Hartford Fire Insurance v. Jones

ON REHEARING. Counsel for appellant in his motion for rehearing urges upon us that section 4125, Revised Statutes of Arizona of 1913, Civil Code, was passed, not to protect the innocent purchaser of merchandise exposed to sale in the regular course of the business from taking it subject to a hidden and superior lien, but rather to protect creditors of the owner of such merchandise against secret preferences given by means of a chattel mortgage on such merchandise.

On examining the authorities cited, we think the language used by us in the original opinion was too narrow when it attempted to state the purpose of section 4125, supra. We believe on reconsideration that its purpose was to protect all innocent third parties whether they be creditors or ordinary purchasers of such merchandise. A mortgage, therefore, on such property would be void as against the rights of any innocent third parties. This, however, would not affect the principle laid down by us in the original opinion, to wit, that the mortgage is good as between the parties, and the motion for rehearing is therefore denied.

ROSS, C.J., and McALISTER, J., concur.