29 N.J. Eq. 311 | N.J. | 1878
The Raritan and Delaware Bay Railroad Company was incorporated in 1854. Its corporate name was changed to The New Jersey Southern Railroad Company, in 1870. Under the powers granted in its charter, the company con
On the 14th of September, 1869, the company made the complainant’s mortgage, in trust, to secure bonds issued to the amount of $2,000,000. The property mortgaged comprised all the railways, branches, rights of way, depots, station-houses, and the company’s franchises then held or thereafter to be acquired, including its rolling stock, fixtures, tools and machinery, and all real estate of every kind, wheresoever situate, and all personal property, of every nature, kind or description then held or thereafter to be acquired. It also contained a covenant that the company would hold all after-acquired franchises and property, real and personal, in trust, for the mortgagee, and would make conveyance thereof accordingly, from time to time, as the same might be acquired.
The bill originally filed was an ordinary foreclosure bill, to which the New Jersey Southern Railroad Company and the trustees named in the second and third-mortgages were the only parties. After bill filed and interlocutory decree thereon, other interests and rights under the complainant’s mortgage were discovered, and claims were preferred by other persons of rights in some of the property, for the enforcement of which suits at law had been brought, and an amendment of the complainant’s proceedings was deemed advisable. Supplemental bills were therefore filed, on the 11th of May, 1874, and the 20th of September, 1876. By these supplemental bills and orders and decrees made, from time to time, on several branches of the case, and submissions thereto by the parties, the court of chancery assumed jurisdiction over the rights, legal and equitable, of all the parties in or relating to the property in controversy. The chancellor, on final hearing, so regarded the scope of
Erom the final decree the complainant has appealed. Of the defendants, Berthoud & Co., the Lehigh Car Manufacturing Company, and the Lackawanna Iron and Coal Company have also appealed. No appeal was taken by the other defendants. The discussion in this court was confined to the rights of the parties appealing inter sese. ■ --■
Eirst: Berthoud & Co. claim a mechanics lien under the the tenth section of the mechanics lien act (Rev. p. 669), for work done and materials furnished by them in erecting certain docks, wharves and piers at the terminus of the Long Branch and Sea Shore Eailroad, near Sandy Hook. This work was done under a contract, in writing, between the claimants and the New Jersey Southern Eailroad Company, made on the 17th of May, 1873. It was completed on the 21st of November, 1873. The lien claim was filed on the 23d of July, 1874, against the New Jersey Southern Eailroad Company, as builders, and the Long Branch and Sea Shore Eailroad Company, as owners; and summons was issued thereon on the 16th of October, 1874. Berthoud & Co. were made' parties to this suit by the first supplemental bill, and the prosecution of their action at law to enforce their lien was enjoined.
The validity of this claim is contested for imperfections and illegality in the filing of the lien claim, and in the prosecution of the suit thereon. All these objections were carefully considered by the chancellor, and discussed with a fullness that will not admit of argument beyond a restatement of the grounds on which he reaches the conclusion sustaining the lien'. It is sufficient to say, that no reason has been made to appear whereon to reject his conclusions in that respect. Nor are we satisfied that any error -has-has been committed, in law or in fact, in the designation of the curtilage to which the lien should attach.
The Long Branch and Sea Shore Railroad Company was incorporated March 20th, 1863, and its road was constructed between Long Branch and Spermaceti Cove, on Sandy Hook, within three miles of its present terminus. The length of the road is about twenty miles, and the only point of contact with the road of the New Jersey Southern Railroad Company is at Long Branch. It was built as part of a competing line between Long Branch and New York city, and was operated as such until the year 1870. By supplements to the charters of the two companies, passed on the 16th of February, 1870 (P. L. 1870, pp. 228-230), a consolidation of the capital stock of the two companies was authorized with the consent of two-thirds' of the stockholders of the said companies respectively; and in lieu thereof the New Jersey Southern Railroad Company was empowered to purchase the stock or the railroad of the Long Branch and Sea Shore Railroad Company.
