sequent stage of the trial, the railway company put in evidence the deed by which the canal company obtained title to the land occupied with its canal at that point, which deed conveyed the land to the canal company, its successors and assigns, to have and to hold so long as said land and premises should be used for the purposes of said canal. This grant showed the title of the canal company to be just what its title by condemnation would have been,-the lowest title which it should be presumed to hold from the mere fact of peaceable possession. Apparently, because of this deed, the trial judge changed his opinion as to the unity of the tracts lying east and west of the canal, and, in his charge to the jury, instructed them to disregard the testimony concerning damages, so far as it related to the tract east of the canal, and to estimate only the damages done to the curved strip. We must assume that the jury obeyed these instructions. Nevertheless, I think the error was not cured, because the correction came too late.

The right of trial by jury, as established among us, includes the right of counsel to discuss before the jury the issues of fact which are submitted to their decision. Sullivan v. State, 46 N. J. Law, 446. Under the rulings of the court at the trial of the present case, up to the delivery of the charge, one of the issues to be submitted to the jury was the amount of detriment which the lands of the ferry company lying east and west of the canal, considered as one tract, would sustain by the taking of the land condemned; and it must be assumed that that was the issue to which counsel directed their argument. The issue finally submitted to the jury by the judge was a materially different one,-the amount of detriment to the curved strip alone, a comparatively insignificant portion of the ferry company's property. This issue counsel had had no opportunity to discuss, and they had been practically deprived of such an opportunity by the erroneous rulings of the court. Indeed, the injurious effects of this error went deeper even than to the right of discussion by counsel; for the very testimony introduced by the railway company in its defense must have been confined to the issues as the ruling of the court had shaped them. Certainly, a ruling which constrained respectful counsel to sustain in proof and in argument a burden more onerous than their client was legally bound to bear was not rendered harmless because the court ultimately told the jury that the law imposed on the party a different and a lighter task. The error should have been corrected in time to enable the defendant to meet the issue as the new views of the court presented it. Had the evidence, when received, been legitimate, and its irrelevancy become apparent only on the disclosure of other facts, a motion to overrule it would no doubt have been necessary to make its retention erroneous; but, its reception being an error, that error continued until

it was eradicated under conditions which restored the substantial rights of parties. We are not unaware of the fears which some judges have entertained as to inconveniences springing out of the rule here laid down, but, on consideration, those fears seem to have no reasonable basis. The rule will not prevent the trial court from rectifying its mistakes, when that can be done without substantial injury to litigants; and it should prevent an attempt to correct them under any other circumstances.

But, even upon the theory of damages adopted at the trial, there are errors which require the reversal of the judgment. Mr. Seidler, a witness produced by the ferry company, testified that he was connected with the railroad of an existing railroad corporation and with a projected railroad, not stating in what capacity; that he had knowledge of the value of terminal property on the Hudson river opposite New York, had bought properties on the line of New York Bay, and was acquainted generally with the value of property in the vicinity of the Point Breeze Company. On the strength of these qualifications, he was asked the value of the land in that vicinity between the Central Railroad and the Morris canal, in connection with land adjacent to it having a water front, the value of the curved strip as it stood, and what the residue of it would be worth after the land acquired by the railway company had been taken by that company. These questions were evidently intended by the examining counsel, and understood by the opposing counsel, the court, and the witness, to call for the witness' opinion with regard to the comparative utility of the curved strip as the site of a railway from the Central Railroad to the tract lying east of the canal, viewing the strip as it was and as it would be after the construction of the Bergen Neck Railroad. Lawful answers to these questions necessarily required on the part of the witness expert knowledge respecting the building and operation of one railroad across another, at, above, or below grade. This line of examination was objected to by counsel for the railway company, on the ground that the qualification of the witness as an expert was not shown. Nevertheless, the questions were allowed; and, in response, the witness gave his views at length on the expense and inconvenience which would attend the construction and management of a railroad on the curved strip after the Bergen Neck Railroad was built. On these topics we think the legal competency of the witness did not appear. Mere connection with railroad corporations, and knowledge of the value of land, come far short of indicating expertness on the special subjects with which the witness was permitted to deal. Railroad Co. v. Root, 53 N J. Law, 253, 21 Atl. 285; Laing v. Canal Co., 54 N. J. Law, 576, 25 Atl. 409.

For these errors, the judgment below must be reversed.

MEDING v. ROE et al.

(Court of Chancery of New Jersey. Nov. 5,

1894.)

CHATTEL MORTGAGE-FAILURE TO RECORD-VA

LIDITY.

