David Josiah Brewer

“ The interests of the general public are not prejudiced by any such transaction between debtor and creditor. Indeed, they are rather promoted by any arrangement under which the mortgagor can continue in business, for in ninety-nine cases out of a hundred the taking of possession by a creditor results in closing the business, and turning the debtor out of employment. ”

“ What was meant was that such an instrument should not be used to enable the mortgagor to continue in business as theretofore, with full control of the property and business, and appropriating to himself the benefits thereof, and all the while holding the instrument as a shield against the attacks of unsecured creditors. Neither was it suggested in either of those cases that this court, in determining the validity of a chattel mortgage, would ignore the settled law of the state in which the transaction took place, as established by the decisions of its highest court. ”

“ It is contended that these mortgages should be considered as executed simultaneously, and parts of one transaction, and as equivalent to a general assignment for the benefit of creditors, and that, having preferences in them, they are void under the state law respecting assignments. But this contention is clearly untenable. The instruments, on their faces, are mortgages given to secure debts not yet due. The mortgagor had no thought of closing out his business. ”

“ Were the mortgages of plaintiffs executed in good faith, and for the purpose of securing a bona fide indebtedness due to them from George W. Hamilton at the time, or were the same executed by Hamilton and received by the plaintiffs for the purpose of defrauding creditors of George W. Hamilton.' It further instructed the jury that the insolvency of Hamilton, if proved, would not of itself avoid the mortgages, and that he had the right to prefer any of his creditors. ”

“ Indeed, it would seem that such an arrangement, if honestly carried out would be for the mutual advantage of the mortgagee and the unpreferred creditors. But there are features ingrafted on this mortgage whih a re not only to the prejudice of creditors, but which show that other considerations than the security of the mortgagees, or their accommodation even, entered into the contract. Both the possession and right of disposition remain with the mortgagors. They are to deal with the property as their own, sell at retail, and use the money thus obtained to replenish their stock. ”

“ People v. Bristol, 35 Mich. 28, 32; Wingler v. Sibley, 35 Mich. 231; Robinson v. Elliott, 22 Wall. 513, 523. The good faith of such transactions, where they are not void upon their face, is, under the statutes of Michigan, a question of fact for the determination of the jury. Oliver v. Eaton, and Gay v. Bidwell.' See, also, Allen v. Massey, 17 Wall. 351. While in the foregoing quotation reference is made only to the tat utes of the state, the law is as fully established by repeated decisions of its supreme court as by the express language of its statutes. ”