Goodheart v. Johnson

Citations

• 88 Ill. 58

Syllabus

<p>1. Chattel moktgaoe—whether fraudulent in not showing real state of facts. Although a chattel mortgage on its face may appear to be given to secure an absolute debt, yet, if in good faith it is given in the most part to secure against a contingent liability as surety, the latter being a good consideration, it will not thereby be held fraudulent and void as to creditors of the mortgagor, and although the mortgagee has not in fact paid anything as surety, still, if he will have to pay debts as such, he may hold the property or its proceeds to apply upon the debts for which he is surety.</p> <p>2. Same—allowing mortgagor to sell, as showing fraud. If a mortgagee permits the mortgagor to sell the mortgaged chattels in the ordinary course of trade, in the same way after as before the mortgage was made, this will be such a perversion of the mortgage from its legitimate purpose as a security as to render it fraudulent in law, and void as to Creditors of the mortgagor.</p> <p>3. But when the mortgagee gives written permission to the mortgagor to sell the mortgaged chattels at public sale, taking the notes given to himself, and also taking the cash paid, this, not being inconsistent with the rights of the mortgagee, will not render the mortgage void as to creditors.</p> <p>4. When a chattel mortgage embraces a large amount of property, the mortgagee, by allowing in several instances the sale of a few articles, being inconsiderable in value as compared with that of the whole property, this can not be held to characterize the mortgage as fraudulent. It can be allowed no greater weight than as a circumstance to be considered in determining whether the mortgage was originally made to hinder and delay creditors.</p>