Case Name: Cross, Trustee v. Carstens
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1892-06-28
Citations: 49 Ohio St. 548
Docket Number: 
Parties: Cross, Trustee v. Carstens.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 49
Pages: 548–578

Head Matter:
Cross, Trustee v. Carstens.
Insolvent debtors— When and how may prefer creditors — Must be in good faith — Section 6343, Revised Statutes, construed — Chattel Mortgages — How to be filed— What verification of required— Section 4151, Revised Statutes, construed — How copies of to be verified.
1. A failing debtor, knowing his insolvency, and in contemplation of making an assignment for the benefit of creditors, may prefer one or more creditors to others, provided he does so in good faith, and by means calculated to hinder other creditors no more than is incidental to the preference, and this he may do by a chattel mortgage delivered to the mortgagee before the deed of assignment is delivered to the probate judge. Such transaction is not within the operation of section 6343, Revised Statutes, which provides that “ all assignments in trust to a trustee or trustees, made in contemplation of insolvency, with the intent to prefer one or more creditors, shall inure to the equal benefit of all creditors in porportion to the amount of their respective claims.”
2. Where, in order to comply with section 4151, Revised Statutes, it is necessary to deposit a chattel mortgage, or a true copy, at the office of a county recorder, and also with the clerk of the township of the residence within the state of one of the mortgagors, the statute is not satisfied by depositing in one place the mortgage duly verified by the sworn statement of the mortgagee, and at the other a copy of the mortgage, with a copy of such statement indorsed thereon, but it is necessary that on each instrument so deposited, there should be an original sworn statement.
(Decided June 28, 1892.)
Error to tbe Circuit Court of Hamilton county.
Tbe controversy arose on tbe application of the defendants in error, mortgagees, to the probate court of Hamilton county, for an order upon the plaintiff in error, trustee for creditors, requiring him to pay their mortgage claims from funds in his hands, arising from sale of property covered by the mortgages, the assets being insufficient to pay all creditors in full.
From the order made by the court requiring payment of the mortgage claims, as preferences, the trustee appealed to the court of common pleas, where a like order was made. A bill of exceptions, setting out all the evidence, was taken, and was presented to the circuit court, by which court the-judgment of the common pleas'was affirmed.
Facts sufficient for an understanding of the case are as> follows:
On May 27,1887, Frank Horst and-George F. Wachendorf, composing the firm of Hosrt & Wachendorf, doing business in the city of Cincinnati, Cincinnati township, Hamilton county, Ohio, being insolvent, made an assignment for the benefit of their creditors to S. B. Hammel, of the law firm of Matson, Coppock & Hammel.' The deed was filed the same day at 2:30 P. M. Frank Horst lived in Newport, Ken- lucky, and George F. Wachendorf lived in Springfield township, Hamilton county, Ohio.
On the same day the firm executed three chattel mortgages covering all their merchandise, to Amelia Carstens, Fred Klessman and The Second National Bank of Cincinnati, respectively, which were duly sworn to by the respective mortgagees and filed with the recorder of Hamilton county, (whose office is in Cincinnati township) within a few minutes before the filing of the deed of assignment. These mortgages were for money loaned to the firm some time before. After the chattel mortgages had been signed by both members of the firm and duly sworn to by the mortgagees, without the knowledge or direction of the mortgagees, copies of the mortgages and copies of the affidavits thereon, were prepared and were filed by the assignee with the clerk of Springfield township, a few minutes prior to the filing of the original mortgages with the recorder.
The assignment was proposed by Geo. F. Wachendorf .after consultation with his attorney, Judge I. B. Matson. Mr. Frank Horst being sick, it was necessary to go to Newport to get his • signature. He consented only on condition that the claims of the mortgagees above mentioned be .secured. This was agreed to, and the deed and mortgages were signed at the same time, it being impossible to determine from the evidence which was executed first.
The mortgagees were not seeking payment or security, until informed of the intended assignment and the intention to secure them; and then they were informed only in order that they might make the necessary affidavits to their claims. At no time, until delivered to Mr. S. B. Hammel for filing, ■did the deed of assignment of the chattel mortgages, pass out of the control of Judge Matson. He claimed to have “been acting as the attorney for the mortgagees as well as for the mortgagors and assignors. When the deed of assignment and mortgages had been properly executed, and •the necessary affidavits attached, Judge Matson delivered, all ■the papers to Mr. Hammel, who had consented to. act as .■assignee, with instructions to “file the mortgages first and lo file copies in Springfield township and the originals with the recorder, and then file the deed of assignment.” These instructions Mr. Hammel followed.
Hammel subsequently resigned and J. B. Cross was appointed Trustee to succeed him.
Grdnger & Hunt, for plaintiff in error.
I. The mortgages are invalid as preferences, because not properly filed. Westlake v. Westlake, 47 Ohio St., 315.
The original mortgages with the original affidavits were filed with the Recorder of Hamilton county. This was a correct filing as to the Recorder; but copies of the mortgages with copies of the affidavits were filed with the clerk of Springfield township. This latter was not a compliance with the statute. Porter v. Dement, 35 Ill., 478; Cooper v. Knoppes, 45 Ohio St., 625; Bitter v. Baldwin, 42 Ohio St., 125; Nesbit v. Worte, 37 Ohio St., 378; Hanes v. Tiffany, 25' Ohio St., 546; Seaman v. Eager, 16 Ohio St., 210; Erwin v. Shuey, 8 Ohio St., 510; Hill v. Gilman, 39 N. H. 88; Ruffv-Echterman, 52 Md., 582,
The cases of Ashley v. Wright, 19 Ohio St., 291, and The Gambrinus Stock Company v. Weber, 41 Ohio St., 689, do-not apply to the copy of the'mortgages filed here; for, in those cases, the affidavits were in fact made to the instrument filed.
The question of notice is also foreign to this case. Although the assignee had actual notice of the mortgage, inasmuch as he represents creditors, notice could not affect him. Erwin v. Shuey, 8 Ohio St., 510.
II. The deed of assignment and the preferential mortgages being parts of the same transaction, the mortgages-are within the operation of section 6343, of the Revised Statutes of Ohio, and therefore inure to the equal benefit of all creditors.
This section is not restricted by its terms nor by any other section of the Ohio statutes to any particular form in which such assignment may be made, nor limited by the number of acts performed or instruments executed by the parties, nor intervals of time between their acts and the execution of tlie instruments necessary to consummate their purpose. Nor has any such restriction been placed on the •construction of similar statutes by the courts of other states. The record shows, that the mortgages and the deed of assignment were all executed at the same time; which was signed first is not known; that they covered the same property and were executed in pursuance-of a prior formulated plan to make an assignment with preferences; that all the parties, the assignor, assignee, mortgagors and attorneys, knew of the intended assignment and preference, and co-operated to give each- and all the intended effect. The deed of assignment and mortgages were, when executed, delivered at one time by the attorney of the assignor to the assignee to be filled in pursuance of the previously understood intention. The mortgagees never expected to secure any advantage or preference except in the assignment proceedings in the probate court. Could there have been anything else said or done to have constituted the deed and mortgages more completely one transaction? The mortgage creditors were not seeking security; they simply acquiesced in the plan and co-operated with the assignors and assignee. They had not even the element of diligence to characterize their conduct and distinguish their motives'and designs from the common design to make an assignment in a manner by which some creditors would be preferred over others. If the preferences had been inserted in the deed of assignment itself, there could have been no more elements in common, either of subject matter, time, place, motive, or design.
