94 N.Y.S. 495 | N.Y. App. Div. | 1905
This action is to foreclose a mortgage .of the corporation called Morse Iron Works and Dry Dock Company, made in April, 1900, to tile plaintiff trustee to secure its bond issue. The mortgage in terms covered all the mortgagor’s property and appurtenances acquired or to be acquired. The property included certain real estate, with water rights and a dry dock.. In September, 1900, the Prindle Engineering Company contracted with the said mortgagor to construct and to furnish a flooding and pumping plant for the latter’s business. The mortgagor did not comply with the terms of payment for this pump, and so in February, 1903, there was made a supplemental agreement which provided for the payment of the balance by three notes, due at different times. In April, 1903, the mortgagor defaulted on its bonds, and in October, 1903, this action was begun. The notes for the pump were never paid, and the Prindle Company is a defendant in this foreclosure suit.
The question upon this appeal arises from this purchase of the pump, and it is raised only by certain other defendants, who are respectively the trustee in bankruptcy and certain of its creditors. So far as this question'is involved, the Special Term found as facts that in September, 1900, the Prindle Company contracted to furnish a complete flooding and pumping plant for a certain dry dock then under construction for the mortgagor ; “ that the said dry dock is a movable, floating structure, rising and falling with the tide, and not affixed to the earth in any way, but held in place between two piers, by side timbers; ” that the' mortgagor agreed to pay -$60,000 therefor, and also agreed that title to the apparatus and machinery constituting said flooding and pumping plant should remain in the said
No exceptions were filed to any of the findings of fact which-
The contention of the learned counsel for the appellants is against the provision of the decree which directs payment of the balance due to the Prindle Company. I understand that there is no quarrel with: the determination as to its title to the plant and to its right- to any separate remedy which it has, based upon the terms of the sale and the default of the mortgagor in its payments under the contract. Obviously the décree is based upon the theory that the mortgage covered the interest of the mortgagee in the plant, and that it was the wisest course to sell all of the property covered by the mortgage in one parcel, free from all liens and the like,, but that, in-such event the Prindle Company was entitled to the payment from •the proceeds of the sale of the balance due upon the purchase price, befóte any application of such proceeds, to the payment of the bondholders or any other creditors.
It would seem inequitable that the mortgagee or other creditors • should receive the benefit of a sale which comprised the property of the Prindle Company, without provision in the first.instance for full payment for that property. If the policy of the decree can be sustained by law, I see no reason' why it should be reversed. Follett, J., in Crane v. Turner (7 Hun, 357, 358; affd., 67 N, Y. 437), says: “ Any present interest, legal or equitable, in real or personal property, which can be the subject of a sale, may be the subject of a mortgage. (1 Hilliard on Mortgages, chap. 1, § 4; 4 Kent’s Com, 144.)” (See, too, Thomas. Mort. [2d ed.] 53; Friedman v. Phillips, 84 App. Div. 179.) I think that under the conditional sale the purchaser had a mortgagable interest in this pumping plant. I think also that the- mortgagor could execute a mortgage which contemplated and covered its afteivacquired property! (New York Security Co. v. Saratoga Gas Co., 88 Hun, 569, 587 et seq.; affd. on opinion below, 157 N. Y. 689; Platt v. New York & Sea Beach R. Co., 9 App. Div. 87; affd., 153 N. Y. 670; Benjamin v. Elmira, Jefferson & Canandaigua R. R. Co., 49 Barb. 441; affd., 54 N. Y. 675; Holroyd v. Marshall, 10 H. L. 191; cited in Jones Mort. [6th ed.] § 152.) I .agree with the learned judge at Special Term that “ the mortgage is a lien on the personal property of the
The contention that the conditional contract was not filed as required by'section 112 of the Lien Law (Laws of 1897, chap. 418),. is met by Graves Elevator Co. v. Callanan (11 App. Div. 301).
The judgment must be affirmed, with costs.-
IIirschberg, P. J., Woodward, Rich and Miller, JJ., concurred-.
Judgment affirmed, with costs.