The Federal Reporter with Key-Number Annotations, Volume 256: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, May-July, 1919. Page: 74
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74 256 1EDERAL iiPOltdiER
In the matter of 'the F. & D. Company, bankrupt. Petition by Mar-
shall S. Hagar, trustee, to revise order of District Court. Affirmed.
See, also, 242 Fed. 69, 155 C. C. A. 13.
This cause comes here on petition to review an order'in bankruptcy, entered
in, the United States District Court for the Southern Ditrict"of New York
and entprgd therein on the 2d day of Octolber, 1918.
The bankrupt executed a mortgage, dated 5th of Febrriary, 1912, t' Thomnas
W. Joyce for the sumn of $650,000. This mortgage was subodinate to a mort-
gage executed by the bankrupt to the Title Insutra~ce Companyreof' New York
on the real property comprising the Madison Square (Arden and theGarden
Theater securing a loan of $2,300,000. The second mortgage embraced the
prpDerty known as the Madison Square, Garden aqd Jlrden Thopte., It .was
a real estate mortgage and was recorded as such. It was never separately filed
or refiled as a chattel mortgage. It contained, however, the following clause:
"Together with all fixtures and articles of personal propeftY,'&;ttaehed to or
used in connection with said premises, all of which it is declared are to be
covered by this mortgage."
On the 13th of November, 1916, the F. & D. Company was adjudicated a
bankrupt in the tUnited States District Court for the Soithern District of
New York, and a few days later the petitioner herein was appointed trustee in
bankruptcy of the estate. The first mortgage, the one executed to the Title In.
surance Company, and which covered the real property, was sold on the 8th
of December, 1916, upon the foreclosure of the mortgage, and there was left
a balance of more than $300,000 due on the mortgage debt.
The referee in bankruptcy held that the chattels locrited in Madison Square
Garden and the Garden Theater were not included under' the lien of the
first mortgage. And the trustee in bankruptcy was authorized by order of
the referee in bankruptcy to sell the chattels located in Madison Square Gar-
den and the Garden Theater free of the alleged lien of the second mortgage,
the one to the respondent Joyce, and the property was so sold for $5,600, the
proceeds of the sale to be held subject to the order of the court as to the
validity of the alleged lien of the second mortgage. The mortgagee under that
mortgage claims that under the terms of his mortgage he is entitled to the
money ; and the trustee in bankruptcy claims that the money is payable to
himself for the benefit of the creditors of the bankrupt.
At the hearing before the referee testimony was taken, and thereafter the
referee directed the trustee to pay over to the respondent Joyce, the mortgagee
under the second mortgage, the said sum of $5,600, less the amount of $500
deducted on account of the expenses incident to the administration of the
The trustee subsequently filed a petition, praying that the order of the
referee be reviewed by the District Court. Thereafter the trustee's petition
was reviewed, and after hearing the District Court entered an order affirming
the order of the referee. The last order was entered on the 2d of October,
1918, and it is this order which this court is now asked to review.
Stetson, Jennings & Russell, of New York City (Edward R. Greene
and Kenneth E. Stockton, both of New York City, of counsel), for
Augustus H. Skillin, of New York City (George W. Hubbell, of New
York City, of counsel), for trustee.
Before WARD and ROGERS, Circuit Judges.
ROGERS, Circuit Judge (after stating the facts as above). 
The sole question to be determined by this court is whether the mort-
gage given to the respondent Joyce, the second mortgage, is a chattel
mortgage and good as against creditors, although it was filed as a
real estate mortgage, and not separately as a chattel mortgage. Do the
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The Federal Reporter with Key-Number Annotations, Volume 256: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, May-July, 1919., legislative document, 1919; Saint Paul, Minnesota. (digital.library.unt.edu/ark:/67531/metadc38827/m1/88/: accessed March 19, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.