If then the failing debtor and the preferred creditors in the case at bar have effected the very thing the legislature has declared shall not be effected, it ought not to be difficult for the court to find a principle by which it can construe section 6343 as other statutes are construed, and, whatever the form or the color of the transaction, to. look to its substance and its effect. The law cannot be evaded by mere contrivance. Maxwell on Statutes, page 133, chapter 4; Downing v. Kintzing, 2 Serg. and Rawle, 326, 335, 341; Wilson v. Gidding, 28 Ohio St., 554; Slutz v. Degenberg, 28 Ohio St., 371; Bloomingdale v. Stein, 42 Ohio St., 168, 171; Turner v. Reid, 3 C. Ct., 660; Sylvester v. Hessiein,. 5 C. Ct., 256; Van Patten v. Burr, 52 la., 518; Perry v-Vezima, 63 la.. 25; Moore v. Church,,70 la., 208.
We will refer to the various statutes of the different states and the respective decisions supporting the proposition advanced.
In the statutes construed the-words, “assignment,” “general assignment,” “assignment for the benefit of creditors,” and “assignment in trust in contemplation of insolvency,”' have all the same significance; for such conveyances are, necessarily, in trust, necessarily made in contemplation of insolvency, and necessarily for the benefit of some or all creditors. Alabama: section 2126, Code of 1876; (section 1556 of 1852); Holt v. Bancroft, 30 Ala., 193,199 ; Danner 6 Co. v. Brewer, 69 Ala., 200; .Rochester v. Armour, 8 South Rep.T' 780. .
Maine: Revised Statutes of 1857, page 437 (Gen. Raws of 1844, page 112, sections 1 and 2); Berry v. Coutts, 42. Maine, 445, 447j
Missouri: Revised Statutes, section 354; Clapp v. Nord-meyer, 25 Fed. Rep., 71, 72, 73; Kellog v. Richardson, 19-Fed. Rep., 70, 72.
Colorado: Act of February 12, 1881, to regulate assignments, etc. Doggett v. Herman, 16 Fed. Rep., 812, 814.
New Jersey : Revised Raws of 1877, page 36 ; Livermore v. McNciir, 34 N. J, B., 478, 482; Garretson v. Brown, 26. N. J. R. (2 Dutcher), 425, -444. '
Oregon: Act of October, 1878. Session law, page 36,. section 1; Hahn v. Soloman, 20 Fed. Rep. 801, 811.
Michigan: Howell’s Statutes, section 8739; Fellogg v. Rood, 23 Fed. Rep. 525, 528; Root v. Potter, 26 N. W., 682, 684. ■ ■
Wisconsin: Raws of 1883. Chapter 349, section 1; Winner v. Ployt, 66 Wis., 227, 234.
Illinois: Starr and Curtis’ Annotated Statutes, page 1307 ; Preston v. Spaulding, 120 Ill., 208, 217, 219; Field v. Geo-hegen, '16 N. E. Rep., 912, 914; Hide & Leather National Bank v. Rehm, 18 N. E. Rep., 788,. 789 ; Hier v. Kaufman,. 25 N. E. R., 517, 519.
Indiana: J. Shillito Co. v. McConnell, 26 N. E., 832; White v. Cotzhavin, 129 U. S. Supreme Court Rep., 329, 343.
New Hampshire : Raws of 1834 (July 5th), chapter 161; Rundlet v. Dole, 10 N. H., 458, 465.
New York: Berger v. Varrelman, 27 N. E. 1065; First Nat. Bank v, Bard, 13 N. Y. Supp. 688.
Massachusetts: Act of 1836, chapter 238; Perry v. Holden, 22 Pick. 269, 277; Fairbanks v.- Hayne, 23 Pick. 328, 325.
Connecticut: May session, Chapter 3, page 128; Bates v. Coe, 10 Conn. 283, 293; Harvey v. Mix, 24 Conn. 406, 423.
Iowa; Section 2115, Code; Moore v. Church, 70 la. 208; Van Patten v. Burr, 52 la. 518, 523; Perry v. Vezima, 63 la. 25.
From an examination of the foregoing cases which we think include all reported decisions on the subject to date; and when read in connection with the facts as shown by'the record of this case, but one Conclusion can be reached i. e.: that the mortgages were in fact and law part of the assignment and therefore invalid as preferences.
III. It was long ago asserted by this court, conceding the right of a failing debtor to prefer one creditor over another, that to make it valid, the preference must have been obtained fairly. Our point is that the manner in which the preferences were obtained in this case was a fraud upon the other, creditors, and therefore these mortgagees will be estop-ped from claiming any priority over the deed of assignment.
The assignee himself, after the deed of assignment had been delivered and the trust had been accepted by him, filed the mortgages, and at the request of the mortgagees, speaking by their attorney, purposely withheld the filing of the deed until he had first filed the mortgagees; and this he did with the intention of giving the mortgagees an advantage over the other creditors.
It must be conceded that if the assignee was at this time a trustee for all the creditors alike, then his active assistance in procuring an advantage for certain of those credi tors' over others would be a fraudulent act, of which the beneficiaries thus favored cannot claim the benefit.
The negative answer to this question proceeds from the fact that the statute, section 6335, as amended in the revision, expressly' says a deed of assignment “shall take effect only from the time of its delivery to the probate judge;” but we think this language does not determine the question proposed.
We claim that the spirit of this amendment is the same, and only the same, as that off similar enactments concerning deeds and mortgages of real estate, chattel-mortgages, etc.: It was intended merely to fix a mode of giving notice of the assignment, and nothing more; it was not intended to prevent the ordinary effect of execution and delivery as between the parties themselves. If this is cqrrect, then the moment the deed of assignment was delivered to Hammel, and accepted by him his relation of trustee began. Fosdick v. Barr, 3 Ohio St., 471; Sidle v. Maxwell, 4 Ohio St., 236; Bloom v. Nagle, 4 Ohio St., 45, 54; Stewart v. Hopkins, 30 Ohio St., 502; Seal v. Duffy, 4 Barr, 274; Golden’s Appeal, 1 Atlantic Reporter, 660; Rummery v. McCulloch, 54 Wis., 565; Thatcher v. Franklin, 37 Ark., 64; Clayton v. Johnson, 36 Ark., 406; Brennan v. Wilson, 71 N. Y., 502, 506;
So much, we think, establishes the claim that the deed of assignment in this case became effectual upon its delivery to the assignee, as between him and the assignor. To what extent and intent did it become effectual? From the moment of delivery it made him a trustee -for the benefit of the assignors’ creditors in general. The relation of trustee between him and the creditors, was thereby immediately created. Hall v. Dennison, 17 Vermont, 310;' Ingram v. Kirkpatrick, 6 Iredell, Eq. 462; Burrill on Assignments, sections 296, 362 and page 548; Scull v. Reeves, 2 Green Ch., Nicoll v. Mumford, 4 Johns. Ch., 523, 530; Hyde v. Olds, 12 Ohio St., 595; Ingram v. Griggs, 13 S. & M. 22; Bank v. Bank, 94 Ill., 271; Keen v. Hall, 31 Ohio St., 107, 110; Burrill on Assignments, section 298, and pages 380, 385, 386 and 550 ; 'Brennan v. Wilson, 71 N. Y, 502; Burrill, page 548, note; Alpaughv. Roberson', 'FI N. J. Eq. 96; Met- caljv. Van Brunt, 37 Barb. 621; Inre Backer, 2 Abb. (N. C.) 1379; Jones v. Dougherty, 10 Ga. 273; Wier v. Tannehill, 2 Yerg. 57; %etz v. Snyder, 28 N. E. 234, 237.
