Case ID: ohio-cir-dec_5/html/0276-01.html
Source: Caselaw Access Project
Author: {"author": "Smith, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

CHATTED MORTGAGES.
    [Butler Circuit Court,
    October Term, 1895.]
    Swing, Cox and Smith, JJ.
    Morey, Andrews & Morey v. Pierce.
    [aen oe as Against Operatives oe Mortgagor.
    Where a chattel mortgage, given within two months before an assignment for benefit of creditors, is produced, it is incumbent on the mortgagee as against the lien of the mortgagor’s operatives for wages due under section 6855, to show that such mortgage was given in good faith, not to create a preference among creditors, or to secure a preexisting debt other than upon real estate for the purchase money thereof.
    Error to the Court of Common Pleas of Butler county.
   Smith, J.

We are of the opinion that under the facts disclosed in the bill of exceptions, it was incumbent on the plaintiff in error on the trial of the court of common pleas, in addition to the production of the note and chattel mortgage, which was executed ’ to them by the assignor, a few days before the assignment, to show that such mortgage was obtained in good faith, and was not given to create a preference among creditors, or to secure a pre-existing debt, other than upon real estate for the purchase-money thereof. The first clause of section 6355, provides that 1 ‘every person who shall have performed any labor as an operative in the service of the assignor shall be entitled to receive out of the trust funds, before the payment of other creditors, the full amount of the wages due to such person for such labor performed within twelve months preceding the assignment, not exceeding $300.00. And it was conceded that the operatives in this case who were preferred to the mortgage claim, came within this provision. It is then stated in the succeeding part of the section that the foregoing provisions shall not in any way affect securities given or liens obtained in good faith,.for value, but that judgments, by confession on warrants of attorney, rendered within two months prior to the assignment, or securities given within such time to create a preference among creditors, or to secure a pre-existing debt, other than upon real estate for the purchase money thereof, shall be of no force or validity as against such claims for labor to the extent above provided, in case of assignment.” It would seem, therefore, that where it appears that operatives have such a claim, that the mere production of a note or mortgagegivenwithintwomonthspriorto the assignment, without any proof that it was obtained in good faith, or was not given to create a preference among creditors or to secure a pre-existing debt, is not sufficient to entitle it to priority over the claims of such operatives. The judgment of the common pleas will therefore be affirmed.

Morey, Andrews & Morey, Attorneys for Plaintiff in Error.

P. G. Berry, Attorney for Defendant in Error.