Case Name: FREDERIC G. MOORE, Respondent v. PRENTISS TOOL AND SUPPLY COMPANY, Appellant
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1891-07-02
Citations: 27 Jones & S. 516
Docket Number: 
Parties: FREDERIC G. MOORE, Respondent v. PRENTISS TOOL AND SUPPLY COMPANY, Appellant.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 59
Pages: 516–536

Head Matter:
FREDERIC G. MOORE, Respondent v. PRENTISS TOOL AND SUPPLY COMPANY, Appellant.
Chattel mortgage, prior liens based thereon—Conversion of property.
This is an action for conversion.. On October 28,1889, the Yonkers Brass Works, a copartnership composed of Samuel Hunt, Herman Siebert and Charles Florence, executed and delivered to the plaintiff a chattel mortgage payable in thirty days, and which mortgage covered principally the machinery and tools of the Yonkers Brass Works at Yonkers, 'New York. The mortgage to the plaintiff was for twenty-three hundred and fifty dollars, and was given to secure an indebtedness for money loaned and goods sold exceeding said sum. There is no dispute but that the Yonkers Brass AVorks owed the plaintiff said sum. About a month prior to the giving and filing of the mortgage to plaintiff, the said Yonkers Brass .AVorks executed and delivered a chattel mortgage to one Jewett to secure the payment of a promissory note for twelve hundred dollars, dated September 21, 1889, and payable in twelve months from its date, with interest, and providing that until default should be made in the payment of the said-sum of money that the Said Yonkers Brass Works were to-remain and continue in peaceable possession, etc. Subsequent to the execution and delivery of both of these mortgages said Yonkers Brass Works, on November 12, 1889, executed a bill of sale whereby they transferred to the defendant all the property of the Yonkers Brass Works, including the property in question in this action; and at the same time delivered to the defendant a key of the factory in which the chattels were contained. That the property was taken possession of by the defendant in this action was proved beyond the shadow of a doubt. On December 5, 1889, the plaintiff foreclosed his chattel mortgage at the city of Yonkers, New York, the foreclosure sale taking place in front of the factory of the Yonkers Brass AVorks. The defendant was represented at said sale by its attorney, Mr. Perry, who refused the plaintiff admission to the factory, and stated that the goods and chattels offered for sale belonged to the defendant. The sale proceeded and the goods and chattels were bought in by the plaintiff, but he could not obtain possession of them. On December 10, 1889, the plaintiff served on the defendant a written demand for the possession of the property, which was refused, defendant stating that it was its intention to hold on to the property. On December 30, 1889, the plaintiff commenced this action, and after the defendant had answered therein, the first or Jewett mortgage was assigned to one Roy, who made an arrangement with defendant by which that mortgage was to be considered then due, and on the 28th day of February, 1890, it was foreclosed and the defendant became the purchaser, and thereupon it served an amended answer setting up these facts as a further defence. Held, that the defendant acquired no rights that can affect the issues in this action by the purchase of the chattels at the sale under the foreclosure of the Jewett mortgage, which was considered due by the arrangement between Roy and defendant. Whatever right of action the plaintiff had at the commencement of this action could not be taken away from him without his consent, and he was not a party to said agreement or foreclosure, nor did he acquiesce therein or assent thereto. The bill of sale of the chattels to the defendant, after the execution and filing of the mortgage to the plaintiff, cannot and did not deprive the plaintiff of any rights under his mortgage. That bill of sale was executed and delivered to defendant with full knowledge of the two preceding mortgages.
The principal error assigned by defendant, was the refusal of the court below to permit defendant to show that, at the time of the execution of the mortgage to the plaintiff, the plaintiff agreed to start in business again the persons who gave the mortgage before the expiration of the time mentioned in the mortgage, which defendant claimed was a part of the consideration for the execution of the mortgage. Held, that the question here presented is not on the admission of parol evidence to explain, vary, or contradict a written instrument, nor is it a question as to the admission of parol evidence tending to establish an independent agreement. There being no agreement claimed as between plaintiff and defendant, the latter cannot avail itself of a breach of contract between plaintiff and the Yonkers Brass Works. If such an agreement existed and was a part of the consideration of the mortgage, it constitutes no defence here, and the rulings of the trial court on this question were proper.
