1. A mortgage of goods and chattels in the State of New York,
which is not accompanied by an immediate delivery and followed by
an actual and continued possession of them, is void as against the
creditors of the mortgagors, subsequent purchasers, and mortgagees
in good faith if it he executed by a firm the members of which
reside there, unless, pursuant to the statute, it be filed in the
city or town where they respectively reside.
2. A failure so to file it does not impair its validity as
between the mortgagee and the mortgagors, or the assignee in
bankruptcy of the latter.
3. Where a controversy arose between the assignee in bankruptcy
of the mortgagors, their execution creditors, and the mortgagee,
touching the application of the fund in court derived from the sale
of the personal property covered by a mortgage which was not so
filed,
held that the creditors are entitled to payment,
and that the residue of the fund, the same not being more than
sufficient to satisfy the mortgage debt, belongs to the mortgagee,
and is not chargeable with any expense incurred by the assignee in
the execution of his trust.
4. Where property, conveyed to the wife under a valid settlement
made by the husband, was by their joint act afterwards appropriated
to the payment of one of his creditors,
held that
subsequent creditors and his assignee in bankruptcy could not
rightfully complain.
5. The bankrupt law does not prohibit an insolvent debtor from
dealing with or exchanging his property before proceedings in
bankruptcy are instituted against him, provided there be no purpose
to defraud or delay his creditors, or to give a preference to any
one, and the value of his estate is not thereby impaired.
This is an appeal from a decree whereby the distribution of a
fund in court was ordered, and certain conveyances of real estate
declared to be void as in violation of the provisions of the
bankrupt law.
The record presents the following facts, in addition to those
stated in the opinion of the Court:
By an indenture executed April 30, 1867, Alexander T Stewart
leased to Simeon Leland, Warren Leland, and Charles Leland,
copartners, the Metropolitan Hotel, in the City of New York, for
the term of four years from that date, at an annual rent of
$79,186, payable in equal monthly installments. One of the
conditions of the lease was that, simultaneously with its delivery,
the rent reserved should be secured by the lessees
Page 101 U. S. 732
giving a first mortgage and lien upon their household furniture
and chattels of every description then contained in, and used for
the purposes of, the hotel, and also that they should every year
during the term, and within thirty days prior to the thirtieth day
of April therein, renew such mortgage, and execute an additional
one, covering all property of the like kind used at its date in the
hotel for hotel purposes, including that described in the first
mortgage.
The lessees accordingly executed and delivered to Stewart a
first mortgage upon the property described, dated April 30, 1876,
which they acknowledged June 11. It was filed September 2 in that
year in the office of the register of deeds for the city and county
of New York. Among its stipulations was one that in case of default
in the payment of rent, at the times and in the manner specified in
the lease, the lessor might "take and carry away the said goods and
chattels," dispose of them at the best price he could obtain, and
apply the proceeds in satisfaction of the rent due and unpaid. As
required by the lease, mortgages in renewal, and in addition
containing similar conditions, were executed by the lessees during
the subsequent years of the term, and filed in the same office.
At the respective dates of the several chattel mortgages, as
well as during the entire term of the lease, Simeon Leland resided
with his family at New Rochelle, in Westchester County, New York,
where he had resided since 1850; Warren Leland resided with his
family in the same county, and had resided there since 1857; and
Charles Leland then and for the ten or twelve previous years
resided with his family at Mt. Vernon, in the same county.
None of the mortgages were filed in the towns where the lessees
resided with their families.
In pursuance of an arrangement made in January, 1871, between
the lessees and Stewart, the former caused conveyances to be made
to the latter as follows: 1st, certain houses and lots on Crosby
and Jersey Streets in New York City, at the price of $10,000, by
conveyance from George S. Leland, dated Jan. 23, 1871, acknowledged
and recorded in the proper office on the following day; 2d, certain
houses and lots on Prince Street, in the same city, at the price of
$14,000, by conveyance
Page 101 U. S. 733
from George S. Leland, dated Feb. 9, acknowledged Feb. 13, and
recorded Feb. 15, 1871; 3d, an improved farm in the Town of
Harrison, Westchester County, at the price of $19,500, by
conveyance from Warren Leland and wife, dated Feb. 1, acknowledged
Feb. 2, and recorded Feb. 24, 1871.
The real estate conveyed by George S. Leland was the property of
the lessees or of some of them, the legal title having been
transferred to him, as was claimed, for the convenience of the real
owners when they should sell to others.
