Huntington v. Clemence

103 Mass. 482 | Mass. | 1870

Morton, J.

The contract under which the question in this case arises is peculiar, but in substance it is a contract by which a debtor undertakes to give collateral security to certain of his creditors, by agreeing to hold personal property as trustee for *484himself and them. The plaintiff borrowed money of Dalton and his associates, for which he gave his notes payable abso lately. The money thus became his. He bought personal property, having previously agreed in this contract that he would hold the same “in trust for the security to said parties who have furnished” said money. It is difficult to see how thr creditors have obtained any title to such property which they can enforce either in their own names or in the name of Huntington. The property was purchased by Huntington, and remained in his possession and use. He was held out to the world as the owner, and thus obtained credit. When the property is attached by creditors, who may have given him credit upon the strength of his apparent ownership, he claims that he holds it upon a secret trust for the security of other creditors. Such a claim cannot be upheld in law.

It is the general policy of our laws that security upon personal property shall not be valid unless the property is delivered, or a mortgage is duly recorded. A trust of the kind set up in this case is a complete evasion of the laws respecting pledges and mortgages, and would produce all the mischiefs which those laws were designed to prevent. Judgment on the verdict.