Is a mortgagee permitted to sell or dispose of the goods in the ordinary course of business?

In Dedrick v. Ashdown, supra, there was a chattel mortgage of the stock-in-trade and business effects of a trader and there was a provision in the mortgage to the effect that if the mortgagor should attempt to sell or dispose of the goods, the mortgagee might take possession of the same, as in case of default of payment. It was held that this proviso only prohibited the sale of the goods other than in the ordinary course of business.

In National Mercantile Bank v. Hampson, supra, the mortgagee of chattels brought an action of trover against a purchaser of some of the goods from the mortgagor, and the defendant pleaded that he bought the goods in the ordinary course of business, and without notice that they were not the property of the vendor. Lush, J. held that the defence was good, saying, that, having regard to the terms of the bill of sale, there was an implied license for the grantor to carry on his business and any bona-fide purchaser from him would have a good title.