Britt v. . Harrell

Davis, J. after stating the case: The sole question presented in this case is, Was the paper executed by Dunn & Kitchen a chattel mortgage? Was it sufficient to constitute a lien, legal or equitable, in favor of the plaintiffs against a purchaser at a sale made by the Sheriff under execution? Whether the instrument, in itself, is a mortgage, is a question of law to be determined by the Court. Comron v. Standland, 103, N. C., 207; Jones on Chattel Mortgages, § 18. In the case before us there is nothing in the paper to indicate that Lawrence & Britt shall “have a lien” upon the railroad ties. Nothing found therein imports a conveyance of the title to the ties. No authorit}'' is given to sell the property upon default of payment, or in any way to dispose of of control it. There is nothing to bring it within the definition of a legal mortgage. Jones on Chattel Mortgages, § 1, et seq. But it is insisted that it is an equitable assignment or appropriation of the ties to the payment of this debt, and *13 the purchaser at the Sheriff’s sale had notice. We do not think it can be so considered. It was only a promise by Dunn & Kitchen to pay money, with the additional promise that they would pay it “ out of the proceeds” of the ties. While “ no particular form is necessary to constitute a mortgage,” yet the words must “clearly indicate the creation of a lien, specify the debt to secure which it is given? and upon the satisfaction of which the lien is to be discharged and the property upon which it is to take effect.” “The statement that the creditor is to have a lien, and that on default he may take possession and sell, * * * sufficiently discloses the intent." Harris v. Jones, 83 N. C., 317, and eases cited. The instrument under review gives the plaintiff, in no event, authority to take possession and sell the tits. A debtor says to his creditor: “I will send cotton which I have in my gin to my commis-ion merchant and pay your debt out of its proceeds, or I will authorize him to retain it for you.” The debtor sends the cotton off and sells it, or it is seized under execution and sold by the Sheriff. Would the creditor, in such a case, even though he had registered the promises of his debtor, have a right, in law ob equity, to follow the property and have it applied to the payment of his debt?' However it might be as between the parties, one making the promises and the other relying on them, in the absence of any charge or circumstances of fraud or collusion to cheat the debtor, as to third persons, such an agreement could, in no sense, be regarded or treated as a mortgage of the cotton. The plaintiffs say: “ This lien was not divested by the attachment in favor of Jordan and Holloman and the sale thereunder to the defendant,” and for this, the case of Lake v. Doud, 10 Ohio, 415, is cited. The plaintiff’s misfortune is that, in this case, there was no lien. In the case of Lake v. Doud, the mortgage had been drawn properly, and was- *14 registered, but it was improperly attested; was not therefore a “legal mortgage.” The complaint charged that the defendants (whose relations to each other are set out) combined to cheat and defraud him, and the Court, after setting forth at great length facts to show the fraudulent, character of the transaction, were “irresistibly led to the conclusion” that.it was fraudulent and void, and held that though the plaintiff had no legal mortgage, yet he had an equitable mortgage, which could be enforced. There is no allegation or pretence of any combination and collusion between the execution creditors, the purchasers at the Sheriff’s sale, and the debtors in the present case, to cheat and defraud the plaintiffs, and the case is unlike that of Lake v. Doud. The plaintiffs had nothing in addition to their note but the promises of Dunn & Kitchen that they would pay “out of the proceeds of certain railroad ties,” &c., and “authorize the purchaser to retain” the amount of their debts for them; and these promises, without a transfer of the title to the ties, as security, were worth no more, it seems, than the promise to pay the money. Affirmed.