187 F. 970 | 8th Cir. | 1911
A chattel mortgage on a stock of merchandise and fixtures iu Nebraska, given eight months before the mortgagor became bankrupt, was withheld from the records by the mortgagee pursuant to agreement until two days before bankruptcy proceedings were commenced. The mortgagee then filed the mortgage, took possession of the mortgaged property, and sold it. The mortgagor was insolvent when the mortgage was filed, and the mortgagee had reasonable grounds for believing it, and that he would thereby secure a preference. The trustee in bankruptcy sued the mortgagee tor the value of the property, claiming the mortgage was fraudulent and void under the state law, and therefore so under section 67 of the bankruptcy act (Act July 1, 1898, c. 541, 30 Stat. 564 [U. S. Comp. St. 1901, p. 3450]) ; also that the mortgagee secured a voidable preference under section 60. The trial court held against the trustee and dismissed his bill of complaint. Mattley v. Wolfe (D. C.) 175 Fed. 619. The trustee appealed.
“Where a preference consists in a transfer, such period of four months shall not. expire until four months after tlie (late of the recording or registering of the transfer, if by law such recording or registering is required.”
In First Nat. Bank v. Connett, 73 C. C. A. 219, 142 Fed. 33, we held that the term “required” had reference to the character of tlie instrument of transfer, rather than to the particular persons who might or
About. the time the mortgagee took possession he purchased another mortgage on the property; but, as the claim under it is subject to similar infirmities, it is disposed of by the conclusions above expressed. We think there was a voidable preference, and that the trustee was entitled to recover the value of the mortgaged property and interest from the time it should have been' surrendered.
The decree is reversed, and the cause is remanded for a decree in conformity with this opinion.
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