Case ID: ad_111/html/0202-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam :", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Fred E. Shaw, Respondent, v. Frank B. Cooke, Appellant.
    Third Department,
    January 8, 1906.
    Chattel mortgage—when not paid by delivery of defective real mortgage in lieu thereof. '
    When a chattel mortgage executed by the plaintiff provides that he is to assign to the mortgagee a mortgage on certain real estate in lieu of the chattel mortgage, and the real estate mortgage subsequently assigned does not cover all the premises specified, and when on the discovery of said defect in the latter mortgage the chattel mortgagor agrees-to pay the balance unpaid by the foreclosure of the same and said chattel mortgage is not redelivered to the mortgagor, the"real estate mortgage is not substituted for the chattel mortgage and the same is still a lien upon the personal property and may be foreclosed by the mortgagee.
    Appeal by the defendant, Frank B. Cooke, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Chenango" on the 17th day of February, 1905, upon the decision of the court rendered after' a trial at an adjourned term of the Chenango Special Term.
    On November 11, 1902, plaintiff, being about to- engage in the livery business, purchased of B. Y. & T. A. Jewell, of Mt. Upton, Chenango county, N. Y., certain horses, wagons, harness, robes, blankets and a fur coat. In consideration thereof plaintiff gave to ■ the said Jewells his promissory note for $800 and also a chattel mortgage upon said property, which contained the following clause: “And this mortgage is on'the express condition that if the said Fred E. Shaw shall pay to the said B. "V. & T. A. Jewell the sum of $800.00 with interest thereon as follows, viz.: Shall deliver to the said B. Y. & T. A. Jewell a first mortgage on 14 acres of land and creamery, known as the Culver property, and a mortgage on a farm of 200 acres known by the same name, and there is to be not to exceed $1,500.00 encumbrance on the said 200 acres except the 'mortgage to be delivered to said Jewells. Said mortgage is for the sum of $800 and accrued interest, which the said Fred E. Shaw hereby agrees to pay, then this transfer to be void and of no effect.” Thereafter, on November twenty-eighth, plaintiff assigned to the said Jewells' a certain bond .and mortgage, made by Charles A. Culver and wife to Olney A. Gifford, upon real estate as set forth in the clause of the chattel mortgage specified, in which there was covenanted tó be due and owing the sum of $800. The mortgage was not a lien upon the 200 acres therein described because the lien thereof had been divested under a foreclosure sale of a prior mortgage, and there was no creamery standing upon the fourteen-acre piece at the time of the sale. It is not claimed, however, that these facts were known to Shaw, this plaintiff, or that there was any fraud upon his part. There was in the assignment of the mort,gage no agreement on Shaw’s part to pay the same. On. the same day'said Jewells, by written instruments, assigned the said real property mortgage and the said chattel mortgage and transferred the $800 note to this defendant in consideration of $700; Thereafter this defendant foreclosed' the 'real estate mortgage, upon which foreclosure lie received,, exclusive of costs, a little over $200. , He then seized and sold the property covered by the chattel mortgage. ■
    . Plaintiff has brought this action asking for relief that the defendant account to the plaintiff for the full and true value of the chattel mortgaged property so taken and sold by him and that the said chattel mortgage be decreed to have been fully paid before said sale “ and that if there was any smn or part thereof unpaid at the time of said sale that the value of said property so to be ascertained or-so much thereof as may be necessary to ■ be applied in payment and extin; guishment of said debt secured by said mortgage so given to B. Y. & T. A. Jewell, if any there be, that the amount remaining due on said mortgage be ascertained, if any ; that it be adjudged that this plaintiff may redeem on payment of , such amount; that the plaintiff herein have'judgment against .said' defendant for the balance, together with such other and further relief in the premises as may be .just and equitable,, with the costs of this action.” In the answer, after certain admissions and denials, the' giving of' the note and the chattel mortgage and the real estate mortgage by the plaintiff-are, alleged and their transfer to the- defendant for the sum of $700, the foreclosure of the Culver mortgage, the sale under the chattel mortgage for the. sum of- $387.51, and that there remained, after said sale under the chattel mortgage, due upon the plaintiff’s obligation the sum of $424.62. '.That upon the foreclosure "of the real estate mortgage there was received the sum of $221.09, which leaves due upon the plaintiff’s obligations the sum of $214.22. Judgment is demanded for such sum as a counterclaim. The action was moved for a trial at.a Special Term before a single justice. ' The trial judge found that the personal property was transferred by said Jewells to the plaintiff in consideration of the mortgage upon the Culver farm aforesaid and that the note and chattel mortgage were as .security for the transfer of said mortgage.; that while the said mortgage did not answer the exact .description in the chattel mortgage, nevertheless, it having been tendered and received, constituted full payment and satisfaction thereof, and that the plaintiff was-entitled to recover from tlite defendant the value of the chattels taken under the chattel mortgage as having been wrongfully taken. For that value, to wit, the sum of $425, judgment was ordered, with costs against the defendant. From the judgment entered upon this decision the defendant has appealed.
    
      A. R. Gibbs and Wood D. Van Derwerken, for the appellant.
    
      Hubert C. Stratton and Irving J. Tillman, for the respondent.
   Per Curiam :

When the Culver mortgage was delivered to Jewell, the chattel mortgage was not surrendered. The fact that the Culver mortgage was an actual lien upon less land than was understood and was, therefore, of less value did not come to the knowledge of the defendant, as the assignee of Jewell, until about the time of the foreclosure. Upon his representation of that fact to the plaintiff the plaintiff recognized the chattel mortgage as an existing liability and agreed to pay the balance thereof, over and above the proceeds of the Culver mortgage, and requested the foreclosure of the Culver mortgage. Under such circumstances it is wholly unnecessary to return the Culver mortgage. Upon the evidence we are of opinion that the Culver mortgage was riot in fact substituted by the parties for the chattel mortgage, and, therefore, that the chattel mortgage was still a lien upon the property purchased by the plaintiff.

The judgment should, therefore, be reversed upon the law and facts and a new trial granted, with costs to appellant to abide event.

All concurred.

Judgment reversed on law and facts and new trial granted, with costs to appellant to abide event.