Hartford-Connecticut Trust Co. v. Puritan Laundry of Hartford

• Decision Date: 20 July 1920
• Court: Connecticut Supreme Court
• Parties: HARTFORD-CONNECTICUT TRUST CO. v. PURITAN LAUNDRY of Hartford, Inc., et al.

111 A. 149

95 Conn. 172

HARTFORD-CONNECTICUT TRUST CO. v. PURITAN LAUNDRY of Hartford, Inc., et al.

Supreme Court of Errors of Connecticut.

July 20, 1920

Appeal from City Court of Hartford; Herbert S. Bullard, Judge.

Action by the Hartford-Connecticut Trust Company against the Puritan Laundry of Hartford, Incorporated, and the Pratt Laundry Company to foreclose a mortgage of personal property. Facts found and judgment rendered for the plaintiff, and appeal by the defendant the Pratt Laundry Company. No error.

This is an action to foreclose a mortgage of personal property. The defense of the Pratt Laundry of Hartford Incorporated, hereinafter called the Pratt Company, is that an attachment made by it on the property mortgaged in an action against the mortgagor, the defendant the Puritan Laundry Company, hereinafter called the Puritan Company subsequent to the mortgage, has priority over the mortgage. It appears that on October 30, 1916, the Puritan Company executed and delivered to the Hartford Trust Company a mortgage of personal property to secure the sum of about $7,000. After the bringing of the action the Hartford Trust Company merged with the Connecticut Trust & Safe Deposit Company into a new corporation bearing the name of Hartford-Connecticut Trust Company, which became entitled to the mortgage in suit, and the mortgagee is hereinafter referred to as the trust company. The property, so far as is involved in this appeal, was not otherwise described than as " all machinery, tools, and equipment of every kind and nature on the premises known as No. 10 Clinton street Hartford" ; also as " all machinery, tools, and equipment located on said premises used in connection with the laundry business conducted by the grantor." 10 Clinton street was the place of business of the mortgagor the Puritan Company. This mortgage was duly recorded on the land records of Hartford. The property mortgaged remained in the possession of the Puritan Company. On April 4, 1918, the Pratt Company, desiring to purchase and use in its laundry business conducted at 147 Sheldon street, in Hartford, the machinery, tools, implements, and equipment described in the mortgage to the trust company, then in the possession of the Puritan Company, the Puritan Company and the Pratt Company entered into an agreement in the form of a lease, but in fact a conditional sale and so recognized by the parties, by which the Puritan Company was to deliver to the Pratt Company the personal property described in the mortgage to the Trust Company. Certain articles mentioned in the mortgage and conditional sale are not involved in this action and this statement is to be taken, for brevity, as referring only to such property as was covered by the mortgage and attached by the Pratt Company, as hereinafter set out. The so-called lease contained the following agreements which are printed in the margin:

" Said machinery is subject to a mortgage to the Hartford Trust Company for the sum of $7,000, which, in addition to the payments to be made to the said party of the first part by the said party of the second as herein contemplated, said party of the second part hereby assumes and agrees to pay, as part consideration hereof, the weekly rent of $50 during the first year of said term, and $40 through each remaining year of said term, whereof $25 shall be paid on each and every week hereafter to the Hartford Trust Company, as in said agreement stipulated, and during the first year the remaining $25 of each weekly installment shall be paid to said party of the first part and after the first year the sum of $15 of each weekly installment shall be paid to the said party of the first part, said payments to be made without demand on Saturday of each week next thereafter, whereof the first payment is to be made one week after said machinery has been installed and in operation.

" And it is further agreed that if said payments shall be promptly and fully paid to said the Hartford Trust Company and to the party of the first part, as hereinbefore contemplated, whenever the payments shall amount to the sum of $10,600, with interest on said sum, or on so much thereof as shall from time to time remain unpaid, said interest payments to commence one year after the date hereof, at the rate of 6 per cent. per annum, then said property shall belong to said party of the second part, and in consideration thereof the said party of the second part agrees to use said property carefully and not to underlet, sell, or assign any interest in said property.

