Duke v. Markham

Corporation- — -Chattel Mortgage. Any conveyance or mortgage of its property executed by any corporation is void and of no effect as to the creditors of said corporation existing at the time of the execution of said deed or mortgage, and who shall commence' proceedings to enforce their claims against the corporation within sixty days after registration of the conveyance.

This was a civil ACTION, tried before Armfield, J., at January Term, 1890, of Durham Superior Court, for claim and delivery of certain personal property which the defendant, as Sheriff of Durham County, under executions in his hands against the Durham* Sash, Door and Blind Manufacturing Company, a corporation, had seized as the property of said corporation and advertised to sell to satisfy said -executions. The plaintiff (as to this appeal) claims by virtue of a chattel mortgage executed to him by said corporation, September 4, 1889-, and registered the same day. It was in evidence that the executions were already in the hands of the Sheriff, and had been levied on other property of the corporation when this mortgage was executed by it as indemnity to plaintiff to secure him from loss on a note of the company to which he was surety, and which would fall due November 15th, 1889. The defendant took into possession the property in controversy under said executions on September 5th and 6th, 1889. The Court held that this mortgage was not valid against the executions levied by defendant, because it had not been registered sixty days, and comes within the terms of the proviso in § 685 of The Code, and recited a debt of $2,000 in favor of the plaintiff as the consideration, when no such debt was, in fact, due the plaintiff, and directed the jury to find the issues as to this mortgage in favor of the defendant. To this ruling the plaintiff excepted. Judgment in favor of defendant for all the property described in the mortgage of September 4th, 1889, from which judgment plaintiff appealed.