215 Mass. 13 | Mass. | 1913
This is a bill in equity brought by the trustee in bankruptcy of the defendant Cross, to recover as assets of the bankrupt certain chattels in the possession of the defendant Ward, alleged to have been conveyed to him by the bankrupt contrary to the United States bankruptcy act.
The first question is, what were the rights of the parties under these circumstances, apart from the federal bankruptcy act. It is the settled law of this Commonwealth that an instrument of transfer of personal property, absolute in form but intended by the parties to be a mortgage, genuine, honest and valid as such when executed and delivered, authorizes the person named as vendee to take possession of the property, in order to secure his own debt, at any time before the rights of other persons have
The second question presented is the effect of the transaction in the light of the federal bankruptcy act. It was said in York Manuf. Co. v. Cassell, 201 U. S. 344, at 349, with affluent citation of authorities: “The trustee in bankruptcy takes no greater title than the bankrupt and the bankruptcy proceedings do not operate as a judicial seizure, conferring new and greater rights on the creditors of the bankrupt.” To the same effect see Zartman v. First National Bank of Waterloo, 216 U. S. 134, 138; Sexton v. Kessler & Co. 225 U. S. 90, 97; Holt v. Crucible Steel Co. of America, 224 U. S. 262; Thomas v. Taggart, 209 U. S. 385.
It is the law under the present federal bankruptcy act, as established by decisions of the United States Supreme Court, that the effect of talcing possession of property within four months of the bankruptcy by a mortgagee according to the terms of the mortgage made earlier than four months before the filing of the petition in bankruptcy is to be determined according to the law of the State. Thompson v. Fairbanks, 196 U. S. 516. This continues to be the law, except as modified by 32 U. S. Sts. at Large, 797, 799; U. S. St. 1903, c. 487, § 13, approved February 5, which provides that “where the preference consists in a transfer, such period of four months shall not expire until four months after the date of the recording or registering of the transfer, if by law such recording or registering is required.”
The point next to be determined is whether the instrument of transfer here under consideration was one required to be recorded or registered under the law of this Commonwealth. It is true that in general mortgages of personal property are required by R. L. c. 198, § 1, to be recorded. But a bill of sale is not a mortgage. It has been decided several times that it was not only not a mortgage, but could not be recorded as a mortgage- and acquired no additional validity by being recorded. Williams v. Nichols, 121 Mass. 435. Hill v. Marston, 178 Mass. 285. Harding v. Eldridge, 186 Mass. 39. Clark v. Williams, 190 Mass. 219. The reason for this is that the mortgage agreement in cases like the present is partly oral, and therefore cannot be recorded. It is not required to be recorded under the law of this Commonwealth, and its validity does not depend on such recording, and
The United States Circuit Courts of Appeal generally have sustained the validity of an instrument of transfer which was valid without recording as between the parties and against attaching creditors under the State law since the enactment of 32 U. S. Sts. at Large, 797, 799; U. S. St. 1903, c. 487. Meyer Bros. Drug Co. v. Pipkin Drug Co. 69 C. C. A. 240, In re Doran, 83 C. C. A. 265, In re Sturtevant, 110 C. C. A. 68, In re Klein, 116 C. C. A. 603, 613, although there are contrary decisions: In re Beckhaus, 100 C. C. A. 561, Loeser v. Savings Deposit Bank & Trust Co. 78 C. C. A. 597. Other decisions sustaining the conclusion we have reached are Mower v. McCarthy, 79 Vt. 142, Laurel Oil & Fertilizer Co. v. Horne, 101 Miss. 629. See also Fisher v. Zollinger, 79 C. C. A. 76.
Decree affirmed with costs.
In the Superior Court Jenney, J., made a final decree dismissing the bill; and the plaintiff appealed.