Hunt v. Ludwig

• Decision Date: 03 February 1922
• Docket Number: No. 50/361.,50/361.
• Citation: 116 A. 699
• Parties: HUNT v. LUDWIG et al.
• Court: New Jersey Court of Chancery

116 A. 699

HUNT

v. LUDWIG et al.

No. 50/361.

Court of Chancery of New Jersey.

Feb. 3, 1922.

Suit to foreclose a chattel mortgage by Henry J. Hunt against Edward It Ludwig and others. On final hearing. Decree advised declaring the mortgage void as against judgment creditors.

Lehlbach & Van Duyne, of Newark, for complainant.

Herman Krohn, of Newark, for defendants.

BACKES, V. C. The bill in this case is to foreclose a chattel mortgage given by Edward and Virginia Ludwig to Hunt, the complainant, dated January 8, 1921, and recorded two days thereafter in the register's office of Essex county. The mortgage is for $3,583.52, and the articles covered are listed in the schedule attached to the mortgage in groups under three captions, thus: "List of Goods Purchased from 'the Cooperative Kitchen,' and Not Removed from No. 8 Hillside Avenue, Montclair, N. J., up to and Including January 1, 1921," and "List of Goods Purchased from 'the Goerke Co.' by Edward Ludwig, Now at the 'Whileaway Inn,' No. 8 Hillside Avenue, Montclair, N. J.," and "List of Goods Bought by Edward Ludwig from Other Firms for Cash and Now at the 'Whileaway Inn,' No. 8 Hillside Avenue, Montclair, N. J."

The statutory affidavit annexed to the mortgage states:

"That the true consideration of said mortgage is as follows, viz.: Unpaid purchase price on goods and merchandise described in schedule annexed. Some of said goods being purchased from others as stated in said schedule."

Rochlin & Bros., the judgment creditors of the mortgagors, with executions levied upon the mortgage chattels, attack the validity of the chattel mortgage on the ground of the insufficiency of the affidavit, and because of its falsity as to the true consideration and the amount stated to be due thereon.

The statute declares chattel mortgages absolutely void as against creditors of the mortgagor, when there is is no immediate delivery followed by an actual and continued change of possession of the things mortgaged unless the mortgage be recorded, having annexed thereto an affidavit made by the holder or his agent "stating the consideration of said mortgage and as nearly as possible the amount due and to grow due thereon." C. S. p. 463, § 5.

In stating the consideration, legal nicety is not demanded. An honest and substantial compliance with the requirements of the statute is all that is necessary, and, if the affidavit in some fashion discloses the nature of the debt owing by the mortgagor to the mortgagee, viz. the price of the debt, the cause of the indebtedness, how the debt came into existence, it will be sufficient; but that much must be clearly shown. If this be not found in the affidavit proper or in the affidavit read in connection with the body of the mortgage, then the mortgage must fail as to creditors.

The affidavit does not in this respect meet the requirements of the statute. If it had been therein stated that the consideration was "unpaid purchase price on goods and merchandise described in schedule annexed hereto" and had stopped there, and the statement were true, it would have been sufficient (Metropolitan Fixture Co. v. Albrecht, 70 N. J. Law, 149, 56 Atl. 237), for, while it even then would not have stated from whom the goods and merchandise were purchased and to whom the debt was due, the fair inference would be, reading the affidavit in connection with the mortgage, that the mortgagor purchased the goods from the mortgagee and did not pay for them, and that there was a balance due. Black v. Pidgeon, 70 N. J. Law, 802, 58 Atl. 372; Shupe v. Taggart, 93 N. J. Law, 123, 107 Atl. 50. But when we read the words added to those just quoted, "Some of said goods being purchased from others as stated in said schedule," with the schedule, which recites that all of the goods...