York & Jersey Steam Boat Ferry Co. v. Associates of Jersey Co.

The Court gave its opinion, to the following effect: If the ferry were the only subject mortgaged to the associates of the Jersey company, the court would find it necessary to determine the question of constitutional law, which has been so fully argued. But the subjects of this mortgage are the one half of two or more boats, with their machinery, and the whole of certain wharvés, a pier and a bridge with their appurtenances, situated in the state of Jew Jersey. These mortgaged subjects may probably, be more valuable, in connexion with an exclusive right of ferry, than without such a right; but the boats and the lands undoubtedly, have value, whether the exclusive right of ferry now contested, is valid or void. If there is no exclusive right of ferry, this mortgage may be void, in that respect; but it is still valid, as to the lands and the boats; and as the cause now stands, it does not appear, that the lands and the boats are not of sufficient value, to satisfy both these mortgages. The lands alone, may be [469] sufficient to Satisfy the mortgage to the associates of the ¿farsey company: and it is unnecessary in the present state of the cause, to express any opinion concerning the exclusive right of ferry. . The York and Jersey steam boat ferry company mortgaged , , . _ , , ^ J 00 the boats and lands to the associates of the Jersey company in November 1823:' and in February 1824, they the boats to Barretto. - ' This then, is in substance, the ordinary cáse, in which a creditor has a lien on two funds, and another creditor has a posterior lien on one of the same funds. In such cases, equity requires, that the creditor who is secured by two funds, shall first resort to that-fund, which is not hound to the other creditor, in order that the other.may receive- the benefit of his single security, so far as may be practicable. . This principle so obviously just, is fully established; and two cases will sufficiently show; that it has been adopted and enforced by our own courts. Evertson against Booth, 19 John. 486.; and Hays against Ward, 4 John, ch. 123. It is objected, -that the fund mortgaged to the-associates of the Jersey company and not mortgaged4o Barretto, is in the state of New Jersey. But it is nevertheless, in the power of the mortgagees to pursue and exhaust their -remedy .in¿that state: and in the case of Hays against .Ward, the late chancellor suspended the proceedings of a creditor, until a mortgage of lands in another state, should be pursued and exhausted. The order of the circuit court does not give effect to this principle; and it must be so modified, that the associates of the Jersey company shall be compelled to proceed in the first instance, against the property not mortgaged to Barretto. In the existing posture of the cause, no other direction to the circuit court is necessary. The following decree was entered. This cause having been brought into this court, by an appeal entered therein by the appellants above named, from an interlocutory decree of the circuit court for the first circuit, made on the fifteenth day of March last; having been argued in this court, on.the second'and third days of May instant [470] by Sir. Henry of counsel for the appellants, and Mr. Hof-' KINS of counsel for the respondents; and having been duly considered; this icourtis of opinion, that the associates of the ^ersey company are bound in equity, to proceed against that Portion of the property mortgaged to them, which is not mortgaged to Francis Barretto Junior, and is situated in the g^te of New Jersey, and to exhaust their remedies against that portion, before they can subject the portion, which is mortgaged to Francis Barretto Junior, to the satisfaction of the debt due to them: and it is adjudged and decreed, that all proceedings in this cause, on the part of the associates of the Jersey company as complainants, he suspended, until it shall appear, that they have proceeded against that portion of the property mortgaged to them, which is not mortgaged to Francis Barretto Junior, and have exhausted their remedies against that portion; that when it shall appear, that the associates of the Jersey company have so proceeded and exhausted their remedies, if any debt or balance shall remain due to them, this suit shall proceed in the usual course, to enforce payment of any such debt or balance; and if the associates of the Jersey company shall not pursue and exhaust their remedies against theproperty not mortgaged to Francis Barretto Junior, with reasonable diligence, this suit shall be dismissed: and this cause is remanded to the circuit court, for such farther proceedings, as may be had, in conformity to this decree.