Williams v. Winsor

• Decision Date: 13 October 1877
• Citation: 12 R.I. 9
• Parties: GEORGE WILLIAMS, Administrator, v. EDWIN WINSOR, Assignee, and NICHOLAS C. BRIGGS.
• Court: Rhode Island Supreme Court

12 R.I. 9

GEORGE WILLIAMS, Administrator, v. EDWIN WINSOR, Assignee, and NICHOLAS C. BRIGGS.

Supreme Court of Rhode Island.

October 13, 1877

In Rhode Island a mortgage of personal property to be subsequently acquired creates a lien on such property when acquired, which is valid in equity against the mortgagor or his voluntary assignee.

The question, whether a mortgage which allows the mortgagor to retain possession of the mortgaged personalty or to sell and replace the same, is or is not fraudulent as against his creditors, should be determined by a jury from the circumstances attending its execution.

A voluntary assignee for the benefit of creditors takes the assignor's estate subject to all existing equities.

BILL IN EQUITY brought by George Williams, administrator of William B. Lawton, against Nicholas C. Briggs and Edwin Winsor, his voluntary assignee, to enforce a lien on certain personalty purporting to be conveyed by a mortgage executed by Briggs to Lawton, which personalty was acquired by Briggs after the mortgage had been executed and delivered, and possession of which had been retained by the mortgagor or his assignee.

July 2 1870, Nicholas C. Briggs mortgaged to William B. Lawton certain tools, fixtures, and his stock in trade, after describing which, the mortgage deed continued, " and also all and every article and thing that may be hereafter purchased by me to replace or renew the articles and things hereinbefore conveyed and also all stock, tools, fixtures, and carriages, whether manufactured or in process of manufacture, that may be hereafter purchased by me to be used in or about my business of buying and selling, making and repairing, carriages." The mortgage was acknowledged and duly recorded.

August 14, 1875, Briggs made an assignment of his property to one Frank H. Macreading, in trust, " to pay all the just debts of him the said Nicholas C. Briggs, without distinction or preference, which shall be exhibited and proved to said Macreading within six months from the date hereof, in full if sufficient, if not, then ratably and in proportion to said debts. Should any surplus remain after payment of the several debts aforesaid, then to return the surplus to said Briggs." Subsequently Macreading was removed and the respondent, Edwin Winsor, was appointed trustee in his place by this court, under Gen. Stat. R.I. cap. 181, §§ 11-14.

After the execution of the mortgage Briggs carried on his business as usual, using the mortgaged property as his stock in trade.

The condition of the mortgage being broken, and Lawton having died, his administrator, Williams, brought an action of trover against Briggs and Winsor, for converting the chattels mortgaged, both those acquired before and those acquired after the execution of the mortgage. See Williams v. Briggs, 11 R.I. 476. After the decision of the court in that case this bill was filed to enforce the mortgage lien on the after-acquired personalty.

The prayer of the bill was that the lien might be established that the respondents might be directed to surrender the chattels mortgaged, or that the same might be sold under an order of court and the proceeds applied to indemnify the mortgagee; that the respondents might be required to account for the value of all the chattels sold after the assignment and for general relief.

Tillinghast & Ely, for the complainant, cited: Brett v. Carter, 2 Lowell Decis. 458; Williams v. Briggs, 11 R.I. 476; Groton Manuf. Co. v. Gardiner, 11 R.I. 626.

Benjamin N. Lapham & Daniel R. Ballou, for the respondents. The provision in this mortgage relating to after-acquired property does not belong to the class of contracts of which an Equity Court will decree a specific performance, because such a transaction is against public policy, throwing open a wide door to possible fraud. 2 Story Eq. Jur. § 736; Robinson v. Elliott, 22 Wall. 513; Moody v. Wright, 13 Met. 17; Collins v. Meyers, 16 Ohio 547; Mittnacht v. Kelly, 3 Abb. Ct. App. 301; Phelps v. Murray, 2 Tenn. Ch. 746.

Registration under our statute is a substitution for delivery of possession; but as the property in controversy was not in esse when the mortgage was recorded, and when acquired was again disposed of, and the stock replenished many times before the assignment, how could the record of the mortgage operate as a substitute for delivery, when there was nothing in the hands of the mortgagor to deliver? Gen. Stat. R.I. cap. 105, § 9; Robinson v. Elliott, 22 Wall. 513; Collins v. Meyers, 16 Ohio 547.

If this mortgage of property to be acquired in future is valid in equity, it is only valid between the parties in the absence of adverse claims, as a contract to assign when the property shall be acquired, not as an assignment of a present interest in the property; and if it is enforcible in equity, it can only be enforced as a right under the contract, and not as a trust attached to the property; such a mortgage is not a specific lien on the property acquired. Moody v. Wright, 13 Met. 17; Chapman v. Weimer & Steinbacher, 4 Ohio St. 481; Chynoweth v. Tenny et al. 10 Wis. 397; Hunt v. Bullock et al. 23 Ill. 320.

This mortgage gives to the mortgagor a power of sale and disposition, without any provision...