Case ID: ny-super-ct_58/html/0004-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Ingraham, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

SIGMUND KLEINBERGER, Respondent, v. HARRIS BROWN, et al., Appellants.
    
      Chattel mortgage. After default the title to the property mortgaged becomes absolute in’ the mortgagee.
    
    In September, 1887, one Anna Anstead purchased from plaintiff certain goods and chattels for $1,000, and paid $500 cash and executed and gave ten promissory notes for the sum of $50 each and a chattel mortgage to secure same; one of said notes being made payable every month thereafter^' Two of said notes were paid but there was a default in the payment of the third note that became due December 23, 1887. The mortgage was duly filed September 25, 1887, in the office of the register. Subsequently, and about December, 9,1887, Mrs. Anstead executed and delivered to defendant, Harris Brown, another chattel mortgage on the same property,and he foreclosed the same and sold the property on or about December 31, 1887, without any regard to plaintiff’s mortgage or to his title to the property described therein. There was some difference in the statements of the witnesses as to the exact date of the sale, one testifying to December 22, another that it occurred near the close of December, while the notice of sale printed in the N. T. Staats Zeitung of the 29th of December, 1887, which was introduced and proved on the trial, named Saturday, the 31st of December, as the day of sale.
    
      Held, that as the defendant Brown claims only through the mortgagor, Anna Anstead, and as she had no title nor interest in the mortgaged property after December 23, 1887, the act of the defendants in taking and selling the mortgaged property after that time was a conversion.
    
      Also held, that there being conflicting evidence as to the exact date when the defendants took possession of the property, if defendants desired to have that question determined by the jury, they should have made a request to have it submitted, but no such request was made. The defendants moved that the complaint be dismissed, which was properly denied, and the court then instructed the jury to find for the plaintiff. An exception to this direction does not raise any question for review.
    Before Sedgwick, Ch. J., Freedman and Ingraham, JJ.
    
      Decided March 4, 1890.
    Appeal from a judgment, entered at trial term upon the verdict of a jury, and from an order denying defendants’ motion to set aside the verdict and grant a new trial.
    
      Louis Levy and Julius Levy, attorneys, and Smith Tuttle of counsel, for appellants, argued
    That if the mortagor be in possession before default in payment of the mortgage and before demand of possession by the mortgagee, that such interest of the mortgagor is subject to the claims of creditors ; accordingly, if Mrs. Anstead, at the time of the foreclosure of the Brown mortgage, had a leviable interest in the goods and chattels covered by the plaintiff’s mortgage, the defendants had the right to enter the premises where said goods and chattels were, and upon default in the payment to seize and sell the goods and chattels ; in other words, the defondants had a right “ to sell the interest of the mortgagor and deliver the property to the purchaser, and the purchaser was warranted in taking it into his possession and using it for the purposes to which it was adapted until the day of payment. And he had, moreover, a right to pay the mortgage debt, and thus extinguish the lien.” Hull v. Carnley, 11 N. Y.5 06. Hathway v. Brayman, 42 lb. 322; Harnill v. Gillespie, 48 lb. 556. It becomes, therefore, an exceedingly important question in this case as to whether or not the mortgagor was in possession at the time of the seizure or entitled to the possession for a definite period as against the mortgagee Kleinberger. The evidence is conflicting as to when the defendants made a demand and put the mortgagor in default. Mrs. Anstead testifies that the foreclosure sale took place on the 22d day of December ; that demand was made two or three days previous. Mr. Spier testifies about the same date. Mr. Myers, the other defendant, testifies to about the same date as being near the close of the month of December, but by all the evidence in the case the mortgagor was in possession," and the mortgagee had not made any demand for the mortgaged property. This question therefore should have been submitted to the jury under proper instructions, as it was the most material one in the case, and decisive of the right of the defendants. If the jury believed that the mortgagor, Mrs. Anstead, was in the rightful possession of the mortgaged property at the time of the seizure by the defendants, then they were entitled to a verdict. This the learned judge refused to submit to the jury and the defendants duly excepted.
    II.—There is not the usual provision in the mortgage, given by Mrs. Anstead to the plaintiff, by which the whole amount secured to be paid should become due upon default in the payment of any one of the notes ; the last note was not due until July 23, 1888, and consequently there could be no default in respect to the whole sum until that date; and the mortgagor was entitled to remain in possession until then. Parker v. Paschall, Gen. T. Com. Pleas, 5 N.Y. Legal Obs., 418, which holds, “ where a chattel mortgage is for a certain sum to be paid in installments until the whole is paid ; and, in case of default of the payment of said sum, the mortgage to be forfeited. The mortgagee is not entitled to take the property until default has been made in the payment of all the installments and the whole sum is due.”
    
