Pryor v. Gray

G-eey, Y. C. The first cause of demurrer challenges the bill, because it does not show any facts which give this court jurisdiction, and particularly the demurrant insists that the bill shows that the mortgaged chattels have been sold clear of the mortgage, and no facts are alleged which show that the defendant claims any lien by virtue of the mortgage on either the mortgaged chattels or the money proceeds of their sale, &c. A sufficient ground of equitable jurisdiction is stated in the allegations that the defendant, under a void chattel mortgage obtained from the insolvent corporation, has, by taking possession and sale of that company’s chattels, wrongfully realized unknown sums of money', for which the bill prays he may be decreed to account to the receiver of that company. The bill, taking it as a whole, is also sufficiently definite in its statements of fact to show that it charges that the defendant wrongfully claims, under his void chattel mortgage, to have been entitled to sell the insolvent company’s chattels and keep the proceeds; that the mone3's in dispute were realized under an ■order of this court upon an agreement of the defendant that the mortgaged chattels should be sold clear of the disputed chattel [416] mortgage, and that the lien, thereof, if it had any validity, should attach to the moneys proceeding from that sale. The averments of the amended'bill inform the defendant that the subject regarding which he is called upon to respond is. his claim to a lien by virtue of his chattel mortgage upon the goods of the insolvent company and upon the fund raised by the sale of the chattel mortgaged goods, which chattel mortgage the complainant charges is void because not lawfully recorded. This notifies the defendant of the purpose of the suit which the court of errors and appeals has held is all that is required in bills in equity. Mutual Life Insurance Co. v. Sturges, 33 N. J. Eq. (6 Stew.) 328. The first ground of demurrer is overruled. The second ground of demurrer avers that the complainant’s attack on the chattel mortgage is inefficient, because on the face of the bill it appears that the defendant had in fact taken possession of the mortgaged property before the complainant was appointed receiver for the insolvent company mortgagor. The statute, in dealing 'with the sort of possession which may validate an unrecorded chattel mortgage, declared that it must be immediate. The complainant’s contention is that the entry of the defendant’s chattel mortgage in the mortgage-book, without either certificate of its acknowledgment or proof of its execution, was in law not a recording. The pleadings show that the chattel mortgage was made on the 13th day of July, 1904, and that possession of the mortgaged goods was taken under it on the 6th day of December, 1904, nearly six months after its execution. In Roe v. Meding, 53 N. J. Eq. (8 Dick.) 350, the court of errors and appeals declared that the requirement of the statute regarding chattel mortgages is for immediate recording or immediate taking possession, for the obvious reason that one or the other is necessary to give notice to possible creditors of the moftgagor of the mortgagee’s interest-in the goods. In that case the delay in recording was less than three months, yet it was held to invalidate the chattel mortgage. The receiver is not limited in challenging the defendant’s wrongful acts to those done after his appointment. The second ground of demurrer is overruled. [417] The third ground of demurrer contends that the hill of complaint does not show that the defendant claims any lien on the moneys received from the sale of the mortgaged chattels by virtue of the mortgage, and does not show that the defendant has filed any claim with the receiver for moneys due under the chattel mortgage, or due by virtue thereof. This is substantially answered in the above discussion of the first ground of demurrer. Upon the whole case, as exhibited by the bill of complaint, it obviously appears that the complainant, as receiver, &c., alleges that the defendant, by virtue of his void chattel mortgage and of the stipulation with the receiver, claims a lien upon the proceeds of the sale of the mortgaged goods. This ground of demurrer, therefore, should be overruled. The fourth ground of demurrer is that the amended bill of complaint does not show that there are any .moneys due by the insolvent company to, persons other than the defendant, or that persons other than the defendant are interested in the estate of the insolvent company. The fifth ground of demurrer is that the amended bill of complaint does not show that there are not sufficient moneys to pay all the debts of the insolvent company. Both these grounds , of demurrer, challenging the amended bill (and indeed most of the others), might have been assigned against the original bill of complaint before it was amended. The defendant demurred to that bill, and did not then see fit to present these criticisms as grounds of demurrer. He thereby waived any right of objection for that cause to the same extent as if lie had pleaded over. Bean v. Ayers, 69 Me. 128. He may not reserve existing grounds of demurrer to an original bill, and by presenting those defects successively against amendments unreasonably protract litigation and unjustly enhance the costs. Bean v. Ayers, 69 Me. 128. The demurrer should be overruled, with costs.