Dunn v. Hastings

• Decision Date: 23 March 1896
• Citation: 34 A. 256,54 N.J.E. 503
• Parties: DUNN v. HASTINGS et al.
• Court: New Jersey Court of Chancery

34 A. 256

54 N.J.E. 503

DUNN

v. HASTINGS et al.

Court of Chancery of New Jersey.

March 23, 1896.

(Syllabus by the Court)

Bill by Lottie A. Dunn against Ambrose Hastings and others. Decree for complainant.

On the 3d of July, 1894, the complainant was the owner of a livery stable plant situate at Nos. 152 and 154 Mulberry street, in Newark, consisting of horses, harness, robes, blankets, wagons, carriages, and the ordinary implements of a livery stable. On that day she conveyed the same to Luther Van Pelt and Annie E. Eddy, and took back a chattel mortgage upon the plant, the items of which were scheduled and annexed to the mortgage, to secure $1,000 of the purchase money, payable in monthly installments of $50 each, with interest commencing August 1st in the body of the mortgage the property is described thus: "All the goods and chattels mentioned in the schedule hereunto annexed, and now in our possession, at No. 152 & 154 Mulberry street, Newark, N. J., and which said schedule is hereby made a part of this instrument; together with such goods and chattels of like kind that may be purchased from time to time by said parties of the first part to replace such chattels as may have become used up, worn out, or consumed in the course of business carried on at the place aforesaid; the intention being that this mortgage shall cover such property as may be acquired by said mortgagors after the date hereof to use in the livery and boarding stable business." Van Pelt & Eddy took possession of the plant, carried on the livery stable business there for some time, and then Mrs. Eddy conveyed her interest to the other joint owner, Van Pelt Among the articles mortgaged were ten carriages, four horses, and divers sets of harness. Before Mrs. Eddy conveyed her interest to Van Pelt they had exchanged two of the horses mentioned in the mortgage for two others, which were known as the "Peddy" horses, and paid $35 to boot on the trade. Shortly after Van Pelt became the sole owner he made an exchange of two old carriages mentioned in the mortgage for two new carriages of the same character, viz. buggies fit for use in the livery stable business, and paid $125 cash on the exchange. He afterwards bought, or acquired in exchange, a set of double harness and a set of single harness at a cost of $35 for the two. It was assumed at the hearing, and there was no contention to the contrary, that these additions, so far as they were additions were no more than sufficient to keep the livery plant up to its proper condition and value. In addition to these changes, however, Mr. Van Pelt, about the 1st of September, 1894, purchased an additional pair of horses of a man by the name of Tiplin at an expense of $225, and added them to his livery stable plant. There was no proof as to whether or not these horses made a material addition to the plant, and were more than sufficient to keep it up to the value which it had at the time the complainant's mortgage was given. He paid for this last purchase of the Tiplin horses by giving two promissory notes indorsed by the defendant Hastings, and, as they severally matured, paid $25 on them, with the result that in the end Mr. Hastings was obliged to pay them both; and to secure him for the money so paid, and for other moneys loaned by Hastings to him, Van Pelt gave to Hastings a chattel mortgage, dated the 15th of December, 1894, upon the four new horses, being the two obtained in exchange, called the "Peddy" horses, and the two purchased from Tiplin, the two new buggies obtained in exchange for old buggies, and the two sets of new harness. Hastings had actual notice of complainant's mortgage. This chattel mortgage was not put upon record, but Mr. Hastings immediately proceeded to enforce the same. The complainant, hearing of this, and payments on her mortgage being in arrear, the whole of it not being yet due, filed her bill of complaint on the 28th of December. In it she stated her mortgage and the changes made by Van Pelt in the horses and carriages and the purchase of the Tiplin horses, and charged that all the additions were subject to her mortgage; that Van Pelt had mortgaged to the defendant Hastings the four horses and two carriages acquired by purchase and exchange, and that Hastings threatened to enforce his mortgage, and remove the chattels, and dispose of them. The bill prayed a foreclosure, the appointment of a receiver, and an injunction against Hastings. The injunction was granted, but it turned out that Hastings had succeeded in pushing his proceedings to a sale two days before the bill was filed, and the chattels mortgaged to Hastings had been sold and purchased by him, and again by him transferred to the defendant Barnard for $250, and removed from the premises. Proceedings in contempt against Hastings were taken, but failed. A receiver was appointed, and the remaining chattels not removed by Hastings were sold, and produced a sum not sufficient to pay complainant's mortgage. The complainant then filed an amended bill, making Hastings and Barnard defendants, setting out the circumstances, and praying that her mortgage might be declared to be in equity a lien upon the chattels which Hastings had sold and removed, and that he might be decreed to account for their value to an extent, if sufficient, to pay the balance due on her mortgage.

Mr. Bradner, for complainant.

Ambrose Hastings, in pro. per.

PITNEY, V. C. (after stating the facts). I was embarrassed in hearing this cause by the circumstance that the defendant was without counsel. But it seemed to me that the only ground of defense which he could set up was that, by reason of his having paid the consideration money of a portion of these chattels by becoming surety on the note given for their price, he was, as to them, invested with an equity superior to that of the complainant. The complainant is in the situation of a person asking for the specific performance of a contract, and such is the nature of her suit. The clause in her mortgage giving her a lien upon after-acquired chattels has no effect at law. It must be construed as a covenant on the part of the mortgagor to give her such lien, which may be enforced in this court by relief, in the nature of specific performance, against the mortgagor or his assignee with notice, and must be subject to all defenses which would lie against an ordinary bill for specific performance. Upon the facts appearing at the trial there can be no doubt that the goods taken and carried away by the defendant Hastings were clearly within the description of after-acquired property which should become subject to the mortgage. Those taken in exchange are clearly so. But the clause goes further than to give the complainant an equitable lien upon new property acquired to replace the old that was...