Textor v. Orr

Citations

• 86 Md. 392
• 38 A. 939
• 1897 Md. LEXIS 134

Syllabus

<p>Pledge— Transfer of Possession—Equitable Mortgage or Lien Not Recorded—Rights of Prior and Subsequent Creditors—Assignment For Benefit of Creditors—Powers of Assignee.</p> <p>In order to create a valid pledge of personal property a transfer of the possession of the thing pledged to the pledgee or to a third party for his benefit, is essential.</p> <p>A promise to execute a mortgage of certain property or a defectively executed or unrecorded mortgage, creates an equitable lien upon the property binding the conscience of the mortgagor and enforceable in equity against him. A pre-existing indebtedness is a sufficient consideration to support such mortgage.</p> <p>Such equitable mortgage or lien is also enforceable against parties who claim under the mortgagor without an equity superior to that of the creditor holding the lien and against unsecured creditors of the mortgagor who were such at the time the lien was created, but is not valid as against subsequent creditors or bona fide purchasers for value.</p> <p>An assignee for the benefit of creditors so far represents the creditors of the assignor who became such after the creation of an equitable lien or defective mortgage as to contest claims against the estate in his hands made to their prejudice.</p> <p>A debtor agreed in writing to give certain hoops to A., a creditor, as security for the payment of promissory notes, which represented a pre-existing indebtedness, and stipulated that the hoops should be the property of A. in case the notes were not paid at maturity. The hoops remained under the control of the debtor and the agreement was not recorded under the statute requiring all bills of sale or chattel mortgages to be recorded when the debtor remains in possession. Subsequently the debtor made a general assignment for the benefit of creditors, the notes being unpaid. A. claimed that under the agreement he was entitled to a first lien on the hoops which had come into the possession of the assignee. Held,</p>