Garbe v. HUMISTON, KEELING AND COMPANY
| Citation | 242 F.2d 923 |
| Decision Date | 23 April 1957 |
| Docket Number | No. 11890.,11890. |
| Parties | Martin GARBE, as Trustee in Bankruptcy of Mattoon City Drugs, Inc., Plaintiff-Appellee, v. HUMISTON, KEELING AND COMPANY, Defendant-Appellant. |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
Philip A. Rose, Robert C. Pierce, Chicago, Ill., for appellant.
Ralph E. Suddes, Mattoon, Ill., for appellee.
Before DUFFY, Chief Judge, and FINNEGAN and SCHNACKENBERG, Circuit Judges.
We are here presented with this question arising under Illinois law: Is a chattel mortgage executed by an Illinois corporation valid as against its creditors when it is recorded only in the county where its sole place of business and the mortgaged property are located, even though its articles of incorporation set forth that its initial registered office and agent are in another county?
The mortgagee is Humiston, Keeling and Company, an Illinois corporation, and the mortgagor is Mattoon City Drugs, Inc., which was incorporated in Illinois on October 31, 1952. The mortgage was executed March 1, 1954, at Chicago, Cook County, and recorded in the recorder's office of Coles County, Illinois, on March 4, 1954. It covers the fixtures in a drugstore operated by mortgagor in Mattoon, Coles County. The mortgagor having defaulted in its payment, the mortgagee foreclosed by taking physical possession of the fixtures. Three days later the mortgagor filed a voluntary petition in bankruptcy in the district court, which at first stayed and later permitted a sale to be had, from which $14,000 was realized. The plaintiff, as trustee in bankruptcy, filed an action in the district court, in which his amended complaint prayed, inter alia, that the chattel mortgage be declared void as against him and that the court enter a judgment for $14,000 in his favor and against the mortgagee.
The case was tried on the amended complaint and mortgagee's answer thereto. From the evidence heard, it appeared that the drugstore in Coles County was the only place of business of the mortgagor, and further, that all of its books and records were kept at Canton, Fulton County, where its president lived. The articles of incorporation specified 232 West Pine St. in Canton as the address of its initial registered office in the state of Illinois and gave Bernard G. Maxwell as the initial registered agent at said address.
The district court was of the opinion that the mortgage was invalid as against the trustee in bankruptcy because it was not recorded in Fulton County, "the residence of the bankrupt corporation".
The provisions of the Illinois statute which are relevant here, § 4, ch. 95, R.S. Ill.1953, vol. 2, 185, are as follows:
"* * * Such mortgage * * * shall be filed or recorded with the recorder of the county in which the mortgagor shall reside at the time when the instrument is executed and recorded and, in the event the property is not in such county at such time, a certified copy thereof shall be filed with the recorder of the county where the personal property is then situated * * *."
While it has been said that a corporation has residence only in a figurative sense, Friend...
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