Petition of International Harvester Co.

• Decision Date: 11 December 1925
• Docket Number: No. 4427.,4427.
• Parties: Petition of INTERNATIONAL HARVESTER CO. OF AMERICA. In re COLE.
• Court: U.S. Court of Appeals — Sixth Circuit

9 F.2d 299 (1925)

Petition of INTERNATIONAL HARVESTER CO. OF AMERICA.

In re COLE.

No. 4427.

Circuit Court of Appeals, Sixth Circuit.

December 11, 1925.

A. M. Cummins, of Lansing, Mich., for petitioner.

Charles D. Thompson, of Bad Axe, Mich., for respondent.

Before DONAHUE, MACK, and MOORMAN, Circuit Judges.

MACK, Circuit Judge.

1. The construction of the Michigan chattel mortgage filing act, copied, so far as essential, in the margin,¹ is here involved; the question is whether, under the amendment of 1905, the affidavit attached to the mortgage or copy of mortgage filed in the register's office must be an original or may be a copy. It is clear that more than one filing may be necessary; it is equally clear that, while there is but one original mortgage, though of course duplicate originals are possible, there would be no difficulty in having more than one original affidavit, if this is required. Clearly only a copy of the mortgage needed to be filed under the original statute. But when by the amendment of 1905 it was deemed so essential to give public notice of the consideration and good faith that the public officer was expressly forbidden to receive the mortgage or copy for filing without an annexed affidavit, the Legislature avoided the phrase "or copy of the affidavit." An intent to give opportunity to inspect an original affidavit is expressed; we find no ambiguity to justify a doubt as to that intent.

It is urged, however, that "thereto," in the act of 1905, necessarily refers to "mortgage" as antecedent; therefore the affidavit need be annexed only to the mortgage; that done, a copy of the instrument, mortgage and affidavit combined, alone need be filed. This argument overlooks, however, the effect of the phrase "before the filing of the same." "The same" necessarily and concededly refers to the copy as well as the original mortgage, inasmuch as the original need never be filed; "thereto" then has this "same" as antecedent.

We concur in the views of the referee and the District Judge as to the construction of the statute, that an original affidavit must be filed, and for want thereof the filing of the mortgage created no lien.

2. It is, however, contended that petitioner is entitled to a lien because, pursuant to the mortgage, it had taken and was in possession of the chattels at the time of the adjudication in this voluntary bankruptcy proceeding. The referee, however, found that the petitioner had waived the possession so taken; that the receiver in bankruptcy had then acquired possession and had sold the goods as the bankrupt's property.

Clearly there was a waiver of actual possession. The receiver did not take possession forcibly or without consent; but this possession, acquired after bankruptcy, does not necessarily involve a waiver of any right which by actual seizure petitioner may have acquired and may have had at the time of the filing of the petition in bankruptcy to retain the possession. Whether or not that right to possession and the lien, if any, thereby acquired, were waived, depends upon the agreement under which actual possession was surrendered and a sale by the receiver permitted. It is quite common expressly to agree that the bankruptcy court may determine the validity of a lien, and that such lien shall attach to the proceeds. One in possession may, however, expressly waive any claim of lien and be content to rank as a general creditor. The parties may fail to express their understanding in words. The court must then find it from the circumstances. In...