58 N.H. 260 | N.H. | 1878
It would seem that the verbal agreement concerning the *263
disposition of the avails of the mortgaged property was a collateral arrangement, independent of, but not inconsistent with, the terms of the indorsement upon the mortgage, and that if it had any tendency to explain that writing it was not inadmissible, but, on the contrary, was very properly received in evidence. George v. Joy,
The defendant claims that the facts disclosed establish a secret trust between the plaintiff and Gilbert Brothers in favor of the latter, or a fraudulent contrivance to hinder, delay, and defraud creditors; that this trust and fraud is an inference of law from the facts disclosed, and consequently the mortgage must be declared void.
The retention of personal property by the former owner, after a sale or mortgage, has never been regarded in this state as conclusive evidence of fraud, but only as prima facie evidence, capable of explanation (Haven v. Low,
An honest intention and understanding or agreement must certainly exist between the parties, that the proceeds of the sales shall be applied to the extinguishment of the mortgage debt; and any understanding that the mortgagor shall or may retain possession of the goods, continuing to sell them, as before, for his own benefit, without accounting to the mortgagee for the proceeds, is clearly a trust inconsistent with the legitimate purposes of the mortgage, and establishes a legal presumption of a fraudulent intent to protect the mortgagor in the enjoyment of the property, and to enable him to set his creditors at defiance. Such agreement or understanding, whether contemporaneous with or subsequent to the execution of the mortgage, will render the mortgage void as to the mortgagor's creditors. Ranlett v. Blodgett,
The principles which control this case are clearly recognized in Ranlett v. Blodgett and Putnam v. Osgood, before cited. The doctrine of those cases is, that the trust and fraud, which the law condemns, consist in the mortgagee authorizing the mortgagor to act as owner of the property, and not as agent of the mortgagee, in permitting him to appropriate the proceeds of sales to his own use instead of to the payment of the mortgage-debt. By manifest implication, those cases hold that authority to act as the agent of the mortgagee and not as owner, the mortgagor, as such agent, paying the money to the mortgagee as owner, instead of applying it to his own use, is not a fraudulent trust.
A careful examination of the cases cited by the defendant reveals distinctions so clearly defined as to render them inapplicable to the present case. Many of them, moreover, are controlled by local statutes which have no resemblance to our own, touching the subject under consideration. This want of analogy is particularly obvious in Collins v. Myers,
In Conkling v. Shelley,
In cases of sales of personal property, it is undoubtedly true, that the retention of possession by the vendor is prima facie (and, if unexplained, conclusive) evidence of a secret trust — Kendall v. Fitts,
In the case of a recorded mortgage, the retention of possession is, of course, unobjectionable; but the selling of the goods occupies the same position in respect to the mortgage, that the mere retention and use of the goods does in respect to an absolute sale. By our statute, a sale by the mortgagor is as permissible as retention of possession. The permission undoubtedly raises a presumption, prima facie, of a secret trust, and the secret trust being shown, the fraudulent intent is conclusively presumed; but as the intention may be explained in the case of retention of property by the vendor after sale, so may the sale of the goods by the mortgagor. Putnam v. Osgood, before cited. The explanation need not be expressed in the written consent. The settled rule, that the written consent may be explained, necessarily implies that it may be explained by evidence not contained in the writing itself.
The statute which forbids the sale, by a mortgagor, of mortgaged personal property, is prohibitory merely. Its infraction brings a penalty upon the offender (Gen. St., c. 123, s. 15), but neither the mortgage nor the mortgagee is affected thereby. There is nothing in the statute (ss. 13, 15) indicating an intention of the legislature that the mortgage shall be void as against creditors, because the mortgagee's consent indorsed thereon does not contain in its terms something more than the statute prescribes.
There is no secret trust, when it appears from all the evidence that the permitted sale is honestly made for the purpose of extinguishing the mortgage-debt, and not (except incidentally) for the advantage of the mortgagor. Such a sale and such an application of the proceeds has no tendency to hinder, delay, or defraud the unpreferred creditors.
Where the mortgagee, by written and recorded consent, permits the mortgagor, as his agent, to sell the goods as the mortgagee's goods, and to receive the money as the mortgagee's money, the proceeds thus received by the agent being the property of the mortgagee in the hands of his agent, the mortgagor, the transaction is lawful and valid. And an agreement that all this may be done (when a written consent to the sale of the goods is recorded) is a lawful agreement. In the case before us, if no actual fraud or secret trust is disclosed, if the mortgagor, in selling the goods and retaining the proceeds, is regarded simply as the agent of the mortgagee, and if those proceeds, as soon as they reach the hands of the agent, be regarded as applied, and the debt pro tanto extinguished, whether the money has actually passed from the hands of the agent to those of the principal or not, it is difficult *266 to see how any legal inference of fraud or of a secret trust can be said to result from such circumstances.
If it is to be inferred from the language of the case that the shoes which were made by one of the mortgagors were manufactured from stock included in the mortgaged property, we also infer that the proceeds of that labor were added to the stock of goods in the substance of the manufactured article, and so became available for the use and benefit of the mortgagee, like the rest of the property; and we are unable to discover how the fact that the compensation for the maker's labor, expended by him for his support, could diminish the mortgagee's security, or tend to the detriment of other creditors, since an equivalent for the value of that labor was returned in the shape of the manufactured article which went into the general stock in trade.
Judgment on the verdict.
STANLEY, J., did not sit.