text:
    Emily Thompson et al. v. John West et al.
    [Filed April 23d, 1898.]
    1. The administrator of C., a deceased daughter of the deceased mortgagee, and a daughter of C., to whom the administrator had assigned a half interest In the mortgage, filed a bill against the mortgagor individually and as administrator of R., the other deceased daughter of the deceased mortgagee, to foreclose. The money was admitted to be due, and the only disputed question was as to its distribution. — Held, that complainant, daughter of C., was not competent to testify to statements by R. during her life, contracting to bequeath her share in the mortgage to C.
    2. An agreement between two sisters who jointly owned a mortgage, that, in consideration of the one boarding the other, the property of the latter should “revert” to the former on her death, does not show a completed assignment thereof.
    3. Upon the facts established in this case — Held, that the evidence was not sufficiently convincing to show a gift of the mortgage.
    On final hearing.

      Mr. Edmund Wilson, for the complainants.

      Mr. James Steen and Mr. Robert Allen, Jr., for the defendants.
   Stevens, V. C.

This is a bill to foreclose a mortgage given by John West to Mary West. Mary West died intestate in March, 1886. Her property consisted of a house and lot in Middletown, and of the mortgage of $3,300, which is being foreclosed in this suit. Ho letters of administration upon her estate were issued until June, 1894. Her daughters, Caroline and Rebecca, were her only heirs-at-law and next of kin. Although no letters of administration were taken out, John West, the mortgagor, paid the daughters interest on the mortgage until the death of Rebecca, in July, 1889. Then he paid it to Caroline until she died, in October, 1893. Rebecca, like her mother, died intestate. Her sole heir-at-law was her sister Caroline. Her next of kin were this sister, a half-brother, John West, and a half-sister, Martha Ann Jones. When John West paid the entire interest money to his half-sister, Caroline, he did it in ignorance of the legal rights of himself and his sister. Caroline, by her will, left her property to her children, Emily Thompson, Richard Lufburrow and Caroline Applegate. The executors of her will, finding •that no legal disposition could be made of the Mary West mortgage until an administrator was appointed, procured administration to be taken out by one of them, Richard Lufburrow, who, as administrator of Mary West, assigned the mortgage to himself and William M. Thompson, as executors of Caroline. They assigned a half interest in it to the complainant Emily Thompson. The other half interest they hold in trust for Mrs. Applegate. The legal title to the mortgage stands, therefore, one-half in Emily and one-half in the executors of Caroline. In 1896, John West, being advised that he and the children of Mrs. Jones, who died in 1893, had an interest in the mortgages as two of the next of kin of Rebecca, took out administration on her estate, and now claims that although the legal title is as I have stated, yet that, as administrator of Rebecca, he is entitled to her share of the mortgage money, viz., one-half. It is, on the other hand, claimed by the executors of Caroline that she, in her lifetime, acquired by contract or gift from Rebecca, Rebecca’s interest, and that, therefore, they became, in equity as well as at law, the sole owners of the mortgage in question. This is the only matter in dispute.

The complainants, in their evidence, took two alternative and somewhat inconsistent positions. They sought, in the first place, to prove by Emily Thompson that there was a contract between Rebecca and Caroline, by the terms of which Caroline was to have Rebecca’s share of the mortgage at Rebecca’s death; and they sought, in the second place, to prove by Amanda Lufburrow, wife of Richard Lufburrow, that Rebecca gave her share to her sister in her lifetime.

It appears that immediately after the death of their mother, in 1886, the two daughters moved into the house or hotel, the title to which had just descended upon them, and that they talked over the “ financial situation.” Mrs. Thompson’s evidence is as follows:

“Aunt Rebecca said she hadn’t any money to pay board unless she took her principal, and she didn’t want to use it in that way, and if mamma would let her remain there with the understanding that after she had finished her life the mortgage, or the interest which she held in it, and what other property she possessed, would revert to mamma, and mamma was satisfied.”

