FEDERAL ,REPORTER,
vol. 48.
ARt1ALJ, V. SEYMOUR BIERMAN · ',.' " , .' ... ,,' ..', . ' ·
et aI.
et al.
tI. SAME. . "', ,.', -: f "-:, \
(O£rcuit Oourt, S. D. Iowa, O. D. May, 1888.) 1.
a.' BA.id::m-INTIlllVlIlNING At Law. MCCRARY,
" a autb,orizes the mortgagee totlike possession lit lIl1y''time, " the fact that he does not record it for over 80 days, an\l allows the mortgagor to remain in possession for about 70 days, selling' from the stock in the usual course of business, does not avoid the mortgage as to prior existing creditors, in the absence .of4oIly,fraudulent int:el\.t·..··.. . 'Buta-sto,sprior creditor, whoex'tended the tUne of payment while the mortgage was unrecorded, the mQrt;gageis VOid, ' , CRlIlDITOlis.
FBAtlDULlIlNT CoNVlIlYAN01IlS CORDING. '.'
CHATTlIlL MORTGAGlIlS >
CUNGB Oll' POSSESSION -
RB-
Proceeding in garnishment.
J., (orally.) These cases are before me, having been subthe answeroNllEfgarhishee and other testimonytakehbpon the issue joined thereon, by stipulation of counsel jury being waived. Thep:tdcaeding is one Toy, as garnishee; and the 'Claim of the plaintiffs in the. several cases-I believe there are a numberof them, all to be determined by the ruling upon these two-is that Toy , as garnishee, is responsible to certain judgment creditors of,A . W. Seymout' 'for the value of the stock of goods which Mr, Toy,took under a chtlttel'mOrtgage, and 'caused to'be sold, receiving the proceeds:' Seymour,was a merchant in the town of Alta, in the nortMl'opart of this state, carrying on a retailestltblishment.· Being indeb'ted to Mr. Toy for mone;y'advatlcedby Toy:to him in order to enable him to pay eertaindebts'{he executed a chattel mdrtgage uponhis stock of goods. dated on"the30th of September, 1881'.·' It was not filed foFrecdrduntil tl?;e3d"ofNoveniber, 1881, a. period' of about 30 'fossession was' not' until the 12th 1881. Durii'ig!-fh'e"period from'tW; the of 'the hlortgageuntil the the mortgagor, SeymoUr, reIIlained in 'pos8essU;H:'6f1hestoCk.af.goods;iandcontihued' todem' Mth sales therefrom in the ordinary course of business. There ion in the mortgage authorizing him to retain possession and continue to make sales; but he did so, with the consent, undoubtedly, of the mortgagee, and that was the understanding and purpose, as clearly appeared in the proof. The claims of these plaintiffs, with one exception, to which I shall presently refer, all, so far as I am advised, antedated the execution of the mortgage. In other words, none of them, with the exception to be noted, contracted with the mortgagor after the execution of the mortgage and before its record. The rule laid down in the case of Robinson v. Elliott, 22 Wall. 523, is recognized as establishing this proposition: A mortgage of chattels, which provides that the mortgagor may retain possession of the property and continue to deal with it as his own by selling therefrom from time to time, is at least constructively fraudulent as to creditors, and therefore void. That case went no further than that. It held that, where d
ARGALL 'V. SEYMOUR.
