Vail Receiver v. Jameson

• Decision Date: 30 June 1886
• Citation: 41 N.J.E. 648,7 A. 520
• Parties: VAIL Receiver, v. JAMESON.
• Court: New Jersey Supreme Court

7 A. 520

41 N.J.E. 648

VAIL Receiver,

v. JAMESON.

Court of Errors and Appeals of New Jersey.

June Term, 1886.

On appeal from court of chancery.

Ephraim Cutter, for appellant, Vail, Receiver.

C. C. Hommann, for respondent, Jameson.

MAGIE, J. The question presented by this appeal relates to the proceeds of a sale of property of an incorporated company, made by a receiver appointed under the act concerning corporations, with the concurrence of a creditor of the company holding a chattel mortgage thereon. The latter claims the proceeds of the sale by virtue of his mortgage. The receiver contends that he should be permitted to distribute the proceeds among the general creditors. The receiver was appointed February 19, 1885, on a bill filed by a creditor and stockholder, February 17, 1885. The mortgage was made by the company to respondent Jameson, September 27, 1884, and was therein declared to be intended to secure the payment of such notes (not exceeding $6,000) as had then been or might thereafter be made by the company, and indorsed by Jameson for the accommodation of the company.

The case shows that, when the mortgage was made, Jameson was an accommodation indorser on a note of the company for $3,000, which was afterwards renewed, and was outstanding when the bill was filed, and that on September 29, 1884, he indorsed a note for $2,000, for the accommodation of the company, which was also renewed and outstanding when the bill was filed. Jameson paid both the outstanding notes, and a large sum is due to him.

The receiver's contention is that Jameson's chattel mortgage was a transfer of the company's property to him after insolvency, and as a preference over other creditors, and that it is thereby rendered null and void as against creditors. But the evidence has not satisfactorily made out that the company was insolvent when the mortgage was made, or that it was made as a preference. The decree made in the proceedings fixed the insolvency of the company as having occurred on December 10, 1884. The mortgagee's petition was filed in that cause. If the decree does not conclude the receiver in this proceeding, the evidence he has produced is not sufficient to establish the fact of insolvency at a time prior to the date of the mortgage.

The only facts tending to show the intent with which the mortgage was made, seem to indicate that it was designed rather as security for the loan of Jameson's credit to the company than as a preference over other...