A mortgage upon chattels, which, though given for a full consideration, is designedly kept from the record for a considerable period of time after its execution, while the chattels mortgaged remain in the possession of the mortgagor, is absolutely void as against creditors of the mortgagor whose debts accrue between the making and the recording of the mortgage, though such creditors obtain their lien upon the chattels after such recording, and though the mortgagee is innocent of any intention to defraud.

(Syllabus by the Court.)

Bill by Charles E. Meding, as receiver of the Butler Silk Manufacturing Company, an insolvent corporation, to declare void a chattel mortgage upon its plant held by Madeline A. Roe and one Todd. Decree granted.

This bill is filed by a receiver of an insolvent corporation, appointed by this court, against a party holding a mortgage upon the chattels of the corporation. Its object is to obtain a decree of this court declaring the mortgage void. The complainant bases his equity on four grounds: First, that the mortgage was not executed in pursuance of authority for that purpose given by the board of directors; second, that it was purposely withheld from the records for several months after it was executed, and, indeed, until the day before the application for the appointment of a receiver was made to a judge of this court; third, that such withholding from the records was done by virtue of an agreement between the parties for the purpose of defrauding creditors; and, fourth, that the affidavit was insufficient.

There is no dispute as to the facts. They are as follows: The insolvent corporation, the Butler Silk Manufacturing Company, was organized under the general corporation act on the 14th of February, 1889, by Richard V. Butler, Abram Fardon, and James H. Huntoon, all of Paterson. Its object was the manufacturing of silk, and its place of business was Paterson. Huntoon was merely a nominal stockholder, and never took any part in the affairs of the company. They were managed, as long as it existed, by Butler and Fardon. Butler was president, and attended to the manufacturing department, and Fardon was secretary and treasurer, and attended to the financial department. He was also teller in a national bank at Paterson. In the latter part of the year 1892 the corporation was largely in debt, and in fact insolvent. Its financial condition in this respect was concealed from its creditors, and statements made and exhibited to them showing that it had a large surplus. About that time the defendant Miss Madeline Roe and her brother, Augustus C. Roe, who were cousins of both Butler and Fardon, became entitled to a considerable sum of money-

nearly $10,000-by the death of their mother; and Augustus, who seemed to be somewhat helpless, was thrown out of a home and employment. In this situation of affairs the defendant Madeline Roe applied to her cousin Butler to give a position to her brother, as employé, in the Butler silk mill. He agreed to do so provided she and her brother would loan the corporation the small fortune which they were about to receive, to enable it to increase its machinery and plant, and thereby create a need of an additional man in the works, and proposed to give them a chattel mortgage to secure them. Under this arrangement, Miss Roe began paying the money that she received from her mother's estate over to the corporation as fast as it came in to her, and also borrowed from her brother's trustee his share, and paid that over to it, upon the understanding that she was to have a chattel mortgage upon the plant for the whole. In fact, that mortgage was prepared in December, but was not executed until after the last payment was made, which was some time in April, 1893, when Miss Roe, by adding her own savings from her labor for years to the money she received from her mother's estate on her own and her brother's account, made up the sum to an even $10,000. To secure this sum the chattel mortgage in question was executed. It bears date on the 9th of May, 1893, and was executed on that day by Butler, as president of the company. Miss Roe made the necessary affidavit on the 18th of May, 1893. The mortgage was prepared and the business transacted by Mr. J. H. B., a realestate agent and conveyancer in Paterson, who occupied confidential relations towards Mr. Butler. Neither Butler nor Fardon was present when Miss Roe made the affidavit. After it was made, Miss Roe said to J. H. B., "You understand, Mr. B., that this mortgage is not to be recorded until I send you word myself?" And she says that he (B.) answered, "I think so, Miss Roe." And she says that she gave this direction to Mr. B. because Mr. Butler had said to her, when the mortgage was ready for execution, that he would prefer, for business reasons, that she would not record it; but that, as she was a woman, if at any time she grew nervous she might record it without any further conversation with either Butler or Fardon. Mr. J. H. B. placed the mortgage in his safe, and kept it there until Monday, the 31st day of July, 1893. On Saturday, the 29th of July, Mr. Fardon was arrested for a criminal breach of the federal banking laws, and lodged in jail. Miss Roe saw him on Sunday, and, at his suggestion, immediately sent word to Mr. J. H. B. to put her mortgage on record; and he swears, and he is probably right, that he lodged it for record on Monday morning, July 31st, but the clerk's certificate is that it was so lodged at 4 o'clock in the afternoon. In the meantime, during the business hours of July 31st, counsel for Mr.

