Court Opinion

ID: 3555920
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:06:57.516192+00
Date Added: 2024-06-11T14:06:47.995882
License: Public Domain

Unless the Brick Company were authorized to mortgage after-acquired property by chapter 66, Laws 1901, the plaintiffs cannot recover. Pierce v. Emery, 32 N.H. 484. If foreign corporations are included within the operation of this statute (In re Prime, 136 N.Y. 347), it will be unnecessary to decide whether the rule, that when a mortgage of after-acquired property is in all other respects valid equity will sustain it as against the mortgagors and all those claiming through them who either knew or ought to have known of the mortgage when their cause of action accrued, — the rule for which the plaintiffs contend (Holroyd v. Marshall, 10 H. L. Cas. 191; Mitchell v. Winslow, 2 Sto. 630), — prevails in this jurisdiction (Pierce v. Emery, 32 N.H. 484, 506), for under such a construction of the statute, at the time the mortgage was made the Brick Company would be authorized by statute to mortgage after-acquired property. So, in that view of the law, if the parties had wished they could legally have included within the operation of the mortgage in question, not only any wood and bricks then on hand, but also any they should acquire while the mortgage was in force; and it would be valid, not only against the mortgagors and those claiming through them with notice of the mortgage, but also against all the world if the mortgage were properly recorded. Consequently, conceding the plaintiff's contentions to be sound on these points, this mortgage would be valid in so far as the defendant creditors are concerned, even if the parties intended that it should cover all the wood and bricks that the mortgagors should subsequently acquire, unless it is voidable for other reasons.
But a mortgage of personal property is invalid as to subsequent attaching creditors when there is an understanding between the parties, either at the time the mortgage is made (Wilson v. Sullivan, 58 N.H. 260) or later (Putnam v. Osgood, 52 N.H. 148), that until there is a default the mortgagors shall retain possession of the mortgaged property and use it or dispose of it for their own benefit without accounting to the mortgagees for the proceeds. Hodgdon v. Libby, 69 N.H. 136; Wilson v. Sullivan,58 N.H. 260; Putnam v. Osgood, 52 N.H. 148; S.C., 51 N.H. 192; Coolidge v. Melvin, 42 N.H. 510; Ranlett v. Blodgett, 17 N.H. 298. This is also the rule in most of the states. See 5 Am.  Eng. Enc. Law 995, and 6 Cyc. 1104-1120, where the authorities are collated. If it is true, as the plaintiffs contend, that the weight of authority is opposed to this rule, and that the reasons which have been given for sustaining it are illogical or even absurd, it is a sufficient answer to say that the rule is "too firmly established in our jurisprudence to be reversed by judicial action." Thompson v. Esty, 69 N.H. 55, 63; Hodgdon v. Libby, *Page 494 69 N.H. 136; Mandigo v. Healey, 69 N.H. 94; Sanborn v. Wilder, 68 N.H. 471; Janelle v. Denoncour, 68 N.H. 1; Watkins v. Arms, 64 N.H. 99; Stratton v. Putney, 63 N.H. 577; Parsons v. Hatch, 63 N.H. 343; Gerrish v. Gerrish,63 N.H. 128; McDonough v. Prescott, 62 N.H. 600; Sanborn v. Putnam,61 N.H. 506; Parker v. Marvell, 60 N.H. 30; Tilton v. Sanborn, 59 N.H. 290; Flagg v. Pierce, 58 N.H. 348; Plaisted v. Holmes, 58 N.H. 293; S.C.,58 N.H. 619; Cutting v. Jackson, 56 N.H. 253; Lang v. Stockwell,55 N.H. 561; Carter v. Grimshaw, 49 N.H. 100; Shaw v. Thompson,43 N.H. 130; Clapp v. Rogers, 38 N.H. 435; Ladd v. Wiggin, 35 N.H. 421; Kendall v. Fitts, 22 N.H. 1; Low v. Carter, 21 N.H. 433; Seavy v. Dearborn,19 N.H. 351; Morse v. Powers, 17 N.H. 286; Towle v. Hoit, 14 N.H. 61; McConihe v. Sawyer, 12 N.H. 396; Boardman v. Cushing, 12 N.H. 105; Clark v. Morse, 10 N.H. 236; Tifft v. Walker, 10 N.H. 150; Page v. Carpenter,10 N.H. 77; Winkley v. Hill, 9 N.H. 31; Paul v. Crooker, 8 N.H. 288; Smith v. Lowell, 6 N.H. 67; Trask v. Bowers, 4 N.H. 309; Parker v. Pattee,4 N.H. 176; Coburn v. Pickering, 3 N.H. 415.
Does this rule apply to after-acquired property mortgaged by virtue of the power given by the act of 1901?  If it does, it will not be necessary to decide whether the parties intended the mortgage to cover the wood and bricks, for if they did it would be void as to these defendants. The legislative intent is expressed very briefly: "Any corporation making a mortgage of its property and franchises to secure its bonded or other indebtedness may include therein property and franchises it may thereafter acquire." Laws 1901, c. 66. There is in this no apparent purpose to permit manufacturing and trading corporations to mortgage after-acquired property in a way they could not mortgage property in their possession. If that had been the legislative intent, it is very probable apt words would have been used to express it. The words of this act are not such as the legislature would be expected to use if they intended to give the right to make a mortgage of after-acquired property which would be invalid if it covered property in possession, but are such as they would be expected to use if it was intended that mortgages of both classes of property should stand alike. The mere fact that the statute gives corporations the right to mortgage after-acquired property does not give them the right to dispose of it after it has been mortgaged, for their own benefit.
Case discharged.
All concurred. *Page 495