is not at the time in possession of the assigned property, if he is acting with reasonable diligence in his efforts to get possession.16

30. Possession remaining with mortgagor.-In the absence of a statute, a chattel mortgage of all the goods and stock in trade of the mortgagor is not per se void because of a provision contained in it, allowing the mortgagor to remain in possession of it and to sell and dispose of the mortgaged property in the usual course of trade, but upon condition that he will account to the mortgagee and apply the proceeds of such sales to the payment of the debt which the mortgage secures; but the question of good faith is for the jury." Such sale and application of proceeds is the normal and proper purpose of a chattel mortgage, and within the precise boundaries of its lawful operation and effect, and it is impossible that any fraud or injury to others can be imputed to the agreement. The mortgagor becomes the agent of the mortgagee, and the proceeds are a satisfaction of the mortgage debt pro tanto, whether paid over or not.18 But a chattel mortgage

16. Lowe v. Matson, 140 Ill. 108, 29 N. E. 1036, rev'g 35 Ill. App. 602.

17. N. Y.-Brackett v. Harvey, 91 N. Y. 214; Brown v. Kiefer, 71 N. Y. 610; Frost v. Warren, 42 N. Y. 204; Russell v. Winne, 37 N. Y. 591, 97 Am. Dec. 755; Miller v. Lockwood, 32 N. Y. 293; Conkling v. Shelley, 28 N. Y. 360, 84 Am. Dec. 348; Ford v. Williams, 24 N. Y. 359; Ostrander v. Fay, 3 Abb. Dec. 431, 2 Keyes, 586; Southard v. Pinckney, 5 Abb. N. C. - 184.

U. S.-Davis v. Turner, 120 Fed. 605 56 C. C. A. 669.

Ala.-Thornton v. Cook, 97 Ala. 630, 12 So. 403.

Kan.-Frankhouser

v. Ellett, 22

Kan. 127, 31 Am. Rep. 171.
Mass.-Hall v. Tay, 131 Mass. 192;
Jones v. Huggeford, 44 Mass. 515.

Mont.-Noyes v. Ross, 23 Mont. 425, 59 Pac. 367, 75 Am. St. Rep. 543, 47 L. R. A. 400.

Neb.-Lepin v. Coon, 54 Neb. 664, 74 N. W. 1079.

N. C.-Cheatham v. Hawkins, 76 N. C. 335, 80 N. C. 161, such a transaction approaches the verge of being on its face fraudulent in law, but is not so.

N. D.-Red River Valley Nat. Bank v. Barnes, 8 N. D. 432, 79 N. W. 880.

Ohio.-Kleine v. Katzenberger, 20 Ohio St. 110, 5 Am. Rep. 630.

S. D.-Meyer Boot, etc., Co. v. Shenkberg Co., 11 S. D. 620, 80 N. W. 126.

Tenn.-McGrew v. Hancock (Ch. App.), 52 S. W. 500.

Tex.-Scott v. Alford, 53 Tex. 82. 18. Brackett v. Harvey, 91 N. Y.

permitting the mortgagor to remain in possession and sell the stock and use the proceeds generally in his business, or appropriate them or any part of them to his own use or for his own benefit, is fraudulent and void in law, as against the creditors of the mortgagor.19 And where the chattels mortgaged are of a perishable nature, the use of which consists in their consumption, as the conversion of growing timber into lumber, a mortgage reserving to the mortgagor the right of possession and use in the prosecution of his business is fraudulent per se.20

31. Effect of retaining vendor's sign.-It has been held that although a purchaser of a stock of goods notifies the clerks that they are to act for him, and the vendor thenceforth has no further control with the purchaser's consent, if the latter permits the goods to remain without taking down the vendor's sign, the change of possession is not so unequivocal as to be a valid delivery, as against the vendor's creditors. Likewise that a change of possession is not effected by merely installing the seller's brother as a clerk, without otherwise indicating any change in the business,22 or where the vendee did not take personal possession, and the same manager and clerks continued in charge without objection, paid bills made out in the name of the vendor, and the name of the vendor continued on the windows of the store and in the newspaper advertisements of the business.23 But

214; Conkling v. Shelley, 28 N. Y.

360;
Robinson v. Elliott, 22 Wall.
(U. S.) 524.

19. Brackett v. Harvey, 91 N. Y. 214; Southard v. Benner, 72 N. Y. 424; Black v. Fuller, 4 Neb. (Unoff.) 303, 93 N. W. 1010; Robinson v. Baugh (Tenn. Ch. App. 1900), 61 S. W. 98; McTeer v. Huntsman (Tenn. Ch. App. 1898), 49 S. W. 57; Collins v. Corwith, 94 Wis. 514, 69 N. W. 349; Blakeslee v. Rossman, 43 Wis. 116. 20. Acme Lumber Co. v. Hoyt, 71 Miss. 106, 14 So. 464; Harman v.

