256 F. 73 | 2d Cir. | 1919
(after stating the facts as above).
“As to wlio should get it no more is held than that a trial court of the United States should not refuse to follow Judge Kellogg’s ruling on a purely Kew York question. For that reason the referee’s order is aillrmed.”
Before we proceed further, it is necessary to consider the provisions of the Lien Raw of the state of New York (Consol. Laws, c. 33). The provisions applicable to this case may be found in the margin.
This couri is thus called upon to construe an act of the Legislature of the state of New York which appears never to have been construed cither by the New York Court of Appeals or by the Appellate Division of the Supreme Court of that state. The act has been construed only by the Special Term of the Supreme Court for Saratoga county, N. Y., in the case of Clement v. Congress, supra. That case does not appear to have been carried to a higher tribunal, or to have been cited or referred to in subsequent decisions in the higher courts of the state. The court in that case discussed at length the question whether section 231 applied to chattel mortgages executed by a corporation as security for a single bond, and it came to the conclusion that the section did apply to such cases. The court said:
“It is urged on behalf of the defendants that this provision of law is not applicable, because we have, in the case at bar, only a single bond secured by a single mortgage, and that the phraseology of the section in question is confined to the plural number, including only ‘bonds.’ and that there must be a plurality of bonds in order that the provision of the section may attach. It is not urged that the same reasoning applies to the plural term ‘mortgages,’ ust'd in the same section. There is no apparent reason why the same principle of law should not apply to one bond which is conceded to apply to two. This is clearly a case whore the provision of section 35 of the General Construction*76 Law (Consol. Laws 1909, c. 22) applies. This section provides as follows: ‘Words in the singular number include the plural, and in the plural number include the singular.’ * * * The construction claimed by the defendants, limiting the operation of the section to mortgages securing plurality of bonds, cannot be successfully upheld.
. “Neither is there anything in the section indicating any intention on the part of the Legislature to confine its applicability to negotiable as distinguishable from nonnegotiable bonds.”
On the other hand we are told by counsel for the respondent that it is not true that the federal courts will follow only the construction of a state law given by the highest courts of the state. In Erie Railroad Co. v. Hilt, 247 U. S. 97, 38 Sup. Ct. 435, 62 L. Ed. 1003, the Supreme Court held that the federal court, in construing a statute of the state of New Jersey, should follow the construction given to it by the Supreme Court of New Jersey, although it was not the highest court of that state. “In view of the importance of that tribunal in New Jersey,” said Justice Holmes, “although not the highest court in the state, we see no reason why it should not be followed by the courts of the United States even if we thought its decision more doubtful than we do.” The Supreme Court of New Jersey is not a trial court, as is the Special Term of the Supreme Court of New York, and instead of being composed of a single judge, as that court is, it is composed of nine judges, who sit as an appellate trihunal.
We do not regard the decision in the Hilt Case as laying down a rule which makes it incumbent upon this court to adopt a construction given to a state statute by a trial judge in a state court. While, therefore, free to examine the statute for ourselves, and to put our own construction upon it, we have no hesitation in saying that we fully concur in the construction that the Supreme Court of New York gave to section 231. We entertain no do.ubt that the construction which Judge Kellogg gave to that section of the act in Clement v. Congress, supra, is correct, and rules this case.
The question has been raised, however, whether that section applies to any mortgage not executed by a railroad, telegraph, telephone, or electric light corporation. But the New York Court of Appeals has held that the section applied to a mortgage given by a manufacturing corporation. Zartman v. First National Bank, 189 N. Y. 267, 82 N. E. 127, 12 L. R. A. (N. S.) 1083. That decision is binding upon this court. See, also, Westchester Trust Co. v. Hobby Bottling Co., 102 App. Div. 464, 92 N. Y. Supp. 482, affirmed in 185 N. Y. 577, 78 N. E. 1114, on the opinion of the court below.
It is said that the respondent’s mortgage does not cover chattels ac
“AH fixtures and articles oí personal property attached to, or used in connection with said premises, all of which it is declared aro to be covered by this mortgage.”
The use of the words “are to be covered/’ it is argued, indicate an intention to make the mortgage applicable to future acquired property. It seems to us that, if the intention had been to cover future interests or property subsequently to be acquired, that intention would have been more clearly indicated. But, however that may be, it is the law of New York that a mortgage of future interests is valid between the parties thereto and against all other persons claiming under the mortgagor voluntarily, with notice, or in bankruptcy. Reynolds v. Ellis, 103 N. Y. 115, 8 N. E. 392, 57 Am. Rep. 701. It does not constitute a lien as against creditors whose claims arose subsequent to the mortgage.
But there is no evidence in the record of this case that there were any creditors of the bankrupt whose claims arose subsequent to the execution of the respondent’s mortgage. In the absence of any proof that the trustee represents creditors whose claims arose subsequent to the execution of the mortgage, the respondent is entitled to the whole of the sum realized.
The order is affirmed, with costs.
“Sec*. 230. Chattel Mortgages to he Filed. — Every mortgage or conveyance intended to operate as a mortgage of goods and chattels or of any canal boat, steam tug, scow or other craft, or the appurtenances thereto, navigating the canals of the state, which is riot 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 creditors of the mortgagor, and as against subsequent purchasers and mortgagees in good faith, unless the mortgage, or a true copy thereof, is filed as directed in this article.
“Sec. 231. Corporate Mortgages Against Real and Personal Property.--^Mortgages creating a lien upon real and personal properly executed by a corporation as security for the payment of bonds issued by such corporation, or by any telegraph, telephone or electric light corporation, and recorded as a mortgage of real property in each county where such property is located or through which the line of such telegraph, telephone or electric light corporation runs, need not be tiled or refiled as chattel mortgages.”