The first question which arises is whether Emily Thompson was competent to give this evidence. In determining this it will be necessary to consider the objects of the suit and the position of the parties to it. Its primary object is to foreclose a mortgage. Its secondary, to distribute the mortgage money among those entitled to it. Had Richard Lufburrow, before he assigned, brought this suit as administrator of Mary West, the duty of directing the distribution of the mortgage money would not have been imposed upon this court. The suit would have been one instituted by the administrator of the mortgagee against the mortgagor, and they would have been the only parties. But the transfer of the mortgage by Richard to himself and Thompson, in their character of representatives of Caroline, and the transfer by these latter to Emily Thompson of a half interest therein, have introduced an element of complexity into-it. John West now appears in it not only as mortgagor, but as. administrator of Rebecca, claiming, as such administrator, that the assignment of the legal title by Richard was wrongful. The mortgage money is admitted to be due, and the dispute is only' as to the persons among whom it is distributable. This controversy is presented by cross-bill. Looking, therefore, at the substance of the issue, it appears that the parties whose interests are really antagonistic are, on the one hand, Emily Thompson and the executors of the estate of Caroline, and on the other, the administrator of Rebecca. The testimony shows that Caroline’s estate has been distributed on the assumption that she owned the entire mortgage in her lifetime and that Emily Thompson can only retain the entire half interest assigned to her in case it is established that Rebecca’s administrator has no title to any part of the mortgage money. That the court can look at the substance of the issue through the mere form of the procedure was decided by the court of appeals in Smith v. Burnet, 8 Stew. Eq. 321. That the record alone furnishes the statutory criterion of the competency of the litigants was decided by Hodge v. Coriell, 15 Vr. 456, 17 Vr. 354. Looking at the substance of the issue, as disclosed by the record, we find that Emily Thompson stands therein as a party who, in her own right, prosecutes a claim against John West as administrator of Rebecca. As such party her interest is as directly antagonistic to that of Rebecca’s administrator as is the interest which the executors.claim, to hold for the benefit of Mrs. Applegate. It would seem, therefore, that the case falls within the principle of McCartin v. McCartin, 18 Stew. Eq. 265, where the effect of a representative on one side only was considered, and not within the principle of Haines v. Watts, 26 Vr. 149, where the effect of representatives on both sides was considered. It is true that we have here, as in Haines v. Watts, the case of persons standing in a representative capacity on opposite sides, but then, it is to be observed, Emily Thompson is not one of those representatives. She is a party with an interest of her own, which she is setting up in antagonism to Rebecca’s administrator. The substantial controversy, so far as she is concerned, is between a representative on the one side and a person claiming in her own right on the other. When she offers herself against that representative she must stand or fall on the strength of her own position and not on the representative character of some one else claiming a distinct right. I think, therefore, the evidence of Emily Thompson should not be read.

But even if her evidence were competent, it would not of itself warrant the inference that Rebecca had assigned to Caroline. The agreement was, in terms, that Rebecca’s interest should revert to Caroline at her death. If this were the expression really used by Rebecca at that time, it would seem to be an agreement that she would not make a will, so that Caroline, as she erroneously supposed, might take all her interest under the statute of distributions. At best, giving to the word “ revert ” a non-natural meaning, the agreement in question could not be more than an undertaking to make a will in Caroline’s favor. No will was made, and consequently we have here not the case of an agreement fulfilled, but of one broken, the breach giving rise merely to an action of damages.

The position secondly taken by the complainants was that Rebecca made a gift of her interest to Caroline in her lifetime. Amanda, wife of Richard Luf burrow, testified that Rebecca died of consumption ; that she was ill, during the last two years of her life, most of the time, and that in December, 1888, about seven months before her death, she desired Caroline to go up to her room because she wanted to give her some papers.

“ She said, when she went into her room, after we were there a little while, she said 1 Now, Lina, I will settle about these papers,’ and she took a bunch of keys and went to the bureau drawer and unlocked it and she took out this package of papers and she handed it to Mrs. Caroline Luf burrow, and Mrs. Luf burrow said ‘Becca, what do you want me to do with them?’ she said ‘.What for.’ She said, because they are yours. I give them to you. Everything I have got is yours, and she gave her this package of papers.”

She subsequently said that she saw the mortgage in the package. On cross-examination she was asked: Did she say, I will give you these papers, or I will give you my interest in them ? ” And her reply was: She said I will give you these papers.”

