In Seacoast Finance Corp. v. Cornell, supra, the acknowledgement to the mortgage had been taken by the mortgagee and the affidavit prescribed by the statute by the mortgagor, and although the mortgage was recorded, it was held void. It seems plain, therefore, that "the rule that substantial compliance with the statute is sufficient does not mean that any of its requirements may be dispensed with."Summary of this case from Sherman v. Union County, c., Co.
Submitted May 13, 1927 —
Decided October 4, 1927.
1. The amendment of 1925 ( Pamph. L., p. 96) to the Garage-keepers' Lien act ( Pamph. L. 1915, p. 556) provides that the lien "shall not be superior to, nor affect, any lien, title or any interest of any person or corporation held by virtue of a prior conditional sale or of a prior chattel mortgage properly recorded." Held, that the words "properly recorded" connote a lawful recording under the Chattel Mortgage act, and that where a chattel mortgage was ineligible for record because of lack of proper acknowledgment or proper affidavit of consideration, it was not "properly recorded" though copied into the record books and indexed.
2. A chattel mortgage void as to creditors for want of the statutory acknowledgment and affidavit is a lien upon the property mortgaged so far as the rights of the parties to the instrument are concerned.
3. In an action by a chattel mortgagee against his mortgagor and conflicting lien claimants, the questions as to the liability of the mortgagor and the claimants are separable, and a reversal as to one defendant, in view of rules 131 and 147 of the Supreme Court, will not work a reversal as to all in a case where the matter is remanded for a new trial.
On plaintiff's appeal from the District Court.
Before Justices PARKER, MINTURN and CAMPBELL.
For the appellant, Matthew Krafte.
For the respondent, Jacob Lubetkin.
This was a replevin suit for an automobile by parties named as mortgagees in an instrument purporting to be a chattel mortgage, as against the chattel mortgagor (Cornell) and a firm of garage keepers holding the car for storage charges. Cornell made no defense, and at the trial it appeared that the chattel mortgage was invalid as against subsequent creditors for the reasons that the affidavit of consideration was made by the mortgagor instead of by the mortgagee, and the acknowledgment and proof were made by the mortgagee through its president, instead of by the mortgagor. Notwithstanding these glaring defects, the paper had been accepted for record, and the claim made by the plaintiff was that as the amendment of 1925 ( Pamph. L., p. 96) to the Garage Keepers' Lien act ( Pamph. L. 1915, p. 556) provides that "the lien of a garage keeper shall not be superior to, nor affect, any lien * * * held by virtue of a prior conditional sale or of a prior chattel mortgage properly recorded," the chattel mortgage in question, having been actually recorded before the garage lien accrued, is superior to the latter. The trial court held, not only that the chattel mortgage was invalid as against the garage keepers, but that it was invalid as against Cornell, the mortgagor, and gave a general judgment for all the defendants.
So far as relates to the controversy between plaintiff and the garage keepers, the judgment was manifestly right. Plaintiff concedes that the chattel mortgage was invalid under the Chattel Mortgage act as against creditors, but its claim, as we understand it, is that the act of 1925, ubi supra, in using the phrase "properly recorded," refers to the official action of the recording officer in receiving the paper, copying it into the books, c. But we are unable to take that view of the matter, which obviously would have the effect of excluding a garage keeper as a creditor from the benefits of the Chattel Mortgage act, and this through an independent enactment under a wholly alien title. Such could not have been the intent of the legislature. To us it seems quite plain that the words "properly recorded" mean "lawfully recorded," i.e., with the sanction and under the restrictions of the Chattel Mortgage act; and a glance at that act, sections 5 and 6 in particular ( Comp. Stat., p. 468), will show that no chattel mortgage was meant to be eligible for record unless acknowledged or proved according to law, and with the added affidavit of consideration by the mortgagee, his agent or attorney.
We conclude that this mortgage was not "properly recorded," and, hence, was invalid as against the garage keeper's lien.
There was error, however, in adjudging the mortgage invalid as against Cornell. It is familiar law that a chattel mortgage, invalid as against creditors for want of the statutory affidavit and proper record, is valid as between the parties to it. Williamson v. New Jersey Southern Railroad Co., 26 N.J. Eq. 398; Fidelity Trust Co. v. Staten Island Clay Co., 70 Id. 550; Cashin v. Alamac Hotel Co., 98 Id. 432, 443.
For this error the judgment in favor of Cornell must be reversed and the cause remanded. As to the defendants garage keepers, the judgment will be affirmed. Hagy v. Hafner, 86 N.J.L. 502.