Bruck v. Credit Corp.

• Citation: 3 N.J. 401,70 A.2d 496
• Decision Date: 09 January 1950
• Docket Number: No. A--55,A--55
• Parties: BRUCK v. CREDIT CORPORATION.
• Court: United States State Supreme Court (New Jersey)

Page 401

3 N.J. 401

70 A.2d 496

BRUCK v. CREDIT CORPORATION.

No. A--55.

Supreme Court of New Jersey.

Argued Dec. 5, 1949.

Decided Jan. 9, 1950.

Abe W. Wasserman, Newark, argued the cause for the appellant. Harry G. Cohen, Newark, attorney.

Charles Blume, Newark, argued the cause for the respondent.

The opinion of the court was delivered by

BURLING, J.

This is an appeal from a judgment of the Superior Court, Appellate Division, reversing a judgment of the Superior Court, Chancery Division. Certification was granted on the petition of the plaintiff.

The litigation stems from certain chattel mortgage transactions between Marlowe Motors, Inc., which was engaged as a dealer in new and used automobiles, and the defendant, an automobile finance company. At the time of the mortgage transactions, each of said corporations had its principal place of business in Essex County, New Jersey.

In March, 1947, Marlowe Motors, Inc., as mortgagor, and the defendant, as mortgagee, executed and recorded a statement that thereafter 'the mortgagor may execute and the mortgagee may accept a series of chattel mortgage transactions arising out of the business of the mortgagor,' in accordance with R.S. 46:28--5.1, N.J.S.A. During the months of March through September, 1947, numerous loans were made by the defendant to Marlowe Motors, Inc., and chattel mortgages were executed as security therefor.

On February 11, 1948, the plaintiff having been appointed as Statutory Receiver of Marlowe Motors, Inc., in a proceeding instituted in the former Court of Chancery on October 14, 1947, filed a complaint in which he attacked the validity of four chattel mortgages executed, pursuant to the foregoing recorded statement, during the months of August and September 1947. The four chattel mortgages under attack had not been recorded but Each was accompanied by an affidavit stating that the consideration therefor was a loan in the specified amount evidenced by a promissory note. The Chancery Division, 2 N.J.Super. 196, 65 A.2d 86, decided that while R.S. 46:28--5.1, N.J.S.A., set up a procedure making it no longer necessary to record chattel mortgages of a type therein delineated, it did not obviate the necessity of affidavits of consideration as required by R.S. 46:28--5, N.J.S.A., and, upon a determination that the affidavits executed by the defendant were legally insufficient, decided that the four chattel mortgages were void.

On appeal, the Appellate Division, 3 N.J.Super. 177, 65 A.2d 852, reversed the judgment of the Chancery Division. The Appellate Division, while indicating that it did not approve the decision of the Chancery Division that the affidavits were insufficient, based its decision upon the ground that R.S. 46:28--5.1, N.J.S.A., not only dispenses with the necessity of recording chattel mortgages of the type therein described but also eliminates the necessity of affidavits of consideration in connection with such chattel mortgages.

The present appeal is by the plaintiff from the latter judgment. The defendant urges In limine that the plaintiff, as a statutory receiver, has no authority to maintain this appeal without direction or leave of court for that purpose and cites Mortgage Security Corporation of New Jersey v. Townsend, 108 N.J.Eq. 268, 154 A. 827 (E. & A.1931) in support of that contention. It is sufficient to say, in disposing of this question of adjective law adversely to the defendant, that the cited case is inapplicable because it involved an initial appeal by the receiver. The initial appeal in the instant case was filed by the defendant to the Appellate Division. We know of no rule which prevents the receiver, under such circumstances, from appealing from the judgment of the latter court. Moreover, certification was granted by this Court permitting the present appeal.

The substantive question requires a construction of R.S. 46:28--5.1, N.J.S.A., and a determination as to whether the statute dispenses with the necessity of affidavits of consideration in conjunction with chattel mortgages executed pursuant thereto. If such determination is in the negative, a further question relating to the adequacy of the affidavits of consideration executed in conjunction with the four chattel mortgages constituting the subject matter of this litigation must be resolved.

