William Deering & Co. v. Washburn

• Decision Date: 18 January 1892
• Citation: 141 Ill. 153,29 N.E. 558
• Court: Illinois Supreme Court
• Parties: WILLIAM DEERING & CO. v. WASHBURN.

141 Ill. 153

29 N.E. 558

WILLIAM DEERING & CO.

v.WASHBURN.¹

Supreme Court of Illinois.

Jan. 18, 1892.²

Appeal from appellate court, fourth district.

Replevin by William Deering & Co. against Leroy Washburn. Defendant obtained judgment, which was affirmed by the appellate court. Plaintiff appeals. Affirmed.

Cox & Wills, for appellant.

John A. Bingham and Wood Bros., for appellee.

WILKIN, J.

This was an action in replevin by appellant against appellee in the circuit court of Fayette county. It was tried before the Hon. JAMES A. CREIGHTON, Judge, without a jury, and judgment rendered for the defendant. That judgment has been affirmed by the appellate court, and appellant now brings the record to this court by appeal. Plaintiff below claimed the property in question-a stock of agricultural implements-under a chattel mortgage executed to it on the 1st day of February, 1889, by one H. R. Miller; while the defendant justified his seizing and holding the same as sheriff of Fayette county under an execution in favor of Walter A. Wood Mowing & Reaping Machine Company, dated September 22, 1889, and on the same day levied by him on said property. It is admitted that the chattel mortgage was executed, delivered, entered on a justice of the peace docket, and recorded, in conformity with the requirements of the statute of this state; and that it provided that the mortgagor might retain the possession of the mortgaged property until the maturity of the debt for which it was given as security, viz., October 1, 1889, with the usual insecurity clause. The trial was had in the court below on an agreed state of facts, one clause of which is as follows: ‘That at the time said chattel mortgage was made, and during the summer of 1889, and up to September 27, 1889, said Miller was engaged in selling hardware and agricultural implements at retail, and by virtue of an understanding entered into between said Miller and plaintiff at the time of executing and delivering said chattel mortgage, said Miller sold a portion of the property described in the chattel mortgage, at retail, in his usual course of business, and at its market value; and the entire proceeds of such sales made by said Miller, amounting to $425, were turned over to plaintiff by Miller in full of proceeds of sale, on November 14, 1889, and was on that day duly credited by plaintiff on said Miller's note, secured by said chattel mortgage. That at the time of making said chattel mortgage and anderstanding that Miller might sell a portion of said property, it was further agreed between plaintiff and said Miller that said Miller should have no beneficial interest in such proceeds, except the right to have them credited on said note, and should retain no portion of such proceeds whatever, but should make such sales with the consent of plaintiff, and for plaintiff's sole and exclusive benefit, except that the proceeds were to be credited on said Miller's note; and that said Miller did surrender to plaintiff the entire proceeds of said sales, and retained no portion whatever, and plaintiff gave said Miller credit on said note for the full amount of said sales.’

The only question in the case is: Did the agreement made between the mortgagor and mortgagee at the time of the execution of said chattel mortgage, that the mortgagor, remaining in possession of the mortgaged property, might sell the same in his usual course of business and account to the mortgagee for the proceeds thereof, as stated in the stipulation, and the fact that the mortgagor, in pursuance of that agreement, did sell a portion of said property at retail, in the usual course of his business, render said chattel mortgage fraudulent in law, and void as to the creditors of the mortgagor? That the question is one which has been fruitful of litigation, and that the decisions upon it in this county have not been harmonious, is certainly true. While local statutes have contributed somewhatto this conflict of authority, yet, giving due weight to that consideration, it is impossible to deduce a uniform rule from decided cases on the subject. It would therefore be unprofitable to attempt a review of those authorities, or to place this decision upon any line of cases decided by other courts, especially so since, while the question, as here presented, has not been directly decided by this court, there is a well-settled current of decisions, heretofore rendered by it, which must lead to the conclusion that, under our statute, a mortgage of personal property, accompanied by an agreement like that set out in the foregoing stipulation, though binding between the parties, is fraudulent per se as to third parties, and void. Thus it has been uniformly held in this state that all conveyances of personal property, unaccompanied by a change of possession, are fraudulent in law, and void as to creditors of and purchasers from the vendor, unless his retaining possession is consistent with the deed; and that within this rule, if the mortgagor in a chattel mortgage remains in possession of the mortgaged property, the mortgage is fraudulent as to such creditors and...