549
the mortgage itself by its own terms provided that the mortgagor should retain possession and continue to deal with the property as his own, it was constructively fraudulent and void. But I am of opinion that another proposition necessarily follows, and that is this: That where such a mortgage does not upon its face provide for the retention of possession by the mortgagor, and that he may continue to deal with the property as his own,yet, if it be shown by proof that such was the understanding orthe patties, and that the mortgagor did in fact retain possession of the goods and continue to deal with them as his own by selling portions thereof, etc., the same result follows, and the· mortgage must be hEildvoid; that is to say, it is not a question as to the nature of the proof by which the character of the transaction is to be established, but it is a lluestion as to the fact itself,-as to the nature of the tranFlaction itself. This may be shown by the terms and stipulations of the mortgage. It was so shown in the case of Robinson v. EUioU. And it may also appear by evidence aliunde the mortgage; and, if it is established as a fact in either mode, the same result must foIlow. But there is another question here, and that is this: Whether in a case where the mortgage is silent upon the question of possession, and makes no provision authorizing the mortgagor to continue to deal with the property mortgaged, and the mortgagee delays for a brief period to take possession under it, and permits the mortgagor during that period to deal with it as his own, this itself, in the absence of proof of actual or intentional fraud, will render the mortgage void in law. This question is not settled by the case of Robinoon v. Elliott, because there the possession had continued for more than two years in the mortgagor after the execution of the mOl:tgage, and during all that time he had continlIed tadeal with the property as his own,being authorized so to do by the express terms of the mortgage itself. In the present case thepossession of the mortgagor was continued only about. 60 days, andI, am not prepared to say that we must necessarily hold the mortgage to be fraudulent alone because the mortgagee delays to take possession fora period of time such as that, and no longer than that. I think if there is no proof of actual fraud, or of an intent to cover up the property for the purpose of hindering other creditors, and if possession bedelivElred before IJ.ny rights of third parties have intervened, that from the time of Buch delivery it may be held to be as valid as if executed at the date of such delivery. As to persons who deal with the mortgagor after the execution of the mortgage, and before its recording, I am of opinion that they nlaY'be treated 118 having dealt upon the faith of his ownership of the goods, he being then in possession. In other. words, I adhereto w1)at was said in the case. of Crook's Assignee v. Stuart, reported in 2 McCrary, 13, 7 Fed. Rep. 800. The doctrine laid down in Robinson v. Elliott has never been extended 80 far as to render void absolutely a transaction such as that s40wn by the evidence in this case; and the courts do not seem inclintld to,extend th,e doctrine of that case further than its facts require. ,See JJfett v."Carter, 2, Low. 458; Miller v.Jonea, 15 N. R R.1.50,. , .. aIA,col1sideriug contained a provision authorizing the mortgagee to take possession at any time. 'fhere is some proof tending
FEDIJ;RAJ,..REPORTER.
to show that hI:': for a. Ji\De .(rom doing so in consequence of a pro,mise of toapply'the. proceeds qf' sales to the payment mortgage dl;lbt. The. case is therefore in several respects unlike that of llobinson v. Tbese propositions being decided, counsel can determine as to how far they.afl'ect the several cases growing out of this lam prepared to say that as to the plaintiffs here in one. of ,these Cllses--tQe case of .Bierman, Hei(lelberg & Co.-the proof after the execution and before the .shows that they dealt with recorqing of the chattel mqrtgage, upon the of his ownership of the stock of goods, and that therefore the mortgage as to them must be beld They dealt with Seymour wbilehe w.as in possession of the 1'rue, tbeir debt had bQeIl, previously contracted, but on the 2d of November the time for payment was and a new note was taken. At that date Seymour was in possession of the stock of goods, and there, was no recorded lien thereon. Following the decision of this court in Orook'8 A8signee v. Stuart, I must hold that asto them the mortthe gargage is void, and that they are entitled to judgment nishee accordingly.
UNITED STATES'll. SANDREY.
(otrcuU Oou'l't, E. D. Louwfa,na. December 26, 1891.) lInIIGUTlON-DESTITUTB MASTER.
Where a stowaway, found upon a British vB8selsoon after leaving Liverpool, is lngood faith regularly enrolled as a mew-ber of the crew for the voyage to New Orleans and return, his 8tattf,8 is thereby fixed as a British sailor, and he cannot be regarded as a destitute alienimmigrant, so as to charge the master, upon arrival at New Orleans, with the duties and penalties imposed by Aot Congo March 8, 1891, ln respeot to the and importation of. aliens; and the fact that such sallor deserts whUe ill port does not affect the master's responsibility.
ALIENS-STOW.\W.\YS .
ENROLLED AS BAILORS-DUTY OJ'
At Law. Complaint against S. S. Sandrey for violating tbe immigration laws. Before the circuit juuge as.committing magistrate. Rev. St. § 1014. Wm. Grant, U. S. Atty·. S. Gilmore and John Baldwin, for defendant. PARDEE, 'J. The affidavit in this case made by Ferdinand Armant, United States commissioner and inspector of immigration, charges that S. S. Sandrey"Then being master of the British steam-ship Cuban, from Liverpool, England, brought into the tJnited States, to-wit, to the port of New Orleans, Louisiana, on board said ship, one alien immigrant, who was not entitled to land, viz., - - Murray. aged 17 years,who was a pauper, and likely to become a public charge, and was therefore excluded from admission into the United States; and aftla.llt£ul'ther charges that on the arrival aforesaid of the said alien imm'Jl'ant on the said in the United States, as afortsaid, the said S. S. Sandrey, the commander of the said vessel, unlawfully and negligently did permit .the said alien immigrant to land therein at a time and place other than that. designated by the insp'ecting officers of alien immigrants arriVing in the United States. in violation of sections 6 and 8 of the act approved 8.: 1891. contrary to the form; 'J etc.