The farm conveyed by Warren Leland and wife was purchased by him
in 1866, and in pursuance of his directions conveyed to her in
1868.
There were at the time of these transactions unsatisfied
mortgages for large sums upon all the real estate. Stewart took it
subject to them, but without assuming to pay the debts thereby
secured.
During the months of February and March, 1871, numerous
creditors obtained judgments against the lessees, in the courts of
New York, and sued out executions, which were levied upon the
property covered by the chattel mortgages. The judgments were also
docketed in the proper offices in New York City and in Westchester
County, so as to create a lien upon the real estate of the lessees.
The first, in point of time, of these executions was issued
February 3, and the last March 29, in that year.
Upon the petition of one of their creditors, filed March 24,
1871, the lessees were duly adjudged bankrupts April 1, 1871. Under
an order of the bankrupt court, directing possession to be taken of
their property, the marshal took into his custody that covered by
the chattel mortgages to Stewart. It was inventoried at $47,253.92,
and under subsequent orders of the court was sold at public
auction, bringing the sum of $43,469.31. After paying sundry
expenses there remained at the date of the decree in the district
court about $26,867.29, subject to distribution.
This suit was commenced in the district court May 26, 1871, by
the assignee in bankruptcy of Simeon, Warren, and Charles Leland,
against them, their judgment creditors, Stewart, and others. The
bill, besides seeking the distribution of
Page 101 U. S. 734
that fund, assails as invalid, not only the several chattel
mortgages and the conveyances of the real estate heretofore
described, but also the judgments obtained in February and March,
1871. The assignee claimed that he was entitled to the fund in
court, and also to the proceeds of the sale of the real estate, for
distribution among all the creditors of the bankrupts, without any
preference among them, except one Ramaley, who was conceded to be
entitled upon his judgment to priority.
The court, upon final hearing, held that the chattel mortgages
as well as the conveyances of real estate were void as against the
assignee in bankruptcy. Stewart was ordered to convey the real
estate to the assignee, and he was adjudged to be liable for the
net rents and profits arising from the same subsequently to the
execution of the several conveyances. The court also held that the
judgments obtained against the bankrupts within four months
preceding the commencement of the bankruptcy proceedings were void
as against the assignee, and by its further order prohibited
Stewart and the judgment creditors from proving their claims in the
bankrupt court.
An appeal was taken to the circuit court, pending which Stewart
died. His representatives were made parties to the proceedings. The
decree of the district court as to the chattel mortgages and the
conveyances of the real estate was affirmed, and reversed only as
to the creditors who had obtained judgments against the lessees
within four months prior to March 24, 1871. The court held that the
several judgments had not been obtained in violation of the
bankrupt law, and that the claim upon the fund in court, asserted
by the creditors, whose executions had been levied prior to the
commencement of the proceedings in bankruptcy, was superior to the
respective claims of Stewart and the assignee.
Page 101 U. S. 735
MR. JUSTICE HARLAN delivered the opinion of the Court.
The objects of this suit, so far as they concern the appellants,
were:
1st, to obtain the distribution of the fund arising from the
sale of furniture and other personal property in use in the
Metropolitan Hotel, in the City of New York, at the commencement of
the proceedings in bankruptcy. The Lelands were lessees of that
hotel under a written lease from A. T. Stewart, dated April 30,
1867, for a term of four years thereafter, at an annual rent of
$79,186, payable in equal monthly installments. Upon the property
thus sold Stewart held, as security for rent reserved by the lease,
several chattel mortgages executed by the Lelands, the validity of
which was questioned in this suit by the assignee in
bankruptcy.
2d, to have a decree declaring sundry judgments against the
bankrupts within four months prior to the adjudication in
bankruptcy, as well as certain conveyances of real estate to
Stewart, to be, as against the assignee, invalid under the
provisions of the bankrupt law.
The first question to which we will direct our attention relates
to those several chattel mortgages.
The district and circuit courts concurred in opinion that they
were not filed in the office designated by the statutes of New
York, and, upon that ground, were ineffectual to give the security
and lien contemplated by the parties, and void as against the
assignee.