The facts in the case show a conversion of the property in question by the defendant.
Before Freedman, Dugro and Gildersleeve, JJ.
Decided July 2, 1891.
Appeal from a judgment entered on a verdict of a jury at trial term, and from an order denying a motion for a new trial.
John M. Perry, for appellant, argued :
I. It was error not to allow the defendant to show that the chattel mortgage under which plaintiff claims, was given upon an express condition, and in consideration of an express promise, which he did not fulfil. Plaintiff had the right to show, by parol, what the true consideration for the giving of the mortgage was. Parkhurst v. Higgins, 38 Hun, 113, was an action by the representative of a deceased mortgagee to foreclose a mortgage, which stated that it was given to secure the payment of the sum of $2,500. The defendant, under plaintiff’s objection, was allowed to prove, among other things, that the mortgage was executed with the understanding that it should not be enforced, and that it was only made to make it appear that the property was encumbered for its full value. McKinster v. Babcock, 26 N. Y. 378, was an action by a chattel mortgagee against the defendant for an alleged conversion where the real consideration, differing from that stated in the mortgage, was allowed to be shown. In Young v.Wilson, 27 N. Y. 351, the Court of Appeals said (p. 356) : “ It has long and often been held in this state that the real consideration of mortgages or deeds may be shown by parol, though differing from that expressed in the instrument, and this court, in McKinster v. Babcock, 26 N. Y. 378, applied the rule to a chattel mortgage, in which the consideration expressed was money, when, in truth, the real consideration was the endorsement of the note of the mortgagor, and the mortgage was given by way of security.” In Kane v. Cortsey, 100 N. Y. 132, one P. had given plaintiff a mortgage on certain real estate, and defendants were sureties for the sum secured to be paid thereby. When the mortgage matured, P. made an oral agreement with.plaintiff that the time of the mortgage should be extended one year upon his giving a chattel mortgage as additional security; this was done. P. subsequently failed to pay the real estate mortgage, and this action was brought against the defendants on their guaranty. Defendants defended on the ground that the above extension being made without their knowledge released them. On the trial, when defendants attempted to give evidence of this agreement, it was objected to, and, speaking of this objection, the Court of Appeals (Earl, J.), said (p. 139): “ The parol evidence as to the agreement for the extension of time does not come under the ban of the rule which prohibits parol evidence to explain, vary, or contradict written instruments. It does not contradict or vary the real estate mortgage. That was past due, and the time for its payment could be extended by any valid agreement. It does not contradict the chattel mortgage. That was complete in itself, and was not intended to embody the agreement. Its sole purpose was to give the additional security. This was an independent agreement, existing outside of the two mortgages. It was the occasion or condition inducing the giving of the chattel mortgage, and no rule of evidence was violated in allowing it to be proved by parol.” Unless this court is going to draw a distinction which will on the one side in cases where a money consideration is expressed "permit it to be shown that the real consideration was an extension of time (100 N. Y. 139), or security for an endorsement (27 N. Y 351), or to indicate encumbrances (38 Hun, 114); and on the other side exclude evidence that the real consideration is a promise to start a business, as is the case here; it is submitted that the law as established by the above cases necessarily leads to the conclusion that it was error not to allow the plaintiff to prove the real consideration here.
