| New York Court of Chancery | May 15, 1873
The bill is silent as to the nature or even the existence of the indebtedness to secure the payment of which the mortgage was given. But it appears from the answer that it arose under a contract in writing, made on the 6th day of March, 1871, between the defendants Wiles and the corporation, by which the former agreed to furnish the latter with the mortgaged chattels, and put them up on the twenty-acre tract for §7000, to be secured by bond and mortgage upon that tract, and “a chattel mortgage on the articles furnished.” The vendors having complied with the terms of the contract on their part, the company executed and delivered to them, in this state, the bond and mortgage of the corporation on the twenty-acre tract, according to the
On the argument, the defendants’ counsel insisted that if the corporation had no power under the laws of New York to give the chattel mortgage, it is valid nevertheless, because having been made by a foreign corporation in this state, upon property in this state, its validity depends, not on the law of New York, but on that of New Jersey — the lex loci contractus; and that, admitting that the law of New York is to govern, the mortgage is valid, because the proviso of the amendment was substantially complied with in the execution of the instrument by Johnson and Stryker, who then owned two-thirds of the stock.
I deem it unnecessary to pass upon the first of these questions. It satisfactorily appears that the mortgaged chattels are the same which were furnished under the contract. By the terms of that contract the vendors were entitled to a mortgage upon the property to secure the purchase money. The company executed a mortgage in pretended compliance with the agreement. The vendors supposed it was in actual and full compliance. It was drawn and its execution superintended by a counselor-at-law of Jersey City, acting for both parties in the matter. It is fair to presume that the company intended to give a valid mortgage, and supposed
In Shakel v. Duke of Marlborough, 4 Madd. 463, there had been an advance of money on an agreement to execute a mortgage to secure its repayment. The borrower had failed to perform his agreement, and there was an arrear of interest due on the money advanced. The court, on bill for specific performance, appointed a receiver.
The complainant has no equity against the vendors in this suit. He sets up none. He neither questions their debt nor their conduct, nor their right to their lien, except as he calls in question the validity of the mortgage for want of the certificate of assent. For the purposes of this suit, at least, it may well be held that the execution of the mortgage by officers who were at the time owners of two-thirds of the stock rendered such filing unnecessary, and was a substantial compliance with the statute. The vendors were entitled to a mortgage such as they understood that which was given to them to be. They obtained lawful possession under their mortgage after they had become by its terms and the terms of their contract entitled to it. They held it at the time of filing the bill, and had held it for some months. The complainant is merely a stockholder, seeking to deprive them of a lien to which they are equitably entitled as against him. They being in possession of the mortgaged property, and being equitably entitled to the lien they assert, this court will not lend its aid to the complainant in his attempt to deprive them of it.
The injunction is dissolved, with costs.