Perry v. Pettingill , 33 N.H. 433 ( 1856 )

Perley, C. J.

The objection made to the mortgage in this case is not that it was originally void, or in any way defective ; but that the materials mortgaged wTere finished and greatly increased in value by the labor of the mortgagor, after the mortgage. No question was made on trial as to notice or fraud. It does not appear whether the shears were finished with or without the assent of the plaintiff.

The materials all belonged to the plaintiff by virtue of his mortgage ; the different parts were wrought out, excepting the spring. On this state of facts the materials, in the condition in which they were mortgaged, must be regarded in law as the principal, and the labor added as accessory. Glover v. Austin, 6 Pick. 220; Sumner v. Hamlet, 12 Pick. 76; Eaton v. Lynde, 5 Mass. 241; Willard v. Rice, 11 Met. 493; Harding v. Coburn, 12 Met. 333; Pulcifer v. Page, 32 Maine 404; Babcock v. Gill, 10 Johns. 287; Dunning v. Stearns, 9 Barb. Sup. Ct. 630; Jenckes v. Goffe, 1 Rhode-Island 510.

In case materials were mortgaged by a particular description, and with the assent of the mortgagee were manufactured into articles not answering to that description, and so changed that with reasonable diligence a creditor could not know that they were the same, if he should, without actual notice of the claim under the mortgage, attach them for the debt of the mortgagor, it would deserve serious attention whether, under our statute requiring mortgages of personal property to be registered, the mortgagee could hold against the attaching creditor.

But if the mortgagor, after the mortgage, add to the value of the mortgaged property, no matter how much, the added value, as between mortgagor and mortgagee, goes to increase the security. This is the familiar rule in mortgages of land, and we see no reason why the principle should not apply with equal force to mortgages of personal property. If the mortgage is fair, and fairly used, no creditor of the mortgagor has just ground of complaint. If the mortgage were fraudulently used to cover up the property of the mortgagor from his creditors, it might be invalid on general principles. But in the absence of fraud it does not occur to me that a creditor of the mortgagor has any good reason to complain that the labor or the materials of the mortgagor have been incorporated with the property originally mortgaged. Until the creditor obtains some right in the property of his debtor by attachment or otherwise, the debtor may lawfully apply it to pay or secure such of his creditors as he may choose to prefer ; and he may apply his labor in the same way.

Judgment on the verdict.