. On acceptance of tlie trust,. the trustee must take an active part in the execution of it; which is to say, he must do nothing that will defeat it. Eewin on Trusts, page 190 ; Burrell, sec. 269; McGregor v. Bilis, 2 Disny, 286, 295. He is bound to defend the estate. Andrews v. His, 7 Ohio St., 143,151; Story’s Equity Juris., 1275; Pomeroy’s Equity Juris., sec. 1062, 1066, 1070, 1075; particularly 1077, 1079 and 1080; Mumford v. Stowaser, L,. R. 18 Eq. 556, 563; Horsey v. Chew, 5 Atlantic Rep. 466; Dickson v. Hodges, 10 Atl. Rep, 111; Wilson v. Jennings, 3 Ohio St., 528.
Von Seggern, Phares & Dewald, and W. J. Coppock, for defendant in error.
I. It is conceded that the filing with the recorder of Hamilton county was correct, but it is maintained that the filing with the clerk of Springfield township was defective for the reason that the affidavits on the copies filed were copies of the affidavits on the original mortgages and not in themselves original affidavits. Section 4154, Revised Statutes.
We maintain that all the requirements of the .above section were complied with; copies of the instrument were filed with the clerk of Springfield township; a statement was indorsed thereon stating the amount of the claim; that it is just and unpaid.
The statement was made under oath, as appears from the original affidavits on the original mortgages filed with the recorder.
The object of filing a chattel mortgage is to give notice to the world of the condition of the mortgaged property, and the Supreme Court has so held. Gambrinus Stock Company v. Weber,-41-Ohio St., 689.; Gardiner v. Parmalee, 31 Ohio St., 551; Ashley v. Wright, 19 Ohio St., 291.
• II. We maintain that the deed of assignment and preferential mortgages are separate and distinct transactions, and operate independently of each other, and are not within the 'operation of section 6343.
At common law a failing debtor had the undoubted right to dispose of his propertjr in payment of his debts, or to prefer one creditor over another. The only provision of the statutes of Ohio which in any manner restricts that right, is section 6343, 'of the Revised Statutes, which has been law since 1835.
The amounts of the respective claims of the mortgagees and the justness of the same is not questioned.
The right of the firm to make an assignment is conceded. But it is urged by counsel for'plaintiff in error that the firm being insolvent, and having in their minds determined to make an assignment, and having communicated their intention to at least two of the defendants in error, that therefore the said creditors having accepted chattel mortgages to secure their respective claims with knowledge of the contemplated assignment, which was afterwards in fact made, said mortgages and deed of assignment constitute parts of but one act and purpose, fall within the operation of said section 6343, of the Revised Statutes, and that said preferences are void. We submit that the proposition of counsel for plaintiff in error is untenable, r-
The defendants in error each claim under their respective mortgages. No one claims any thing by virtue of the mortgage executed to either of the others, and neither claims any thing by virtue of the assignment. The mortgages contend in right against each other, and the assignment is adverse in right to each and all of them, and the priority in right is fixed by the time at which they take effect as liens respectively, i. e., according to priority of time of filing. This is fixed by the statute, and has been repeatedly construed by our Supreme Court. It has become a rule of property. Magee v. Beatty, 8 Ohio, 396; Stansel v. Roberts, 13 Ohio, 148; May ham v. Coombs, 14 Ohio, 428; White v. Denman, 1 Ohio St., 110.
As to the intention of the parties to make an assignment, how can the defendants in error, whether cognizant of the fact or not, be in any wise responsible for or affected by. -what passed through the minds of the assignor, over which they had no control ? They neither advised nor suggested the making of an assignment, nor does it appear that their advice or judgment was solicited.
The defendants in error accepted mortgage security, each, for the amount that was justly due him. Neither took any thing to be turned back to the firm, or to pay over to another after satisfying his own claim. No trust relation existed at any time between the firm 'and either of the defendants in error, and without such trust, relation the provisions of section 6343, as construed by our Supreme Court, do not apply. Doremus v. O’Hara, 1 Ohio St., 50.
Does anything in the record disclose a purpose on the part of any one of the defendants in error, in the taking of' his mortgage, tó do more.than take securities for his debt? Bagaley v. Waters, 7 Ohio St., 364.
That a creditor taking a mortgage to secure his own debt simply, does not, in the absence of a trust in himself, fall within the operation of section 6343, was also held in Dickson v. Rawson, 5 Ohio St., 218; Atkinson v. Tomlinson, 1 Ohio St., 237; Jtistice v. Uhl, 10 Ohio St., 170.
We maintain that the deed of assignment, so far as affects the rights of the defendants in error, is in the nature of a chattel mortgage, the priorities to be determined by the respective times of filing in the proper offices as prescribed by statute.
In view of the number of cases in our Supreme Court, construing the language of section 6343, and its bearing upon cases involving principles in every way allied with assignment and trusts, we deem it unnecessary to cite cases in other states, which are influenced by statutes, the wording of which does not agree with ours. Nor do we think the citations in the brief for plaintiff in error on the construction of-the word assignment, etc., as used in different states, assist the court in reaching a proper determination of the case'at bar.
III. There is no question that preferences, to be valid, must be fairly obtained, and, conceding the right of the assignors to make them, the mere manner in which they are obtained, is of no consequence, so long as they are fairly obtained. The assignors had the right to dispose of their property among their creditors as they saw fit, and had exercised this right. They had executed and delivered the mortgages to the mortgagees, in good faith, and the mortgagees handed them to Hammel for the sole purpose of having him file them. The assignors delivered the deed of assignmeht with the express stipulation that it was to be subject to these preferences. Hammel in all honor could not do otherwise than file the mortgages first. He would have been guilty of fraud and palpable dishonesty had he not done as he did. What matters it whose hand files the papers, so long as the filing of them is carrying out a lawful purpose? Would it • alter the case if the parties had retained each his individual paper and made a pretense of racing to the court house each with the other? Was Hammel under any obligation to -make any such pretense of antagonism to validate these transactions? And failing to do so, did he thus render invalid all things which before were right, proper, just and lawful? There is no claim that the debts secured by these mortgages were dishonest. On the other hand, each mortgage was given for an honest, bona fide debt, money loaned to the assignors. These the assignors wished to prefer. They had the right to prefer them; they gave their mortgage to prefer them, .even stipulating which, as between the mortgages, should have priority. Every thing was done 'openly and fairly, without taint or shadow of fraud, and in the exercise of honest purposes and legal rights, and we submit that such acts can not be vitiated by the fact that Hammel’s was the hand that bore the papers to the court house. Wilson v. Esten, 14 R. I. 621; Keller v, Smalley, 62 Tex., 512; Shaw v. Glen, 37 N. J. Eq., 32.
