Collerd v. Tully

• Decision Date: 13 October 1910
• Citation: 77 A. 1079,77 N.J.E. 439
• Parties: COLLERD v. TULLY et al.
• Court: New Jersey Court of Chancery

77 A. 1079

77 N.J.E. 439

COLLERD

v. TULLY et al.

Court of Chancery of New Jersey.

Oct. 13, 1910.

Bill by Amelia E. Collerd against John J. Tully and others. Decree directed.

The bill in this case is filed to foreclose two chattel mortgages, each made by the defendant John J. Tully, and each now owned by the complainant. Each mortgage covered horses, wagons, and harness. One of these mortgages was for $2,000, and was dated December 21, 1890, and contains a clause respecting after-acquired property. It was originally given to Mrs. Ettie C. Wynant and by her assigned to her daughter, and by her daughter assigned to the complainant herein. At the time of the assignment to the complainant $1,000 was due upon this mortgage. The other mortgage was dated December 19, 1905, and was made to Amelia Collerd, the complainant, and was for $1,400. The contest in the case is between the complainant and William H. Brown. Brown is the holder of two judgments against the defendant John J. Tully, upon each of which he claims to have made a levy upon the goods and chattels of Tully claimed by the complainant to be covered by the chattel mortgages held by her. One of the judgments in question was entered on the 11th of October, 1907, in the Hudson county circuit court, for $544.86; and the other on June 25, 1909, in the Supreme Court of New Jersey for $1,959.50. Pending the suit a receiver was appointed-who took into possession and sold all the property in controversy.

James A. Gordon, for complainant.

J. E. Pyle, for defendant Brown.

GARRISON, V. C. (after stating the facts as above). The various questious raised by the defendant Brown are as follows: First. As to the amount due upon the respective mortgages held by the complainant. Second. As to whether the first mortgage covered after-acquired property. Third. Whether either of the mortgages covered the horses sold by Brown to Tully, Brown claiming that the sales were conditional and that the title had not passed. Fourth. As to whether the second mortgage was not ineffective as to Brown because of a defective affidavit. Fifth. If the second mortgage was invalid as to Brown, whether the proceeds of the sale certain horses, on which horses Brown had no levy, should not, as respects Brown, be credited by the complainant on her first mortgage.

The complainant sought to show that Brown had not made levies so as to entitle him to raise the questions he sought to raise.

First. As to the amounts due upon the mortgages for principal.

The complainant admitted payments on the first mortgage to the amount of $525 in addition to, the $1,000 paid before she acquired title thereto, and also admitted the payment of $1,000 on the second mortgage. Brown contended that the $1,000 credited by the complainant on the second mortgage should have been credited upon the first. The controversy arises out of four payments of $50 each made by Tully to the complainant. At the time the first mortgage was assigned to the complainant, the defendant Tully signed a paper which has been admitted in evidence, and marked "Exhibit C, 8," dated April 1, 1903, as follows: "I John J. Tully do agree to pay Amelia Collerd twenty-five dollars a month on account of one mortgage to Effie C. Wynant. * * *" The second mortgage by its terms provides that Tully was to pay the amount in installments of $25 per month. Prior to the giving of the second mortgage (in January of 1905), Tully had been paying $25 a month to Collerd, which she credited on the mortgage she then held (the first mortgage). Beginning with the mouth of January, 1905, Tully paid four sums of $50 per month, which Mrs. Collerd then credited $25 on the first and $25 on the second mortgage. I find that she properly credited the sums received, and that, there has been paid $525 on the first mortgage in addition to the $1,000 paid before she acquired title, leaving $475 principal due thereon, and $100 on the second mortgage, leaving $1,300 principal due thereon.

Second. As to whether the first mortgage covered after-acquired property.

The terms of the mortgage are "all the goods and chattels mentioned in the schedule hereunto annexed and now in the stable and premises No. 71 Oakland Avenue in the City of Jersey City aforesaid," and the schedule, after a specific description of various property (horses, trucks, harness, etc.), concludes "that all horses, trucks, wagons, carts, and harness purchased by the mortgagor during the life of this mortgage shall become immediately subject to the lien of this mortgage." It will be observed that in the body of the mortgage there is no reference to any other property than that contained in the stable premises designated, and that only in the schedule (to which the body of the instrument refers the inquirer for additional information) is the after-acquired property referred to.

