CHATTEL MORTGAGE. A transfer of personal property as security for a debt or obligation in such form that upon failure of the mortgagor to comply with the terms of the contract, the title to the property will be in the mortgagee. Thomas, Mort. 427.
An absolute pledge, to become an absolute interest if not redeemed at a fixed time. Cortelyou v. Lansing, 2 Caines, Cas. (N. Y.) 200, per Kent, Ch.
Strictly speaking, a conditional sale of a chattel as security for the payment of a debt or the performance of some other obligation, Jones, Chat. Mort. § 1. The condition is that the sale shall be void upon the performance of the condition named. If the condition be not performed, the chattel is irredeemable at law ; but it may be otherwise in equity or by statute; id. The title is fully vested in the mortgagee and can be defeated only bx the due performance of the condition; upon a breach, the mortgagee may take possession and treat the chattel as his own ; id.; Por ter v. Parmly, 34 N. Y. Sup. Ct. 398. See Flanders v. Thomas, 12 Wis. 413.
At common law a chattel mortgage may be made without writing; it is valid as between the parties ; Bank of Rochester v. Jones, 4 N. Y. 497, 55 Am. Dec. 290. A verbal chat, tel mortgage is valid between the parties ; Gilbert v. Vail, 60 Vt. 261, 14 Atl. 542; Stearns v. Gafford, 56 Ala. 544 ; Bardwell v. Roberts, 66 Barb. (N. Y.) 433 ;• Bates v. Wig gin, 37 Kan. 44, 14 Pac. 442, 1 Am. St. Rep. 234 ; Carroll Exch. Bank v. Bank, 50 Mo. App. 92; and as to third parties with notice ; Sparks v. Wilson, 22 Neb. 112, 34 N. W. 111; contra, Lazarus v. Bank, 72 Tex. 359, 10 S. W. 252; Knox v. Wilson, 77 Ala. 309; and even as against third parties if accompanied by possession in the mortgagee ; Bardwell v. Roberts, 66 Barb. *(N. Y.) 433 ; but delivery is not essential in all cases to the validity of a chattel mortgage ; Morrow v. Turney's Adm'r, 35 Ala. 131; but see Bardwell v. Rob erts, 66 Barb. (N. Y.) 433. It differs from a pledge in that in case of a mortgage the title is vested in the mortgagee, subject to de feasance upon the performance of the condi tion ; while in the case of a pledge, the title remains in the pledger, and the pledgee holds the possession for the purposes of the bail ment; White v. Cole, 24 Wend. (N. Y.). 116;
Conner v. Carpenter, 28 Vt. 237; Day v. Swift, 48 Me. 368; Heyland v. Badger, 35 Cal. 404; Badlam v. Tucker, 1 Pick. (Mass.) 389, 11 Am. Dec. 202 ; Sims v. Canfield; 2 Ala. 555. By a mortgage the title is trans ferred ; by a pledge, the possession; Jones, Mort. § 4.
Upon default, in cases of pledge, the pledg or may recover the chattel upon tendering the amount of the debt secured ; but in case of a mortgage, upon default the chattel, at law, belongs to the mortgagee ; Porter v. Parmly, 43 How. Pr. (N. Y.) 445. In equity he may be held liable to an account; Stod dard v. Denison, 38 id. 296. Apart from statutes, no special form is required for the creation of a chattel mortgage. A bill of sale absolute in form, with a separate agreement of defeasance, constitute together a mort gage, as between the parties ; Carpenter v. Snelling, 97 Mass. 452 ; Taber v. Hamlin, 97 Mass. 489, 93 Am. Dec. 113 ; Davis v. Hub bard, 38 Ala. 185; Polhemus v. Trainer, 30 Cal. 685; Soell v. Hadden, 85 Tex. 182, 19 S. W. 1087 ; State v. Bell, 2 Mo.. App. 102 or a note with an endorsement on the back that at any time the maker agreed to make a chattel mortgage ; Riddle v. Norris, 46 Mo. App. 512. And in equity, the defeasance may be subsequently executed; Locke's Ex'r v. Palmer, 26 Ala. 312. A parol defeasance is not good in law ; Harper v. Ross, 10 Allen (,Mass.) 332 ; Bryant v. Crosby, 36 Me. 562, 58 Am. Dec. 767; Montany v. Rock, 10 Mo. 506; contra, Fuller v. Parrish, 3 Mich. 211; but it is in equity ; Coe v. Cassidy, 72 N. Y. 133; Laeber v. Langhor, 45 Md. 477; Stokes v. Hollis„ 43 Ga. 262; National Ins. Co. v. Webster, 83 Ill. 470; Bartel v. Lope, 6 Or. 321; Hurford v. Harned, 6 Or. 363; even as to third parties with notice ; Omaha Book Co. v. Sutherland, 10 Neb. 334, 6 N. W. 367. See Conway v. Iron Co., 33 Neb. 454, 50 N. W. 320. The question whether a bill of sale was intended as a chattel mortgage is for the jury ; King v. Greaves, 51 Mo. App. 534.