In re Johnston

This is a review of an order made by the referee in bankruptcy in the above-entitled proceeding, allowing as valid a certain chattel mortgage given by the said bankrupts upon personal property belonging to them, and decreeing that the owner and holder of said mortgage had a right to foreclose the same, as against the trustee in bankruptcy.

The sole question in the case arises out of a requirement of the Civil Code of the state of California. By section 2957 of said Code it is provided that a mortgage of personal property is void as against creditors of the mortgagors and subsequent purchasers and, incumbrancers of the property in good faith and for value, unless: (1) It is accompanied by the affidavit of all the parties thereto that it is made in good faith and without any design to hinder, delay, or defraud creditors; and (2) it is acknowledged or proved, certified, and recorded in like manner as grants of real property. The mortgage in question was given to secure the payment of a subsisting indebtedness owed by the mortgagors to the mortgagee, and was duly and regularly signed and acknowledged as required by section 2957. With respect to the affidavit mentioned in said…