These mortgages in the case at bar were not void, they were valid, and therefore the cases of Hanes v. Tiffany, 25 Ohio St., 549, Lindeman v. Ingram, 36 Ohio St., 1, and Blandy v. Benedict, 42 Ohio St., 295, are not in point.
The'filing of a chattel mortgage is required only for the purpose of notice, and Hammel, as assignee, had notice of the existence of these mortgages.
Brief of Yaple, Moos & McCabe (with A. S. Longley), by consent of the court, they having similar cases pending.
I. In Ohio, under the present laws of the state, an insolvent debtor, out of the effects of which he is owner, knowing his insolvency, and in contemplation of assigning for the benefit of his creditors, may prefer one or more of such creditors, except through the intervention of a trustee, by chattel mortgage delivered to the mortgagee before his deed of assignment is filed in the probate court.
1. We submit that, by the common law of England and the United States, a failing debtor has a right to prefer one creditor to another, and by making a transfer of his property to one favored claimant to defeat the other, provided he do so in an open manner, and without any further object than his act upon the face of it imports. Twine’s Case, 3 Coke, 80; 1 Smith Ed. Cas. 12 ed., p. 17; 2 Kent’s Com. 12 ed. 532, 733, top; Brashear v. West, 7 Pet. 608, 614: Tompkins v. Wheeler, 16 Pet. 106; Tillon v. Britton, 4 Halst. N. J. 120, 136; Blakey’s Appeal, 7 Barr (Pa.) 449, 451; Uhler v. Maul-fair, 23 Penn. St., 481; Hopkins v. Beebe, 26 Penn. St., 85; Hull v. Jeffrey, 8 Ohio, 391; Wakeman v. Gi'over, 4 Paige, 23, 36.
2. A recognized legal method of giving such preferences is, conditionally, or by way of security, as by bond, pledge, or mortgage. Stevois v. Bell, 6 Mass. 339; Johnson v. Whit-well, 7 Pick., 71, 73; Nostrand v.' Atwood, 19 Pick., 284; Bates v. Coe, 10 Conn., 280; Pomeroy v. Maninff Paine, 476; Waters v. Comley, 3 Har. (Del.) 117; Anderson v. Tydings,. 3 Md. Chy. Dec., 167; Davis v. Anderson, 1 Kelly, 176; Birdseye v. Ray, 4 Hill, 158,1.63; Curtis v. Leavitt, 15 N. Y., 197; Mussey v. Noyes, 26 Vt., (3 Deane) 462, 471; Giddings v. Sears. 115 Mass., 505; Pecker. Merrill, 115, Mass., 686, 693; Leitch v. Hollister, 4 N. Y., 211; Fassett v. Traber, 20 Ohio, 540, 545; Brown v. Webb, 20 Ohio, 389.
II. There has been no legislation in Ohio affecting the right of a failing debtor to prefer, by mortgage, a creditor, while such debtor is the owner, and retains possession of, and the right to control, his property — that is, before, he has assigned his property to a trustee for the benefit of his cred itors; but our legislation has made clear and definite the time when such assignment takes effect, and withdraws the failing debtor’s property from his dominion and control, and deprives him of the right to dispose of it to preferred creditors.
In this state, in 1835, 1838, re-enacted in 1859, in the assignment law, and embodied in section 6343 of our Revised Statutes, governing such Assignments, the common law, as illustrated in the case of Tompkins-¶. Wheeler, stipra, was changed — making “all assignments, in trust, to a trustee or trustees, in contemplation of insolvency, with the intent to prefer one or more creditors, inure to the equal benefit of all creditors,” but not* affecting such preferences made directly to a creditor for himself alone.
This was the construction put upon such legislation in Htill v. Jeffrey, 8 Ohio, 391; Wilcox^ v. Kellogg, 11 Ohio, 399, last paragraph. But, in Mitchell v. Gazzam, 12 Ohio, 315, the holding in Hull v. Jeffrey, and Wilcox v. Kellogg, was departed from, and the statute of 1838 was construed to forbid preferences of creditors by debtors in contemplation of insolvency.
This was the only legislation in Ohio at that date claimed to have such effect, and there has been none since. Our statutes will be searched in vain for legislation on this subject other than what is known as section 16 of the assignment act of 1859, 56 Ohio Raw 231, re-enacting the law of 1838. The case of Mitchell v. Gazzam urges all the reasons of supposed policy, justice and equity that are now urged against the right of the failing debtor, in -view of his insolvency, to prefer his creditors out of his effects and property before he has parted with his title thereto, as will as be seen by a careful reading of the case.
The case of Mitchell v. Gazzam was expressly overruled by the Supreme Court in the case of Atkinson v. Tomlinson, 1 Ohio St., 237; Dor emus v. O'Harr a, 1 Ohio St., 45; Fassett v. Traber, 20 Ohio 540, approved in Atkinson v. Tomlinson-, Bloom v.Noggle, 4 Ohio St., 56; Harkrader v. Lciby, 4 Ohio St., 609; Dickson v. Rawson, 5 Ohio St., 221, 222.
III. The matter is very clear in Ohio, and our legislature leaves no room for confusion or doubt. The common law is here in full force, except only' as modified by section 6348. An assignment to a trustee for the benefit of creditors has no retroactive effect. Ennis v. Hulse, Wright’s Rep. 259. It can not have any effect a single moment prior to the time the assignment takes effect. When does a voluntary assignment by an insolvent debtor take effect? Sec. 6335; Follett v. Hall, 16 Ohio, 111; Holliday v. Bank, 16 Ohio, 533; Davis v. Messenger, 17 Ohio St., 231; Hemingway v. Davis, 24 Ohio St., 150; Whiter. Cotzhausen, 129 U. S. 341.
IV. In Ohio, there has been no legislation providing that the property of a failing debtor must be equally divided among all his creditors, and thus depriving him of his common-law right, while he retains the ownership, and dominion, and control of it, to prefer such of his creditors as he chooses, and assigning, for the benefit of his creditors, what may remain after he has made such preferences.
As before stated, this was attempted to be accomplished by legislation, in 1885, by the Pruden bill, which was defeated in the senate, and no effort to adopt s.uch legislation has been since made in this state, showing that the legislative department of the state has so far approved of the rule of the common law, which, we submit, it will be asking too much of this court to change, by judicial legislation.
