Case ID: misc_12/html/0090-01.html
Source: Caselaw Access Project
Author: {"author": "Bischoff, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Joshua Gregg et al., Respondents, v. Jacob F. Wittemann et al., Appellants.
    (New York Common Pleas
    —General Term,
    April, 1895.)
    Where a chattel mortgage does not in express terms restrict'the mortgagor’s right to remove or transfer the possession of the mortgaged chattels, but gives him the use and possession thereof until default, he may lawfully transfer his possession to others, who may, in turn, divest themselves of possession by further transfer.
    
      Conversion is not predicable of a refusal by a transferee from the mortgagor to surrender the mortgaged chattels, where he has parted with the possession thereof before the mortgagee’s right to possession accrued.
    Appeal from a judgment of the District Court in the city of ¡New York for the third judicial district, rendered by the justice, without a jury, in favor of the plaintiffs.
    Action to recover damages for .the conversion of mortgaged chattels.
    
      Wager <& Acker, for respondents.
    
      Louis B. JLasbrouck, for appellants Wittemann.
    
      Benjamin Tuska, for appellant Kannenberg.
   Bischoff, J.

The action was for the conversion of certain furniture, and upon the trial the plaintiffs asserted their right to possession as mortgagees under a mortgage executed by one Bartram to secure the payment of the promissory note of one Merz. The chattels in question had been previously sold by the plaintiffs to Merz, and, with others, were contained in the latter’s place of business. Bartram’s title, and, as incident, the validity of the plaintiffs’ claim in this action, was dependent upon an alleged oral transfer of the chattels to him, from Merz, without consideration. Subsequent to Bartram’s mortgage to the plaintiffs Merz executed and delivered a bill of sale, covering the entire contents of his place of business, to the defendants Wittemann, as a means of providing for the payment of the vendor’s precedent debt to the vendees. The defendants Wittemann had employed one Alexander to collect their claim against Merz, and the bill of sale to them was of Alexander’s procurement. At Alexander’s instance the defendants Wittemann transferred all their rights under the bill of sale to the defendant Kannenberg, and employed the latter to sell the chattels at auction. The defendant Kannenberg took possession of the chattels, including the furniture mortgaged to the plaintiffs, sold them, and accounted to the defendants Wittemann for the proceeds of such sale. When the mortgage debt matured, which w*as after the sale last above alluded to, the plaintiffs demanded the furniture from the defendants Wittemann and Kannenberg, and, failing to secure the delivery of the chattels, had judgment against the said defendants for damages in this action, from which judgment the defendants have appealed.

The recovery below is not to be supported. The plaintiffs’ right to the possession of the mortgaged chattels did not accrue until the mortgage debt matured and default was made in the payment thereof. Until then, therefore, the defendants’ possession of the chattels was not tortious in so far as the plaintiffs were concerned. But before the accrument of the plaintiffs’ right to possession the defendants parted with then* possession to the purchasers of the chattels. Hence conversion was not predicable of the defendants’ failure to surrender the mortgaged chattels to the plaintiffs.

Where the mortgage' does not,.in express terms, restrict the mortgagor’s right to remove or transfer the possession of the mortgaged chattels (Russell v. Butterfield, 21 Wend. 300), and provides, as was here the case, that until default in the payment of the mortgage debt the mortgagor shall have the use and possession of the chattels,- the latter has an interest which is capable of transfer by levy and sale under execution. He may, therefore, lawfully transfer his possession to others who, in turn, may divest themselves of such possession by further transfer, the mortgagee’s only recourse for surrender of the chattels to himself being against the person or persons in possession at the time when the former’s right to possession accrued. 6 Lawson Rights, Rem. & Pr. 5018, § 3086; Hathaway v. Brayman, 42 N. Y. 322.

Another question would have been presented if it had appeared upon the trial that the mortgagor and those of the defendants who derived possession of the mortgaged chattels from or under him disposed of the chattels in hostility to the plaintiffs’ rights as mortgagees. Herman Chat. Hort. § 137; Hale v. Omaha Natl. Bank, 64 N. Y. 550, 556; Cooley Torts (2d ed.), 527 et seq. The action, however, was not tried upon any such theory, and from the evidence in the record it is not to be determined that the mortgaged chattels, at the time of the maturity of the mortgage debt, were not available and accessible to the plaintiffs in the possession of the purchasers.

A further objection is fatal to the recovery. In that which has been said we have assumed the mortgagor’s default in the payment of the mortgage debt. The fact of the default, however, does not appear from the evidence, and cannot be presumed. Lent v. N. Y. & M. R. Co., 130 N. Y. 504. Hence the plaintiffs’ right to the possession of the mortgaged chattels, at the time of the demand therefor upon the defendants, was not apparent upon the trial; and, failing of the right to possession, no conversion was shown.

The judgment should be reversed and a new trial ordered, with costs of this appeal to the appellants severally to abide the event. There should be restitution of the costs below, paid by the appellants to perfect their appeal.

Daly, Ch. J., and Pryor, J., concur.

Judgment reversed and new trial ordered, with costs to appellants severally to abide event.