No consolidation in fact of the two companies was ever effected; nor was the railroad of the Long Branch and Sea Shore Company acquired by the New Jersey Southern Company by any formal purchase or conveyance. The latter company became the owners of one thousand six hundred and nineteen shares of the one thousand seven hundred and eighteen shares of the capital stock of the former company, and in the summer of 1870 took possession of the railroad of the Long Branch and Sea Shore Company, and has operated it ever since, in connection with its main line,
Where a mortgage attaches to after-acquired property, and additions are made to the premises, after the title becomes vested in the mortgagor, by the erection of buildings, or the construction of embankments, or the laying of rails for a track, such additions become part of the mortgaged premises, as they are made on the maxim quicquid plantatur solo, solo cedit, and enure to the benefit of the mortgagee. But where the after-acquired property comes into the hands of the mortgagor, subject to encumbrances or liable to liens, the mortgage attaches to the property in the condition in which it comes to the mortgagor’s possession, subject to such liens and encumbrances as are then on it. Willink v. Morris Canal Co., 3 Gr. Ch. 377; Dunham v. Railw. Co., 1 Wall. 254; Galveston R. R. Co. v. Cowdrey, 11 Wall. 459; United States v. N. O. R. R. Co., 12 Wall. 362. When the decree of the chancellor was signed, which established the lien of the complainant’s mortgage on the prop
Second: The L.ehigh Car Manufacturing Company, on the 7th of April, 1873, made a contract in writing with the New Jersey Southern Railroad Company to build and deliver to the company one hundred box cars, according to specifications furnished by the company, for the price of $805 each, payable on the delivery of- each twenty-five cars, in the notes of the company, at four months, with the company’s first mortgage bonds, at seventy per cent, of their par value as collateral. In pursuance of this contract, seventy-five of these 'cars were delivered to the company. The first lot of twenty-five cars was delivered on the 15th and 20th of July, and the notes of the company were given for the full price on the 18th of August. The second lot of fifty cars was delivered on the 14th, 18th aud 22d of . August, and notes were given on the 4th of September for tpart of the price—the sum of $13,200.72 being withheld on account of alleged defects in the wheels. "When these notes ¡were given, certain bonds were delivered as collateral which .were not first mortgage bonds. They were called first mortgage consolidated bonds, and were received by the car company in the belief that they were first mortgage bonds, such as were prescribed in the contract. In fact, they were securities only in appearance and entirely worthless.
The sale, as was held by the chancellor, was clearly conditional, the condition being that the security provided for
But it is contended in behalf of the complainant, that the car company lost its property in the cars and its right to reclaim them by a.waiver arising from the delivery of them to the company, and neglect to exercise the right of reclamation in due season. The contract being an executory contract to build the cars according to specifications, one of its incidents was the right of the vendee to examine them for the purpose of ascertaining whether they conformed to the contract. Delivery to the vendee for that purpose was not a consummation of the contract of sale. The sale was not completed until after the inspection and examination, and the performance of the condition precedent, of the by the vendee of the securities stipulated for.
Tire evidence clearly shows that the car company was) induced to complete the sale by the grossest fraud. A^ vendor, who is induced by fraudulent means to part with! his property under color of a contract of purchase, may dis-affirm the sale and reclaim the property. In such case no title passes to the fraudulent vendee, even though delivery be made; nor will execution creditors or purchasers or mortgagees under such fraudulent vendee, acquire a title superior to the original vendor, unless they be purchasers or mortgagees bona fide and for a valuable, consideration. Stoutenburgh v. Konkle, 2 McCart. 33; Hicks v. Campbell, 4 C. E. Gr. 183; Ash v. Putnam, 1 Hill 302; Van Cleef v. Fleet, 15 Johns. 147; Mowrey v. Walsh, 8 Cow. 238; Hicks v. Cleveland, 39 Barb. 573; Paddon v. Taylor, 44 N. Y. 371; Devoe v. Brandt, 53 N. Y. 462; Barnard v. Campbell, 55 N. Y. 456, 58 N. Y. 73; Earl of Bristol v. Wilsmore, 1 B. & C., 514; Load v. Green, 15 M. & W. 216; Clough v. L. & N. W. R. R. Co., L. R. (7 Exch.) 26; Morrison v. The Universal Marine Ins. Co., L. R. (8 Exch.) 197; Wiggin v. Lay, 9 Gray 97. The vendor may rescind the contract of sale and reclaim the property until, with a knowledge of the fraud, he elects to ratify and confirm the sale, or third persons,
The complainant does not occupy a vantage ground either at law or in equity over the original vendor. He was put in possession of the railroad, and these cars, as part of its equipment, in January, 1874, but no consideration was parted with under his mortgage on the faith of the apparent ownership of this property by the mortV gagor. In equity, a mortgage of personal property after-wards to be acquired by the mortgagor, attaches to the property as soon as it is acquired by the mortgagor. Smithhurst v. Edwards, 1 McCart. 408; Gevers v. Wright, 3 C. E. Gr. 330, 333; Pennock v. Coe, 23 How. 117; Beall v. White, 94 U. S. Rep. 382; Holroyd v. Marshall, 10 H. of L. Cas. 191. But this doctrine is founded on the maxim that equity considers that to be done which ought to be done, and is applicable only where the contract of the mortgagor to transfer to the mortgagee the after-acquired property is such as, under the circumstances, would be the subject of a decree for specific performance. That this is the foundation and qualification of the rule as administered in courts of equity, will appear, on an examination of the cases above cited, and especially by the observations of Lord Westbury in Holroyd v. Marshall. In the present case, the contract of sale having been disaffirmed, the legal title to the cars in controversy is in the car company, and a court of equity will not aid to give effect to the fraud of the mortgagor in procuring the mortgaged property where no superior equities have intervened.
