| N.H. | Jul 15, 1872
No certificate of the stock was delivered by James M. Hilliard to the plaintiff. The transaction between James M. Hilliard and the plaintiff was not a pledge of the stock, nor was it so intended. The plaintiff must claim under his mortgage, or not at all. Janvrin v. Fogg, 49 N. H. 340. The mortgage, not having been sworn to or recorded as prescribed by statute, was not valid against attaching creditors without notice. Comp. Stats., ch. 138, sec. 10; Gen. Stats., ch. 123, sec. 12.
Jennison & Crane must have commenced their levy at least thirty days prior to the sale. Gen. Stats., ch. 217, sec. 16. The commencement of the levy, like an attachment, created a lien upon the shares, which would ripen into a complete title if perfected by the subsequent seasonable completion of the levy by a sale. The title, when thus perfected, relates back to the beginning of the levy, as in levies on real estate—Colburn v. Pomeroy, 44 N. H. 19—and takes effect from that time. The levying creditors stand substantially in the position of - persons purchasing at the date of the commencement of the levy, and no notice given to them after that date can abridge their rights. It does not appear that the creditors, at the commencement of the levy, or indeed at any time, had notice of the so-called mortgage; and there is, therefore, no occasion to consider the question discussed in Gooding v. Riley, 50 N. H. 400. They were entitled to have the shares applied, by sale on the execution, to the satisfaction of their judgment, without any diminution in value on account of the mortgage which
So long ago as 1695, in the case of Harrison v. Forth, 1 Eq. Cases Abridged, Notice, A 6, p. 331, it was decided that a purchaser with notice from a purchaser without notice holds the estate discharged of the incumbrance; “ for, otherwise, an innocent purchaser without notice must be forced to keep the estate, and cannot sell it.” That decision has since been generally followed—1 Story’s Eq. Jur., 9th ed., secs. 409, 410; 4 Kent’s Com. 179; 2 Leading Cases in Equity, 3d Am. ed., 68, 69; 1 Parsons on Notes and Bills 261, q.; 2 ditto 26, 27; Redfield & Bigelow’s Leading Cases on Bills of Exchange and Promissory Notes 261, 262; Trull v. Bigelow, 16 Mass. 406" court="Mass." date_filed="1820-10-15" href="https://app.midpage.ai/document/trull-v-bigelow-6404909?utm_source=webapp" opinion_id="6404909">16 Mass. 406, pp. 418-420; Boynton v. Rees, 8 Pick. 329, p. 332. “ The reason is,” said Chancellor Kent, “ to prevent a stagnation of property, and because the first purchaser, being entitled to hold and enjoy, must be equally entitled to sell.” Bumpus v. Platner, 1 Johns. Ch. 213" court="None" date_filed="1814-09-29" href="https://app.midpage.ai/document/bumpus-v-platner-5550072?utm_source=webapp" opinion_id="5550072">1 Johns. Ch. 213, p. 220. Otherwise, the Iona fide purchaser “ would not enjoy the full benefit of his own unexceptionable title. Indeed, he would be deprived of the marketable value of such a title.” 1 Story’s Eq. Jur., 9th ed., sec. 409. To refuse to apply this doctrine to the case of a levying creditor might amount to denying that a beneficial interest could be acquired by a levy. If the debtor or the mortgagee attends the sale, and there gives public notice of the incumbrance, all buyers at the auction will be purchasers with notice. If, then, the buyer cannot stand in the shoes of the levying creditor, he must take subject to the mortgage, for he purchased with notice of it. The result would be, that the property could not be sold for its full unincumbered value; and the levying creditor might be effectually precluded, by what took place after the lien of his execution had attached, from availing himself of the lien to satisfy his claim. This cannot be the law. Henderson v. Downing, 24 Miss. (2 Cushman) 106. We think that, if the shares had been sold on the execution without qualification or limitation, there could have been no question of the purchaser’s right to hold the shares unincumbered by the mortgage.
The shares were sold “ subject to all legal claims on said bridge.” Does this limitation render the purchaser’s title subordinate to the plaintiff’s mortgage ? The creditors had a right to sell the shares free from this incumbrance. They might have something to gain, and certainly had nothing to lose, by so doing. Otherwise, the property might
The plaintiff cites True v. Congdon, 44 N. H. 48. In that case, the return of an execution sale was, that Congdon bought “ all of the interest which Charles Bailey, the debtor within named, had in and to” certain lumber- It was held that the purchaser did not thereby acquire the rights of Bailey’s creditors, but only the rights of Bailey himself; and that, as he stood in the place of Bailey, he could not show, in defence of his title to the lumber, that the course of dealing between True and Bailey was fraudulent as to bona fide creditors of Bailey. In True v. Congdon, the court did not advert to Kingsbury v. Wild, 3 N. H. 30. In the latter case, the plaintiff claimed real estate under an administrator’s deed, purporting to convey “ all the right,” &c., which the intestate had in the land “ at the time of his death.” The defendant claimed under a deed made by the intestate in his lifetime with intent to defraud creditors.. It was objected that, at the time of the intestate’s decease, he had no right in the land; but it was held that the administrator’s deed conveyed the estate to the plaintiff, and gave him the right to avoid the fraudulent conveyance. Without questioning the authority of True v. Congdon, it is sufficient to say that we do not think the principle of that decision requires the adoption of the construction favorable to the present plaintiff in the case at bar. Exception sustained.
Ladd, J., did not sit.