Holt v. Crucible Steel Co. - 224 U.S. 262 (1912)
U.S. Supreme Court
Holt v. Crucible Steel Co., 224 U.S. 262 (1912)
Holt v. Crucible Steel Company of America
Argued March 4, 1912
Decided April 1, 1912
224 U.S. 262
Under 67a of the Bankruptcy Act of 1898, the effect to be given to an unrecorded chattel mortgage must be determined by the recording law of the state.
As construed by the highest court of the state, the term "creditors," as used in § 496, Kentucky Statutes 1903, which declares that no mortgage shall be valid against purchasers without notice or creditors until recorded, does not include antecedent creditors or subsequent creditors whose claims are acquired with notice, but does include subsequent creditors without notice who, by diligence, secure a specific lien before the mortgage is recorded; but that court has not specifically decided whether the term includes subsequent creditors without notice who have not so secured such lien.
The circuit Court of Appeals having held that, under the decisions of the highest court of the state bearing on the question, the term "creditors" as used in § 496, Kentucky Statutes, 1903, does not include subsequent creditors without notice who have not secured a lien on the property prior to the recording thereof, and this Court not being able to say that such construction is wrong, held that the title of the holder of an unrecorded chattel mortgage on property in Kentucky is valid and effective as against the trustee in bankruptcy as to the creditors who became such after the mortgage was given and who had not fastened any lien on the property prior to the proceeding in bankruptcy.
174 F. 127 affirmed.
The facts, which involve priority of claims against the bankrupts' estate, are stated in the opinion.