Opinion
07-09-1908
SIMPSON v. ANDERSON et al.
Henry D. Banning and John S. Van Dike, for the motion. John Sykes, opposed.
Suit by the ordinary, etc., for and on behalf of Mabel L. Simpson, against Abijah A. Anderson and others. Heard on motion for preliminary injunction. Preliminary injunction advised.
Henry D. Banning and John S. Van Dike, for the motion.
John Sykes, opposed.
WALKER, V. C. On May 8, 1907, the ordinary, for and on behalf of Mabel L. Simpson, recovered a judgment in the Mercer circuit against the defendant Josiah B. Flock for $1,168.75, including costs, and issued an execution and levied upon the goods and chattels of the defendant named, but was confronted with a chattel mortgage made by the defendant Flock to the defendant Abijah A. Anderson August 28, 1897, covering the goods and chattels upon which the levy was made. The bill charges that the chattel mortgage is void and invalid as against the creditors of the defendant Flock and as against the complainant under his execution and levy, in that the affidavit attached thereto does not comply with the statute in such case made and provided. There are other objections levelled against the validity of the chattel mortgage, and they raise questions of fact. Their determination is in my judgment unnecessary, because the affidavit is insufficient, and the mortgage is, therefore, in law, void as against the creditors of mortgagor.
The affidavit annexed to the chattel mortgage roads as follows: "State of New Jersey, County of Mercer—ss.: Abijah A. Anderson, of the borough of Allentown, county of Monmouth, being duly sworn on his oath, saith that he is the holder of the foregoing mortgage, that the consideration of said mortgage is, whereas the said Josiah B. Flock became indebted to one Richard H. Hendrickson in the sum of fifteen hundred dollars, and the said Josiah B. Flock made, executed, and delivered to the said Richard H. Hendrickson a certain bond bearing date the twenty-third day of March, eighteen hundred and ninety-two, and to secure the payment of the said bond the said Josiah B. Flock and wife made, executed, and delivered to the said Richard H. Hendrickson a mortgage bearing date the twenty-third day of March, eighteen hundred and ninety-two, which said mortgage is recorded in the office of the clerk in and for the county of Mercer In Book 89 of Mortgages, pages 290, etc., and whereas the said Richard H. Hendrickson, for the consideration of fifteen hundred dollars, assigned, transferred, and set over the said bond and mortgage to Abijah A. Anderson by virtue of a deed of assignment of mortgage bearing date the first day of April eighteen hundred and ninety-three, and recorded in the clerk's office in and for the county of Mercer in Book S of Assignment of Mortgages, pages 296, etc., and whereas the said Josiah B. Flock is indebted to this deponent for the full amount of the said fifteen hundred dollars, together with interest thereon from the first day of April, eighteen hundred and ninety-seven, and whereas, on the thirtieth day of March, eighteen hundred and ninety-four, this deponent loaned and advanced in cash, the sum of three hundred and forty-four dollars to the said Josiah B. Flock, at his special instance and request, and that the whole amount of the said three hundred and forty-four dollars, with interest thereon from the first day of April, eighteen hundred and ninety-seven, is still due and owing from the said Josiah B. Flock to the said Abijah A. Anderson, and whereas this deponent has, at the special instance and request of the said Josiah B. Flock, become an accommodation endorser and surety upon three certain promissory notes, one of which bears date the twenty-second day of June, eighteen hundred and ninety-seven, for the consideration of thirty-five dollars, one of which bears date June twenty-eighth, eighteen hundred and ninety-seven, for the sum of twenty-eight dollars; and one which bears date the third day of August, eighteen hundred and ninety-seven, for the consideration of seventy-eight dollars: And, now, the consideration for this chattel mortgage in the said fifteen hundred dollars due from the said Josiah B. Flock to this deponent upon the said bond and mortgage, and the further sum of three hundred and forty-four dollars, loaned and advanced by this deponent to the said Josiah B. Flock on the thirtieth day of March, eighteen hundred and ninety-four, and the further sum of money as this deponent may be called upon to pay by reason of having become an accommodation endorser upon the three certain promissory notes hereinbefore mentioned, and the amount of money now due and to grow due thereon is the sum of eighteen hundred and forty-four dollars, payable on the twenty-eighth day of August, eighteen hundred and ninety-seven, besides such sums of money as this deponent may be called upon to pay by reason of having become such accommodation endorser, together with interest on the said sum of eighteen hundred and forty-four dollars, from the first day of April, eighteen hundred and ninety-seven."
