In re Leigh

• Decision Date: 19 September 1899
• Docket Number: 222.
• Citation: 96 F. 806
• Parties: In re LEIGH et al.
• Court: U.S. District Court — District of Colorado

96 F. 806

In re LEIGH et al.

No. 222.

United States District Court, D. Colorado.

September 19, 1899

Patterson Richardson & Hawkins, for petitioner.

Thomas H. Hardcastle, for trustee.

HALLETT District Judge (orally).

There was an argument some days back upon a ruling made by the referee, which ruling was brought into this court for review. Leigh Bros. were dealers in typewriting machines, and while they carried on business they made a chattel mortgage upon a portion of their stock to secure an indebtedness due to W. T Branch. There were several mortgages in succession, some part of the indebtedness being paid from time to time, and the mortgage now in controversy is given to secure what was due in May, 1899. The mortgage in controversy (and all of them apparently) was not recorded; and the question raised by the demurrer to the petition of Branch, who asked to have his mortgage allowed and sustained, and to have possession of the property described in it, is whether one claiming in good faith under an unrecorded mortgage at the time of the bankruptcy can have the property which is conveyed by the mortgage. The question is stated by the referee in this way:

'W. T. Branch filed his petition herein, exhibiting a chattel mortgage given by the bankrupt firm to secure its note to him, covering certain property in the possession of the trustee in bankruptcy, and praying for permission to take possession of and sell said mortgaged property for the purpose of satisfying said loan. The trustee filed a demurrer to said petition upon the ground that it appeared that said mortgage had never been recorded, and no possession taken thereunder, and that the same was therefore, void as against the trustee in bankruptcy. The referee sustained the demurrer, to which ruling the petitioner has filed an assignment of errors, and prays for a review.'

The referee delivered an opinion, which is returned with the papers, and which discusses the question very fully and fairly, and I think that he has reached a correct conclusion.

In my judgment, the matter is determined by the first clause of section 67 of the bankrupt act; that is, clause a, which reads as follows:

'Claims which for want of record or for other reasons would not have been valid liens as against the claims of creditors of the bankrupt, shall not be liens as against his estate.'

Under the law of this state as expounded by the supreme court of the...