John Humphrey v. Charles Tatman

Decision Date17 April 1905
Docket NumberNo. 169,169
Citation49 L.Ed. 956,198 U.S. 91,25 S.Ct. 567
PartiesJOHN B. HUMPHREY, Plff. in Err. , v. CHARLES T. TATMAN, Trustee in Bankruptcy of Nelson H. Davis
CourtU.S. Supreme Court

Messrs. William H. Brown and Henry W. Putnam for plaintiff in error.

Mr. Charles T. Tatman for defendant in error.

Mr. Justice Holmes delivered the opinion of the court:

This is an action brought by a trustee in bankruptcy, the defendant in error, to recover an alleged preference. The case was heard on agreed facts, which may be summed up as follows: Davis filed a voluntary petition in bankruptcy on May 23, 1901. Two years before, on May 6, 1899, being then solvent, he executed to the plaintiff in error, Humphrey, a mortgage of his present and after-acquired stock in trade and fixtures, which covered the goods in controversy; but the mortgage was not recorded, and the goods remained in Davis's possession. On April 30, 1901, Humphrey, having reasonable cause to believe that Davis was insolvent, took possession of the goods, in accordance, it fairly is implied, with the terms of the mortgage, although against the wishes and protest of Davis. The defendant in error was qualified as trustee on June 18, 1901, and at once demanded the goods without payment of the mortgage debt. The case went from the superior court to the supreme judicial court of the state, and the latter court ordered judgment for the plaintiff (184 Mass. 361, 63 L. R. A. 738, 100 Am. St. Rep. 562, 68 N. E. 844), which was entered below, and thereupon the case was brought here.

It may be assumed, in view of the recent decision in Thompson v. Fairbanks, 196 U. S. 516, 25 Sup. Ct. Rep. 306, 49 L. ed. 577, that, if the taking possession was good as against the trustee in bankruptcy so far as the Massachusetts law is concerned, it should be held good here. We assume also, without deciding, that if, as against the trustee, the mortgage is to be regarded as first having come into being when the mortgagee took possession, it would be void. In the latter view the anomalous case would be presented of a mortgage of all a man's stock in trade to secure a past debt, executed to one who had reasonable cause to believe that the mortgagor was insolvent and that he was receiving a preference, but executed without intent to prefer on the part of the mortgagor. There would be a preference within the definition in § 60a, and the mortgagee would know it, but he could not be said in a strict sense to have reasonable cause to believe that it was intended to give a preference. We assume, for purposes of decision, that such a case must be regarded as falling within the intent of the act.

The question, then, is one of Massachusetts law, and unfortunately the decision does not leave us free from doubt upon that point. If hereafter the supreme court of the state should adopt a different view from that to which we have been driven, this case would cease to be a precedent. The language of the Massachusetts statute is, 'unless the property mortgaged has been delivered to and retained by the mortgagee, the mortgage shall not be valid against a person other than the parties thereto, until it has been so recorded; and a record made subsequently to the time limited [fifteen days] shall be void.' Mass. Rev. Laws, chap. 198, § 1. There are cases which indicate that an assignee in bankruptcy is a universal successor, like an executor or a husband, and so that, as it is put in Lowell, Bankruptcy, § 309, the assignee is the bankrupt. Phosphate Sewage Co. v. Molleson, 5 Ct. Sess. Cas. 4th series, 1125, 1138; Bank of Scotland v. Cuthbert, 1 Rose, 462, 481; Selkrig v. Davies, 2 Dow, P. C. 230, 248, 2 Rose, 291, 317. So, in the Roman law, Bonorum emptor ficto se herede agit. Gaius, IV. § 35. But it is the settled law of Massachusetts that such a fictitious identity does not satisfy the statute, that the trustee in bankruptcy is 'a person other than the parties thereto,' and that, therefore, as against him the mortgage is void. Bingham v. Jordan, 1 Allen, 373, 78 Am. Dec. 748; Blanchard v. Cooke, 144 Mass. 207, 226, 11 N. E. 83; Haskell v. Merrill, 179 Mass. 120, 124, 125, 60 N. E. 485. Haskell v. Merrill is cited and relied on in the supreme court of the state, and we assume that it and the other cases cited still correctly state the law. It is clear under these cases that recording or taking possession after the qualification of the trustee would be too late, and it certainly would seem not illogical to hold that as against him the...

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