Does this testimony prove that Rebecca gave her equitable interest in the mortgage to Caroline? I think it does not. In the first place, it must be remembered that the equitable title to this mortgage was vested equally in Rebecca and Caroline. The one was as much entitled to the manual possession of it as the other. The transfer of this possession from the one to the other, therefore, loses much of its significance. When we consider that Rebecca must have been at that time in an advanced stage of consumption, the mere act of transfer is, if possible, still less significant. Certainly it was not unnatural that one who felt herself gradually sinking should give the papers in which she and her sister were jointly interested to that sister. We must then have recourse to the words accompanying the transfer. Here we must bear in mind that the witness was testifying to a conversation which took place about nine years previously. It is not to be supposed that she could recall the precise words used. The words “ I give them to you” are open to the same criticism that was applied to similar words in the case of Smith v. Burnet, supra. Mr. Justice Reed said, in delivering the judgment of the court of appeals in that case: “The word ‘give’ is often used with other meaning than as evincing an intention to confer the title in the thing delivered. You give a person an article to carry for you or to perform work upon. * * * This view, together with the difficulty of recalling or stating with accuracy all that was said, and how it was said, should cause such a declaration to be closely scrutinized before a title is passed solely upon testimony like that here adduced.” These remarks are peculiarly applicable to this case. The further statements, if accurately remembered, “ because they are yours; everything I have got is yours,” which, as to Rebecca’s interest in the real estate, were manifestly inaccurate, point as probably to that close community of interests by which they were bound together— interests which, as she believed, would soon be converted by her death into an absolute ownership on her sister’s part — as they do to a then present intention to make a gift inter vivos. It is true that bonds and other non-negotiable obligations for the payment of money are held to be the subject of a valid gift, and that the delivery of the obligation to the donee without written assignment, but with a clearly-manifested intention to give, is sufficient. Travelers’ Insurance Co. v. Grant, 9 Dick. Ch. Rep. 212; Corle v. Monkhouse, 5 Dick. Ch. Rep. 537. But it is to be remembered that under the operation of the statute of frauds, no sale’ of such an interest could be effected by parol merely. Greenwod v. Law, 26 Vr. 168. If public policy, evidenced by this statute, requires that transfers of such interests, when founded on consideration, be in writing, certainly, in the case of transfers of similar interests, to take effect by way of gift, a like policy should require that the parol evidence of transfer be convincing. This is far from being the case here. Besides, the subsequent conduct of the parties is at variance with the hypothesis that an absolute gift was then intended. No notice of the alleged assignment was given to the mortgagee who subsequently paid $300 of the principal, and a year’s interest to both the sisters. The principal so paid was used in defraying the cost of a monument to their mother. Rebecca’s share of the interest was treated by her as her own, and she gave a part of it to her half-sister, Mrs. Jones. I think the complainants have failed to establish either an assignment for consideration or a gift.


source: Caselaw Access Project

author: Grey, V. C.

license: Public Domain

text:
    William M. Burgin, trustee, v. John B. Rutherford.
    [Filed November 16th, 1897.]
    1. A purchaser at a tax sale, under the act entitled “An act concerning the settlement and collection of arrearages of unpaid taxes, assessments and water rates or water rents, in cities of this state, and imposing and levying a tax, assessment and lien in lieu and instead of such arrearages, and to enforce the payment thereof, and to provide for the sale of lands subjected to future taxation and assessment,” passed March 30th, 1886, commonly called the “Martin Act” (Gen. Stat. p. 3370), does not acquire any title to the land so purchased until a deed therefor be delivered to him as provided in that act.

      2. When the sale is made for taxes assessed after the date of the act, the owner or any party interested may redeem the lands in the manner provided by the act, at any time within one year from the time of the sale.
    3. During this period the interest of the purchaser remains a mere lien on the premises.
    4. A mortgagee who forecloses, may make the purchaser at the tax sale a party defendant as a lienholder, and if redemption of the tax lien be effected pending the foreclosure suit, may enforce the collection of the redemption money in connection with the proceedings to foreclose the mortgage.
    On bill, answer and proofs.
    The complainant in this case, William M. Burgin, trustee under the will of Charles F. Burgin, deceased, filed his bill to foreclose a mortgage made by James E. Day and wife to Randall E. Morgan, bearing the date October 14th, 1886, recorded in the Camden county clerk’s office October 23d, 1886, on a lot of land in the city of Camden.
    The only question in controversy arises touching the interest of the defendant Joseph Kaighn in the mortgaged premises. The bill states that on August 27th, 1896, J. Willard Morgan, city solicitor of the city of Camden, under the act of Mar«h 30th, 1886, concerning the settlement and collection of arrearages of taxes, &c., and its supplements and amendments, commonly called the “Martin Act” (Gen. Stat. p. 3370), caused the mortgaged premises to be sold to the defendant Joseph Kaighn for the sum of $40 to satisfy the taxes and assessments, with interest and costs, for the years 1893, 1894 and 1895, with costs, &c. The complainant alleges that Kaighn claims to have á first lien on the premises paramount to and ahead of the complainant’s mortgage by virtue of this tax sale.
    The defendant Kaighn answers the bill, admits the mortgage of the complainant, and admits the tax sale, and his purchase for the taxes assessed on the premises for the year 1893, and remaining unpaid thereon, under the provisions of the “ Martin Act,” and claims that by reason of the tax sale and his purchase for $40 he, Kaighn, is the owner in fee-simple of the premises, and has title paramount to and ahead of the complainant and' those through whom the complainant claims. The defendant Kaighn further says that the defendant Rourke, who is in possession of the premises, holds the same under his lease and not otherwise, and he denies that the possession of the defendant Rourke is subject to the complainant’s mortgage, and denies that the complainant’s mortgage is a prior lien thereto, and alleges that Rourke’s title under him, Kaighn, is paramount to and ahead of the complainant’s mortgage.

