Argument for Defendants in Error.

Wend. 396; Dickerson v. Tillinghast, 4 Paige, 215 [S. C. 25 Am. Dec. 528]; Van Heusen v. Radcliff, 17 N. Y. 580 [S. C. 72 Am. Dec. 480]; Thompson v. Van Vechten, 27 N. Y. 568; Gafford v. Stearn, 51 Ala. 434; Short v. Battle, 52 Ala. 456; Zorn v. Railroad Co., 5 S. C. 90; Pancoast v. Duval, 26 N. J. Eq. (11 C. E. Greene) 445; Mingus v. Condit, 23 N. J. Eq. (8 C. E. Greene) 313; Wells v. Morrow, 38 Ala. 125; Gilchrist v. Goff, 63 Ind. 576; Strangham v. Fairchild, 80 Ind. 598; Manning v. McClure, 36 Ill. 490; Butters v. Haughwout, 42 Ill. 18; Kranert v. Simon, 65 Ill. 344; Cook v. Helms, 5 Wis. 107; Jenkins v. Schaub, 14 Wis. 1; Paine v. Benton, 32 Wis. 491; Roxborough v. Messick, 6 Ohio St. 448 [S. C. 67 Am. Dec. 346]; Cleveland v. State Bank, 16 Ohio St. 236; Copeland v. Manton, 22 Ohio St. 398; Atkinson v. Brooks, 26 Vt. 569 [S. C. 62 Am. Dec. 592]; Quinn v. Hard, 43 Vt. 375; Russell v. Spalter, 47 Vt. 273; Stoddard v. Kimball, 6 Cush. (Mass.) 469; Fisher v. Fisher, 98 Mass. 303; Bank v. Carrington, 5 R. I. 515 [S. C. 73 Am. Dec. 83]; Brush v. Scribner, 11 Conn. 388 [S. C. 29 Am. Dec. 303]; Bridgeport City Bank v. Welch, 29 Conn. 475; Stone v. Welling, 14 Mich. 514, and cases cited; Railroad Co. v. Nat. Bank, 102 U. S. 14; Swift v. Tyson, 16 Pet. 1; Bayley v. Greenleaf, 7 Wheat. 46; Payne v. Bensley, 8 Cal. 260 [S C. 68 Am. Dec. 318].

Mr. D. M. Dickinson for defendants in error cited: Railroad Co. v. Bank, 102 U. S. 14; Allan v. Massey, 17 Wall. 351; Sumner v. Hicks, 2 Black. 532; Swift v. Tyson, 16 Pet. 1, 15; Outhaite v. Porter, 13 Mich. 533; Borheimer v. Gunn, 24 Mich. 372; Stone v. Welling, 14 Mich. 514; Kohl v. Lynn, 34 Mich. 360; Maury v. Woods, 33 Iowa, 265; Thomas v. Stone, Walker (Mich.), 117; Dixon v. Hill, 5 Mich. 404; Warner v. Whittaker, 6 Mich. 133 [S. C. 72 Am. Dec. 65]; Blanchard v. Tyler, 12 Mich. 339; Johnson v. Peck, 1 Woodb. & Min. 334; Morse v. Godfrey, 3 Story, 364; Rison v. Knapp, 1 Dillon, 186; Atkinson v. Brooks, 26 Vt. 569 [S. C. 62 Am. Dec. 592]; Bay v. Coddington, 5 Johns. Ch. 54 [S. C. 9 Am. Dec. 268], affirmed 20 Johns. 636; Weaver v. Barden, 49 N. Y.

Opinion of the Court.

286; Thompson v. Van Vechten, 27 N. Y. 568; Cary v. White, 52 N. Y. 138; Jones v. Graham, 77 N. Y. 628; Jenness V. Bean, 10 N. H. 266 [S. C. 34 Am. Dec. 152]; Ashton's Appeal, 73 Penn. St. 153; Boyd v. Beck, 29 Ala. 703; Spurlock v. Sullivan, 36 Texas, 511; Johnson v. Graves, 27 Ark. 557; Busenbrake v. Ramey, 53 Ind. 499; Gilchrist v. Gough, 63 Ind. 576; Ryan v. Chew, 13 Iowa, 589; Prentice v. Zane, 2 Gratt. 262; Butters v. Haughwout, 42 Ill. 18; Kranert v. Simon, 65 Ill. 344; Knox v. Ilunt, 18 Missouri, 174; Bramhall v. Beckett, 31 Maine, 205; Brush v. Scribner, 11 Conn. 388 [S. C. 29 Am. Dec. 303]; Leland v. Collver, 34 Mich. 418; American Cigar Co. v. Foster, 36 Mich. 368; People v. Bristol, 35 Mich. 28; Wingler v. Sibley, 35 Mich. 231; Robson v. Mich. Cent. Railroad, 37 Mich. 70; Cadwell v. Pray, 41 Mich. 307.

MR. JUSTICE HARLAN, after stating the facts as above reported, delivered the opinion of the court.

The mortgagees, respectively, insist that there was, within the meaning of the statute, an immediate delivery to them, followed by an actual and continued change of possession of the things mortgaged; the bank claiming to have taken possession under its mortgage on the 11th of February, 1881, while Bates, Reed & Cooley, denying that the bank ever had such possession as the law requires, contend that they took possession on the 15th of February, 1881. But the claim of neither party in that respect is satisfactorily sustained by the proof. The evidence does not show such open, visible, and substantial change of possession as the law required in order to give notice to the public of a change of ownership. Doyle v. Stevens, 4 Mich. 87, 93. In a sense, both parties were in possession by agents early on the morning of the 15th of February, each claiming the exclusive right to manage and control the property under the terms of the respective mortgages. As the contest for such management and control was likely to result in an unseemly display of force, the parties, on that day, entered into an agreement, which recited their respective claims of priority both of possession and of right, and provided" neither

Opinion of the Court.

party waiving or surrendering any right or advantage" — that the possession of each should remain as it then was, and that the business should continue as it was then being conducted, all the proceeds of sale being deposited in bank and remaining there intact until these conflicting claims should be settled by judicial decision or by agreement. The claims were not settled by agreement; and the defendants in error, having insisted that this arrangement was not being carried out in good faith, and having been refused exclusive possession, brought this action as they might do consistently with the agreement to obtain a judicial determination of their rights. In adopting that course they surrendered no right they had in the premises.