Hoskins, 56 Miss. 142; Ewing v. Cargill, 13 Sm. & M. (Miss.) 79; Farmers' Bank v. Douglass, 11 Sm. & M. (Miss.) 469; Simpson v. Mitchell, 8 Yerg. (Tenn.) 417; Sommerville v. Horton, 4 Yerg. (Tenn.) 541, 26 Am. Dec. 242; Darwin v. Handley, 3 Yerg. (Tenn.) 502.

21. Wright v. McCormick, 67 Mo.

426.

22. Revercomb v. Duker, 74 Mo. App. 570.

23. Howard v. Dwight, 8 S. D. 398, 66 N. W. 935.

a bona fide sale of the contents of a store, accompanied by delivery to and possession by the vendee, is not rendered void as against creditors by the fact that the signs and signboards remain unchanged," nor because the vendee failed to remove a curtain having the vendor's name on it, when his acts were otherwise sufficient to constitute an open and notorious change of possession.25 Especially so, where there is no evidence of a restoration of possession to the vendor, and the bill of sale was publicly recorded and public advertisement made of the sale to and that the business would be conducted by the vendee. That the old sign was not removed, nor any new one set up, are not facts sufficient to overcome other evidence of facts showing open, notorious and unequivocal change of possession."

26

§ 32. Notice of transaction-Publicity and notoriety.—The presumption of fraud created by the failure to deliver immediate possession does not arise where the transfer is founded on a valuable consideration and there is no intention in fact to defraud creditors, and the instrument of transfer is recorded pursuant to law or otherwise given publicity and notoriety, as publicity avoids the fraud which the statute provides against.

28

§ 33. Judicial and public sales.-The statute of frauds, which makes sales of personal property void where the possession remains in or returns to the vendor, and the rule that retention of possession of personal property by the vendor is prima facie evidence of fraud, do not apply to judicial sales or public sales at

24. Hugus v. Robinson, 24 Pa. St. 9, although the vendor remained in the store, settling up his own business and assisting in selling goods.

25. Huels v. Boettger, 40 Mo. App. 310. See also Pollard v. Farwell, 48 Mo. App. 42.

26. Benjamin v. Madden, 94 Va. 66, 26 S. E. 392.

27. Greenthal v. Lincoln, 68 Conn. 384. See also Burchinell v. Smidle, 5 Colo. App. 417, 38 Pac. 1097, where also the bill of fare in a restaurant, which was the subject of the sale, had not been changed to indicate the change of ownership.

28. Lowe v. Watson, 140 Ill. 108, 29 N. E. 1036; Sechler Carriage Co. v. Dryden, 71 Ill. App. 583.

auction, as the publicity and notoriety of the sale take away any presumption of fraud which might otherwise arise from such possession. The continuance in possession of personal property, after the property has been in good faith publicly sold under execution or under a mortgage or deed of trust is not even prima facie evidence of fraud, so as to subject the property to the creditors of the grantor or execution debtor, especially when purchased by a third person or a stranger to the proceeding.29 The rule

29. Ala.-Wyatt v. Stewart, 34 Ala. 716; Montgomery's Ex'rs V. Kirksey, 26 Ala. 172; Creagh v. Savage, 14 Ala. 454; Simerson v. Branch Bank, 12 Ala. 205; Anderson v. Brooks, 11 Ala. 953; Abbey v. Kingsland, 10 Ala. 355, 44 Am. Dec. 491; Ravisies v. Alston, 5 Ala. 297.

Cal.-Matteucci V. Whelan, 123 Cal. 312, 55 Pac. 990, 69 Am. St. Rep. 60. See also O'Brien v. Chamberlain, 50 Cal. 285.

Del.-Pennington v. Chandler, 5 Harr. 394; Perry v. Foster, 3 Harr.

293.

Ill.-Lowe v. Watson, 140 Ill. 108, 29 N. E. 1036; Hanford v. Obrecht, 49 Ill. 146.

Ky.-Allen v. Johnson, 27 Ky. 235; Kilby v. Haggin, 26 Ky. 208; Greathouse x. Brown, 21 Ky. 280, 17 Am. Dec. 67; Howe v. Lillard, 7 Ky. L. Rep. 298.

La.-Porche v. Labatut, 33 La. Ann. 544; Holms v. Barbin, 15 La. Ann. 553. But see D'Armand V. Sheriff, 21 La. Ann. 198.

Miss.-Ewing v. Cargill, 21 Miss. 79; Foster v. Pugh, 20 Miss. 416; Garland v. Chambers, 19 Miss. 337, 49 Am. Dec. 63.