By the laws of New York, it is provided that every mortgage or
conveyance, intended to operate as a mortgage of goods and
chattels, which should not be accompanied by an immediate delivery,
and followed by an actual and continued change of possession of the
things mortgaged, should be absolutely void, as against the
creditors of the mortgagor, and as against subsequent purchasers
and mortgagees in good faith, unless the mortgage, or a true copy
thereof, shall be filed as directed in the act. The statute
requires such mortgages to be filed in the town or city where the
mortgagor,
"if a resident of that State, shall reside at the time of the
execution thereof; and if not a resident, then in the city or town
where the property so mortgaged shall be at the time of the
execution of such instrument. "
Page 101 U. S. 736
In the City of New York, the mortgage is directed to be filed in
the office of the register of said city; in other cities of the
state, and in the several towns thereof in which a county clerk's
office is kept, in such office, and, in each of the other towns of
the state, in the office of the town clerk thereof. Registers and
clerks are required to file such instruments, presented to them for
that purpose, and indorse thereon the time of receiving same, and
keep them deposited in their offices for the inspection of the
persons interested.
It is further provided that every mortgage filed in pursuance of
the statute should cease to be valid against the creditors of the
mortgagor, or against subsequent purchasers or mortgagees in good
faith, after the expiration of one year from the filing thereof,
unless within thirty days next preceding the expiration of each and
every term of one year after the filing of the mortgage, a true
copy thereof, together with a statement exhibiting the interest of
the mortgagee in the property thereby claimed by him in virtue
thereof, shall be again filed in the office of the clerk or
register aforesaid of the town or city where the mortgagor shall
then
reside.
The bankrupts resided with their families in the County of
Westchester at the respective dates of the several chattel
mortgages, but the business of the firm of Simeon Leland & Co.,
as lessees of the Metropolitan Hotel, was carried on in the City of
New York, and all the property covered by the mortgages was in use
in that hotel. The mortgages were filed in the office of the
register of deeds for the City and County of New York, and were not
filed in the towns where the lessees respectively resided with
their families. The contention of learned counsel for the
appellants is that the firm was the mortgagor, that its residence
or domicile was in the City of New York, and that the manifest
object of the statute was met by filing the several mortgages in
the city where the firm carried on its business. The question thus
presented is within a very narrow compass, and is not free from
difficulty. Its solution depends upon the meaning of the word
"reside" employed in the statute. It is to be regretted that we are
not guided by some direct controlling adjudication in the courts of
New York construing the statute under examination. But no
Page 101 U. S. 737
such decision has been brought to our attention. With some
hesitation we have reached the conclusion that a chattel mortgage,
executed by a firm upon firm property, is void, under the New York
statute, as against creditors, subsequent purchasers, and
mortgagees in good faith, unless filed in the city or town where
the individual members of the firm severally reside. The statute
upon its face furnishes persuasive evidence that its framers
intended to make a sharp distinction between the place where the
property might be at the time of the execution of the mortgage and
the place of the mortgagor's residence. If he be a nonresident of
the State of New York, the mortgage may be filed in the town or
city where the property shall be at the time of the execution of
the mortgage. If he be a resident, then his residence, not the
actual situs of the property, governs. If these instruments be
executed by several resident mortgagors, the statute would seem to
require that the mortgage be filed in the towns or cities where the
mortgagors at the time respectively reside.
Some stress is laid upon the fact that in each of the mortgages
the mortgagors are described as "of the City of New York." If that
is to be regarded as a representation by them that their fixed
abode was in that city, it is obvious that the statute designed for
the protection of creditors, subsequent purchasers, and mortgagees
in good faith cannot be thus defeated. Their rights depend not upon
recitals or representations of the mortgagors as to their
residence, but upon the fact of such residence. The actual
residence controls the place of filing, otherwise the object of the
statute would be frustrated by the mere act of the parties to the
injury of those whose rights were intended to be protected. The
recital of the residence in the mortgage "seems to be of no
importance, and might for the matter of security be omitted
altogether." Nelson, C.J., in
Chandler v. Bunn, Hill &
D.Supp. (N.Y.) 167.
A good deal was said in oral argument as to the serious
inconveniences which may result from any construction of the
statute that requires chattel mortgages executed by a firm upon its
property to be filed elsewhere than in the town or city where the
property is used, and where the firm business is conducted. On the
other hand, it is quite easy to suggest reasons
Page 101 U. S. 738
of a cogent character why, in view of the manifest purpose of
such legislation, the actual residence of the mortgagors should
determine the place of filing. But these are considerations to be
addressed more properly to the Legislature of New York, with whom
rests the power to make such alterations as experience may suggest
to be necessary. The statute expressly declares that a chattel
mortgage not filed as required by its provisions is void as to
creditors and subsequent purchasers and mortgagees in good faith,
and the circuit justice well said that the statute had
"imposed a rigid and unbending condition, to-wit, a filing in
the place where the mortgagors actually reside, as a preliminary to
the validity of the mortgage. Whether this condition is wise or
not, whether convenient or difficult of performance, is not for the
courts to say. The statute exacts it, and the courts must see that
it is performed."