In Ohio, the only legislation on the subject is the acts of 1835, 1838, 1859, section 16 — Revised Statutes, section 6343 —making assignments in trust to a trustee, in contemplation of insolvency, inure to the equal benefit of creditors. This has been deemed by o'ur legislature a sufficient removal of all that was objectionable in the common law. Hull v. Jeffrey, 8 Ohio, 391; Atkinson v. Jordan, 5 Ohio, 293, 304; (See Corwen’s note to this case in his edition of Hammond’s Reports.) Reppettier v. Orrich, 7 Ohio (pt. 2), 246, 247; Stevenson v. Agry, 7 Ohio (pt. 2 ), 248/249;
For an instructive case as to what does not come within the provisions of section 6343 (section 16 of act of 1859), see Bagaley v. Waters, 7 Ohio St., 359, 369.
Brief of Phillip Roettinger, by leave of the court, he having similar cases pending.
The position here taken is in the affirmative, and the principle for which we contend is that, so long as a debtor, .in Ohio, retains control and dominion over his property, so long does he have the right to dispose of the same (jus disponendi) as he pleases, sitbject only .to the limitations that he must do sq for value and in good faith. He may therefore mortgage, let a lien be taken under confession of judgment, or convey or transfer his property to one creditor, to the exclusion of another. And the fact that he is insolvent and contemplates making an assignment, does not affect his right so to do. This is a right which - is inherent in the ownership of property, and exists and is recognized in all states except those in which statutes prevail which are, in effect, bankrupt laws. Only does the right cease when the debtor has actually and finally, surrendered control of his property, and then only do the rights of creditors accrue to an equal distribution of the assets in proportion to their claims; and, although the debtor contemplates making an assignment, he retains control of his property until the deed of assignment has been executed and delivered. Up to that moment, he may change his determination, and consequently he has not yet surrendered the dominion which the law gives, him.
Under the common law of England and the United States,, a failing debtor may prefer one creditor over another, providing the preference is made in good faith, and there is no fraud connected with the transaction. See Smith’s Reading Cases, 12th ed., page 17.
The practice of preferring creditors, by executing and delivering mortgages and other conveyances, just before making an assignment, has prevailed in Ohio for many years, and, while those who have not been thus favored have always been largely, in the majority as 'to number, and have made corresponding complaint of the injustice which they alleged had thus been put upon them, nevertheless, it has been generally accepted as a law, clearly established by our Supreme Court in a long series of decisions, that, so long as a debtor had control of and dominion over his property, he could dispose of it as he pleased, acting in good faith; the only limitation being, that he could not make a transfer or assignment to a trustee for the purpose of preferring one or more creditors. Hull v. Jeffrey et al., 8 Ohio, 390, 892; Wicox et al. v. Kellogg, et al., 11 Ohio, 394; Fas sett v. Traber et al., 20 Ohio, 545; Bloom v. Noggle, 4 Ohio St,, 45; Harkrader and others sr.Leiby and others, 4 Ohio St., 603; Sayler sr. Simpson, 45 Ohio St., \KL\Clapp v. Dittman 21 Fed. Rep. 16, 17; Smith Middlings Purifier .Co. v. NcGroarty, 136 U. S. 237 ;Brightly’s Prudens Digest, vol. 1, p. 118, par. 2; Blakely's Appeal,Ills.. St.,'449; Johnson! s Appeal, 103 Pa. St.. 377; Bates sr. Coe, 10 Conn., 280; Garetsonsr. Brown. 26 N. J. E. 425; National Bank sr. Sprague et al., 20 N. J. Eq., 11, par. 15; Gilbert, Assignee v-McCorkel and others, 110 Ind., 215; Grubbs sr. Morris, 103 Ind., 166; John Shillito Co. sr. McConnell and others, 26 N. E. Rep. 832; Lampson & Powers sr.-19 Iowa, 479, 480; Fromme v. Jones, 13 Iowa, 480; Cadwell’s Bank sr. Crittenden, 66 Iowa, 237; Kohn Bros. sr. Clement et al., 58 Iowa, 589; Farwell & Co. sr. Howard & Co., 26 Iowa 381; Crow v. Beardsley, 68 Mo.,435 ■, Hargadine sr. Henderson, 97 Mo, 375, 389; Chicago Union Bank v. Kansas City Bank 136 U. S. 223, 237; Eldridge sr. Phillip son, 58 Miss., 270, 280; Estes sr. Gunter, 122 U. S. 450; La Belle Wagon Works sr. Tidball 59 Tex., 291; Stiles et al. sr. Hill et al., 62 Tex. 429; Jackson sr. Harley, 65 Tex. 710; Waiterman et al. sr. Silverberg, 67 Tex. 100; Scott sr. McDaniel, 67 Tex. 315; Reagan sr. Aiken, 138 U. S., 113; Olmstead et al. v. Mattison, 45 Mich., 617; Root v. Potter, 59 Mich., 499; Root & Co. et al. sr. Hart et al., 62 Mich. 420; Johnson sr. Stillwagen, 67 Mich. 10; Low sr. Wyman, 8 N. H. 536; Barker v. Hall, 13 N. H. 293; Waters et al. v. Comly et al., 3 Harrington’s Reports (Del) 117; White sr. Cotzhausen, 129 U. S. 329; Preston sr. Shauld-ing, 120 Ill., 210; Field et al. sr. Geohegaw, 125 Ill. 68; Tom-linson sr. Mathews, 98 Ill., 178, 180; Payne v. Miller, 103 Ill., 442.
The attack upon preferences is a thoughtless one, and entirely loses sight of the principle, old as the ages, that, one who owns property should not be hampered in its disposal, so long as he-uses it for an honest purpose.

Opinion:
Spear, C. J.
Several questions are raised by the plaintiff in error.
I. He insists that the preferential mortgages are within the operation of section 6343, of the Revised Statutes, and inure to the equal benefit of all creditors.
That section, so far as it is involved in this case, is as follows: "All assignments in trust to a trustee or trustees, made in contemplation of insolvency, with the intent to prefer one or more creditors, shall inure to the equal benefit of all creditors in proportion to the amount of their respective claims."
It is contended " that when a debtor recognizes his insolvency and forms a purpose to assign his property to a trustee, all instruments that he may execute with that purpose in view are, in law, one instrument." Hence, in the present case, the mortgages having been executed after the purpose to make the assignment had been formed and at or about the same time, the mortgages were, in fact and law, part of the assignment and therefore invalid as preferences.
In support of this proposition, the argument in brief is, that to hold the mortgages good as preferences, is to render the statute nugatory. The parties were aware, having resolved to make an assignment for the benefit of creditors, that'the preferences desired to be made could not be incorporated in that instrument, and therefore agreed to carry out the purpose by the appearance of separate instruments, in the form of chattel mortgages, thus attempting to do indirectly what the statute forbade them doing directly. The thing done is substantially that which is prohibited, and the law, looking through form and color, to substance, will strip off the disguises and give to the acts of the parties the true interpretation, and declare the several steps but one transaction, and as result, order that done which equity and fair dealing requires, viz: an equal distribution of the proceeds of all the property among all creditors in proportion to the amount of their respective claims.
This doctrine has been confidently argued by eminent lawyers, and has recently received the sanction of at least one Ohio court of high standing; perhaps of more than one There is about it a spice of the heroic which challenges admiration, though it may not win acquiescence. Indeed, we may confess that when first presented we were attracted to the doctrine. But reflection has satisfied us that it is consistent neither with a fair interpretation of the statute, nor with the previous decisions of this court, and, as an attempted rule of property, would prove unsubstantial and delusive^ and practically impossible of execution.
