Beamer v. Freeman
Before: Gibson
Synopsis
Chattel Mortgage — Registry—Validity as against Creditors — Construction of Code. — Section 2957 of the Civil Code, declaring that a mortgage of personal property is void as against creditors of the mortgagor unless it is recorded in the same manner as grants of real property, is designed to substitute the record of the mortgage for the actual delivery and change of possession, otherwise required by section 3440 of the same code.
Id. — Attachment before Record. —Without holding that such unrecorded mortgage is void per se as against creditors at large of the mortgagor, it is certainly void as against creditors who obtain a lien by attachment of the mortgaged personalty in the hands of the debtor before record of the chattel mortgage.
Id.—Dissolution of Attachment — Effect of Insolvency Proceedings.
— Though such attachment is dissolved by subsequent proceedings in insolvency within one month, such dissolution does not inure to the benefit of the holder of the chattel mortgage which was unrecorded at date of the attachment.
Id. — Replevin by Assignee of Insolvent. ■— The attached property may be recovered in an action of replevin by the assignee of the insolvent debtor, as having, by force of the attachment befoie record of the mortgage, remained in the insolvent debtor by operation of law.
Id. — Disposition of Attached Property. — The attached property, when recovered by the assignee, must be regarded as a portion of the general assets of the insolvent, which must be disposed of for the common benefit of all his creditors.
Id. •—Construction of Insolvent Act. —The Insolvent Act must receive a reasonable construction, in order to effectuate its object and promote justice; and it must be regarded as designed to protect the creditors of the insolvent, and not to give an advantage to their detriment to a mortgagee of personal property who had failed to acquire a lien by his own laches in not recording his mortgage before the property was attached.
Appeal — Reversal of Judgmf.nt upon Findings—Waiver of Damages.
— When the findings show a right of the plaintiff to recover, and leave only the question of damages undetermined, an erroneous judgment for the defendant may be reversed, and judgment ordered for the plaintiff upon the findings, if he consents to waive damages.
Gibson, C. Action of replevin. Judgment passed for defendant, from which the plaintiff appeals.
November 4, 1882, Jeans executed and delivered to defendant a chattel mortgage of a portable steam-engine then in Yolo County, to secure the payment of a promissory note for $1,150. This mortgage was not recorded until August 13, 1886, when it was placed of record in Yolo County, and on the sixteenth day of the same [556]month it was recorded in San Joaquin County, Jeans having on the 1st of the same month, in the same year, removed the engine to the latter county.
August 11, 1886, Baker & Hamilton, creditors of Jeans, attached the engine in San Joaquin County, Jeans having retained the possession of it until that time. On the 20th of the same month, nine days after the attachment was levied, Jeans was adjudged an insolvent debtor, and the plaintiff was by his creditors elected as his assignee; and after having qualified as such, the clerk of the superior court of Yolo County, as required by law, executed and delivered to plaintiff an assignment of all the property of the insolvent debtor, Jeans. Thereupon the sheriff of San Joaquin County, who held the engine under the attachment levy, already referred to, delivered it to the plaintiff as such assignee. The engine, which is of the value of eight hundred dollars, was then taken from plaintiff’s possession by defendant Freeman, who claimed it by virtue of the terms of his chattel mortgage upon it; and upon demand of the assignee therefor, refused to return it to him. Between the date on which the mortgage was made and that on which it was recorded in Yolo County, three years and nine months had elapsed, during which time Jeans incurred numerous liabilities, among which was the one upon which Baker & Hamilton obtained their attachment, who, with other creditors, filed their claim against the insolvent’s estate.
It thus appears that the contest is between the creditors of the insolvent and his mortgagee under the chattel mortgage.
A mortgage of personal property is void against the creditors of the mortgagor unless it is recorded in the same manner as grants of real property. (Civ. Code, sec. 2957.) This law substitutes the record of the mortgage for the actual delivery and continued change of possession, made essential to effect transfers in other cases by [557]
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