Roddy v. Brick

• Decision Date: 22 November 1886
• Citation: 42 N.J.E. 218,6 A. 806
• Parties: RODDY and another, Trustees v. BRICK and others.
• Court: New Jersey Court of Chancery

6 A. 806

42 N.J.E. 218

RODDY and another, Trustees

v. BRICK and others.

Court of Chancery of New Jersey.

November 22, 1886.

On bill to foreclose.

The facts are fully stated in opinion.

A. V. Schenck, for complainant.

J. D. Bedle, for defendant Campbell.

W. P. Wilson, for defendants.

BIRD, V. C. This bill is filed to foreclose a mortgage bearing date seventeenth day of May, 1880, and recorded on the seventeenth day of June in the same year, in the county wherein the mortgaged premises are situated. This mortgage was given by Riley A. Brick and wife to the complainants, as trustees, to secure the payment of 100 bonds, given by the said Brick, payable in five years, with interest, semi-annually, on the first days of January and July, on condition that if default be made in the payment of any interest, or any part thereof, on the day when the same was payable, and should remain unpaid for the space of 30 days, then the principal of said bonds should become due. The property covered by the mortgage is first described as follows: "All that certain lot or parcel of ground, with the buildings and improvements thereon erected, situate," etc., with a more particular description by courses and distances, containing four acres and a half. It makes no mention of the property which is in dispute, which the complainant claims is part of the real estate, as being fixtures, and which the defendant Campbell claims is personal property.

The bill alleges that, at the time of the execution and delivery of the said mortgage, the said premises were designed for and used as an iron foundry for the casting and making of water-pipe and gas-pipe, and that there was, at that time, machinery and fixtures of a permanent nature used in the said business, and attached to the realty, and intended to be, and actually were, included in the said mortgage, and, as such, did pass as a part of the real estate to the complainants. The articles claimed by the complainants are: "One large steam-crane, one jack, one steam-engine and boiler, one large lathe, one small lathe, one planer, one drill-press, one drill upright, one Mackensie blower, two small pumps in machine-shop, shafting, belting, etc., one large truck-scale, (for weighing cars and contents,) one wire rope and drum, one jig-saw and stand in blacksmith shop, one pair of bellows, two anvils, one large anvil, railroad track, and smith at foundry in machine-shop, one iron hoisting block and chain, one wood hoisting block and rope, one wood hoisting block and small."

The bill states that whole number of bonds, that is, 100, was issued, and that many of them are held entirely by persons unknown; and that no interest has been paid since January 1, 1884, and that, therefore, the whole amount of principal and interest has become due. The bill also shows on the twenty-ninth day of May, 1880, the said Brick and wife made and delivered to the defendant Campbell a mortgage upon the same premises to secure the sum of $10,000. The bill also shows that on the twenty-fourth day of June, 1882, the said Brick conveyed all the said mortgage premises to the said Campbell; and also that on the twenty-ninth day of May, 1880, the said Campbell executed a bill of sale to the said Brick, for said articles, and many others, which was filed in the clerk's office, sixteenth of August, 1880, and also a certain other bill of sale dated January 5, 1882, which was recorded January 6, 1882, and also recorded December 22, 1882, and eighteenth of December, 1883, which were given to the said Brick by the said Campbell, to complete the sale and transfer of the chattels therein mentioned by said Campbell to said Brick; each one containing a distinct proviso that, in case default be made by said Brick in the payment of four several notes given in consideration of said sale, or any part thereof, then said sale should be void, and the said chattels should revert to Campbell, and it should be lawful for him to take possession of them.

As intimated, the articles above enumerated are all named in this bill of sale. Campbell claims two cranes, (one steam and one jack,) one engine and boiler, and one blower by virtue of the proviso in said bill of sale, insisting that the title did not pass thereby, and could not, in law, until all the consideration money was paid; whereas, the complainants claim that they have all been attached to the realty, and are fixtures, and that the taking of a chattel mortgage, or treating the bill of sale as a chattel mortgage, estops Campbell from claiming under bill of sale.

First. Did the title pass, and was the instrument called a bill of sale intended to be used as a mortgage to secure the payment of the purchase money only? I think it was intended to be used as a mortgage only. It is true, the language used, which is, in case of default "this conveyance to be void, of no effect, and the possession of the goods herein described shall revert to the said party of the first part," is very clear and emphatic; yet a copy of this bill of sale Campbell had recorded in 1882, after having it acknowledged both by himself and Brick, and after making thereon an affidavit by himself, in which he declares himself to be "the mortgagee in the within-described chattel mortgage." This must be taken to show what the parties intended. Campbell called it a mortgage when giving it character under oath. I cannot see how the court can now give the instrument any other name. And, if there be any doubt, the law prefers treating such instruments as securities. Mr. Justice Story, in Flagg v. Mann, 2 Sum. 489-533, so declares. I quote:

"It has been said that the true test whether a conveyance is a mortgage or not is to ascertain whether it is a security for the payment of any money or not; whether it is a security for the performance or non-performance of any act or thing. If the transaction resolves itself into a security, whatever be its form, it is in equity a mortgage. If it be not a security, then it may be an absolute sale or a conditional purchase."

"Again, it is well known that courts of equity lean against construing contracts to be conditional sales; and therefore, unless the construction be clearly made out to be of that nature, it is always construed to be a mortgage. So Lord HARDWICKE laid down the doctrine, (Longuet v. Scawan, 1 Ves. Sr. 406,) and it has never been departed from. The onus probandi there is on the defendants to establish it to be a conditional sale. If it be doubtful, then it must be continued to be a mortgage." Flagg v. Mann, 2 Sum. 535.

And this view of the law is not at all in conflict with the case of Cole v. Berry, 42 N. J. Law, 308, where the rights of the vendor, when it is intended that possession shall pass to the vendee, but not the title to the thing agreed to be sold, is most clearly defined. The doctrine which is involved in the present case is discussed in Jones, Chat. Mortg. §§ 26-32. In section 30 he declares the law to be the same as laid down by Mr. Justice Story in Flagg v. Mann, supra; but I believe he does not notice this case in his treatise.'

If the...