Page:Federal Reporter, 1st Series, Volume 7.djvu/815

 CBOOKS V. STUABT. 803 �a lien before having notice of the insti'umeht, ,it eeems to us that the door for fraud is left wide open. One^ho gives; credit to a merchant in the open and exclusive possession of a stock of merchandise, upon which there is no recorded lien, bas a right to assume that he is dealing with the owner of such stock, and to rely upon such ownership in extending credit. If he is to be affected by any secret lien upon such stock which may be recorded before be secures a lien by levy or otherwise, it will generally Happen that the first notice to bim upon which he can make an af&davit for attachment will be the recording of the lieu, so that the circumstance that gives him the right cuts off the remedy. If, therefore, we were at liberty to construe the statute for ourselves, we should unhesitatingly hold the mortgages in question in this case to be void under the statute. �But the supreme court of lowa, whose decisions upon the construction of state statutes are rules of decision in this court, have reaohed uppn this question a different conclusion. By a series of decisions that court bas held that an unre- corded mortgage of chattels, where the mortgagor retains possession, is valid as against creditors who reoeive notice at any time before obtaining a lien by levy or otherwise. Hughes Y. Cary, 20 lowa, 399; AUen v. McCalla, 25 lowa, 465; and other cases cited in note to the case of Cragin v. Carmickael, 2 Dill. 519. �The question remains whether these mortgages should be held void independently of the statute, upon the ground that the mortgagor retained the possession of the property, with" power to dispose of the same in the usual course of trade. As already stated, the proof shows that the mortgagor re- mained in possession and continued the business with the assent of the mortgagees. �The case of Robinson v, Elliott, 22 Wall. 513, is, we think, conclusive of this controversy. It was there distinctly held that a mortgage of chattels which permitted the mortgagor to remain in possession until default in payment of the debt secured, with power to sell the goods as theretofore, was fraudulent and void in law, and could not be enforeed by a ��� �