So much of the statute in force at the time the chattel mortgage was made as is applicable provided that every such conveyance should be absolutely void as against the creditors of the mortgagor, unless it be recorded and had annexed thereto an affidavit by the holder, his agent, or attorney, stating the consideration of the mortgage, and, as nearly as possible, the amount due and to grow due thereon. Gen. St. 1895, p. 2113, § 52. The present statute is the same. P. L. 1902, p. 437, § 4. It will be remembered that the present mortgagee and affiant was not the original creditor of the mortgagor, but toot from his mortgagee an assignment of a bond and mortgage other than the chattel mortgageunder consideration, and the mortgagee in this chattel mortgage, in his affidavit annexed thereto, says that Richard H. Hendrickson, the original mortgagee, for the consideration of $1,500, assigned the bond and mortgage to him, deponent, by deed of assignment, etc., and that the mortgagor, Flock, is indebted to him, deponent, for the full amount of the $1,500, together with interest, etc. Here is no statement of the consideration of the mortgage. This amounts to no more than an assertion that Flock was indebted to Hendrickson in the sum of $1,500, and that Hendrickson assigned the mortgage given to secure that indebtedness to Anderson for something which was of the value of $1,500, and that therefore Flock owes Anderson the $1,500. The language used by Vice Chancellor Van Fleet in declaring void the chattel mortgage in Graham Button Co. v. Spiel mann, 50 N. J. Eq. 120, at page 122, 24 Atl. 571, at page 572, is so pertinent that it is here quoted: "Nothing, as it seems to me, can be more certain than that simply saying, under oath, that the consideration of a mortgage is the indebtedness of the mortgagor to the mortgagee, consisting of a present indebtedness of $1,500—and that is all that is said here—without disclosing how the debt on which the mortgage is founded arose, whether it arose out of a sale, a loan, or how otherwise, is not a compliance with the statute. On the contrary, a statement of consideration, expressed in language so general and indefinite, so plainly contravenes the fundamental purpose of the legislation that, if it were adjudged to be a compliance with the law, such judgment would unquestionably defeat the most salutary provision of the statute. The command of the statute is imperative. Unless the mortgage, when recorded, is accompanied by an affidavit which states fully and plainly the consideration on which it is founded, the statute says that the courts shall treat the mortgage as absolutely void as against the creditors of the mortgagor."
There is another defect in the affidavit concerning the consideration for which the chattel mortgage was given, and it is entirely aside from the statute to which reference has been made. It is this: The language used to show that there was an indebtedness originally from Flock to Hendrickson, and that that indebtedness was assigned to the chattel mortgagee, is not direct and positive, but a mere recital, and is insufficient. The affidavit states "that the consideration of the mortgage is, whereas, the said Josiah B. Flock became indebted to one Richard H. Hendrickson," etc., "and, whereas, the said Richard H. Hendrickson for the consideration of $1,500 assigned, * * * the said mortgage to Abijah A. Anderson," etc., "and, whereas, the said Josiah B. Flock is indebted to this deponent [Anderson] for the full amount of said $1,500," etc. In Bennett v. Benson, 25 N. J. Law, 106, 170, an affidavit to hold to bail, which commenced with the words, "for that," was held to be good, but it was observed that an affidavit commencing with the words, "for that whereas," was by way of recital, and would not be sufficient. Now, I can see no difference between commencing an affidavit with the words "for that whereas" and commencing an affidavit with the words "and whereas." Both are commonly used by way of recital in legal instruments, but are not, so far as I am aware, used by way of direct and positive averments of facts in affidavits. The word "whereas" is defined to mean "the thing being so that," "considering that things are so." 30 Am. & Eng. Ency. of Law (2d Ed.) p. 514. Suppose a witness were upon the stand giving oral testimony, and he were asked: "Is the mortgagor indebted to you?" and he answered, "it being so that he is indebted to me," or, "considering that he is indebted to me"—neither would be a direct and positive statement that the mortgagor was indebted, but, at best, only a statement from which