to discharge the ' Gen. Stat. ch. 24, ? 10. "Gen. Stat. ch. 90, §? 27-29. 'Gen. Stat, of 1878, ch.-Sg, 2 13. *Law8ofl881. p. 3, §11. "Code, II 1206,1207. 'Rev. Stat. |§ 3311,3312. 2p 626 SATISFACTION OF DEBT. same as aforesaid, he is liable in the sum of fifty dollars, in addition to actual damages.^ The Nevada statute prescribes that any mortgage may be discharged or assigned by an entry on the margin of the record thereof, signed by the mortgagee, or his representa- tive or assigns, acknowledging the satisfaction of or value received for the mortgage, and the debt secured thereby, in the presence of the recorder or his deputy, who shall sub- scribe the same as a witness, and such entry shall have the same effect as a deed of release or assignment duly acknowl- edged or recorded.^ In New Hampshire no stated form for discharge is estab- lished. Any memorandum upon the mortgage, signed by the mortgagee, stating the mortgage has been satisfied, will cancel the mortgage.* In New Jersey cancellation of the mortgage will be made by the clerk of the county on application to him made by the mortgagor or the person redeeming, paying and dis- charging the mortgage, and producing to him the mortgage canceled ; or a receipt thereon, signed by the mortgagee, his heirs, executors, administrators or assigns; or a certificate signed by him or them, and acknowledged or proved and certified in the same manner as is required for conveyances, specifying that the mortgage has been paid or otherwise satisfied and discharged.* In New York a chattel mortgage may be discharged by presenting to the officer in whose office it is filed a certificate from the mortgagee, or the holder or owner of the mortgage, that such mortgage is paid or satisfied.^ In North Carolina the mortgage is released as follows : The trustee or mortgagee or his legal representative, agent or attorney, may, in the presence of the register, acknowl- 'Law8 0fl885, p. 260. ' Laws of 1885, §? 2604-2607. •See Gen. Laws, p. 327. • Rev. Stat. p. 707 ; Supp. 1886, p. 134. " Laws of 1879, ch. 171 ; Laws, 1884, oh. 326. RELEASE. 627 «dge the satisfaction, whereupon the register shall forthwith make upon .the margin of the record of such mortgage, an •entry of such acknowledgment or satisfaction, which shall be signed by the mortgagee or his agent, and witnessed by the register.' So, in North Dakota a mortgage may be released by the «ntry in the margin of the record thereof, signed by the mortgagee or his personal representative or assignee, acknowl- edging the satisfaction of the mortgage, in the presence of the register of deeds, or upon the record by a certificate xiuly executed, acknowledged or proved, and certified and recorded the same as the mortgage.'^ The Ohio law prescribes that a satisfaction of a mortgage «hall be made by entering satisfaction, or a receipt for the same, either on the mortgage or on the record of the mort- gage. No acknowledgment, witness or seal is required to release. When the release is on the mortgage, then it should be entered by the recorder on the records.^ In Oregon a mortgage is discharged upon the record by ^n entry in the margin thereof, signed by the mortgagee or his agent, acknowledging the satisfaction of the mortgage.* In Rhode Island mortgages are discharged by release on the face of the record, or upon the mortgage, by the mort- gagee, or by a separate deed of release.' In South Dakota a mortgage may be discharged by an entry in the margin of the record thereof, signed by the mortgagee or his personal representative or assigns, acknowl- edging the satisfaction of the mortgage, in the presence of the register of deeds, or upon the record, by a certificate -duly executed, acknowledged, or proved and certified and Tecorded the same as the mortgage.^ In Texas mortgages are discharged by payment, no record ' Code, g 1271 ; ' Civil Code, g 1750. ' Laws 1888, p. 284. *Code, ? 3031. ^ Pub; Stat. oh. 176, §?6, 7. *Civil Code, 11750. 628 SATISFACTION OF DEBT. of discharge being necessary except to show perfect title on record.^ In Utah Territory a mortgage is discharged by entry on the margin of the record, or by a satisfaction-piece, executed, acknowledged, certified and recorded in the same manner as a deed.^ The Vermont statutes provide that mortgages may be dis- charged by entry on the margin of the record thereof, by entry on the mortgage deed, signed and sealed in the pres- ence of one or more witnesses and recorded upon the mar- gin of the record, or by recording a certificate of payment.* In West Virginia, mortgages, deeds of trust, &c., are dis- charged by a short deed of release, acknowledged before aa officer authorized to take acknowledgments of deeds, and admitted to record in the proper county.* In Wisconsin, after payment of any chattel mortgage, the mortgagor demands of the mortgagee, his personal represen- tative or assignee, a certificate of such payment, and within ten days after receiving such certificate, the mortgagor must file it in the office where the mortgage is filed, and remove the mortgage from the files.^ In Kansas, if the mortgagee fails to release the mortgage after satisfaction, he may be fined $100, and if the property is sold subject to the mortgage, the purchaser, after satisfac- tion, is the proper party to bring suit to recover the penalty.^ • See Kev. Laws of 1879, ch. 127, § 5. ^Com. Laws, pp. 254-263. 'Kev. Laws, || 1965-1979; Laws of 1886, No. 91 ; Rev. Laws, 1774-1885 ^ Laws of 1888, Nos. 79, 82. *Code, ch. 76, ?? 1,2. I' Rev. Stat. ? 2318 et seq. •Coflfman v. Hillard (Kans.), 24 Pac. Rep. 1098. mortgagee's title after condition broken. 629 Part VI. — Eights of Parties After Default. CHAPTER XIX. FOKECLOSUKE AND SALE. article I. — non-formal foreclosure. S66. Mortgagee's Title After Condition Broken. 967. Michigan Rule. •968. Oregon Rule. 969. Washington Rule. 970. Taking Possession Under Stipulation in the Mortgage. 971. With No Time of Payment in the Mortgage. 972. Payable on Demand. 973. No Time of Performance Specified. 974. Taking Possession Must be Peaceable. 975. Extending the Time of Payment by Parol Agreement. . 976. A Valid Promise. 977. Default in Payment of an Installment. 978. Proceeds May be Retained to Meet the Other Installments. 979. Michigan Rule. 980. The Mortgagee's Remedy for Withholding the Property. 981. Joint Mortgagors — Application of Proceeds. 982. Stipulation Under the Insecurity or Danger Clause. 983. Construction of Insecurity Clause. 984. Seizing Goods on Execution. 985. Answerable for the Use. 986. Rights of a Trustee. 987. Trover by Mortgagee— Evidence of Conversion. 988. Replevin by Mortgagee. 989. May Enter Upon the Land of the Mortgagor. 990. Wrongful Seizure. 991. As to Third Parties. 992. Pursuing the Wrong Remedy. ^93. Wrongful Foreclosure. § 966. Mortgagee's Title After Condition Broken. — The legal title of the mortgaged property, with right of posses- sion, is in the mortgagee, and this title becomes absolute after condition broken. The only right, then, that the mortgagor has is an equitable action to redeem.^ And a 'Brown v. Lipscomb, 9 Port. (Ala.) 472; Wright v. Ross, 36 Cal. 414; Larmon v. Carpenter, 70 111. 549; McConnell v. People, 84 111. 583; Blod- gett V. Blodgett, 48 Vt. 32; Musgat v. Pumpelly, 46 Wis. 669; Byron v. May, 630 FORECLOSTTRE AND SALE. mortgagee, when the legal interest has thus been transferred to him, stands, in a court of law, in the same situation as if he were an absolute purchaser/ It is not necessary to fore- close by judicial proceedings, but the mortgagee may pro- ceed to sell the personal property upon due notice to the mortgagor." As a general proposition, however, a right of lien gives no right to sell the goods. But when goods are deposited by way of security to indemnify a party against a loan of money, it is more than a pledge. The lender's rights are more extensive than such as accrue under an ordinary lien in the way of trade.^ So, if the mortgagor fails to pay or tender the debt when or before it becomes due, but allows the stipulated time to- elapse, the mortgage title, defeasible before, becomes absolute at law, and the property vests in the mortgagee and may be levied on and sold for the mortgagee's debts.* The mortgagee commits no violence of the rights of the mortgagor in taking possession of the mortgaged property upon default in the payment of the mortgage debt. The only right which a mortgagor can have after breach of con- 2 Pin. (Wis.) 443; Smith v. Coolbaugh, 21 Wis. 428; Bates v. Wilbur, 10 Wis. 415; Smith v. Konst, 50 Wis. 360; Rice v. Kahn, 70 Wis. 323; Smith V. Phillips, 47 Wis. 202; Flanders v. Thomas, 12 Wis. 410; Hall v. Bellows. 3 Stock. (N. J.) 334; Fikes v. Manchester, 43 111. 379; Simmons v. Jenkins, TS- UI. 479; Durfee v. Grinnell, 69 111. 371; Bean v. Barney, 10 Iowa 498; Brown v. Phillips, 3 Bush (Ky.) 656; Winchester v. Ball, 54 Me. 558;. Flanders v. Barstow, 18 Me. 357 ; Landon v. Emmons, 97 Mass. 37 ; Wells v. Connable, 138 Mass. 513; Fletcher v. Neudeck, 30 Minn. 125; Mann v. Flower, 25 Minn. 500; Braley i). Byrnes, 21 Minn. 482; Volney Stamp «.. Gilman, 43 Miss. 456; Thornhill v. Gilmer, 4 Sm. & M. (Miss.) 153; Robin- son II. Campbell, 8 Mo. 365 ; Bowens v. Benson, 57 Mo. 26 ; Tompkins v. Batie, 11 Nebr. 147; Adams v. Nat. Bank, 4 Nebr. 370; Bryant v. Carson River Lum. Co., 3 Nev. 313; Leach v. Kimball, 34 N. H. 568; Judson v. Easton, 58 N. Y. 664; Bragelman v. Dane, 69 N. Y. 69; Langdon v. Buel, 9 Wend. (N. Y.) 80; Charter v. Stevens, 3 Denio (N. Y.) 33; Brown v. Bement, 8 Johns. (N. Y.) 98; Talraan v. Smith, 39 Barb. (N. Y.) 390; Ackley v. Finch, 7 Cow. (N. Y.) 290 ; Fuller v. Acker, 1 Hill (N. Y.) 473 ; Hulsen v. Wolter, 34 How. Pr. (N. Y.) 385; Burdick v. McVanner, 2 Denio (N. Y.) 170; Williams v. Dobson, 26 S. Car. 110; Wolflf ». Farrell, 3 Brev. (8. Car.) 68; Reese v. Lyon, 20 S. Car. 17. 'Mervine v. White, 50 Ala. 388. 'Tucker v. Wilson, 1 P. Wms. 262 ; Lockwood v. Ewer, 7 Mod. R. 279. " Pothonier v. Dawson, Holt N. P. 885, ' Heyland v. Badger, 35 Cal. 404. See Section 810. MICHIGAN KTJLE. 631 ^ition is either to bring an action to redeem the mortgaged property, which must be commenced before the foreclosure of the mortgage by sale, or an action against the mortgagee to account for any surplus proceeds of the sale which might remain after satisfying the mortgage debt. So, an action to redeem cannot be commenced after sale, as per the stipulations in the mortgage. Then, the only right of the mortgagor is to have the mortgagee account properly for the proceeds of the sale, and to such an action the mort- gagee would certainly have a right to set up any claim, whether secured by the mortgage or not, which he may have against the mortgagor.^ But this rule is different when the action is brought by the mortgagee to foreclose the mortgage, because the action being based upon the contract to pay the mortgage debt, the mortgagee is entitled to recover no more than the amount secured by the contract." A mortgagee of chattels may maintain an action at law for the conversion of the goods, although not in his actual possession. He has also a right to resort to a court of equity to obtain a foreclosure of the equity of redemption and a sale of the chattels, and also to protect the property from conversion or destruction until a sale is ejffiected. The con- duct and fairness of a sale of chattels by the mortgagee, and the rights acquired thereunder, are always open to investi- gation at the instance of the mortgagor.' § 967. Michigan Rule. — A chattel mortgage does not trans- fer the legal ti,tle until after foreclosure, or something equiv- alent thereto, which must usually be by a sale ; and the pro- ceeds of the sale by the mortgagee must be treated as means collaterally to apply on the security, and do not belong to the mortgagee beyond the extent of his lawful claim as a creditor.* A chattel mortgage simply creates a lien upon ' Reese v. Lyon, 20 S. Car. 17. ^ Reese v. Lyon, 20 S. Car. 17. ^ Freeman v, Freeman, 17 N. J. Eq. 44. *Kohl V. Lynn, 34 Mich. 360. 632 FORECLOSUEE A.ND SALE, the property mortgaged. It does not, without foreclosure, convey any title.* § 968. Oregon Rule. — It was at one time held in this State that a chattel mortgage simply created a lien upon the mort- gaged property, and did not convey any title. Judge Burnett said : " It is no doubt true that at common law a mortgage of chattels vested the title in the mortgagee, and after default by the mortgagor the title of the mortgagee was absolute ; but under the statute he is not entitled to the possession of the chattels as a matter of right until condition broken ; and it appears from the different sections of the statute in regard to chattel mortgages that they simply create a lien upon the property mortgaged in favor of the mortgagee, and do not vest any title without foreclosure." ^ The rule has been changed, and now a mortgagee has the right to begin action to gain possession of the mortgaged property after condition broken.* The common-law defini- tion has been adopted by the courts.* § 969. Washington Rule. — This State has also adopted the equitable ^ule, and the courts hold that a chattel mortgage is a mere security under which no title can pass except by foreclosure and sale." § 970. Taking Possession Under Stipulation in the Mort- gage. — A provision in a chattel mortgage authorizing the mort- gagee to take possession, if at any time he deems himself insecure, is generally equivalent to giving him the right of possession whenever he chooses to demand it.* But such stipulation will not justify the mortgagee in taking possession and selling the property after tender by the mortgagor of the 'Lucking v. Wesson, 25 Mich. 443; Baxter v. Spencer, 33 Mich. 325; Gary v. Hewitt, 26 Mich. 228. "Chapman v. State, 5 Oreg. 432. ' Case V. Campbell, 14 Oreg. 460. *Hembree v. Blaokbiirn, 16 Oreg. 153. 'Byrd v. Forbes, 3 Wash. St. 318. «Gage V. Wayland, 67 Wis. 566, WITH SrO TIME OF PAYMBNT IS THE MOKTGAGE. 633 amount due and interest, and trover will lie for the conver- sion.^ When the mortgagee takes possession of the mortgaged chattels he must fully comply with the statute before selling them, or he will be liable to the mortgagor for any damages- he may sustain.^ An assignee of the debt may advertise the property for sale and attach the mortgagee's name to the notice of sale, and such foreclosure will be valid. Thus, a chattel mortgage was given to the mortgagee, but was not formally transferred to his assignee, who held the debt which it was given to secure. The assignee foreclosed, affixing the name of the mortgagee to the notice of sale. This was held to be a valid foreclosure.^ § 971. With No Time of Payment in the Mortgai^e. — ^A chattel mortgage given to secure an existing debt, that con- tains no time of payment, is due as soon as given to secure so much of the indebtedness as was due at the time of its exe- cution, and the mortgagee may, even after a part of the debt has been paid, take possession and sell the property to pay the balance.* Thus, a trust deed was made, but specified no time of payment; it was held that it was due as soon as given. ^ And, in general, an instrument containing no express promise of interest, and specifying no time of payment, either at a future day or on demand, is due and payable as soon as given ; * and, in case of a mortgage, it is by implica- tion an interest-bearing security from date.^ 'Harder v. Hosp, 69 Wis. 288. ^Stromberg v. Lindburg, 25 Minn. 513; Brink v. FreofT, 40 Mich. 610; Simpson i;. Carleton, 1 Allen (Mass.) 109; Black ii. Howell, 56 Iowa 630; Denny v. Faulkner, 22 Kans. 89; French v. Edwards, 13 Wall. (U. S.) 506. ' Carpenter v. Bank (Minn.), 47 N. W. Eep. 150. *Bearss v. Preston, 66 Mich. 11. See, also, Dikeman v. Buckhafer, 1 Abb. Pr. (N. S.) 32; Farrell v. Bean, 10 Md. 217 ; Howland v. Willett, 3 Sand. (N. Y.)607. 'Eaton V. Truesdail, 40 Mich. 1. = Sheehy v. Manderville, 7 Cranch (U. S.) 208. 'Purdy V. Phillips, 11 N. Y. 406; Gillett v. Balcom, 6 Barb. (N. Y.) 370; Eeid V. Eensselaer Glaas Factory, 3 Cow. (N. Y.) 486 ; Goo41oe v. Clay, 6 B. Mon. (Ky.) 236; Farquhar v. Morris, 7 Term R. 120. 634 FORECLOSURE AND SALE. § 972. Payable on Demand. — A mortgage given to secure a note payable on demand is payable immediately.' A foreclosure suit is a sufficient demand, and so is a notice of intention to foreclose, legally given.'' § 973. No Time of Performance Specified. — When a mort- gage is given to secure the performance of some act or con- tract other than the payment of money, and no time of performance is specified, this omission does not avoid the contract, and the law will require the performance within a reasonable time.^ When a mortgage is given to secure a note described in the instrument, that note must be produced, and the mort- gage is notice to no other claim than the one described in the instrument.* § 974. Taking Possession Must be Peaceable. — The mort- gagee of personal property has no right to take it out of the mortgagor's possession by force or threats, or against his will, although the law day is passed, and the mortgage con- tains an express power authorizing the mortgagee to take possession on default being made in the payment of the secured debt.® He has a right to take possession if he can do so without a breach of the peace.® § 975. Extending the Time of Payment by Parol Agreement. — Although the mortgage be under seal, the time of pay- ment may be extended by parol as between the parties, and the condition saved until the expiration of the extended time,' and the mortgagee will not be justified in seizing the property before the expiration of the extended time.* 'Southwick *. Hapgood, 10 Gush. (Mass.) 119. • 'Goodrich v. Willard, 2 Gray (Mass.) 203. 'Byram v. Gordon, 11 Mich. 531. *Hinchman v. Town, 10 Mich. 508. ' Thornton v. Cochran, 51 Ala. 415. •Thompson v. Thornton, 2] Ala. 808; Flanders v. Barstow, 18 Me. 357,- Brackett v. Bullard, 12 Met. (Mass.) 308; Bell v. Pharr, 7 Ala. 807; Coty D.Barnes, 20 Vt. 78; Sheppards ». Turpin, 3 Gratt. (Va.) 373; McLure v. Hill, 36 Ark. 268. ' Flanders v. Barstow, 18 Me. 857. ^ Baxter v. Spencer, 83 Mich. 325. Compare Bowens v. Benson, 57 Mo. 26. MICHIGAN RULE. OSS' § 976. A Valid Promise. — A valid promise for an exten- sion of time of the payment must be a promise founded upon a consideration, or such as the mortgagor might properly rely upon, and make the sale by the mortgagee within the time specified wrongful.* In case of a mortgage specifying no time of payment,, parol evidence of an agreement that it should not be imme- diately payable, is not admissible." § 977. Default in Payment of an Installment. — ^A mortgage given to secure notes becoming due at difierent times, the mortgagee, on default of payment of either of the notes when- due, is entitled to the possession of the goods ;^ and this may be had if the default is in making payment of the first installment.* § 978. Proceeds May be Retained to Meet the Other Install- ments. — Where there has been a sale of the mortgaged prop- erty for non-payment of first installment or of the interest due, the mortgagee has the right to retain the proceeds to meet the installments which have not matured .° He has the option to take possession upon default in payment of the first installment, or to await the maturity of the entire debt. His authority to do so, by the terms of the mortgage, im- poses on him no obligation to take possession.^ § 979. Michigan Rule. — If the mortgagee seizes the prop- erty when only one installment is due and sells it to a third party for the satisfaction of the whole mortgage, the sale being illegal, the mortgagor is entitled to recover the value of the property sold, after the first installment has been paid,, together with special damages, if any are shown, but with a 'Williams v. Stern, L. R., 5 Q. B, Div. 409. ' Bates V. Ripp, 1 Abb. App. Dec. (N. Y.) 78. 'Burton v. Tannehill, 6 Blackf. (Ind.) 470. • Murray v. Erskin, 109 Mass. 597 ; Bragelman v. Daue, 69 N. Y. 69 ;; MoConnell v. Scott, 67 111. 274. ^Flanders v. Barstow, 18 Me. 357. 'Chapin v. Whitsett, 3 Colo. 315; Barbour v. White, 37 111. 164; aeaves V. Herbert, 61 111. 126. ■636 FOKECLOSUKE AND SALE. ■deduction of the amount then remaining unpaid on the mortgage.^ This is upon the principle that where a party to or inter- est in a thing is partial, damages for its conversion by one holding the rest of the title or interest should, as respects the value of the thing, be partial also — that is, the mort- gagee is entitled to deduct from the whole value of the property converted the amount of the notes unpaid secured by the mortgage.* § 980. The Mortgagee's Remedy for Withholding the Prop- erty. — After the forfeiture the mortgagee may maintain re- plevin or detinue for the mortgaged goods against one who tortiously withholds the property,^ or against a creditor of the mortgiagor who has levied upon it.* Under the Codes of some of the States the mortgagor can make equitable defenses in suits at law, and when the mort- gage has not been foreclosed he can reduce the recovery against him to the actual amount due on the mortgage debt.' § 981. Joint Mortgagors — Application of Proceeds. — Where a mortgagee takes possession and sells for his own benefit, applying the proceeds, with the consent of only one of the joint mortgagors, to the payment of another debt, this satisfies ' Brink v. Fteoff, 44 Mich. 69 ; 40 Mich. 610. 'Brierly v. Kendall, 17 Q. B. 937; Johnson v. Stear, 15 C. B. (N. S.) 330; Brown «. Phillips, 3 Bush (Ky.) 656; Kussell d. Butterfield,. 21 Wend. (N. Y.) 300; Ballv. Liney, 48 N. Y. 6; Fowler v. Gilman, 13 Met. (Mass.) 267; Chamberlain v. Shaw, 18 Pick. (Mass.) 278. ' Hopkins v. Thompson, 2 Port. (Ala.) 433 ; Welch v. Sackett, 12 Wis. 243 ; Fuller V. Acker, 1 Hill (N. Y.) 473. * Nelson v. Wheelock, 46 111. 25; Macomber v. Saxton, 28 Mich. 516; Hendrickson v. Walker, 32 Mich. 68 ; Spriggs v. Camp, 2 Spears (S. Car.) 181 ; Mobley v. Letts, 61 Ind. 11 ; Stringer v. Davis, 35 Cal. 25 ; Frisbee v. Langworthy, 11 Wis. 375; Swift v. Hart, 12 Barb. (N. Y.) 530; Cary v. Hewitt, 26 Mich. 228 ; Mervine v. White, 50 Ala. 388 ; Brookover v. Esterly, 12 Kans. 149 ; Bates v. Wilbur, 10 Wis. 415 ; Brown v. Phillips, 3 Bush (Ky.) €56; Machette v. Wanless, 1 Colo. 225; Bellamy v. Doud, 11 Iowa 285; Fikes V. Manchester, 43 111. 879 ; Lacey v. Giboney, 36 Mo. 320. 'Binman v. Judson, 13 Barb. (N. Y.) 629. Property exempt from attachment may be recovered from the mort- gagor's widow, by the mortgagee, though set off to her by the order of Pick. (Mass.) 117. « Libby v. Cushman, 29 Me. 429. GENERAL PBIiNCIPLES. 663 AKTICLE V. — -m EQUITY. 1038. General Principles. 1039. When the Mortgage Contains a Power of Sale. 1040. Rights of Junior Mortgagee. 1041. Property Taken Beyond the Jurisdiction of Court. 1042. Appointment of Receiver. 1043. Right of Simple Contract Creditor. 1044. Rule as to Appointment. 1045. Several Mortgages — Amount of Debt in Dispute. 1046. Parties to the Suit. 1047. Mortgagor Without any Interest. 