32 N.J. Eq. 652 | New York Court of Chancery | 1880
This is a strife for position. The facts material to the controversy are as follows : On the 3d of December, 1877, Mrs. Margaret V. Hewes executed a chattel mortgage on certain chattels, then being in a building in the city of Newark, to Francis M. Hoag, and the mortgage was, on the same day, filed in the office of the register of the county of Essex; a second mortgage on the same chattels was executed by Mrs. Hewes to Frederick Fisher, February 14th, 1878, which was filed March 2d, 1878, in the office of the register of Hudson county; a third mortgage was executed by Mrs. Hewes to the complainant (Edward Sayre), on the same chattels, February 25th, 1878, which was also filed in the office of the register of Hudson county on the day of its date; on the 27th of February, 1878, the complainant recovered a judgment against Mi’s. Hewes, by confession, in the Essex county circuit court, and another judgment was recovered against her, by confession, in the same court, by Albert H. Hewes, on the 2d of March, 1878. Executions were immediately issued upon these judgments, and levies made upon the chattels covered by the three mortgages. Albert H. Hewes assigned his judgment to the complainant immediately after its recovery. No consideration was paid for the assignment. The complainant and Frederick Fisher knew, when they received the mortgages made to them, that Mrs. Hewes had previously executed a mortgage to Mr. Hoag. They are subsequent mortgagees with notice of the antecedent mortgage.
Neither of the complainant’s securities is founded on a debt actually' existing at the time it was obtained. Both were given for the same purpose. The complainant had become surety for Mrs. Hewes, on a bond given by her to the ordinary, in 1874, on obtaining a letter of guardian
The mortgages, it will be observed, were filed in different counties—those given to the complainant and Mr. Eisher having been filed in Hudson, and that given to Mr. Hoag, in Essex. The chattels mortgaged were, at the time the mortgages were executed, in the county of Essex. The residence of the mortgagor is in dispute; but the evidence, I think, leaves little ground for diversity of opinion as to where it must be adjudged to have been. The mortgagor’s husband died in 1873. At the time of his death his residence was in Kearney township, Hudson county. The mortgagor, after his death, continued to occupy the house in which he had resided. She spent portions of each win
It is clear, then, that Mr. Hoag’s mortgage was not filed. in the county where he was required by law to file it, in order to give it validity against the creditors of the mortgagor, and against subsequent purchasers and mortgagees in good faith. The law upon this point is plain and imperative. Unless a mortgage is filed in the county where the mortgagor resides (if a resident of this state) at the time of its execution, or the mortgagee takes immediate possession of the mortgaged chattels, and continues in the actual and constant possession of them, it is absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers and mortgagees in good faith. Rev. p. 709 §§ 39, 40; DeCourcey v. Collins, 6 C. E. Gr. 357.
The complainant is clothed with a dual character; he is both a creditor and a subsequent mortgagee. He is not, however, a subsequent mortgagee in good faith. He knew, when he took his mortgage, that a prior mortgage had been
' To what extent, then, is the complainant a creditor? Is he entitled to that position in virtue of both of his judgments, or only one? The judgment he holds under assignment from Albert H. Hewes does not seem to be open to any valid objection. It -was founded on a just debt, actually existing at the time it was confessed. The defendant Hoag cannot impeach the complainant’s title because he paid nothing for it. The judgment creditor had an unquestionable right to assign it, with or without a consideration, just as he pleased. That is a matter which concerned him alone. The fact that the assignment was gratuitous, is only important as it may serve to show whether the foundation of the judgment was honest or fraudulent. Hnder the evidence, there can be no doubt that it is supported by a just debt.
Besides, I think I am bound to consider the doctrine as settled, so far at least as this court is concerned, that a judgment on bond and warrant of attorney, under our statute, can only be entered for a debt actually existing at the time of its entry, and that a simple liability as endorser or surety does not constitute such a debt. “ It is an abuse of language to say,” says Chancellor Halsted, “ that because I endorse your note to-day, payable three months hence, to be used by you, you are indebted to me to-day for the amount of it.” Blackwell v. Rankin, 3 Hal. Ch. 160. But the decisive authority on this point is the judgment of the court of errors and appeals, in Clapp v. Ely, 3 Dutch. 555. It will be remembered that, in that case, it was finally held, by a divided court, it is true, after repeated and exhaustive discussion by counsel as able as any that ever adorned the bar of this state, and after the best consideration that could be given by the court to am case, that a valid judgment could not be entered, under our statute regulating the recovery of judgments by confession on bond and warrant of attorney, to secure future advances, or a debt to be subsequently created. Á. single quotation from the masterly opinion of Chief Justice Green will pre
But if it were possible to hold that the complainant was entitled to be treated as the holder of a valid security for future advances, it is not perceived how that would give him the least advantage in this controversy. ' The general rule in respect to such securities is well established. They are only entitled to priority over subsequent encumbrances to the extent of the sums actually advanced prior to actual notice of the subsequent encumbrance. Ward v. Cook, 2 C. E. Gr. 93; Kline v. McGuckin, 9 C. E. Gr. 441. Here nothing, up to this time, has been advanced, and the complainant .cannot, therefore, in equity, lay claim to the rights of a creditor.
This disposes of the case so far as it involves merely the rights of the complainant and Mr. Hoag, and without reference to the rights of Mr. Fisher. But his rights must also be considered. He took his mortgage with notice that, a prior mortgage had been given to Mr. Hoag, and he must, therefore, as between Hoag and himself, take the subordinate position. But he and complainant, as between themselves, occupy equal rank; the judgment of the one, and the mortgage of the other, were recovered and filed on the same day. So that the relative positions of the several parties are as follows: J The complainant and Fisher, as between themselves, hold concurrent liens, but Hoag stands prior to Fisher as between Fisher and himself, and the complainant, as between Hoag and himself, stands prior to Hoag. In this condition of affairs, it is impossible to give the complainant the full benefit of the superiority of his
The decree will declare the liens of the parties to stand in the following order: The complainant shall be first paid the amount due on the judgment assigned to him by'Albert H. Hewes; the defendant Hoag shall next be paid the amount due on his mortgage, and, lastly, Eisher shall be paid the amount due on his mortgage. If a surplus remains, it must be brought into court to await the determination of the question whether the complainant or Mrs. Hewes is entitled to it.