Case ID: ny-st-rep_60/html/0268-01.html
Source: Caselaw Access Project
Author: {"author": "Herrick, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Sigmund Ashner, Resp’t, v. Daniel H. Deyoe, as Sheriff, etc., App’lt.
    
      (Supreme Court, General Term, Third Department,
    
    
      Filed May 8, 1894.)
    
    1. Fraud—Rescission.
    Where the possession of property is obtained by fraud and misrepresentation, its title is not changed, and the vender can retake it from any one npt a bona, fide purchaser.
    2. Same—Chattel mortgagee.
    A mortgagee, whose chattel mortgage was executed to secure a preexist isting debt, is not a bona fide purchaser.
    3. Appeal—First instance.
    The objection that replevin does not lie for property taken under attachment cannot be raised for the first time on appeal.
    Appeal from a judgment entered on a verdict in favor of plaintiff.
    
      T. F. Hamilton, for app’lt; Henning & Me Call (J. L. Henning, of counsel), for resp’t.
   Herrick, J.

This is an appeal from a judgment against the defendant, awarding to the plaintiff possession of certain tobacco, and, in case the same is not delivered to the plaintiff, that then the plaintiff recover of the defendant the sum of $551.50, the value of said property, and also the sum of $44.20 damages for the detention thereof. It appears that the plaintiff sold the tobacco in question to one Metzner, about the 1st of July, 1891, on a credit of four months. About September 23, 1891, certain creditors of Metzner’s, claiming that he was removing and disposing of his property with the intent to defraud his creditors, obtained an attachment against Metzner’s property. Under such attachment the defendant, as sheriff, levied upon the property of said Metzner, seizing, as a part of the same, the tobacco in question in this action. The plaintiff brought his action in replevin against the sheriff to obtain possession of the tobacco, alleging that the same was obtained from him by false and fraudulent representations and statements made by Metzner as to his financial condition, and that the said tobacco was purchased by Metzner with the intent not to pay for the same, and with the intent to defraud and cheat the defendant out of his property, and that, upon the discovery of such fraud, he (the defendant) dis-affirmed the sale, and made a demand upon the sheriff for said tobacco in the sheriff’s possession. The property was replevied from the sheriff by the coroner. The plaintiff in the attachment proceedings executed and delivered to the coroner a proper undertaking for that purpose, which was approved by the coroner, and the tobacco returned to the possession of the defendant. Upon the trial, evidence was submitted by the plaintiff of the false and fraudulent representations made by Metzuer at the time of the sale of the tobacco, and by which the plaintiff was induced to make such sale; and the jury, by their verdict, have found that issue in favor of the plaintiff, and there was evidence to justify such finding; .and for the purposes of this appeal it may be taken as established that Metzner, by false and fraudulent representations, induced the plaintiff to part with the possession of the tobacco in question, with the intent not to pay for the same, and with the intent to cheat and defraud the plaintiff out of his property therein. The action was commenced on the 23d of September, 1891. On the 19th of September, 1891, Metzner gave a chattel mortgage on the tobacco in question to the First National Bank of Saratoga Springs to secure the payment of certain notes then held by the bank to the amount of $1,237, Metzner being the maker of one of the notes, and the indorser upon four others. There was no agreement that, by the giving of the chattel mortgage, such notes should be delivered up to Metzner, nor were they in fact delivered to him at that time. The next day, however, after giving the chattel mortgage, the bank gave Metzner such notes, and took Metzner’s own note in lieu thereof. At the time of the giving of the chattel mortgage, the bank did not advance or give anything to Metzner therefor, and in his testimony Metzner says: “I gave the mortgage for the sole purpose of securing the notes then held by the bank, upon which I was liable as maker or as indorser.” At the close of plaintiff’s case, the defendant moved for a dismissal of the complaint upon the ground that it “affirmatively appears by the proof that the legal title to the goods in question is in the First National Bank of Saratoga Springs, and that, upon plaintiff’s own proof, he cannot recover in the action.” This motjon was denied. And again, at the close of the whole case, “ the defendant’s .counsel asked to go to the jury upon the question whether or not, by the terms of the agreement under which the mortgage was received, and the five notes surrendered, and Metzners’s own note taken therefor, were not a transaction by which the bank surrendered valid security, and became a bona fide holder'of the mortgage for value.” This request was denied. I can see no reason for a reversal • of the judgment in this case. Metzner having obtained possession of the property by fraud and misrepresentation, and with the intent not to pay for the same, but with the intent to cheat and defraud the plaintiff out of his property therein, the title to the property was not changed, and the plaintiff could retake the same from any one not a bona fide purchaser. Hotchkin v. Third Nat. Bank, 127 N. Y. 329-338 ; 38 St. Rep. 754; Devoe v. Brandt, 53 N. Y. 462. The bank does not stand in the position of a bona fide purchaser. It did not give anything for the mortgage, and the debt that the mortgage was executed to secure was a pre-existing one, and the mortgage executed as security therefor gave it no right to hold the property as against the owner, who had been deprived of the possession thereof by fraud. Barnard v. Campbell, 58 N. Y. 73; Nat. B. & D. Bank v. Hubbell, 117 N. Y. 384-398; 27 St. Rep. 396.

No question is raised upon this appeal but that the plaintiff, within a reasonable time after the discovery of the fraud upon him, commenced proceedings to recover his property; neither is there any question raised as to a proper' demand having been made by him for the possession thereof. The appellant does, however, raise the question that, such property having been seized under an attachment, the same was in the custody of the law, and that the plaintiff has mistaken his remedy; that his action, if any, should have been for' conversion, and not for replevin—and cites the case of Wise v. Grant, 140 N. Y. 593; 56 St. Rep. 496, to sustain his contention. The case cited is in point, and, if it were not for other considerations, I would feel constra'ned to hold that the judgment should be reversed. But the question so presented is raised for the first time in this case on appeal. It was not suggested in the court below. The case was there tried upon the question as to whether there had been in fact any fraudulent action on the part of Metzner towards the plaintiff, and as to whether the bank, under this chattel mortgage, had a title to the property; and, as we have seen, the only question raised by the defendant upon the motion for a nonsuit at the close of the plaintiff’s testimony was that arising under the chattel mortgage to the plaintiff, and the only question upon which the defendant requested to go to the jury was that arising out of the same chattel mortgage. Under such circumstances, I do not think the defendant should be permitted to avail himself of an objection to the form of the action, now raised for the first time. Having tried the case upon another theory, he must ba considered to have waived that objection. To hold to the contrary would be justifying a practice which is misleading to the trial courts, and an injustice to the parties. Salisbury v. Howe, 87 N. Y. 128 ; O' Neill v. N. Y., O. & W. Railway Co., 115 id. 579-584; 26 St. Rep. 269.

The judgment should be affirmed, with costs.

Mayham, P.o J., concurs ; Putnam, J., not acting.