Thompson v. Spittle

Chapman, C. J. It appears that, on the 25th of October • 1867, William and John Spittle, being copartners with Thompson, and each owning one third of the partnership assets, mortgaged all their right, title and interest in and to the stock in trade, fixtures and personal property of the firm to the petitioners. Within two months afterwards, the business of the firm was closed and the receiver was appointed. The property having been sold, and the debts of the firm having been paid, a question arises whether the balance shall be paid to the mortgagees in preference to the claims of the private creditors of William and John Spittle, to whom they were indebted. It is settled that one or more members of a firm may assign their interest in the existing assets of the firm, subject to the claims of the creditors of the firm and of the other partners. Kingman v. Spurr, 7 Pick. 235. It is true that a mortgage cannot take effect upon property acquired by the mortgagor after its execution. But this principle is not important in the present case, because the avails of the property actually mortgaged were more than the balance now remaining in the hands of the receiver. The fact that the mortgagors purchased other goods after the making of the mortgage, and brought them into the store and mingled them with the mortgaged goods, is not material. The mortgagors could not, by such an act, in any way affect the title of their mortgagees. They could not divest the title to the mortgaged property, nor could the newly purchased goods be thereby transferred to the mortgagees. [211] The fact that the note secured by the mortgage was also secured by the signature of a surety, and that he gave the payees a mortgage of his property as additional security, imposes no obligation on the payees of the note to resort to him. They have a right to resort to the principal debtors, and to the security obtained from them. Against the surety the unsecured creditors of William and John Spittle have no superior equity. Decree for the petitioners for the balance in the receiver’s hands.