Without question, at the common law, a failing debtor might prefer one creditor to another, and make a transfer of part or all his property for that purpose, provided he did so without fraud, and could do it even by an instrument which provided for the payment also of other creditors of the debtor.
The statute was enacted with full appreciation of the extent and reason of the rule of the common law. It is but applying a most familiar principle, therefore, to say that the legislature, in changing the rule, would make clear the changes proposed. Had it been intended to include within the class of instruments which were to be held as general assignments for the benefit of creditors equally, all transfers and conveyances whatever, made by a failing debtor, what more easy way than to say just that thing? Had such purpose been in the minds • of the law makers, it is entirely clear that the statute falls very far short of expressing the purpose. The language does not include all transfers, nor all conveyances, made in contemplation of insolvency, but assignments, and it is assignments by the failing debtor in trust to a trustee, which the legislature has declared must inure • to the benefit of all creditors. Now it is true that a mortgage, though generally a conveyance as distinguished from an assignment, may be made to serve the purpose of an assignment, for it may be made in trust, and a mortgagee may thus become a trustee. If, by the terms of the instrument, he is to hold the property for the benefit of some creditor other than himself, and is thus liable to account to such other creditor, then a trust is created, and the mortgagee is a trustee. But in cases where, by the terms of the instrument, and by every intendment of the parties, he takes title for himself alone, as in the case at bar, the mortgagee cannot be regarded as a trustee. By its plain terms, the statute, as applied to the mortgages, does not make of them assignments, and there is an entire absence of a trust, or a trustee. Upon no accepted theory of construction, therefore, are we authorized, in view of the acknowledged rule of the common law, to enlarge the class, and say that it must by judicial construction, be held to include other instruments not described, instruments which, since our earliest adjudications, have been held to be valid and entitled to enforcement in accordance with their terms.
But it is insisted that the "trustee" contemplated by the statute, and to whom the language of section 6343 is to apply, is not the mortgagee, but the assignee named in the assignment, because the mortgagee does not, and cannot under the circumstances of the case, take possession of the property as against the assignee, the latter having the right of possession and of sale as against the mortgagee, who must work out his rights through the probate court and under the assignee. To this it is sufficient to answer, that the assignment is but an incident. It is a factor for which the creditor is in no way responsible. He has had no agency in procuring it, nor does he hold, nor claim to hold, by right of it. He finds, after his own rights have vested by virtue of his mortgage, that subsequent rights have attached to the same propertr'- by an act of the debtor talcing effect after his rights are perfect, by force of which the property is in court, to be disposed of according to law, and hence he resorts to that court for the vindication of his claim, and the fruits of his security. The possession of the assignee was not taken in the right of the mortgagee, but of the mortgagor, and his holding is adverse to the mortgagee. Moreover, the parties took every possible pains to declare by their acts, that the assignee was not intended to be Trustee for the mortgagee, and if, in the iace of this, possession, or right of possession, subsequently acquired, is to' be held as making of the assignee a trustee for the mortgagee, then every mortgage will be a trust where the mortgagor disposes of the property by a sale, or even where he remains in possession of it. The claim may be plausible; it is not sound. In the sense that every receiver, or sheriff, or master commissioner, or other officer of the court who may hold property or money in which a creditor has an interest, or to which he has a claim, is a trustee for such creditor, the assignee for the benefit of creditors may be a trustee for a mortgagee, but in no other.
The conclusion hereinbefore stated is aided by application of another familiar rule of construction. Prior to, and about the time of the enactment, of the first statute on the subject, it was common for failing debtors to make assignments of their effects to a trustee with conditions as to benefits. Some were for the benefit of preferred creditors, with a clause that those who do not, within a certain time specified, release the debtor, on account of what may be received from the proceeds of the assignment, shall not be entitled to share in the proceeds. Others were for the benefit of such creditors only as, within a certain time, would agree to take a pro rata share in full; others for the benefit of certain creditors, and any balance to be returned to the assignor; and still others adding a condition controlling the time within which the trustee should proceed to sell and convert the property. All which was without the knowledge or consent of the creditors. Thus the debtor was enabled to delay the creditors' remedy for an indefinite period unless they would consent to discharge the debtor on different terms from those provided in their contracts, and in effect permitted the debtor to make a bankrupt law upon his own terms, and for his own benefit. See Atkinson v. Jordan, 5 Ohio, 289, and Repplier v. Orrich, 7 Ohio, 2d pt. 246, for illustrations. The act of 1885 affected assignments to trustees when made fraudulently. The act of 1838, (now section 6343) went further and made all assignments to trustees in contemplation of insolvency, whether fraudulent or not, inure to the equal benefit of all creditors. See Hull v. Jeffrey, 8 Ohio, 390. In none of the cohtemporaneous decisions do we get an intimation, even, that the payment, or securing, of an honest debt by a failing debtor was unlawful, or was deemed an evil which called for legislative interference. But the real evil is clearly manifest in these decisions, and the remedy for their correction as clearly embodied in the statute. Knowing, therefore, the mischief which was sought to be remedied, we may the more readily construe the language of the statute used to effect that object.
It is insisted that the precise question presented in this case has not been determined by this court. If by this, it is meant that the argument advanced by counsel was not urged in any of the reported cases, the claim may be correct. But if it is meant that the principle which must control this case, has not before been considered, it is, we think, an utter mistake. The principle announced as the controlling, underlying one in the above and following cases, is, we are confident, conclusive of the one at bar.
In the many decisions upon the general subject, from Atkinson v. Jordan, supra to its last deliverance upon the question, (save in the overruled case of Mitchell v. Gazzam, 12 Ohio, 815), this court has not omitted to affirm the right of a debtor, in failing circumstances, in good faith, to pay or secure, one or more creditors in preference to others. Wilcox v. Kellogg, 11 Ohio, 394; Fassett v. Traber, 20 Ohio, 540; Doremus v. O'Harra, 1 Ohio St., 45; Atkinson v. Tomlinson, Id., 237; Bloom v. Nogle, 4 Ohio St., 45; Harkrader v. Leiby Id., 602; Dickson v. Rawson, 5 Ohio St., 218; Bagaley v. Waters, 7 Ohio St., 359; Justice v. Uhl, 10 Ohio St., 170. From an examination of these decisions it will appear clear, if decisions can establish anything, that it is established beyond question, that however equitable it may seem to require the assets of an insolvent debtor to be distributed pro rata among his creditors, our statute fails to make cumpulsory provision for that end. But, on the contrary, it permits preferences, if made in good faith, though but little be left, or nothing at all be left, for other creditors equally meritorious.