1048. Payment of Debt in Specific Articles. ' § 1038. General Principles, — A mortgagee may go into equity to compel a speedy redemption or to foreclose the right of the mortgagor. The same object may be attained by a fair sale of the property on due notice to the mort- gagor. These are familiar principles wherever the relation of mortgagor and mortgagee exists.' Chancellor Green says : " The right of a mortgagee of chattels to come into equity to obtain a foreclosure of the equity of redemption and a sale of the chattels, and also to protect the property from conversion or destruction until a sale be effected, is well settled. In many cases the remedy in equity is more complete and effectual than at law. If the mortgagee retains the chattels they are always liable to re- demption by the mortgagor. His only right to them is to satisfy his debt. When that is satisfied his title ceases."^ The judicial sanction of the transaction is safer, and, when the amount is large, sometimes advisable, especially in the absence of statutory regulations. The conduct and fairness of the sale, and the rights acquired under it, are always open to investigation at the instance of the mortgagor.^ It is true, ' Charter v. Stevens, 3 Denio (N. Y.) 33 ; Langdon v. Buel, 9 Wend. (N. Y.) 80 ; Patohin v. Pierce, 12 Wend. (N. Y.) 61 ; White v. Cole, 24 Wend. (N. Y.) 116; Conard v. At. Ins. Co., 1 Pet. {U. S.) 441; Morris v. Tillson, 81 111. 607; Aldrich v. Goodell, 75 111. 452; Hammers v. Dole, 61 111. 307; Wylder v. Crane, 53 111. 490 ; Packard i;. Kingman, 11 Iowa 219; Broadhead v. McKay, 46 Ind. 595; Brown v. Greer, 13 Ga. 285. ^ Freeman v. Freeman, 17 N. J. Eq. 46 ; Doughten v. Gray, 2 Stock. (N. J.) 323. , 'Morris v. Fisher, 1 Stock. (N.J.) 667; Morris v. Lewis, 1 Beas. (N. J.) 323. 664 FORECLOSURE AND SALE. however, that the title of the mortgagee to chattels mortgaged is absolute at law after forfeiture, and that he may sell them for the satisfaction of his debt, without the aid of a court of equity.^ § 1039. When the Mortgage Contains a Power of Sale. — The fact that a deed of trust or mortgage contains a power of sale and contemplates a foreclosure without the aid of a court, does not preclude a resort to a chancery court for the purpose of foreclosure.* An action in equity lies to foreclose a chattel mortgage. The remedy by sale " under the power, without resorting to judicial proceedings, is in most cases a more speedy and ef- fectual means of extinguishing the equity of redemption, but the right to foreclose by action has not been taken away.^ § 1040. Rights of Junior Mortgagee. — A junior mortgagee of part of the property embraced in a prior mortgage may, after exhausting other securities for his satisfaction, file a bill in equity against the prior mortgagee for the purpose of subjecting such property to his lien, by compelling him to foreclose and resort to the other property embraced in his mortgage.* And on a bill of foreclosure by the first mort- gagee, subsequent mortgagees may, for the purpose of re- ducing the claim of the plaintiff, insist upon the just and faithful application of a collateral security in his hands, to which they are not parties. When chattel security of the first mortgagee consists of certain chattels assigned to him and others, some of which were attached and taken out of his possession by the creditors of the assignor, and he thereupon brought suit in trespass against such creditors, in which he was ultimately defeated, 1 Hall V. Bellows, 3 Stock. (N. J.) 334; ■ Long Dock Co. v. Mallery, 1 Beas. (N. J.) 94 ; 4 Kent's Com. 139 ; Story on Bailm. § 310, note 4. ^ Green v. Gaston, 56 Miss. 748. "Brigss V. Oliver, 68 N. Y. 336; Hart v. Ten Eyck, 2 Johns. (N. Y.) Ch. 99; Slade v. Bigg, 3 Hare 35; Packard v. Kingman, 11 Iowa 219; Mc- Donald V. Vinson, 56 Miss. 497. * Hannah v. Carrington, 18 Ark. 85; High v. Brown, 46 Iowa 259; Kichards v. Spicer, 23 Minn. 212. EULE AS TO APPOINTMENT. 665 the action being in good faith, for the benefit of the assignees, such expense becomes part of the mortgage debt.' § 1041. Property Taken Beyond the Jurisdiction of Court. — Where the property is within the jurisdiction of the court but was taken beyond such jurisdiction by another person, who refuses to return it, the court may decree that the per- son in possession shall pay its value.'' § 1042. Appointment of Receivers. — A receiver is never to be appointed over a mortgagee in possession where the mort- gagee swears to a balance due him, much less when the plaintiff himself states such balance, and that the pledge is not an inadequate security to such balance.' § 1043. Right of Simple Contract Creditor. — It is well settled that a receiver is never to be appointed over a mort- gagee in possession where he swears to a balance due him ; much less where the mortgagor himself states such balance, and that the property is not an inadequate security for such balance.* In this view of the case, there being no allegation of danger or irresponsibility on the part of the mortgagee in whose possession the property is, there can be no reason for restraining him from selling the same to reimburse himself for his advances ; or for appointing a receiver to take the same out of his possession, and make sale thereof, and keep the proceeds until the accounts are finally settled between the parties.* And in general a simple contract creditor cannot have an injunction to restrain even a fraudulent disposition of prop- erty ; m,uch less to restrain it in the possession of the alleged debtor, or place it in the hands of a receiver.® § 1044. Rule as to Appointment. — A receiver may be ap- 'Pettibone v. Stevens, 15 Conn. 19. ' Gaar v. Hurd, 92 111. 315. See, aJBO, Hungate v. Eeynolds, 72 111. 425. ' Quinn v. Brittain, 3 Ed. (N. Y.) Ch. 314; Patton v. Access. Trans. Co., 4 Abb. (N. Y.) 235. * Quinn V. Brittain, 3 Ed. (N. Y.) Ch. 314; Patton v. Access. Transit Co., 4 Abb. (N. Y.) 235. 5 Bayaud v. Fellows, 28 Barb. (N. Y.) 451. = Reubens v. Joel, 3 Kern. (N. Y.) 488. 666 FORECLOSURE AND SALE. pointed, although the mortgagee has the legal title and might enforce his possession at law, whenever there are equitable , grounds shown for such relief, such as inadequacy of prop- erty to secure the debt, the insolvency of the mortgagor, and danger that the property will be lost or materially injured.^ Where a corporation engaged in carrying on a newspaper and printing office is greatly embarrassed by its indebted- ness, and the officers cannot agree, and their dissentions likely to materially injure the value' of the property, a re- ceiver may be appointed, in an action by a mortgagee in a foreclosure proceeding, where it appears that there has been a breach of the conditions of the mortgage.^ § 1045. Several Mortgages — ^Amount of Debt in Dispute. — When the parties have had mutual dealings and several mortgages have been given, and the amount of the indebted- ness is in dispute, sale under power is not allowed ; if adver- tised for sale, the sale may be enjoined until the balance due the mortgagee is ascertained. Chief Justice Pearson says : "Here we have an unascertained balance due upon a mortgage, to say nothing of a charge of usury ; the fact of an action pending for damages by reason of a failure on the part of the defendants to comply with their part of the agreement, and the fact that the power to sell the land is subject to conditions precedent, to wit, that the balance due is not by a sale of the crop, and by a sale of the property con- tained in a chattel mortgage. "The proceeds of the sale of the crop is stopped by an order still pending. The sale of the horses, mules, &c.,. under the chattel mortgage is stopped by an injunction still pending. In despite of these actions now pending the de- fendants seek to cut the ' Gordian knot ' by a sale of the land under the power in the mortgage deed. This cannot be allowed."^ ' Williams v. Noland, 2 Tenn. Ch. 151. "State Journal Co. v. Commonwealth Co., 43 Eans. 93. See, also, Harga- dine v. Bank, 52 Tex. 362. ' Purnell v. Vaughan, 77 N. Car. 268. PAYMENT OF DEBT IN" SPECIFIC ARTICLES. 667 § 1046. Parties to the Suit. — In a suit to foreclose a mort- gage the mortgagor and every party having any interest in the mortgaged property must be made parties defendant, so that the equities can be ascertained.^ Every person secured by the mortgage should be made a party, though he be not a mortgagee.^ Every beneficiary and trustee should be made a party .^ § 1047. Mortgagor Without Any Interest. — A mortgagor without any interest in the mortgaged property, having parted with it by sale or otherwise, and against whom no relief is demanded, is a proper party to a foreclosure suit, but not necessary, and he need not be summoned when no per- sonal judgment is demanded upon the note.* § 1048. Payment of Debt in Specific Articles. — A mort- gage to secure the payment of a debt in specific articles, where the mortgagee, on default, is authorized to sell the mortgaged property at public sale, and to retain from the proceeds of the sale a specific sum, may be foreclosed under the statute. Such a mortgage is equivalent to a mortgage to secure the payment of money, and foreclosure of such a mortgage is valid and the mortgagee is entitled to a judg- ment.^ 'Greither V. Alexander, 15 Iowa 470; Trittipo v. Edwards, 35 Ind. 467. 'Chapman v. Hunt, 14 N. J. Eq. 149. ^Chapman v. Hunt, 14 N. J. Eq. 149. *Farnsley v. Anderson, 90 Ind. 120. See, also, Stevens v. Campbell, 21 Ind. 471 ; Scarry v. Eldridge, 63 Ind. 44. "Jackson v. Turner, 7 Wend. (N. Y.) 458. See Doolittle v. Lewis, 7 Johns. Ch. 45. 668 FORECLOSURE AND SALE. ARTICLE VI. — PLEADINGS, PROOF AND DECREE. 1049. Bills of Complaint. 1050. Must Aver Notice. 1051. Identification of Debt. 1052. Evidence — Mortgagors' Befusing to Appear. 1053. Conflicting Evidence. 1054. Fraud and Duress. 1055. Proof. 1056. Identification of Property. 1057. Defense. 1058. When an Assignee Cannot Resist Foreclosure. 1059. Attempt to Sell Before Breach— Effect. 1060. Decrees. 1061. When Personal Representatives Must be Made Parties. 1062. When Entitled to Personal Decree. 1063. When Personal Decree Should Not be Made. 1064. No Personal Indebtedness. 1065. Decree for Interest. 1066. Under Texas Statute. 1067. Decree Binds Parties and Privies in Estate. § 1049. Bills of Complaint. — Bills of complaint should not contain superfluous verbiage and useless repetition. The mode of statement must be such as to make the pleadings intelligible to the parties and the court, without recurring to possible facts which do not appear, and with such a degree of certainty that nothing can, from the pleading, be pre- sumed to the contrary. The evidence must correspond with tlie allegations of the bill, and the averments must show that the statute has been complied with in the execution and registration of the chattel mortgage. If the averments comply with the statute, but the evidence shows that the parties did not bring themselves within the statutory provi- sions, the rights of third parties will not be divested. Thus, a bill in a foreclosure proceeding alleged that the mortgage was executed July 30th, and recorded August 1st. . A copy of the mortgage filed with the complaint according to statu- tory provision, as an exhibit, showed that it was executed July 18th. It was held that the exhibit controlled, and as it was shown that the mortgage was executed July 18th, and the complaint averred that it was not recorded until August 1st, it was void as against bona fide purchasers of the mort- MUST AVER NOTICE. 669 gaged property, under the Statutes of 1881, Section 4913, Which requires chattel mortgages to be recorded within ten days of execul^on.^ A motion to strike out a bill to foreclose a chattel mort- gage cannot be sustained on the ground of want of proper parties if the motion does not point out who should be made parties ; nor on the ground that the goods and chattels are not properly described, when many of the goods are par- ticularly described ; nor on the ground that the bill includes goods not included in the mortgage, that being a matter of evidence; nor because the bill does not describe all the goods now in the defendant's store, the bill only asking to foreclose the equity of redemption of the goods which are described.* Where parties having claims against the mortgagor file a cross-bill in a suit to foreclose a chattel mortgage, and in their bill fail to show that their claims have been reduced to judgment, except the claim of one of them,, and set up an assignment for the. benefit of the mortgagor's creditors, and aver that the mortgage is fraudulent as to creditors, a demurrer to the cross-bill will be sustained as to the parties who have not obtained a lien on the property by action at law.^ § 1050. Must Aver Notice. — A complaint in an action to foreclose a chattel mortgage on cattle, alleged the execution and recording of the mortgage in a certain county; that immediately after executing the mortgage the mortgagor drove the cattle into another county, where he delivered them to the purchaser, who claimed to have purchased them from the mortgagor ; that the purchaser knew at the time of such alleged purchase that the cattle had just been driven from another county, and that the price was much less than the value; that the vendor's reputation was very bad ; that the defendant or purchaser did not try to learn . ' Briggs V. Fleming, 112 Ind. 313. 'Howell V. Frances (N. J.), 9 At. Kep.,379. 'Osborne v. Barge, 30 Fed. Eep. 805. 670 FORECLOSURE AND SALE. how his vendor obtained the cattle ; that the cattle were in defendant's possession ; that the mortgagor was a bankrupt ; that the plaintiff had tendered defendant the amount he claimed to have paid for the cattle. It was held that the complaint was demurrable on the ground that it did not show that defendant had any actual or constructive notice of plaintiff's mortgage.' § 1051. Identification of the Debt. — In order to enforce a chattel mortgage, either the petition or the evidence must show that the debt sued for is the debt described in the mortgage. Chief Justice Mitchell, speaking for the court, says : "While literal accuracy in describing the debt secured or the condition upon which the mortgage is to become void is not required, it is essential that the character of the debt and the extent of the incumbrance should be defined with such reasonable accuracy as to preclude the parties from substi- tuting other debts than those described, thereby making the mortgage a mere cover for the perpetration of fraud upon creditors.^ The court may not assume that debts which in no way correspond with those described are within the terms or security of the mortgage. It would be altogether useless to require that the debts for which the mortgage is to stand as security be described, if other claims bearing no sort of resemblance to those specifically set forth could be regarded as covered by the mortgage without evidence showing their relation to the mortgage." ' Whatever change the debt may undergo, so iQug as it is shown to be the same debt as that described in the mortgage, the lien or security continues. The form of a debt may be changed, but such a change does not impair the lien of the mortgage.* 'Smith V. Ellis (Wash.), 21 Pac. Kep. 385. 'New V. Sailors, 114 Ind. 407. See, also, Pettibone v. Griswold, 4 Conn. 158. 'Bramhall ti. Flood, 41 Conn. 68; Doyle v. White, 26 Me. 341; Storms v. Storms, 8 Bush (Ky.) 77. *Shuey v. Latta, 90 Ind. 186. PKOOF. 671 § 1052. Evidence — Mortgagors' Refusing to Appear. — In an action to foreclose a mortgage against the mortgagors and one having in possession the mortgaged goods, where the notes secured are given with the mortgage, the declarations of the .mortgagor that he had sold to his co-defendant are admitted without objection, and both defendants absent themselves from the trial to avoid testifying, the evidence sufficiently shows that the sale to the co-defendant was after the mortgage was executed.' § 1053. Conflicting Evidence — Will Not Reverse When, — A judgment in favor of one seeking to uphold the good faith of a chattel mortgage given to secure a just debt will not, when the evidence is conflicting, be reversed as contrary to the evidence.^ § 1054. Fraud and Duress. — In an action to foreclose a mortgage, an answer which sets up as a defense a failure of consideration, and that the mortgage was obtained by fraud and duress, is sufficient, though the facts constituting the alleged duress are not set out. In such action evidence of a former transaction had be- tween the parties, which led to the execution of the mort- gage, is proper. Chief Justice Simpson said : . " The de- fense was, in substance, in part a failure of consideration on account of misrepresentation as to the age of the ox and fraud and duress in obtaining the mortgage. True, some- thing as to the alleged duress — the facts and circumstances thereof — would have been required in a case before the Court of Common Pleas, perhaps, but in this inferior court was there not enough stated to enable the plaintiff to know what was intended? We think so." ^ § 1055. Proof. — Where, in an action for the possession of ' Chaytor v. Brunswick, &c., 71 Tex. 588. 'Studebaker Bros. Man. Co. v. Bird, 119 Ind. 427. ' Kiggs V. Wilson, 30 S. Car. 172. Justices of the peace in South Carolina have jurisdiction to foreclose chattel mortgages which are security for indebtedness not exceeding $100. 672 FOEECLOSUKE AND SALE. personal property, in Missouri, the mortgagee makes proof of the chattel mortgage to him valid on its face, the posses- sion of the property by the mortgagor, the record of the mortgage, and the maturity of the debt the mortgage was given to secure, he makes out a prima facie case, and it is error for the court to direct a verdict for the mortgagor. Judge Black, speaking for the majority of the court, says : "The chattel mortgage is not fraudulent on its face, and there was not sufficient evidence to direct a verdict on the ground of fraud. Proof of the possession of the property by Richey [mortgagor] and the recorded mortgage from him to the plaintiffs, and proof of the maturity of the debt, made a prima facie case for the plaintiffs. Mr. Adams, the wit- ness, does not show affirmatively that the execution was levied before the mortgage was recorded. The execution was not read in evidence, nor does the record show when or by whom it was issued. The triors of fact might infer that the execution was levied before the mortgage was recorded, but this did not justify the court in assuming that to be the fact. This court has said where a ' material fact is left in doubt or there were inferences to be drawn from facts proved, the case, under proper instructions, should be sub- mitted to the jury.' '"^ § 1056. Identification of Goods. — The first mortgagee of goods which were removed to another store and there mort- gaged again, may prove the removal and identification of the goods without alleging such transactions in his petition to foreclose.^ Judge Seevers says : " Now, the question is whether the property described in the mortgage is the same. We think evidence may be introduced showing this fact, in the absence of any allegation in the pleadings. The only question is one of identity. The property is described differ- ently in the mortgages, but it is in fact the same. Clearly, we think, evidence may be introduced so showing, and evi- ' Turner v. Langdon, 85 Mo. 438. Norton and Sherwood, JJ., dissented. ^Odell V. Gallup, 62 Iowa 253. WHEN ASSIGNEE CANNOT RESIST FOKECLOSUBE. 673 dence showing the removal from one building to the other is admissible fof this purpose." § 1067. Defense. — In an action to foreclose a mortgage, and for a judgment on the purchase-money notes secured thereby, averments in the answer that the mortgagee had taken absolute possession of the mortgaged property and con- verted the same to his own use, and that at the time he so took the same it was of a value largely in excess of the amount due on the notes, state a good defense, as such pos- session and conversion operate to extinguish the mortgage.* The rule is, that in case the mortgagee takes possession of the mortgaged property and converts the same to his own use, it operates as an extinguishment of the mortgage debt, to the extent of the value of the property at the time it was so taken and converted by the mortgagee.* In a replevin suit by the assignee of a forfeited chattel mortgage against the mortgagor for the goods included in the mortgage, the mortgagor cannot set up in defense that a third party holds a better title than the assignee by reason of a prior mortgage, delivered to such third person by the defendant, as such defense implies a breach of his own war- ranty of plaintiff's title, especially when it does not appear that the condition of such prior mortgage has been broken.* § 1058. When an Assignee Cannot Resist Foreclosure. — In general, a voluntary assignee for the benefit of creditors cannot, in the absence of legislation in aid thereof, resist the enforcement of a mortgage of his assignor on the ground that it was made by the latter in fraud of his creditors.* The Florida Supreme Court, per Eaney, J., holds with the current of authority, the assignee, under such circum- ' Hartman v. Ringgenberg, 119 Ind. 72. ' Landon v: White, 101 Ind. 249 ; Lee v. Fox, 113 Ind. 98. "Gottschalk v. Klinger, 33 Mo. App. 410. *Bridgford •;;. Barbour, 80 Ky. 529; Williams v. Winsor, 12 R. I. 9; Wilson V. Esten, 14 R. I. 621; Brownell v. Curtis, 10 P?,!ge (N. Y.) 210; Storm v. Davenport, 1 Sandf. (N. Y.) Oh. 135; Van Heuaen v. RadclifF, 17 N. Y. 580; Hawks V. Pritzlaflf, 51 Wis. 160; Wakeman v. Barrows, 41 Mich. 363; Flower v. Cornish, 25 Minn. 473 ; Estabrook v. Messersmith, 18 Wis. 542. 2s 674 FORECLOSURE AND SALE. stances, cannot resist the foreclosure of a chattel mortgage given by his assignor. That the mortgagor could not do it, and that the assignee has no greater power or privilege in the matter than his assignor had, nor could he give him more. " This conclusion is in accordance with the decided weight of authority and entirely in harmony with the pre- vious doctrine of this court on the same and analogous ques- tions. It is a mistake to suggest that the case of Kent v. Lyon, 4 Fla. 474, holds that the administrator of a fraudu- lent grantor, dying in possession of the property, can urge his intestate's fraud as against a recovery by the fraudulent grantee or donee, such administrator coming into possession through his intestate. The contest there was not between the administrator and the fraudulent donee, but between a creditor of the intestate who had levied his execution on the property in the actual possession of the administrator and the donee ; and the court held that the deed of gift was void with reference to the creditor, and could be subjected to his execution as assets of the intestate. A careful consideration of the opinion will find that it distinguishes clearly the effect of the bill of sale or transaction, as between the creditor and the donee, from its effect as between the grantor or his administrator and the donee. The cases it cites illustrate the distinction, and it is only when a creditor is a party seeking to subject to his debt the property or to assert his rights as such, that it is regarded as assets in the hands of the administrator, and in his favor alone is it regarded as assets or the question of fraud permitted to be raised. The conclusion reached in Holliday v.