Page:Federal Reporter, 1st Series, Volume 7.djvu/854

 842 FEDERAL REPORTER. �become insolvent, and falls within the principle sactioned by the United Statea supreme court in Sawyer v. Turpin, 91 U. S. 121. �It is urged that if the court is not satisfied that there was an agreement by the parties thereto to withhold the mort- gage from record, still in fact the resuit has been to give the mortgagors a false credit, — to hold them out, to those who were dealing with them, as being the absolute owners of their shop without incumbrance, — and that injustice will resuit to those who had since dealt with them on credit if the property la allowed to pass under the mortgage, and is not distributed equally among all the firm creditors; that the leading rule in equity is that a party who asks equity must do equity; and as by the decisions in this state after-acquired personal property does not at law pass under a mortgage, although such may be its purport, and these complainants are com- pelled to corne into equity for relief, they should not be allowed to appropriate the stock purchased since the mort- gage, but the samo in justice and equity ought to be dis- tributed pro rata among all the creditors. But a complete answer to this view is that the mortgagees, not having had any fraudulent intent in not recording their mortgage, the assignee in insolvency of the mortgagors acquired no greater equity than the insolvents had after giving the mortgage; and having expressly stipulated by their mortgage that any property they should afterwards acquire should pass to the mortgagees, and b,e held by them as security, the mortgagees thereby acquired a greater equity to appropriate such after- acquired property to their security, if occasion should arise, than the general creditors who were without contract for any security. �Fraud not being established, the case must be governed by Mitchell t. Winslow, 2 Story, and the mortgagees must be held to have acquired, by the terms of their mortgage, a better right to the after-acquired property than the general creditors of the insolvent, and of this security the holders of the paper from liability on which the mortgage was intended ��� �