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Mortgage on personal

SEC. 2956. A mortgage of personal property is called property, a a personal mortgage.

personal

mortgage. Property

subject to.

Same.

How created

Power of

attorney to execute.

Form of.

SEC. 2957. All personal property is the subject of mortgage, except as provided in Sec. 2978.

SEC. 2958. Growing crops, nursery trees and other anticipated products of land are personal property, within the meaning of this article.

[New section.]

SEC. 2959.

Story Eq. Jur. Sec. 1021; Wilson vs. Wilson, 32 Barb., 328. There may be a mortgage of personal property not yet in being, if it is the anticipated product of property owned by the mortgageor (as where he mortgages all the produce of his farm during a given season), taking effect upon the property as soon as it comes into existence (Conderman vs. Smith, 41 Barb., 328). But the mere expectancy of an heir apparent cannot be mortgaged (Carlton vs. Leighton, 3 Meriv., 667). See Secs. 460 and 461, for a definition of what may be transferred.

NOTE. In New York all personal property may be mortgaged mortgage to be filed, not recorded; must be renewed every year. The two preceding sections propose to extend the law to all personal property. The following section is the existing law. One or the other will be finally omitted: SEC. A personal mortgage may be made on the following property, to secure the payment of just indebtedness: 1. Upholstery and furniture used in hotels and public boarding houses.

2 Saw mill, grist mill and steamboat machinery.

3. Tools and machinery used by machinists, founderymen and other mechanics.

4. Steam boilers, steam engines, locomotives, engines and the rolling stock of railroads.

5. Printing presses and other printing materials.

6. Instruments and chests of a surgeon, physician or dentist.

7. Libraries of all persons.

8. Machinery and apparatus for mining purposes.

9. Growing crops.

"Chattel Mortgages," Sec. 1. The last subdivision is from "Fraudulent Conveyances," Sec. 17. This section may be substituted for the two preceding; the remaining sections can readily be adapted to it.

A personal mortgage can only be created. by a written instrument, and with the same formalities required to create a mortgage on real property.

SEC. 2960. A power of attorney to execute a personal mortgage must be in writing, subscribed, acknowledged or proved, certified and recorded, in like manner as pow ers of attorney for grants of real property.

SEC. 2961. A personal mortgage may be made in substantially the following form:

This mortgage, made the year, by A. B., of mortgageor, to C. D., of

day of
by occupation a

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, mortgagee, witnesseth: [I] That the mortgageor mortgages to the mortgagee [here describe the property], as security for the payment to dollars, on [or before] the

bim of

day of in the year with interest thereon [or, as security for the payment of a note or obligation, describing it, etc] This mortgage is executed in good faith, and not to hinder, delay or defraud creditors.

[If a vower of sale is to be given, add.] II. That in case of the non-payment of the principal sum, or of any part of the interest thereon, when due, the mortgagee may enter upon any place where the said property is situated, and sell the property above described, in the manner prescribed by the CIVIL CODE and the CODE OF CIVIL PROCEDURE of this State, and apply the proceeds of such sale to the satisfaction of the amount due under this mortgage, and of the expenses of the sale; the residue to be forthwith paid to the mortgageor.

[If the interest clause is to be inserted, add,] III. That, if the interest upon the principal sum mentioned herein is not fully paid as it falls due, the entire principal shall become immediately payable, at the option of the mort

gagee

[If the insurance clause is to be inserted, add,] IV. That the mortgageor shall, at his own expense, keep the said property insured against [fire] in a reputable insurance office, for the benefit of the mortgagee, to the extent of dollars, until this mortgage is paid or otherwise

extinguished, Witnessed by:

E

F

N. Y. C. C., "Schedule."

Executed by:
A B-

thenticated.

SEC. 2962. A personal mortgage, before it can be Must be aurecorded, must be acknowledged, or proved, certified and recorded, in like manner with real mortgages.

NOTE. This takes the place of an affidavit. Ample penal sections must be prepared for the Penal Code, to supply a punishment for fraudulent mortgage equal to that for perjury. The change is made to give uniformity and similarity to real and personal mortgages.

recorded.

SEC. 2963. A personal mortgage must be recorded in Must be the office of the County Recorder of the county or counties where the property, or parts thereof, is respectively located or used, or in which it is removed. It must be recorded, also, in the county where the mortgageor re

Other sections on recording made applicable.

Recorded in different places.

Time allowed for

corder's

A certified copy of a

sides, if a resident of this State.

personal mortgage, once recorded, may be recorded in any other county.

[New section.]

SEC. 2964. The provisions of Sec. 1218 are applicable to the recording of a personal mortgage.

[New section.]

SEC. 2965. A single personal mortgage, embracing several things of such character or so situated that, by the provisions of this article, separate recording would be required in different places, is only valid in respect to the things and places as to which it is duly recorded. N. Y. C. C., Sec. 1637.

