On Rehearing.
MR. JUSTICE MILBURNdelivered the opinion of the court.
*191This case is before ns for decision after rehearing. We are convinced that we were in error in onr conclusion as announced in the opinion rendered heretofore.
We held that the instrument of August 11, 1899, and the delivery and taking of the property made on the 14th day of March 1901, were not such as are allowed by the law of this state and were such as attempted to give an unlawful preference to the defendant. Rennie was adjudged a bankrupt on the 14th day of May, 1901. Section 4491 of the Civil Code, cited heretofore, was adopted from California, as was declared in Yanks v. Bordeaux, 23 Mont. at page 210, the section being identical with Section 3440 of the Civil Code of California. In the latter state there were at the time of the enactment of their Civil Code, certain kinds of personal property which it was not lawful to mortgage. This fact was overlooked by the codifiers of the Laws of Montana. In this state all personal property may be mortgaged; therefore, the words “when allowed by law,” as appearing in our Section 4491, are superfluous. Disregarding the phrase “when allowed by law,” all mortgages of personal property are exempted from the operation of the section. A mortgage not executed in manner and form as prescribed by law is good between the parties, as has been frequently declared by our court.
One ground upon which we decided that the delivery of the property to Hoffman was, in effect, to enable him to obtain a preference over other creditors, was that the delivery to him was not to secure a present loan or advance, but one to pledge the payment of an old obligation. Whatever views we had as to this, we are controlled by the utterance of the Supreme Court of the United States in Sawyer v. Turpin, 91 U. S. 114, 23 Lawyers’ Co-op., p. 235. In all matters pertaining to a construction of the United States Bankruptcy Act, the holdings of the Supreme Court of the United States are conclusive. Our attention has been called pointedly to this Federal case upon rehearing, and we find that it is almost identical as to its facts *192with the case before us, and Mr. Justice Strong, who wrote the opinion, is so clear, full and convincing in his argument and presentation of the facts and points that, were it not for the length of the opinion, it would be quoted in full herein. In it, as here, the question presented on appeal was whether the mortgage given by the bankrupt was a fraudulent preference of creditors within the prohibition of the Bankruptcy Act, and therefore void as against the assignee of the bankrupt. A bill of sale, understood by the parties to be a mortgage, was originally given for the protection of a pre-existing debt, and a formally executed mortgage covering the same property for the same purpose was given within four months immediately preceding the filing of the petition in bankruptcy. In that case it was admitted that the bankrupt was insolvent when the mortgage was made, and that the creditor had then reason to believe that he was insolvent. The petition in bankruptcy was filed on the 22d of October, 1869. On the 15th"of May. next preceding, the bankrupt gave the bill of sale to Turpin as security for a debt of $21,839. The mortgage was dated July 31, 1869. The bill of sale w-as a conveyance absolute in its terms, having no condition or defeasance expressed, but was understood to be a security for the debt due. It was in substantial legal effect, though not in form, a mortgage. “Having been executed,” as the court says, “more than four months before the petition in bankruptcy was filed, there is nothing in the case to show that it was invalid.” It was not recorded and it was doubtful whether it was admissible of record. “No possession was taken under it by the vendee; but for neither of these reasons,” the court remarks, “was it the less operative between the parties.” It was within the power of Turpin to record it, and equally within his power to take possession of the property at any time before other rights against it had accrued. The court added that the Acts of Massachusetts, from which state the case came, did not prescribe when the record must be made or possession taken, remarking further, that when made or taken the instrument takes effect, as against third persons as well as between the parties, from the time of its execu*193tion unless intervening rights have been obtained. The court cites Mitchell v. Black, 6 Gray, 100, in which case it was ruled by the Supreme Court of Massachusetts that one who has taken bills of sale of merchandise from a debtor as security for money advanced,'and who had allowed the debtor to sell portions of the merchandise in the usual course of his business as if ho were the owner thereof, might take possession of it at any time in order to secure his debt, and that such taking of possession, though at a time when the debtor was known by himself and the creditor to be insolvent, was effectual, notwithstanding the state insolvency law, which contained provisions very like those of the Bankruptcy Act. The court held unqualifiedly that the bills of sale, absolute as they were in terms, though in fact intended only as a security and though unattended by possession of the property, and though not placed upon record, vested a complete title in the creditor, subject only to be defeated by the discharge of the debt or by some intervening right acquired before the possession was taken. (See also Humphrey v. Tatman, 25 Sup. Ct. Reports, 567, decided April 17, 1905.)
In the ease before us the taking of the goods related back for authority to the time of the giving of the power on xlugust 11, 1899. The formal mortgage given February 6, 1901, is of no importance in this case, as it did not give or take away any right or power to or from Hoffman, but left him with what rights or power he had. The delivery to and taking by Hoffman of the goods was not unlawful under the law of Montana, and, under the authority of the S'awyer-Turpin Case, was not an unlawful preference under the Bankruptcy Act. The Federal Supremo Court says the giving of the formally executed mortgage was a “mere exchange in the form of the security” and that the preference, if any, was obtained when the bill of sale was. given long before. In the case at bar here, there was a change in the form of the security, or, as the lower court found, the formal mortgage was a continuation of the original security. The preference, if any, was as of August 11, 1899.
*194The judgment of the court below is affirmed.
Affirmed.
Mr. Justice Holloway^ being disqualified, takes no part in the foregoing decision.