Under the proof in this case, the car company would have succeeded ixx its action of replevin, axxd the damages recoverable woxxld have been the value of the property at the time of demand made, and damages for its detention thereafter (Frazier v. Fredericks, 4 Zab. 162), and the complainaxxt, after judgment paid, would be entitled to be reimbursed the amount thereof out of the trust funds ixx his hands.
The decree does not do complete justice to the car company, nor does it give the complainant adequate indemnity. In substance it merely releases the hold of the court upon the property, and directs the complaixxant to redeliver it.
The car company having brought its action of replevin, and the cars having been redelivered to the defendant in that suit, it is not boxxnd to accept a reform of its property in satisfaction of its cause of action. In replevin, where the
Third : The Lackawanna Iron and Coal Company recovered a judgment against the New Jersey Southern Railroad Company, on the 19th of January, 1874, for damages and costs, amounting to $42,268.68. ' Executions were issued into all the counties of the state through which the company’s railroad extended, and levies were made between the 20th and 24th of January upon the cars, engines and rolling
The complainant’s mortgage was duly recorded as a mortgage of real estate, soon after it was executed and delivered, and long before the judgment aforesaid was recovered, but was not filed in compliance with the act concerning chattel mortgages of March 24th, 1864, which makes every mortgage or conveyance intended to operate as a mortgage of goods and chattels,^hich shall not be accompanied by an immediate delivery) and followed by an actual and continued change of possession of the things mortgaged, absolutely void as againgKthe creditors of the mortgagor, and as against subsequent purchasers and mortgagees in good faith, unless the mortgage, or a copy thereof, be filed as is directed by the act {Rev. p. 709). The chancellor held that the rolling stock of a railroad company, mortgaged with the railroad, is part of the realty, and that if such rolling stock be personal property, the provisions of the,above-mentioned act requiring immediate delivery and continued possession of the chattels mortgaged or filing instead thereof, were inapplicable to such mortgages. The appeal of the judgment creditor denies the soundness of this legal proposition in both its parts.
The complainant’s mortgage, in terms, is comprehensive enough to cover property, real and personal, in present ownership and afterwards to be acquired, of every kind and description which is susceptible of sale or mortgage, either at law or in equity. But that does not solve the problem for consideration, which is, whether the rolling stock of a railroad company is such a constituent part of its realty as that it would pass under a conveyance or mortgage of its road-bed and franchises without other words of description. For fixtures which are part of the realty, like easements, will) pass under a conveyance as part of the lands granted with- , out additional words.
The first two of these propositions may be regarded as judicially settled in the affirmative-. It has been held quite generally that, in equity, a mortgage will apply to after-acquired personal property if apt words of description be contained therein, and that a court of equity will, at the instance of the mortgagee, enjoin the sale of such property under subsequent executions. But these principles, have been applied, indiscriminately, to property indisputably personal, such as unattached machinery in a factory, goods in a store and furniture in a house, as well as to the rolling stock of a railroad. In Smithhurst v. Edwards, 1 McCart. 408, the property protected from sale under execution was the after-acquired furniture in a hotel. Decisions of this class give no support to the proposition under consideration.
To sustain the views adopted by the chancellor on this subject, counsel relied greatly on the decisions of the federal courts. An examination of those cases will show that the point has not been directly, or at least finally, adjudged.