Upon this branch of the case, therefore, we concur in opinion
with the circuit court.
It follows necessarily from what has been said, that the circuit
court rightly adjudged that creditors who obtained judgments and
sued out executions against the Lelands, previous to the
commencement of bankruptcy proceedings, had prior claims and liens
upon the proceeds arising from the sale of the property covered by
the chattel mortgages.
But the final decree in the circuit court is erroneous in
directing the residue of the proceeds of the sale of the mortgage
property, after satisfying execution creditors, "to be paid to the
assignee (in bankruptcy) for the purposes of the trust," and in
charging that balance with the payment of the fees due counsel of
the assignee.
In
Yeatman v. Savings Institution, 95 U. S.
764, we held it to be an established rule that,
"except in cases of attachments against the property of the
bankrupt within a prescribed time preceding the commencement of
proceedings in bankruptcy, and except in cases where the
disposition of property by the bankrupt is declared by law to be
fraudulent and void, the assignee takes the title subject to all
equities, liens, or encumbrances, whether created by operation of
law or by act of the bankrupt, which existed against the property
in the hands of the bankrupt.
Brown v. Heathcote, 1 Atk.
160;
Mitchell v.
Page 101 U. S. 739
Winslow, 2 Story 630;
Gibson v.
Warden, 14 Wall. 244;
Cook v.
Tullis, 18 Wall. 332;
Donaldson v.
Farwell, 93 U. S. 631;
Jerome v.
McCarter, 94 U. S. 734. He takes the
property in the same 'plight and condition' that the bankrupt held
it.
Winsor v. McLellan, 2 Story 492."
The decree below is plainly in contravention of this rule.
Although the chattel mortgages, by reason of the failure to file
them in the proper place, were void as against judgment creditors,
they were valid and effective as between the mortgagors and the
mortgagee.
Lane v. Lutz, 1 Keyes (N.Y.) 213;
Wescott
v. Gunn, 4 Duer (N.Y.), 107;
Smith v. Acker, 23 Wend.
(N.Y.) 653. Suppose the mortgagors had not been adjudged bankrupts,
and there had been no creditors, subsequent purchasers, or
mortgagees in good faith to complain, as they alone might, of the
failure to file the mortgages in the towns where the mortgagors
respectively resided. It cannot be doubted that Stewart, in that
event, could have enforced a lien upon the mortgaged property in
satisfaction of his claim for rent. The assignee took the property
subject to such equities, liens, or encumbrances as would have
effected it, had no adjudication in bankruptcy been made. While the
rights of creditors, whose executions preceded the bankruptcy were
properly adjudged to be superior to any which passed to the
assignee by operation of law, the balance of the fund, after
satisfying those executions, belonged to the mortgagee, and not to
the assignee for the purposes of his trust. The latter representing
general creditors, cannot dispute such claim, since, had there been
no adjudication, it could not have been disputed by the mortgagors.
The assignee can assert, in behalf of the general creditors, no
claim to the proceeds of the sale of that property which the
bankrupts themselves could not have asserted in a contest
exclusively between them and their mortgagee. As between the
mortgagors and the mortgagees, the chattel mortgages were and are
unimpeachable for fraud, or upon any other ground recognized in the
bankrupt law.
It results that the court below erred in directing the fees of
the assignee's counsel to be paid out of the residue of the fund in
court remaining after the claims of execution creditors were
satisfies. To that balance the appellants are entitled without
Page 101 U. S. 740
diminution, to be applied in payment of the rent remaining
unpaid, after crediting thereon $43,500, the agreed valuation of
the real estate conveyed to Stewart, and to which we will presently
refer in another connection. It was error to charge that balance
with the payment of costs of fees of counsel, or any expense
incurred by the assignee in bankruptcy in the administration of his
trust.
We come now to the questions relating to the several conveyances
of real estate made to Stewart in January and February, 1871, all
of which were adjudged by the circuit court to be void as against
the assignee in bankruptcy.
