40 N.J. Eq. 83 | New York Court of Chancery | 1885
The present object of this suit is to have the legal character-of certain surplus-moneys determined, and also to procure a decision as to which of several claimants is entitled to the moneys. The suit was originally brought for a partition of a leasehold interest, but during its pendency the term or estate sought to be-partitioned was sold, at judicial sale, under a judgment entitled to rank as the first lien on the demised premises, and standing paramount to the right of any of the parties to this suit. The sale, of course, rendered the original object of the suit unattainable, but the sale having resulted in raising a considerable sum in excess of the amount required to satisfy the judgment under which it was made, the suit has been brought to final hearing for-the purpose of having a determination made deciding which of the parties is entitled to the surplus-moneys.
The following facts need to be stated: On the 21st of February, 1882, James A. Bradley demised by lease under seal, to William W. McChesney and John B. Hutchinson a term of twenty years, commencing on the 1st day of March, 1882, in a lot fifty feet by one hundred and twenty, at Asbury Park, the-lessees covenanting to pay an annual rent of $50, and also to-pay all taxes and assessments levied upon the demised premises. The lessees also covenanted that, unless they erected on the demised premises, within four months, from the date of the lease, a building thirty feet by sixty, three stories high, the lease should be void. They further covenanted that, on the expiration of their term, they would quit and surrender the demised premises,.
The question to be decided between these parties is whether Mr. Hutchinson, by virtue of his chattel mortgage, had a lien on the property from which the moneys in question were raised. His counsel contends that he had, and, in support of his contention, insists that the building is a trade fixture, and, as such, may be severed and removed at any time. The building, according to his viéw, is, in contemplation of law, a mere personal chattel. His argument, it will be observed, rests entirely on the ground that the title to the building, and the title to the land into which the building is built, are distinct, being vested in different persons, and that the owner of the building has a right, as against the owner of the land, to sever and remove the building at his will. The whole strength of this argument, it will be perceived, depends upon whether or not the building is removable by the lessees; if it is not, the argument is without foundation. Now, while it is a rule of law of great antiquity, that whatever is affixed to the soil becomes, in contemplation of law,
Besides, I think the covenant defining what the lessees should
But had a different conclusion been reached on this branch of the case, and the building been declared to be a mere personal chattel, still I think it is manifest that no part of the moneys in question could have been applied to the satisfaction of the chattel mortgages. The writ under which the moneys were raised commanded the sale of nothing, in respect to the particular property from which these moneys were raised, but land. That is all the sheriff was authorized to sell, and all he could either sell or convey. It is authoritatively established that, under an execution simply commanding the sale of land, the officer executing the writ has no authority to make sale or to pass title to any class of property except that described in his writ, and that the money raised by sale, under such writ, no
But the claim on behalf of Mr. Hutchinson is put on additional ground. It is said, conceding that the building is not a personal chattel, and that it is immovable, still there can be no doubt that the lessees had a right to the possession and use of the building during the term of their lease, and that this right embraced power to pledge their interest in .the building, as security for a debt. I think there can be no doubt about the soundness of both parts of that proposition, but the more material question just now is, Can property of this nature be effectually pledged, as against the creditors of the mortgagor, by a chattel mortgage ? One of the fundamental objects of the law is the classification of property. It divides all property into two kinds, real and personal, and, by positive rules, prescribes by what means the title to each may be acquired and transmitted. The rules governing the acquisition and transmission of title to personal property differ, in many essential particulars, from those which govern the acquisition and transmission of the title to real property. Eor example, statutes exist authorizing the registration of mortgages of both real and personal property, and making such record notice of the contents of the mortgage to all persons subsequently acquiring an interest in the mortgaged property, but these statutes provide that the record of each class of these securities shall be kept separate and distinct from the other, so that if a mortgage of chattels is recorded in the record of mortgages of land, the record can have no effect. The record of an instrument not authorized by law to be recorded is a mere voluntary act, and is, in judgment of law, no notice. Spielmann v. Eliest, 9 Stew. Eq. 199. And so the record of a mortgage of chattels, recorded in the record of mortgages of land, and not in the manner directed for the registration of mortgages of chattels, will not constitute notice to a subsequent judgment creditor. Williamson
But had this statute not been passed, I think it is entirelv clear that, even in that condition of the law, Mr. Hutchinson’s claim to these moneys would not have been a whit stronger than it is now. For it is well settled that in order to make the record of a mortgage of a chattel real effectual against a person subsequently acquiring an interest in the mortgaged property, the mortgage must have been recorded in the manner and in the record in which mortgages of lands are directed to be recorded, and that our statute regulating the execution and registration of chattel mortgages was intended to prescribe rules applicable alone to mortgages of personal chattels. It is quite obvious, both from the provisions and policy of this statute, that it was not intended to apply to mortgages of chattels real. Decker v. Clarke, 11 C. E. Gr. 163 ; Spielmann v. Kliest, 9 Stew. Eq. 199.
The complainants also make a claim to a part of the moneys in question. They recovered a judgment against one of the lessees (William W. McChesney) on the 7th of May, 1883. Their judgment is founded on a debt contracted by McChesney as an individual, and prior to the formation of the partnership. The complainants, soon after the recovery of their judgment, caused a levy to be made upon McChesney’s interest in the demised premises, and subsequently purchased the same at sheriff’s sale. On the 8th of October, 1883, McChesney sold and conveyed all the assets of the partnership, including the lease, to his copartner, his copartner stipulating to pay all the debts of the firm. McChesney received no other consideration for his transfer. The complainants had levied upon McChesney’s interest in the demised premises long prior to McChesney’s transfer to his copartner, but they can stand no higher than McChesney did; whatever rights they have, they derived through McChesney. By their purchase they simply took his place. He was entitled to nothing until the partnership debts were paid, and the complainants are in no better plight. The firm was hoper lessly insolvent when McChesney conveyed his interest to his copartner. The facts before the court leave no doubt on that subject. If any part of the moneys in question shall remain after Mr. Beakes’s judgment is satisfied,-and his costs of this suit are paid, the residue should be paid to John B. Hutchinson. The complainants are not entitled to any part of it.