The earliest, and perhaps the leading case, is Coe v. Pennock, decided by Judge McLean, as reported in 6 Am. Law Peg. 27, 2 Pedf. Am. Railw. Cas. 546, and afterwards in the supreme court, and there reported sub nom. Pennock v. Coe, 23 How. 117. In that case the mortgage, which is set out in 23 How. 126, expressly enumerated, as part of the property mortgaged, “ all the present and future-acquired property, * * including engines, tenders, cars, tools, machinery, materials, contracts and all other personal property.” The rolling
In Gee v. Tide Water Canal Co., 24 How. 257, the property levied on and offered for sale was land which was admitted to be necessary to the working of the canal. On bill filed by the company, the court enjoined the sale,-on the ground that the property was necessary for the operations of the company’s canal, and could not be dissevered from the franchises without destroying its useful existence.
In Minnesota Co. v. St. Paul Co., 2 Wall. 609, a railroad company had divided its line of railway into two divisions, and had given separate mortgages on each division. The mortgages each enumerated rolling stock as part of the
In Railroad Company v. James, 6 Wall. 750, the case rested on a statute of Wisconsin, which declared that “ all rolling stock of any railroad company used and employed in connection with its railroad shall be and the same is hereby declared to be fixtures.” (R. S. Wis. 511, § 34.) The dictum of the judge delivering the opinion of the court, who was one of the dissenting judges in Minnesota Co. v. St. Paul Co., supra, that the rolling stock would have been fixtures independent of the statute, was merely obiter.
In Scott v. C. & S. R. R. Co., 6 Bissel 529, the sole question was, whether a mortgage made by a railroad company, covering all after-acquired property, included after-acquired rolling stock. The judge, after reviewing the cases in the supreme court of the United States, held that it did, and declared, in his opinion, that it did not make any difference in the result, whether the property was real or personal.
The cases cited from the state courts are chiefly such as decide that a mortgage of after-acquired goods and chattels is valid, or such as hold that such property, when mortgaged, is not liable to be taken under certain kinds of process, under rules of procedure peculiar to the practice in such states. P. & W. R. R. Co. v. Woelpper, 64 Pa. St. 366, and Cowry v. P. & T. W. R. R. Co., 3 Phila. R. 173, are cases of that kind. Where the question has been directly presented, whether the rolling stock of a railroad, included in a morb gage, of its road-bed and franchises, is real or personal property, the great wmght’^TautEofrtyl'sUfTiavor of”its being considerecUas" personalty. Stevens v. B. & C. R. R. Co., 31 Barb. 590 ; Beardsley v. Ontario Bank, Id. 619; Bermont v. P. & M. R. R. Co., 47 Id. 104; Randall v. Elwell, 52 N. Y. 521; Hoyle v. Plattsburgh R. R. Co., 54 N. Y. 314; Chicago, &c. R. R. Co. v. Howard, 21 Wis. 44; B. C. & M. Co. v. Gil
One of the primary objects of law is the classification of property and the establishment of certain indicia by which its ownership may be determined. For this purpose all property is by law divided into two kinds, real and personal, and the mode of enjoyment and methods of disposition are regulated by positive rules of law, which are founded on considerations of public policy, and established for the purpose of determining the ownership of property according to its kind. The method of transmuting property, personal in its nature, into realty, is as fixed and- established in the law as the method of testamentary disposition. Such property does not become realty by mere use in connection with land. The implements of husbandry, though used only for agricultural purposes, do not thereby become part of the land. Nor will such property become realty by being'included in a mortgage with lands any more than lands will become personalty by such an association. The stock of goods in a store, or the furniture in a hotel, do not become part of the
The criterion for determining whether property ordinarily ; regarded as personal becomes annexed to and part of the realty, is the union of three requisites: First—Actual annex- '■ ation to the realty or something appurtenant thereto. Sec- k ond—Application to the use or purpose to which that part'k of the realty with which it is connected is appropriated. 1 Third—The intention of the party making the annexation J »tq_make a permanent accession to the freehold. Teaff v. Hewitt, 1 Ohio St. 511. This criterion was adopted by the chancellor in Quimby v. Manhattan Cloth Co., 9 C. E. Gr. 260, and by this court in Blancke v. Rogers, 11 Id. 564, and by the court of appeals of New York in McRea v. Central Nat. Bank, 66 N. Y. 489.