It is important to consider the circumstances under which those
conveyances were made. Early in the month of January, 1871,
commenced a series of interviews between the lessees and Stewart,
brought about, perhaps, by the demand of the latter, through his
agent, for the settlement of rent in arrear, which then amounted to
about $50,000. The lessees desired a new lease at a reduced rent,
while Stewart insisted upon the payment, or a satisfactory
arrangement, of the rent due him. They confessed present inability
to discharge the indebtedness in any other mode than by conveyances
of real estate, which they urged him to take at fair valuation and
give a new lease at reduced rent. They, in those interviews,
expressed the utmost confidence that such an arrangement would
relieve them from all immediate financial burdens, growing out of
the hotel business, and enable them to meet promptly thereafter not
only installments of rent, but all other engagements. Stewart,
finally, agreed, for the accommodation of his lessees, to accept
certain real estate, offered to him at the aggregate price of
$43,500, in satisfaction of a like amount of back rent, and,
necessarily, in extinguishment to that extent of his mortgages upon
the furniture and other property in the hotel building. He also
signified his willingness to renew the lease to the same parties,
at the reduced rent of $65,000. In pursuance of this arrangement
the lessees, or some of them, caused conveyances to be made to
Stewart of the real estate in question, consisting of a farm in
Westchester County, and several houses and lots on Crosby, Jersey,
and Prince Streets, in New York City.
Page 101 U. S. 741
We are all of opinion that the conveyance, dated Feb. 1, 1871,
by Mrs. Warren Leland and her husband of the farm in Westchester
County, was unassailable by the assignee upon any ground whatever.
That property was a gift from the husband to the wife at a time
when his right to make it cannot be disputed. As early as 1868 it
was distinctly separated from the mass of his property, and the
title made to her for her benefit. There is no proof that the
conveyance was with any intention to defraud his then existing or
future creditors. Of those whose interests the assignee in
bankruptcy here represents, or assumes to represent, none, except
perhaps one, were creditors of Warren Leland at the date of that
conveyance. The bill alleges that the bankrupts, or some of them,
intended to give Stewart a preference over other creditors, and to
that end, it is charged, Warren Leland caused the conveyance to be
made to his wife of the farm in question, "owned by the said Warren
Leland, but standing in the name of his wife." But clearly it was
not owned by the husband after the execution of the absolute
conveyance of 1868. Her rights, by reason of anything appearing in
this record, could not be disturbed by the husband's creditors who
became such after the execution of the conveyance to her. She
chose, in order to aid her husband, or for other reasons
satisfactory to herself, to unite with him in the conveyance to
Stewart, thereby surrendering her estate for the benefit of the
husband's creditor. Suppose she had not so done, and that the title
had remained in her name up to the time of the adjudication in
bankruptcy. Would it be contended, for a moment, that the assignee
in bankruptcy, or that the creditors of the bankrupts, becoming
such after the execution of the conveyance, could have subjected
that farm to the debts of Warren Leland against the consent of his
wife? This question must, in view of the evidence, receive a
negative answer, which shows, conclusively, that the appropriation
of the wife's property, by the joint act of herself and husband, to
the payment of the debt of a particular creditor of the latter, is
not a matter of which the assignee in bankruptcy, or any subsequent
creditor of the husband, can rightfully complain. The decree of the
circuit court declaring the conveyance of that farm to Stewart to
be void, and
Page 101 U. S. 742
requiring Mrs. Stewart to convey to the assignee in bankruptcy,
was, for the reasons stated, clearly erroneous.
It remains to consider that part of the decree which declared
the conveyances to Stewart of the houses and lots on Crosby,
Jersey, and Prince Streets, in New York City, to be void.
When these conveyances were agreed to be made, Stewart, as
already stated, had an undisputed claim for rent in arrear
amounting to over $50,000. Under the provisions of the mortgages, a
default in the payment of rent having taken place, Stewart, at the
time the exchange was determined upon, could have taken actual
possession of the mortgaged property and sold it for the best price
he could obtain in satisfaction of his claim for rent. His right to
possession for such a purpose could not have been questioned by any
creditor of the lessees who had not, by previous judgment and
execution, acquired a lien upon the mortgage property.
Burdick
v. McVanner, 2 Den. (N.Y.) 170;
Stewart v. Slates, 6
Duer (N.Y.) 83;
Hall v. Sampson, 35 N.Y. 274;
Ackley
v. Finch, 7 Cow. (N.Y.) 290;
Langdon v. Buel, 9 Wend.