The clause of the statute under consideration has been the subject of frequent review by the courts, and'there have been many amendments as to other portions. Had the language of this section been regarded as obscure, we would suppose that, the attention of the legislature being directed to the subject, it would have been amended and its meaning relieved of doubt. But it has stood for over fifty years substantially as it stands today. And this, too, with full knowledge that the construction given by this court had, with the exception stated, supported preferences. More than this, the right of preference, as between preferred and general creditors, is distinctly recognized by two recent enactments. Section 3206a, of the Revised Statutes, passed in the year 1883, in giving a lien to laborers for wages, declares such lien "to be superior to the following liens taken or attaching during the existence of such unpaid labor claims, to-wit: liens of attachment, liens of mortgage given or taken at a time of actual insolvency of the debtor, or with a view of preferring creditors or to secure a pre-existing debt." And section 6355, as amended in 1889 (being a part of the same title and chapter with 63'43), giving the priority of claims to be paid by the assignee, directs: "But judgments by confession on warrants of attorney rendered within two months prior to such 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." Now, when it is remembered, that this section, as it stood prior to the adoption of section 3206a, and prior to the amendment, gave-claims for labor preference over the claims of general creditors, what possible necessity could there have been for the provision above quoted of 3206a, or the amendment of 6355, if the true intent and meaning of 6343 was to place the claims of general creditors on a par with securities given creditors by the insolvent debtor to create preferences? We do not expect the law-makers to do vain things. And. that the construction given by this court to section 6343 is in consonance with the legislative intent, is further shown by the refusal, in the year 1885, by the Senate, to pass a bill offered by Senator Pruden, prohibiting preferences.
As we understand it, the "one transaction" theory, reduced to its last analysis, is predicated upon the condition of mind of the debtor, as to the purpose to make/or not, a general -assignment. The mortgage and assignment are not between the same parties, and it is conceded that they are diverse in their nature and object, and, that there is no intention on the part of either party that they shall be one. On the contrary, the intention is that they shall be separate and distinct in fact, and accomplish separate and distinct purposes. It seems also to be conceded that, however insolvent the debtor may be, and however full his knowledge of that fact may be, only so that he is not then conscious of a purpose to make an assignment, he then may, in a proper way, and fairly, prefer one or more creditors to others. He may, after giving the preference, omit the making of an- assignment and permit the remainder of his effects to be seized in execution, and still the preference may be good. But if he has reached a conclusion that he will then, or at a near future time, execute an assignment for the benefit of his creditors generally, then from that moment he ceases to have the right to use the property, or any of it, for any purpose other than that of an assignment, and any attempt to give a preference to one creditor will be destroyed by the vice of the intention of the debtor, and will be treated as a mere evasion of the object of the statute, and this intent and this evasion, will •cause the mortgage and the deed of assignment to become one instrument the same as if the mortgage had been specifically set out in the deed of assignment, and thus made part •of it. If this is not it then we confess our inability to comprehend the idea.
The proposition is open to many fatal objections. It rests, primarily, upon the assumption that the law relating to assignments, requires the property of an insolvent debtor to be applied to the equal benefit of all creditors upon conditions7 not contained in section 6843, which it does not, and upon, the further assumption that for some occult reason, there is a vice in the purpose to make an assignment, if entertained while an intent to prefer is present, and, beyond this, it involves the confusing and commingling of distinct and separate rights. There can be no vice in the purpose to make an assignment, no matter what company it is found in, because the debtor has a right to do it. At the same time he has an equal right to make an honest preference, and there is not the slightest warrant, we submit, either in the statute, or in the decisions, ^for assuming that the latter right is to be held subordinate to the former, or to be made dependent for its exercise, upon the presence or absence of a purpose afterward, to exercise the former. The theory leads to the result that the purpose to exercise one independent right, at a proper time and in a proper manner, will destroy another independent right, for it is perfectly manifest that to say the debtor may not exercise the right to prefer is to take away that right altogether. It is the very fact that he realizes his inability to pay all creditors in full which induces a desire to prefer one or more, and if he has concluded that he may, or will, cause a part of his property to be devoted to the payment of debts generally, by an assignment, the exact condition has arisen which makes the right to prefer available. The " one transaction" theory while admitting the right, denies its exercise at the time of all others when its exercise will effect a purpose of the debtor admitted to be lawful.
This theory is also inconsistent with the scheme of our registry laws. It would displace the rule that instruments of this nature, shall take effect from the time of their delivery to the proper officer, and substitute for it the state of mind, the purpose not yet executed, of the debtor, and which purpose may be subsequently changed.
Beyond this, the theory claimed, as a rule of property, would be impracticable, The object sought to be attained could be evaded by postponing the making of the assignment until such time had elapsed as would make the debtor's state of mind at the time of the preference difficult of proof. It could be entirely neutralized by failure to -make any assignment at all. In order-to give it effect, in' spirit, and obtain a distribution pro rata of an insolvent's effects, the restraining power of the law would heed to be carried farther. It would be necessary to prevent the debtor, so soon as the fact of the insolvency existed and was known to him, from exchanging his property, or any of it, in satisfaction of a debt, and from selling his property and paying any debts, and also prevent the creditor from having advantage of a judgment lien by execution, or from obtaining a lien by taking judgment by confession, or otherwise. A retroactive insolvent law of'this nature would be impossible of execution.
It is contended that this is not a case of diligent creditors, but simply acquiesing creditors. But it is difficult to see how this claim advances the argument. The vital point of the present inquiry is not of vigilance on the part of creditors, or the opposite. In another view of the case that will become important. We are here dealing solely with the power of the debtors to make the voluntary preference. If that is satisfactorily established, certainly any question as to the right of the creditors to receive it cannot embarrass the •case.
The right of preference rests upon the natural right to acquire and control property. The jus disponendi is necessarily an element of ownership. To authorize the citizen to acquire property would be of little use if he had not the corresponding right to dispose of it. So long as he retains his dominion over it the property is his to do with it what he wills, save only that it must not be devoted to an unlawful purpose. Our statute, section 6835, fixes the time when an assignment for the benefit of creditors shall take effect. It is, at least so far as the transfer of control over the property is concerned, only from the time the deed of assignment is delivered to the probate judge. Until that is done, therefore, the debtor has dominion over the property, and it is subject to his disposition in all lawful ways. And, necessarily, the assignment can convey such property only as the assignor has at the time of such delivery.
Attention has been called to many decisions of other states. A review of them is unnecessary, as the law of this case may be satisfactorily determined without resort to them. However, our examination leads to the impression that, where not affected by statutes equivalent to bankrupt laws, the holdings in most of the sister states are in harmony with the Ohio cases cited, and the conclusions here given.
As conclusion, we are satisfied, that in Ohio a failing debtor, knowing his insolvency, and in contemplation of assigning for the benefit of creditors, has a right to prefer one or more creditors to others, if he does so in good faith and hinders other creditors no more than is incidental to the preference, and this he may do by chattel mortgage delivered to the mortgagee before the deed of assignment is delivered to the probate judge.
Plaintiff in error also insists that the mortgages are invalid as preferences because not properly filed.
