Wilde, J.
This case, at a former term, was referred to the determination of an arbitrator, who was required, at the request of either party, to state the evidence and facts, in respect whereof either of the parties should think fit to raise any legal question. In pursuance of this reference, a hearing of the parties has been had before the arbitrator, and the case comes before us on his report.
At the hearing, it appeared in evidence, that the plaintiff claimed the property in question between the parties, by virtue of an attachment thereof as the property of one Addison Richardson, and that the defendant claimed the same under a mortgage to him from the said Addison, made and recorded before the said attachment; and the principal question submitted to the court by the arbitrator is, whether the said mortgage is valid against the creditors of the mortgagor.
The property mortgaged is thus described in the deed: “ The whole stock in trade of said Addison, as well as each and every article of merchandize which the said Addison this day bought of Timothy Walker, as every other article constituting the said Addison’s stock in trade, in the shape the same is and may become in the usual course of the said Addison’s trade and business as a trader.” And it was admitted that the goods in question were, at the time of the attachment, the stock in trade of the said Addison, but that only a part of them was owned by him until after he made the said mortgage.
It has been contended by the plaintiff’s counsel, that the mortgage was in law fraudulent and void against bona fide attaching creditors; or if not wholly void, that it was void as to all the goods which were not a part of the mortgagor’s stock in trade when the mortgage was executed. There seems to us to be no ground for the argument that this mortgage was wholly void, as being fraudulent on the face of it, or as having been made with an intent to defraud the creditors of the [488]*488mortgagor. It was not denied that the mortgage was given to secure a large debt due from the mortgagor to the mortgagee ; and no evidence was introduced at the hearing, tending to prove that the mortgage was not made bond fide. The question therefore is reduced to this, namely, whether the defendant has acquired any valid title, under the mortgage, to the goods purchased by the mortgagor subsequently to the mortgage.
That a person cannot grant or mortgage property,, of which he is not possessed, and to which he has no title, is a maxim of the law too plain to need illustration, and which is fully supported by all the authorities. Perkins, § 65, says, it is a common learning in the law, that a man cannot grant or charge that which he hath not. Bac. Ab. Grants, D. 2. Com. Dig. Grant, D. It is true that a person may grant personal property of which he is potentially, though not actually possessed. A man may therefore grant all the wool that shall grow on the sheep which he owns at the time of the grant, but not the wool which shall grow on sheep not his, but which he after-wards may buy. So a parson of a church may grant his ithes for years, for although they are not actually in him at the time, yet they are potentially; and the same exception to the general rule extends to grants of crops growing on lands of the grantors, at the time of the grants. Lunn v. Thornton 1 Man. Grang. & Scott, 383, and the authorities there cited. Not denying these principles, the defendant’s counsel contend, that although the mortgagor could not convey or create a charge on property to which he had no title nor possession, actual or potential, yet when he, after the mortgage, added to his stock in trade by new purchases, the property vested immediately in the mortgagee, without any other act or conveyance on the part of the mortgagor, by virtue of the previous agreement to that effect contained in the mortgage deed. One of the cases cited in support of this argument is Mitchell v. Winslow, 2 Story R. 630. But that case was decided on principles of equity, and on the construction of the United States bankrupt act of 1841, c. 9, on which it was held “ that (except [489]*489in cases of fraud) assignees in bankruptcy take only such rights and interests as the bankrupt himself had, and could himself claim and assert at the time of his bankruptcy; and consequently that they are affected with all the equities which would affect the bankrupt himself, if he were asserting those rights and interests.” “ It is material here to state,” says the learned judge, in giving his opinion, “ that the present is not a controversy between a first and second mortgagee as to property acquired and in esse after the execution of the first mortgage, and before the execution of the second mortgage, both the mortgagees being purchasers for a valuable consideration. That might at law present a very different question.” The decision, therefore, in that case, is of no authority in favor of the defendant in the present casé, but seems' rather to be an authority impliedly in favor of the plaintiff, who claims under an attachment by a bona, fide creditor of Addison Richardson, the mortgagor. The same remark may be made as to the case of Fletcher v. Morey, 2 Story R. 555. That was a case' in equity, in which the plaintiffs relied on an equitable lien on certain shipments, and the proceeds thereof, in the hands' of the defendant, the assignee of James Read & Co., as col-' lateral security for advances made to them by the plaintiffs. And this lien was adjudged valid, as an equitable charge on the property, constituting a trust. But these decisions have but little bearing on the question under consideration. Many things are held by courts of equity to be assignable which are not so held by courts of law. So the legal distinctions between executory and executed contracts are, in many cases, disregarded by courts of equity. But the present case is to be decided according to the principles of the common law. The question is, what are the legal rights of the respective parties to the property in question.
