Court Opinion

ID: 6718699
Source: CourtListenerOpinion
Date Created: 2022-07-20 22:50:54.017432+00
Date Added: 2024-06-11T16:01:32.759533
License: Public Domain

WESTENHAVER, J.
Epitomized Opinion
Petition for review of a finding and order of the referee ,refusing and denying a lien asserted by petitioners, Jessie E. Alvord and Stella G. Thur, against the real estate of the bankrupt.
The bankrupt claims this lien by a written agreement dated 'May 31, 1921. This recites that the bankrupt assigns to petitioners all her right, title and interest in and to a certain judgment, describing it, wherein it was determined that George had an interest in a store building in Crestón, Wayne county, 0., which judgment and her interest in the building was thereby assigned to said petitioners as security for the payment of $3275, the unpaid portion of the purchase price. The bankrupt’s interest a-s determined by the decree is not specifically described, but must be regarded as real estate, and such was the finding of the referee. .
The bankrupt had possession of the store building located on the real estate, and received and collected rents up to the bankruptcy.
This court held that the agreement, having been given to secure a debt, can operate only as a mortgage, if at all. Hence it was void as against the trustee and general creditors, as it was not recorded. See in re Schilling, 251 Fed. 966; 8542 GC. Under this section, a mortgage upon real estate operates as to such parties only from the date it is recorded. Cheney v. 64 OS. 205. In this respect it differs from a chattel mortgage, which may be made effective without record, if possession is taken by the mortgagee. 8560 GC.
The fact that this agreement might have been in form that it could not be recorded would not prevent this consequence, because the law requires all mortgages to be recorded, and it is only such liens as these as are valid without recording, that are within the rule thus invoked. The authorities, holding that an assignment of a chose in action, is valid, although not recorded, do not apply, as plaintiff’s agreement was one undertaking to pledge or assign an interest in real estate, to secure an indebtedness, and can be held valid in law and operative only of the theory of a mortgage. The order of the referee affirmed.