      Abraham L. Jacobs, attorney and of counsel, for respondent, argued :—
    I.—It is conceded that plaintiffs mortgage was a first lien on the chattels mortgaged and was executed to secure part of the purchase money therefor on the sale thereof by plaintiff, Mrs. Anstead, the mortgagor ; also that the mortgagor, Mrs. Anstead, defaulted in the payment of the third note which became due on December 23, 1887, thus making plaintiffs mortgage wholly payable by its terms and entitling him to absolute possession of the mortgaged property. Plaintiffs title to the chattels became, complete upon the failure to pay the installment then due and no action on the part of the mortgagor or any person claiming under or from her, could affect plaintiffs lien or right of possession. Judson v. Easton, 58 N. Y. 664 ; 1 Supm. Ct. (T. & C.), 559 ; 2 N. Y. Leg. Obs. 160 ; Willis v. O’Brien, 35 N. Y. Supr. 536 ; Hall v. Sampson, 35 N. Y. 274; Hathaway v. Brayman, 42 lb., 324 ; Wheeler v. Lawson, 103 lb., 40. The rule is clear that any interference with the mortgagee in possession or entitled to possession is unwarranted and a conversion. In this case there was no reversionary interest attacked, but plaintiff s right of possession was arbitrarily violated. Plaintiff’s mortgage became due December 23, 1887, by the mortgagor’s default, and notwithstanding this fact the defendants entered upon the mortgaged property and sold the same on December 31, 1887. While there is some conflict of defendant’s evidence as to the exact day of sale, the difference was substantially settled by the introduction of the New York Staats Zeitung of December 29, 1887, advertising the sale to take place on December 31, 1887. Plaintiff’s possessory rights having been violated by the defendants’ acts, they are guilty of conversion. Goulet v. Asseler, 22 N.Y. 225 ; Manning v. Monoghan, 28 lb. 585 ; Hathaway v. Bray man, supra.
    
    II.—The sale of the mortgaged property by the defendants was hostile to plaintiff’s rights. Without regarding plaintiff’s title in any manner, in fact entirely ignorant of plaintiff’s lien (to place the most charitable construction on the defendants’ conduct) the defendants entered upon the mortgaged property, and sold it at auction. No notice was given to the plaintiff and the property was immediately distributed and scattered in parcels among the many purchasers, who carried it away beyond the pow;er of the plaintiff. Where, therefore, the defendants act in hostility to plaintiff’s rights, the property is sold, distributed and scattered among bona fide purchasers without notice of plaintiff’s lien, the defendants are clearly liable. Hale v. Omaha Natl. Bk., 64 N. Y. 550 and cases cited, supra.
    
   By the Court.—Ingraham, J.

In Champlin v. Johnson, 39 Barb. 606, after a careful review of all the authorities, it was held that on a default in a condition of a chattel mortgage the title to the mortgaged property became absolute, and that the mortgagor had no interest in the property that could be sold on. execution ; that it made no difference, that the mortgagor remained in possession ; that a sale of the mortgaged property under an execution against the mortgagor was a conversion of such mortgaged property.

This case was cited with approval in Judson v. Easton, 58 N.Y. 664.

As the defendant Brown claims only through the mortgagor, and as the mortgagor had no title or interest in the mortgaged property after the 23d of December, 1887, the act of the defendant in taking possession of and selling the mortgaged property after that time was a conversion.

If defendant took possession of the property before December 23d, he was bound to return it to plaintiff on demand, and if he refused he was guilty of conversion. If he took possession after the 23d of December, the taking was a conversion and the defendant was in either event liable.

There was evidence that the sale under the mortgage took place on December 22d. There was also evidence that would justify a finding that it took place some days later and as late as December 31st,

If the defendants desired to have had that question determined by the jury they shouldhave made a request to have it submitted. No such request was made. The defendants moved that the complaint be dismissed, which was properly denied, and the court then instructed the jury to find for the plaintiff.

An exception to this direction does not raise any question for review. In Ormes v. Dauchy, 82 N. Y 448, Miller, J., says : “At the circuit, the judge directed a verdict in favor of the plaintiff, to which the defendants expected.

It is now claimed that the defendants having-relied upon their motion to dismiss the 'complaint and not having requested that any fact be submitted to the jury, it cannot be properly urged that there was any question of fact for the jury.

We think that the defendants should have asked to go to the jury upon the facts, and the exceptions to the rulings and direction of the court is not, under the circumstances, available. Dillon v. Cockcroft, 90 N. Y. 649.”

I do not think that any of the rulings on questions of evidence require that the judgment-should be reversed. I think, therefore, that the judgment should be affirmed, .with costs.

Sedgwick, Ch. J., and Freedman, J., concurred.