MEYER BROS. DRUG CO. v. PIPKIN DRUG CO., 136 F. 396

PARDEE, Circuit Judge (after stating the facts).

The trustee of the bankrupt’s estate moves to dismiss this petition to revise because it was not allowed by any j’udge of this or the lower court; no bond has been given; the transcript of the record filed is not certified by the clerk of the lower court; the transcript does not contain the pleadings upon which the issues were tried, nor show who are the proper parties to this proceeding; the transcript does not contain the evidence upon which the findings of the referee were based; the petition to revise was filed more than three months after the entry of the judgment below; and, lastly, because no supersedeas has been granted.

In our opinion, none of these grounds are well taken. The statute allows the petition to revise to be filed on due notice, but provides no other regulations. This court has made no rules as to any of the requisites or formalities referred to in the motion to dismiss. As to the time elapsed between the decision of the court below and the filing of the petition, we are not prepared to say that there has been unreasonable delay. . See In re New York Economical Printing Co., 106 Fed. 839, 45 C. C. A. 665; and, for a discussion of the whole subject, see Foveland on Bankruptcy, 812, and authorities there cited.

There is no suggestion that pending the delay the proceeds of the mortgaged property have been distributed, or that any party’s rights have suffered. The question presented by the petition is whether the mortgage of petitioners, which was granted on the 22d day of November, 1902, filed for registration on the 2d day of June, 1903, constitutes such a preference as falls within the meaning of

section 60a of the bankrupt law (Act Feb. 5, 1903, c. 487, § 13, 32 Stat. 799 [U. S. Comp. St. Supp. 1903, p. 416]), which is as follows: “(

a) A person shall be deemed to have given a preference if, being insolvent, he has, within four months before the filing of the petition, or after the filing of the petition and before the adjudication, procured or suffered a judgment to be entered against himself in favor of any person, or made a transfer of any of his property, and the effect of the enforcement of such judgment or transfer will be to enable any one of his creditors to obtain a greater percentage of his debt than any other of such creditors of the same class.

Where the preference consists in a transfer, such period of four months .shall not expire until four months after the date of the recording or registering of the transfer, if by law such recording or registering is required.’’ This depends upon whether or not the mortgage in question was one which was required by law to be recorded or registered. The requisites of the Texas law with reference to registration of chattel mortgages are contained in

article 3328 of the Revised Statutes of 1895, as follows: “Every chattel mortgage, deed of trust, or other instrument of writing intended to operate as a mortgage of or lien upon personal property, which shall not be accompanied by an immediate delivery, and be followed by an actual and continued change of possession of the property mortgaged or pledged by such instrument, shall be absolutely void as against the creditors of the mortgagor or person making same, and as against subsequent purchasers and mortgagees or lien holders in good faith, unless such instrument, or a true copy thereof, shall be forthwith deposited with and filed in the office of the county clerk of the county where the property shall then be situated, or if the mortgagor or person making the same be a resident of this state, then of the county of which he shall at that time be a resident.” This statute has been construed in the Supreme Court of the state of Texas to mean that an unrecorded chattel mortgage shall be void only against lien creditors of the mortgagor, or subsequent purchasers and mortgagees or lienholders in good faith; and, as between the parties to tire chattel mortgage and against all ordinary creditors, the record is immaterial.

Grace v. Wade, 45 Tex. .527; Overstreet v. Manning, 67 Tex. 663, 4 S. W. 348. 'And this may be considered as the established jurisprudence of the state of Texas. As the case was presented before the referee and before the lower court, there was no question made that the rights of any lien creditors of the bankrupt or any subsequent purchasers or mortgagees were in any wise affected by the rights claimed under the chattel mortgage.

We think it follows that the chattel mortgage in this case was valid between the bankrupt and the holders thereof, and as to all parties shown to be interested in the bankrupt’s estate, whether the said mortgage was recorded or not. It cannot be said, therefore, that the mortgage was one required by law Jo be registered or recorded under

section 3338 of the Revised Statutes of Texas of 1895, nor that the granting of said mortgage constituted a preference within four months, under

section 60a of the bankrupt law. The petition for revision is allowed, and the judgment of the referee and the judgment of the District Court affirming the same, filed December' 16, 1904, are reversed; and judgment is now rendered that the claim of the Meyer Bros. Drug Company, as assignee of D. B. and S. W. Pipkin, to the mortgage lien asserted by them upon the funds in the hands of the trustee, and resulting from the sale of the mortgaged property, be, and the same is, allowed, as in all respects valid and just.