The first query that presented itself to me was whether the absence of any reference in the body of the instrument to after-acquired property rendered the presence of the reference thereto in the schedule ineffective. After consideration I reached the conclusion that such was not the law, and that this clause in the schedule should be given the same effect as if it had been in the body of the instrument. It was clearly the intention of the parties to pledge all the enumerated property and all of the designated kind that the mortgagor should afterward acquire. It appears from the authorities that a chattel mortgage does not have to be in any particular form, that a description of the property mortgaged is sufficient if it indicates such property clearly enough to enable one to determine what property is meant, and that this result is accomplished if the language used puts one on inquiry in such a way as to necessarily lead to knowledge of the property intended to be mortgaged, and, as to after-acquired property, the rule is that the mortgage will be held to extend to such property, if the court under the terms of the mortgage would have decreed a specific performance of a contract to sell or to pledge it. After-acquired property clauses have been held sufficient where they covered "all property purchased in replenishment of stock," "all property purchased in addition to the present stock," and other like descriptions. In each of these cases, it will, of course, be observed that testimony de hors the instrument was required to identify the property The principles involved and applications thereof will be found in the following cases: Smithurst v. Edmunds, 14 N. J. Eq. 408 (Green, Chan. 1862); Shaw v. Glen, 37 N. J. Eq. 32 (Runyon, Chan. 1883); Howell v. Francis, 10 Atl. 436 (Bird, V. C, 1887); Dunn v. Hastings, 54 N. J. Eq. 503, 34 Atl. 256 (Pitney, V. C, 1806); Cumberland Bank v. Baker, 57 N. J. Eq. 231, 237. 40 Atl. 850 (Grey, V. C, 1898); Fidelity Trust Co. v. Staten Island Clay Co., 70 N. J. Eq. 550, 553, 67 Atl. 1078 (Bergen, V. C, 1905); Stoll v. Sibson, 65 N. J. Eq. 552, 56 Atl. 710 (Reed, V. C, 1903); Cunningham v. Alryan Woolen Mills, 69 N. J. Eq. 710, 712, 61 Atl. 372 (Bergen, V. C, 1905).

The next matter for consideration is whether the language used in this instrument is sufficient to make the mortgage effectual as to the after-acquired property, bearing in mind that the test is the same as would be applicable in a case of specific performance. If there is any doubt in a case of specific performance as to what property the parties had in mind, or as to what property the language used is intended to describe, the court will not decree the performance, because the court will not attempt to make a contract for the parties. But, if a man agrees to sell or to pledge all of any kind of property that he may acquire title to, there can be no uncertainty about that.

Proof that he has acquired title is proof of the thing intended to be transferred This clause, therefore, will not fail because of uncertainty. If it be held bad, it must be because the court finds that one cannot legally agree to pledge to another all of certain kinds of property to which he may in the future acquire title. I know of no such principle, and, in fact, many of the decided cases (cited above) show that there is no such principle. Among the cases above cited will be found instances, as before mentioned, where the after-acquired property clause related to stock to be bought in addition to that then on hand, and stock to be bought in replenishment thereof, and other similar phrases. In every one of such cases the mortgagor, by the after-acquired property clause, was held to have pledged all the property of certain kinds to which he might in the future (during the life of the mortgage) acquire title. In principle such cases are indistinguishable from the one at bar. I therefore conclude that the after-acquired property clause in this mortgage is effective to cover the horses, wagons, harness, etc., to which Tully subsequently acquired title.

Third. Whether either of the mortgages covered the horses sold by Brown to Tully; Brown claiming that the sales were conditional, and that the title had not passed.

All of the sales by Brown to Tully were after the date of the first mortgage, so that none of such horses were specifically described in it, and the lien thereof is extended to such horses by reason of the after-acquired property clause aforesaid. In the second mortgage certain of the horses sold by Brown to Tully are specifically described. The proper solution of the question depends upon a finding as to whether Tully acquired title to the horses he bought of Brown, or whether the sales were conditional sales and title had not passed. Brown contends that Tully did not acquire title, and that the sales were conditional. I cannot find from the testimony that he has sustained this contention. All the sales by Brown to Tully were made through an agent of Brown's named Wilson, and were all alike in character. The horse or horses which were the subject of each sale...