R. Co. v. Hamilton, 134 U. S. 296, 10 Sup. Ct. 546, 33 L. Ed. 905. Failure to show that a mortgage was' recorded before a judgment, is fatal to the mortgagee's claim of priority ; Hoist v. Burrus, 79 Ga. 111, 4 S. E. 108. The redelivery of a mortgage which has been paid, upon an agreement that it shall secure another debt, does not create a lien ; Thompson's Adm'r V. George, 86 Ky. 311, 5 S. W. 760. A mortgage cannot be continued iu effect so as to cover a new indebtedness by an oral agreement ; Thomas' Appeal, 30 Pa. 378; Sims v. Mead, 29 Kan. 124; but where money has been paid thereunder, the party making payments will be protected as against the mortgagor, or his vendee with knowledge of the facts; Stone v. Lane, 10 Allen (Mass.) 74; L. R. 12 Eq. 516.
A chattel mortgage is a transfer of per sonal property as security for the obligation of the mortgagor. In form it is usually a bill of sale with a clause of defeasance. In some states its form is prescribed by statute ; in the greater number, however, this is not the case, and any form may be adopted. A mortgage is to be distinguished from a pledge, the former being a transfer of title, the latter a transfer of possession (see PLEDGE) ; also from a conditional sale, the test being that if after the transfer the mere relation of debtor and creditor exists the transaction is a mortgage, if not, a condi tional sale. The courts lean toward con struing the transaction as a mortgage.
The subject-matter of the transaction be ing a chattel, the law is in some respects simpler than the law as to mortgages of realty which is complicated by rules of con veyancing. The courts seek, in dealing with chattel mortgages, as in the case of other contracts, to arrive at the intention of the parties, and form is generally of little im portance. But on the other hand the sub ject is complicated by the transitory nature of the subject-matter and the devices resort ed to to secure the mortgagee and at the same time protect from fraud the creditors of , the mortgagor, in other words by the recording acts. These are the very life of the chattel mortgage, and without them it cannot exist. For example, it was held in Pennsylvania (where chattel mortgages for merly did not exist at all, and are now rec ognized only to a limited extent) that while such a mortgage between citizens of Mary land would be recognized and enforced, when the question arose between the mortgagee and a citizen of Pennsylvania who had in good faith purchased the mortgaged chattel from the mortgagor, the mortgage could not be regarded because in the absence of statu tory provisions the common law rule pre vails in Pennsylvania that a sale of personal property unaccompanied by delivery of pos session is void as against the intervening rights of creditors and purchasers ; McCabe v. Blymyre, 9 Phila. (Pa.) 615.
The problem is how to restrict a transac tion by which the mortgagor, though retain ing possession of his goods, gives a valid lien upon them as security for a debt, so that in nocent parties shall not be injured by giving Credit to the mortgagor on the strength of the apparent ownership of the,goods. Mani festly the only way to secure this end is by requiring the transaction to be made a mat ter of record.
Accordingly, the statutes provide for re• cording the instrument, usually in the coun ty or town in which the mortgagor resides, or, if he is a non-resident, in the county or town in which the chattels are situated. Commonly this is sufficient record while the mortgaged property remains within the state, but some of the acts require re-recording if the property be removed to another county.
The recording acts gave the mortgagee who recorded his mortgage a right good against any one- who subsequently acquired any interest in the goods from the mortga gor. This result is generally accomplished by saying that the record gives constructive notice to all the world. All that was pur posed and effected by the mortgage recording acts was to protect a mortgagee against sub sequently acquired interests by placing knowledge within the reach of all. It has been held that a fire insurance company is not charged with notice of a recorded mort gage so as to raise a forfeiture clause for breach of condition against encumbrancing ; Wicke v. Ins. Co., 90 Ia. 4, 57 N. W. 632. Where a commission merchant, ignorant of an existing mortgage on cattle, sold them and reritted the proceeds to the consignor, the mortgagee recovered, in an action against him on a count for money had and received ; Greer v. Newland, 70 Kan. 310, 77 Pac. 98, 70 L. R. A. 554, 109 Am. St. Rep. 424, this decision being the result of employ ing the fiction of constructive notice, instead of recognizing that recording really dispens es with the necessity of notice. This dis tinction was recognized in Frizzell v. Rundle, 88 Tenn. 39S, 12 S. W. 918, 17 Am. St. Rep. 908, with the consequence that a contrary decision was reached.