SEC. 2966. The mortgagee in a personal mortgage is travel to Re- allowed, from the date of the mortgage, one day for every twenty miles of the distance between his residence and the County Recorder's office where such mortgage ought by law to be recorded. During such time the mortgage

office.

Property

in transit exempt.

Property of

common carrier, where recorded.

Property exempt from

operation of

the mort

shall have the same effect as if recorded.

[New section.]

Based on "Chattel Mortgages," Sec. 7.

NOTE. This section should either be omitted or extended to all real instruments and real mortgages.

SEC. 2967. Property in transitu from the possession of the mortgagee to the county of the residence of the mortgageor, or to a location for use, shall, during a reasonable time for such transportation, be considered as located in any county where it is recorded.

Stats. 1857, 347, Sec. 2.

SEC. 2968. A mortgage of property used in conducting the business of a common carrier must be recorded in the county where the principal office or place of business of such carrier is located; and such recording shall operate to protect the mortgage in all counties, as against creditors, subsequent purchasers and encumbrancers, to the same extent as if the mortgage was recorded in all counties.

[New section.]

SEC. 2969.

Except as

Except as provided in Secs. 2967 and 2968, gage, when. personal property, mortgaged within the provisions of

this article, is exempt from the operation of the mortgage when voluntarily removed by the mortgageor from the county in which the mortgage is recorded, or when permitted to remain out of such county, when otherwise removed, after the expiration of a reasonable time for its return, unless the same is taken as a pledge, as provided in the next section.

[New section.]

SEC. 2970. If the mortgageor voluntarily removes the same. mortgaged property into a county wherein the mortgage is not recorded, or voluntarily permits it to remain there if removed by others, the mortgagee may take posses-ion of the property and dispose of it as a pledge for the payment of the debt, though such debt is not due.

[New section.]

SEC. 2971. A personal mortgage ceases to be valid, Same. as against creditors of the mortgageor, and subsequent purchasers or encumbrancers in good faith, after the expiration of three months from the time the money is due, as shown by the mortgage, unless within such three months proceedings are commenced to foreclose the lien. Any further extension requires a new mortgage. [New section.]

SEC. 2972. The recording of a personal mortgage, in conformity to the provisions of this article, operates as notice thereof to all creditors, subsequent purchasers and encumbrancers.

N. Y. C. C., Sec. 1635.

SEC. 2973. A personal mortgage is void as against creditors of the mortgageor, and subsequent purchasers and encumbrancers of the property in good faith and for value, unless it is recorded, or accompanied by an immediate delivery and followed by an actual and continued change of possession.

N. Y. C. C., Sec. 1634; "Fraudulent Conveyances,"
Sec. 15.

SEC. 2974. A personal mortgage may be satisfied on the record in like manner as mortgages of real property. Secs. 2948, 2949, 2950, 2951, apply to personal mortgages. [New section.]

Recorded mortgage, notice.

[blocks in formation]

Mortgagee may soreclose.

Creditors of mortgageor, remedy.

Creditors of mortgagee, remedy.

Does not ap. ply to ships.

SEC. 2975. A mortgagee of personal property, when the debt for which it is given is due, may foreclose the mortgageor's right of redemption by a sale of the prop erty, made in the manner and upon the notice prescribed by the Title on Pledge, or by proceedings under the CODE OF CIVIL PROCEDURE.

N. Y. C. C., Sec. 1633.

SEC. 2976. A creditor of a mortgageor of personal property, by a proper action in the District Court, may subject the interest of the mortgageor to the payment of debts due such creditor. In such cases the Court may decree the payment of the secured debt before maturity, issue injunctions, establish priority of liens and decree sales, in like manner as in other civil cases. In such case the burden is upon the mortgageor or mortgagee to show that the mortgage, and the debt secured by it, were created in good faith, for value, and not to hinder, delay or defraud creditors.

[New section.]

NOTE. This last clause is a hard rule, which, when stated in another form, is, that "the mortgage is presumed to be fraudulent, but the parties may show good faith." This is better than the existing law, which makes it conclusively fraudulent and void.

SEC. 2977. A creditor of a mortgagee of personal property has remedies against the interest of the mortgagee in the mortgaged property and debt, as provided by the CODE OF CIVIL PROCEdure.

[New section.]

SEC. 2978. This article does not apply to any mortgage of a ship or part of a ship, which is required by Act of Congress to be filed or recorded in any other manner.

NOTE.-By Act of Congress of July 29th, 1850 (9 U. S. Stat. at L., 440), it was provided "" that no bill of sale, mortgage, hypothecation or conveyance of any vessel, or part of any vessel, of the United States, shall be valid against any person (other than the grantor or mortgageor, his heirs and devisees, and persons having actual notice thereof), unless such bill of sale, mortgage, hypothecation or conveyance be recorded in the office of the Collector of the Customs where such vessel is registered or enrolled.

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