Smith v. Hotel Ritz Co.

New Jersey Court of Chancery

Smith v. Hotel Ritz Co.

70 A. 137, 74 N.J. Eq. 296, 4 Buchanan 296, 1908 N.J. Ch. LEXIS 74

CourtNew Jersey Court of Chancery

DecidedMay 6, 1908

StatusPublished

Cited by2 cases

This text of 70 A. 137 (Smith v. Hotel Ritz Co.) is published on Counsel Stack Legal Research, covering New Jersey Court of Chancery primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Smith v. Hotel Ritz Co., 70 A. 137, 74 N.J. Eq. 296, 4 Buchanan 296, 1908 N.J. Ch. LEXIS 74 (N.J. Ct. App. 1908).

Pincite

Opinion

Leaming, V. C.

I am unable- to determine that the unrecorded agreement of conditional sale now 'in question is void as against the receiver or general creditors of defendant corporation. The Chattel Mortgage act under consideration in Graham Button Co. v. Spielmann, 50 N. J. Eq. (5 Dick.) 120, and in Currie v. Knight, 34 N. J. Eg (7 Stew.) 485, provided that mortgages not executed and recorded in accordance with the act should be void as against creditors of the mortgagor. While in Currie v. Knight, supra, it was held that creditors could not, without a judgment [297]*297or other lien on the chattels, assert their claims against the validity of such a mortgage, it was also held that when a lien should have been procured by a creditor and the invalidity of the mortgage asserted by virtue of the lien, the infirmity of the mortgage would be ascertained by reference to conditions obtaining at the time the creditors became a creditor and not at the time the lien of the creditor was procured. The provisions of the act that the mortgage should be void as to creditors (general creditors) was thus observed and enforced. In Graham Button Co. v. Spielmann, supra, it is held that insolvency of a debtor corporation operates, under our statute, to fasten the debts of such corporation on its property in such manner as to enable the receiver of the corporation, in behalf of its creditors, to assert the invalidity of a chattel mortgage which has not been executed and recorded in accordance with the provisions of the Chattel Mortgage act. It is manifest that the principles controlling these decisions do not extend to the present case, for the provisions of our statute touching conditional sales of chattels (P. L. 1898 p. 670 §§ 71, 72) protect only judgment creditors, subsequent purchasers and mortgagees without notice. While the claims of general creditors of an insolvent corporation are fastened upon its property by force of the provisions of our Corporation act touching insolvency and the appointment of receivers and distribution of assets in such manner as to enable either a receiver or general creditor to assert in this court the invalidity of a chattel mortgage which the statute declares void as to creditors, yet it is apparent that such receiver or general creditors cannot in any sense be regarded as judgment creditors within the meaning of the conditional sales statute referred to.

I will advise an order directing the receiver to deliver the chattels in question to petitioner.

Free access — add to your briefcase to read the full text and ask questions with AI

Leaming, V. C.

I am unable- to determine that the unrecorded agreement of conditional sale now 'in question is void as against the receiver or general creditors of defendant corporation. The Chattel Mortgage act under consideration in Graham Button Co. v. Spielmann, 50 N. J. Eq. (5 Dick.) 120, and in Currie v. Knight, 34 N. J. Eg (7 Stew.) 485, provided that mortgages not executed and recorded in accordance with the act should be void as against creditors of the mortgagor. While in Currie v. Knight, supra, it was held that creditors could not, without a judgment [297]*297or other lien on the chattels, assert their claims against the validity of such a mortgage, it was also held that when a lien should have been procured by a creditor and the invalidity of the mortgage asserted by virtue of the lien, the infirmity of the mortgage would be ascertained by reference to conditions obtaining at the time the creditors became a creditor and not at the time the lien of the creditor was procured. The provisions of the act that the mortgage should be void as to creditors (general creditors) was thus observed and enforced. In Graham Button Co. v. Spielmann, supra, it is held that insolvency of a debtor corporation operates, under our statute, to fasten the debts of such corporation on its property in such manner as to enable the receiver of the corporation, in behalf of its creditors, to assert the invalidity of a chattel mortgage which has not been executed and recorded in accordance with the provisions of the Chattel Mortgage act. It is manifest that the principles controlling these decisions do not extend to the present case, for the provisions of our statute touching conditional sales of chattels (P. L. 1898 p. 670 §§ 71, 72) protect only judgment creditors, subsequent purchasers and mortgagees without notice. While the claims of general creditors of an insolvent corporation are fastened upon its property by force of the provisions of our Corporation act touching insolvency and the appointment of receivers and distribution of assets in such manner as to enable either a receiver or general creditor to assert in this court the invalidity of a chattel mortgage which the statute declares void as to creditors, yet it is apparent that such receiver or general creditors cannot in any sense be regarded as judgment creditors within the meaning of the conditional sales statute referred to.

I will advise an order directing the receiver to deliver the chattels in question to petitioner.

Cite This Page — Counsel Stack

Bluebook (online)

70 A. 137, 74 N.J. Eq. 296, 4 Buchanan 296, 1908 N.J. Ch. LEXIS 74, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-hotel-ritz-co-njch-1908.

Opinion

Related

Cite This Page — Counsel Stack