R.S. 46:28--5.1, N.J.S.A., source material L.1936, c. 257, is a supplement to R.S. 46:28--5, N.J.S.A., source material L.1902, c. 153, as amended L.1928, c. 61, and provides as follows:

'Whenever the mortgage or instrument mentioned in section 46:28--5 of this title is of goods, merchandise or other chattels acquired or held by a mortgagor engaged in the business of manufacturing processing, storing, shipping or selling of such goods, merchandise or other chattels, it shall not be necessary that the said instruments be recorded as provided for in this article, if prior to the execution and denvery of any such mortgage, or series of mortgages, the proposed mortgagor and mortgagee shall execute under seal and acknowledge a statement which shall set forth the location of the chief place of business of each of the parties, the fact that the mortgagor may execute and the mortgagee may accept a series of chattel mortgage transactions arising out of the business of the mortgagor, and a general description of the type of chattels to be made the subject of such mortgages, which said statement shall be recorded and indexed among chattel mortgages in the same manner as chattel mortgages in the required to be recorded and indexed. No affidavit or affirmation need be annexed to such statement, as otherwise required in this article.

'The holder of any mortgage which may be executed as one of a series of such mortgage transactions shall, within five days of demand in writing made by any person, served upon such holder personally, or by registered mail sent to his chief place of business, as shown by the record, disclose in writing to the person making such demand whether any chattel described in such demand is subject to the lien of any such mortgage. Such disclosure may be made personally to the person demanding the same, or be sent by registered mail to his post-office address as shown in the demand. The demand must contain the date of the statement, the names of the parties thereto, and a description of each chattel concerning which inquiry is made, described in such manner that said chattel may be readily identified, and the post-office address of the person making such demand. Failure to reply to such demand as herein required shall result, in the case of an innocent holder for value, in the forefeiture of any lien under the mortgage which is held at that time by the person upon whom the demand is made. In case such mortgagee has no interest in any such mortgage at the time the demand is made upon him, he must disclose in the manner aforesaid to the person demanding, the name and address of the person who has succeeded to his interest; and a failure to make such disclosure within five days shall in the case of an innocent holder for value, result in the forfeiture of any lien under the mortgage.

'All and every mortgage made, executed and delivered within the period of five years subsequent to the date of the recording of any such statement, shall be valid to the same extent as would be the case if said mortgage had been duly recorded in the manner provided for in this article.'

R.S. 46:28--5, N.J.S.A., which is supplemented by the foregoing statute provides as follows: 'Every mortgage or conveyance intended to operate as a mortgage of goods and chattels, which shall not be accompanied by an immediate delivery and be followed by an actual and continued change of possession of the things mortgaged, shall be absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers and mortgagees in good faith, unless the mortgage, having annexed thereto an affidavit or affirmation, made and subscribed by the holder of such mortgage, his agent or attorney, stating the consideration of such mortgage and, as nearly as possible, the amount due and to become due thereon, be recorded as provided by section 46:28--7 of of this title.'

An analysis of R.S. 46:28--5, N.J.S.A., clearly discloses that two conditions are imposed as requisites to a chattel mortgage's validity as against creditors and subsequent purchasers and mortgagees in good faith, where the mortgage is not accompanied by immediate delivery and continued change of possession of the things mortgaged namely, 1--that there be annexed to said mortgage an affidavit stating the consideration therefor, and 2--that the mortgage be recorded.

The problem of determining the extent to which existing legislation is repealed by subsequent statutes ultimately resolves itself into legislative intent. To reach the legislative intent, the rule of construction is well defined upon which subsequent legislation will operate to repeal prior legislation without an express repealing clause. Where there are two acts on the same subject, the rule is to give effect to both if possible. If the two acts are repugnant in any of their provisions, the later act operates to repeal the earlier to the extent of the repugnancy. The 1936 act, Chapter 257, is entitled as a supplement to the act of 1902 which was a general act relating to chattel mortgages, now found generally in the source material to Revised Statutes Title 46, Chapter 28, N.J.S.A. It calls for a section to be known as section 5a. The source material of R.S. 46:28--5, N.J.S.A., is indicated in the Revised Statutes to be the same act, ...