it might be inferred that he was indebted. There are two other items of consideration for which the chattel mortgage was given, as shown by the affidavit. One is that the mortgagee loaned and advanced in cash to the mortgagor April 1, 1807, the sum of $344. The other is that the mortgagee, at the request of the mortgagor, became an accommodation indorser and surety upon three promissory notes, one of which bears date June 22, 1807, for the consideration of $35, another June 28, 1897, for the consideration of $28, another August 2, 1897, for the consideration of $78. These two items of indebtedness (if, in fact, any indebtedness ever accrued upon the promissory notes) are also bad because they are stated by way of recital, instead of as positive facts; the language being, "and whereas * * * deponent loaned and advanced in cash," etc., "and whereas this deponent has, at the special instance and request of the said Josiah B. Flock, become an indorser and surety upon three certain promissory notes," etc. That is not all, for, as to the contingent liability of endorser and surety upon the promissory notes, there is no sufficient description of the notes. This defect came under the reprobation of Vice Chancellor Grey in Dunham v. Cramer, 63 N. J. Eq. 151, 51 Atl. 1011. He said, at page 157 of 63 N. J. Eq., at page 1014 of 51 Atl.: "Nothing in this affidavit shows whose promissory note is secured by the chattel mortgage in question, nor who is the holder of that promissory note, nor for what consideration, whether a loan of money, or a sale of goods, or how otherwise the debt was created to secure which the chattel mortgage was made. An affidavit so markedly deficient in the statement of the transaction out of which the mortgage arose, no opportunity to inquiring creditors of the mortgagor to ascertainwhether the chattel mortgage is given for a valuable consideration, which would be binding upon them, or for a merely voluntary one, which would not be obligatory upon them." Nor are the defects in the affidavit as to the several matters of consideration cured by the statement (laid under "and whereas"), "The said Josiah B. Flock is indebted to this deponent for the full amount of the said $1,500.00," etc., or "and now, the consideration for the chattel mortgage is the said $1,500.00 due from the said Josiah B. Flock to this deponent upon the said bond and mortgage, and the further sum of $341.00 loaned and advanced by this deponent to the said Josiah B. Flock on the 30th day of March 1894, and the further sum of money as this deponent may be called upon to pay by reason of having become an accommodation endorser upon the three certain promissory notes hereinabove mentioned," or, "and the amount of money now due and to grow due thereon is the sum of $1,844.00, payable," etc., because these are mere statements that such an amount of money is due from the mortgagor to the mortgagee, and do not disclose the consideration upon which the mortgage is founded. It is one of the two essential requisites which are conjunctively required by the statute to be stated in the affidavit. Not only must the mortgage have an affidavit annexed thereto stating the consideration of the mortgage, but also as nearly as possible the amount due and to grow due thereon. To omit to state either the consideration or the amount due and to grow due renders the affidavit defective, and makes the chattel mortgage void as against creditors.
The only possibly supportable consideration set forth in the chattel mortgage is the loan of $344 made by Anderson to Flock, but, as Anderson in his affidavit submitted on the return of the order to show cause says that that sum has been paid (and also the promissory notes which the mortgage was given, in part, to secure), the mortgage stands only as security for the $1,500, the consideration of the original mortgage which was made by Flock to Hendrickson and by the latter assigned to Anderson. The affidavit as to the consideration underlying that transaction, namely, the assignment, being so radically defective, the mortgage cannot stand as against the complainant who is a judgment creditor of the mortgagor, Flock, with an execution actually levied upon the goods and chattels covered by the mortgage, which mortgage, of course, as between Flock and Anderson is perfectly valid.
Mr. Anderson, having seised and advertised for sale the goods and chattels levied upon under the complainant's execution, will be restrained from making a sale under his chattel mortgage. I will advise the issuance of a preliminary injunction as prayed for in bill of complaint.