Court Opinion

ID: 8828896
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:56:30.421968+00
Date Added: 2024-06-11T17:04:51.812178
License: Public Domain

BREWSTER, District Judge.
This is a petition to establish the validity of a mortgage given by the bankrupt prior to adjudication. It presents a close question. Bankrupt purchased of the petitioner a grocery business in Boston, Mass. The referee found that when the purchase was made the bankrupt lived in Worcester, Mass. The mortgage is dated September 22, 1921, recorded in Worcester September 24, 1921, and recorded again in Boston on October 11, 1921. The record at Boston was too late, and the question calling for decision is whether under the statutes of Massachusetts it was necessary to record the mortgage in Boston in view of the following facts which were found to exist:
On the afternoon of September 22d the bankrupt met Keller, the petitioning mortgagee, at an attorney’s office in Boston, at which time and place a bill of sale was executed and delivered to the bankrupt, and the bankrupt gave Keller a purchase-money mortgage on all the property in the store for $1,500. Thereafter bankrupt and Keller drove.to the store, remaining there only a short time. The store was closed at the usual hour on that day, and Keller, under his arrangement with the bankrupt, retained the cash taken in at the store on September 22d. The bankrupt returned on the morning of September 23d and took charge of the business, and later took up his residence in Boston. He continued the business from then until the time of bankruptcy. The statute of Massachusetts (G. L. c. 255, § 1) applicable to the recording of mortgages of personal property requires that mortgages of personal property “shall, within fifteen days from the date *447written in the mortgage, be recorded on the records of the town where the mortgagor resides when the mortgage is made, and on the records of the town where he then principally transacts his business.”
When was the mortgage made, and at the time where did the mortgagor principally transact his business? The mortgagee contends that the mortgage was made on the afternoon of September 22, 1921, and that on that day the mortgagor was not transacting business in Boston; that he did not begin to transact business until the morning of September 23d, and since he was not transacting any business at all in Boston on September 22d it cannot be held that Boston was the city where he was then principally transacting his business.
With some reluctance the learned referee has given it as his opinion that the mortgage should have been recorded in Boston, and with equal reluctance the court has reached the same conclusion. If the bill of sale operated to pass title on the afternoon of September 22d, the mortgagor at the time he gave the mortgage was the owner of a business in Boston, which lie had taken over as a.going concern, and while the mortgagee may have received the proceeds taken in from the sale of goods that afternoon, nevertheless the proceeds were from the sale of the mortgagor’s property, and it was his business that was being conducted, although he may not have derived any profit from the business. If, on the other hand, the parties agreed between themselves that title Should not vest until the morning of September ’23d, then September 23d hecame the effective date of the mortgage, and at that time there is no question about the location of the principal place of business .of the mortgagor. He then was clearly transacting business in Boston. Whichever view one may take, he is led to the same conclusion, namely, that the mortgagor was principally transacting business in Boston at the time he gave the mortgage. This conclusion is in harmony with the intent and spirit of the act. A contrary conclusion would defeat its'obvious purpose.
The order of the referee, therefore, denying the petition, is affirmed.