Wimpfheimer v. Perrine

• Decision Date: 15 November 1901
• Parties: WIMPFHEIMER et al. v. PERRINE et al.
• Court: New Jersey Supreme Court

50 A. 356

65 N.J.E. 770

67 N.J.E. 597

WIMPFHEIMER et al.

v. PERRINE et al.

Court of Errors and Appeals of New Jersey.

Nov. 15, 1901.

(Syllabus by the Court.)

Appeal from court of chancery.

Bill by Adolph Wimpfheimer and others against John J. Perrine and others. Decree for complainants. 47 Atl 769. Defendants appeal. Affirmed.

Edward M. Colie, for appellants.

Coult & Howell, for respondents.

VAN SYCKEL, J. The complainants at the time of filing their supplemental bill held four judgments against John J. Perrine: The first recovered March 25, 1898, upon a promissory note given to them by said Perrine June 23, 1897, for money loaned. The second recovered April 16, 1898, by Albert Courter upon a debt due Courter before the recording of the chattel mortgages hereafter mentioned, which judgment was assigned to the complainants April 26, 1898. The third recovered April 19, 1898, upon a debt due from Perrine to complainants for $1,259.35; the balance being upon notes originally given by Perrine to Martin Bates & Co. before the recording of said mortgages, and by them assigned to the complainants after they were due, and after the assignment by Perrine to Stagg hereafter mentioned. The fourth judgment was obtained May 3, 1898, upon an obligation incurred by Perrine to complainants before the mortgages were recorded. Perrine made three chattel mortgages to Stuart and Charles A. Lindsley, defendants and appellants: The first, dated October 17, 1896, for $3,000. The second, dated February 10, 1898, for $1,200. The third, dated February 14, 1898, for $8,500. All three of these mortgages were recorded March 25, 1898. On the 25th of March, 1898, Perrine made a deed of assignment under the statute for the benefit of his creditors to George R. Stagg, one of the defendants, and an appellant in this case. The complainants filed their original bill March 31, 1898, based on the judgment of March 25, 1898, to set aside the aforesaid chattel mortgages as void as against said judgment A supplemental bill was filed after the recovery of the other three judgments aforesaid.

Two questions are presented by this appeal: First, whether the complainants, as judgment creditors, have the right to set aside the chattel mortgages, and appropriate the proceeds of the mortgaged chattels to their judgments, to the exclusion of the assignee, Stagg; second, if they have such right whether it extends to so much of their judgments as was for claims assigned to them after the chattel mortgages were recorded.

The first question will be solved by deciding whether Stagg, the assignee under the voluntary assignment, can successfully attack the chattel mortgages, which are admitted to be bona fide for value, because they were not recorded according to the requirement of the statute. It must be regarded as the settled law of this court that the right to set aside such mortgages for fraud rests in the assignee under a voluntary assignment to the extent that such property is needed for the payment of debts. Pillsbury v. Kingon, 33 N. J. Eq. 287, 36 Am. Rep. 556. But in such case of fraud the title to the chattels mortgaged does not pass out of the assignor, and the holder of the mortgage gets no legal title or equitable title to them. He retains the property as against the assignor, because the assignor cannot set up his own fraud to regain it; but in equity the assignee will be permitted to set aside the fraudulent transaction for the purpose of applying the property to the payment of the creditors of the fraud doer, —the equity court recognizing an equitable title in the assignee for an equita ble purpose in contravention of the fraud. Where the title...