Case ID: ny_19/html/0123-01.html
Source: Caselaw Access Project
Author: {"author": "Denio, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Gardner v. McEwen.
    A chattel mortgage, otherwise valid as to part of the property described in it, is not rendered void as to such property by reason of its professing to mortgage other property, as to which it is inoperative.
    Thus, a mortgage of all the goods of a specified description then in a store, or thereafter to be brought there, though void as to the latter, may be good as to the rest.
    Such a mortgage, lawful upon its face, duly filed, and proved to have been given for an honest debt, is, it seems, void as to creditors, if given under an agreement of the parties that the mortgagor might continue the business of buying and selling goods, and the lien attach upon those remaining, when the mortgage should be enforced.
    The question of fraud arising from evidence warranting the finding of such an agreement, is however one for the jury, and cannot be withdrawn from them, and decided as a mere question of law.
    Appeal from a judgment of the Superior Court of Buffalo. The action was in the nature of trover for a quantity of books, stationery and store furniture, which the plaintiff claimed title, to under a chattel mortgage, executed by John B. Collins on the 9th December, 1854, and which were afterwards sold on an execution issued on a judgment against Collins, in February, 1855. The defendant became the purchaser, and refused to deliver the property to the plaintiff on request. The mortgage was given to secure $272.91, and purported to convey, by way of mortgage, all the books, periodicals, stationery, papers, engravings, furniture and other personal property of Collins, in the store No. 154 Main street, Buffalo, or which might thereafter be purchased and put into the store by him, and was to be void if he paid the debt by certain installments therein mentioned. Upon default, or if the mortgagee should, at any time, deem himself in danger of losing his debt, he was at liberty to take possession of the property and sell it, paying thereout his debt and returning the surplus to Collins.
    On the trial, the mortgage, which had been duly filed, and the judgment and execution, under which the defendant claimed, were given in evidence by the respective parties. It appeared that the property sold by the sheriff consisted in part of the goods which were in the store when the mortgage was executed, and in part of such as had been subsequently purchased by Collins. The defendant then gave evidence tending to show, as the Case states, that from the time of the date of the mortgage to the sheriff’s sale Collins was in the actual possession of the whole of the stock in the store, acted as its owner, made retail and daily sales therefrom, received and retained the proceeds of such sales and made daily new purchases to replenish and keep up the stock, and to sustain his trade as a retail dealer; that his daily sales were from $15 to $20, and that his new purchases were for much of the time from $30 to $40 daily; that at the time of the sheriff’s sale there probably remained, of the goods which were in the store at the date of the mortgage, $150 to $200 in value; that they were indiscriminately intermingled and mixed up with goods of a similar character, which Collins had purchased after giving the mortgage; that they could not without difficulty be distinguished the one from the other, without the bills of purchase, but could be with them; that the plaintiff was often in the store from the date of the mortgage to the sheriff’s sale. The plaintiff proved that the debt mentioned in the mortgage was Iona fide owing to him, and that the mortgage was given after repeated endeavors of the plaintiff to obtain payment of his debt.
    The defendant moved for a nonsuit, for reasons stated in several separate propositions, which being refused, he requested the judge to charge the affirmative of each of the propositions, which he declined to do; and the defendant’s counsel excepted to both rulings. The positions taken by the counsel in his reasons for a nonsuit and the request to charge, were, that the mortgage was void for want of a schedule; on account of its professing to cover after-purchased property; on account of the property in the store at the date of the mortgage being mixed with that afterwards purchased; because Collins was suffered to sell by retail; for the want of a delivery of the property to the mortgagee, or any sufficient reason being shown for the absence of such delivery; and because the demand made by the plaintiff was not sufficiently specific in describing the property which the plaintiff claimed, and distinguishing it from the after-purchased property.
    The court charged that the plaintiff could not recover for any property not specified in the mortgage. Verdict and judgment for the plaintiff. After an affirmance at a general term, the defendant appealed.
    
      H. W. Rogers, for the appellant.
    
      John Ganson, for the respondent.
   Denio, J.

The mortgage was not fraudulent upon its face. It was of all the property of a particular description in a certain store; and that was sufficiently definite as to the property on hand. So far as it professed to convey property which Collins should afterwards purchase and put into the store, it was inoperative; and the court so charged. But the circumstance that Collins attempted to mortgage property which he did not then possess, did not render invalid the conveyance of that which he owned and was entitled to mortgage. ( Van Heusen v. Radcliff, 17 N. Y., 580.)

As to the oral evidence, it is not stated that it proved an agreement that Collins might continue his retail business and sell these mortgaged goods as though they were his own; nor is it stated that it was proved that he did in fact do so. What the Case states is, that the defendant gave evidence tending to show a course of conduct on the part of Collins from which the jury might reasonably have inferred an agreement out of the mortgage, not consistent with the nature and effect of that instrument, and which would have enabled him to pronounce it fraudulent, especially as it is also stated that the plaintiff was often in the store, and hence must probably have known and assented to what was going on. This, with the clause in the mortgage by which after-acquired property was attempted to be covered, made a pretty strong case for the jury; and ' might, I think, have justified them in finding that there was an agreement between mortgagor and mortgagee that the former might continue his business of buying and selling as usual, and that the mortgage should eventually attach, if it Should have to be enforced, to whatever might be on hand when that event should happen. I have, in another case, .expressed my opinion as to the effect of such an arrangement, and this court has decided, that where it is authorized by the terms of the mortgage, it renders it void. (Engell v. Hart, 5 Seld., 213.) The defendant in the present case was entitled, according to my view, to have the jury instructed that if the arrangement was such as I have suggested, they ought to find for the defendant. Perhaps the proof was strong enough to warrant the Superior Court in setting aside the verdict as against the evidence ; but this can only be determined upon the evidence actually given being stated; and, in any event, we have no jurisdiction to review their decision in that aspect of it. The defendant did not ask for any instruction to be given to the jury, except that they should find for the defendant, for rea- ! sons given in detail; which instruction, if given, would have taken from them the right to pass on thé facts, and would have determined the case as a pure matter of law. ISTo error was committed in refusing that instruction, or in denying the motion for a nonsuit. Where one of this description of mortgages is lawful upon its face, and there is proof that the debt which it was given to secure was fairly and honestly owing by the mortgagor to the mortgagee, and it has been filed according to the statute, the indications of fraud arising upon possession of the goods and the conduct of the parties respecting them, must be determined by the jury. This I understand to be the doctrine of this court upon this subject, (Smith v. Acker, 23 Wend., 653; Hanford v. Artcher, 4 Hill, 271; Thompson v. Blanchard, 4 Comst., 303.) But, independently of this principle, the manner in which the evidence in this case is stated is such that we cannot determine what was in fact proved as to the conduct of Collins respecting the property after he had given the mortgage, or how far the plaintiff knew or assented to what he did. '

I think the judgment ought to he affirmed.

Allen, J., delivered an opinion to the same effect upon all the points discussed in the preceding.

All the judges concurring,

Judgment affirmed.