II. Defendant was in a position to contest the validity of plaintiff’s mortgage. There is no dispute about the fact that before plaintiff’s mortgage matured the Yon kers Brass Works, plaintiff’s mortgagor, gave the defendant a bill of sale of the property which plaintiff claims is covered by the mortgage. Defendant thereby had a specific interest in this particular property. Its bill of sale did not recognize the plaintiff’s mortgage. By this bill of sale, if plaintiff’s mortgage were declared invalid the property belonged absolutely to the defendant, and even if it were declared valid defendant had thereby acquired the equity of redemption. It is not only a judgment creditor who can attack a chattel mortgage ; any one who has obtained a specific interest in the particular property which the mortgage is claimed to be a lien upon has this right. In Thomas on Chattel Mortgages (p. 188) the author states the rule to be that: “ A purchaser of the mortgaged chattels, or of any interest therein, or the holder of any subsequent lien thereon, providing that his claim has not, by the contract under which he claims, been limited to the equity of redemption, may resist the enforcement of the mortgage on any other ground that would have constituted a valid defence for the mortgagor.” On the same subject Judge 'Huger said in Sullivan v. Mitchell, 106 Ah 7. 635, that the validity of a chattel mortgage could be assailed by a creditor who has u secured a lien thereon by a levy under a judgment and execution, or by some other method acquired a legal or equitable interest in the property,” citing Southard v. Benner, 72 N. Y. 426, and Gerry v. Gerry, 63 Ib. 256 ; Briggs v. Austin, 29 State Rptr. 245.
■ III. There was not sufficient evidence to render defendant liable as for a conversion, and it was error to allow the question to go to the jury; and not to set aside the verdict of the jury finding a conversion, as contrary to law and evidence, (a.) The evidence did not establish that defendant held possession adverse to the plaintiff, subsequent to the time of the maturity of his mortgage and prior to the time of the commencement of this action. (5.) The evidence did not establish a sufficient demand and refusal. The alleged possession by the defendant, and the alleged demand by the plaintiff and refusal by the defendant were all denied in the answer, and were the questions principally contested on the trial. The most succinct and satisfactory definition of what character of acts in relation to property will be considered sufficient evidence of possession, which, when coupled with demand and refusal, will render a defendant liable for a conversion which we have been able to find, is contained in Gillet v. Roberts, 57 N. Y. 28, where Judge Earl says there must be “ active interference ” and that “ mere passivity and quiescence could not make him liable for a conversion.” It is submitted that there is nothing in this case to indicate any active interference by the defendant with the plaintiff in his right, if he had any, to take this property. Defendant did not go in the building where it was from before the time of the bill of sale until after this action was commenced. Plaintiff was in the building several times, and examined the property. Surely there is nothing in the evidence that indicates anything more than mere passivity and quiescence on the part of the defendant, so far as preventing plaintiff from taking physical possession of the property is concerned. The defendant’s position is that there was no proof of such possession or control as would render it liable as for a conversion. But assuming, for the sake of argument, that there was such evidence, it is then contended that the evidence given as to a demand and refusal does not establish such a demand and refusal as would render the defendant liable in conversion. Plaintiff and defendant both claim from the same source. The defendant received its bill of sale from the very people who gave plaintiff his chattel mortgage. If they had the right to give the one they had the right to give the other. Defendant having acquired what rights it had rightfully, in order to render it liable in conversion, a demand had to be shown. The following authorities, it is submitted, es tablish that the alleged demand and refusal shown here were not sufficient to render the defendant liable in conversion. G-illet y. Roberts, supra; Andrews v. Shattuck, 32 Barb. 396 ; Richard v. Pitt. A. Works, 27 Hun, 1; McClellan v. Wyatt, 11 N. Y. Supp. 686.
IV. Defendant was under no obligation to comply with the written demand in the form in which it was made. By the terms of the chattel mortgage under which plaintiff claims, he was given the right, upon default in payment, “ to enter * * the premises * * where * * such goods * * may be placed, * * and take and carry away the said goods.” In his written demand he demanded a return or delivery of the property and asked that a place be specified where the goods would be delivered. The demand, it is submitted, is entirely too broad to conform to the rights required by the terms of the mortgage. The words used in the mortgage to confer the right signify that the act shall be done by the plaintiff’s mortgagee. He shall enter and take and carry away. The mortgagor remains passive, and the thing to be accomplished is to be done by the mortgagee. The action is on the part of the mortgagee. If the plaintiff’s mortgagee had demanded here from the defendant who had succeeded to the rights to the mortgagor the right to enter the premises and take and carry away the goods, he would have been within the terms of his mortgage. But he did not do that. By his written demand he did not even demand possession. What he did was to demand that the defendant return and deliver the property and specify the place where it would deliver it. The words used in this demand do not allow of mere passiveness on the part of defendant, but render it necessary that it should take some active step. An enforced compliance with this demand reverses the positions that obtained under the mortgage. The mortgagor must become active and the mortgagee needs but remain passive. The words used are “ return ” and “ deliver.”
