Court Opinion

ID: 6311703
Source: CourtListenerOpinion
Date Created: 2022-02-18 20:16:19.426532+00
Date Added: 2024-06-11T08:59:05.873022
License: Public Domain

The opinion of the Court was delivered by
Sergeant, J.
The character of this instrument cannot admit of dispute. It is not, as in Friedly v. Hamilton, 17 Serg. & Rawle 70, a deed absolute on its face, and made a mortgage by a defeasance not recorded, but is, in its terms, a mortgage. The contents of the articles of agreement, if inserted at length, woirld not render the instrument more conditional in its character. The only-doubt as to its validity, is, whether the omission to record the articles renders it null as to subsequent lien creditors. Though there have been some doubts entertained of the effect of a mortgage to secure the mortgagee against debts or responsibilities not then incurred, and therefore not appeariug of record, yet the case of Lyle v. Duncomb, 5 Binn. 585, is a decisive authority as to the validity of such arrangement; and it seems to be settled, by the cases cited 4 Kent’s Com. 175, that the law is, that a mortgage or judgment may be taken and held as a security for future advances and responsibilities to the extent of it, when this is a constituent part of the original agreement; and the future advances will be covered by the lien, in preference to the claim under a junior intervening incumbrance with notice of the agreement. A mortgage is always good to secure future loans when there is no intervening equity. It is necessary that the agreement, as contained in the record of the hen, should give all the requisite information of the extent and certainty of the contract, so that a junior creditor may, by inspection of the record, and by common prudence and ordinary diligence, ascertain the extent of the incumbrance. Here the record contained notice of the articles and a judgment creditor could, by inquiry, ascertain these terms and understand the extent to which the incumbrance went, and has no equity against the mortgagee, as to claims subsisting when the lien of his judgment attached.
But what was the extent to which the goods to be furnished by the mortgagee were covered by. the mortgage? I think it clear *60that it was limited to the 1st of April 1833. For all sums over 1200 dollars, the payments were to be made before that túne; and for the 1200 dollars, the credit was only "until the 1st of April 1833,” when, it would seem, their transactions were to close.
The plaintiffs are, therefore, entitled to judgment for the amount of goods sold, prior to the 1st of April 1833, (stated to be 1283 dollars 15 cents,) with interest from that date, to the sheriff’s sale.
Decree of the court below reversed, and judgment for the plaintiffs accordingly.