97 F.2d 513 | 2d Cir. | 1938
The trustee in bankruptcy appeals from an order which adjudged and decreed that the lien of the mortgage held by the appellee (East River Savings Bank) covering real estate situated in the Borough of the Bronx, City and State of New York, covered also all the chattels in the catering establishment maintained on the premises and all the replacements and additions thereto and - further, other personalty- used in the operation of the premises. The bankrupt was the assignee of a contract to purchase real estate consisting of land and building from the appellee. Pursuant tó the terms of the agreement, the bankrupt gave a purchase money mortgage which in addition to covering the real estate also contained a personal property clause which declared in part that it covered "* * * any and all * * * improvements, fixtures and articles of personal property used in the operation of said premises or any part thereof, * * *; together with any and all * * * improvements, fixtures and other articles of personal property at any time hereafter constructed or placed upon said premises or any part thereof, (including certain specific enumerated articles), * * *, whether herein enumerated or not, constituting a part of the plant thereof or belonging to the owner of the premises, and all cither equipment and machinery, appliances, fittings and fixtures of every kind in, or used in the operation of, any building now or hereafter standing on said premises, together with any and all replacements thereof and additions thereto * *
On the same day and as further security for the payment of the same debt, the bankrupt gave to the appellee a separate instrument as a chattel mortgage covering certain specifically enumerated chattels. This chattel mortgage was never filed because of an agreement between the president of the bankrupt and the appellee, which provided that “* * * in consideration of the bank witholding the filing of said chattel iriortgage for a period of one year from the date of said mortgage * * * Samuel Fuchs, the guarantor herein does hereby agree to indemnify the said East River Savings Bank against any loss which it may sustain by withholding the filing of said mortgage.” The unfiled chattel mortgage is ineffective to grant to appellee a lien on the chattels in dispute, and the sole question presented on this appeal is whether appellee has a prior lien on the chattels on the basis of the personal property clause in the real estate mortgage.
The appellee contracted to sell premises which were used for catering purposes in which there was personal property useful and necessary in that business. The record shows that the bankrupt intended to purchase such personal property from one Kynin when the real estate was purchased by it. The bankrupt purchased the personal property from Kynin prior to the execution of the real estate mortgage. It seems clear that when these transactions took place it was contemplated by all the parties that the bankrupt take title to the personal property then on the premises. The intent is clear to subject the personal property to the lien of the realty mortgage, as property used on the premises.
In Ex parte Benevolent and Protective Order of Elks, Manufacturers’ Trust Co. v. Bachrach, Trustee, 2 Cir., 69 F.2d 816, relied upon by appellant, advances under the building loan were made to be applied
In the instant case, both the personal property and the real estate wer’e covered by the realty mortgage.
Order affirmed.