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of the property intended to be mortgaged; and as to after-acquired property the rule is that the mortgage will be held to extend to such property, if the court, under the terms of the mortgage, would have decreed a specific performance of a contract to sell or to pledge it.
After-acquired property clauses have been held sufficient where they covered "all property purchased in replenishment of stock," “all property purchased in addition to the present stock," and other like descriptions.
In each of these cases it will, of course, be observed that testimony de hors the instrument was required to identify the property.
The principles involved and applications thereof will be found in the following cases : Smithurst v. Edmunds (Chancellor Green, 1862), 14 N. J. Eq. (1 JcCart.) 408; Shaw v. Glen (Chancellor Runyon, 1883), 37 N. J. Eq. (10 Stew.) 32; Howell v. Francis (Vice-Chancellor Bird, 1887), 10 Atl. Rep. 436; Dunn v. Hastings (Vice-Chancellor Pitney, 1896), 54 N. J. Eq. (9 Dick.) 503; Cumberland Bank v. Baker (Vice-Chancellor Grey, 1898), 57 N. J. Eq. (12 Dick.) 231 (at p. 237); Fidelity Trust Co. v. Staten Island Clay Co. (Vice-Chancellor Bergen, 1905), 70 N. J. Eq. (4 Robb.) 550 (at p. 553); Stoll v. Sibson (Vice-Chancellor Reed, 1905), 65 N. J. Eq. (20 Dick.) 552; Cunningham v. Alryan Woolen Mills (Vice-Chancellor Bergen, 1905), 69 N. J. Eq. (3 Robb.) 710 (at p. 712).
The next matter for consideration is whether the language used in this instrument is sufficient to make the mortgage effectual as to the after-acquired property—bearing in mind that the test is the same as would be applicable in a case of specific performance.
If there is any doubt, in a case of specific performance, what property the parties had in mind, or as to what property the language used is intended to describe, the court will not decree the performance, because the court will not attempt to make a contract for the parties. But if a man agrees to sell or to pledge all of any kind of property that he may acquire title to, there can be no uncertainty about that.
Proof that he has acquired title is proof of the thing intended to be transferred. This clause, therefore, will not fail because of uncertainty. If it be held bad it must be because the court finds that one cannot legally agree to pledge to another all of certain kinds of property to which he may in the future acquire title. I know of no such principle, and, in fact, many of the decided cases (cited above) show that there is no such principle. Among the cases above cited will be found instances, as before mentioned, where the after-acquired property clause related to stock to be bought in addition to that then on hand, and stock to be bought in replenishment thereof, and other similar phrases. In every one of such cases the mortgagor, by the after-acquired property clause, was held to have pledged all the property of certain kinds to which he might in the future (during the life of the mortgage) acquire title. In principle such cases are indistinguishable from the one at bar. I therefore conclude that the after-acquired property clause in this mortgage is effective to cover the horses, wagons, harness, &c., to which Tully subsequently acquired title.
Third. Whether either of the mortgages covered the horses sold by Brown to Tully-Brown claiming that the sales were conditional and that the title had not passed.
All of the sales by Brown to Tully were after the date of the first mortgage, so that none of such horses were specifically described in it, and the lien thereof is extended to such horses by reason of the after-acquired property clause aforesaid.
In the second mortgage certain of the horses sold by Brown to Tully are specifically described.
The proper solution of the question depends upon a finding as to whether Tully acquired title to the horses he bought of Brown, or whether the sales were conditional sales and title had not passed.
Brown contends that Tully did not acquire title, and that the sales were conditional. I cannot find from the testimony that he has sustained this contention. All the sales by Brown to Tully were made through an agent of Brown's named Wilson, and were all alike in character. The horse or horses which were the subject of each sale were delivered to Tully and his note was taken for the price. These notes were discounted by
Brown. Money was loaned by Brown to Tully, and notes taken for the amount of such loans, and these notes were also discounted by Brown. No attempt to keep separate accounts of the separate sales and loan transactions was made.
When Tully paid money it was credited on the existing indebtedness indiscriminately, and the original transactions lost all identity by the merging of smaller note or notes into larger ones and combining indebtedness upon which something had been paid into new indebtedness, and representing it all by a new note.
Some of the horses died after they were delivered to Tully, but this fact was ignored by Brown in his accounts. He did not, by reason thereof, lessen his claim against Tully, as he undoubtedly would have and must have done if the sales were conditional and the horses were his and not Tully's.
Neither Brown nor his bookkeepers and agents were able to separate any one transaction from the mingled accounts. They could not trace any one sale and tell what had been paid thereon, or how much was due on any separate transaction. They were only able to state a general account--so many horses sold, amounting in the aggregate to so much, plus money loaned, so much, less what Tully had paid-leaving a net balance due by Tully of a stated sum.
