Case ID: wend_19/html/0514-01.html
Source: Caselaw Access Project
Author: {"author": "Nelson, Ch. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Sanger vs. Eastwood.
    NEW-YORK,
    May, 1838.
    A purchaser of personal property with notice of the existence of a mortgage covering it, cannot avail himself of the facte that the mortgage was unaccompanied by a delivery of the possession and that it had not been filed in the town clerk’s office.
    Error from the Onondaga common pleas. Eastwood sued Sanger in trover for a horse, and claimed to recover under a mortgage of the horse executed to him by one James Foran, 28th June, 1834, conditioned for the payment of $80 according to the terms of a promissory note made by Foran to the plaintiff. The defendant bought the horse of Foran with notice of the existence of the plaintiff’s mortgage ; the horse at the time of the purchase being in the possession of Foran. The plaintiff demanded him from the defendant on the 3 5th August, 1835, and two days thereafter commenced this suit. It appeared that the mortgage had not been filed in the town clerk’s office where the mortgagor resided, nor had any statement of the interest of the mortgagee been filed. The defendant moved for a nonsuit on the grounds, 1. That the mortgage had not been filed, and 2. That no change of possession had acccompanied the mortgage. The motion was denied, and the jury under the charge of the court found a verdict for the plaintiff. The defendant having tendered a bill of exceptions, sued out a writ of error.
    
      
      J. A. Spencer, for plaintiff in error.
    
      A. Taber, for defendant in error.
   By the Court,

Nelson, Ch. J.

This was an action of trover by the plaintiff below for the value of a horse ; he was a mortgagee, and the defendant a subsequent purchaser for valúe, but with notice. The horse continued in the possession of the mortgagor until the sale. On the trial the defendant contended, 1. That the mortgage was void as against him, he being a subsequent purchaser; and 2. On the ground that it had not been filed under the act of 1833. Statutes, sess. of 1833, p. 402. The court charged that the defendant was not a bona fide purchaser if he had notice, and therefore did not come within the protection of the above act or of the 2 R. S. 136, § 5.

The omission to file, or the continued possession in the mortgagor, according to the terms of these statutes, makes the security void per se, but it is so only as against judgment creditors and subsequent purchasers in good faith. A purchaser with notice cannot claim to be a purchaser in good faith within these acts. Clear notice of a prior claim is considered per se evidence of mala fides. 15 Johns. R. 568. 1 Mad. Ch. R. 328. 2 Johns. Ch. R. 182. 15 Wendell, 588. 17 id. 25. 8 Cowen, 264. It is his own folly to purchase in such a case.

There was no offer on the part of the defendant to prove actual fraud between the mortgagor and mortgagee; that might have protected him, for then, though chargeable with notice of a prior claim, he might have urged that he knew at the same time that it was fraudulent. But then it must be a fraud that the purchaser may take advantage of himself. It might have been intended to defraud creditors, but that is a question solely between the creditors and the mortgagee. Proof of such a fact, as observed by Mr. Roberts, ought rather to prejudice than advance the claims of a purchaser. Roberts on Frauds, 59.

Judgment affirmed.