Mo.-Thompson v. Cohen, 127 Mo. 215, 28 S. W. 984, 29 S. W. 885; Clark v. Cox, 118 Mo. 652, 24 S. W. 221; Lampert v. Haydel, 96 Mo. 439,

9 S. W. 780, 9 Am. St. Rep. 358, 2 L. R. A. 113; Gutzweiler v. Lachman, 28 Mo. 434.

Pa.-Bisbing v. Third Nat. Bank, 93 Pa. St. 79, 39 Am. Rep. 726; Smith v. Chrisman, 91 Pa. St. 428; Maynes v. Atwater, 88 Pa. St. 496; Appeal of Craig, 77 Pa. St. 448; Schott v. Chancellor, 20 Pa. St. 195; Walter v. Gernant, 13 Pa. St. 515; Staller v. Kirkpatrick, 1 Monag. 486; Sharp v. Congregational Pub. Co., 2 Pa. Co. Ct. 620; Dick v. Lindsay, 2 Grant. 431; Lover v. Mann, 2 Am. L. J. N. S. 95.

S. C.-Sloan v. Hunter, 56 S. C. 385, 34 S. E. 658, 879, 76 Am. St. Rep. 551; Richardson v. Mounce, 19 S. C. 477; Garrett v. Rhame, 9 Rich. 407, 67 Am. Dec. 557; Guignard v. Aldrich, 10 Rich. Eq. 253; Poole v. Mitchell, 1 Hill, 404; Coleman v. Bank of Hamburg, 2 Strob. Eq. 285, 49 Am. Dec. 671.

Tenn.-Carlock v. Atlee (Ch. App. 1899), 53 S. W. 186; Floyd v. Goodwin, 16 Tenn. 484, 29 Am. Dec. 130.

Vt.-Wolcott v. Hamilton, 61 Vt. 79, 17 Atl. 39; Austin v. Soule, 36 Vt. 645; Gates v. Gaines, 10 Vt. 346; Bates v. Carter, 5 Vt. 602; Batchelder v. Carter, 2 Vt. 168, 19 Am. Dec. 707; Boardman v. Keeler, 1 Aik. 158, 15 Am. Dec. 670.

Va.-Roberts Adm'r v. Kelly, 2

30

declaring void a sale of personalty as to attaching creditors, unless there is a change of possession, does not apply to a bona fide sale made by a sheriff on execution, after compliance with all legal formalities, even though the execution creditor is himself the purchaser. But in New York, where the statute, with its presumptions founded upon non-delivery and absence of changed possession, draws no distinction between modes of transfer, a sale of chattels under execution is fraudulent as to creditors, if there is no change of possession, whether the plaintiff in the execution or a third person be the purchaser.

31

§ 34. Effect of knowledge or notice as to existing creditors.— The doctrine of notice is not applicable to the sales of personal or movable property, and the existing creditors may seize and sell when there has been no delivery of possession, although informed of an agreement to sell, and where one purchases a chattel from another against whom an execution is about to be levied on such chattel, and pays the amount of such execution, he is not affected with notice of a prior transfer or lien without a change of possession.32 Notice is not a substitute for change of possession, so as to render valid a sale of personal property.

33

35. Effect of knowledge or notice as to subsequent creditors and purchasers.-A sale of personal property whereof the seller remains in possession is valid against his subsequent creditor or

Pat. & H. 396; Carr v. Glasscock, 3 Gratt. 343; Wilson v. Butler, 3 Munf. 559.

30. Huebler v. Smith, 62 Conn. 186, 25 Atl. 658.

31. Stimson v. Wrigley, 86 N. Y. 332; Masten v. Webb, 19 Hun (N. Y.), 172; Gardenier v. Tubbs, 21 Wend. (N. Y.) 169; Fonda v. Gross, 15 Wend. (N. Y.) 628; Taylor v. Mills, 2 Edw. Ch. (N. Y.) 318; Dickenson v. Cook, 17 Johns. (N. Y.) 332; Farrington V. Caswell,

15

Johns. (N. Y.) 430. But see Woodworth v. Woodworth, 21 Barb. (N. Y.) 343; Acker v. White, 25 Wend. (N. Y.) 614; Brown v. Wilmerding, 12 N. Y. Super. Ct. 220.

32. Rothchild v. Swope, 116 Cal. 670, 48 Pac. 911; Lassiter v. Bussy, 14 La. Ann. 699; Stark v. Ward, 3 Pa. St. 328; Warwick Iron Co. v. First Nat. Bank, 10 Pa. Cas. 14, 13 Atl. 79; Perrin v. Reed, 35 Vt. 2.

33. Hart v. Farmer's & Mechanics' Bank, 33 Vt. 252.