One of the principal cases, relied on by the defendant is that of Macomber v. Parker, 14 Pick. 497. In that case, it appeared that Hunting & Lawrence Were lessees of a brick yard, and entered into a contract with Joseph Evans, by which he was to make for them a certain number of bricks [490]*490on certain terms, and to share the profit or loss betweeh them, one half each ; Evans agreeing that Hunting & Lawrence should have .full power to retain Evans’s part of the bricks or money, to the amount of all sums of money due, or which might become due from him to them. Hunting & Lawrence afterwards assigned to the plaintiffs all their property, including the brick yard, and their rights under the contract with Evans, to which Evans assented, and agreed to act as agent for the assignees. This, unquestionably, was a good assignment, upon the principles already stated. Hunting & Lawrence not only had a potential possession, but they owned the clay of which the bricks were to be made, .subject only to the right which Evans might afterwards acquire by his contract. The transmutation of the clay into bricks did not change the right of property; so that Evans coma not acquire an absolute legal title to his share of the bricks until he paid the balance due to the plaintiffs. Upon this view of the case, the question as to the right which might be acquired by the pledging or hypothecation of property was not material to the decision of the case.
Free access — add to your briefcase to read the full text and ask questions with AI
Wilde, J.
This case, at a former term, was referred to the determination of an arbitrator, who was required, at the request of either party, to state the evidence and facts, in respect whereof either of the parties should think fit to raise any legal question. In pursuance of this reference, a hearing of the parties has been had before the arbitrator, and the case comes before us on his report.
At the hearing, it appeared in evidence, that the plaintiff claimed the property in question between the parties, by virtue of an attachment thereof as the property of one Addison Richardson, and that the defendant claimed the same under a mortgage to him from the said Addison, made and recorded before the said attachment; and the principal question submitted to the court by the arbitrator is, whether the said mortgage is valid against the creditors of the mortgagor.
The property mortgaged is thus described in the deed: “ The whole stock in trade of said Addison, as well as each and every article of merchandize which the said Addison this day bought of Timothy Walker, as every other article constituting the said Addison’s stock in trade, in the shape the same is and may become in the usual course of the said Addison’s trade and business as a trader.” And it was admitted that the goods in question were, at the time of the attachment, the stock in trade of the said Addison, but that only a part of them was owned by him until after he made the said mortgage.
It has been contended by the plaintiff’s counsel, that the mortgage was in law fraudulent and void against bona fide attaching creditors; or if not wholly void, that it was void as to all the goods which were not a part of the mortgagor’s stock in trade when the mortgage was executed. There seems to us to be no ground for the argument that this mortgage was wholly void, as being fraudulent on the face of it, or as having been made with an intent to defraud the creditors of the [488]*488mortgagor. It was not denied that the mortgage was given to secure a large debt due from the mortgagor to the mortgagee ; and no evidence was introduced at the hearing, tending to prove that the mortgage was not made bond fide. The question therefore is reduced to this, namely, whether the defendant has acquired any valid title, under the mortgage, to the goods purchased by the mortgagor subsequently to the mortgage.
That a person cannot grant or mortgage property,, of which he is not possessed, and to which he has no title, is a maxim of the law too plain to need illustration, and which is fully supported by all the authorities. Perkins, § 65, says, it is a common learning in the law, that a man cannot grant or charge that which he hath not. Bac. Ab. Grants, D. 2. Com. Dig. Grant, D. It is true that a person may grant personal property of which he is potentially, though not actually possessed. A man may therefore grant all the wool that shall grow on the sheep which he owns at the time of the grant, but not the wool which shall grow on sheep not his, but which he after-wards may buy. So a parson of a church may grant his ithes for years, for although they are not actually in him at the time, yet they are potentially; and the same exception to the general rule extends to grants of crops growing on lands of the grantors, at the time of the grants. Lunn v. Thornton 1 Man. Grang. & Scott, 383, and the authorities there cited. Not denying these principles, the defendant’s counsel contend, that although the mortgagor could not convey or create a charge on property to which he had no title nor possession, actual or potential, yet when he, after the mortgage, added to his stock in trade by new purchases, the property vested immediately in the mortgagee, without any other act or conveyance on the part of the mortgagor, by virtue of the previous agreement to that effect contained in the mortgage deed. One of the cases cited in support of this argument is Mitchell v. Winslow, 2 Story R. 630. But that case was decided on principles of equity, and on the construction of the United States bankrupt act of 1841, c. 9, on which it was held “ that (except [489]*489in cases of fraud) assignees in bankruptcy take only such rights and interests as the bankrupt himself had, and could himself claim and assert at the time of his bankruptcy; and consequently that they are affected with all the equities which would affect the bankrupt himself, if he were asserting those rights and interests.” “ It is material here to state,” says the learned judge, in giving his opinion, “ that the present is not a controversy between a first and second mortgagee as to property acquired and in esse after the execution of the first mortgage, and before the execution of the second mortgage, both the mortgagees being purchasers for a valuable consideration. That might at law present a very different question.” The decision, therefore, in that case, is of no authority in favor of the defendant in the present casé, but seems' rather to be an authority impliedly in favor of the plaintiff, who claims under an attachment by a bona, fide creditor of Addison Richardson, the mortgagor. The same remark may be made as to the case of Fletcher v. Morey, 2 Story R. 555. That was a case' in equity, in which the plaintiffs relied on an equitable lien on certain shipments, and the proceeds thereof, in the hands' of the defendant, the assignee of James Read & Co., as col-' lateral security for advances made to them by the plaintiffs. And this lien was adjudged valid, as an equitable charge on the property, constituting a trust. But these decisions have but little bearing on the question under consideration. Many things are held by courts of equity to be assignable which are not so held by courts of law. So the legal distinctions between executory and executed contracts are, in many cases, disregarded by courts of equity. But the present case is to be decided according to the principles of the common law. The question is, what are the legal rights of the respective parties to the property in question.