- McKinne, 22 Fla. 153, where the authorities are reviewed, is that the administra- tor of a fraudulent vendor of personal property, dying in possession, cannot, as against the vendee or donee suing him to recover possession, question the sale as having been made by the intestate in fraud of creditors." ^ ' Einstein v. Shouse, 24 Fla. 490. KEPKESENTATIVES MUST BE MADE PARTIES. 675 Such an assignee will be bound where his assignor will be bound/ Statutory provisions may provide that an assignee for the benefit of creditors may file a bill to set aside a conveyance made by his assignor in fraud of creditors.^ Many of the authorities make a clear distinction in favor of the statutory assignee or trustee.' § 1059. Attempt to Sell Before Breach — Effect. — Where one who has taken the legal title of goods to secure himself as surety on the owner's bond, but has never been in posses- sion, attempts to transfer the goods to another before a breach in the condition of the bond, the attempt amounts only to a waiver of his lien and passes no title.* * § 1060. Decrees. — ^Where two causes are consolidated, one to construe a 'deed for real estate as a mortgage, and the other carrying into effect a chattel mortgage, the decree of foreclosure should be limited, and a sale of the personal property to the sum for which such chattel mortgage was given.^ § 1061. When Personal Representatives Must be Made Par- ties. — In a suit to redeem, all persons interested must be made parties, and the personal representatives of an intes- tate who had an interest at his death. Thus, a party mort- gaged certain shares of stock, which, although personalty, were by the charter of the corporation transferable by deed, and then by deed assigned his property for the benefit of his creditors. The assignee conveyed the property to a pur- chaser, setting forth the same trusts as those under which he had received the assignment. The purchaser died. It was held on a bill to redeem, brought by the administrator of Wood V. Whelen, 93 111. 153. •McCauley v. Rogers, 104 111. 578; Gaar v. Hurd, 92 111. 315. MORTGAGES ON HOUSEHOLD GOODS, ETC. 689 may be maintained to foreclose a chattel mortgage thereon, to adjust the rights and have the property sold and the fund distributed ; but if the amount is small and there are no adverse claims of other creditors, or liens, it seems that such bill cannot be sustained, as in such case the remedy by notice and sale of the property is sufficient.' But in case there are adverse claims, successive mortgages and incum- brances, a court of equity will take jurisdiction of the suit and adjust the rights of all interested parties.^ § 1088. Foreclosure Under Power of Sale. — Generally the mortgage contains provisions for summary foreclosure, by public or private sale, on a few days' notice, without court proceedings. But a mortgage on household goods, wearing apparel or mechanics' tools, must be foreclosed in a court of record ; and, before foreclosure, such property can be taken from the mortgagor's possession by the sheriff only on a judge's order.' Under the Statute of 1845, Ch. 20, Sec. 3, the mortgagee could not permit the mortgaged property to remain with the mortgagor until maturity of debt, provided default arose under the mortgage in less time.* The Statutes of 1874, Ch. 95, Sec. 4, make chattel mortgages valid from the time they are filed for record until maturity of the entire debt or obligation, not to exceed two years. § 1089. Mortgfages on Household Goods, Wearing Apparel ajid Mechanics' Tools. — Foreclosure of mortgages on neces- sary household goods, wearing apparel and mechanics' tools, executed after June 30th, 1889, can be foreclosed only in a court of record ; this does not apply to furniture sold by regular dealers on the installment plan. No one but a sheriff can take possession of this kind of property, and he only after obtaining an order of court.^ ' Dupuy V. Gibson, 36 111. 197. "Hammers v. Dole, 61 111. 307. 'Laws of 1889, tit. "Mortgages." ♦Reed v. Eames, 19 111. 594. 'Laws of 1889, tit. "Chattel Mortgages." 2t 690 STATUTORY FORECI-OSUEE AND REDEMPTION. § 1090. Indiana. — Upon condition broken, mortgagee may maintain replevin for possession, but the mortgagor, his heirs, assigns, legal representatives and execution creditors, have the equity of redemption, which can be extinguished only by a judicial sale, under foreclosure proceedings or a sale according to express terms of the mortgage. It may be foreclosed as a mortgage of real property is. Taking possession and retaining it without foreclosure and sale under decree, will constitute payment of the mortgaged debt.^ § 1091. May Foreclose in Court. — Whether the mortgage contains a power of sale or not, the mortgagor's equity of redemption may be foreclosed by a judicial proceeding, or by taking possession of the mortgaged property and sale at public auction, in pursuance of legal notice to the mort- gagor.^ § 1092. Iowa. — A mortgage of personal property to secure the payment of money only, and when the time of payment is therein fixed, may be foreclosed by notice and sale, unless a stipulation to the contrary has been agreed upon by the parties, or may be foreclosed by action in the proper court. The notice must contain a full description of the property mortgaged, together with the time, place and terms of sale. The notice must be served on the mortgagor and all sub- sequent purchasers, and on all persons having recorded liens upon the same property which are junior to the mortgage, or they will not be bound by the proceedings. The service and return must be made in the same manner as in the case of the original notice by which civil actions are commenced, except that no publication in the newspapers is necessary for the purpose. After notice has been served upon the parties, it must be published in the same manner, and for the same 'Landon v. White, 101 Ind. 249. ' Lee V. Fox, 113 Ind. 98. No formal foreclosure is required. The equity of redemption can be ex- tinguished only by a public sale after proper notice, or by a judicial sale on foreclosure proceedings. KENTUCKY. 691 length of time as required in case of the sale of like prop- erty on execution, and the sale shall be conducted in the same manner. The purchaser shall take all title and' interest on which the mortgage operated. The sheriff conducting the sale shall execute to the purchaser a bill of sale of the personal property, which shall be effectual to carry the whole title and interest purchased.^ § 1093. Instances. — A mortgage may be foreclosed after the death of the mortgagor, and the mortgagee need not file his claim against the estate.^ § 1094. May be Foreclosed in Equity .-^Though a mort- gagee need not resort to a court of equity, yet the foreclosure of a chattel mortgage is subject to equity jurisdiction.* These is no specified time in which a chattel mortgage must be foreclosed,* § 1095. Kansas. — The mortgagee or his assignee may pro- ceed to sell the mortgaged property after condition broken, or so much thereof as may be necessary to satisfy the mort- gage and cost of handbills posted up in at least four public places in the township or city in which the property is to be sold, at least ten days previous to sale. If the mortgagee or his assignee shall have obtained possession of the mortgaged property, either before or after condition broken, the mort- gagor or any subsequent mortgagee may demand, in writing, a gale of such property. Then the property must be sold as set forth in the statute. Any surplus then remaining, the same shall be paid to any subsequent mortgagee entitled thereto, or to the mortgagor or his assigns." § 1096. Kentucky. — In an action to foreclose a chattel mortgage the court may order the sale of the property and give judgment against the mortgagor personally. Such sale ^ Kev. Code, §§ 3307-3317. Mortgages of after-acquired property are valid. " Cocke V. Montgomery, 75 Iowa 259. ' Packard v. Kingman, 11 Iowa 219 ; Kramer v. Bebman, 9 Iowa 114. *Eev. Laws, tit. XX. ch. 4. *Dass. Com. Laws of 1885, U 3499-3509. 692 STATUTORY FORECLOSURE AND REDEMPTION.. must be public, upon reasonable credits to be fixed by the court, not less than three months. Unless otherwise ordered, the sale shall be made at the door of the court-house of the county in which the property, or greater part of it, is situ- ated ; and the notice of sale must state for what sum of money it is to be made. The purchaser shall, under the order of the court, give a good and sufficient bond ; or if the court make no order on the subject, it shall be made pay- able to the officer. It shall bear interest from date at the " rate the judgment bears. It shall have the force of a judg- ment ; and on execution issued upon it no replevy shall be allowed, and sales Shall be for cash.^ § 1097. Maine. — When the condition of a mortgage of personal property is broken, the mortgagor or any person legally claiming under him may redeem it at any time, before it is sold, by virtue of a contract between the parties on an execution against the mortgagor, or before the right of redemption is foreclosed, by paying or tendering to the mortgagee or his assignee the sum due thereon, or by per- forming or offering the conditions thereof, when not for the payment of money, with all reasonable charges incurred. If the property is then not immediately restored it may be replevied, or damages for withholding it recovered in an action on the case. The mortgagee or his assigns may give to the mortgagor or his assigns, when his assignment is recorded where the mortgage is recorded, written notice of his intention to fore- close the same, by leaving a copy thereof with the mort- gagor or his assigns, or if the mortgagor is out of the State, though resident therein, by leaving such copy at his last and usual place of abode, or by publishing it once a week, for three successive weeks, in one of the principal newspapers published in the town where the mortgage is recorded. The notice, with an affidavit of service or a copy of the publication, with the name and date of the paper in which ' Civil Code, S| 695-698. MARYLAND. 693 it was last published, shall be recorded where the mortgage is recorded, and the copy of such record shall be evidence that the notice has been given. If the mortgagee or his assignee is not a resident of the State he shall, at the time of recording such notice, record therewith his appointment of an agent resident in the same town to receive satisfaction of the mortgage, and payment or tender may be made to him. If he does not appoint such • agent, the right to redeem shall not be forfeited. The right to redeem shall be forfeited, except as provided in the pre- ceding sections, if the money to be paid, or other thing to be done, is not paid or performed, or tender thereof made, within sixty days after such notice is recorded.^ § 1098. Notes Are Given. — Notes are also given for prop- erty, stipulating that it shall remain the property of the payee until the note is paid, and are subject to the same regulations as to record and foreclosure as mortgages.^ § 1099. Maryland. — A clause may be inserted in a chattel mortgage authorizing the mortgagee, or any other person to be named therein, to sell the mortgaged property upon such terms and on such contingencies as may be expressed therein. When the interests in any mortgage are under one or more assignments, or otherwise, the power of sale contained shall be held divisible, and he or they holding any such in- terest who shall first institute proceedings to execute such power shall thereby acquire the exclusive right to sell the mortgaged premises. But before sale the party so authorized shall give bond to the State in such penalty and with such security as shall be approved by the judge or clerk of a court of equity of the city or county in which the chattels may be, to abide by and fulfill any order or decree which shall be made by any court of equity in relation to the sale of such mortgaged property. Sales made in pursuance of such authority shall have notice given as stated in the mort- 'Laws of 1880, ch. 193 ; oh. 91, ?§ 1-7. »Chapterlll, §5. 694 STATTJTOEY FORECLOSURE iND REDEMPTION. gage. In absence of an agreement, then twenty days' notice shall be given by advertising in some newspaper printed in the county where the mortgaged property may be, if there be one so published, and if not, in a newspaper having a large circulation in said county, and also by advertisement set up at the court-house door of said county. These sales must be reported under oath to the court having chancery jurisdiction where the sale is made, and there shall be the same proceedings on such report as if the same were made by a trustee under a decree of said court, and the court shall have full power to hear and determine any objections which may be filed against such sale, and may confirm or set aside the sale thus made. When confirmed by the court such sale shall pass to the purchaser all the title the mortgagor had at the time of recording the mortgage. The surplus, if any, may be distributed equitably among the claimants. When any suit is instituted to foreclose a mortgage the court may decree, except in Baltimore,* that, unless the debt and costs be paid by a certain time, the property may be sold for cash, unless the complainant shall contiient to a sale on credit. If the proceeds do not satisfy the debt and costs the court may, on motion of the complainant, enter a decree in personam against the mortgagor or other party to the suit who is liable for the payment thereof, provided the mort- gagee would be entitled to maintain an action at law upon the covenants contained in said mortgage for said residue of the said mortgage debt, which decree shall have the same effect as a judgment at law, and may be enforced only in like manner by a writ of execution in the nature of a writ of fieri facias or otherwise.^ , § 1100. Massachusetts. — Upon default, the mortgagor, or any person legally claiming under him, may redeem the mortgaged property at any time before the property is sold in pursuance of the agreement between the parties, or the right of redemption is foreclosed. The person entitled to * Pub. Local L., art. 4 ; Bernstein v. Hobleman, 70 Md. 29. ' Rev. Code, art. 66, H 47-53, 65. MAY GO INTO EQUITY. 695 redeem shall pay or tedder to the mortgagee, or to the per- son holding lender him, the sum due on the mortgage, or shall perform or offer to perform the thing to be done, and shall pay all reasonable and lawful charges incurred in the care and custody 'of the property. If then the property is not forthwith restored, it may be recovered in an action of replevin, or the person entitled to redeem may recover such damages as he may have sustained by the withholding thereof, in an action adapted to the circumstances of the case. Or the mortgagee or > his assigns, after condition broken, may give 'to the mortgagor, or to the person in pos- session of the property claiming the same, written notice of his intention to foreclose the mortgage for breach of the con- dition thereof, which notice shall be served by leaving. a copy with the mortgagor, or person in possession of the property claiming the same; or by publishing it at least once a week, for three successive weeks, in one of the principal newspapers published in the town or city where the jnort- gage is properly recorded, or where the property is situated, or, if there is no such paper, in one of the principal news- papers published in such county. The notice, with an affidetvit of the service, shall be recorded wherever the mortgage is recorded, and, when so recorded, the same, or a copy of the record, shall be admitted as evidence of the giving of such notice. If the money to be paid, or other thing to be done, is not paid or performed, or tender thereof made, within sixty days after such notice is so recorded, the right to redeem shall be foreclosed.^ § 1101. Instances. — When a chattel mortgage of personal property is valid without being recorded, the notice of in^ tention to foreclose it is valid without registration.''^ § 1102. May Go Into Equity. — If a mortgagee of personal property refuses to render an account, without which the ' Gen. Stat. eh. 192, §| 4-8. ?Taber v. Hamlin, 97 Mass. 489. 696 STATUTORY FORECLOSURE AND REDEMPTION. mortgagor cannot ascertain the amount due so as to make payment or tender for the redemption of the property, relief will be afforded to the mortgagor in equity/ § 1103. Michigan. — A mortgagee may foreclose by proceed- ing to sell the property after due notice, or to sell in accord- ance with a power of sale contained in the mortgage ;^ or the mortgagee may foreclose in a Court of Chancery. Any surplus remaining is held by the mortgagee in trust for the mortgagor. At any sale of property upon foreclosure of a chattel mortgage, the mortgagee or his assigns, or his repre- sentatives, may fairly and in good faith purchase the property so offered for sale. § 1104. Minnesota. — After condition broken, the mort- gagor, or any person lawfully claiming under him, may redeem the same at any time before the property is sold, in pursuance of an agreement between the parties, or the right of redemption is foreclosed. The person entitled to redeem shalt'pay or tender to the mortgagee or assigns, the sum due on the mortgage, or offer performance of the thing to be done, and shall pay all reasonable and lawful charges and expenses incurred in the care and custody of the property ; if then the property is not forthwith restored, the person entitled to redeem may recover it in civil action, with such damages as he may have sustained by the withholding thereof. If the mortgagee has a remedy by sale of the mortgaged property, authorized by the terms of the mortgage in case of default, such property cannot be sold at private sale but only upon previous written notice, given at least ten days before sale, by serving a copy of such notice upon the mortgagor, or upon the person in possession of the property, claiming the same, if to be found within the town, city or village where the mortgage is filed ; if not so found, then by posting a copy of such notice in three of the most- public places of the city, village or town where the mortgage is filed, or where the 'Boston, &c., V. Montague, 108 Mass. 248. ' How. Stat. ch. 234, | 6193 et seq.; Flanders v. Chamberlain, 24 Mich. 305. MOETGAGEE MAY PUKCHASE AT THE SALE. 697 property is seized or taken under the mortgage. Such sale must be made by the sheriff of the county or constable of the town. Redemption can be made at any time prior to the sale. Equity of redemption can be foreclosed by service of a sixty days' notice of inteatton to foreclose same, on the person in possession, or by publication for three successive weeks.^ § 1105. The Mortgagee May Purchase at the Sale — Expenses. — The mortgagee, his legal representative or assign, may purchase at the sale.^ In view of the statute, and of the terms of a chattel mort- gage authorizing the mortgagee to retain from the proceeds of the mortgaged property a specified attorney's fee, and such other expenses as may be incurred, the mortgagee may charge the reasonable and necessary expenses of proper efforts, although unsuccessful, to take possession of the mort- gaged property, and the mortgage may be enforced to satisfy such sum, notwithstanding a tender of the bare debt. The attorney's fees are not chargeable, if there be no foreclosure. Judge Dickinson says the taking of the property is a proper step in the proceedings for the enforcement of the mortgage, and the proper expense of it is authorized, both by the statute and by the mortgage, to be charged as a sum to be satisfied under the mortgage ; that the expenses chargeable are not limited to such only as are incurred in such efforts to take the property as are immediately successful ; and if proper efforts to gain possession wholly fail, without fault of the mortgagee, the expense is chargeable, so that the mort- gagor cannot thereafter satisfy the obligation for which the mortgage is held, by tendering payment of the bare debt, without such expenses.* A stipulation in a mortgage for the payment of the " expenses for the sale and keep of said property," is sub- 'Gen. Laws of 1885, ch. 171. " Laws of 1885, p. 212. ' Iteisan v. Mott, 42 Minn. 49. 698 STATUTOKY FORECLOSUEE AND REDEMPTION. stantially equivalent to the statutory provision, and includes the expense of taking the property.^ § 1106. Mississippi. — When any mortgage or deed of trust shall be given on any real or personal estate, or when any lien shall be given by law ^o secure the payment of any sum of money specified in any writing, no action or suit or other proceeding shall be brought or had upon such lien, mort- gage or deed of trust, to recover the sum of money so secured, ,but within the time that may be allowed for the commence- ment of an action at law, upon the writing in which the sum of money secured by such mortgage or deed of trust may be specified; and in all cases where the remedy at law to recover the debt shall be barred, the remedy in equity on the mortgage shall be barred. Mortgages are foreclosed in courts of equity.^ §1107. Missouri. — Chattel mortgages are generally given with a power of sale in the mortgagee. Sales made by mortgagee when so empowered shall be valid and binding upon the mortgagor and all persons claiming under him, and shall forever foreclose all right and equity of redemp- tion in the property sold.' And when the mortgagee takes possession after condition broken, he has the legal title and can sell and execute the powers conferred in the mortgage without the aid of a court of equity.* § 1108. Montana. — All actions of foreclosure of chattel mortgages, or the enforcement of any lien against personal property, shall be commenced and conducted in the same manner as foreclosures of mortgages and liens against real property. In actions for foreclosure of mortgages, the court may, by judgment, order a sale of the mortgaged property, or as much as may be necessary, and direct the application of the proceeds of the sale to the payment of the costs of the court and expenses of sale, and the amount due to the mort- ' Ferguson v. Hogan, 25 Minn. 135. ''Code,? 2667. ^Kev. Stat. ? 3310. * Keating v. Hannenkamp, 100 Mo. 161. NEBKASKA. ' 699 gagee. If it appears from the sheriff's return that the pro- - ceeds are insufl&cient, and a balance still remains due, judg- ment shall be docketed for such balance against the defend- ant personally liable for the debt, and shall then become a lien on the real estate of such judgment debtor, as in other cases in which execution may issue. Any surplus will be paid to the person entitled to it. If the debt be not due at one time, so soon as sufficient of the property has been sold to pay the amount due, with costs, the sale shall cease, and afterwards, as often as more becomes due for principal or interest, the court, on motion, may order more to be sold. If the property cannot thus be sold with- out injury to interested parties, the whole may be ordered sold in the first instance, and the entire debt and costs paid, making a proper rebate for interest. A clause may be in- serted in the mortgage allowing the sheriff of the county in which the property, or any portion thereof, is situated, to execute a power of sale therein granted to the mortgagee, in which case the sheriff may advertise and sell the property as provided, and the mortgagee or his representative or his assigns may in good faith purchase the property so sold, or any part thereof.