      Mr. Martin V. Bergen, Jr., and Mr. Martin V. Bergen, for the complainant.

      Mr. Samuel H. Richards, for the defendant Joseph Kaighn.
   Grey, V. C.

Neither the bill nor the proofs raises any question as to the authority of the board having control of the finances of the city, to order a sale for the taxes and assessments named in the bill, at the time when it is stated to have been made. The validity of the tax sale is not disputed by the pleadings, proofs, or in argument, and I shall consider the case as it has been presented.

Upon the hearing it appeared that the mortgaged premises had been sold for taxes under the provisions of the “ Martin Act,” on August 27th, 1896, to the answering defendant Joseph Kaighn. He was made a defendant upon the averment that he claimed, by reason of this purchase, to have a first lien on the premises for the amount, of the purchase-money paid, with interest and costs. Had the defendant answered the bill setting up his purchase at the tax sale, and claiming that by it he had acquired a lien to the amount of his purchase-money with interest and costs, as provided by the act, which was superior to the mortgage, he would have been entitled either to have been dismissed, allowing his lien to remain upon the premises to be. redeemed as provided for in the “ Martin Act,” or to have had the amount of his lien ascertained and decreed to be first paid out of the proceeds of sale of the mortgaged premises.

The defendant Kaighn admits by his answer that his interest in the premises has been acquired by purchase at a tax sale under the “Act concerning the settlement and collection of arrearages of unpaid taxes,” &c., commonly called the “Martin Act” (Gen. Stat. p. 3370), but he avers that by reason of this sale he has become the owner in fee of the mortgaged premises and has a title superior to the admittedly prior mortgage of the complainant. He makes no allegation that any of the incidents subsequent to the sale, such as notice to owners and mortgagees, expiration of a year after the sale, receipt of a deed, &c., which the act prescribes as prerequisites to the vesting of a fee, have happened. Gen. Stat. pp. 3374, 3384, ¶¶ 422, 453. Nor was there any proof that any such circumstances had come to pass, nor could there be, as sufficient time had not elapsed before redemption was effected.

The defendant Kaighn insists that this claim shows a legal title, adverse to the complainant’s mortgage, and that this court has no jurisdiction to pass upon the issue thus raised, and can only dismiss the defendant, with costs, &c.

The allegations of the bill and the admissions of the answer, when considered in connection with the provisions of the Martin act under which the defendant purchased, show that he has no title whatever in the mortgaged premises. His right depends entirely upon the provisions of the act, which nowhere gives the purchaser at the tax sale any title until he shall not only have paid the price, but shall also have proved that he has served notice of -the sale upon the owners and mortgagees, and that after the expiration of one year from the time of sale he has received a deed. When these things have been efficiently done,' and not until then, the purchaser at the tax sale takes a “ fee-simple absolute free of all encumbrances.” Gen. Stat. p. 3384 453. The mere claim that he has a legal title when all the facts are admitted and before the court, which show that he has not, cannot give this defendant a status to challenge the jurisdiction of this court to pass upon his rights in the mortgaged premises. Until this title actually vests by the delivery of the deed the interest of a purchaser at a tax sale under the Martin act remains a mere lien; the right of redemption is outstanding in the owner and mortgagee. Gen. Stat. p. 3372 415; Gen. Stat. p. 3374 422. It is the peculiar province of this court to adjust and enforce the equities attendant upon the redemption of a title from the encumbrance of liens. I have no doubt that such a jurisdiction may be exercised under the general equity powers of this court; but if there were any question about it, the supplement to the Martin act, approved May 23d, 1890 (Gen. Stat. p. 3383 449), in express terms recognizes not only the right of the mortgagee to redeem the lien under the tax sale, but, having redeemed it, to hold and enforce it against the lands “ by any appropriate proceeding at law or in equity,” and the steps taken to enforce this redeemed lien “ may be independently of and before, or in connection with proceedings to enforce payment of the mortgage.”

