In re Thorson Bros.

Decision Date29 September 1913
Citation209 F. 961
PartiesIn re THORSON BROS.
CourtU.S. District Court — Eastern District of Wisconsin

Browne Browne & Smith, of Waupaca, Wis., for mortgagees.

H. J Severson, of Iola, Wis., for trustee.

GEIGER District Judge (after stating the facts as above).

The facts are conceded. Prior to 1887, under the law of Wisconsin-- to which effect must be given as a rule of property-- chattel mortgages upon changeable stocks of merchandise, the mortgagor being in possession, at liberty to sell in the ordinary course of business, and to apply the proceeds to his own use, were fraudulent and void. Place v. Langworthy, 13 Wis. 629, 80 Am.Dec. 758; Steinart v. Deuster, 23 Wis. 136; Blakeslee v. Rossman, 43 Wis. 116; Single v. Phelps, 20 Wis. 398; Anderson v Patterson, 64 Wis. 557, 25 N.W. 541.

The last-cited case was decided in 1885. Chapter 241 of the Laws of 1887 (now section 2316b, Statutes 1898 of Wisconsin) provides:

'The mortgagor of any stock of goods or stock in trade of which he is in possession and from which he is permitted to make sales and apply the proceeds thereof upon the indebtedness existing between him and the mortgagee shall file a statement in writing of the aggregate amount of the sales made therefrom, the amount applied on the mortgage debt and the total valuation of the stock added every sixty days from the date of such mortgage with the town, city or village clerk in whose office said mortgage is filed. Such mortgage shall cover and be a valid lien upon the property added to such stock after its execution for the amount of the indebtedness remaining unpaid thereon. Such statement shall be verified by the mortgagor, his agent or attorney as being a true and correct statement of all sales made from the stock of mortgaged goods, the value of the additions made to the original stock since the date of the mortgage or the date of the last verified statement so filed and the amount paid on the mortgage debt since the execution of the mortgage or the filing of such statement. If any mortgagor shall fail to file the statement herein required within the time prescribed the mortgage, as between the parties thereto, shall be immediately due and payable, and at the expiration of fifteen days from the time fixed for the filing of such statement shall cease to be a lien upon such stock of goods or stock in trade except as between the mortgagor and mortgagee.'

This section doubtless was aimed to provide some regulative or remedial measures in respect of mortgages on merchandise stocks. It seems to be limited to recognizing the validity of such instruments if these conditions concur and are complied with: (1) That the mortgagee may remain in possession and sell the stock. (2) That the proceeds of sale be applied toward the extinction of the mortgage debt. (3) That the mortgage lien attach to after-acquired goods. (4) That the sales, accretions, or substitution of stocks, and the application of proceeds of sale be evidenced by filing verified statements as prescribed.

It may be noted that, prior to the enactment of this statute, the adjudications were unequivocally to the effect that mortgages, whereunder the mortgagor was at liberty to make sales and apply the proceeds to his own use, were 'fraudulent and void in law as against creditors; absolutely void as to them, beyond all aid from extrinsic facts. ' Blakeslee v. Rossman, supra. And in Anderson v. Patterson, it was said:

'That the inevitable tendency and effect of a mortgage, fair and valid on its face, but void because of some extrinsic or secret infirmity, must be to
...

To continue reading

Request your trial
3 cases
  • Hasbrouck v. LaFebre
    • United States
    • United States State Supreme Court of Wyoming
    • 13 Octubre 1915
    ......353.) Nebraska; ( Brinker v. Ashenfelter, 1 Neb. (Unoff.) 793, 95 N.W. 1124;. Tallon v. Ellison, 3 Neb. 63, 75; Buckstaff. Bros. Mfg. Co. v. Snyder, 54 Neb. 538, 74 N.W. 863;. Sherwin v. Gaghagen, 39 Neb. 238, 57 N.W. 1005;. Paxton v. Smith, 41 Neb. 56, 59 N.W. 690.) ......
  • Adams Machinery, Inc., In re
    • United States
    • United States State Supreme Court of Wisconsin
    • 5 Marzo 1963
    ...statement. Such a requirement was aimed to provide some regulative measure respecting mortgages on merchandise stock. In re Thorson Bros. (D.C.E.D.Wis.1913), 209 F. 961. The bank's contention the chattel mortgage cannot be a mortgage on stock of goods because the mortgage did not cover afte......
  • Ex parte Thaw
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of New Hampshire
    • 17 Diciembre 1913

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT