Black v. Mullins & Co.

The opinion of the court was delivered by

Parker, J.

The suit ivas in replevin, and the controversy is between a chattel mortgagee (plaintiff) and a purchaser at an execution sale (defendant). The defendant attacked the title claimed under the chattel mortgage on the ground that it had not been placed on record with the promptitude required by law; and tire plaintiff claimed that defendant took no title under the execution sale that would enable him to-hold the property as against the mortgagee.

Under section 4 of the Chattel Mortgage act (Comp. Stat., p. 463), a chattel mortgage not duly recorded is void only as against creditors of the mortgagor and subsequent purchasers and mortgagees in good faith. The defendant’s stand is that of a subsequent purchase]1 in good faith. No question of the defendant’s good faith is raised, but the point made is that it is not a legal "purchaser,” first, because of irregularity in failure of the constable to attach a levy and inventory to the execution under which he sold. Such an irregularity, however, in levy or advertisement, does not affect the purchaser’s title. Boylan v. Kelly, 36 N. J. Eq. 331.

Secondly, it is said that the constable sold only the right, title and interest of the mortgagor, and that the purchaser was therefore bound by the mortgage, and took only such title as the mortgagor had as against the mortgagee. But it ap'pears, in this case, that the debt for which the judgment was entered and the property sold by the constable, was incurred before the chattel mortgage was made. Consequently, the mortgage, if not duly recorded, was void as against this creditor; and when he entered his judgment and had the property sold, the protection afforded Jiim by the statute extended to i he purchaser at his sale. Otherwise, he could not have the J’ull benefit of the statute. Sharp v. Shea, 32 N. J. Eq. 65, 66. And even if this were not so, tlie presumption is that defendant purchased in good faith without notice, and the burden of proving otherwise is on plaintiff. Coleman v. Barklew, 27 N. J. L. 357, 359. The sale of chattels under execution Ly crying the right, title and interest of the defendant, subject to liens and encumbrances, is a common practico, and merely expressive of the well-settled rule that the officer transfers what the defendant could have transferred, and no more. The recording acts would lose much of their efficacy if this phraseology were held to conclude innocent purchasers at judicial sales, who are charged by law with all recorded liens, but not with unrecorded ones; and the result would be to hang the title of such purchasers on the question whether a sheriff or constable used a mere formula in making his sale.

We conclude, then, that the defendant as purchaser had a slalus to question the legal effect of the chattel mortgage. It remains to ascertain whether the court rightly held, as it did, that the mortgage was not recorded wifh due diligence.

The law is not in doubt. The mortgage must be recorded immediately, which moans as soon as may be with reasonable despatch under the circumstances of the case. Brockhurst v. Cox. 71 N. J. Eq. 703; affirmed, 72 Id. 950. The delay in that case was fifteen days. In the case at bar it was over two months. The excuse offered was that the New York notary that took the mortgagor’s acknowledgment failed to take the mortgagee’s affidavit, and left town so that he could not be reached until a month had elapsed; and after he had then taken the affidavit, plaintiff tried to record tire mortgage, hut because of his ignorance of the law or of facts pertinent to the selection of the proper recording office, another month was consumed before it finally was put on record. It is now claimed that the question of reasonable diligence was for the jury. To this we do not agree. Apart from the second month, the delay of the first month was utterly inexcusable. 'Plaintiff was bound to know that there was nothing in the law requiring the affidavit and the acknowledgment to be taken by the same officer. Pie could have had his affidavit taken by any competent officer at once. His ignorance of the law is no excuse, and leaves a delay of a month with no lawful explanation at all. The trial judge was right in holding that no jury question was raised on this point and in treating it as a court question. Timlan v. Dilworth, 76 N. J. L. 568.

The judgment will be affirmed.