Court Opinion

ID: 6949865
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:30:09.093634+00
Date Added: 2024-06-11T16:08:02.630865
License: Public Domain

Breese, J. There can be no just pretense of a partnership-in this case, for the complainant positively disclaims it in his bill of complaint. The' case must stand on other grounds-. There would be little diEculty about it, had the mortgage set up in the bill been acknowledged before a district justice of the peace, and recorded in the clerk’s oEce, as the chattel mortgage act requires. We have examined, with great care, all-the cases to which reference has been made on both sides, and we are by no means satisfied that a party cannot mortgage property to be acquired after the execution of the mortgage, provided the mortgage deed is properly executed, acknowledged and recorded, or possession taken of the property before any lien has attached; and that a court of equity will protect the mortgagee where the transaction is fair and honest. The case of Langton v. Horton, 1 Hare, (23 Eng. Ch. R. 550,) is a strong case in support of the latter position. This was the mortgage of a ship at sea, with her tackle and appurtenances, and all oil; head matter, and other cargo, which might be caught or brought home in such ship. The ship was on her voyage at the time of the assignment ; the parties sent notice of the assignment to the master of the ship, and the master delivered up possession of the ship and cargo to the mortgagees immediately after her return from the voyage. The Vice Chancellor, Sir James Wigram, held, that the equitable title of the mortgagees to the cargo was perfected, and could not be defeated by a judgment creditor of the mortgagor, who afterwards sued out & fi.fa., and proceeded to take the ship and cargo in execution. The Vice Chancellor uses this strong language in giving his opinion: “ It is impossible to doubt, for some purposes at least, that by contract, an interest in a thing not in existence at the time of the contract, may, in equity, become the property of a purchaser for value: A tenant, for example, contracts that particular things which shall be on the property when the term of his occupation expires, shall be the property of the lessor at a certain price, or at a price to be determined in a certain manner. And so of contracts relating to mines. He refers to the case of the ship Wane, 8 Price, 269, and Curtis v. Auber, 1 Jacob and Walker, 526, decided by Lord Eldon, as establishing the proposition, that non-existing property may be the subject of a valid assignment. There is -reason and good sense in this; and Mr. Justice Story relies with much confidence upon this case, in deciding the case of Mitchell v. Winslow et al., 2 Story, 630, in which he reviews all the authorities. He says: “ It seems to me a clear result of all the authorities, that wherever the parties by their contract intend to create a positive lien or charge either upon real or personal property, whether then owned by the assignor or contractor, or not, or if personal property, whether it is then in esse or not, it attaches in equity, as a lien or charge upon the particular property, as soon as the assignor or contractor acquires a title thereto, against the latter, and all persons asserting a claim thereto under him, either voluntarily, or with notice, or in bankruptcy.” . In Forman v. Proctor, and Wood, etc., v. Proctor, 9 B. Monroe, 121, it was held that the interest of a party, in property which he may perfect by the performance of an executory contract, may, in chancery, be the subject of a mortgage or attachment, and if that be in relation to live stock, its natural increase and produce become subject to the mortgage. The cases from Massachusetts, especially that of Moody v. Wright, 13 Metcalf, 32, seem to militate against these, but the doctrine of these cases seems a reasonable doctrine, and fit to be recognized by this court. We see nothing in it in conflict with any of the provisions of our chattel mortgage act, or with its spirit and object. Unfortunately for the complainant, however, his case does not come within their principles—his mortgage was not recorded, and he cannot, therefore, hold the property against the execution. A stipulation that future-acquired property shall be holden as security for some present engagement, is an executory agreement, of such a character that the creditor with whom it is made, may, under it, take .the property into his possession when it comes into existence, and hold it for his security, and is a proper subject of transfer by his debtor; and whenever he does so take it into his possession, before any attachment or other lien has been made of the same, or any alienation thereof, such creditor, under his executory agreement, may hold the same; but until such an act done by him, he has no title to the same; and that such act being done, and the possession thus acquired, the executory agreement of the debtor authorizing it, it will then become holden by virtue of a valid lien or pledge. Per Dewey, J., delivering the opinion in the case of Moody v. Wright, 13 Pick. 32. The case of Frost v. Willand, 9 Barbour, 449, to which complainant’s counsel has specially referred us, is a strong case, to show that even at law a mortgage of articles to be thereafter manufactured, wül be upheld, and the mortgagee protected. The public good requires that contracts of this kind should be supported. When a manufacturer is unable to prosecute his business without aid from others, the industry of the country may be materially promoted by allowing him to pledge his future earnings to those who will make advances to him. In this case, however, the plaintiffs obtained the actual possession of the barrels as they were manufactured. The defect in the case at bar is, that the mortgage was not recorded, nor was possession taken of the hogs. The demurrer to the bill having been to the merits, and in bar, the decree overruling it, is reversed, and the bill must necessarily be dismissed. Separate opinion by Walker, J. While I fully concur in the decision in this case, I am clearly of the opinion that this mortgage contravenes both the letter and spirit of the chattel mortgage law. That in equity no lien could attach as against third persons, until the property had been acquired by the mortgagors, and had also been reduced to possession by the mortgagee, and that a levy of an execution, intervening the purchase by mortgagors, and the acquisition of its possession by the mortgagee, should hold it free from the mortgage, it being fraudulent as against creditors, and the statute not having been complied with in its execution. Catón, C. J. I concur in the above views. Bill dismissed.