One of the principal cases, relied on by the defendant is that of Macomber v. Parker, 14 Pick. 497. In that case, it appeared that Hunting & Lawrence Were lessees of a brick yard, and entered into a contract with Joseph Evans, by which he was to make for them a certain number of bricks [490]*490on certain terms, and to share the profit or loss betweeh them, one half each ; Evans agreeing that Hunting & Lawrence should have .full power to retain Evans’s part of the bricks or money, to the amount of all sums of money due, or which might become due from him to them. Hunting & Lawrence afterwards assigned to the plaintiffs all their property, including the brick yard, and their rights under the contract with Evans, to which Evans assented, and agreed to act as agent for the assignees. This, unquestionably, was a good assignment, upon the principles already stated. Hunting & Lawrence not only had a potential possession, but they owned the clay of which the bricks were to be made, .subject only to the right which Evans might afterwards acquire by his contract. The transmutation of the clay into bricks did not change the right of property; so that Evans coma not acquire an absolute legal title to his share of the bricks until he paid the balance due to the plaintiffs. Upon this view of the case, the question as to the right which might be acquired by the pledging or hypothecation of property was not material to the decision of the case. But if it >ere otherwise, the doctrine laid down by the learned judge, ivho delivered the opinion of the court in that case, is not applicable to' the present case. For if, when a party agrees to pledge property afterwards to be acquired, and, when it is acquired, delivers over the same to the pledgee, the right of the pledgee would then attach, it does not follow that the same doctrine would apply to a mortgage or sale. A mortgage is an executed contract; and it is clear that nothing passed by the mortgage deed, in this case, besides the stock in trade which the mortgagor had at the time the mortgage was executed. But in Abbott v. Goodwin, 7 Shepley, 408, it was held, that where certain goods were mortgaged, and the mortgagor afterwards exchanged some of the goods mortgaged for other goods, the mortgagee thereby acquired a title to the goods taken in exchange. And the case of Macomber v. Parker rvas cited by the learned judge who delivered the opinion of the court, as a strong case in support of [491]*491this decision, without noticing the distinction between the two cases. We cannot, however, concur in the principles upon which the case of Abbott v. Goodwin was decided. It was laid down in that case, that “ all persons coming in under the mortgagor stand by substitution in his place, equally affected by the contract, whether notified of its existence or not.” But the defendant in that case had attached the property as the property of the mortgagor; and though he claimed under him, he might show that the mortgage and the exchange of property were void as to the creditors of the mortgagor, though they might be valid against him by way of estoppel or otherwise. And that case seems to be impliedly, though not expressly, overruled by the case of Goodenow v. Dunn, 8 Shepley, 86. And we fully concur with Whitman, C. J. in the principles laid down by him in deciding the latter case. In the former case, the mortgage deed had no reference to any property afterwards to be acquired by the mortgagor; and the case seems to have been decided on the assumed fact that the property mortgaged was afterwards exchanged for the property in dispute, with the assent of the mortgagee ; but it does not appear that the exchange was made with his assent, or that there was any agreement to this between the mortgagor and the mortgagee. In the case of Tapfield v. Hillman, 6 Man. & Grang. 245, the construction and legal effect of a similar mortgage were considered; and it was decided, that the mortgagee had no title to any property acquired by the mortgagor subsequently to the date of the mortgage. There was a clause in the mortgage, giving power to the mortgagee, upon non-payment of the debt, to enter into the mortgaged premises, and “ to take, possess, hold and enjoy all and every the goods, chattels, effects and premises.” And it was held that the mortgagee had no right to take any property but what was on the mortgaged premises at the date of the mortgage. It was however said by Tindal, C. J. that “ it would have been very easy so to have framed the power of entry as to make it extend to all effects found upon the premises at the time tha; [492]*492such power should be enforced, if such was the intention of the parties.” From this the defendant’s counsel infer that such a power would have been upheld by the court. And it would, undoubtedly, have been a good defence in that action, if the mortgage had contained such a power ; for it was an action of trespass by the mortgagor against the mortgagee.