' Whether a chattel is a fixture or not depends upon the/ facts. The mere intention of the parties to make it part of the freehold does not make it a fixture. To accomplish that result there must be an actual annexation to the freehold, though the strength of the union is not material if in fact it be annexed. The intent of the party affixing it is only important on the' question whether he intended to make the chattel so annexed a temporary or a permanent accession to the freehold. Rogers v. Brokaw, 10 C. E. Gr. 497; S. C. sub nom. Blancke v. Rogers, supra. Cases of what is called constructive annexation are only apparent exceptions to this rule. The instances of constructive annexation such j as the keys, doors and windows of a house removed for a j temporary purpose, a millstone taken out of the mill to be ! picked, and saws and leather belting taken out to be ‘ repaired or laid aside for future \uséj -and the like, are all ■ cases where the chattel, by actual annexation, was once part of the realty and had been detached for temporary purposes' without the intent to sever it from the freehold. Having once been part of the realty, removal temporarily without intent to sever permanently does not reconvert the chattel into personalty, and destroy its character as a fixture.
The illustrations of doves in a cote, deer in a park, and fishes in a pond, are entirely inapplicable to the present subject. They go with the inheritance for special and'peculiar reasons. In Amos Ferrard on Fixtures, they are classified under the head of heir-looms, a class of property entirely distinct from fixtures. A. & F. on Fixturesr 168. Sir Edward Ooke assigns them to go with the inheritance, because they are animals ferae naturae, “ and could not b'e gotten without industry, as by nets and other engines.” Co. Lit. 8a. This is the true foundation of the common law rule, for Wentworth saith that “young pigeons, being in the dove-house, not able to fly out, go to the executor; yet their dams, the old ones, shall go to the heir with the dove-house ” (Went. Off. Ex. 143); and fishes confined in a trunk or the like go to the executor. Co. Lit. 8a. In Paulet v. Gray, fishes in a pond were adjudged to belong to the heir, for the reason that “they are as profits of the freehold which the executor shall not have, but the heir, or he who hath the water.” Cro. Eliz. 372. No analogy exists between these animals and machinery, such .as engines and cars, by which the legal status of the one can be deduced from that of the other.
The critexion above stated of actual annexation to the freehold, as a x’ule for determining when chattels become. 'part of the realty, is as well settled in this state as axxy other rule of property. Exceptions founded on fanciful and grouxxdless distinctions only tend to produce uncertainty axxd confusion ixi the rules of property, which should be permanexxt and unifoxm. “ The general impox-tance of the rule,”
Tested by the foregoing criterion, it is manifest that the rolling stock of a railroad must be regarded as chattels which have not lost their distinctive character as personalty by being affixed to and incorporated with the realty. It is true that engines and cars are adapted to move on the track of the railroad, and are necessary to transact the business for which the railroad was designed. But unattached machinery in a factory, the implements of husbandry on a farm, and furniture in a hotel, are similarly adapted for use in the factory, on the farm, or in the hotel, and are equally essential to the profitable prosecution of the business in which they are employed. When regard is had to the fundamental and necessary condition under which the law permits chattels to become part of the realty, engines and cars and the'rolling stock of a railroad utterly fail to answer the requirement of the law. Cars which left Jersey City this] morning, before the close of the succeeding week will bejj found scattered over tke west or on the Pacific coast, their ji places in transportation through this state being supplied!1 by cars- gathered from the railroads of other companies, many of which are located in other states. The suggestion that each one of these cars carries with it the attribute of realty in its journey through other states, or even over other railroads in this state, will show the incongruity of denominating that a fixture which, in its ordinary use, travels over other railroads, and is connected with the railroad of its owner in no other way than in its useful employment in the business in which the company is engaged. In Randall v. Elwell, supra, Judge Grover says: “ I think no one would claim that a car of the New York Central which, in the course of business, had been run to Chicago, was part of its real estate while there; and, if not such, I can discover no principle upon which the character of the property
Having reached the conclusion that the rolling stock of a railroad is personal property, the next inquiry will be, whether a mortgage of such property is within the provisions of the statute requiring such mortgages to be filed.
