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: 75
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;. IN RE F. & D. CO. 75
laws of the state of New York require that this mortgage should also
be filed as a chattel mortgage? The District Court filed a memorandum
opinion, in which it declared that the case of Clement v. Congress Hall,
72 Misc. Rep. 519, 132 N. Y. Supp. 16, is flat authority in favor of the
decision under review. The court said:
"As to who should get it no more is held than that a trial court of the
United States should not refuse to follow Judge Kellogg's ruling on a purely
New York question. For that reason the referee's order is athrmed."
Before we proceed further, it is necessary to consider the provisions
of the Lien Law of the state of New York (Consol. Laws, c. 33). The
provisions applicable to this case may be found in the margin.' The
trustee in bankruptcy relies on section 230, and claims that, as the
mortgage was not filed as required by the act, it is absolutely void as
against creditors, and that he is entitled to the proceeds. The re-
spondent Joyce relies on section 231, and claims that his mortgage is
by that section a valid chattel mortgage, although not refiled as a chat-
This court is thus called upon to construe an act of the Legislature
of the state of New York which appears never to have been construed
either by the New York Court of Appeals or by the Appellate Divi-
sion of the Supreme Court of that state. The act has been construed
only by the Special Term of the Supreme Court for Saratoga county,
N. Y., in the case of Clement v. Congress, supra. That case does not
appear to have been carried to a higher tribunal, or to have been cited
or referred to in subsequent decisions in the higher courts of the state.
The court in that case discussed at length the question whether section
231 applied to chattel mortgages executed by a corporation as security
for a single bond, and it came to the conclusion that the section did
apply to such cases. The court said:
"It is urged on behalf of the defendants that this provision of law is not
applicable, because we have, in the case at bar, only a single bond secured by
a single mortgage, and that the phraseology of the section in question is
confined to the plural number, including only 'bonds,' and that there must be a
plurality of bonds in order that the provision of the section may attach. It
is not urged that the same reasoning applies to the plural term 'mortgages.'
used in the same section. There is no apparent reason why the same principle
of law should not apply to one bond which is conceded to apply to two. This is
clearly a case where the provision of section 35 of the General Construction
1 "Sec. 230. Chattel Mortgages to be Fdlcd.-Every mortgage or conveyance
intended to operate as a mortgage of goods and chattels or of any canal boat,
steam tug, scow or other craft, or the appurtenances thereto, navigating the
canals of the state, which is not accompanied by an immediate delivery, and
followed by an actual and continued change of possession of the things mort-
gaged, is absolutely void as against the creditors of the mortgagor, and as
against subsequent purchasers and mortgagees in good faith, unless the mort-
gage, or a true copy thereof, is filed as directed in this article.
"Sec. 281. Corporate Mortgages Against Reat and Personal Property.-Mort-
gages creating a lien upon real and personal property executed by a corpora-
tion as security for the payment of bonds issued by such corporation, or by
any telegraph, telephone or electric light corporation, and recorded as a mort-
gage of real property in each county where such property is located or through
which the line of such telegraph, telephone or electric light corporation runs,
need not be filed or refiled as chattel mortgages."
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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/m1/89/: accessed July 27, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.