^ § 1109. Nebraska. — After default, and if no suit is insti- tuted at law to recover the debt, or if begun, has been with- drawn, and the mortgage has been duly recorded, such mortgage may be foreclosed. Notice that such mortgage will be foreclosed, by sale of the property or some part thereof, shall be given as follows : By advertisement pub- lished in some newspaper printed in the county in which such sale is to take place, or in case no newspapers are printed therein, by posting up notices _in at least five public places in said county, two of which shall be in the precinct where the mortgaged property is to be offered for sale, and such notice shall be given at least twenty days prior to the day of salCi Such notice shall contain the name of the 'Code, I? 346-348; Act of February 19th, 1881. 700 STATUTORY FOKECLOSUEE AND REDEMPTION. mortgagor and mortgagee, and the assignee of the mortgage, if any, the amount claimed to be due, a description of prop- erty conforming, substantially, with that contained in the mortgage, the time and place of sale. Such sale may be pbstponed from time to time, by insert- ing a notice of such postponement, as soon as practicable, in the newspaper in which the original advertisement was pub- lished, and continuing such publication until the time to which the sale shall be postponed ; or in case no newspaper is published in the county in which such sale is to be had, by posting a notice of such adjournment in some conspicu- ous place, at the place designated in the original notice posted for the sale to be had. Such sale shall be at public auction in the county where the mortgage was first recorded, or in any county where the property may have been removed by consent of parties and in which the mortgage was duly recorded, and in view of said property. The mortgagee may fairly and in good faith purchase any of the mortgaged property at such sale. When a mortgage shall have been foreclosed as herein provided, all rights of equity of redemption which the mortgagor may or might have had shall be and become extinguished.* § 1110. Nevada. — In action to recover the mortgage debt, judgment shall be rendered for the amount found due the mortgagee, and the court shall have power, by its decree or judgment, to order a sale of the .property, or such part thereof as may be necessary, and the application of the pro- ceeds of the sale to the payment of the costs and expenses of the sale, the costs of the suit and the amount due to the plaintiff. If it shall appear from the sheriff's return that there is a deficiency, a judgment shall be docketed for such balance against the mortgagor personally liable for the debt, and shall be a lien upon the real estate of the judgment debtor, and an execution may thereupon be issued by the ' Gen. Stat. ch. 46, S? 1-8. NEW HAMPSHIRE. ' 701 clerk of the court, in like manner and form as upon other judgments, to collect such balance. If there be a surplus it shall be paid to the person entitled to it, and in the mean- time may be deposited in court. If the debt is not all due, so soon as sufficient of property has been sold to satisfy the amount due, the sale shall cease ; and afterwards, as often as more becomes due for principal or interest, the court may, on motion, order more to be sold. If the property cannot be thus sold without injury to the parties, the whole may be ordered sold in the first instance, and the entire debt and costs paid, a proper rebate for inter- est being allowed.^ § 1111. New Hampshire. — After condition broken the mortgagor may redeem the property by paying or tendering to the mortgagee the amount due on such mortgage, with all reasonable expenses, at any time before a sale thereof, as provided by statute. The mortgagee may, at any time after thirty days from the time of default, sell the mortgaged property or any part thereof at auction, notice of the time, place and purposes of such sale being posted at two or more public places in the town in which such sale is to be, four days, at least, prior thereto. The mortgagee shall notify the mortgagor of the time and place of sale, either by notice in writing delivered to the mortgagor, or, if a corporation, to the person on whom legal process may be served, or left at his abode, if within the town, at least four days previous to the sale. If the mort- gagor does not reside in the town, such notice sent by mail shall be sufficient. The mortgagee may be a purchaser at such sale, and the proceeds of such sale shall be applied by him to the pay- ment of the demand secured by such mortgage, and the ex- penses of keeping and sale ; and the residue shall be paid to the mortgagor on demand.^ ' Com. Laws, || 1309-1311. 'Gen. Stat. ch. 187, |? 18-21. 702 STATUTORY FORECLOSURE AND REDEMPTION. Under the statute the mortgagee is liable in case to the mortgagor for selling against the latter's objection, before the expiration of the thirty days. Judge Smith says that while the mortgagee's possession may be lawful, he cannot sell the property except by consent of the mortgagor, until thirty days from the time of condition: broken, as the mortgagor has the right, during the thirty days after the note matured, to redeem. " This right would be defeated if the mortgagee could, in the meantime, sell the property ; or if not defeated, and if the mortgagor could pursue and recover it from the purchasers, he could not be subjected to the trouble, expense and vexation of following it in the hands of perhaps widely- scattered claimants. As the sale of the defendant was pre- mature, she is liable to him in damages, under the count in case. The count in trover is not sustained."^ § 1112. New Jersey. — The foreclosure of chattel mort- gages is under the general jurisdiction of the Court of Chancery ; and the proceedings are the same as those had for the foreclosure of mortgages of real estate. In fore- closure of a niortgage which may relate to real or personal property, all persons claiming an interest in any incumbered property, by an instrument which should be recorded, but fail to thus record, shall be bound by the proceedings in such suit. If the instrument be recorded, then the party holding it may cause himself to be made a party to such suit, by petition. The petition must set forth, in each case, the instrument at length, and the title and interest of such party, in such a manner as to show that he has an interest in the subject-matter, and is a proper party in the suit. Or a chattel mortgage, after breach of condition, may be, and usually is, foreclosed by a sale of the mortgaged property. Such sale must be at public auction, and shall be advertised and conducted in the same manner as sales of personal property under execution. The mortgagee is not entitled to more than the amount of his mortgage debt and costs, • Adams v. Eice, 18 At. Kep. 652. NORTH CAEOLIIfA. 703 and the surplus, if any, of chattels or proceeds thereof, remaining after satisfaction of such debt and costs, must be given to the mortgagor.^ § 1113. New Mexico. — After default the mortgagee may proceed to sell the mortgaged property, or so much thereof as shall be necessary to satisfy the mortgage and costs of sale, having first given notice of the time and place of sale, by wri<;ten or printed handbills, posted up in at least four public places in the township in which the property is to be sold, at least ten days previous to the day of the sale. If the mortgagor shall have obtained possession of the property either before or after condition broken, the mortgagee, or any subsequent mortgagee, may demand in writing a sale of the property. In such case the mortgagee shall proceed to sell the property, having first given the notice as provided. If, after satisfying the mortgage and costs of sale, there shall be any surplus remaining, the same shall be paid to any sub- sequent mortgagee entitled thereto 'or to the mortgagor or his assignee.^ § 1114. New York. — Chattel mortgages are usually fore- closed by the mortgagee taking possession after breach of condition and selling the same according to the agreement of the parties, after giving due notice thereof, and such sale is binding. The mortgagee may sell the property, after due notice, at public sale, without suit, although the mortgage contains no power of sale ; but if the mortgagee desires to recover any deficiency that may be after applying the pro- ceeds of the sale, he must then proceed in equity.^ § 1115. North Carolina. — In foreclosing mortgages the court may adjudge and direct the payment by the mortgagor of any residue of the mortgage debt that may remain un- satisfied after sale of the mortgaged premises, in cases in 'Rev. Stat. p. 118, § 78; Rev. Stat, and Sup. Rev. Stat. tit. "Mortgages." ' Gen. Laws, p. 65. 'Dane v. Mallory, 16 Barb. 46; Talman v. Smith, 89 Barb. (N. Y.) 390. 704 8TATUTOKY FORECLOSUKE AND REDEMPTION. which the mortgagor shall be personally liable for the debt secured by such mortgage.^ A debt not exceeding $300 may be secured by a deed of trust of personal property containing a power to sell said property, or so much thereof as may be necessary, by public auction, for cash, first giving twenty days' notice at three public places; the mortgagee must apply the proceeds of such sale to the discharge of said debt and interest on the same, and pay the surplus to the mortgagor.^ § 1115a. North Dakota. — A mortgagee may foreclose the mortgagor's right of redemption by a sale of the property, made in the manner and upon the notice prescribed for en- forcing a pledge. Before property pledged can be sold, the pledgee must demand performance of the debtor, if he can be found. The pledgee must give actual notice to the pledgor of the time and place at which the property pledged will be sold, at such a reasonable time before sale as will enable the pledgor to attend. The sale by the pledgee of the property must be made by public auction, in the manner and upon the notice to the public usual at the place of sale, in respect of auction sales of similar property, and must be for the highest obtainable price. A pledgee cannot sell any evidence of debt pledged to him, except the obligations of governments, states or corporations ; but he may collect the same when due. A pledgee may foreclose the right of redemption by judi- cial sale under the directions of a competent court, and may be authorized by the court to purchase at the sale.^ A chattel mortgage may be foreclosed by public sale of the property, on ten days' public notice, or by action in the District Court ; and in a justice's court in cases where the amount of lien claimed is less than $100.* In foreclosure by statute, it is provided the notice must be 'Bat. Eev. oh. 17, ? 126. 'Bat. Rev. oh. 35, ??31-33. "Civil Code, §1743. * Civil Code, ?? 1742-1755. OREGON. 705 published in a newspaper one week before sale, unless pub- lication be waived, for sales at particular places on Satur- days, and for report of sale to be made in ten days and filed with the register of deeds.' The mortgagee or his assignee may be a purchaser at the sale.^ A mortgagee who takes possession of the mortgaged prop- erty and sells it at private sale loses his lien, but the mort- gage debt is not thereby released. One claiming under a sale known by him to be private, cannot maintain a claim to the possession thereof as against the mortgagor's lessee under the lease made subsequently to the mortgage.^ § 1116. Ohio. — Courts of Chancery have general jurisdic- tion of mortgage foreclosures. The nature of the suit is not that of a proceeding in rem, but in personam; and the court of equity has full authority acting upon the parties, to deal and adjudicate in respect to the rights of the parties in the property, without regard to where the property itself is located, as the ends of justice may require.* § 1116a. Oklahoma Territory. — Chattel mortgages are gen- erally made with a power of sale in the mortgagee. After breach of condition the ihortgagee may foreclose the mort- gage by complying with the terms, and is not obliged to resort to the courts.* § 1117. Oregon. — Mortgages are foreclosed by action. The decree may be enforced by an execution, as an ordinary decree for the recovery of money, except when a decree of foreclosure and sale is given, an execution may issue thereon against the property adjudged to be sold. When the decree is in favor of dijQferent persons, not united in ' Act of March 8th, 1889. ' Act of March 13th, 1885. 'Everett v. Buchanan, 2 Dak. 249. * Means v. Worthington, 22 Ohio St. 622. *Gen. Laws, tit. "Mortgages." 2u 706 STATUTORY FORECLOSTJEE ANI> REDEMPTION. interest, it shall be deemed a separate decree as to sucli per- sons, and may be enforced accordingly.' Whenever, in any mortgage of goods and chattels, the parties to such mortgage shall provide the manner in which such mortgage may be foreclosed, such mortgage, upon breach of condition, may be foreclosed in the manner therein provided, and not otherwise. If no manner is stipulated, then, in case the consideration of such mortgage shall not exceed f500, the same may be foreclosed, and the property sold by the sheriff, or any constable of the county in which such mortgage has been filed, upon the written request of the mortgagee, upon such notice, and in the manner pro- vided by law for the sale of personal property upon execu- tion ; and if the consideration shall exceed the sum of $500, the same may be foreclosed by an action at law in the Cir- cuit Court of the county in which such mortgage may have been filed. Any surplus shall be deposited with the clerk of the court, for the mortgagor.^ § 1118. Pennsylvania. — After default, it shall be lawful for the mortgagee, after having given the mortgagor thirty days' notice, either personally or by public advertisement, inserted four times, at intervals of one week each, in some daily newspaper, if any, and if not, in a weekly paper pub- lished in the county wherein the mortgage is recorded, to cause the said chattels to be sold at public auction. Any surplus shall be paid to the mortgagor. The mortgagor, after default, may redeem at any time before the property is sold, by the payment of the debt and costs.* § 1119. Rhode Island. — After default the mortgagor has sixty days to redeem, unless the property shall in the mean- time have been sold in pursuance of the contract between, the parties. The person entitled to redeem the property shall pay or ' Gen. Laws, pp. 196, 197. ' Hill's Code, ? 3838. ' Purdon's Dig. p. 2005, ii 14, 16. .SOUTH DAKOTA. 707 tender to the mortgagee the sum due, with all reasonable charges. If the property then is not forthwith restored, the person entitled to redeem may recover it in an action of replevin, or may recover such damages as he may have sus- tained, in any proper action. Any person entitled to foreclose the equity of redemption in personal property, may prefer a bill to foreclose the same to the Supreme Court sitting in the county in which the mortgagor may reside, if in the State, and if not, then in any county in this State, which bill may be heard, tried and determined by said court, according to the usages in chan- cery and the principles of equity. At any sale at public auction the mortgagee may purchase the property, provided that noticcvin writing of the mort- gagee's intention to purchase shall be given to the mort- gagor, or left at his last and usual place of abode, twenty days prior to the time of sale at which he proposes to pur- chase as mortgagee, and the proper evidence that such notice has been given shall be in the possession of the auctioneer at the time the sale takes place; or that such mortgagee shall in his public advertisement of sale give notice that it is his intention to bid upon such property as advertised for sale. Foreclosure is usually by sale under power in the mortgage.^ § 1120. South Carolina. — Mortgages may be foreclosed by suit in the nature of a suit in equity. When mortgaged per- sonal property is sold under power for the purpose of satis- fying the debt secured, the mortgagee shall advertise the same for fifteen days, unless the person making such mort- gage shall consent to a sale in some other way, or on some other notice, such consent to be expressed in writing." § 1120a. South Dakota. — A chattel mortgage may be fore- closed by public sale of the property, on ten days' public notice, or by action in the District Court, and in the justice's 'Pub. Stat. ch. 176. • Gen. Stat. ?§ 2346-2348. 708 STATUTORY FOKECLOSTJBE AND »BEDEMPTION. court in cases where tlie amount of lien claimed is less than Foreclosure not by action shall be void unless made in accordance with the statute, which provides for publication in a newspaper one week before sale, unless waived, for sales at public places on Saturdays, and for report of sale to be made in ten days and filed with the register of deeds.* The mortgagee or his assignee may be a purchaser- at the .Hle.^ § 1121. Texas. — Foreclosure is by suit, and the mortgagee may have judgment to recover his debt, damages and costs, and an order of sale shall issue to the sheriff or any consta- ble of the county where such property may be, directing him to take and sell, as under execution, in satisfaction of the judgment. If the property is insufficient to satisfy the debt, the sheriff can make the balance due out of any other prop- erty of the mortgagor, as in case of ordinary executions. Justices of the peace have jurisdiction to foreclose mort- gages and enforce liens on personal property, when the amount is $200 or less, exclusive of interest.* In a. suit to foreclose a chattel mdrtgage a certified copy thereof is admissible in evidence, as against the single objec- tion that it is " a copy," where it appears that the original is filed in another' county and cannot be withdrawn, though the statute^ regulating the registration of chattel mortgages provides that a copy of such instrument, certified by the clerk, shall be received in evidence of the fact that it was received and filed according to the clerk's indorsement, " but of no other facts." " § 1122. Utah. — In an action to recover for a debt secured ' Civil Code, ?§ 1742-1755. 'Act of March 8th, 1889. "Act of March 13th, 1885. « Kev. Stat. art. 1340. ^Sayles' Stat. art. 3190b, i 8. "Grounds D. Ingram, 75 Tex. 509. The equity of redemption continues until the sale; then the redemptioik is extinguished. VEEMONT. 709 by a chattel mortgage, judgment shall be rendered for the amount due the mortgagee, and the court may direct a sale of the property, or such, part of it a^ may be necessary, and the application of the proceeds to the payment of the costs and expenses and other legal costs, and the amount due the mortgagee. If it shall appear from the return of the mar- shal or the sheriff of the county that there is a deficiency of such proceeds, and a balance still due the mortgagee, the judgment shall be docketed, and become a lien upon the real estate of the mortgagor, and an execution may issue thereon in like manner as upon other judgments. Any surplus shall be paid to the person entitled to it. If the debt is not all due, so soon as sufficient of the property has been sold to pay the amount due, with costs, the sale shall cease, and afterwards, as often as more becomes due for principal or interest, the court may, on motion, order more to be sold. But if the property cannot be sold in portions, without injury to the parties, the whole may be ordered to be sold in the first instance, and the entire debt and costs paid, there being a rebate of interest where such rebate is proper. It is law- ful to insert the usual clauses of trust deeds, with power of sale, and without the right of redemption, on such notice and advertisement, and in such manner as is provided for sale of personal property on execution, in trustee or in sheriff of county ,wherein the property is situate ; and at any sale made under the power of trustee or sheriff, the mortgagee, his representatives or assigns, may, in good faith, purchase all or any part of the property sold.^ § 1123. Vermont. — Upon default the mortgagor, or a per- son holding a subsequent mortgage, may redeem the same by paying or tendering to the mortgagee the amount due on such mortgage, with all reasonable charges, at any time before the sale thereof, or foreclosure and time of redemption expired. The mortgagee may, at any time after thirty days from 'Com. Laws, ?? 1471-1473; Laws of 1884, pp. 28-32. 710 STATUTOEY FOEECLOSXIEE AND EEDEMPTION. the time of condition broken, cause the mortgaged property, or any part thereof, to be sold at public auction by some public ofl&cer at some public place in the town where the mortgagor resides or where his property it situate, notice of the time, place and purpose of such sale being posted at two or more public places in such town at least ten days prior thereto. The mortgagee shall notify the mortgagor, and persons holding subsequent mortgages, of the time and place of sale, either by notice in writing delivered to him or left at his abode, if within the town, or sent by mail if he does not reside in such town, at least ten days previous to the sale. The pro- ceeds shall be applied to the payment of the debt and costs, and the residue, if any, shall be paid to the persons holding subsequent mortgages, in their order, which shall be applied to liquidate the claims secured by such mortgages, and if there be no subsequent mortgage, then to the mortgagor or persons holding under him, on demand.' The statute'^ provides that the mortgagee may, after thirty days from the time of condition broken, " cause the mort- gaged property, or part thereof, to be sold," &c. Under this clause he may elect to sell it all. He cannot be re- stricted by the amount of the actual debt. The title to the whole is in him, and he must be left free to foreclose the mortgagor's equity in the whole in the method provided by law. The mortgagor's rights are suflBciently protected by the provision that the balance of the proceeds of the sale, after satisfying the mortgage debt, with costs and expenses, and subsequent mortgages, if there be any, shall be paid over to him on demand.^ § 1124. Washington. — Chattel mortgages, after default, may be foreclosed by notice and sale, or they may be fore- closed by action in the District Court having jurisdiction in the county in which the property is situated. The notice must contain a full description of the property, with time 'Rev. Laws, ?U977-1879. •Kev.Laws, J1977. 