Case ID: misc_44/html/0485-01.html
Source: Caselaw Access Project
Author: {"author": "Cochrane, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John K. Cullin, Plaintiff, v. Martha R. Ryder et al., Defendants.
    (Supreme Court, Columbia Special Term,
    July, 1904.)
    Bill of sale given for the vendor’s future support—Failure to renew a chattel mortgage — Who cannot take advantage thereof — Meaning of the term “ creditor ” as used in the Lien Law.
    A bill of sale, the consideration of which is the support and maintenance, of the vendor during the remainder of his life, is void as to his creditors under section 23 of the Personal Property Law.
    The failure to file in due time a renewal of a chattel mortgage does not render such mortgage void as against a subsequent chattel mortgagee who had actual notice of the existence of the prior mortgage.
    A person not having a judgment and execution is not a “ creditor ” within the meaning of sections 90 and 95 of the Lien Law.
    This is an action to foreclose a chattel mortgage executed •by the defendant Ryder to the plaintiff on the 27th day of November, 1902, for the sum of $2,196.
    The property covered by the mortgage was formerly owned by Allen Reynolds who on November 4, 1902, executed to the defendant Ryder a bill of sale thereof. The consideration of this bill of sale was the support and maintenance of the said Reynolds during the remainder of his life.
    November 17, 1902, Reynolds executed to Ryder a chattel mortgage covering the same property, the consideration thereof as therein expressed being to secure a promissory note for the sum of $2,000 given on the same day by Reynolds to Ryder. This mortgage was filed in the town clerk’s office the day after it was executed.
    November 27, 1902, the plaintiff’s mortgage which he seeks to foreclose herein was executed by Mrs. Ryder to secure the payment of a promissory note for $2,196 which was a part of a real estate mortgage indebtedness existing against the farm which was on the same day conveyed by Reynolds to Mrs. Ryder and which indebtedness was assumed by the latter.
    Reynolds while the owner of the property in question and on April 2, 1901, executed to the defendant William Smith a chattel mortgage for the sum of $740, covering the property involved herein which mortgage was duly filed April 4, 1901. It was not renewed, however, until April 15, 1902, eleven days after the expiration of the time within which the same should have been renewed as provided by statute.
    An action was brought by Smith against Reynolds, after the execution of the plaintiff’s mortgage, to foreclose the Smith mortgage and judgment was recovered in such action, prior to the commencement of this action, which judgment among other things appointed the defendant Macdonald as receiver of the mortgaged property, and directed him to sell the same and out of the proceeds thereof to pay Smith $495.37, the amount due on his mortgage, including the costs of the action.
    The defendant Smith and Macdonald as such receiver defend this action, claiming that the mortgage to Smith is a prior lien to the plaintiff’s mortgage notwithstanding the failure to renew the same as provided by statute.
    A. Frank B. Chace & Sons (John Cadman, of counsel), for plaintiff.
    John L. Crandell, for defendant Smith and Macdonald, as receiver, etc.
   Cochrane, J.

The bill of sale from Reynolds to Ryder having been given for the future support and maintenance of Reynolds was void as to his creditors. Pers. Prop. Law, § 23. Smith was a creditor of Reynolds and hence as to him the bill of sale is within the condemnation of the statute. TTis claim as such creditor was established by judgment-•before the commencement of this action and is not questioned herein.

The chattel mortgage from Reynolds to Ryder was expressly declared therein to be subject to the provisions of a previous chattel mortgage,” meaning the Smith mortgage, which was coneededly the only mortgage then on the property.

The defendant Ryder consequently received no title to the property in question as against Smith. Her bill of sale was void as to him, and her chattel mortgage was expressly declared to be subject to his mortgage. "Whatever title she received to the property, either by virtue of the bill of sale or chattel mortgage, was subject to the interest of Smith therein.

The plaintiff was fully aware of the origin and source of Mrs. Ryder’s title. According to his testimony, when he took his chattel mortgage from the defendant Ryder he was aware of the actual consideration of her bill of sale. He had full knowledge of the imperfections and defects which existed in her title by virtue of her bill of sale. The objectionable features were known to him because he says so. Mrs. Ryder could give to Guilin no better title than she had received from Reynolds, which title so received by her was expressly subject to the Smith mortgage; and Guilin could acquire from her no greater interest in the property than he might have acquired from Reynolds if the latter had not executed to Ryder any bill of sale or chattel mortgage.

The plaintiff, therefore, is not entitled to any more favorable consideration than if his claim had been derived directly from Reynolds. But in the latter event, as the facts now appear, plaintiff could not avail himself of the failure of Smith to renew his chattel mortgage. Smith testified on the trial without contradiction that his mortgage was taken at the suggestion of the plaintiff and that, after the time when it was originally filed, he informed the plaintiff of its existence. Part of the consideration of the Smith mortgage was received by plaintiff, to apply on the real estate mortgage indebtedness against the Reynolds’ farm. . Plaintiff, therefore, had actual notice of Smith’s mortgage and cannot take advantage of the failure to properly renew the same. McCormack v. Venable, 34 N. Y. St. Repr. 717; affd., 133 N. Y. 536; Zimmer v. Wheeler, 2 N. Y. St. Repr. 325; Gildersleeve v. Landon, 73 N. Y. 609; Mack v. Phelan, 92 id. 20, 25; Eastern Brewing Co. v. Feist, 21 Misc. Rep. 681.

The plaintiff not having a judgment and execution is not a “ creditor ” within the meaning of sections 90 and 95 of the Lien Law. Jones v. Graham, 77 N. Y. 628.

It follows that the mortgage of the. plaintiff is subsequent in lien to the mortgage of Smith and that the motion of the defendant Smith and Macdonald, as receiver, made on. the trial for a dismissal of the complaint must be granted.

Complaint dismissed as to the defendant Smith and Macdonald, as receiver, etc., with costs not including an additional allowance.

Ordered accordingly.