Against this conclusive and convincing evidence of the nature of these sales, which demonstrated that they were ordinary sales on credit and that the title unquestionably passed to Tully, the only testimony produced is that of Wilson. He testified that Tully agreed, upon the occasion of the first sale of the Brown horses to him, that the title should not pass until the price was paid, and that a similar understanding was had, or implied, with respect to each subsequent sale. There was no writing expressive of this most important and distinguishing feature of these sales; although it was shown that in previous transactions between Wilson and Tully, where the intention was undoubtedly to make the sale conditional, Wilson caused a writing of the character required by the statute to be made and signed by Tully.
Apart from the denial of Tully of any such agreement, I am unable, in the face of the other evidence in the case, to give any credit to the testimony of Wilson in this respect; and I therefore find that title to the horses in question passed to Tully.
Fourth. Whether the second mortgage was not ineffective as to Brown because of a defective affidavit.
The statute (Gen. Stat. p. 2113 § 52) provides that a chattel mortgage shall be absolutely void as against the creditors of the mortgagor unless the mortgage have annexed thereto an affidavit stating the consideration of the mortgage; and our cases all hold that this affidavit must show how the debt arose on which the mortgage is founded; how the debt came into existence, and how the relation of debtor and creditor as between the mortgagor and the mortgagee was created. Ehler v. Turner (ViceChancellor Van Fleet, 1882), 35 N. J. Eq. (8 Stew.) 68; Receiver Graham Button Co. v. Spielman (Vice-Chancellor Van Fleet, 1892), 50 N. J. Eq. (5 Dick.) 1:20; Dunham v. Cramer (Vice-Chancellor Grey, 1902), 63 N. J. Eq. (18 Dich.) 151; Miller v. Gourley (Vice-Chancellor Grey, 1903), 65 N. J. Eq. (20 Dick.) 237; Black v. Pidgeon (Court of Errors and Appeals, 1904), 70 N. J. Law (41 Vr.) 802.
The affidavit attached to this mortgage recites that the consideration
"is a balance of $700 due upon a judgment recovered by Effie C. Wynants against John J. Tully and assigned to deponent, and also $700 which John J. Tully owed Abraham Collerd and which indebtedness Abraham Collerd assigned to me" (the deponent).
I cannot agree with the defendant's argument that the recital of the indebtedness due upon the judgment is insufficient. A judgment is a debt of record, and I do not think it is necessary to recite how the antecedent debt, obligation, or legal duty which is merged into the judgment, arose. The fact that it has been crystallized into a judgment is sufficient. When, therefore, a chattel mortgagee swears that she is the owner of a debt of record against the mortgagor and that the chattel mortgage is given in consideration thereof, there is a sufficient statement of the consideration of the mortgage to satisfy the statute.
The remaining question in this respect is whether it is shown in this case that the chattel mortgage was given upon this consideration--that is, whether it appears from the proofs that the chattel mortgagee canceled the judgment, or bound herself not to proceed thereon for a period, or bound or obligated herself in any way concerning the judgment so as to make it a consideration for the mortgage?
The mere fact that she held the judgment would not be a consideration for the mortgage, unless she agreed that upon receiving the mortgage she would be bound in some way with respect to the judgment. Otherwise, it would be a nudem pactem. It is argued that the mortgage was given as collateral security for the payment of the judgment, but even so, there must be a consideration for the mortgage, and unless the mortgagee was disadvantaged or the mortgagor was advantaged by reason of the giving of the chattel mortgage, there was no consideration. There is no proof of disadvantage to the mortgagee or of advantage to the mortgagor as a consideration of the mortgage, and no proof of any agreement of any kind by the mortgagee respecting the judgment. I do not find it necessary to pursue this inquiry further, and announce a conclusion thereon, because of my findings with respect to this affidavit, and the effect which such finding has upon the affidavit as a whole.
It will be recalled that the remaining portion of the affidavit reads: "$700 which John J. Tully owed Abraham Collerd, and which indebtedness Abraham Collerd assigned” to the deponent. This clearly is not a statement of consideration which satisfies the statute as interpreted by our cases. It does not show or attempt to show how the indebtedness arose between the mortgagor and the mortgagee. Affidavits have been held insufficient which recited that the consideration was an existing indebtedness by the mortgagor to the mortgagee—a fortiori, is one defective which contents itself by reciting that there was an indebtedness by the mortgagor to a third person which was transferred by such third person to the mortgagee.
The result is that I find that this affidavit is defective and does not satisfy the statute, and consequently the mortgage is invalid as to Brown, the creditor of the mortgagor.