G. Ober & Sons Co. v. Keating

Robinson, J., delivered the opinion of the Court. This is a plain case. By a contract in writing dated the 30th September, 1890, Caroline C. Davis the landlord and J. W. Powell, her tenant, bought of the appellants twenty tons of ammoniated phosphate at twenty-five dollars per ton, to secure the payment of which they ¹⁰² agreed to give to the appellants a chattel mortgage of their respective interests in the wheat crop then about to-be seeded on the farm. The mortgage was executed by Powell, and then mailed to Miss Davis, who lived in another county, but was never, it seems, received by her: Subsequently, on the 3rd of December, Miss Davis made a general assignment of all her property, including her interest in the wheat, for the benefit of her creditors, and the question is whether, the appellants by the contract of September 30th, acquired a lien upon her interest in the wheat crop enforceable in a Court of equity against her assignees ?

It is a familiar principle, that an agreement to give a mortgage, founded irpon a valuable consideration, will be treated in equity as a mortgage. It will be so treated, for the reason that equity will regard that as done which the parties themselves have agreed shall be done. And, if so, then her assignees stand in no better position. They are merely assignees for the payment of pre-existing creditors, and as such they take the property under the assignment subject to all liens and charges which existed against it in the hands of the assignors.

They are not bona fide purchasers, because no consideration was paid or advanced by them at the time of the execution of the deed of assignment, nor was any legal right relinquished or surrendered on the part of the creditors. Tyler, Trustee vs. Abergh, 65 Md., 18 . The wheat crop in question, it appears from the statement of facts, was sold and the proceeds deposited in Bank to await the final determination of this case. The appellants 'being then entitled to a lien upon the crop in the hands of the assignees, and Miss Davis being jointly and severally liable for the payment of the debt, to secure which the mortgage was to he given, they are entitled to so much of the proceeds of sale as may be necessary to pay their claim.

We come then to the next question. The mortgage executed by Powell, the tenant, was mailed to Miss Davis, ¹⁰³ but was never executed by her, nor was it returned to the appellants, nor was it ever recorded.