Ash v. Savage

The opinion of the Court was delivered by Richardson C. j. In this case there was a just debt due to the plaintiff; and the oxen were conveyed to him by way of mortgage to secure the debt, with an agreement, that the mortgagor should retain the oxen in his possession, until the condition should be broken. It does not appear that there was any secrecy as to the transaction, nor is there any thing stated in the case which indicates fraud, unless it be the circumstance, that possession was retained by the mortgagor under the agreement. Two questions arise. In the first place, was possession essential to the title of the plaintiff under the mortgage ? In the next place, did the possession of the mortgagor, under the circumstances, render the mortgage fraudulent in law, with respect to creditors ? The first of these questions has long been settled in this court. Possession is essential to the validity of a pledge of personal property ; but not to the validity of a mortgage. 2 N. H. Rep. 13, Haven v. Low. The other question has also been settled in this court; in the same case of Haven v. Low, where a chattel is mortgaged, possession by the mortgagor may, in some cases, be evidence of fraud, but is never a fraud in law, or conclusive evidence of fraud. The law is the same in Maine. 5 Greenl. 309, Holbrook v. Baker; in Massachusetts, 1 Pick. 389, Badlam v. Tucker; 2 Pick. 607, Holmes v. Crane; 5 Pick. 59, Ward v. Sumner; in New-York, 3 Cowen, 166, Bissell v. Hopkins. The principle has been adopted in the circuit court of the United States for the first circuit, 4 Mason, 534, and has been recognized by the supreme court of the United States. 1 Peters, 449. [548] Whether it would not be better, if no mortgage of personal property were held to be valid, unless the mortgagee took possession, is a question fit for the consideration of the legislature. But we must administer the law as we find it. In this case there was a debt to be secured, a contract to secure the debt, and the possession of the oxen, by the mortgagor, was consistent with the terms of the contract. There is nothing disclosed in the case, which raises the slightest suspicion of an intent to defraud any body, or which is in any degree inconsistent with a bona fide mortgage of the property. Judgment on the verdict.