Source: https://supreme.justia.com/cases/federal/us/236/97/
Timestamp: 2019-04-23 06:38:40+00:00

Document:
A taking possession by the mortgagee of the personal property under the power contained in the mortgage is a delivery that satisfies the requirements of the Massachusetts statute in regard to the delivery of goods sold or mortgaged unless recorded.
Goods under attachment may be sold or mortgaged upon notice to the officer as effectively as though a true delivery took place.
the mortgage represented cash advanced at the time it was given.
No order having been made in the bankruptcy court as to whether the lien of the attachment should be preserved for the benefit of the estate, the case is sent back to that court without prejudice to further action on that point.
The facts, which involve the validity of a chattel mortgage and the lien thereof on goods of the bankrupt, are stated in the opinion.
against others than the parties unless the property was delivered to and retained by the mortgagee (Rev.Laws, c. 198, § 1). The district court and the circuit court of appeals held the mortgage void on the ground that the deputy sheriff's possession was exclusive, and that therefore what was done by the mortgagee on May 24 and 25 had no effect. 193 F. 533, 200 F. 747. The main question before us is whether this ruling is right.
We may assume that the trustee in bankruptcy is not a party within the meaning of the Massachusetts act. For, although there have been decisions by the courts of the United States that the assignee under former acts is the bankrupt -- that is to say, that he is a universal successor who, like the executor, represents the person of him to whom he succeeds -- the supreme court of the state has established the construction of the Massachusetts statute. Humphrey v. Tatman, 198 U. S. 91, 198 U. S. 93; Haskell v. Merrill, 179 Mass. 120, 124; Clark v. Williams, 190 Mass. 219, 223. We assume, on the other hand, that if possession was delivered and retained within the meaning of the act at any time before the bankruptcy, the title of the mortgagee will be good. Blanchard v. Cooke, 144 Mass. 207, 227; Keepers v. Fleitmann, 213 Mass. 210, 211; Humphrey v. Tatman, supra. Moreover, a taking possession under the power in the mortgage is a delivery that satisfies the statute. Keepers v. Fleitmann, supra. So the issue is narrowed to the precise point of the ruling below.
is called a change of possession may be accomplished when the goods are in the hands of a third person claiming a lien. Hallgarten v. Oldham, 135 Mass. 1, 9, 10; Union Trust Co. v. Wilson, 198 U. S. 530, 198 U. S. 536. Accordingly, goods under attachment may be sold or mortgaged upon notice to the officer, as effectively as if a true delivery took place. Grant v. Lyman, 4 Met. 470, 477; Mann v. Huston, 1 Gray 250, 253; Clark v. Williams, supra. The acts of the appellant had the same effect as if the mortgagor had been present and assenting, Keepers v. Fleitmann, 213 Mass. 210, and we see in the attachment no sufficient ground for denying him his security. The mortgage embraced after-acquired property, with power of sale and substitution in the mortgagor, but we assume that it was good under Massachusetts law. Blanchard v. Cooke, 144 Mass. 207; Thompson v. Fairbanks, 196 U. S. 516.
Whether or not the lien of the attachment should be preserved for the benefit of the estate, and whether it still is open to the bankruptcy court to make an order to that effect if, on due notice, it should seem just, is not before us. No such order has been made. The decree will be reversed without prejudice to further action upon that point.

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