Webster defines the word “ return ” to mean “ to bring, carry, or send back,” and “ deliver ” has a synonymous meaning. In common parlance, if one says he wishes a thing delivered, he means he wishes it sent to him, and that it is used in that sense here is clear from the fact that defendant is asked to name the place where he will make the delivery. Plaintiff under his mortgage had no right to impose this burden on the defendant. This distinction, obvious in itself, has the sanction of authority. Richards v. Agricultural Iron Works, supra.
V. The demand of possession upon defendant’s attorney was not sufficient, as there was no proof that the attorney had power to comply with it. The alleged demand of December 5th, to which reference has been made, was made upon Perry, the attorney for the defendant. There is no evidence that he acted in any other capacity than as attorney for the defendant, and in that capacity he was not the proper person upon whom to make the demand. He could not have complied if he wished, for, so far as the evidence shows, he was not authorized to do so. He was asked to surrender the property of his client, a thing which ordinarily does not fall within the usual powers conferred upon an attorney where the mere relation of attorney and client exists. Such relation was all that was shown to have existed here, and it is submitted that as it was not shown that in this case the attorney was invested with powers beyond the usual powers of an attorney, such powers cannot be presumed to have existed. In Goodwin v. Wertheimer, 99 N. Y. 149, the defendant was the general assignee of Goldsmith, whom he had left in possession of the assigned goods as custodian. Plaintiff made a demand upon. Goldsmith for property claimed, and then begun a conversion action against the assignee, based on this demand, and in holding that this demand was insufficient, the court said : “ In reply (to the demand) Goldsmith said that he had no power or authority to give up the goods, as the firm had made a general assignment for the benefit of the creditors. ' It does not affirmatively appear wliat authority Goldsmith had or in what capacity he was acting. The most that can be inferred from the evidence is that he had the custody of the assigned property for the assignee, and had been placed in charge by him. It is insisted that the demand made of Goldsmith was sufficient to support the action against Wertheimer. If Goldsmith, in refusing to deliver the goods, was acting in obedience to Wertheimer’s orders, there would be no question. But this cannot be assumed in the absence of any evidence on the subject. The refusal of a servant to deliver goods entrusted to him by his master on a demand by a stranger is not sufficient evidence to maintain replevin against the servant, nor against the master when a demand and refusal is necessary to make the possession of the defendant tortious, unless the servant acted under direction of the master in refusing to deliver the goods. Mount v. Derrick, 5 Hill, 455. We can make no difference in respect to the sufficiency of the demand against the master, that the servant knew the person making the demand was entitled to the property, or that the master’s title was voidable. An agent or servant having the custody merely of goods, cannot bind the principal by acceding to a demand of a third person, nor, on the other hand, by refusing to deliver the property.”
Phillips & Avery, for respondent, argued
I. Plaintiff had title to the chattels in question. Upon the 27th day of November, 1889, the day plaintiff’s mortgage became due and was not paid, he became entitled to the property described in his mortgage, a portion thereof being subject to the encumbrance of the Jewett mortgage, but which mortgage was not then due. Said Jewett was not in possession, nor was he entitled to the possession of the chattels described in his mortgage. After default has been made by a mortgagor (in this case the Yonkers Brass Works), the conditional title in the mortgagee (in this case the plaintiff,) becomes absolute, leaving in the mortgagor only a right of redemption in equity. Campbell v. Birsch, 60 N. Y. 214 ; Code v. Cassidy, 72 Ib. 133 ; Judson v. Easton, 58 lb. 664 ; Bragehnan v. Dane, 69 Ib. 69. And this is the rule even though the mortgage is not in possession, and said mortgagee may maintain an action for conversion. Bragehnan v. Dane, swpra ; Davis v. Morrell, 16 Weekly Dig. 530.
II. A. mortgagee may recover the whole value of the property converted, subject to a liability to account for the excess according to the equities of the parties. M. & T. Bank v. F. & M. National Bank, 60 N. Y. 40 ; Marsden v. Cornell, 62 Ib. 215.
