Am. Soda Fountain Co. v. Stolzenbach

• Decision Date: 02 March 1908
• Citation: 68 A. 1078,75 N.J.L. 721
• Parties: AMERICAN SODA FOUNTAIN CO. v. STOLZENBACH.
• Court: New Jersey Supreme Court

68 A. 1078

75 N.J.L. 721

AMERICAN SODA FOUNTAIN CO.

v. STOLZENBACH.

Court of Errors and Appeals of New Jersey.

March 2, 1908.

(Syllabus by the Court.)

Error to Circuit Court, Atlantic County.

Replevin by the American Soda Fountain Company against William F. Stolzenbach. Judgment for defendant, and plaintiff brings error. Reversed, and judgment in the court below ordered for plaintiff.

Thompson & Cole, for plaintiff in error. William M. Clevenger, for defendant in error.

DILL, J. The American Soda Fountain Co., a New Jersey corporation, sold a fountain to one Brownley, who gave his notes therefor to the company, secured by a chattel mortgage upon the property, which was duly recorded. Subsequently, a judgment creditor of the mortgagor seized the property in the mortgagor's possession. The American Soda Fountain Company thereupon instituted an action in replevin, in which the defendant claimed title under a judgment, execution, and sheriff's sale; the company, in opposition to this claim, relying upon its chattel mortgage. The case was tried upon stipulated facts on the theory that, if the affidavit to the chattel mortgage complied with the statute, title was in the mortgagee, the plaintiff in error here. The affidavit was as follows:

"County of Philadelphia, State of Pennsylvania—ss.:

"Alfred H. Lippincott, of full age, being duly affirmed according to law, saith that he is vice president of American Soda Fountain Co., the mortgagee named in the foregoing chattel mortgage; that the true consideration thereof is for one 20 Syrup 6 Draught 'Fenrose' soda water apparatus with mahogany top and fountains, one cherry refrigerator, one 6 ft. oak sink and sundries, and that the amount due and to grow due thereon is the sum of two thousand two hundred and twenty-seven dollars, with interest on the same from the 1st day of August, A. D. 1901, which constitutes its interest in the goods and chattels mentioned in the schedule thereunto annexed.

"A. H. Lippincott, Vice President.

"Affirmed and subscribed to before me this twenty-third day of October, 1901.

'Daniel S. Mann,

"Commissioner of Deeds for New Jersey."

Admittedly the mortgage in question is void as to the defendant in error unless it had "annexed thereto an affidavit or affirmation made and subscribed by the holder of said mortgage, his agent or attorney, stating the consideration of said mortgage, and as nearly as possible the amount due and to grow due thereon." Chattel Mortgage Act, § 4 (P. L. 1902, p. 487). The court below held the mortgage void as to creditors, on the ground (1) that this affidavit did not state the true consideration; and (2) because it was verified by the vice president, as such, and did not recite that he was the agent or attorney of the company and specifically authorized to make it. As to each of these grounds we think the decision of the trial judge was erroneous.

In the absence of fraud, instruments so common in the course of commercial transactions by the laity should be sustained whenever there is an honest and substantial compliance with the statute. Criticisms directed to matters of artifice rather than to those of substance ought not to prevail. Kelly v. Calhoun, 95 U. S. 710, 24 L. Ed. 544. As to the consideration, the criticism is that the affidavit states that the consideration was the property, whereas it should have stated that it was the price of the property. This objection is, we think, captious, and does not go to the substance of the transaction stated. Strictly speaking, the consideration was neither the property nor the price, but was "the delivery of the apparatus with the right to acquire title." American Soda Fountain Co. v. Vaughn, 09 N. J. Law, 582, 55 Atl. 54. The statement of the affidavit, while not artificially beyond criticism, is a substantial compliance with the statute. A similar question was before this court in 1891, as to whether the consideration was truly stated in an affidavit upon which a judgment by confession had been entered. The statute there under review was quite similar in purpose and intent to the section of the chattel mortgage act before us. The facts were that, upon a sale of lumber, the vendee had given certain notes secured by a bond with a warrant to enter judgment thereon by confession. The affidavit on which the judgment was entered, which stated that the consideration of the bond was lumber, was held good, Mr. Justice Garrison, in the circuit court, saying: "If the affidavit state the consideration by giving truthfully the substance of the transaction, a judgment entered for an honest demand for an actual indebtedness, and without fraudulent purpose, will not be open to the attack of other creditors merely because the affidavit is inartificially drawn;" This case, which was affirmed upon the opinion of Justice Garrison in the court below (Strong v. Gaskill [N. T. Err. & App.] 59 Atl. 339), is in principle directly opposed to the contention of the defendant in error. The affidavit before us is in like sense a substantial compliance with the statutory requirement. Douglass v. Williams (N. J. Ch.) 48 Atl. 222; Camden Safe Deposit Co. v. Burlington Carpet Co. (N. J. Ch.) 33 Atl. 479.

