Safford v. McNeil, 129 A. 721

Safford v. McNeil

129 A. 721 | Conn. | 1925

It is admitted that the mortgage to the First National Bank was not executed "as mortgages of land in accordance with the laws of this State," as required by §§ 5206 and 5208 of the General Statutes, which prescribe the terms on which valid mortgages of chattels retained in the possession of the mortgagor may be made. Nevertheless, the defendant claims that the record of this mortgage, covering both real and personal estate, was notice to the world of the fact of an equitable lien on the personality attached, because § 5095 of the General Statutes provides that any instrument "intended as a conveyance of lands," but which, by reason of a formal defect, operates only as a conveyance of an equitable interest therein, shall be notice to all the world of the equitable interest thus created. We think this contention is fundamentally unsound. It has always been the policy of our law that the land records should be the authentic oracle of title on which a bona fide purchaser or attaching creditor might safely rely. Such a person would be negligent if he failed to consult them. Wheeler v.Young, 76 Conn. 44, 49, 55 A. 670. And the record being thus notice to the world (i.e., to whom it may concern), it is only logical and fair that it should be notice of an equitable as well as a legal title.

Needless to say no such policy exists in respect of the title to personality. Ordinarily one is not required *688 or expected to search the town clerk's records before buying or attaching a tangible chattel; and hence it would be quite illogical and unfair to impute to the plaintiff notice of the record of a defectively executed mortgage of the defendant's land because it happened also to embody a defectively executed mortgage of the personality attached.

Sections 5206 and 5208 of the General Statutes, providing for the record of chattel mortgages when executed as therein required, are in the nature of exceptions to the general policy of law. They do not reverse the general rule as to the effect of retention of possession of tangible chattels by the former owner, by requiring purchasers and attaching creditors of personality to look to the town clerk's records for authentic information as to the title; but they do create definite exceptions to the rule upon terms imposed by the statutes themselves; and compliance with such terms is thus made a condition precedent to the validity of the lien as against all purchasers and attaching creditors not having actual notice thereof. Hartford-ConnecticutTrust Co. v. Puritan Laundry, Inc.,95 Conn. 172, 180, 111 A. 149.

The charge that this mortgage was not a valid chattel mortgage as against the plaintiff was correct, and assignment of error eighteen is overruled.

It must also follow that, for the purposes of this action on the bond, the value of the interest of the Morris Metal Products Corporation in the property attached was not diminished thereby, for it seems clear that in a bond given to release an attachment the undertaking of the principal and surety to pay the actual value of the interest of the defendant in the attached property must refer to the interest actually taken by the attachment, rather than to an interest affected by equities wholly invalid as against the attaching *689 creditor. Otherwise no attaching creditor ought to be compelled to take such a bond in lieu of the property attached.

The claim that by reason of the mortgage the interest of the defendant corporation in the attached property was rendered so uncertain and contingent that it was wholly incapable of being attached, is answered by the ruling that the mortgage was invalid as to attaching creditors of personality.

Section 5740 of the General Statutes provides that whenever, in an action on "a bond given in accordance with the provisions of section 5888," the defendant claims that the interest of the principal in the attached property was less than the amount directed by the writ to be attached, "the burden of proving the actual value of such interest shall be upon the defendant." The trial court charged that the statute applied to this case, and the defendant assigns this instruction as error, on the ground that, though executed in accordance with the form set forth in § 5888, the bond was given voluntarily and not imposed on the plaintiff by order of court. As § 5888 says nothing about an order of court, but deals solely with the form of the bond, and § 5740 puts upon the defendant the burden of proving a specific defense to an action on a bond "given in accordance with the provisions of section 5888," we are unable to construe § 5740 otherwise than as referring to a bond in the form recited in § 5888. See also Republic Rubber Co. v. Foster, 95 Conn. 551,111 A. 839.

The defendant's claim that the actual value of the interest of the defendant in the property attached should be measured, not by its fair market value, but by the amount which it would have brought on execution sale, is based on the argument that if the plaintiff were permitted to recover any greater sum in this *690 action, he would be put in a better position than if he had not released the attachment. That may be true, but the statutes providing for the dissolution of attachments by substituting a bond are primarily for the benefit of the defendant, and they express the terms upon which he is permitted, if he asks for it, to retake his property freed from the lien of the attachment. One of these terms is the agreement of the principal and surety on the bond, in case the plaintiff recovers judgment, to pay the "actual value" of the interest of the defendant in the property attached at the time of the attachment; and the trial court properly charged the jury that the bond meant what it said; and that the actual value of the personality attached was its fair market value. See also Perry v. Post, 45 Conn. 354. This instruction rendered it unnecessary for the court to charge the jury, as requested, that the penal sum named in the bond was not evidence of the actual value of the interest of the principal on the bond in the property attached.

Our conclusion that the mortgage was invalid as to personality, makes it unnecessary to pass on the defendant's assignments of error for rulings on evidence.

The plaintiff has filed a bill of exceptions as to the ruling and charge of the trial court that the value of certain items included in the sheriff's return should not be included, in ascertaining the value of the defendant's interest in the property attached. It seems to be conceded for the purposes of the exception, that the attachment of these items was invalid, or at least not perfected, at the time when the attachment was released and the bond substituted; so that the real question is whether the defendant having regained possession of the property, after an actual seizure by the officer, by substituting a bond in the statutory *691 form, may deny that they were validly attached at the time when the bond was given.

In Birdsall v. Wheeler, 58 Conn. 429, 20 A. 607, we held that the giving of a bond in the statutory form then prescribed, estopped the obligors from denying that the defendant had any attachable interest in the property attached. The bond in that case recited that the "estate of the defendant has been attached," and referred to "said attached property," and "said attachment," and the estoppel was based on these recitals and on the ground that, "clearly there could be no valid attachment upon process against the defendant, unless the defendant in the suit had an attachable interest in the property." That is to say, the estoppel was primarily against denying the validity of the attachment, and therefore prevented the defendant from denying that she had any attachable interest in the property. The present statutory form of bond is not in the same words, but is to the same effect; and it recites that "an attachment has been placed upon property of the said" defendant, and refers to "said attachment" and "said attached property." Upon principle the case cannot be distinguished from Birdsall v. Wheeler, 58 Conn. 429, 20 A. 607, and we think that the defendant, having procured the release of its property from the custody of the officer by admitting that it had been attached, and agreeing, in the event of a plaintiff's judgment, to pay to the officer having the execution issued on the judgment "the actual value of the interest, not exempt from attachment and execution," of the defendant "in said attached property," is equitably estopped from denying that the property was validly attached.

There is no error on the defendant's appeal.

In this opinion the other judges concurred.