At common law a mortgage of chattels, unaccompanied by possession of the property mortgaged, was fraudulent and void as to creditors, and this principle is re-affirmed in our statute, section 4150, and following, save that the mortgage is validated, and a lien created, by compliance with the statutory requirements as to registry. The mortgage, or a true copy thereof, must be deposited with the township clerk where the mortgagor resides, at the execution thereof if a resident of the state, and if not such resident, and the property is within a township wherein is the office of a county recorder, the mortgage shall be filed withsuch recorder. Or, if the mortgagor resides in a township in which the office of county-recorder is kept, the mortgage, or a true copy, shall be filed with such recorder. But before the mortgage, or a copy, is filed the mortgagee, his agent or attorney, shall state thereon, under oath, the amount of the claim and that it is just and unpaid if given to secure the payment of money, and if given to indemnify against liability, as surety, such sworn statement shall set forth such liability, and that the instrument was taken in good faith to indemnify against loss.
In the present case, the mortgagor Horst resided without the state, the mortgagor Wachendorf resided in Springfield township, Hamilton county.
No question is made as to the due execution of the mortgages. Immediately after the execution, a proper affidavit, by the mortgagee, was made upon each mortgage, respectively, in conformity with the statute. Then a copy of each mortgage, and of the affidavit thereon, was made. The three original mortgages with affidavit thereon, were thereupon filed in the office of the recorder for Hamilton county, in the city of Cincinnati, where the mortgaged property was. The copies were soon thereafter, and prior to the filing of the deed of assignment, deposited with the clerk of Springfield township. It is as to the sufficiency of these copies that the controversy arises. Do they satisfy the requirements of the statute ?
The common law having been changed by statute, it would follow, by force of a familiar principle, that the requirements of the statute should be fully complied with by those who seek to avail themselves of its provisions. This rule is recognized by numerous decisions of this court regarding mortgages. Erwin v. Shuey, Assignee, 8 Ohio St. 509; Samen, Trustee v. Eager, 16 Ohio St., 209; Hanes v. Tiffany, 25 Ohio St., 549; Nesbit v. Worts, 37 Ohio St. 378 ; Biteler v. Baldwin, 42 Ohio St., 125; Cooper v. Koppes, 45 Ohio St., 625, are authorities to the proposition that a failure to comply with the requirements of the statute'is fatal to the attempted lien These cases are instructive as showing the strictness with which the court has held parties to a compliance with the statute, and that defective instruments, or affidavits, will not be cured. Other cases are to the effect that mere form is not controlling, and where the affidavit made substantially complies with the statute, it will be held good. We are dealing with a case, not of form of affidavit, but of absence from an instrument deposited to perfect a lien, of any affidavit whatever.
Now what does the statute require? Westlake v. Westlake, 47 Ohio St., 315, is authority, if authority be needed, to the point that a filing in the city or town where the property was situated is- not sufficient, buft that there must also be a deposit with the proper officer at the place where the resident mortgagor resided. Where both are required, no rea son is apparent for making any distinction between the two acts, nor for regarding one as higher, or more important, than the other, nor is any valid reason given why less formality should attend the filing of the mortgage, or true copy, in one place than in the other. If it is important that creditors, or others interested, in the one locality, have notice of the status of the mortgagor's property, by sworn statement, and have access to a document which if false, might be the predicate of a criminal prosecution, why should not persons having a like interest, living in the other locality, have a like notice? Or if a copy of the mortgage, and a copy only of the affidavit, is sufficient in the one place, why would it not be in the other? It is impossible to see how the present case would be different if the mortgage, with affidavit had been filed at Springfield, and the copy with copy of affidavit, had been filed in Cincinnati; or how it would be different, in principle, if the resident mortgagor's home had been in the remotest section of the state instead of in Hamilton county. It is insisted that creditors and purchasers are presumed to know the law, and therefore, those finding copy only of the affidavit on copy of mortgage on file should presume that the law had b.een complied with, and that a genuine affidavit had been attached to the paper filed at the other place. But what reason is there for requiring the acceptance of a presumption by creditors or purchasers at either place? Of course the anxious country creditor, if he wanted information from original sources, could travel to Cincinnati to see what the files there might disclose, but this would consume 'time, and time might be of the first importance. And if the task could be imposed upon one living in Springfield township, a like task would have devolved upon one living in the township of the state farthest distant from Cincinnati, had that section happened to be the home of either mortgagor. Other inconveniences incident to the situation will readily occur. The argument ab inconvenienti manifestly has application.
It has been urged that it was sufficient to file the mortgage, with affidavit, at Cincinnati, because the property was there, and therefore that was the place where persons inter •ested would be most likely to consult the files. To this it would seem sufficient to suggest that the actual situs of the property is of consequence, or can have effect, only where there is a non-resident mortgagor, the actual place or places of residence governing where the mortgagors are all residents of the state, and further that personal property is transitory; it may be here today, and away tomorrow, the mortgagor having the right,without consent of the mortgagee, to remove it to any point within the county, while the residence of the mortgagor, though capable of transition, is less frequently the subject of removal.
But, however these considerations may affect the question, it would seem enough to say that the statute, for reasons abundantly good to the law-makers has prescribed: 1. What shall be filed; and 2, the place or places•, where filed. The thing to be filed is the mortgage, or a true copy, verified as required, by the oath of the mortgagee; the places, in this case, where to be filed, the town of the residence of the resident mortgagor, and the place where the mortgaged property was situate.
The statute, by its terms, requires a mortgage to be duly executed, and in like plain terms, authorizes as valid a copy of it; the statute, also, by its terms, requires an affidavit, but it nowhere, by direct language, or by fair implication, recognizes the validity of a copy of an affidavit, A true copy of the mortgage may take the place and serve the- purpose of the original, but the affidavit is no part of the mortgage. That instrument is complete without an affidavit, and .good between the parties. It is only to affect third parties that further formalities are necessary.
By the enactment of the registry law, the legislature has attempted to lay down plain rules, easy to be understood and followed, and,- so far as practicable, to allow all questions of priority to be settled by order of registration, and it is incumbent on the courts to further this'just and sound public policy by administering the law as they find it, and not, by yielding to the inclination to relieve hard cases, fritter away these wise provisions ordained by the law-makers. As to creditors, the mortgage is but the creature'of the statute, and to carry out the intent of the legislature, we think that all material provisions of the statute must be complied with. To like effect are decisions of courts of other states where similar statutes are in force. Cases in point are: Hill v. Gilman, 39 N. H. 88; Porter v. Dement, 35 Ill. 478; and Reiff v. Eshleman, 52 Md. 582.
Giving effect to the language, and what seems to us to be the plain intent of the statute, we are constrained to the conclusion that the filing of a copy of a chattel mortgage, with copy of affidavit only, does not satisfy the requirements of the statute, and can have no legal effect whatever, but that an instrument, fully meeting the description given in the statute in every respect, is necessary to be deposited wherever the mortgage, or a copy of it, is directed to be placed.
It is insisted, further, by the plaintiff in error, that the preferences should be set aside as obtained by fraud, because the assignee, after the deed of assignment was delivered to him, at the request'of the mortgagees, purposely withheld the filing of the deed until he had first filed the mortgages, with intent to give the mortgagees an advantage over the other creditors. Not finding it necessary" to pass upon this question in disposing of the case, we express no opinion upon it.
In holding that the mortgages were legally filed we are of opinion the common pleas erred. For this error its judgment, as well as that .of the circuit court affirming the same, will be
Reversed.