Machine Works v. Lang , 67 N.H. 348 ( 1892 )

By the terms of the contract the machines were to remain the property of the Cleveland Machine Works until paid for. The contract was negotiated in Massachusetts, by citizens of Massachusetts, respecting property situated in Massachusetts. The shipment of the machines at Worcester — Parsons paying the freight from that point — made Worcester the place of delivery, and vested in Parsons all the right and interest he ever acquired in the property. The agreement to send a man to set up the machines at Northfield was not a condition precedent to the vesting of the conditional title in Parsons, any more than an agreement to furnish instruction as to the mode of operating the machines would have been. The written agreement shows that the parties understood that the conditional title passed upon the shipment of the machines, by fixing the times of payment from that date. The contract was a conditional sale of chattels in Massachusetts, negotiated and completed there by Massachusetts parties, and valid by the law of Massachusetts; and being valid where it was made, its validity was not affected by the subsequent removal of the property to New Hampshire. Sessions v. Little, 9 N.H. 271; Smith v. Godfrey, 28 N.H. 379; Stevens v. Norris, 30 N.H. 466.

As a general rule, contracts respecting the sale or transfer of personal property, valid where made and where the property is situated, will be upheld and enforced in another state or country, although not executed according to the law of the latter state, unless such enforcement would be in contravention of positive law and public interests. A personal mortgage of property in another state, executed and recorded according to the laws of that state, is valid against the creditors of the mortgagor attaching the property in this state, although the mortgage is not recorded here. Offutt v. Flagg, 10 N.H. 46; Ferguson v. Clifford, 37 N.H. 86. A mortgagor of horses in Massachusetts, bringing them into this state, cannot subject them to a lien for their keeping against the Massachusetts mortgagee. Sargent v. Usher, 55 N.H. 287. A boarding-house keeper's lien under the laws of Massachusetts is not lost by bringing the property into this state. Jaquith v. American Express Co., 60 N.H. 61.

Formerly by the law of Vermont a chattel mortgage was invalid against creditors of the mortgagor if the property remained in his possession. But it was held both in Vermont and in New Hampshire that a mortgage of personal property in New Hampshire, duly executed and recorded according to the law of New Hampshire, was valid against creditors of the mortgagor attaching the property in his possession in Vermont. Cobb v. Buswell,37 Vt. 337; Lathe v. Schoff, 60 N.H. 34. In Cobb v. Buswell the property was taken to Vermont with the consent of the mortgagee, and in Lathe v. Schoff it was understood, when the mortgage was executed, that the horses mortgaged were to be removed to Vermont by the mortgagor and kept there after the season of summer travel closed. So a chattel mortgage made by a citizen of Massachusetts temporarily in New York with the mortgaged property, if valid by the law of New York, is valid against the creditors of the mortgagor attaching the property in his possession in Massachusetts. Langworthy v. Little, 12 Cush. 109.

The law of New Hampshire respecting conditional sales has no extra-territorial force, and does not apply to sales made out of the state. Neither the parties nor the subject-matter of the contract respecting the machines were within its operation. If the conditional sale had been made in this state before the statute was enacted requiring an affidavit of the good faith of the transaction and a record in the town clerk's office, it would not have been affected by the statute. When the machines were brought to this state, there was no provision of the statute for recording the plaintiffs' lien. There was no change or transfer of title in this state, and the title of the plaintiffs, valid against creditors under a contract completed in Massachusetts, was not destroyed by the removal of the property to New Hampshire.

Smith v. Moore, 11 N.H. 55, cited by the defendant as sustaining the position that the plaintiffs' lien was destroyed because there was no law in this state providing for a record in such a case, is an authority against the defendant. In that case the property was in this state when the mortgage was made, the mortgagor residing out of the state. The court say, — "If the property had been situated out of the state when the mortgage was made, and the mortgage had been valid according to the law of the place, a subsequent removal of the property to this state would not have affected its validity," citing Offutt v. Flagg, 10 N.H. 46.

Conditional sales were valid in this state without record until January 1, 1886. McFarland v. Farmer, 42 N.H. 386; Holt v. Holt, 58 N.H. 276; Weeks v. Pike, 60 N.H. 447. The statute of 1885, c. 30, had no application to contracts between parties residing out of the state, and made no provision for recording such contracts. The fact that the contract is not within the statute is an answer to the position that the plaintiffs' title is to be tested by the law of New Hampshire.

The attachment of the real estate gave the defendant no possession of or right of property in the machines. Scott v. Manchester Print Works,44 N.H. 507. By attaching them as personal property, the defendant claims to hold the possession and property in them, as the property of Parsons, for the benefit of the attaching creditors. If Parsons had an attachable interest subject to the plaintiffs' lien, the defendant's claim to hold the entire property under the attachment entitles the plaintiffs to maintain replevin, if they have any title to the machines and there is no estoppel. As between the plaintiffs and Parsons, the machines were the property of the plaintiffs. They were never the property of Parsons. He was simply a bailee, and never claimed to own them.

"Judgment and execution liens attach to the defendant's real, instead of his apparent, interest in the property. It follows from this that the sale made under such a lien can ordinarily transfer no interest beyond that in fact held by the defendant when the lien attached, or acquired by him subsequently thereto and before the sale." Freem. Ex., s. 335. A purchaser at a sheriff's sale, there being no estoppel, acquires no title to property not belonging to the debtor. Bryant v. Whitcher, 52 N.H. 158.

An attaching creditor is not in the position of a purchaser for valuable consideration without notice of any defect of title. The defendant, and the creditors of Parsons whom he represents, do not occupy the relation of bona fide vendees or mortgagees for value without notice. They stand no better than Parsons, who never owned or claimed to own the machines. Their claim to hold the property against the plaintiffs' title is based upon Parsons's ownership, and not upon any attempted transfer of title by him to them; and as he had no title they took nothing by the attachment.

The case has no analogy to an attachment of property to which the debtor has a voidable title valid until rescinded (Bradley v. Obear, 10 N.H. 477), or to the numerous class of cases where the debtor once had a valid title which he has conveyed or transferred in fraud of creditors.

As Parsons had no title to the machines, and as no legal or equitable ground of estoppel to the assertion of the plaintiffs' title is shown, the plaintiffs are entitled to judgment.

Judgment for the plaintiffs.

BLODGETT, J., did not sit: the others concurred.