It remains to be considered whether the lien under his purchase, which the defendant Kaighn had acquired, has been redeemed by the complainant. The counsel of the defendant objected to the proof of this discharge by redemption, because it was not alleged in the bill of complaint. When the bill was filed, the payment which is claimed to have effected the redemption had not been made. There was no obligation upon the complainant mortgagee to make his payment of redemption before the bill was filed, nor is there any reason why this court should not, in a foreclosure suit on final hearing, ascertain whether a lien existing when the bill was filed, has meanwhile been discharged. When the defendant was brought into court on the allegation in the bill, which- showed his claim of lien, he filed his answer substantially admitting the facts set up in the bill as to his purchase at the tax sale, but claiming that the legal operation of that sale was to vest in him a title in fee in the mortgaged premises. When issue was joined on this answer, the question to be determined was that tendered by the answer, namely, had the defendant any status as an owner in fee, as he alleged, or was his interest merely a lien ? If it appeared that he held a legal title which was adverse to that of the mortgagee, he might fairly claim to have disclosed his title, and thus to have complied-with the rule declared in Chadwick v. Island Beach Co., 16 Stew. Eq. 616, by the court of errors, and he might ask to be dismissed so that his legal title might be tested in a court of law. When, however, the pleadings and the provisions of the public statute show that the defendant has no title, but only a lien, which the complainant claims to have redeemed since the bill was filed, there is no occasion to dismiss the defendant, as the whole matter is one which is within the ordinary jurisdiction of this court, and its consideration in this suit is also in accordance with the statutory provisions of paragraph 449, above cited; for how can the complainant mortgagee who claims to have redeemed the defendants’ lien, enforce it against the mortgaged premises, to recover his money in this foreclosure proceeding, unless he be permitted to show that he has actually redeemed in the mode prescribed by the statute ?

Proceeding to inquire into the fact of redemption by the complainant mortgagee. The .statute provides for the sale not only of lands in arrears of payment of taxes at the time the act was passed, in 1886, but also for sales because of future taxes which may be in arrears. Gen. Stat. p. 3372 415 and Gen. Stat. p. 3384 453 direct the mode of selling for taxes in arrears when the act was passed, and Gen. Stat. p. 3374 422 directs the mode in cases of taxes levied after the passage of the act (as in the case now under consideration) and declares that the deed shall have the same effect as in cases of proceedings where taxes were in arrears when the act was passed, but the deed shall not be given for one year after the time of the sale, during which the owner may redeem on the same terms as are provided in the act.

By Gen. Stat. p. 3372 415 the mortgagee who redeems must pay to the city treasurer for the use of the purchaser the sum paid by him at the sale — this sum was $40; by the same paragraph he must also pay the interest at ten per cent, from the date of sale, interest should therefore be added from August 27th, 1896, to October. 22d, 1896, the day of the claimed redemption, at ten per cent, per annum — sixty-three cents; by the same paragraph the mortgagee who redeems must pay for each notice served $1, and the affidavit proving such service is required to be filed in the office of the city clerk and is made “ evidence in all courts and places of the’ facts therein stated; ” the affidavit so filed shows three notices served — $3; total, $43.63.

These are all the payments which, in my view of the provisions of the statute, were needed to be deposited with the city treasurer in order to redeem the mortgaged premises.

The statute further declares that “ the certificate of the city treasurer stating the payment and showing what property such payment is intended to redeem, shall be evidence of such redemption and payment.” Gen. Stat. p. 3381 ¶ 442. Such a certificate is produced, showing the deposit on October 22d, 1896, for redemption of the mortgaged premises by the complainant, to have been $53.67. This sum is more than sufficient to make the full amount necessary to redeem the defendant Kaighn’s lien.