'Ingalls V. Vance, 61 Vt. 582. WISCONSIN. ' 711 and place of sale, a statement of the amount due, and must be signed by the mortgagee or attorney. Such notice shall be placed in the hands of the sheriff or other proper officer, and shall be personally served in the same manner as is pro- vided by law for the service of a summons ; provided, that if the mortgagor cannot be found in the county when the mortgage is being foreclosed, it shall not be necessary to advertise the- notice or affidavit in a newspaper, but the general publication shall be sufficient, as follows : After notice has been served upon the mortgagor, it must be pub- lished in the same manner, and for the same length of time, as required in cases of the sale of like property on execution, and the sale shall be conducted in the same manner. If any balance of the purchase-price remains it shall be disposed of in the same manner as surplus proceeds of sales are on execution. Where the debt is not due, and the mortgagee has reason- able cause to believe that the mortgaged property will be ' destroyed, lost or removed, he shall have the right to an immediate action in the proper court for the recovery of his debt, and the court may make any order it may deem fit, to secure said property so as to make it available for the satis- faction of the debt.' § 1125. Wisconsin. — Upon taking possession by the mort- gagee, the mortgagor is divested of all interest in the prop- erty at law ; he still has an equity of redemption which a court of equity will protect and foreclose.^ There can be no sale of any personal property taken by virtue of a chattel mortgage, except by the consent of the mortgagor, before the expiration of five days from the time when the property was actully taken.' But a mortgagor may waive the benefit of the statute, and effectually does so by consenting in writing to the sale of the property by the mortgagee " at once, without putting up any notices, or de- ' Code, ? 1986. 'Nichols V. Webster, 1 Chand. 203; Flanders v. Thomas, 12 Wis. 410. 'Laws of 1887, ch. 294. 712 STATUTORY FORECLOSUBE AND REDEMPTION. laying the sale of said property for five days, or any length of time." ^ § 1126. Wyoming. — A chattel mortgage containing a power of sale may be foreclosed without resorting to court. Notice that such mortgage will be foreclosed by a sale of the mortgaged property, or some proof thereof, shall be given by an advertisement published in some weekly newspaper published in the county in which the sale is to take place, for three times in three consecutive issues of such weekly newspaper ; in case no weekly newspaper is published in said county, then by posting notices in at least three public places in said county, one of which shall be at the place designated for the sale to take place, at least three weeks prior to the day of sale. The notice must state the date of the mortgage and where recorded, the name of the mort- gagee and the mortgagor, the amount claimed to be due thereon, a description of the mortgaged property, conform- ing substantially with that contained in the mortgage, and the time and place of sale. Such sale shall be at public auction in the county where the mortgage was first recorded, or in any county where the property may have been removed by consent of the parties, and in which the mortgage was duly recorded, and in view of said property. The mortgagee may fairly and in good faith purchase any of the mortgaged property offered for sale. Such foreclosure will extinguish the equity of redemption.'' 'Stevens v. Breen, 75 Wis. 595. • The court says that the mortgagor can waive the benefit of the statute, and the sale can then be made at once. 'Kev. Stat. U 70-90. AT COMMON LAW. 718 CHAPTER XXL REDEMPTION. ARTICI/E I. MORTGAGOK's RIGHT TO REDEEM. 1127. At Commoa Law. 1128. In Equity. 1129. Waiver of. Eight to Eedeem. 1130. Time to Redeem. 1131. Who May Redeem. § 1127. At Common Law. — At common law a mortgage, not a pledge, of personal property, transferred tlie property absolutely to the mortgagee upon breach of the condition. No process of foreclosure was necessary, and noL right of redemption remained. Still, some authorities held that the mortgagor might maintain a bill in equity to redeem within a reasonable time after forfeiture, but this rule was neither clearly settled nor generally admitted.^ The common-law doctrine held that the mortgagee, after forfeiture, had the absolute title, and may sell or otherwise dispose of the mortgaged property.^ The mortgage is held to be a grant in prcesenti; subject to be defeated on payment of the money intended to be secured. The legal title to those chattels passes by the mortgage, and vests in the mortgagee. Unquestionably, after forfeiture, the mortgagee has the legal title, and is, in law, the absolute owner of the chattels. It is difficult to conceive of a title of this kind with restrictions to prevent the mortgagee, after forfeiture, to transfer it to another.* ' Taber v. Hamlin, 97 Mass. 489. 'Tucker v. Wilson, 1 P. Wms. 261; Lockwood v. Ewer, 2 Atk. 303; Westerdell v. Dale, 7 Term R. 306 ; Ryall v. Rowles, 1 Ves. 365. ' Robinson v. Campbell, 8 Mo. 366 ; Hall v. Snowhill, 2 Gr. (N. J.) 18 ; Holmes v. Hall, 3 Dev. (N. Car.) 98 ; Langdon v. Buel, 9 Wend. (N. Y.) 83; 714 REDEMPTION. § 1128. In Equity. — When the mortgage is regarded as a conditional sale, if the property is not redeemed at the day the debt is due, it is forfeited.^ But this rule does not apply to cases of delivery of prop- erty in the way of security, or to cases ■where the delivery is made expressly as collateral security, and in no respect as a sale. From the earliest times there seemed to be a recog- nized distinction between such mortgages in the way of conditional sales and mortgages in the way of security or pledge. Under the equitable doctrine, Courts of Chancery have jurisdiction to decree the redemption of chattels mortgaged, as well as real estate. And although after condition broken the legal title to the property vests in the mortgagee, the mortgagor has the right to redeem by the payment or tender of payment of the amount the mortgage was given to secure, and the • mortgagor of personal property, after condition broken, has an equity of redemption which may be asserted, if he brings his bill to redeem within a reasonable time.* Though the redemption of mortgaged chattels originally be- longed to the jurisdiction of the chancery court, it is not divested of this jurisdiction, even though it may now be ex- ercised by courts of law.* Judge Currey says : " The cases which hold that at law the title of the mortgagee to the chattels mortgaged becomes absolute upon the breach of the stipulation to pay at a par- ticular day, recognize that the mortgagor has an equitable Brown v. Bement, 8 Johns. (N. Y.) 96 ; Ackley v. Finch, 7 Cow. {N. Y.) 292 ; Case V. Boughton, 11 Wend. (N. Y.) 109; Smith v. Acker, 23 Wend. (N. Y.) 667 ; Capper v. Dickinson, 1 Bolle 315. '2 Story's Eq. ?§ 1014, 1015, 1030! 1031; Hart v. Ten Evck, 2 Johns. (N. Y.) Ch. 62; Kemp v. Westbrook, 1 Ves. 278; Slade v. Rigg, 3 Hare 35. 'Davis V. Hubbard, 38 Ala. 185; Flanders v. Chamberlain, 24 Mich. 305; Smith V. Coolbaugh, 19 Wis. 106 ; Flanders v. Barstow, 18 Me. 357 ; Wilson V. Brannan, 27 Cal. 258; Heyland v. Badger, 85 Cal. 404 ; West v. Crary, 47 N. Y. 423; Hinman v. Judson, 13 Barb. (N. Y.) 628; Patchin v. Pierce, 12 Wend. (N. Y.) 61 ; Dupuy v. Gibson, 36 111. 197; Hammers v. Dole, 61 111. 807 ; Wylder v. Crane, 53 111. 490 ; Waite v. Dennison, 51 111. 319; Blodgett V. Blodgett, 48 Vt. 32; Foster v. Ames, 1 Low. D. 0. 313 ; Stoddard v. Deni- Bon, 88 How. Pr. (N. Y.) 296; Pratt v. Stiles, 17 How. Pr. (N. Y.) 211; Charter v. Stevens, 8 Den. (N. Y.) 33 ; Saxton v. Williams, 15 Wis. 292. " m EQUITY. 715 right or interest in the property of which he may avail him- self by paying the debt due and thus redeeming the property,- and as long as the right of redemption remains in the mort- gagor, it may be said, viewing the subject from an equitable standpoint, that the title of the mortgagee is not in every instance absolute. In mortgages of personal property there exists, after condition broken, as in mortgages of land, an equity of redemption, which may be asserted by the mort- gagor, if he brings his suit to redeem within a reasonable time."^ The mortgagee has then two remedies, either of which he may pursue at his election. He may resort to a court of equity to compel a redemption or to foreclose the mortgagor's right to redeem, or he may obtain the same object by a fair public sale of the property after due notice to the mortgagor.'' The mortgagor's right of redemption remains until fore- closed by judicial sentence, in the one case, or sale after due notice in the other; and this right may be enforced in equity.^ No necessity exists, in case of foreclosing a chattel mort- gage, to resort to a court of equity. The mortgagee, upon due notice, may sell the personal property, as he could under the civil law, and the title, if the sale be bona fide made, will vest absolutely in the vendee. And it makes no diflference whether the personal property mortgaged consists of goods or of stock, or of personal annuities.'' Judge Bailey says that the mortgagee may treat the prop- erty as his own, subject only to the mortgagor's right of redemption in equity, and his election to hold the property will be treated as a satisfaction of his debt, at least to the extent of the value of the property at the time he took it into possession. If he intends to sell or foreclose, he must 'Wilson V. Brannan, 27 Cal. 258. See, also, 2 Story's Eq. ? 1031. ' Charter v. Stevens, 3 Denio (N. Y.) 33. 'Wilson v.'Brannan, 27 Cal. 258. See, also, Hammond v. Morgan, 101 N. Y. 179; Learned v. Tillotson, 97 N. Y. 1; Carroll v. Deimel, 95 N. Y. 252,- Colie V. Tiflft, 47 N. Y. 119 ; Chapin v. Thompson, 58 How. Pr. (N. Y.) 46. *Patohin v. Fierce, 12 Wend. (N. Y.) 61 ; Story's Eq. ?2 1008, 1009. 716 REDEMPTION. exercise his right to do so withia a reasonable time, or he will be chargeable with the full value/ § 1129. Waiver of Right to Redeem. — A mortgagor not having been barred from the equity of redemption by fore- closure or sale, has the right to redeem, unless he has lost it by. lapsei of time. While it is true that the right to redeem per- sonal property which has been mortgaged may be lost by lapse of time, it is also true that there is no rule universally applicable stating the time within which it must be asserted. And the mortgagor cannot debar himself of his equitable right to redeem by an agreement in the mortgage to waive this claim on forfeiture. Judge Royce, delivering the opinion of the court, said : " While it is true that the right to redeem personal property which has been mortgaged may be lost by lapse of time, it is at the same time true that there is no rule of universal application prescribing the time within which the right must be barred. The party must insist upon his right within a reasonable time, and what is a reasonable time must be determined from the evidence." Thus, a mortgagor not having been barred of his equity of redemption under a mortgage, by foreclosure or sale, and having filed his bill within a reasonable time, has still a right to redeem by paying the agreed sum secured, less the value of the use of the property taken by the mortgagee while in his possession, and the value of any part thereof by him sold or destroyed, and that it is not necessary, in Vermont, for the mortgagor, before filing his bill to redeem,. to tender the sum due.^ The fact that the possession of "mortgaged personal prop- erty has been surrendered to the mortgagee by the mort- gagor after condition broken, will not prevent a sheriff hold- ing executions in favor of other creditors of. the mortgagor from levying upon and selling the equity of redemption until the mortgagee has, by legal notice and sale of the ' Whittemore v. Fisher, 132 111. 243. * Lavigne v. Naramore, 52 Vt. 267. See, also, Bunacleugh v, Poolman, 3 Daly (N. Y.) 236. • WHO MAY EEDEEM. 717 goods, or by judicial foreclosure and sale, cut off the equity of redemption. Thus, where it is provided in a chattel mortgage that, in default of payment of the mortgage debt, the mortgagor shall deliver the property to the mortgagee, such delivery will not vest the absolute ownership of the property in the mortgagee or free the property from the equity of re- demption.^ § 1130. Time to Redeem.^ — Some of the States provide within what time the right to redeem shall be allowed the mortgagor.^ But where no such time is designated, the mortgagor, when he has such right, must redeem within a reasonable time.' That reasonable time may be well deter- mined by analogy to the statute of limitations applicable to actions at law for the recovery of personal property. Equity will not entertain a bill for the redemption after the expir- ation of the time which the statute of limitations provides.* § 1131. Who May Redeem. — Any party who has a sub- stantial interest in the mortgaged property may redeem. Thus, a junior mortgagee has a right to redeem before sale under the prior mortgage.^ The right of the grantee in the second mortgage to redeem the property, continues until foreclosure of the first mortgage, unless defeated by the property being taken and sold by a third party. The grantee may maintain an action of trover against the officer who, before the title of th« first mortgagee becomes absolute, attaches and sells the property mortgaged, such grantee being by the act of' the officer deprived of his right of redemption.* ' Landers v. George, 49 Ind. 309, opinion by Downey, J. See, also, State V. Sandlin, 44 Ind. 504: 'Winchester v. Ball, 54 Me. 558 ; Clapp v. Glidden, 39 Me. 448. '2 Story's Eq. J 1031. * Stoddard v. DeniSon, 38 How. Pr. (N. Y.) 296; Hatfield v. Montgomery, 2 Port. (Ala.) 58 ; Byrd v. McDaniel, 33 Ala. 18. See, also, Hyde v. Dalla- way, 2 Hare 528 ; Edsell v. Buchanan, 2 Ves., Jr. 83 ; Eeeve v. Hicks, 2 Sim. & Stu. 403 ; Hansard v. Hardy, 18 Ves. 455; Lavigne v. Naramore, 52 Vt, 267 ; Bartlett v. Thynes, 2 Hill (S. Car.) Eq. 171. « Smith V. Coolbaugh, 21 Wis. 427. * Treat v. Gilmore, 49 Me. 34. 718 EEDEMPTIOW. ' An attaching creditor may redeem so soon as his attach- ment becomes a lien ; the same rule applies to an execution creditor.' ARTICLE II. — KIG^T OF ACTION. 1132. Relief to Mortgagor. 1133. Massachusetts Rule. 1131. Requisites of a Bill. 1135. New York Rule. 1136. When Mortgage is Open to Redemption. § 1132. Relief to Mortgagor. — If the mortgagee refuses to render an account, without which the mortgagor cannot ascertain the amount so as to make payment or tender for the redemption of the property, relief will be afforded to him in equity.* Relief in equity can be granted ex csquo et bono only upon payment or tender of payment of the whole mortgage debt.' If the mortgagee has disposed of the property, a court of equity will give complete relief by decreeing damages.* If the mortgaged property has been disposed of, so that it cannot be redelivered, the court may decree to him the amount or value of his interest in the property.* But when mortgaged property is sold, the mortgagor cannot claim the benefit of the exemption laws when the mortgage is foreclosed," nor can his widow make such a claim.' If part of his property is mortgaged he can claim •Scott V.Henry, 13 Ark. 112; Lucking! u. Wesson, 25 Mich. 443; Hin- man v. Judson, 13 Barb. (N. Y.) 629. "Boston & F. I. W. V. Montague, 108 Mass. 248. "Stoddard v. Denison, 38 How. Pr. (N. Y.) 296. •Bragelman v. Dane, 69 N. Y. 69; Stoddard v. Denison, 38 How. Pr. (N. Y.) 296. 'Blodgett V. Blodgett, 48 Vt. 32. See, also, Metzler v. James, 12 Colo. 322. •Conway v. Wilson, 44 N. J. Eq. 457; Patterson ti. Taylor, 15 Fla. 336; Flanders v. Wells, 61 Ga. 196; Love v. Blair, 72 Ind. 281; Fejavary v. Broesch, 52 Iowa 88; Jones v. Scott, 10 Kans. 33; Moxley v. Ragan, 10 Busli (Ky.) 156; Frost v. Shaw, 3 Ohio St. 270; Cronan v. Honor, 10 Heisk. (Tenn.) 533. 'Recker v. Kilgore, 62 Ind. 10. EEQUISITES OP A BILL. 719 that n6t mortgaged, under the exemption laws. Thus, if he has two cows, one of which is mortgaged, he can claim the other as exempt under the law,' provided the mortgage is duly recorded, or gives actual notice of such mortgage, in those States where actual notice is sufficient.^ The mort- gagor can resort to his legal remedies when his exempt prop- erty is seized, and compel the officer to restore it.* The mortgage of exempt chattels does not render them, or the equity of redemption in them, liable to levy and sale.* § 1133. Massachusetts Rule. — A mortgagor in this State cannot maintain a bill in equity for relief, a remedy being provided by statute, unless a case is disclosed where, from the nature of the property mortgaged, the peculiar relations of the parties, or the inability to ascertain the amount of the debt, it is evident that the statutory remedy will not protect the mortgagor's right.* § 1134. Requisites of a Bill. — A bill to redeem must set forth the facts upon which the action is based, showing a right to redeem, alleging the amount due on the day of ma- turity, and that a payment of the amount due was tendered in due season, which was refused, and a prayer for relief by Tedeeming the property. But a bill in equity which sets forth the facts upon which the equitable right to redeem mortgaged chattels, after con- dition broken and possession taken by the mortgagee, defends, and alleges that an amount stated was due on a specified day, and that complainant had offered to pay that amount, although it does not in so many words offer to pay what may be found to be diie upon the mortgage debt, contains all the substantial requisites of a bill to redeem where the question 'Tryon v. Mansir, 2 Allen (Ma^s.) 219 ; Greenleaf v. Sanborn, 44 N. H. 16.- 'McCoy V. Dail, 6 Baxt. (Tenn.) 137. 'Brainard v. Simmons, 67 Iowa 646; Eice v. Nolan, 33 Kans. 28. 'Jones V. Scott, 10 Kans. 33; Collett v. Jones, 2 B. Mon. (Ky.) 19; Buckley v. Elliott, 52 Mich. 1 ; State v. Carroll, 24 Mo. App. 358 ; McGivney V. Childs, 41 Hun (N. Y.) 607. * Gordon v. Clapp, 111 Mass. 22. See, also, Boston & F. I. W. v. Mon- tague, 108 Mass. 248 ; Bushnell v. Avery, 121 Mass. 148. 720 KEDEMPTION. arises upon a hearing upon the evidence and merits without a demurrer.' And a complainant's general prayer for other and further relief must be treated as a prayer to be allowed to redeem, that being the appropriate and only equitable relief, if any, which the case would entitle him to.^ If the tender be not alleged in the bill, then a tender of the amount due must be proved, and that the tender was made before bringing the action.' Judge Horton, of the Kansas Supreme Court, speaking of tender, says : " Some of the courts hold that relief can be granted only to a mortgagor upon payment, or tender of payment, of the whole mortgage debt, and then, although the mortgagee has disposed of the property, a court Will give relief by decreeing damages. But in this State the distinction between courts of equity and courts of law has been abol- ished, and it were useless and unnecessary to tender any payment of the mortgage debt, if the plaintiff has unlawfully, fraudulently and unfairly converted to his own use the property of the defendant of a much greater value than the debt, and, subsequently to such conversion, has disposed of large portions of the property, so as to disable him from returning the same, or allowing any redemption thereof."* So, a mortgagee in possession, who sells part of the mort- gaged property to pay the debt, and then denies the debtor's title to the rest, is liable in trover, without either tender or demand.^ § 1135. New York Rule. — Before a suit can be maintained to redeem, the mortgagor must pay or tender the "whole amount of the debt due, and in the bill all'ege payment or tender, which must be proved as averred, as the basis of the 'Flanders v. Chamberlain, 24 Mich. 305. 'Swarz V. Sears, Walker (Mich.) Ch. 170; Barton v. May, 3 Sandf. (N. Y.) Ch. 450; Bartlett v. Fellows, 47 Me. 53. 'Tallon V. Ellison, 3 Nebr. 63; Halstead v. Swartz, 1 T. & C. (N. Y.) 559; and see Adams v. Nat. Bank, 4 Nebr. 370. * Wygal V. Bigelow, 42 Kans. 477. »Iler V. Baker (Mich.), 46 N, W. Eep. 377. WHEN MORTGAGE IS OPEN TO KEDEMPTION. 721 remedy;^ and the tender, if made after law day, must be kept good and paid into court at the trial.^ § 1136. When Mortgage is Open to Redemption. — If a mortgagee has a decree of foreclosure and afterwards brings an action of debt on the bond given at the same time for the payment of the money and performance of the covenants in the mortgage, such action opens again the foreclosure and lets in the equity of redemption of the mortgagor.^ The Rhode Island Supreme Court decides that the mort- gagee, by suing for the full amount of the debt secured to him by the mortgage, and taking judgment therefor, must be held to have disclaimed the foreclosure, if the mortgage was ever foreclosed, and to have opened the mortgage to re- demption. If the debt, by force of the judgment, subsists as a valid claim for its full amount, and if the debt so sub- sists, the mortgage, which was given only as security for it, must also still subsist and be redeemable. It has been questioned whether an action for the deficiency, when the mortgage was insufficient to satisfy the debt, does not also open the foreclosure, it being assumed as beyond question that an action prosecuted to final judgment for the full amount would have that effect ; and when a mortgagee takes judgment, reviving the judgment in full, it opens the mortgage to redemption. Where the mortgage was given to two mortgagees, and one assigns his claim to the other, the court says : " Whether, if this be so, the mortgage is wholly open to redemption or only proportionately to the debt thereby secured to the de- fendant [the assignee], is an interesting question which has not been discussed at the bar nor considered by the court. At present we only decide that the mortgage, as original security for the debt due the defendant, is open to redemption."* 'Stoddard v. Dennison, 38 How. Pr. (N. Y.) 296; Hall v. Ditson, 55 How. Pr. (N. Y.) 19; Halstead v. Swartz, 46 How. Pr. (N. Y.) 289. 'Noyes v. Wyckoflf, 30 Hun (N. Y.) 466. 'Dashwood v. Blythway, 1 Eq. Oas. Abr. 317. * Clarke v'. Robinson, 15 R. I. 231. 2v 722 KEDEMPTION. AETICLE III. — ACCOUNTING BY MORTGAGEE. 1137. Liability of the Mortgagee to Account After Taking Possession. 1138. Sales of Mortgagee After Taking Possession. 1139. Adjustment After a Pretended Sale. 1140. Life Insurance Policy as Collateral Security. 1141. Mingling Goods. § 1137. Liability of the Mortgagee to Account After Taking- Possession. — A-mortgagee in possession, before the right of redemption is extinguished, is liable to account for the profits of the mortgaged property. The mortgagee of per- sonal property, in possession after condition broken, and while the right of redemption exists, is responsible for dili- gence in the management and preservation of the property, and is liable for ordinary neglect. In this respect his duties and responsibilities are similar to those of a pawnee. If the property be destroyed without fault on his part, while thus holding it as security for his debt, he cannot be hold to account for it. But for the net proceeds of the income or profits, accruing to him before the destruction, he will be accountable.^ Even a pledgor may go into equity, whenever it becomes necessary to have an account.