In behalf of the bank it is contended that the mortgage to Bates, Reed & Cooley was fraudulent as against subsequent creditors and mortgagees in good faith, in that the mortgagees contemplated that the mortgagors should remain in possession and prosecute the business in the ordinary mode. The mortgage of February 7, 1881, certainly contains no provision of that kind. But if the extrinsic evidence establishes that such a course upon the part of Freedman Bros. & Co. was, in fact, contemplated by Bates, Reed & Cooley, it would only show that the mortgagees were willing to give the mortgagors an opportunity to avoid a suspension of their business and bankruptcy — the additions to the stock in trade being brought under the mortgage, so as to compensate the mortgagees for any diminution in value by reason of goods disposed of in the usual course of business. If the mortgage had, in terms, made provision for such a course upon the part of the mortgagors, as the bank contends was in the contemplation of the mortgagees, it would not be held, as a matter of law, to be absolutely void or fraudulent as to other creditors. Oliver v. Eaton, 7 Mich. 108, 112; Gay v. Bidwell, 7 Mich. 519, 523; People v. Bristol, 35 Mich. 28, 32; Wingler v. Sibley, 35 Mich. 231; Robinson v. Elliott, 22 Wall. 513, 523. The good faith of such transactions, where they are not void upon their face, is, under the statutes of Michigan, a question of fact for the determination of the jury. Oliver v. Eaton and Gay v. Bidwell. That rule

VOL. CXX-36

Opinion of the Court.

does not, however, restrict the power of the court to give to the jury a peremptory instruction, covering such an issue, when the evidence is all on one side, or so overwhelmingly on one side, as to leave no room to doubt what the fact is. In this case there is an entire absence of any evidence impeaching the good faith of Bates, Reed & Cooley in procuring the mortgage of February 7, 1881. There is nothing whatever to show that they had any purpose to commit a fraud or to put their mortgagors in such a position that the latter could more readily deceive or defraud other creditors.

Besides, as the court below held, upon this branch of the case, the bank, in its capacity as a creditor at large, is not entitled to attack the prior mortgage as fraudulent upon the grounds just stated. This general proposition is conceded by counsel, the usual way, he admits, being for the creditor, who has no particular claim in the property, to acquire a specific interest therein through the levy of an attachment or execution. Hence, he says, that while it is often stated that conveyances of this sort are void as to creditors generally, they must put their claims in the form of a judgment or attachment before they are in a position to attack them-the object of the attachment or execution being to bring the attacking party into privity with the property. And such seems to be the rule recognized by the Supreme Court of Michigan. In Fearey v. Cummings, 41 Mich. 376, 383, the court, construing a somewhat similar statute, said: "If the mortgage was made with the intent to hinder, delay, or defraud creditors (Comp. L. § 4713), or, inasmuch as the possession was not altered, if it was not put on file prior to plaintiffs becoming creditors, it was invalid as against them; the law being that those who be come creditors whilst the mortgage is not filed are protected, and not merely those who obtain judgments or levy attachments before the filing. Still no one, as creditor at large, can question the mortgage. He can only do that by means of some process or proceeding against the property. Sec. 4706." In that case the court cites Thompson v. Van Vechten, 27 N. Y. 568, 582, in which it was held, in reference to a somewhat similar statute, that "the mortgage cannot be legally

Opinion of the Court.

questioned until the creditor clothes himself with a judgment and execution, or with some legal process against his property; for creditors cannot interfere with the property of their debtor without process."

But it is argued that this rule does not apply in the case of a creditor who is a second mortgagee in possession. Such possession, it is claimed, gives him the right, by way of defence, and without resorting to attachment and before obtaining judgment, to assert the invalidity of the prior mortgage. There is some apparent support to this position in Putnam v. Reynolds, 44 Mich. 113, 115. That was a suit in equity brought to foreclose a chattel mortgage not filed until after the mortgagor had become insolvent, and while his estate was being disposed of by an assignee for the benefit of creditors. The court said that there was reason to believe that the mortgagor acted in bad faith; that the mortgage was left off the record for the purpose of giving the mortgagor a credit to which he was not entitled; in which case, the mortgage was void in fact, irrespective of the statute. Upon this ground alone the court declined to give the relief asked, remitting the mortgagee to his remedy, if any he had, at law. It expressly declined to decide whether the rule that creditors cannot -attack a mortgage except indirectly, through a seizure of the property by attachment or other suitable process, applies where the mortgage was originally valid, but is made void by the subsequent neglect of the mortgagee. The case in hand cannot be brought within the principle announced in Putnam v. Reynolds, for the reason, if there were no other, that there was no fraud in fact upon the part of Bates, Reed & Cooley, nor any unreasonable delay in filing the mortgage of February 7, 1881. It was filed shortly after the mortgage to the bank was lodged for record.

This disposes of all the material questions in the case preliminary to the main inquiry whether the bank the mortgage to it having been really given to secure past indebtedness of the mortgagors-is, in the meaning of the statute, a subsequent "mortgagee in good faith." If not, the mere filing of the mortgage of February 11, 1881, before that of February 7,