He claims, however, that additional items must be paid before redemption can be effected by the deposit made with the city treasurer. There were four additional notices which the defendant Kaighn claims were served. Of these services there is no proof by affidavit in compliance with the statutory requirements. This whole proceeding is a purely statutory creation; the statutory gift of the right to be paid for serving the notices is accompanied by a prescription of the mode in which the fact of the service shall be proved, and I think the observance of the mode of proof is a necessary part of the exercise of the power to collect payment for the services. Such proof is safe and proper as a verification of the fact of service of notice, and is also essential to bind the purchaser at the tax sale, to a statement with certainty of the amount he may rightfully claim from the owner or mortgagee who seeks to redeem. If fees may be claimed for notices served, of which no proof is made by affidavit, the very precise requirements of paragraph 415, as to verification and filing of affidavit, would seem to be of no force whatever. Because not proved as required by paragraph 415 above cited, no fees should be allowed for the four additional notices.

The defendant Kaighn also claims an item of fees paid the city for deed, $5. The only deed mentioned in the sections in the statutes applicable to the sale made of the mortgaged premises, is that referred to in Gen. Stat. p. 3374 422 to be given to the purchaser at the tax sale, one year after the time of the sale. In this case no such deed was given, nor was any' due to Mr. Kaighn, as the redemption money was deposited' within less than three months after he purchased, and less than two months after he gave notice. I think this fee for a deed cannot be sustained.

The party redeeming the lands must pay to the purchaser “ all the costs and expenses necessarily incurred in proceedings taken for the purpose of perfecting title thereto, including fees for searching at the rate allowed by law to the county clerk, or registrar of deeds, for his services, but not including counsel fees.” See section 1 of supplement approved April 5th, 1892, as amended by supplement approved March 16th, 1893, Gen. Stat. p. 3389 477. Under this section it is claimed by Mr. Kaighn that searching fees to the amount of $10 should be allowed him, and that the costs of Mr. Kaighn’s defence in this suit must also be awarded as necessarily incurred in proceedings taken to perfect the title. But section 5 of the act of April 5th, 1892 (Gen. Stat. p. 3386 462), expressly declares that no such costs and expenses shall be allowed “ unless the mayor of the city * * * shall approve of the amount,” &c. Neither the item of $10 for searching fees nor any other which could be claimed under this head, has been approved by the mayor, and therefore they cannot be awarded.

It is objected by the defendant Kaighn that although Gen. Stat. p. 3381 442 obliges the mortgagee to pay “any other tax or assessment chargeable thereon which the purchaser or his legal representative or assigns may have paid since the sale,”' with interest, &c., it has not been shown that there are no such taxes, and therefore redemption is not complete. As the purchase was made on August 27th, 1896, and the redemption by deposit was accomplished October 22d, 1896, and there has been no proof nor any claim of any assessment between those dates, the court will not presume that a special or additional tax, which the defendant neither alleges nor proves, was not only imposed on the premises, but also paid by the defendant during this eight weeks that he held his lien unsatisfied.

I will advise a decree of foreclosure according to the prayer of the bill, notwithstanding the answer of the defendant Kaighn, enforcing also the payment of the: $43.63 with interest according to the statute.


text:
    E. G. C. Bleakley, receiver, &c., v. Alfred B. Nelson et al.
    [Filed March 7th, 1898.]
    1. A chattel mortgage not recorded in the clerk’s office of the county in which the mortgagor resided at the time of its execution, and a sale made under it by the mortgagee, are void as against the creditors of the mortgagor.
    2. A transfer or assignment of a chose in action as security for the payment of a debt, will be recognized and enforced in equity.
    3. Such an assignment is not a chattel mortgage within the meaning of the Chattel Mortgage act. Gen. Stat. p. 2112.

    On bill for injunction, &c. Order to show cause, answer and affidavits, &c.
    This is an application for a preliminary injunction to restrain the removal or disposition of certain chattels and also certain moneys due upon a contract between the defendant Nelson and the Seaside Park Company.
    The complainant is the receiver under appointment in aid of a recovery had by J. C. McNaughton & Company against the defendant Nelson in Ocean county circuit court. The judgment was entered and execution issued on September 20th, 1897; an order for discovery was made on December 17th, 1897, and receiver appointed December 28th, 1897.
    The defendant Nelson made a chattel mortgage to the defendant Morgan dated September 2d, 1897, to secure $7,945.62, the sum of five promissory notes which Nelson had theretofore given to Morgan. The articles mortgaged were included in the schedule at the end of the instrument, and specified a number of chattels and also “ all moneys due and to become due to me from the Seaside Park Company arising from a contract made with said company by me on the 26th of February, 1897.” By virtue of the chattel mortgage the mortgagee made sale of -the goods mortgaged on the 13th day of November, 1897, and bought them in for $66.
    It appears without dispute that Morgan had actually loaned to Nelson the amount of money named in the promissory notes, aggregating $7,945.62, and that there remains yet due thereon $4,899.24, less whatever credit might be allowable by the application of the proceeds of the sale under the chattel mortgage.
    Nelson, the mortgagor, resided in Mercer county at the time of the execution of the chattel mortgage and continued in possession of the goods mortgaged until the time the mortgagee sold them.
    The chattel mortgage was recorded on September 9th, 1897, in Ocean county.

