Loth & Haas v. Carty, &C.
| Decision Date | 14 May 1887 |
| Citation | 85 Ky. 591 |
| Parties | Loth & Haas v. Carty, &c. |
| Court | Kentucky Court of Appeals |
APPEAL FROM FAYETTE CIRCUIT COURT.
Z. GIBBONS FOR APPELLANTS.
H. MARSHALL BUFORD FOR APPELLEES.
JUDGE HOLT DELIVERED THE OPINION OF THE COURT.
The lease of W. A. Varty of the store-house of the appellee M. E. Carty began May 1, 1882, and ended May 1, 1883, at one thousand dollars per annum rent, payable monthly. It was paid to June 1, 1882, so that of the unpaid rent the first installment became due on July 1, 1882. On July 7, 1882, the tenant mortgaged to the appellants, Loth & Haas, his entire stock of merchandise then upon the leased premises, and the mortgage by its terms included "all goods that may hereafter be added to said stock."
James Gallahue, as one of Varty's creditors, attached the goods on August 14, 1882; and subsequent thereto but upon the same day, the debtor made an assignment to one Parker of all his estate for the benefit of his creditors.
The trustee brought an action to settle the trust on September 19, 1882, to which the appellants and Mrs. Carty were defendants. The petition averred that they were claiming liens of some character against the assigned estate, and called upon them to assert them. The appellee Carty was summoned to answer on September 21, 1882, but for some unexplained reason she did not do so until June 23, 1883, when she asserted a preferred lien or landlord's claim for her rent from June 1, 1882, to May 1, 1883.
The attaching creditor Gallahue also claimed a lien superior to that of Loth & Haas as to so much of the stock of goods as had been purchased after the execution of their mortgage and before the assignment. This claim to priority was denied by them, they claiming that their mortgage, by virtue of its terms, attached to them as they were added to the stock. They also deny the right of Mrs. Carty to any lien for rent, first, because she never sued out any distress warrant or attachment for it; and second, because if this were not necessary to create or preserve the lien, yet she failed to assert it within three months from the time it became due.
As the question as to her claim apparently presents more trouble in the true solution of it than that between the appellants and the attaching creditor, we will first consider the latter.
The clause of the mortgage relating to any thing that might thereafter be added to the stock was valid between the parties; but the mortgagee thereby acquired no available right to such subsequently acquired property as against the creditors of the mortgagor. The general rule is, that a mortgage of property to be acquired in futuro is void, and cannot avail against the claims of other creditors. (Ross, &c., v. Wilson, Peter & Co., 7 Bush, 29; Vinson v. Hallowell, &c., 10 Bush, 538.)
We do not regard the case of Zaring, &c., v. Cox's Assignee, &c., 78 Ky. Rep., 527, as in conflict with this rule. It is true that the facts of that case are not fully shown by the report of it; and it does not appear in it, as it does in this case, that any creditor had intervened by legal proceedings prior to the deed of assignment. Such an effort to mortgage what the debtor may subsequently acquire is constructively fraudulent; and when the court, in the last named case, said: "Such a conveyance is evidently good between the parties, and the lien attaches so soon as any stock is added, and being good between the parties, it is good as to antecedent creditors, at least until attacked for fraud," it no doubt merely meant that it being merely constructively fraudulent, was valid until another creditor asserted his claim and denied the validity of the mortgage as to property acquired after its execution. In such a case the attacking...
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