Court Opinion

ID: 8835525
Source: CourtListenerOpinion
Date Created: 2022-11-26 16:20:01.865031+00
Date Added: 2024-06-11T17:05:03.234726
License: Public Domain

HOUGH, Circuit Judge
(after stating the facts as abové).  It was said at bar that this case had been brought up both by appeal and petition to revise. No such petition has been filed, and, though in somewhat unusual form, we hold the document which brought the case here to be a notice of appeal. Undoubtedly questions of this kind have been brought to this court by petition to revise, neither party objecting. In re Noethen, 201 Fed. 97, 119 C. C. A. 435. But appellee’s effort was to get something on which he asserted a lien, or as to which he prayed a priority, ’which something was already in the actual possession of the trustee in bankruptcy. An appeal in such a matter is proper. Gibbons v. Goldsmith, 222 Fed. 826, 138 C. C. A. 252; In re Zeis, 245 Fed. 737, 158 C. C. A. 139; In re Monarch Co., 245 Fed. 745, 158 C. C. A. 143.
There is no rigid specified period of time within which a chattel mortgage under New York law must be filed, but it is uniformly recognized that such filing must be within a reasonable time. Trimble v. Broun-Green Co., 105 Misc. Rep. 210, 172 N. Y. Supp. 726. What is a reasonable time depends upon the circumstances, and the object of the law in requiring any- filing. Filing is required in order that diligent creditors may know the truth regarding their debtors, and anything which tends to keep them in the dark may properly be called unreasonable.
But the function of the mortgage here attacked was merely to take the place of another mortgage which had been duly recorded for a long *823time. It is admitted that the actual filing of this mortgage was contemporaneous with the withdrawal or extinguishment of the Weiss mortgage. The mortgage at bar was no more than a change of security for the same creditor. Under such circumstances we think there was no unreasonable delay in filing.
Section 230-a of the New York Lien Law is an application to mortgages of the Bulk Sales Act (Consol. Laws, c. 41, '§ 44) authoritatively construed in Klein v. Maravelas, 219 N. Y. 383, 114 N. E. 809, L. R. A. 1917E, 549, Ann. Cas. 1917B, 273. What is forbidden is the mortgaging (without the prescribed preliminaries) of a “stock of merchandise in bulk” or “merchandise and fixtures.” Undoubtedly the mortgage in one portion thereof does refer (as a subject of mortgage) to “all chattels, fixtures and personal property,” and these words are broad enough to cover a shifting stock of eatables. But such a stock could not be mortgaged, at least as against creditors. In re Noethen, supra.
A stock of merchandise is a phrase aptly descriptive of the subject-matter of trading and mercantile pursuits. Yet, when the application of the Bankruptcy Law (Comp. St. §§ 9585-9656) was confined to corporations “engaged principally in * * * trading * * * or mercantile pursuits,” no petition would lie against an innkeeper. Toxaway, etc., Co. v. Smathers, 216 U. S. 439, 30 Sup. Ct. 263, 54 L. Ed. 558. It has been persuasively held that the Bulk Sales Act does not apply to the goods' ordinarily used in a restaurant, because they are not a stock of merchandise within the.meaning of the statute. Swift v. Tempelos, 178 N. C. 487, 101 S. E. 8, 7 A. L. R. 1581.
Observing that the draftsman of the mortgage generally sought to mortgage goods and chattels only (a phrase which plainly would not cover a shifting stock of food and drink), we think the mortgage language should be construed according to familiar rules, so as to preserve rather than destroy the document. So read, the mortgage affected only fixtures and tools, and did not even attempt to coyer the food stock. Therefore it was valid, and the order appealed from is affirmed.