63 F. 270 | 4th Cir. | 1894
The barge Alfred J. Murray was engaged in trade between New York and Chesapeake bay. She had no means in herself of locomotion, and the American Towing & Lightering Company was under contract with one of her owners to do all necessary towage between Chesapeake City, in the state of Maryland, to a port or ports on Chesapeake bay, usually Piankatank, in Virginia. While this towage service was being performed, in 1892, to April, 1893, the barge was owned by J. A. and C. Griffin, and was covered by a mortgage to Alfred J. Murray in the sum of f6,000. The barge cost, about two years before 1893,
The liability of Engle & Co. on the note of the Griffins, discounted by and held by Eppinger & Russell, ivas fixed. The Griffins were in insolvent circumstances. Engle & Co. were responsible for the note, and when they paid it they paid their own debt. They gave up no security. They divested themselves of no right. They placed themselves in no worse position than they were in before. In fact, incurring a liability and suffering a loss in their dealings with the Griffins, and having no lien, they acquired almost the only property the Griffins had, to secure themselves against loss. In Dickerson v. Tillinghast, 4 Paige, 215, Chancellor Walworth held that the transfer of an estate, upon which there was a prior unrecorded mortgage, in payment of a pre-existing debt, without the transferee giving up any security or divesting himself of any right or placing himself in a worse position than he was before, did not make the transferee, who had no notice of the mortgage, a purchaser for value, and so entitled to protection. In the notes io Vadikin v. Soper, 2 Hare & W. Lead. Cas. 233, this rule is stated. Whatever may be the rule in the case of negotiable instruments, it is well settled that the conveyance of lands and chattels as security for an antecedent debt. Avill not operate as a purchase for value or defeat existing equities. To similar effect is Johnson Ar. Teck, 1 Woodb. & M. 334, Fed. Cas. No. 7,404.
For do we see any want of diligence in the enforcement of their liens on the part either of the libelant or of the interveners, such as to amount to waiver of or to wroik a forfeiture of their liens, On this point nothing can be added to the reasons set out in the opinion of the district court. The decree below is affirmed in all respects;- the costs of this court to be paid by appellants.