^ Whenever the property in the possession of the mort- gagee, before redemption, is capable of bringing a profit to the mortgagee, it not unfrequently happens that it is neces- sary to go into equity to take an account.' After an accounting has been made, and the sum found due, if the mortgagor fails to pay said sum, the mortgagee may sue for the immediate delivery of the property described 'Covell V. DoUofif, 31 Me. 104; Craft v. Bullard, 1 Sm. & M, (Miss.) Ch. 366 ; Osgood V. Pollard, 17 N. H. 271 ; Potts v. Stiles, 17 How. Pr. (N. Y.) 211; Davis v. Hubbard, 38 Ala. 185; Downing v. Palmateer, 1 Mon. (Ky.) 64. ' Sims V. Canfield, 2 Ala. 555. ' Davis V. Hubbard, 38 Ala. 185 ; Overton t'. Bigelow, 10 Yerg. (Tenn.) 48. LIABILITY OF THE MORTGAGEE. 723 in the chattel mortgage, or for damages for its detention, to the extent of the amount found due.^ Where^ in an action to recover after foreclosure of a chattel mortgage, the mortgagor sets up as a defense that the mortgagee has accepted the mortgaged property in full satisfaction and discharge of the debt, he cannot then assert, as a ground of defeating the action, that the mortgagee had converted the property and forfeited all rights under the mortgage by removing the property out of the county con- trary to the statute relating to foreclosure of chattel mort- gages.^ The mortgagee is not always bound to go into equity to foreclose and to account. The subject being personalty, and the condition of the mortgage broken, he has a legal title and the right to take the property into his own possession and sell it fairly, after proper advertisement according to statute, at public sale, and crediting the net proceeds of the sale on the debt, to recover judgment against the mortgage debtor for the balance.^ In general, a mortgagee is entitled to recover the deficiency which remains after applying to the debt the proceeds of sale, especially in the absence of testimony that the sale was not fairly made and for a good price.* Where the mortgagee has taken possession of the prop- erty, and has treated it as his own, and after selling part of it has turned over the residue to the receiver appointed in a suit to redeem, it is proper to charge him with the value of the property taken, credit him with the value of that part of it turned over to the receiver, and to refuse to credit him with the expenses incurred by him in disposing of the part sold, he selling it as his own and not in compliance with the terms of the mortgage.* ' Gulley V. Copeland, 102 N. Car. 326, opinion by Smith, 0. J. 'National Ex. Bank v. Holman, 31 S. Car. 161. 'Straub v. Screven, 19 S. Car. 449. *Darnall v. Darlington, 28 S. Car. 256. ' Whittemore v. Figher, 132 111. 243, opinion by Bailey, J. 724 KEDEMPTION. After taking possession, lie was at liberty to convert said goods into cash by sale or by formal foreclosure, or fore- closure in equity, and, if found insufficient to pay the amount due him, to resort to the mortgagor for the de- ficiency. But it was his duty to exercise the right of sale or foreclosure within a reasonable time after taking possession, or not at all. The mortgagee was not bound to exercise that right, but could hold the property and treat it as his own, subject only to the mortgagor's right to redeem in equity. The electing to hold the property must be treated as a satisfaction of the debt, at least to the extent ef its value at the time he takes possession after breach of condi- tion by the mortgagor.' After a judgment in favor of the mortgagee for the pos- session of the mortgaged property, unless there be special findings as to his interests, he is liable to account to the mortgagor, and, if more has been received for the property than the amount of the debt,, an action will lie for its recovery.^ § 1138. Sales of Mortgagee After Taking Possession. — When a mortgagee takes possession of a stock of goods and continues the business, making sales and replenishing the stock from time to time by purchase of new goods, such additions become, in equity and as between the parties, part and parcel of the mortgaged stock, to be treated and ac- counted for as such. Or if the mortgagee purchases another stock of goods and intermingles them with the mortgaged stock and makes sales therefrom without keeping any sepa- rate account of such sales, such additional stock also will be treated as a part of the mortgaged goods. Judge Lyon says that in an accounting between the parties in such case, 'Casei). Boughton, 11 Wend. (N. Y.) 106; Stoddard v. Denison, 38 How. Pr. (N. Y.) 296; Freeman v. Freeman, 17 N. J. Eq. 44; In re Haake, 2 Saw. C. 0. 281. * Lathrop v. Cheney (Nebr.), 45 N. W. Rep. 617. An excess could not be recovered as money had and received, if the com- plaint has one count in trover and the other in case, in an action of wrongful conversion. Simpson v, Hinson, 88 Ala. 527. ADJUSTMENT AFTER A PRETENDED SALE. 725 the mortgagee should be credited with the amount of the mortgage debt, with the cost of the goods added, and with the expenses of carrying on the business ; he should be debited with the amount received from the sale- of the goods, whether out of the original stock or the additions thereto. He should be credited with interest on the debt and be debited with interest, from some average or equated time, on the amount which the net receipts from the business reduced the debt. Any amount received from the proceeds of sales by the mortgagor^ of the mortgaged property need not be included in the accounting, because, if the mortgagor re- deems the mortgaged goods, the value of the goods which will then be returned to him will be that amount less than the same would have been had he not sold some of the goods and kept said amount. If the defendant does not redeem and the mortgagee forecloses his mortgage by a sale of the mortga,ged property, should the proceeds fall short of paying the mortgage debt, the deficiency would be increased the same amount, and it would be included in his recovery in an action for such deficiency. Hence, this item does not figure in an action of replevin and counter-claim to redeem, and can be properly omitted from the accounting.^ It is the general rule that, wheire a person in a fiduciary capacity mingles assets beyond identification, he must suffer all the loss and inconvenience of such confusion ; and if the condition of the property is so changed that it cannot be separated, he must pay the value at the time it was taken.' § 1139. Adjustment After a Pretended Sale. — In an action to redeem property under a chattel mortgage, and for an accounting, and to recover for mortgaged property taken by the mortgagee under a pretended sale, it is not necessary that such sale shall be formally set aside before an account- ing is had. The court can adjust and settle the claims of ^Burr V. Dana, 72 Wis. 639. See, also, Metzler v. James, 12 Colo. 322. ^ Mowry v. White, 21 Wis. 421 ; Root ^. Bonnema, 22 Wis. 539 ; Mowry v. Nat. Bank, 54 Wis. 38. 726 REDEMPTION. the interested parties when their transactions are not numer- ous, and do not extend over a long period of time, without compelling the parties to resort to another action. Thus, the court can adjust the equities where a bill has been filed to redeem property under a chattel mortgage, for an accounting, and an injunction against the disposition of the mortgaged property taken possession of by virtue of a sale by the mortgagor to the mortgagee, which sale is alleged to be fraudulent, it not being necessary to set aside the alleged sale before adjustment.' § 1140. Life Insurance Policy as Collateral Security. — While in a technical sense, upon default in payment of a mortgage upon a policy of life insurance, the legal title vests absolutely in the mortgagee, it is subject to the right of the mortgagor to redeem, which right can only be cut off by the mortgagee by taking sonae proceedings, adequate in law for that purpose ; where no such proceedings have been taken, and the mortgagee has, upon the death of the mortgagor, collected the amount of the insurance, whoever has succeeded to the rights of the latter is entitled to the amount collected, less the debt to secure which it was mortgaged, together with premiums and expenses of collection paid by the mortgagee, with interest. To enforce such right, a technical action to redeem is not necessary. The court, per Earl, J., says that the money received by the mortgagee fully paid his debt, and thereafter he had no right whatever to retain any of the balance, except what he had paid for premiums and his expenses. By the dejfisiult of the mortgagor to make payment of his indebtedness, the title of the mortgagee to the policy of insurance did not become absolute. " While in a technical sense the legal title- became then absolutely vested in the defendant, it was subject to the rights of redemption" on the part of the mortgagor, and that right could be cut off by the mortgagee ' Franks v. Jones, 39 Kans. 236. * MINGLING GOODS. 727 only by taking some proceedings adequate in law for that purpose. " The mortgage Joaust be deemed to have been paid by the money received by the defendant upon the policy, and he held the balance for the plaintiff, and became indebted to her therefor. To hold that a technical action to redeem was necessary in such a case would be to sacrifice substance to form, under a system of pleadings where mere forms count for but little."' In such a case an action for money had and received against the mortgagee, is proper,'* and as the complaint demanded a judgment for money, the case was properly triable before a jury, under the New York Code.^ As the relief to which the representative of the mortgagor was entitled was the balance of money due her, she was entitled to no other relief and needed no other. The balance was easily ascertainable, and the " peculiar machinery of an equity court was not needed to ascertain it."* § 1141. Mingling Goods. — Where a mortgagee in posses- sion of the mortgaged merchandise, and without any agree- ment, sells and replaces some of the stock with new goods, which become intermingled with the old, and are indistin- guishable, so that he caniAt show the amount of original stock on hand, a decree in a suit for an account and redemp- tion, charging the mortgagor with all the value of the goods delivered to him, is proper, as in such case an original decree of redemption is impracticable. The mortgagee in possession cannot, by consenting to the sale of the equity of redemption in the property, waive the mortgagor's right to object to its validity.^ But in an action for redemption, as applied to mortgaged property remaining on hand, and capable of ascertainment 1 King V. Van Vleck, 109 N. Y. 363. ' Cope V. Wheeler, 41 N. Y. 303. 'Civil Code of Procedure, § 968. • King V. Van Vleck, 109 N. Y. 363. 6 Metzler v. James, 12 Colo. 322. See Burr v. Dana, 72 Wis. 639. 728 REDEMPTION. and identification, the court has no power or authority to fix a price upon the mortgaged goods, and require the mort- gagee to take them at such a price/ ARTICLE IV. — EXTINGUISHMENT OP RIGHT TO REDEEM. 1142. Foreclosure Extinguishes the Right to Redeem. 1143. Two Debts — Judgment on One. ■" 1144. Effect of Part Payment. § 1142. Foreclosure Extinguishes the Right to Redeem. — After foreclosure of a mortgage, the right to redeem is extinguished.^ And a second mortgagee, on a bill to fore- close, can only sell the equity of redemption of the mort- gagor, unless the first mortgagee is in a condition to fore- close, and consents to the sale of the entire property.^ § 1143. Two Debts — Judgment on One. — After foreclosure of a chattel mortgage given to two persons to secure two distinct debts, one mortgagee assigned his debt to the other, who recovered judgment for the amount of his original debt. It was held that the whole of the mortgaged property was not thereby opened to redemptto|i, but only so much as, ap- portioning it between the two debts, would correspond to the debt for which judgment was taken.* § 1144. Effect of Part Pajnnent. — Acceptance of a part payment of the principal of a note is a waiver of the for- feiture, and the time of redemption commences to run again from the time when the last partial payment is made and accepted. Appleton, C. J., says: "The mortgagee, by receiving this payment, must be regarded as having waived his strict legal ' Bragelman v. Daue, 69 N. Y. 70. = Burtia v. Bradford, 122 Mass. 129. 'Cloud V. Hamilton, 3 Yerg. (Tenn.) 81; Gihon v. Belleville Co., 3 Halst. (N. J.) Ch. 531 ; Potts v. N. J. Arms Co., 2 C. E. Green (N. J.) 518. See Wylder v. Crane, 53 111. 490. •Clark V. Robinson, 15 R. I. 231. EFFECT OF PAET PAYMENT. 729 rights. The rights of the parties were the same as if the payment of the note had been thus extended. * * * The mortgagee, by waiving a forfeiture, is to be in no worse condition than if his note had been due at the date of the partial payment."^ Several acceptances of part payment of the note are so many waivers of the forfeiture.^ The mortgagee may also extend the time by parol agree- ment. Weston, C. J., says : " The plaintiff having failed to pay the first note at the time stipulated was a breach of the condition, if the time had not been enlarged. Being enlarged, the condition was saved until the extended time had run out."^ And the mortgagor may show by parol proof a verbal agreement to extend the period of redemp- tion, and an offer to discharge the mortgage, in pursuance of such agreement.* '.Winchester v. Ball, 54 Me. 558. ^Deming v. Comings, 11 N. H. 474 ; Dexter v. Arnold, 1 Sum. C. C. 109. 'Flanders v. Barstow, 18 Me. 357. 'Deshazo v. Lewis, 5 Stew. & P. (Ala.) 91. INDEX. Reference Is to Sections. ACCEPTANCE of mortgage by mortgagee, 134. by creditor's attorney, 136. previous agreement, 137. of part payment— eflfect, 1144. of payment after forfeiture, 954. ACCESSIONS to unfinished articles by mortgagor in possession, 124. when repairs are included, 125. cuttings from plants and trees, 131. ACCOUNTING, obligation of mortgagee after selling property to make returns, 997, 1023. garnishment of surplus after accounting, 1024. mortgagee's refusal to account — relief of mortgagor, 1132. after taking possession, 1137. of sales after taking possession, 1138. after a special sale, 1139. as to life insurance policies, 1140. mingling of goods by mortgagee, 1141. ACKNOWLEDGMENT, no acknowledgment— effect of, 47, 48. not conforming to statutory provisions, 49. no specified form being given, 50. Missouri rule of, 51. i by notary public using a seal not his own, 52. acknowledgment and filing after property is taken by a receiver, 82. ADDITIONS. (See Repairs.) ADMINISTRATOR, rights of— unrecorded mortgage, 343. taking mortgage to indemnify estate, 344. whom he represents, 345. Ohio doctrine, 346. in case mortgage is void as to creditors, 347. mortgagee becoming administrator of mortgagor's estate, 724. ADMIRALTY. {See Ships and Shipping.) AFFIDAVITS, requisites of and validity, 63, 66, 69, 71, 74, 77. AFTER-ACQUIRED PROPERTY. (See Unplanted Crops.) at common law, 211. between the parties, 212. general rule, 213. verbal agreement, 214. 732 INDEX. Reference 1b to Sections. AFTER-ACQUIRED PROPERTY— Conimuerf. natural increase, 215. the young of female animals, 216. taking possession of property by mortgagee, 237. as to a stock of goods, 288. contrary rule, 239. mortgagor as agent for mortgagee, 240. statutory provisions, 241. substitution of new goods, 242. rule of other courts, 248. potential interests, 244, 245, 246, 247. rule in equity, 248. equitable lien, 249. between the immediate parties, 250. lessor's right to seize crops afterwards grown, 251. notice of lien, 252. perfecting lien by taking possession, 254. novus actus interveniens, 255. in England — prevailing doctrine, 256. weight of authority, 257. AGENT AND PRINCIPAL, absolute sale by agent without authority— e£fect of, 105. mortgagor as agent of mortgagee, 906. rights in general, 105. AGISTERS' LIEN. (See Livery Stable Keepers' and Agisters' Lien.) ALABAMA, statutory provisions — form and execution, 54. instances as to form, 55. attachment of mortgagor's interest, 812. foreclosure, 1068as. registration, 280. sale and removal, 849. removal — instance, 850. ALTERATIONS with consent of parties, 83. without consent of mortgagor, 83. ANIMALS, description of, 161. the young of— when included, 216. APPROPRIATION OF PAYMENTS. (See Payments.) APPURTENANT, what is, 209. ARIZONA TERRITORY, statutory provisions — form and execution, 56. subject-matter, 173. attachment of mortgagor's interest, 813. foreclosure, 1069. registration, 281. ARKANSAS, statutory provisions- subject-matter, 174. attachment of mortgagor's interest, 814. foreclosure, 1070. INDEX. 733 Reference is to Sections. ARKANSAS— Continued. registration, 282. sale and removal, 853. removal — instances, 854. ASSIGNEE, rights of in bankruptcy as against mortgagee, 102. in general — rights of, 348. contrary doctrine, 349. rights of in an assignment, 350. as against an assignee in insolvency, 351. the want of filing mortgage before assignment, 376. cannot divest the lien, 392. when title in the assignee, 594. has standing of mortgagee, 775. receiving lease of mortgaged property, 776. pro tanto, 777, 779. rights of— of mortgage and for benefit of creditors, 778. can protect his interest, 780. Illinois rule as to equities, 782. Pennsylvania rule as to equities, 783. as to non-assignable instruments, 784. right of possession, 786. his right of action, 788. cannot resist foreclosure, 1058. rights of in insolvency as against assignee of mortgage, 789. fraud — creditors' rights, 790. rights of as to indemnity mortgages, 791, 792, 793. of collateral security, 11. ASSIGNMENT, distinguished from a mortgage, 13. when a chattel mortgage will be construed as an assignment, 14. illustrations of construction, 15. when construed as a chattel mortgage, 16. when does intention control, 17. rights of assignee under, 350. of a permit to cut timber, 419. when chattel mortgage superior to, 436. whether fraudulent, 580. fraud — question for the jury, 595. who may assail, 596. of void mortgages — when they cannot be attacked — effects of, 767. need not be recorded, 768. need notJse sealed, 769. payment by creditors — equivalent to, 770. after tender by creditors — rights of mortgagee, 771. revesting of title, 772. without the debt, 773. of the debt— no warranty of title implied, 774. of part of the debt— effect, 779. of the debt — security follows, 781. 734 INDEX. Reference is to Sectiona. ASSIGNMENT— Con/mwerf. Illinois rule as to equities, 782. of mortgage for future advances, 785. release of by mistake — effect on the debt, 787. of mortgage given as indemnity, 791, 792. after condition fulfilled — no verbal assignment can be made, 794. after extinguishment of, 907. ATTACHMENT of mortgagor's interest— at common law, 795. statutory provisions, 796. in equity, 797. equitable rule applied, 798. of mortgagor's interest in possession, 799. in case of fraudulent mortgage, 800. mortgagor's right of action, 801, 802. after mortgagor's default, 803. under insecurity clause, 804. liability of officer for taking wrongful possession, 805. third person's right to litigate, 806. seizure and sale without recognizing the mortgage lien, 806. contrary rule, 807. mortgagee may waive his lien by attaching the property, 808, 1037. officer taking an accountable receipt from mortgagee, 809. of mortgagee's interest — will not lie, 810, 811. mortgagee's right of, 1037. laws of the States — Alabama, 812. Arizona Territory, 813. Arkansas, 814. California, 815. Colorado, 816. Connecticut, 817. Delaware, 819. Florida, 820. Georgia, 821. Idaho, 822. Illinois, 823. Indiana, 824. Iowa, 825, 825a. Kentucky, 826. Maine, 827. Maryland, 828. Massachusetts, 829. Michigan, 830. Minnesota, 831. Mississippi, 832. Missouri, 833. Nebraska, 834. New Hampshire, 835. New Jersey, 836. INDEX, 735 Reference Is to Sections, ATTACHMENT— CowWrnted, New York, 837, North Dakota, 837a. Ohio, 838. Oregon, 839, Pennsylvania, 840. Bhode Island, 841. South Carolina, 842. South Dakota, 842a, Tennessee, 843. Texas, 844, Vermont, 845. Washington, 846. Wisconsin, 847. AUCTIONEER, (See Grain Mbrchant,) selling mortgaged property in regular course of trade without actual notice, 398. buying at auction, 765. BADGES OF FRAUD, at common law, 540, when the mortgagor's possession .may be explained, 541. then a question for the jury, 542, mortgagor's possession — Pennsylvania rule, 543, Illinois rule, 544, New York rule, 545. Nebraska rule, 546. Minnesota rule, 547, registration of mortgage — effect of, 548. possession of exempt property, 550, seizure of exempt property — creditar's defense, 551, mortgage given on same day of judgment against mortgagor, not a badge, 599, consumption of property, 603. Indiana rule as to consumption of property, 604. BANKRUPTCY, of mortgagor — rights of assignee and mortgagee, 102. rights of assignee, 348. contrary doctrine, 349. exchanging security, 600, charge of fraud, 601, assignee could sue in the State courts, 602. effect of discharge of mortgagor, 621. BILL OF PARCELS, when evidence of a pledge, 423. is not a chattel mortgage, 424. when a pledge, 12, parol evidence, 42, BILL OF SALE, for money loaned, 36. with lease, 38. 736 INDEX. ' Reference is to Sections. BILL OF SALE— Continued. treated as a chattel mortgage, 39. when party not estopped to show a bill of sale was a mortgage, 40. in equity — parol evidence to show a mortgage, 41. at law — parol evidence not admissible, 42. exceptions to this rule, 43. validity as a chattel mortgage, 80. when must be recorded, 418. with separate defeasance, 421. taken as a security, 35. BROKER. {See Auctioneer.) CALIFORNIA, statutory provisions — form and execution, 57. subject-matter, 175. attachment of mortgagor's interest, 815. foreclosure, 1071. registration, 283. sale and removal, 855. CHATTELS REAL, not usually subject of chattel mortgage, 210. need not file assignment transferring lease, 430. CHOSES IN ACTION, assignments of need not be recorded, 425. COLLATERAL SECURITY, definition and application, 11. further illustrations of, 12. COLORADO, statutory provisions— attachment of mortgagor's interest, 816. foreclosure, 1072. registration, 284. sale and removal, 856. COMITY, not recognized in some States, 437. Pennsylvania rule, 438. Michigan rule, 439. Louisiana rule, 439. may apply to corporations, 441. COMMISSION MERCHANT. (See Auctioneer.) CONDITIONAL SALE, distinguished from a chattel mortgage, 19. condition precedent, 22. rule of construction, 26. vendee's right under, 686. statutory provisions — Alabama, 280. Arizona Territory, 281. Arkansas, 282. Connecticut, 285. Delaware, 287. Florida, 289. Georgia, 290. Indiana, 294. Iowa, 296. Kansas, 299. INDEX. 737 Reference is to Sections. CONDITIONAL SALE— Continued. Kentucky, 301. Louisiana, 302. Maine, 303. Maryland) 304. Massachusetts, 305. Mississippi, 310. Missouri, 311. Nebraska, 813. New Hampshire, 315. New Jersey, 316. New York, 320. Oregon, 325. Pennsylvania, 327. South Carolina, 329. Tennessee, 330. Texas, 331. * Vermont, 333. Virginia, 335. West Virginia, 337. Wisconsin, 338. CONFUSION OF GOODS. (See Intermingling of Goods.) CONNECTICUT, statutory provisions— subject-matter, 176. attachment of mortgagor's interest, 817. foreclosive, 1073. registration, 285. sale and removal, 857. CONSIDERATION, sufficient, 107. for future advances, 108. to secure a pre-existing debt, 110. when no present indebtedness subsisting, 111. New York doctrine, 112. void mortgages founded upon a valid consideration, 80, 561. stating more than the debt, 569. CONSTRUCTION, equitable rule — whether a conditional sale or mort- gage, 26. whether a chattel mortgage is an assignment, 14. whether an assignment is a mortgage, 16. of agreements to insure, 115. of conveying terms, 120. of description as to locality, 158. as to identity of chattels, 159. as to crops, 160. as to animals, 161. as to farm utensils, 162. mortgagor's holding possession as mortgagee's agent, 259. priority of record, 369. 