Bentley v. Wells

Citations

• 61 Ill. 59

Syllabus

<p>1. Chattel mortgage—bankruptcy. ITnder the bankrupt law, a chattel mortgage remains unaffected by the application of the mortgagor for, and his obtaining a discharge in bankruptcy; and, notwithstanding such bankruptcy, the mortgagee, when the debt falls due, may take possession of the mortgaged property as he could of his own temporarily in the possession of the bankrupt. The assignee in bankruptcy only takes the equity of redemption. The lien and the right to assert it remain unimpaired.</p> <p>• 2. Same—when invalid. Where a person, unable to pat' his debts, borrows money and gives a chattel mortgage to secure its payment, although the mortgagee knows the fact, that will not invalidate the mortgage. To have that effect the mortgagee must know that the mortgagor was executing it in contemplation of bankruptcy, and with a view to prevent its going into the hands of the assignee, and from being distributed among his creditors. This is the only reasonable and just construction that can be given to the bankrupt law.</p>