Thompson v. Yeck

Breese, J. This court has adopted the rule, in Thornton v. Davenport et al., 1 Scam.R. 296, and in several other cases, that all conveyances of goods and chattels, when the possession is permitted to remain with the donor or vendor, is fraudulent of itself, and void as to creditors and purchasers, unless the conveyance itself stipulates for such retaining possession by the vendor or donor. And the same was held in a case arising under our chattel mortgage act. Reed v. Eames, 19 Ill. R. 595. In all cases the change of possession must be substantial and exclusive. If goods are purchased on execution by a stranger, and from motives of humanity are left in possession of the debtor, for a temporary and honest purpose, the parties not standing in the relation of debtor and creditor, the transaction has been held in England not to be fraudulent as to creditors, and the title will remain in the purchaser. Here it would be required that the possession should accompany and follow the title, or a sale will be void per se, 'as to creditors and purchasers, without notice, and not open to explanation, unless the deed, if the sale be by deed, acknowledged or proved according to law, expressly stipulates otherwise. In this case the property had been sold under the mortgage. It should then have passed at once into the possession of the purchaser, who, in this case, was the mortgagee. Reed v. Eames, 19 Ill. R. 595. The chattel mortgage act, would be useless if this transaction is sustained. Possession of personal property being one of the strongest indications of ownership, the policy of that law is, that so soon as the credit expires, the mortgagee shall take possession, so that others may not be deceived and defrauded by the appearance of ownership in one, while the title is really in another. The mortgagee in this case, by suffering the property to remain with his debtor, and taking his receipt to re-deliver, is precisely in the situation Eames was, in the case above cited. To have made the transaction fair, there should have been a change of possession. We think under a true and proper construction of the chattel mortgage act, there was such a legal fraud in the transaction, as to render the property subject to the lien of the attachment. The receipt given is quite general, and embraces other property than that sold under the mortgage, namely, “.all other household furniture and farming utensils, not enumerated in this receipt.” This, to say the least, is a strong indication of fraud. The judgment must be affirmed, and the property held liable to the attachment. Judgment affirmed.