2w 738 INDEX. Reference Is to Sections. CONSTRUCTION— Continued. renewal of mortgage, 386. of instrument purporting to be a bill of sale, 420. of insecurity clause, 983. CONSTRUCTIVE DELIVERY. (See Delivbky.) what is, 141. symbolic, 277. CONSUMABLE PROPERTY, consumption of, 603. Indiana rule, 604. CONVERSION. (See Remedies.) by subsequent purchaser, 398, 711, 712, 763. measure of damages, 764. CONVEYANCE, character of— how determined, 23. character of — a question for the court, 23. sale or security, 20. made in fraud of creditors, ^5. statutes as to fraud, 556. CORPORATIONS, right to give mortgages, 106. comity may apply, 441. residence of — recording, 336. officers' rights, 106. consent of stockholders, 106. COVENANT, meaning of mortgagor's, 119. CROPS. (See Unplanted Crops; Growing Crops; Growing Timber; Growing Grass.) description of, 154, 160. identification of by proof, 157. lessor's right to seize, afterwards grown, 251. mortgagor's selling after harvesting the crop, 711. contrary doctrine, 712. CUTTINGS of plants and trees — when included in mortgage, 131. DAMAGES, measure of to mortgagee, 695,'764. measure of to mortgagor, 708. DANGER CLAUSE. (See Insecurity Clause.) DATE, dating back, 83. date supposed to be the time of execution, 46. shown by parol evidence, 114, 140. DEBTOR AND CREDITOR, when this relation must exist, 7. when this relation is not created, 24. when this relation is created, 25. DECREE, in case of foreclosure of real-estate and chattel mortgage, 1060. two mortgagees— joint tenants, 1061. • when mortgagee entitled to personal damages, 1062, 1063. in case of no personal indebtedness, 1064. for interest, 1065. INDEX. 739 Keference is to Sections. DECREE— Conimttei. under Texas statute, 1066. binds parties and privies in estate, 1067. DEFINITION, of mortgage, common-law, 1. of mortgage, equitable, 2. common-law rejected, 3. of goods, 121. DEFINITION AND DISTINCTION, of a pledge, 9. of an assignment, 13. of a conditional sale, 19. of an absolute sale, 35. in case of doubt, a question for the court, 23. DELAWARE, statutory provisions — form and execution, 59. attachment of mortgagor's interest, 819. foreclosure, 1076. registration, 287. , sale and removal, 860. DELIVERY. (See Constructive Delivery.) presumption of, 133. filing not a delivery, 135. for record — presumption, 139. when parol evidence may show date of, 140. of a pledge, 9. DESCRIPTION OF PROPERTY, sufiaoiency of, 142. validity — illustrations, 143. curing faulty description by the pleadings, 144. mortgagor and chattels in same county — what chattels included, 145. of all the chattels of a certain class, 146. rendered sufficient by parol evidence, 147. must include the property, 148. vague and indefinite terms, 149. chattels from a larger amount of the same class, 150. mortgage with schedule, 151. failing to attach schedule, 152. general and specific terms, 153. aa to crops, 154, 160. defective cured, 155. of a part of chattels, 156. identification of crops by proof, 157. as to the location of chattels, 158. as to the identity of the property, 159. as to animals, 161. as to farming utensils, 162. DISAFFIRMANCE, by infant, 93. when acquiescence not, 94. byyunatic, 90. 740 INDEX. Reference is to Sections. DISCHAEGE. (See Payment.) substitution of new notes — effect, 909. revesting of title, 910. pro tanto, 915. effect of mortgagor's discharge in bankruptcy, 921. note barred by statute of limitations — effect of, 922. action for, 927. by mistake, 928. withdrawal of mortgage from the files, 943. by parol, 944. by written instrument, 947. by mortgagor selling the property as mortgagee's agent, 906. DISTEICT OF COLUMBIA, statutory provisions— registration, 288. DURESS, mortgage given under, void, 573, 574. evidence of, 1054. EQUITABLE MORTGAGES, controlled by intention, 8. EXCHANGE OP CHATTELS, cannot exchange, 129. EXECUTION, date— presumption of, 46. in blank, 85. no authority to execute, 86. presumption of, 133. EXECUTOR, mortgagor of mortgagee's estate, 923. ESTOPPEL, when party may show a bill of sale to be a mortgage, 40. by agreement to claim fixtures as part of the realty, 204. evidence of, 205. sale by junior mortgagee, 701. standing by and making no objections, 702. • of purchaser, 762. of mortgagee to take possession, 1012. as to partners, 99. EVIDENCE. (See Parol Evidence.) of record, 377. certified copy — of its filing in New York, 380. declarations of mortgagor, 568. in conversion, 690, 715. in case of lost note — mortgage admissible, 692. prior agreement before levy, 693. burden of proof— concealing property, 851. of usury — when admissible, 927. mortgagor's refusing to appear at suit of foreclosure, 1052. conflicting, 1053. of fraud and duress, 1054. circumstances as — fraud, 558. EXEMPTIONS, mortgagor cannot claim his exemptions from mortgaged chattels, 1132. his equity of redemption in such chattels cannot be levied on, 1132. INDEX. 741 Reference is to Sections. EXTINGUISHMENT, conditions fulfilled— no revival, 794. assignment after, 907. taking second mortgage on same property, 911. ■ by subsequent mortgagee by purchasing the equity. of redemption, 913. buying title of both parties, 916. paying of prior lien, 917. conversion by mortgagee, 918. changing forin of the debt, 936. when judgment extinguishes the debt, 937. taking higher security, 938. substituting security of equal degree, 939. waiving security, 940, 945. taking second security of equal degree, 941. taking new note — agreement will control, 942. sale — mortgagor as agent, 946. foreclosure, 1142. FARM UTENSILS, description of, 162. PILING. (See Recording.) not a delivery when, 135. FIXTURES, when buildings become personal property, 189. become personalty by agreement, 190. Ohio rule, 191. intent alone not sufficient to convert a chattel into a fixture, 192. when fixtures become realty — rule of some courts, 193. another rule, 194. general rule, 195. machinery — physical annexation, 196. between the parties, 197. annexing chattels to the realty, 198. incorporated with the realty, 199. improveriients by mortgagor, 200, 201. several fixtures, 202. on another's realty, 203. estoppel by agreement, 204. evidence of estoppel, 205. priority — notice, 206. divesting lien, 207. attaching mortgaged property to the realty, 208. what is appurtenant, 209. when mortgages of need not be registered, 431. FLORIDA, statutory provisions— attachment of mortgagor's interest, 820. foreclosure, 1077. registration, 289. sale and removal, 861. 742 INDEX. Beferenoe is to Sections. FORECLOSUEE. (For statutory Foreclosure, see reference under each State.) NON-FOHMAL. mortgagee's title after condition broken, 966. Michigan rule, 967. Oregon rule, 968. Washington rule, 969. taking possession by mortgagee, 982. under stipulation, 970. with no time of payment in the mortgage, 971. mortgage payable on demand, 972. no time of performance named, 973. taking possession must be peaceable, 974. extending time of payment by parol, 975. valid promise to extend time, 976. mortgagee must follow the statute, 970, 1068. default in payment of an installment, 977. retaining proceeds to meet the other installments, 978. Michigan rule as to installments, 979. mortgagor's remedy for wrongfully withholding his property, 980. joint mortgagees — application of proceeds, 981. goods being seized on execution, 984. when mortgagee is answerable for use, 985. rights of trustee, 986. right of mortgagee to* bring trover, 987. right of mortgagee to bring replevin, 988. mortgagee may enter upon the lands of the mortgagor, 989. wrongful seizure by mortgagee, 990. as to third parties, 991. election of remedies by mortgagee, 992. wrongful foreclosure, 993. statute of limitations running, 994. taking possession after action and note are barred, 995. right to sell after taking possession, 996. accounting for proceeds, 997. selling in another county not named, 998. selling under the insecurity clause, 999. selling contrary to statute, 1000. giving notice of sale, 1001. waiving notice of sale, 1002. private sale, 996, 1004. cannot barter the property, 1005. sale with mortgagor's consent, 1006. sale of .corporation stock with mortgagor's consent, 1007. selling in parcels, 1008. fraudulent sale, 1009. recovery of deficiency, 1010. surplus goes to mortgagor, 1011. INDEX. 743 Reference is to Sections. FORECLOSUEE— Conimwed. estoppel of mortgagee, 1012. mortgagee cannot question his own sale, 1013. wrongful sale, 1014. sale under power, 1015. as to corporate stock, 1016. waiving irregularities of sale — by mortgagor," 1017. rights of junior mortgagee, 1018. purchase of mortgagee at his own sale, 1019, 1105. effect of such purchase, 1020. purchasing at public sale, 1021. bona fide sale — burden of proof, 1022. np warranty of title, 1025. payment of debt after possession by mortgagee — return of goods, 1026. of partnership property, 99. by agent of the principal, 105. FOEMAL Foreclosure. the mortgagee may proceed with concurrent remedies, 1027. mortgagee's expense, 1028. holding several collaterals, 1029. remedy at law and in equity may be pursued at the same time, 1030. release of mortgage without affecting the personal liability, 1031. as to personal liability, 1032. acknowledgment of indebtedness, 1033. to secure purchase-money, 1034. when an action will not lie, 1035. election of remedies, 1036. mortgagee's right of attachment, 1037. in equity, general principles, 1038. authority for pursuing remedy in equity,' 1087, 1091, 1094, 1102. power of sale in mortgage, 1039, 1088. rights of junior mortgagee, 1040. property taken beyond the jurisdiction of the court, 1041. appointment of receiver, 1042. right of simple contract creditor for appointment of receiver, 1043. several mortgages— amount of debt in dispute, 1045. parties to the suit, 1046. mortgagor without any interest, 1047. payment in specific articles, 1048. ■ bills of complaint, 1049. must aver title, 1050. identification of debt, 1051. evidence — mortgagor refusing to appear, 1052. conflicting will not reverse foreclosure, 1053. fraud and duress, 1054. proof— prima fade case, 1055. 744 INDEX. Reference is to Sections. FORECLOSURE— Continued. identification of property, 1056. mortgagor's defense, 1057, 1084. assignee cannot resist, 1058. attempt to sell before breach, 1059. decrees, 1060. when personal representatives made parties, 1061. personal decree, 1062, 1063. no personal indebtedness, 1064. decree for interest, 1065. lost mortgage, 1083. under Texas statute, 1066. decrees bind parties and privies in estate, 1067. foreclosure in Georgia, 1080, 1081, 1082. PORFEITUEE, waiver of by mortgagee, 889. re-investment of title, 954. waiver by acceptance of part payment, 1144. FOEM, no form of words required, 5, 44. in North Carolina, 322. description of partnership mortgagee, 44. only two of three partners signing, 44. FOEM AND EXECUTION. (For statutory Form and Execution and instances, see the reference under each State.) FEAUD. (See Badges of Fraud; Statute op Frauds.) cannot give priority, 268. possession by vendor, 502. change of possession, 503. Possession, Prima Facie. State decisions — Alabama, 504a. Arkansas, 505. Dakota, 506. Georgia, 507. Indiana, 508. Kansas, 509. Louisiana, 510. Maine, 511. Maryland, 512. Massachusetts, 513. Michigan, 514. Minnesota, 515. Mississippi, 516. Nebraska, 517. New Hampshire, 518. New Jersey, 519. New York, 520. North Carolina, 521. Ohio, 522. INDEX. 745 Reference is to Sections. FRAXJD— Continued. Oregon, 523. Rhode Island, 524. Tennessee, 525. Texas, 526. Virginia, 527. Wisconsin, 528. POSSESSIOJr PER SE. State decisions — California, 529. Colorado, 529a. Connecticut, 530. Delaware, 531. Florida, 532. Idaho, 633a. Illinois, 533. Iowa, 534. Kentucky, 535. Missouri, 536. Nevada, 537. Pennsylvania, 538. Vermont, 539. In General. agreement to defraud, 549. effect of insecurity clause, 552. right of purchaser to contest a prior mortgage is personal, 553. statutes declaratory of the common law, 555. statutes avoiding fraudulent conveyances, 556. Twyne's Case, 557: may be proved by circumstances, 558. who may attack a mortgage, 559. right of creditor at large, 560. fraudulent mortgage founded on valid consideration, 561. fraudulent intent of mortgagor known to the mortgagee, 562. contrary doctrine, 563. , trying to protect property, 564. two mortgagees — one innocent, 565. proof to defraud, 566. extrinsic evidence necessary, 567. placing consideration too large, 569. mortgagee not affected by acts of the mortgagor, 570. rights of junior mortgagee, 571. void mortgage cannot be made valid, 572. mortgage given under duress, 573 against public policy, 574.' when mortgage fraudulent in part, 575, 576. with fraudulent intent, 577. independent valid transaction, 578. when fraud is a question for the jury, 579. 746 INDEX. Reference is to Sections. FRAUD— Continued. assignments in the nature of mortgages, 580. trustee may continue the business, 582. mortgagor using the property as his own, 584. may secure more creditors than the mortgagee, 591. under Bankrupt law, 601. right of assignee to sue in State courts, 602. consumption of property, 603. Indiana rule, 604. as to perishable goods, 605. part of the propesrty being perishable, 606. retention of property against mortgagee's consent, 608. general rule as to mortgagor's retention of property, 609, 611, •whether retention is fraudulent a question for the jury, 612. Illinois rule, 613. fraudulent sale, 1009. FUTURE ADVANCES, validity of agreement for, 108. assignment of mortgage for, 785. GARNISHMENT, rights of garnishee creditor, 253. of mortgagor, 668. , of surplus after sale, 1024. GEORGIA, statutory provisions — form and execution, 60. attachment of mortgagor's interest, 821. foreclosure, 1078J foreclosure — instances, 1079. registration, 290. sale and removal, 862. removal — instance, 863. GOODS, definition of, 121. intermingling, 126. after-acquired, 238. contrary rule, 239. mortgagor as agent — selling new goods, 240. substitution of new goods, 242. rule of other courts, 243. GRAIN MERCHANT. {See Auctioneer.) buying grain mortgaged, 711, 712. GROWING CROPS. (See Crops ; Unplanted Crops.) statutory provisions and in general, 233. Pennsylvania rule, 234. Nevada rule, 314. New Mexico rule, 317. GROWING GRASS, in general, 236. when owned by one not the owner of the realty, 203. INDEX. 747 Reference is to Sections. GROWING TIMBER, in general, 235. wood cut from growing timber — mortgagee's lien, 252. planted trees, 199. GROWING WINE PLANTS, tenant may mortgage, 203. HOUSEHOLD GOODS, foreclosure of in Illinois, 1089. IDAHO, statutory provisions — form and execution, 61. attachment of mortgagor's interest, 822. foreclosure, 1085. registration, 291. IDENTIFICATION, of property, 88. of instrument, 113. parol evidence admissible, 132. of crops by proof, 157. of chattels described, 159. rule in Oregon, 170. description of after-acquired property as between the parties, 250. of the debt in case of redemption, 937. of debt in case of foreclosure, 1051. of property on foreclosure, 1056. ILLINOIS, statutory provisions — form and execution, 62. execution — instances, 63. subject-matter, 177. attachment of mortgagor's interest, 823. foreclosure, 1086. foreclosure — household goods, 1089. registration, 292. registration — instances, 293. sale and removal, 864. INCREASE. (See Natural Incbease.) INDIANA, statutory provisions — attachment of mortgagor's interest, 824. foreclosure, 1090. registration, 294. sale and removal, 865. INDIAN TERRITORY, what law governs, 295. INFANCY, infant's capacity to convey, 90. infant's mortgage voidable, 91. borrowed money — remaining in possession of property, 92. infant may disaffirm in a reasonable time, 93. when disaffirmance is not caused by acquiescence, 94. INJUNCTION. (See Remedies.) INSECURITY CLAUSE, effects of, 552. ■ when mortgagee takes possession under, 670. presumptions under, 671. Illinois rule — taking possession, 672. 748 INDEX. Reference is to Sections. IN8ECUEITY GhAHSE-Continued ' Minnesota rule — taking possession, 673. Dflortgagor has no attachable interest under, 804. right to take possession under, 970, 982. construction of, 983. selling property under, 999. INSTRUMENTS, held to be chattel mortgages, 4. under seal construed, 20. upheld as a conveyance, 84. identification of, 113. when parol evidence is admissible, 114. what must be recorded — bills of sale in the nature of chattel mort- gages, 418. assignment of a permit, 419. as a bill of sale— how interpreted, 420. with separate defeasance, 421. as collateral security, 11. INSURANCE, construction of agreement to insure, 115. New York rule, 116. Wisconsin rule, 117. accounting of mortgagee, of life insurance policy, 1140. INTENTION, will make an equitable mortgage, 8. assignment of chattel mortgage — how construed, 17. whether a sale or a conditional sale, 21. alone not sufficient to convert a chattel into a fixture, 192. whether pledge or mortgage, 12. fraudulent, 562. INTERLINEATION. (See Alteration.) INTERMINGLING OF GOODS, by mortgagor, 126. general rule, 746. burden of proof to distinguish, 747. right of action of mortgagee, 748. in case of new goods, 749. under lease, 750. as to logs, 751. Maryland doctrine as to goods, 752. by mortgagee in possession — accounting, 1141. IOWA, statutory provisions — attachment of mortgagor's interest, 825. foreclosure, 1092. foreclosure — instances, 1093. registration, 296. sale and removal, 866. removal — instance, 867. JOINT TENANTS, two mortgagees— foreclosure, 1061. INDEX. 749 Reference is to Sections. !]SANSAS, statutory provisions — registration, 297. registration — exempt property, 2^8. registration — instance, 300. foreclosure, 1095. sale and removal, 869. KENTUCKY, statutory provisions— attachment of mortgagor's interest, 826, foreclosure, 1096. registration, 301. LEGATEE, mortgagor of mortgagee, 924. LEX LOCI CONTRACTUS, rule of, 433. LEX REI SIT^, rule of, 434. LEX DOMICILII, rule of, 435. - LEX FOKI. (See Remedies.) LIENS, distinguished from title, 29. discharge by release of part of property, 118. equitable — after-acquired property, 249. perfecting — taking possession, 254. mortgagee's taking possession, 264. two mortgagees — postponement of one lien by written promise, 265. notice of, 269. subsequent liens — change of possesssion to protect, 270. prior liens — subsequent mortgagee— rule in New York, 402. effect of prior lien although mortgage filed within statutory time, 403. execution of mortgage — assignment the same day in another State, 436. cannot be divested by removal of property from the State, 440, 442. cannot be divested by assignee, 592. follows the goods, 716. created by mortgagor, 722. mortgage and execution, 723. secret, 725. statutory liens, 728. of livery stable keepers and agisters, 730, 731. vendee's and mortgagee's, 734. duration of, 736. of mechanics on fixtures for repairs to realty, 206. LIMITATION. (See Statute op Limitations.) LIVERY STABLE KEEPER AND AGISTER, rights of, 730. contrary doctrine, 731. LOUISIANA, subject-matter, 178. sale and removal, 870. MAINE, statutory provisions— attachment of mortgagor's interest, 827. foreclosure, 1097. ^ foreclosure — notes, 1098. 750 INDEX. Reference is to Sections. MAl'SE— Continued. registration, 303. sale and removal, 871. MARINE MORTGAGES, recording— United States laws, 444. applies to United States vessels, 445. vessels of the United States— definition, 446. requisites for recording, 447. necessity of acknowledgment, 448. as between the parties, 449. enrollment— validity, 450. application of State statutes, 451. statutory provisions construed, 452. place of record, 453. of ships at sea, 454. effect of recording, 455. application of the United States statute, 456. bill of sale, 457. change of possession, 458. fraudulent mortgages, 459. substitution, 460. courts of admiralty — jurisdiction, 461, bill of sale — construction, 462. equitable mortgage, 463. parol evidence, 464. secondary evidence, 465. Peiobidies. mortgages and other liens, 466. priorities — construction, 467. seaman's wages, 468. towage charges, 469. liens created in a foreign port, 470. lien of material-men, 471. contrary doctrine, 472. liens of collisions and affreightment, 473. master the mortgagee's agent, 474. mortgagor in possession — authority tocontract, 475. mortgagor in possession — repairs by, 476. shipwright's lien, 477. Maryland doctrine, 478. Massachusetts doctrine, 479. recording at custom-house — effect, 480. State courts — authority to classify liens, 481. when the tjnited States statute does not apply, 482. domestic vessels — definition, 483. State courts — authority to enforce liens for supplies and repairs, 484. laws of Congress must prevail, 485. INDEX. 751 Reference is to Sections. MARINE MORTGAGES— Conimwed. Rights op Paeties. the mortgagor in possession, 486. the mortgagee out of possession, 487. when mortgagee is entitled to earnings, 488. liability for master's wages, 489. EnFOEOEMENT — FORECLOSTJEE. admiralty — jurisdiction of, 490. a libel upon a mortgage cannot be sustained, 491. mortgagee may petition as a co-libelant, 492. taxed costs of mortgagee, 493. rights of a holder of a bill of sale, 494. mortgage upon a moiety, 495. mortgagee's right when there are several owners, 496. unauthorized sale by mortgagor, 497. default— effect of, 498. statute of frauds — application of, 499. actions to realize priorities, 500. the lex fori governs, 501. MARRIED WOMEN, mortgages by, 95. taking place of her deceased husband, 101. MARYLAND, statutory provisions — form and execution, 64. attachment of mortgagor's interest, 828. -foreclosure, 1099. registration, 304. sale and removal, 872. MASSACHUSETTS, statutory provisions — attachment of mortgagor's in- terest, 829. foreclosure, 1100, foreclosure — instances, 1101. registration, 305. sale and removal, 873. removal— instances, 874. MERGER, of mortgage debt, 959. mortgagee buying equity of redemption, 960. MICHIGAN, statutory provisions — attachment of mortgagor's interest, 830. subject-matter, 179. foreclosure, 1103. registration, 306. sale and removal, 875. MINNESOTA, statutory provisions — attachment of mortgagor's interest, 831. foreclosure, 1104. registration, 307. registration as to notes, 309. registration — instances, 308. 