But although the mortgagee, with such a power, would be justified in seizing the goods of the mortgagor, purchased by him subsequently to the date of the mortgage, it would not vest the property in the mortgagee. And so it was decided in the case of Lunn v. Thornton, 1 Man. Grang. & Scott, 379, which afterwards came before the same court, and was decided in February 1845. The plaintiff in that case had a bill of sale from the defendant of “ all and singular- his goods, household furniture, plate, linen, china, stock and implements of trade, and other effects whatsoever, then remaining and being, or which should, at any time thereafter, remain and be in, upon or about his dwelling-house,” &c. And it was held that future acquired property would not pass by such a conveyance, unless the grantor should ratify the grant after he had acquired the property therein. The counsel for the defendant relied) among other authorities, on Bacon’s Maxims, Reg. 14. Licet dispositio de interesse futuro sit inutilis, tamen potest fieri declaratio prcecedens, qua, sortiatur effectwm, interveniente novo actu. A strong case in support of the rule is cited by Bacon. “ If I mortgage land, and after covenant with I. S., in consideration of money which I receive of him, that after I have entered for the condition broken, I will stand seized to the use of the same I. S., and I enter, and this deed is enrolled, and all within the six months, yet nothing passeth; because the enrolment is no new act, but a perfective ceremony of the first deed of bargain and sale; and the law is more strong in that case, because of the vehement relation which the enrolment hath to the time of the bargain and sale, at what time he had nothing but a naked condition.” 4 Bacon’s Works, (ed, of 1803,) 55.
[493]*493It was contended on the part of the plaintiff, in Lunn v. Thornton, that the bringing of the goods on the plaintiff’s premises, where they were seized after the execution of the bill of sale, was the new act done by the plaintiff, which gave the declaration contained in the previous bill of sale its effect. But the court held clearly that it could have no such effect. “ The new act,” Lord Tindal said, “ which Bacon relies upon, appears, in all the instances which he puts, to be an act done by the grantor, for the avowed object and with the view of carrying the former grant or disposition into effect.” This adjudication, which appears to us to be founded on well established principles, is decisive against the defendant’s claim as to the property purchased by the mortgagor after the mortgage. He did not prove, nor offer , to prove, any act done by the mortgagor, after the mortgage deed was executed, by which he ratified the same as to the subsequently acquired property. All he offered to prove was, that he had taken possession of the goods before the attachment. But this evidently was irrelevant, as it was held to be by the arbitrator. But if he had proved that the mortgagor had delivered possession to him of the goods in question, to hold the same under the mortgage, that would not have availed him against the plaintiff, although it might be good against the mortgagor. By the Rev. Sts. c. 74, § 5, it is provided that “no mortgage of personal property shall be valid against any other person than the parties thereto, unless possession of the mortgaged property be delivered to, and retained by, the mortgagee, or unless the mortgage be recorded by the clerk of "the town where the mortgagor resides.” Now it is clear, we think, that the record of the mortgage deed is no sufficient notice of a legal incumbrance as to subsequently acquired property ; because, by law, no such property could be sold or conveyed thereby; and it would furnish no notice that any property would be afterwards purchased, or, if purchased, that any act would be done to ratify the grant in that respect. As to such property, therefore, the mortgage could not be valid, except as between the parties [494]*494thereto, unless such goods were delivered by the mortgagor to the mortgagee, with the intention to ratify the mortgage, and the mortgagee retained open possession of the same until the time of the attachment. Whether such proof would be sufficient against creditors, it is not necessary to decide ; as, according to the report of the arbitrator, no such question has been raised.
As to the other questions raised, we think the decisions of the arbitrator were correct, and that upon the whole matter the plaintiff is entitled to recover the estimated value of the goods in question, which were not the property of the mortgagor when the mortgage was executed, and no more. The case, therefore, is to be recommitted to the arbitrator, to ascertain what goods were mortgaged; unless the parties should agree as to this matter.