69 N.J. Eq. 710 | New York Court of Chancery | 1905
This contest arises over the proper distribution of funds reported by the receiver in his hands for that purpose. The claimants are the Trenton Trust and Safe Deposit Company, Frederic G. Lee and numerous employes of the insolvent corporation. For the purpose of considering the question raised, the moneys may be divided into three different funds—first, $1,809.95, the proceeds of the sale of certain chattels which were subject to the lien of a chattel mortgage held by the Trenton Trust ■ and Safe Deposit Company, which it is admitted should go to the trust company, unless under the claim advanced for the employes they have an equitable right to have it, or some portion of it, applied towards the satisfaction of their claims; second, $1,994.01, representing the proceeds of the manufacture of goods from materials on hand when the receiver took possession, which sum is now claimed by Frederic G. Lee, under a chattel mortgage held by him; third, the residue of the fund, which it is conceded goes to the employes.
Mr. Lee does not contest the priority of the trust company mortgage, or its right to be paid the $1,809.95, but insists that, although all of the material represented by the $1,994.01 was purchased by the insolvent corporation and brought on the premises after the making of his mortgage, nevertheless, according to its terms, such after-acquired property is subject to the lien thereof. This claim is disputed by the labor claimants and its determination must depend upon the construction to be given to the mortgage, which covers not only the real estate and machinery, but is also a chattel mortgage on certain of the personal property of the company. The due execution and
In the case we are considering, the -words “and everything thereon pertaining or in any way belonging to the said mills, and the business of the same,” must be read in connection with the next preceding words, “now upon said premises.” Nevertheless, if this construction be too narrow, I am unable to discover in the language used any intention to extend the lien of this mortgage to after-acquired property. The power of extending a chattel mortgage to personalty thereafter to be
.If the mortgage contains an express stipulation that it shall be a lien upon after-acquired property, persons dealing with the mortgagor would be bound to take notice that the chattels they were selling to the mortgagor would, upon coming to his possession, be subject to the hen of such mortgage, but certainly it cannot successfully be contended that this mortgage gave notice of any such condition.
My conclusion is that this mortgage does not apply to after-' acquired property, and that The mortgagee is not entitled, by virtue of it, to any preference in the distribution of the fund resulting from the sale of that class of property, and that the $1,994.01 is held by the receiver free and discharged from any such lien. But the labor claimants also insist that as the receiver has expended more than $1,809.05 in the care of the real estate, which at the sale thereof did not realize a sufficient sum to pay the mortgage debt due the Trenton Trust and Safe Deposit Company, therefore the trust company should be required to contribute at least that amount to the general fund of.the estate, the claim being that as large sums have been taken to preserve the real estate from waste, which alone inured to the benefit of the mortgagee, it is inequitable to cast the entire cost of maintenance and care of the real estate upon the labor claimants, it being admitted that this addition to the general fund will not malee it sufficient to pay the preferred claims of the employes.