Page:Federal Reporter, 1st Series, Volume 7.djvu/814

 802 _ FB0BBAL BBPOBTBS. �Two questions ha ve beeri elaborfttely discussed by counsel, to-wit: �, (l),"Whether under the Btatutea mortgage of personal propertynot recorded is valid as against a subsequent creditor who becomes suchwith- out notice of such mortgage. (2) . Whether, independently of the statute, a mortgage of personal property, where the mortgagor retains the posses- sion and deals with the property as his own, is valid as against a creditor of the mortgagor who becomes such without notice of the mortgage 1 �The first of these being a question as to the true construc- tion 6f a fltatute of the state of lowa, we are constrained to follow the decisions of the supreme court of the state, howt ever much/we may doubt the soundness of those decisions. Were this an original question we should hold, without hesi- tation, that the statute was enacted to prevent the perpetra- tion of fraud by the sale or mortgage of personal property without the delivery of the possession, and without notice to persons subsequently dealing with the vendor or mortgagor. Independently of any statutory provision, a manual deliv- livery of the mortgaged property to the mortgagee would be neeessary to the validity of the instrument. This rule of the common law has its foundation in the doctrine that posses- sion of personal property is prima facie evidence of owner- ship, To allow the owner of such property to transfer the title hj a secret conveyance, while retaining the possession and assuming to act as the owner, was regarded at common law as permitting a fraud upon all who should deal with him upon the faith of his ownership. His possession and appar- ent ownership, it was believed, gave him credit, and afforded him the means of defrauding others. �The purpose of the legistature in enacting this statute was net, in our judgment, to set aside this wholesome doctrine and thus enable dishonest persons to commit fraud by means of secret chattel mortgages; it was only to substitute record: ing for delivery. If thus construed, the statute affords a pro- tection against fraud quite as effectuai as that given by the common law ; but if we hold that a secret unrecorded sale or mortgage may be enforced as against a creditor who deals with the vendor or mortgagor in ignorance of its existence, unless such creditor shall, by attachment or otherwise, obtain ��� �