The second ground of attack of the defendant in error rests on two premises: The first, that when a statutory affidavit is made by an agent or by an attorney specially appointed the affidavit must demonstrate by recitation that the affiant is in fact such agent or attorney, is duly appointed, and that, in the making of the affidavit, he is acting within the scope of his authority; the second, that a corporation cannot make such an affidavit per se, but only per alium by an agent or by an attorney. Resting upon these premises the defendant in error urges that the affidavit of consideration in this case, reciting that the affiant is the vice president of the corporation, the holder of the mortgage, is a nullity, and that therefore the mortgage is void as against creditors. His points are (1) that the vice president as such virtute officii has no authority prima facie to act for the corporation in this matter—in other words, that our corporation statute does not in express terms name the vice president as a statutory officer, and does not define his powers; (2) the first proposition being correct, that the affidavit of an officer comes within the rule above cited as to the requisites of an affidavit by an attorney or agent, and should have set forth that the affiant was the agent or attorney of the corporation, was duly appointed, and was acting under corporate authority. Assuming, but not deciding, that the requirements as to an affidavit made by an attorney or agent are as stated in the first premise, if the effect of the statute under consideration was to limit the class of persons by whom the affidavit might be made to agents and attorneys of the holder, there would be more force in the criticism of the defendant in error. On the contrary, the statute specifically provides that the affidavit is to be made by the "holder" of the mortgage, adding in the alternative "his agent or attorney." Inasmuch as a corporation may be a holder of a chattel mortgage, a judicial decision that as such holder it may make the affidavit only by an agent or attorney specially appointed would rest either upon the denial of the right of a corporation to be a holder within the meaning of and entitled to the benefits of the statute, or else upon the assumed right of the court to nullify one of the three modes by which the Legislature has allowed the affidavit to be made. There is, however, no necessity for assuming either of these untenable positions. A corporation may be a holder of a chattel mortgage, and may make this statutory affidavit, as such holder, through its administrative officers, or it may make it by a duly authorized agent or by its attorney. The fallacy of the argument of the defendant in error is that it fails to note the distinction between a corporate act, performed through the intermediation of a person specially empowered to act as its agent or its attorney, and a like act done immediately by the corporation through its own administrative officers—its inherent agencies. The right of an artificial person to empower and employ agents or attorneys is identical with that of a natural person—each is governed alike by the law of principal and agent. The fundamental difference between the natural and the artificial person is that the latter, even when not acting as a principal through the intermediation of an agent, acts through some agency, inherent in its corporate form. Normally, such agency inheres in the natural persons who hold and administer the offices of the corporation. The analogy of a natural body having a head and members holds good in the case of the artificial body, the common and declared law recognizing that the officers are the means, the bands, the head, by which corporations normally act. Bank of Toronto v. McDougall, 15 U. C. C. P. 475, 482. The very word "officer" has this precise meaning. Webster gives the etymology of the word as "ops," help, and "facere," to do or make. Hence, when a corporation does not go outside of its corporate machinery and capacity in doing a corporate act, it is a confusion of terms and of ideas to say that it is acting through an agent when the fact is that it is acting through an agency, and in chief. This distinction is not merely verbal and hence trivial, but, on the contrary, marks the wide difference that exists between acting for oneself by an inherent faculty and the employment of another person to act for one and in one's stead. In this, as in all cases, loose terminology implies and conduces to loose reasoning. The maxim "qui facit per alium facit per se" requires and should be applied only when the agent—the alius—is not the principal acting for himself. That a corporation does and may so act was expressly declared by Chief Justice...