Alexander v. F. L. Smiths Machine Co.

| Mass. | Apr 8, 1924

Pierce, J.

This is an action of tort for conversion, brought by the plaintiff as trustee in bankruptcy of one H. C. Busch, to recover the value of three machines, described in two mortgages to the defendant, dated respectively June 22, 1920, and June 22, 1921. Busch was described in each of the mortgages as of Boston in the county of Suffolk and Commonwealth of Massachusetts. The first of the said mortgages was recorded on June 28, 1920, in the office of the city clerk of the city of Boston, and was not recorded with the clerk of the city of Chelsea, or anywhere else. The second mortgage was recorded on July 13, 1921, in the office of the city clerk of the city of Boston, and nowhere else.

R L. c. 198, § 1, as amended by St. 1913, c. 656, St. 1915, c. 226, § 1, (now G. L. c. 255, § 1) provides as follows: “ Mortgages of personal property shall, within fifteen days from the date written in the mortgage, be recorded on the records of the town where the mortgagor resides when the mortgage is made, and on the records of the town where he then principally transacts his business. ... If a record in two different places is required and the mortgage is recorded in one within said fifteen days, it may be recorded in the other within ten days after the date of the first record. The mortgage shall not be valid against a person other than the parties thereto until so recorded; and a record made subsequently to the time limited shall be void.” The mortgagor, Busch, when the mortgages were delivered to the defendant had his principal place of business in Boston, and his residence in Chelsea. As appears above, neither mortgage was ever recorded in the town where the mortgagor resided when the mortgages were made; and only the first mortgage was recorded within fifteen days in the office of the town where the mortgagor then principally transacted his business. There is no contention that the property was in fact delivered to and retained by the defendant as mortgagee.

Busch filed a petition in bankruptcy on February 3, 1922, and under this petition the plaintiff was elected and qualified as trustee in bankruptcy. On February 6, 1922, the defendant, claiming to act under the authority of the said mortgages, by force entered the premises of Busch and removed the machines. The defendant’s title in mortgage could not be perfected by his taking possession of the machines after the filing of the petition in bankruptcy and before the adjudication, since by the amendment to the bankruptcy act (the act of June 25, 1910, 36 U. S. Sts. at Large, 840, § 8) “ trustees have the rights and remedies of a lien. creditor or a judgment creditor as against an unrecorded transfer. The estate was in custodia legis from the fifing of the petition, and the title of the trustee related back to that date. Acme Harvester Co. v. Beckman Lumber Co. 222 U.S. 300" court="SCOTUS" date_filed="1912-01-09" href="https://app.midpage.ai/document/acme-harvester-co-v-beekman-lumber-co-97500?utm_source=webapp" opinion_id="97500">222 U. S. 300, 307. Everett v. Judson, 228 U.S. 474" court="SCOTUS" date_filed="1913-04-28" href="https://app.midpage.ai/document/everett-v-judson-97864?utm_source=webapp" opinion_id="97864">228 U. S. 474, 478.” Fairbanks Steam Shovel Co. v. Wills, 240 U.S. 642" court="SCOTUS" date_filed="1915-12-03" href="https://app.midpage.ai/document/fairbanks-steam-shovel-company-v-wills-trustee-in-bankruptcy-of-federal-contracting-company-98705?utm_source=webapp" opinion_id="98705">240 U. S. 642, 649.

When the defendant or mortgagee took possession of the mortgaged property on February 6, 1922, the mortgages were invalid as against the general creditors of the estate of Busch, G. L. c. 225, § 1; and by the amendment to the bankruptcy act of June 25,1910, as interpreted in Fairbanks Steam Shovel Co. v. Wills, supra, were held by the defendant subject to the title and right of possession of the trustee as of February 3, 1922. See also Jump v. Sparling, 218 Mass. 324" court="Mass." date_filed="1914-06-17" href="https://app.midpage.ai/document/jump-v-sparling-6432794?utm_source=webapp" opinion_id="6432794">218 Mass. 324.

The trustee in bankruptcy represents the creditors since the bankruptcy statute of 1910, supra, and is not estopped by the representations of the bankrupt to prove that the residence of the bankrupt was other than the town described in the mortgage. The misstatement or false statement of the mortgagor’s residence could not as against creditors take the place of a record of the mortgage at the place of residence, and make valid as against them a mortgage which the statute specifically declares to be invalid. Nor could the mortgagor’s fraudulent misstatement of his place of residence, if it were a fraud upon the mortgagee, operate by way of trust, or otherwise, to destroy the rights of the general creditors to seize and apply the mortgaged property to. the satisfaction of their claims against the mortgagor, or to affect the rights of the trustee in bankruptcy conferred by the statute of 1910, supra.

We find no error in the refusal of the trial judge to give any requested ruling, or any error in the rulings which were made. It follows that the entry must be exceptions overruled.

So ordered.