      Mr. George H. Pierce, for the complainant.

      Mr. Linton Satterthwait, for the defendants.
   Grey, V. C.

This chattel mortgage is criticised on several grounds. The affidavit of the mortgagee is declared to be a sufficient statement of the consideration, and it is insisted that the chattel mortgage is void because not recorded in the clerk’s office of the county in which the mortgagor resided, and the sale by the chattel mortgagee under the chattel mortgage is alleged to have been made before the chattel mortgage came to be due.

• The mortgage upon the goods and chattels was in my view a nullity as against the complainant, Bleakley, receiver, &c., under the judgment of J. C. McNaughton & Company against Nelson, because of the undisputed fact that it was not recorded in the county in which the mortgagor resided at the time of the execution of the chattel mortgage, as required by the Chattel Mortgage act. Gen. Stat. p. 2113 §§ 52, 53. The statute, in section 52, declares that every mortgage _on goods and chattels not. accompanied by an immediate delivery and followed by actual and continued possession of the things mortgaged shall be absolutely void as against creditors of the mortgagor * * * unless the mortgage * * * be recorded as directed in the succeeding section. Section 53 directs that the chattel mortgage be recorded in the clerk’s office of the county where the mortgagor shall reside at the time of the execution thereof. The mortgage, so far as it operated upon the goods and chattels of the mortgagor, was by the express terms of the statute a nullity as to the. complainant, who stands as a receiver for a creditor. The obvious intent of the act is to fix one place where the creditors and intending subsequent mortgagees and purchasers from the mortgagor may go, in order to ascertain whether his apparent ownership of goods or chattels in his possession is encumbered by a mortgage. Notice is imputed to creditors, subsequent mortgagees and purchasers if the terms of the statute directing the recording of the mortgage are observed; but the whole scheme of constructive notice by the record would be perverted if they could be held to be notified by a record made elsewhere than in the place where'the statute directed them to look. The creditors who were to be protected by these provisions are the creditors at large of the mortgagor without exception. Roe v. Meding, 8 Dick. Ch. Rep. 366. Their rights may have accrued prior or subsequent to the mortgage; in either case they are entitled to the benefit of that statute. Williamson v. Railroad Company, 2 Stew. Eq. 336.

The mortgage upon the goods and chattels being a nullity as to the complainant, the sale of those goods and chattels which was attempted to be made by the mortgagee, under this authority, was also a nullity as to him, whether the- chattel mortgage was in other respects void or not. As there was no chattel mortgage, there could be no sale under it. The goods and chattels named in the chattel mortgage stand, as to the complainant’s judgment and execution, in the same position as if there had been neither chattel mortgage nor sale.

The complainant is entitled to an injunction to restrain the disposition and removal of the goods and chattels by the defendants under the authority of this void chattel mortgage and the sale made thereunder.

The mortgage as to its effect upon the moneys due and to become due on the contract made by the mortgagor with the Seaside Park Company, stands in a different position.

