Court Opinion

ID: 6312796
Source: CourtListenerOpinion
Date Created: 2022-02-18 20:17:49.347225+00
Date Added: 2024-06-11T08:59:08.268089
License: Public Domain

The opinion of the Court was delivered by
Kennedy, J.
The only question in this case is, whether the defendant in error became invested, by virtue of the mortgage, with a right to the buildings and improvements therein described and transferred to him, so as to give him a lien thereon, at least, for the payment of his debt. It is objected, on the part of the plaintiffs in error, that a transmutation of the possession of the mortgaged premises did not accompany the transfer thereof under the mortgage to the mortgagee; and the property mortgaged being of a personal character, the mortgage or transfer of it is therefore void, at least as against them, they having become, since the giving of the mortgage, assignees of all the property of the mortgagors, by a deed of assignment from them, in trust for the benefit *149of their creditors. In order to render a mortgage or sale of personal property valid, as against the creditors of the mortgagor or vendor, it is true, in general, that a corresponding change of the possession thereof must accompany the same. But if such change of the possession be impracticable, it must be dispensed with, for the law never requires that which is impossible. In the present instance, it appears that the mortgagors had an interest in the premises mortgaged by them, equal to their value, and that they were regarded quasi the owners thereof. But the buildings and improvements mortgaged were affixed to real estate, or lots of ground, of which the mortgagors had only a lease from year to year from the owner thereof, which not only restrained them from assigning or letting their interest in the lots under the lease without the consent of the lessor, but likewise restrained them from removing or detaching the said buildings and improvements thereon upon any terms whatever. But in lieu of the right to remove the buildings and improvements from the lots upon which they were erected, they had a right, under the agreement of the lessor contained in the lease, on the lease’s being put an end to, to demand and receive from the lessor a price for the same, to be fixed by appraisers, to be mutually chosen by the lessor and the lessees for that purpose. It is perfectly obvious, therefore, that actual possession of the premises or property mortgaged could not have been delivered by the mortgagors to the mortgagee, without putting the latter also in the possession of the lots upon which the premises mortgaged were placed. But the mortgagors were restrained by the terms of their lease from doing this, as it would have been parting with their right to the possession of the lots. All, therefore, that was practicable, seems to have been done by the mortgagors for the purpose of vesting their right in the buildings and improvements on the lots in the mortgagee, and charging the same with the payment of the debt owing by them to him. That such a charge exists, as between the mortgagors and mortgagee, is not, and indeed cannot well be denied. And as to the plaintiffs in error, they are not execution-creditors, who can claim, on that ground, to be preferred to the mortgagee, because he did not take or obtain actual possession of the property mortgaged to him. They are merely assignees of the mortgagors, in trust for the benefit of the creditors of the latter, and have no rights which could not be set up by the creditors themselves, whom they represent. But the defendant in error, the mortgagee, is also a creditor of the mortgagors, and, as such, his claim is therefore equally meritorious with those of the other creditors, more particularly represented by the plaintiffs in error. But the mortgage, which is a special assignment in his favour, made for the purpose of securing the payment of his debt, being executed anterior to the general assignment under which the plaintiffs in error claim, gives to the defendant in error a prior right, in equity at least, if not in *150law, to whatever is contained in the mortgage, and was thereby-intended to be passed to him as a security for the payment of his debt.
Judgment affirmed.