" And if default at any time he made in the payments of rent as aforesaid, within 30 days after the same become due, or if any of the agreements hereof be violated, then this lease shall become void and said party of the second part shall, without notice, forthwith return said property in good condition, ordinary wear only excepted, to the said party of the first part, its successors or assigns, or representatives, as it may direct, or its representatives or agents may, at any time, with or without process of law, take actual possession thereof, and for that purpose or to search for the same may enter any premises of the party of the second part or to which it has access, showing such force as may be necessary, and said party of the second part hereby waives any right of action for proceedings or damage therefor and agrees to pay all costs, expenses, and fees of every kind included, and in case of the forfeiture of this lease as aforesaid, if default in payment of rent or otherwise, all money having been paid shall be retained by and belong to said party of the first part; provided, however, that said party of the first part, its agents, assigns, or representatives, may at their option elect to confirm this bill of sale and sue for and recover any amount due thereon with interest and costs."

This agreement of conditional sale does not appear to have been recorded. At the same time with the making of the conditional sale certain collateral agreements were made by the Puritan Company, the only one of consequence in this action being an agreement of the Puritan Company that it would install the machinery at the Pratt Company's laundry and put the same in good working order without expense to the Pratt Company, and that payments under the lease should not begin until one week after such installation should be completed. Pursuant to the contract of conditional sale the personal property involved in this action was removed from the premises of the Puritan Company to the premises and plant of the Pratt Company, and the Pratt Company retained possession of the property until the attachment hereinafter referred to. Neither the Pratt Company nor the Puritan Company have ever paid the trust company anything on the mortgage since the execution of the conditional bill of sale April 4, 1918. On or about July 2, 1918, the defendant Pratt Company, through its attorney, wrote the Puritan Company as follows:

" Calling your attention to the contract relative to the setting up of the machinery, you will note that the Puritan Laundry Company agreed forthwith to set up and install the machinery and place the same in good condition, repair and running order free of expense and charge to the Pratt Laundry Co. This has not been done, although the contract was dated on April 4.

" I am instructed to say to you that under the conditions the Pratt Laundry Company will not accept the property on account of the failure to carry out the contracts and that all property that has been actually delivered is hereby tendered to the Puritan Laundry Company and charges therefor will be made for storage if the same is not returned.

" The Pratt Laundry Company has also suffered great loss and expense in consequence of the failure of the Puritan Laundry Company to fulfill its agreement, items of which will be hereafter presented to it.

" I also understand in this connection that the Puritan Laundry Company has received the insurance for damage done to the machinery at this plant.

" I trust to hear from you immediately in this matter, as the property will not be accepted under any conditions and that provision ought to be made for its removal."

On or about February 24, 1919, the Pratt Laundry Company brought a civil action against the defendant the Puritan Laundry of Hartford, Incorporated, claiming damages on account of its alleged failure to carry out its agreements in the instruments marked Defendant's Exhibits 1, 2, 3, and 4 hereto annexed, which said action was returnable to the superior court for Hartford county on the first Tuesday of April, 1919, by a lawful writ of attachment issued and dated on February 24, 1919, and directed to the sheriff of the county of Hartford, his deputy, or either of the constables of the town of Hartford, directing him to attach the goods or estate of said defendant the Puritan Laundry of Hartford, Incorporated.

Under and by virtue of said writ of attachment, the defendant Charles E. Lord, a deputy sheriff for Hartford county, attached all of the goods, chattels, and machinery which had been delivered by the Puritan Laundry of Hartford, Incorporated, at the plant of the Pratt Laundry Company, and said Lord, or his duly appointed keeper or keepers, have lawful possession of said attached property, which attachment is still in full force and effect.

Defendant Puritan Laundry of Hartford, Incorporated, was indebted to the plaintiff at the time of the trial and on the date of the judgment in this action in the principal amount of $4,075.

The court held that the mortgage of the trust company was as to the Pratt Company valid and had priority over the Pratt Company's attachment, and rendered judgment accordingly. The defendant the Pratt Company appealed...