34 N.J. Eq. 485 | New York Court of Chancery | 1881
This is an application for an injunction. It rests on the following facts: Mary A. Ruck executed a mortgage to William C. Knight, September 25th, 1877, on certain chatttels in this state, to secure the payment of $1,500 within one year. The mortgagor died testate October 25th, 1877. The mortgage was .not filed according to the statute until September 18th, 1878. The mortgagor’s estate is insolvent, though no decree so declaring has been taken by her executor. The complainants are creditors at large of the mortgagor. They dispute the validity of the mortgage as to them, and ask that the mortgagee be restrained from making sale under his mortgage.
The statute directs that every chattel mortgage which shall not be accompanied by an immediate delivery, and followed by .an actual and combined change of possession of the things mort
An attempt has been made to aver a delivery in this case contemporaneous with the execution of the mortgage, but it is quite manifest that the possession' which the pleader has struggled to-assert is only such as he supposed* arose out of the execution of the mortgage, and not an actual change of possession from the mortgagor to the mortgagee. His averments amount simply to the statement of a conclusion of law, without the disclosure of a single fact showing that it is warranted. But, more, a subsequent averment of the answer shows that such conclusion has no warrant in fact. The averment here particularized is that in which the defendants say that the executor of the mortgagor, on or about May 17th, 1879, allowed the mortgagee to take possession of the mortgaged chattels, and that he has since held possession of them. The change of possession here spoken of is quite inconsistent with an antecedent possession by the mortgagee.
The question of the case is, have .the complainants a lien on the mortgaged chattels? The chattels constitute part of the assets of an insolvent estate. With regard to such estates, the statute declares that the estate, real and personal, of a testator or intestate, in case the same shall be insufficient to pay all his debts, shall, after certain preferred debts have been paid, be distributed among his creditors, in proportion to the sums that shall be due to them respectively. Rev. 770 § 81. In order
A court of equity should not be more technical nor less liberal in extending aid to creditors, in such a case, than a common law court.
In my judgment, the mortgage in question is void as to the creditors of the mortgagor, and the mortgagee should be en
The complainants ask for the appointment of a receiver as well as an injunction. I do not see my way clear to advise the granting of this last request. The executor, it is true, now stands as the champion of the mortgagee and in an attitude of hostility towards the creditors at large, but I think he has probably assumed this position under a mistaken notion respecting the rights of the contestants, and with no design to prejudice the creditors. He will now understand that the creditors occupy the position of superior right, and w.ill, I have no doubt, take such steps as shall be necessary to give them the full benefit of their rights. If, however, he should not, the complainants may at any time renew their application.