Brooks v. Bank of Beaver City

Citations

• 82 Kan. 597
• 109 P. 409
• 1910 Kan. LEXIS 313

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>Chattel Mortgages — Validity — Time of Execution — Bankruptcy — Voidable Preference. An unrecorded chattel mortgage given by a merchant on his entire stock of goods, under which he was permitted to remain in possession of the goods, sell the same without limitation, replenish the stock whenever he might desire and appropriate the proceeds to his own use and benefit, without keeping the new goods apart from the others or paying anything on the indebtedness, and without accounting to the mortgagee for the sales made or the money derived from such sales, is a void instrument; and a later mortgage given by the merchant to the same creditor on the same stock of goods to secure the same debt, which was executed within four months prior to the bankruptcy of the mortgagor and at a time when he was insolvent, and which was intended as a preference, and where the mortgagee knew that a preference was intended, constitutes a voidable preference under the national bankruptcy act.</p>