Case Name: The Penn Mutual Life Insurance Co. vs. the Walton & Whann Company, Mortgagor, and James P. Winchester & Francis N. Buck, Receivers
Court: Delaware Superior Court
Jurisdiction: Delaware
Decision Date: 1894-09
Citations: 2 Marv. 179
Docket Number: 
Parties: The Penn Mutual Life Insurance Co. vs. the Walton & Whann Company, Mortgagor, and James P. Winchester & Francis N. Buck, Receivers.
Judges: 
Reporter: Delaware Reports
Volume: 16
Pages: 179–182

Head Matter:
The Penn Mutual Life Insurance Co. vs. the Walton & Whann Company, Mortgagor, and James P. Winchester & Francis N. Buck, Receivers.
New Castle County,
September Term, 1894.
Mortgage. Affidavit of Defence.—In a scire facias on a mortgage begun by leave óf the Federal Court, against a corporation for which it had appointed re ceivers, an affidavit setting up as a defence the legal inability of the corporation to pay an instalment because its assets had been taken out of its possession and control by virtue of the receivership, is insufficient.
This was scire facias on a mortgage given by the Walton & Whann Co. to the plaintiff, payable in instalments, one of which was due and unpaid, and with a defaulting clause.
The plaintiff filed an affidavit of demand with an abstract of the mortgage, and a duly verified copy of a decree or order of the Circuit Court of the United States for the District of Delaware, setting forth that the plaintiff, upon its petition, was authorized and permitted to institute suit, in the Superior Court of the State of Delaware, upon this mortgage, and make the said Walton & Whann Company and James P. Winchester and Francis FT. Buck, the receivers, parties defendant; and to proceed therein to judgment, execution and sale of the mortgaged premises.
An affidavit of defence was filed, setting forth that “ until after the appointment and qualification of the receivers of the said Walton & Whann Company, only one payment became due upon the said mortgage, to wit, semi-annual interest upon the principal sum of forty thousand dollars secured thereby,” which “ was duly paid.” It was further alleged that upon the petition of a creditor, James P. Winchester and Francis N. Buck were appointed receivers and qualified as such, and entered into exclusive possession of all the proper effects, real and personal, of the Walton & Whann Co., on the eighth day of June 1894, and before any further payment on said mortgage was due, which made it legally and actually impossible for the said Walton & Whann Co. to make any payment, and the said receivers were wholly without power or authority to make the payment; that the defendant company possessed ample means to meet the payments falling due and would have fully and duly paid the same if the Circuit Court had not, by its action as above stated, prevented the company f$om so doing.
The affidavit further set forth that while the Circuit Court had permitted and authorized the plaintiff to institute and prosecute this suit, there had never been any judicial ascertainment or determination of the amount of money, if any, due and payable upon said mortgage, or of the existence of any right of action thereon. The defendant admitted that the payment of five thousand dollars and interest was due, but insisted that the residue of thirty-five thousand dollars was not due and payable by reason of the non-payment of the instalment of five thousand dollars, under the circumstances and for the reasons stated in the affidavit of defence.
W. C. Spruance, for the plaintiff,
moved for judgment, notwithstanding the affidavit of defence. He contended that a mortgage was a contract, and that it was not by reason of a forfeiture that the whole amount was due, but by the agreement of the parties. Ferris vs. Ferris, 28 Barb. 29 ; Hale’s Receivers vs. Gouverneur, 4 Edw. Ch. 207 ; Mowbray vs. Leckie , 42 Md. 474.
If it were a forfeiture no court of law could afford relief.
This corporation was not dissolved and the Circuit Court cannot dissolve it. It is an existing corporation and liable to be sued. The Circuit Court expressly recognized the right to sue it by the permission granted.
The plaintiff was not responsible for the insolvency of the defendant company, on account of which the receiver was appointed.
If there is any defence in this case, it is an equitable one, and the statute says it must be a legal defence.
E. G. Bradford, for the defendants.
The defence set up may not be a legal defence, but it does not follow that it may not be a complete defence; Tallman vs. Whittaker, 2 Houst. 72. And whenever the Court entertains a doubt, it will let the case go to issue and trial. In this case, however, it would seem, possible to satisfy the Court beyond a doubt. This is a clear case of prevention by law. Here the law steps in and suspends the animation of the defendant company. It makes it impossible for the company to touch a single dollar owned by it. Where the performance-is prevented by act of God, the law, or the obligee himself, the obligation is saved. Com. Dig. 92, Condition D. 1; id. 95; 1 Bac. Abr. 434, Condition Q,. 2; Dougherty vs. Neal, 1 Wms. Saund. 216 n. 2; Leake, Cont, 702, 703, 710, 711; Stevens vs. Vaughn, 20 Am. Dec. 216; People vs. Manning, 8 Cow. 296; Badlam vs. Tucker, 1 Pick. 284; Com vs. Webster, 1 Bush 616; Belding vs. State, 25 Ark. 315 ; Conley vs. Griffin, 3 Harring. 333 ; Brown vs. Mayor of London, 99 E. C. L. 726 ; Caleb vs. Harmon,. 23 N. Y. 148; Blake vs. Niles, 13 N. H. 459; People vs. Tubbs, 37 N. Y. 586; In re James, 18 Fed. Rep. 853; Wolf vs. Howes,. 24 Barb. 174; Jones vs. Judd, 4 N. Y. 411; Ball vs. Liney, 44 Barb. 505; People vs. Globe Mut. Life Ins. Co., 91 N. Y. 174.

Opinion:
Per Curiam.
The motion is granted, and judgment will be entered, in favor of the plaintiff, notwithstanding the affidavit of defence.