This item is a chose in action, and is not within the operation of the Chattel Mortgage act. That statute applies only to mortgages upon goods and chattels, and by its terms refers to such goods and chattels as are capable of delivery and of actual and continued possession. The object of the act is to make invalid, as against the creditors of the mortgagor, all mortgages on goods and chattels, unless possession be taken of them, or the mortgage be recorded as provided by the act. The old doctrine assumed that the possessor of personal property was the owner of it and that secret gifts or charges on that property made while he continued to use it as his own, were frauds upon creditors who dealt with him. Twyne’s Case, 3 Colee 80. But the property which was so treated was of such a visible and tangible character that the possession of it was manifest to creditors, who might by reason thereof give credit to the possessor, and be injured by the subsequent assertion of the secret title. Runyon v. Groshon, 1 Beas. 86 (1858), contains an instructive collation of the cases showing the advance to the doctrine now accepted, that the continued possession of the chattels by the vendor or mortgagor, though prima fade indicative of fraud, may yet be explained away by proof by the vendee or mortgagee that the transaction was in good faith and without fraud. Miller v. Shreve & Pancoast, 5 Dutch. 250 (1861), confirmed this view, and in 1864 the first statute was passed compelling the filing and yearly renewal of chattel mortgages in the county clerk’s office, as a prerequisite to their validity as against creditors, subsequent mortgagees and bona fide purchasers. The obvious purpose of this and subsequent legislation on the subject, is to avoid the creation of secret liens upon personal property, leaving its possession with the creator of the lien, who might obtain credit from those who dealt with him by reason of his apparent ownership of the goods, or make further mortgage or sale of them to parties ignorant of the existing liens.

These evils, however, do not arise, neither do the corrective statutes, either in terms or spirit, apply when the mortgage in question disposes of that sort of property which is not of a physical character and of which there is no apparent possession which could tempt parties to deal with the possessor as with one having values which could be relied upon to pay the debts thus incurred. A Massachusetts statute required “ mortgages of personal property” to be recorded, which language is somewhat wider than that used in an act which named only mortgages on “ goods and chattels.” In Marsh v. Woodbury, 1 Metc. 436, this act was held to apply only to goods capable of delivery, and not to a conditional assignment of a chose in action, and that it was not necessary that such an assignment should be recorded. This case was cited with approval as to this principle, in Williamson v. New Jersey Southern Railway Co., 11 C. E. Gr. 403, where it was held that the act concerning chattel mortgages did not extend to a mortgage of the capital stock of a corporation. In Bacon v. Bonham, 12 C. E. Gr. 209, there was an assignment of a legacy expectant, as security for the repayment of a loan. A judgment creditor filed his bill to compel discovery and application of the assets to the payment of his claim. It was held that in equity it was a good transfer as security for the loan, and not within the operation of the act concerning chattel mortgages, which did not apply to mortgages of choses in action. The decree was affirmed on appeal, though no allusion was made in the opinion to the operation of the Chattel Mortgage act. Bacon v. Bonham, 6 Stew. Eq. 614. I think the principles laid down in this case, both as to the scope of equitable assignments and the limits of the application of the Chattel Mortgage act, control the disposition of the case under consideration.

Bonds and mortgages have been held in this state to be goods and chattels within the operation of section 6 of the statute of frauds (Greenwood v. Law, 26 Vr. 168), and it has been decided that trover will lie for their recovery as goods and chattels, under the act authorizing suit against the executor of a testator who, in his lifetime, had converted goods or chattels. Rev. L. p. 174 (1820); Elm. Dig. p. 165 § 5; Terhune v. Executors of Bray, 1 Harr. 54. Chief-Justice Horn blower declared that bonds and other documentary securities must in law be decreed to be goods and' chattels. I do not consider that these rulings should aifect the views I have expressed, as the contract with the Seaside Park Company, now under consideration, was in no sense a security, being simply an executory agreement for compensation for labor and material, and entirely distinct from that class of personalty, the mortgaging of which led to the passage of the Chattel Mortgage acts.

There is neither allegation nor proof of fraud in the transaction between the defendant Nelson, the mortgagor, and the defendant Morgan, the defendant mortgagee. The evidence all goes to show good faith, and a transfer of the benefits of Nelson’s contract with the Seaside Park Company, as a security for moneys which Morgan had loaned him. This took place on September 2d, 1894, several weeks before the judgment creditor had entered his judgment, and necessarily before any proceedings for discovery, &c., had been instituted. The title of a receiver, such as the complainant, as to the ehoses in action of the defendant in the judgment, has been defined in Coleman v. Roff, 16 Vr. 11, to relate to the time of the issuing of execution. This was on September 20th, 1897. At this time the equitable assignment to the defendant Morgan to secure the payment of his debt was complete, and all that remained to the defendant Nelson was his equity in the benefits of the contract after the payment of his debt to Morgan.

What amount is collectible on the contract does not appear, but the defendant in the judgment (Nelson) being entitled to auy surplus over the amount necessary to pay Morgan’s debt should be restrained from further disposing of his interest if there be any. The injunction may go against Nelson to this extent as to these moneys.

I will advise the issuing of an injunction restraining the lefendant Nelson in the manner indicated by the views above expressed.