Blanchard v. Cooke

Decision Date23 March 1887
Citation11 N.E. 83,144 Mass. 207
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

A.J. Bartholomew and F.P. Goulding, for plaintiff.

The assignee was only the representative of the defendant Cooke taking the same and no better right than Cooke then had; and he, moreover, waived all objections to the proceedings in this suit previous to his being admitted as a party, and accepted the position as a defendant in the case as it then stood. The court therefore ruled correctly that the evidence offered by Staples was not competent. The court correctly ruled that, as the case then stood, the only point open to the assignee was as to the division of the fund in the hands of the clerk. The court correctly ruled that the plaintiff could hold, under the contract, after-acquired goods. The general object of the provision of the contract relating to the future title was to secure Blanchard for the purchase money. The presumption would be that the security would be commensurate with the debt. As to this provision Cooke was the covenantor, whose deed is to be construed more strongly against himself. If there is therefore any want of harmony between different clauses of the provision, that clause which squints towards the defendant's view must yield. We submit that throughout all of the parts of this provision the parties had in contemplation only the view that the goods would at all times equal or exceed the debt then due. In that view, the first part of the provision means that the title shall vest in Cooke as to any goods in excess of the amount of the debt due at any time. The principal proposition of the first part of this provision is that the whole title shall vest in Blanchard for his security till his debt is paid. The subordinate proposition was not intended to destroy, but to explain, the first, and is to be construed if possible, so as to preserve the principal proposition. The second part states what the fractional part of Blanchard is to be in terms which establish the construction we contend for. The fractional part has a certain relation, or bears a certain ratio, to the debt at any time unpaid. The relation or ratio is the relation of equality. The fractional part of Blanchard is to be equal to his debt. The scrivener was contemplating only the contingency of the property being at all times in excess of the amount due. Blanchard is to hold all the insurance money to the extent of his debt, paying only the balance to Cooke. Ball v. Wyeth, 8 Allen, 278.

J.J. Myers, for defendant.

Even though this contract be regarded as a conditional sale as to all the goods originally sold by Blanchard to Cooke, it is clear, both on principle and authority, that, giving it the most favorable construction possible for the plaintiff, it is in effect an unrecorded mortgage of property to be afterwards acquired by Cooke, as to all goods purchased by Cooke from other parties after the contract was made. Wilson v. Russell, 136 Mass. 211; Moody v. Wright, 13 Metc. 17.

The assignee should have been allowed to introduce evidence showing that there was no breach of the contract by Cooke on or before November 28, 1884. Gallup v. Robinson, 11 Gray, 20, 25. Even if it be held that the assignee was not entitled at the hearing to have any question reopened which had been found against Cooke by the decree taking the bill pro confesso, he certainly was entitled to be heard upon the merits as to all these questions on which, as representing the creditors of Cooke, he had rights outside of and beyond those in which he merely stood in the place of Cooke. He was therefore entitled to show that there had never been any delivery by Cooke of any part of the goods in question, and the judge's refusal to admit any evidence on this point is a good ground of exception. This contract being, as to this large amount of after-acquired property, at most only an unrecorded mortgage, it is plainly within the statute requiring delivery of the mortgaged property in order to render it valid against any person other than the parties thereto. St.Mass. 1883, c. 73, §§ 1, 2.

Upon the point that the assignee in insolvency of the mortgagor of personal property, where the mortgage was not recorded, and the property was not delivered, is not "a party" to the mortgage within the meaning of the statute, the law is settled in this commonwealth by the case of Bingham v. Jordan, 1 Allen, 373. In this commonwealth it is settled, both at law and in equity, that a mortgage of after-acquired property does not pass the title to the property unless possession thereof be given, or some further assurance or ratification be made, or some equivalent act done, by the mortgagor after the property comes into the hands of the mortgagor; but, if the mortgage contains a provision for the mortgagee's taking possession, then, upon breach, he may do so, and thereby acquire title; and in the contract in question there is no limit of any such provision. Jones v. Richardson, 10 Metc. 481; Moody v. Wright, 13 Metc. 17, 32; Barnard v. Eaton, 2 Cush. 303; Chesley v. Josselyn, 7 Gray, 490; Pettis v. Kellogg, 7 Cush. 456, 461. The assignee, as hereinbefore shown, not being a "party" within the meaning of the statute (1883, c. 73, § 2) requiring delivery of goods covered by an unrecorded mortgage, and the allegations of the bill clearly establishing that there was no delivery such as the statute requires, the ruling asked for should have been given.