III. The jugglery with the first mortgage, by which, subsequent to the commencement of this action it was made due, and foreclosure thereunder had, in no way affected plaintiff’s rights, even assuming that the court could consider matter occurring subsequent to the service of the summons and not set up by supplemental answer after leave granted. The plaintiff having acquired a right of action could not without his knowledge or consent be held to have lost it. Livermore v. Northup, 44 N. Y. 112 ; Wehle v. Butler, 61 Ib. 245; Tiffany v. Lord, 65 Ib. 310; Cormier v. Batty, 41 N. Y. Superior Court, 70.
IV. There was a conversion. The defendant asserted title to the property in question and entirely repudiated any rights of the plaintiff, as well as refused to relinquish its ‘dominion and control after demand. The mere assertion of title constituted a conversion independent of the demands made. Pease v. Smith, 51 N. Y. 477 ; Heald v. McGowan, 5 N. Y. Supp. 450. The demand at the factory was in immediate proximity to the chattels ; the evidence being conflicting, the verdict of the jury is controlling here. Nelson v. Neil, 12 N. Y. Week. Dig. 157. The demand made in New York City was sufficient of itself, as it read, “ in case of a willingness to deliver the same, that you .specify where the same will be delivered.” This obviated any criticism that could be raised, because of the property not being in proximity to the demand. The. demands were sufficient. Mather v. Freelove, 3 State Rep. 424. Technicalities in reference to a demand will not be encouraged where the defendant is clearly in the wrong. The technicalities in regard to a demand have grown up in the law to protect the innocent, such as bona fide holders for value. Where it clearly appears that a defendant had fair notice and intended to deprive plaintiff of his rights, the reason for entertaining technicalities in regard to a demand disappears. The case at bar is an instance Avhere the technicalities should not be encouraged. On two occasions the defendant had an opportunity to disavow its retention of the property; and again ’ the hardships of a judgment for conversion do not obtain where the same is against a corporation. Even where a demand was for several hundred bushels of wheat more than the person was entitled to, the same Avas held sufficient. Marine Bank v. Fisk, 71 N. Y. 353.
Y. The defendant, in open defiance of plaintiff’s rights, on the day following the maturity of plaintiff’s mortgage, actually sold over eleven hundred dollars worth of the identical machinery and brass goods covered by the plaintiff’s mortgage. This sale was a conversion, and is a sample of the audacity displayed in defendant’s conduct. Even if this sale had been made prior to the maturity of plaintiff’s mortgage, it Avould still have been a conversion, as it would have been its duty after a demand to at once regain the possession and restore the chattels to plaintiff. A neglect or refusal so to do would give the plaintiff an action for conversion. Lawrence v. Maxwell, 53 N. Y. 19. It is not requisite to a A'alid claim for conversion that demands should be made while the goods are in defend ant’s possession and before their sale. Pease v. Smith, 61 N. Y. 477. After a sale it assumed to be the owner, and will be estopped to deny in an action by the lawful owner, the natural consequence of its own acts, and is liable in an action for the value of the goods (lb. 481). The defendant, as a matter of fact, actually did take possession of the chattels, but it is estopped from questioning said fact because it had a key of the premises on November 12, 1889, and there was no pretence or proof -that said key had ever been surrendered or turned over to any person by the defendant. A state of facts once proven to exist is deemed to continue until the contrary is proven and the burden of proving the contrary is thrown upon the opposite party.