752 INDEX, Reference is to Sections. MINNESOTA— ConimMerf. sale and removal, 877. removal — instance, 878. MISSISSIPPI, statutory provisions— attachment of mortgagor's interest, 832. foreclosure, 1106. registration, 310. sale and removal, 880. removal — instance, 881. MISSOUEI, statutory provisions — attachment of mortgagor's interest, 833. foreclosure, 1107. registration, 311. sale and removal, 882. removal — instance, 883. MONTANA, statutory provisions — form and execution, 65. execution — instances, 66. foreclosure, 1108. registration, 312. sale and removal, 884. MOKTGAGEE, rights of in bankruptcy, 102. tenants in common, 103. tenants in severalty, 104. two mortgagees — one postponing his lien by written promise, 265. two mortgagees holding void instruments — taking possession by junior — effect, 266. subsequent mortgagee — notice — rule in New York, 402. two mortgagees — one guilty of fraud, 565. acts of the mortgagor — effects, 570. rights of junior, 571. may complete unfinished goods, 583. * when entitled to possession, 665. use of violence in taking possession, 666. seizing before maturity of debt, 669. taking possession under the insecurity clause, 670, 671. right against creditors, 674. "^~ title of after default, 676. rights of in Michigan after default, 677. rights of in Washington after default, 678. rights of in Oregon after default, 679. right of action, 680. ' right to bring replevin, 681, 876. ^ when demaiud necessary, 682. right to biing troVer, 683. may bring action against creditor and oflScer, 685. rights as against receiver, 687. when entitled to injunction, 696, 697, 699. as to judicial sale, 698. giving preference to second mortgagee, 703. INDEX. 753 Reference is to Sections. MORTGAGEE— CbMiimwed. " may follow and take the goods, 716. ordering assignee to sell — expense, 720. as to execution lien, 723. as to vendor's lien, 734. judgment creditor's rights, 733. selling the property — mortgagor's right, 735. can waive his rights, 743. action against purchaser, 766. rights of after tender by creditors, 771. rights of as surety, 791. right of action when the security is attached, 801, 802. * may waive his lien by attachment, 808. giving an accountable receipt to the attaching officer, 809. mortgagee's interest cannot be attached, 810, 811. right to apply payment, 934. answerable for the use of goods, 985. right to sell, 996. must account for proceeds, 997. cannot question his own sale, 1013. purchasing at his own sale, 1019. effects of such purchase, 1020. .-^purchasing at public sale, 1021. right to attach the mortgaged property, 1037. becoming mortgagor's administrator, 724. chattels in custody of— may hire or lend them to mortgagoi;, 674. MORTGAGOR, meaning of his covenant, 119. using the property as his, 584. garnishment of, 668. purchaser takes his place, 675. in rightful possession, 704. actions by, 705. defense of, 706. execution levied on his interest, 707. when may have injunction, 709. may sell the property, 710. selling mortgaged crops after being harvested, 711. weight of authority, 712. selling by oral consent of mortgagee, 713, 719, 761. implied authority to sell, 714. conveying mortgaged goods without giving notice, 717. rights of— wrongful seizure of goods, 718. forfeiture under internal revenue law, 721. power to create liens, 722. giving assumed name, 726. implied authority to create liens, 727. cannot set up title in another, 732; 2x 754 INDEX. Reference Is to Sections. MORTGAGOR^Conimwed. wrongful sale by, 858. executor of mortgagee's estate, 923. as legatee of mortgagee, 924. sale by as agent, 946. trover before and after tender, 952. remedy of for wrongful withholding of his property, 980. defense in case of foreclosure, 1057. may mortgage exempt chattels, H32. cannot claim his exemptions of mortgaged chattels, 1132. NATURAL INCREASE, increase of live stock, 122. when not covered, 123. in general, 215. NATURE AND EFFECT, chattel mortgage— definition of the common law, 1. common-law definition rejected, 3. equitable definition, 2. alterations, 83. in case of doubt how determined, 23. printed and written words, 83. NEBRASKA, statutory provisions— attachment of mortgagor's interest, 834. foreclosure, 1109. registration, 313. sale and removal, 885. NEVA!dA, statutory provisions — form and execution, 67. subject-matter, 180. foreclosure, 1110. registration, 314. attachment, 834a. NEW HAMPSHIRE, statutory provisions — form and execution, 68. execution — instance, 69. subject-matter, 181. attachment of mortgagor's interest, 835. foreclosure, 1111. registration, 315. sale and removal, 886. removal — instance, 887. NEW JERSEY, statutory provisions — form and execution, 70. execution — instance, 71. attachment of mortgagor's interest, 836. foreclosure, 1112. registration, 316. sale and removal, 888. NEW MEXICO, statutory provisions — subject-matter, 182. foreclosure, 1113. registration, 317. INDEX. 765 Reference is to Sections. NEW YORK, statutory provisions — attachment of mortgagor's interest, 838. foreclosure, 1114. registration, 318. registration — canal boats, 319. sale and removal, 890. removal— instance, 891. NORTH CAROLINA, statutory provisions — form and execution, 72. foreclosure, 1115. registration, 321. sale and removal, 892. removal — instance, 893. NORTH DAKOTA, statutory provisions— form and execution, 58. foreclosure, 1115a. ^ registration, 322a. sale and removal, 893a. attachment, 837a. NOTICE, bona fide purchasers of after-acquired property, 252. rights of garnishfee creditor, 253. of prior lien, 269. what it includes, 397. actual notice, 398. actual notice — when effectual, 399. under Missouri statute, 400. change of property by mortgagor, 401. subsequent mortgagees — rule in New York, 402. rule in Montana, 402. rule in Illinois, 404. rule in California, 405. rule in Niebraska, 406. rule in South Carolina, 407. rule in Indiana, 404. rule in'Georgia, 408. rule in Kentucky, 409. ' when mortgagor removes from the county, 410. when crop is to be planted in another county — North Carolina, 411. mortgagor removes from the State, 412. to subsequent purchasers and mortgagees, 413. under statute making unrecorded mortgages void, 414. in Illinois, 415. in New Wk, 416. purchaser with notice, 754. giving notice of sale, 1001. waiving notice, 1002. what is a reasonable notice, 1003. to auctioneer, 398. 756 INDEX. Beference Is to Sections. OHIO, statutory provisions — form and execution, 73. execution — instances, 74. attachment of mortgagor's interest, 838. foreclosure, 1116. registration, 323. registration— instances, 324. sale and removal, 894. OKLAHOMA TERRITORY, statutory provisions— registration, 324a. sale and removal, 894a. foreclosure, 1116a. ORAL MORTGAGES, good between the parties to the mortgage, 5. a verbal agreement with a sufl5.cient consideration, 79. OREGON, statutory provisions — attachment of mortgagor's interest, 839. foreclosure, 1117. registration, 325. sale and removal, 325, 8946. PAROL EVIDENCE may be given to show the debtor's intention, 18. as to written instrument, 27. in equity — to show an absolute bill of sale was intended for a mort- gage, 41. at law — rule of admission, 42. exceptions to the general rule, 43. to identify instrument, 114. to fix quantity of property, 132. to show date of execution and delivery, 140. as to defective description, 147. whether admissible to prove condition, 691. to show mistake in the satisfying of record, 928. PARTIES, oral mortgages of, 5. rights of infants, 90. rights of married woman, 95. partners — mortgages between, 96. between partner and third party, 99. PARTNERSHIP PROPERTY, mortgages between partners, 96. rights of partner as to money advanced, 97. mortgaging individual goods, 98. mortgage between partner and third party, 99. must be a member of a commercial firm, 100. executing mortgage in a partner's individual name, 99. rights of assignee of one partner, 97. PAYMENT, eflfect of, 906. presumption of, 610, 920. of debt by third person, 706. of by creditors, 770. efiect of, 906. as to sureties, 908. INDEX. 757 Reference is to Sections. PAYMENT— Oontinued. substitution of new notes, 909. by new note, 912. accepting the property, 919. recital in deed of trust, 929. application of payments— made by law, 930. different rule, 931. in discretion of court, 932. right to appropriate, 933, 935. rights of mortgagee and payee to appropriate, 934. by tender of amount due, 948. tender at law after forfeiture, 949. by valid tender, 950. in equity — tender of, 951. destruction of property, 953. acceptance after forfeiture, 954. tender after default, 955. Michigan rule as to tender, 956. Oregon rule as to tender, 957. parol extension of time of, 975. promise to extend, 976. installment — default in, 977. Michigan rule as to default in payment of installment, 979. in specific articles, 1048. by mortgagor selling the property aa the mortgagee's agent, 906. PENNSYLVANIA, statutory provisions — subject-matter, 183. attachment of mortgagor's interest, 840. foreclosure, 1118. registration, 326. sale and removal, 895. subject-matter — act of 1887, 184. PERISHABLE GOODS, rule as to, 605, 606. PLEADINGS, statutes of other States, 443. allegations necessary, 694; bills of complaint, 1049. * must aver title, 1050. identification of debt, 1051. requisites of bill to redeem, 1134. bringing bill to redeem — New York rule, 1138. PLEDGE, definition and distinction, 9. bill of parcels as evidence of, 423. as to collateral security, 11. intention governs, 12. POLICE MAGISTRATES can take acknowledgments of chattel mort- gages in Illinois, 63. POSSESSION, taking by mortgagee, 258. mortgagor holding as mortgagee's agent, 259, 273. 758 INDEX. Reference is to Sections, POSSESSION— Cbniinwed. must be continuous, 260. mortgagor member of firm who holds, 261. mortgagor's employe as mortgagee's agent, 262, 263. taking to perfect lien, 264. two mortgagees holding void mortgages— junior takes, 266. change of— subsequent liens, 270. right of mortgagee to, 271. construction, 272. concurrent by both parties, 274. in possession of third parties, 275. requisites of, 276. symbolic, 277. railroad personalty, 278. failure of mortgagee to take, 609. retention by mortgagor may be evidence of fraud, 612. retention by mortgagor — Illinois rule, 613. who may attack, 614. ^ reasonable time to hold by mortgagor after default, 615. retention of mortgagor after default — Colorado rule, 616. Montana rule, 617. when third parties may attack, 618. when mortgagee entitled to, 665. taking by violence, 666. what is delivery of, 667. taking before maturity of debt, 669. mortgagee's right of action for, 680. making demand by mortgagee, 682. trover by mortgagee, 683. in case of indemnity, 684. assignee's right to, 786. taking must be peaceable, 974. POTENTIAL INTERESTS, in general, 244. application to unplanted crops, 245. contrary doctrine, 246. • Lord Hobart's doctrine, 247. PEEFERENCE8, as to fraudulent intention— in Indiana, 585. in Wisconsin, 585. in Michigan, 585. in Nebraska, 586. in Kansas, 587. in South Carolina, 588. in Alabama, 589. in Missouri, 590. mortgage may secure more creditors than the mortgagee, 591. general rule, 593. PRESENT PROPERTY. (See Subject-Mattee.) INDEX. 759 Reference is to Sections. PRIORITY, of record, 369. of fixtures — notice, 206. fraud cannot give, 268. right of purchaser to contest is personal, 553. notice of prior lien, 269. prior lien — rule in New York, 402. filed within statutory time — right of, 403. livery stable keepers' and agisters' liens, 730, 731. by agreement, 370. PURCHASER. {See Subsequent Purchaser.) RATIFICATION, when valid, 138. of invalid mortgage, 171. mortgaging property of another without his consent, 267. by principal, 105. RECEIVER, rights of, 687. appointment of before default, 688. may avoid a chattel mortgage, 689. release by, 926. appointment of, 1042. rule as to appointment, 1044. right of simple contract creditor, 1043. when gelling goods for the owner — nature of contract, 12. when appointed in foreclosure against a corporation, 1044. RECORDING. (See Registration, Statutory Provisions.) ' in general — between the parties, 340. law of, 341. requisites of, 342. administrator— unrecorded mortgage of the deceased, 343. sufiicient record, 352. sufficient record — Iowa, 353. sufficient record — North Carolina, 354. sufficient record — conflict of authority, 355. books of record, 356. question for the court, 356. where recorded, 357. time of record, 358. • in case of fixtures, 431. the»provisions of the statute must be complied with, 432. presumption of, 139. unrecorded mortgages, 375. unrecorded mortgages — void, 414. when a valid lien, 359. when recorded, 352, 360. failing to keep a book of record, 361. place of record, 362. two or more mortgagors— difierent residences, 363. 760 INDEX. Beference is to Sections, KECORDING— CoWmwed. residing in different States— two mortgagors, 364. in case of partnership, 365. residence of corporation, 366. recording in wrong county, 367. residence — proof of, 368. priority — construction, 369. priority by agreement, 370. withdrawal of mortgage from the files, 371. interpretation of words, 372. rule of record in Arkansas, 373. recorder's agent may receive for record, 374. failure to record — rule in some of the States, 375. want of filing as to the assignee of the mortgage, 376. evidence of record, 377. sufficient filing in Texas, 378. sufficient filing in Missouri, 379. p^oof of contents by certified copy — rule in New York, 380. registration — when crop is to be planted in another county — rule in North Carolina, 411. mortgagor's removing out of the State, 412. of bill of sale, 418. assignment of a permit to cut timber — in Maine, 419. mortgage of written agreement — agreement need not be recorded, 422. of bill of parcels, 424. choses in action, 425. of schedules, 426. mortgages of both realty and personalty, 427. mortgages of rolling-stock, 428. rolling-stock — doctrine of the United States Supreme Court, 429. chattels real — transferring lease, 430. REDEMPTION, at common law, 1127. in equity, 1128. waiver of right, 1129. time to redeem, 1130. who may redeem, 1131. relief of mortgagor— mortgagee refusing to account, 1132. relief— in Massachusetts, 1133. when mortgage is open to redemption, 1136, pretended sale — account, 1139. of insurance policy, 1140. mingling of goods, 1141. extinguishing right of, 1142. in case of two debts— judgment on one, 1143. accepting part payment, 1144. REFILING. (See Renewal.) statutory provisions, 881. INDEX, 761 Beference Is to Sections. DEFILING— Continued. when the copy is not exact, 382. when not necessary under the statute, 383. when mortgagee has taken actual possession, 384. computing the time, 385. a valid refiling, 392. mortgagor's becoming a non-resident, 393. statement of mortgagee's interest must be made, 394. statement — by. whom made, 395. accuracy of statement, 396. REGISTRATION. (See reference to registratiftn under each of the States ; Recording.) in general, 279. RELEASE, of part of the property, 118. of mortgage by mistake— debt being assigned, 787. agreement to, 925. by receiver, 926. by agreement,. 944. statutory provisions, 965. REMEDIES, kxfori governs, 443. replevin by mortgagee, 681. trover by mortgagee, 683. against creditor and officer, 685. injunction by mortgagee, 696, 697, 699. injunction— judicial sale, 698. injunction by maker of note, 700. replevin by mortgagor, 704. trover by mortgagor, 705. execution on mortgagor's interest, 707. pursuing the wrong remedy, 992. election of by mortgagee, 992, 1036. REMOVAL. (See Salb and Removal.) RENEWAL. (See Registration ; Refiling.) construction, 386. in Ohio, 387. in Wisconsin, 388. in Michigan, 389. in New York, 390. in New Jersey, 391. in Pennsylvania, 327. REPAIRS, when included in the mortgage, 125. REPLEVIN. (See Remedies.) REQUISITES, no seal required on a chattel mortgage, 45. of change of possession, 276. RES GEST^, declarations of mortgagor, 568. release— debtor's personal liability, 1031.. 762 INDEX. Beference Is to Sections. RHODE ISLAND, attachalent of mortgagor's interest, 841. foreclosure, 1119. registration, S28. sale and removal, 896. EOLLING-STOCK, right of possession by mortgagee, 278. recording mortgage of, 428. doctrine of the United States Supreme Court aa to recording mort- gage of, 429. subject to mortgage, 164. SAFETY CLAUSE. (See Insecurity Clause.) SALES. (See Conditional Sales.) absolute — definition and distinction, 35. with terms of defeasance, 37. absolute — by agent, 105. private, 996, 1004. SALE AND REMOVAL. (See the reference to this subject under each State.) in general, 848. taking property out of State, 879. validity of bail-bond, 900. SALE AND REPLENISHMENT, doctrine of the United States Supreme Court — inconsistent with the idea of security, 619. validity of— in Michigan a question for the jury, 620. doctrine of the United States Circuit Courts, 621. doctrine of the United States District Courts, 622. English doctrine, 623. other doctrine, 624. general statement, 625. State Decisions. Alabama, 626. Arkansas, 627. Colorado, 628. Connecticut, 629. Dakota, 630. Delaware, 681. Florida, 632. Georgia, 633. Idaho, 633cr. Illinois, 634. Indiana, 635. Iowa, 636. Kansas, 637. Kentucky, 638. Maine, 639. Maryland, 640. Massachusetts, 641. INDEX. 763 Reference is to Sections. SALE AND REPLENISHMENT— Cbnimwed. Michigan, 642. Minnesota, 643. Mississippi, 644. Missouri, 645. Montana, 646. Nebraska, 647. Nevada, 648. New Hampshire, 649. New Jersey, 650. New York, 651. North Carolina, 652. Ohio, 653. Oregon, 654. Pennsylvania, 655. Rhode Island, 656. South Carolina, 657. Tennessee, 658. Texas, 659. Vermont, 660. Virginia, 661. Washington, 662. West Virginia, 663. Wisconsin, 664. SCHEDULE, description of property, 151. when not annexed to mortgage, 152. when recorded, 426. SHIPS AND SHIPPING. (See Mabine Mortgages.) SOUTH CAROLINA, statutory provisions— attachment of mortgagor's interest, 842. foreclosure, 1120. registration, 329. sale and removal, 897. SOUTH DAKOTA, statutory provisions— form and execution, 58. registration, 329a. ' sale and removal, 897a. foreclosure, 1120a. attachment, 842a. STATUTE OF FRAUDS, application of, 6. only actual possession is within the statute, 554. when it does not apply as to assignments, 581. STATUTE OF LIMITATIONS, when it begins to run against mortgagee, 994. barring of debt— effect on mortgage, 994. action and note barred — taking possession, 995. SUBJECT-MATTER. (See reference to this subject under the States.) what is subject to mortgage, 163. 764 INDEX. Reference is to Sections. SUBJECT-MATTER— CowMnwed. rolling-stock of railroads, 164. executory interests, 165. Illinois rule, 166. special interests, 167. prohibited articles, 168. in violation of statute 169. chattels real, 210. statutory provisions — in general, 172. general rule, 170. SUBROGATION, substituting creditor, 961. right of sureties to, 962. rights of execution creditor, 963. payment by third party, 964. SUBSEQUENT MORTGAGEE, status of, 737. his title, 738. his rights, 739. continuation of his rights, 740. selling the property, 741. in possession — replevin by first mortgagee, 742. waiving by first mortgagee of his right, 743. his right of action, 744. assuming prior mortgage, 745. purchasing the equity of redemption, 913. SUBSEQUENT PURCHASER, bona fide purchase, 753. purchase with notice, 754. not a bond fide purchaser, 755. sale subject to prior mortgage, 756. when protected, 757. cannot set up defect in mortgage, 758. cannot set up usury, 759. his defense, 760. when mortgagee has given mortgagor consent to sell, 761. estoppel, 762. conversion by, 763. buying at auction sale, 765. right of action by mortgagee, 766. purchasing mortgaged goods — no criminal offense, 868. payment of mortgage lien, 914. New York rule — unfiled chattel mortgage— creditor taking goods to pay his debt, 753. SUBSTITUTION, in general, 127. replacing goods sold, 128. as to third parties, ISO. substitution — of animals, 129. dead animals need not be replaced, 729. exchange of cotton, 729. INDEX, 765 Reference is to Sections. SUBSTITUTION— ConMnwed. exchange of animals, 129. as to third parties, 130. SURETIES. (See Subrogation.) TENANTS IN COMMON, as mortgagees, 103. TENANTS IN SEVERALTY, as mortgagees, 104. by verbal agreement, 252. TENDER, to pay debt, 948. at law — after forfeiture, 949. when valid, 950. in equity, 951. before and after default, 952. ^ destruction of property after, 953. after default, 955. Michigan rule, 956. effective against mortgagee, 958. when not alleged in a bill to redeem, 1134. before bringing suit— New York rule, 1135. TENNESSEE, statutory provisions — attachment of mortgagor's interest, 848. registration, 330. sale and removal, 8976. TEXAS, statutory provisions — attachment of mortgagor's interest, 844. foreclosure, 1121. registration, 331. sale and removal, 898. removal — instances, 899. TITLE, passing of, 10. what conveyed — general rule, 28. distinguished from a lien, 29. illustration*, 30. common-law rule, 31. exceptions to the common-law rule, 32. New Jersey rule, 33. Maryland rule, 34. of mortgagee after default, 676, 966. Michigan rule as to title of mortgagee after default, 677, 967. Washington rule after default, 678, 969. Oregon rule after default, 679, 968, mortgagor cannot set up, 732, subsequent mortgagee's, 738. revesting of, 772, 910, warranty of, 774. warranty of at foreclosure sale, 1025. TROVER, (See Remedies.) 766 INDEX. Reference is to Sections. TRUSTS, as to surplus, 581. trustee continuing the business, 582. to secure several creditors, 591. taking possession by trustee, 986. UNPLANTED CROPS, in general, 87, 217. rule of the States — Mississippi, 218. Iowa, 219. Nebraska, 220. Kansas, 221. Kentucky, 222. California, 223. Alabama, 224, 852. Arkansas, 225. Tennessee, 226. Missouri, 227. North Carolina, 228. Minnesota, 229. New York, 230. Illinois, 231. North and South Dakota, 232. application of the rule of potential interests, 245. USURY, when cannot be set up, 89. when purchaser cannot set it up, 759. evidence of admissible, 927. UTAH TERRITORY, statutory provisions — form and execution, 75. foreclosure, 1122. • registration, 332. sale and removal, 901. attachment, 844a. VALIDITY, statement of the law, 79. subsequent mortgage— first being void, 81. taking possession by receiver before filing of m.ortgage, 82. dating back, 83. execution in blank, 85. unplanted crops, 87. identification of property, 88. future advances, 108. amount of debt not stated, 109. prohibited articles, 168. in violation of statute, 169. law of the place, 483. kx rei sUas, 434. lex rei sites — lex domieilii, 485, void mortgages, 572. against public policy, 574. INDEX. 767 Reference la to Sections. YALIDYTY— Continued. when fraudulent in part, 575. when void in part and valid in part, 576. contrary doctrine, 577. independent valid transaction, 578. rights of creditors— unfiled chattel mortgage, 594. attaching creditors, 598. perishable goods, 605. part being perishable, 606. farm chattel mortgages, 607. who may attack in Illinois, 614. alterations, 83. printed and written words, 83. VERMONT, statutory provisions — form and execution, 76. execution — instance, 77. attachment of mortgagor's interest, 845. foreclosure, 1123. VIKGlljlA, sratutory provisions — subject-m.a registration, 334. WASHINGTON, statutory provisions— form and execution, 78. subject-matter, 186. attachment of mortgagor's interest, 846. ' foreclosure, 1124. registration, 336. sale and removal, 903. WEST VIEGINIA, statutory provisions— subject-matter, 187. registration, 337. WISCX)NSIN, statutory provisions — subject-matter, 188. attachment of mortgagor's interest, 847. foreclosure, 1125. registration, 338. sale and removal, 904. WORDS, printed and written, 83. interlineation of, 83. WYOMING, statutory provisions — foreclosure, 1126. registration, 339. sale and removal, 905. Date Due , Library Bureau Cat. No. 1137