In the case of a mortgage of after-acquired property, which contains a clause empowering the mortgagee to take possession in case of a default, the cases hold that he may do so in pursuance of that power, and that no assent or ratification or further assurance is necessary by the mortgagor. Wilson v. Russell, 136 Mass. 211; Chase v. Denny, 130 Mass. 566; Rowley v. Rice, 11 Metc. 211. But, in the absence of such authority in the mortgage, possession must be given, or some further act of ratification must be made, by the mortgagor after he acquires the goods. Otherwise the property can be held against attaching creditors or an assignee in insolvency of the mortgagor. The judge should therefore have ruled as requested. Jones v. Richardson, supra; Moody v. Wright, supra. And after the first publication of notice of the filing of the petition in the insolvency proceedings against Cooke, no action taken in this case, the assignee not being in, could effect the rights of the assignee, which related back to the time of the first publication. Butler v. Mullen, 100 Mass. 453; Judd v. Ives, 4 Metc. 401; Clarke v. Minot, Id. 346; Edwards v. Sumner, 4 Cush. 393, 395; Gallup v. Robinson, 11 Gray, 20; Pub.St. c. 157, § 46. See Levy v. Welsh, 2 Edw.Ch. 438.



The procedure in this case suggests some interesting questions of practice which have not been argued, but we have considered only the questions which have been argued, and the matters involved in them. We assume that it was within the power of the superior court to admit the assignee as a party at the time when, and in the manner in which, he was admitted. We assume, too, that the court could modify the original decree according to the facts established at the final hearing. The defendant Cooke, having appeared, and the bill having been taken as confessed against him for want of answer, had still the right to be heard upon the form of the decree, and to appeal from it. Whether, if the bill was not so definite, or was not of such a nature that a decree could be entered upon it without hearing evidence, Cooke could, after the bill was taken for confessed against him, appear and controvert the evidence offered by the plaintiff, need not be determined; for there is nothing in the record or report indicating that any such right was claimed by him. It is plain that the assignee in insolvency, after Cooke became an insolvent debtor, had an interest in the suit, as the assignment vested in the assignee not only all the property of Cooke which he could "have lawfully sold or conveyed," but also all property "which might have been taken on execution upon a judgment against him." Pub.St. c. 157, § 46; Bingham v. Jordan, 1 Allen, 373.

The superior court, on being informed of Cooke's insolvency and the appointment of an assignee, should have required the assignee to be summoned in and made a party, unless he voluntarily appeared. The error in this respect was, however ultimately cured by the admission of the assignee as a party. The assignee was admitted for the purpose of trying the cause upon its merits. Although the court had refused to vacate the final decree against Cooke, or the decree taking the bill for confessed against him, still the assignee, so far as his interest was concerned, was entitled to try the case upon the merits involved in the issue joined upon his answer, in the same manner as if he had appeared in the suit before these decrees against Cooke were entered. The assignee did not take merely the defendant Cooke's title pendente lite. He took all the property which was the subject-matter of the suit on which an execution against Cooke could lawfully have been levied, or which he could lawfully have conveyed at the time the assignment in insolvency took effect, and his position in the case might be adverse to that of the insolvent debtor. If it be assumed, which is not clear, that the frame of the bill is such that, on a decree taking it for confessed against Cooke, a decree could be entered that the plaintiff recover any money of Cooke personally on which an execution could issue against his body or estate, the amount would necessarily depend upon the amount of the whole indebtedness of Cooke to the plaintiff under the contract, after deducting...

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