In this state the legislative policy is to require the registry or filing of mortgages of all property which is visible and tangible, and to postpone the lien of every mortgage not registered or filed as prescribed by law, to the claims of third persons, the creditors of the mortgagor and subsequent bona fide purchasers or mortgagees. This is.apparent from an inspection of the statute {Rev. pp. 705-9). ' The seventeenth and twenty-seventh sections provide for the registration of mortgages of lands, tenements and hereditaments ; the thirty-ninth and fortieth provide for the registry or filing of mortgages of goods and chattels. The language of the sections relating to chattel mortgages is too clear to permit a doubt as to the legislative meaning. Its language is : “ Every mortgage or conveyance intended to operate as a mortgage of goods and chattels, not accompanied by an immediate delivery, and followed by an actual and continued change of possession, shall be,” &c. Hiving the words of this statute their primary and legal signification, which is the cardinal rule for the construction of statutes, this section must be construed to apply to all mortgages of property such as is comprised under the description of “ goods and chattels,” as distinguished from lands. Such a construction was made of the statute of New York, which, in this respect, is in the same words as our act; and the act was held applicable to mortgages of the rolling stock of a railroad in connection with its lands. Stevens v. B. and N. Y. R R. Co., 31 Barb. 590; Bement v. P. and M. R. R. Co., 47
In this state an act was passed in 1876, relating to the registry of mortgages given by certain corporations, providing that nothing in any of the laws of this state shall be held to require the filing of record of any mortgage given by any such corporation conveying the franchises, and including chattels then or thereafter to be possessed and acquired, if such mortgage shall be duly lodged for registry as a conveyance of real estate. (P. L. 1876, p. 307, § 4.) The legal construction of the act we need not now consider.
The rights of the iron and coal company in the property in controversy were fixed and became vested rights in January, 1874, when the levy was made under the executions. By the act concerning executions, the property was bound by the execution from the time of delivery to the sheriff, and upon levy made, title under the execution would be good, even as against subsequent bona fide purchasers {Rev. p. 392, §§ 18, 20). By force of the last-mentioned act, and the act concerning chattel mortgages, as it then stood, the iron and coal company, upon the levy being made, acquired a right in the property, seized under its execution superior to that of the complainant under his mortgage. That right of priority, being a vested right, was not divested by the act of 1876.
The general rule is, that all' statutes shall have a prospective effect only. “Words in a statute,” says Justice Paterson, “ ought not to have a restrospective operation, unless they
The protection of vested rights in property from being destroyed or impaired by after-legislation, has been placed on firmer grounds in this state. By the third section of the act relating to statutes, it is declared that the repeal of any statutory provision “ shall not affect or impair any act done or right vested or accrued * * before such repeal shall take effect; but every such act done, or right vested or accrued, * * shall remain in full force and effect to all intents and purposes as if such statutory provision, so repealed, had remained in force.” (Rev. p. 1120, § 3.) This statute is only declarative of the law as judicially pronounced in Hunt v. Gulick, reported in 4 Hal. 205.
Indeed, a right partaking of the nature of property, such as became vested in the Iron and Coal Company upon the levy of its execution, is clearly within the principle of the constitutional provision which protects private property from legislative action, and forbids its being taken without compensation for either public or private purposes. This constitutional protection is thrown around property of every kind and description, and is not restricted to any particular mode of taking. A partial destruction or diminution in value is a taking within the meaning of the constitutional provision. Glover v. Powell, 2 Stock. 212; Hale v. Lawrence,
Nor is the form of the legislative change in the law a matter of any consequence. Whether it be in the shape of a legislative construction of a pre-existing statute, or a positive -enactment retrospective in terms, the substance of the thing only will be regarded. What may not be done directly in one way, cannot be done by indirection in the other way.
The act of 1876 itself does not necessarily require a retrospective construction, and therefore will not be allowed that effect; and if the language used required such a construction, it could not be effective to deprive a party of prior vested rights acquired under the levy.
Another point made on the argument was, that even if the rolling stock of a railroad be goods and chattels, and a mortgage thereof be required to be registered or filed by the chattel mortgage act, the complainant having taken actual possession of such property before the judgment of the Lackawanna Iron and Coal Company was recovered, the complainant’s mortgage is entitled to priority over the judgment. The mortgage was made on the 14th of September, 1869, and possession of the rolling stock was not taken by the mortgagee until January 1st, 1874. The mortgage was not accompanied by an immediate delivery of the property mortgaged, but possession was taken before the judgment was recovered.
The decree appealed from should bo modified to conform to this opinion, and to that end must be reversed, and the record remitted to the court of chancery, with directions accordingly.
The Lehigh Car Company and the Lackawanna Iron and Coal Company having succeeded on their appeals, are entitled to costs in this court. Both parties having appealed from that part of the decree that related to the claim of Berthoud & Co., and neither succeeding on the appeal, the affirmance in that respect is without costs. The costs of the complainant in this court to be considered as costs in the cause, payable -out of the proceeds of the sale of the property generally.
Decree unanimously reversed.