(N.Y.) 80;
Patchin v. Pierce, 12
id. 61. Instead
of exercising that right -- a course which would have seriously
endangered, if it had not utterly destroyed, the business and
credit of the lessees -- Stewart, at their earnest solicitation,
and for their accommodation, accepted real estate at a fair
valuation in satisfaction of rent due and unpaid, thereby
surrendering and extinguishing his lien to that extent upon the
property described in the chattel mortgages. Of the $43,500 at
which the real estate received by Stewart was valued, $19,500
represented the farm in Westchester County, which, we have shown,
could not have been subjected to the claim of any creditors who
became such after the conveyance to Mrs. Leland. In point of fact,
therefore, only $24,000 in value of real estate, belonging to the
bankrupts, was received by Stewart, while he surrendered his claim
and lien for rent to the extent of $43,500. This was, in its
substance and effect, a mere exchange of securities, not forbidden
by the letter or the spirit of the bankrupt law. In
Cook v.
Tullis, 18 Wall. 332, we said that
"a fair exchange of values may be made at any time, even if one
of the parties to the transaction be insolvent. There is nothing in
the Bankrupt Act, either in its language or
Page 101 U. S. 743
object, which prevents an insolvent from dealing with his
property, selling it or exchanging it for other property, at any
time before proceedings in bankruptcy are taken by or against him,
provided such dealing be conducted without any purpose to defraud
or delay his creditors or give preference to any one, and does not
impair the value of his estate. An insolvent is not bound in the
misfortune of his insolvency to abandon all dealing with his
property; his creditors can only complain if he waste his estate or
give preference in its disposition to one over another. His dealing
will stand if it leave his estate in as good plight and condition
as previously."
Substantially the same doctrine was announced in
Clark v.
Iselin, 21 Wall. 360;
Sawyer v. Turpin,
91 U. S. 114.
These principles would seem to be decisive of the case under
consideration. While there is some conflict in the testimony as to
certain matters, we have a strong conviction, from all the facts
and circumstances established by the proof, that the transaction by
which the real estate, at a fair valuation, was substituted for the
lien of like amount upon personal property was without any
fraudulent purpose. The substitution was not made to give a
preference to Stewart. The belief and hope of the bankrupts,
expressed in decided terms to him, were that the substitution or
exchange would enable them to remove all financial obstacles of a
serious nature. They induced him by earnest representations to
share these hopes. He delayed or forebore to exercise the right,
which, at the commencement of negotiations, he undoubtedly had, of
taking the mortgaged property into his custody, and disposing of it
in satisfaction of his claim for rent. That the arrangement in
question did not substantially impair the value of the bankrupts'
estate is abundantly clear. His lien, which was extinguished by the
exchange, exceeded, in value, that portion of the real estate,
embraced in the conveyances to him, which the creditors of the
bankrupts could have reached under their executions. The fact that
the mortgaged property brought only $43,469.31, is relied upon to
show that the exchange did impair the estate of the bankrupts. This
argument proceeds upon the assumption either that when the exchange
was determined upon, he had not a lien upon the mortgaged property,
as
Page 101 U. S. 744
between him and the mortgagors, or that if he had, he would not
have enforced it by taking the property into his custody, upon a
refusal of the lessees to make some satisfactory arrangement. But
such assumption is without support in the law or the proof.
Besides, the evidence leads to the conclusion that the mortgaged
property sold, at public auction, for less than its fair value.
While the witness, who made the inventory and appraisement,
testifies that it sold for its full value, the auctioneer, who
conducted the sale, testified that with proper appliances it would
have brought fifty percent more. It is certain that it sold for
much less than either the lessees or Stewart at the time of their
negotiations supposed it to be worth.
For these reasons, we are of opinion that the court below erred
in adjudging the conveyances to Stewart of the houses and lots on
Crosby, Jersey, and Prince Streets, in New York, to be void,
requiring Mrs. Stewart to convey the same to the assignee in
bankruptcy, and declaring his estate liable for the rents and
profits of the same.
Decree reversed with directions to enter a decree in
conformity with this opinion.
MR. JUSTICE FIELD, with whom concurred MR. JUSTICE SWAYNE and
MR. JUSTICE BRADLEY, delivered the following opinion:
I concur in the decree of reversal in this case, but I go
further than the majority of the Court. I think that the chattel
mortgages were properly filed with the register in the City of New
York. The mortgagors were partners doing business there. They are
described in the mortgages as of that city. The property mortgaged
was furniture in a hotel situated there, and it is to the records
of the city that one would naturally resort to ascertain whether
there were any liens upon it. The domicile of a firm, under the law
requiring chattel mortgages to be filed in the county where the
mortgagors reside, is, in my judgment, the place where it is
located and carries on its business. I am of opinion, therefore,
that the chattel mortgages in this case held the property against
the judgments of the creditors.