J. H. B. was engaged in preparing a bill for him, asking for the appointment of a receiver of the corporation, and Mr. J. H. B. made an affidavit to it on the 31st of July. Counsel presented it to a vice chancellor on the next day, August 1st, and it resulted a few days later in the appointment of the complainant receiver. The property subject to the mortgage was sold free and clear of it by order of the court, and the proceeds are in court, subject to its disposition. Between the time of the giving of the mortgage and its uing for record, the corporation continued its business, and incurred large liabilities for materials purchased of divers dealers in raw silk in New York City. Several of these parties or their agents were sworn, and declared that they had no suspicion of any mortgage or lien, and, further, that they had, before selling the goods, made special inquiries of Mr. Butler as to whether there were any liens of any kind upon the plant of the corporation, and were assured by him that there were none. One other creditor examined the records for such liens. The proofs show that the giving of a chattel mortgage by a manufacturer tends to seriously injure his credit, and that if, in this case, the mortgage had been filed as soon as given, it is probable that none of the credits which were extended by the various dealers to this corporation after that date would have been given. The proofs further show Miss Roe to have been entirely inexperienced in business, and innocent of any intention to defraud, and quite ignorant that such might be the effect of her holding her mortgage off the record. She had no notion what the "business reason" was that Mr. Butler referred to when he asked her not to record the mortgage. In December, 1892, Miss Roe had indorsed a note made by the company, for its accommodation, to the defendant Todd, its landlord. That note was renewed when due, with a like indorsement, and Miss Roe became charged as indorser; and after her mortgage was recorded she assigned a half interest in it to Mr. Todd, to secure him for her indorsement, and he was made a party defendant by reason of such assignment.

Eugene Stevenson, for complainant. John W. Griggs, for defendants.

PITNEY, V. C. (after stating the facts). The ground principally relied upon by the complainant is the withholding the mortgage from record from May 18 until July 31, 1893, during which period the corporation had the benefit of the credit of owning this silk plant free and clear of incumbrance, and thereby acquired a mercantile credit to which it was not entitled; resulting in the incurring of very considerable indebtedness to persons who are now the creditors of the corporation, and are represented by the receiver. The right of the receiver to attack this mortgage, as a representative of

creditors, cannot be disputed, since the decision of the case of Button Co. v. Spielmann, 50 N. J. Eq. 120, 24 Atl. 571, which was affirmed by the court of errors and appeals, 50 N. J. Eq. 796, 27 Atl. 1033. The question to be decided depends upon the true construction of the chattel mortgage act of May 2, 1885 (Supp. Revision, p. 491). The fourth section of that act provides "that every mortgage or conveyance intended to operate as a mortgage of goods and chattels hereafter made, which shall not be accompanied by an immediate delivery, and followed by an actual and continued change of possession of the things mortgaged, shall be absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers and mortgagees in good faith, unless the mortgage, having annexed there to an affidavit or affirmation made and subscribed by the holder or holders of said mortgage, his, her or their agent or attor ney, stating the consideration of said mortgage and as nearly as possible the amount due and to grow due thereon, be recorded as directed in the succeeding section of this act." This section had its origin in the act of March 24, 1864 (P. L. 493; Nixon, Dig. 1868, p. 613). That act provided for the fil ing of a mortgage, instead of its record, and did not require an affidavit. The words re quiring an affidavit were inserted by the act of March 19, 1878 (P. L. 139). The act of March 12, 1880 (P. L. 266), provided merely for the recording of chattel mortgages. It seems to have left it optional with the mortgagee whether he would record or file, making either sufficient. The act of March 25, 1881 (P. L. 226), was a revision of all the legislation on that subject. So held by Vice Chancellor Van Fleet in Bracher v. Smith, S N. J. Law J. 16. That act omitted the clause requiring an affidavit, but re quired the instrument to be recorded. That was followed by the act of 1885, in which the requisition of an affidavit was again inserted.

The verbiage of the section under consideration is precisely the same as that of the original act of 1864, with the addition of the provision for an affidavit, except that "record" is substituted for "filing." Previ ous to any legislation on this subject, this branch of the law was in an unsatisfactory condition. The result of the opinion of this court in Runyon v. Groshon (1858) 12 N. J. Eq. 86, and of that of the supreme court in Miller v. Shreve (1861) 29 N. J. Law, 250, was to hold chattel mortgages, where the possession of the chattels remained in the mortgagor, prima facie void as against creditors, but capable of being validated by proof to the satisfaction of the trial court that the leaving them in the possession of the mortgagor was not intended for any fraudulent purpose, but was justified by the circumstances of the case. The defect of this state of the law was twofold: On