VI. The questions of law involved by the third defence are practically the same. Defendant’s attorney relied upon “the bald statement that he (plaintiff) was to start them (Yonkers Brass Works) up in business again if they, gave him a chattel mortgage.” Counsel would not even state whether this “ starting up ” was to be by advancing money or goods. It was not contended that the original delivery of the mortgage was conditional, but that an agreement which was to take effect thereafter was orally made between the plaintiff and the Yonkers Brass Worlds. No agreement between the plaintiff and this defendant is claimed, (a) The defendant in this action cannot set up as a defence a breach of contract, if any such existed, between plaintiff and the Yonkers Brass Works. Even if such agreement existed and was part of the consideration for the chattel mortgage it would not be a defence. A partial failure of consideration is not a defence. The remedy is by a separate action for damage by the Yonkers Brass Works, and which they, and they only, can assert. Lasher v. Williamson, 55 N. Y. 619 ; Fellows v. Folsom, 2 Rob. 138. (b) But it is believed that a further complete answer will be found in the statement that such alleged contract would be void for ambiguity and un certainty. The defendant’s contention as to this defence is disclosed, where counsel states that they rely upon “ the bald statement that the plaintiff was to start the Yonkers Brass Works up in business again, if they gave the chattel mortgage.” Can the court say what that means, or what it means as pleaded in the answer ? Was the plaintiff to loan ten dollars or ten thousand dollars ? Was he to furnish ten barrels of material or ten thousand barrels of material ? Was plaintiff to rent or buy a factory ; obtain ten square feet or ten thousand square feet of space ? Was the arrangement to continue for ten days or ten years ?—Even if such contract existed it was void. Buckmaster v. Consumers’ Ice Co., 5 Daly, 313; Vanderwoort v. Dewey, 42 Hun, 68; Eaton v. Wilcox, 42 Ib. 61. (c) Again, there was no consideration for any such alleged contract. Nothing was done-by the parties but to secure a debt already in existence, (d) The rule that a stranger to a written contract may prove it otherwise than as stated in the writing does not obtain where a stranger stands in privity with the party. Selschow v. Stymus, 26 Hun, 145.

Opinion:
By the Court.—Gildersleeve, J.
On or about September 21, 1889, the Yonkers Brass Works, a co-partnership carrying on a brass moulding business, in the city of Yonkers, executed to one Leonidas C. Jewett a chattel mortgage, to secure the payment of a promissory note for $1,200 payable in twelve months from said 21st day of September, 1889. This mortgage covered a large number of chattels in the possession of the Yonkers Brass Works. Subsequently, and on or about the 28th day of October, 1889, the said Yonkers Brass Works, being indebted to the plaintiff in the sum of $2,350, executed a chattel mortgage to, secure this indebtedness to the plaintiff, which mortgage ' covered the same chattels that were covered by the Jewett mortgage. On November 12, 1889, the said Yonkers. Brass Works executed a bill of sale of all the chattels covered by the two mortgages to the defendant, and at the same time delivered to the defendant a key of the factory in which said chattels were contained, and the defendant thereupon took possession of said chattels. Both of said mortgages, to Jewett and the plaintiff, had been duly filed. On the 27th day of November, 1889, the plaintiff's mortgage became1 due, but was not paid ; whereupon the plaintiff, on the 5th day of December, 1889, foreclosed his said mortgage, and at the sale,—which took place in front of the premises of the "Yonkers Brass Works, in which the chattels were, the key to said premises being in the possession of the defendant or its agent,—the plaintiff bought in the property, and then demanded of Mr. Perry, who represented the defendant at said sale, the key to the premises, which was in the possession of said Perry, so that plaintiff could take possession of said chattels. The defendant's said representative, however, refused to give up the key, and declined to allow the plaintiff to take the said chattels, claiming that they belonged to the defendant. On December 10, 1889, plaintiff made both an oral- and written demand upon the defendant to deliver or give up the said chattels to the plaintiff. On December 80, 1889, the plaintiff, being unable to obtain possession of the said chattels, commenced this action for conversion. After this action was so commenced, and on the 21st day of February, 1890, and after the defendant had appeared and answered the complaint, the Jewett mortgage was assigned to one Roy; and, on or about the 24th day of February, 1890, the defendant and said Roy made an arrangement, by which the said Jewett mortgage should be considered then due. On the 28th day of February, 1890, the said Jewett mortgage was foreclosed, the chattels covered by it sold, and the defendant became the purchaser ; whereupon it served an amended answer setting up this fact as a defence. Prior to the foreclosure of plaintiff's mortgage, a fire had taken place at the factory of the Yonkers Brass Works, in which the chattels covered by the two mortgages were, and some damage done to the chattels; but the preponderance of evidence is to the effect that the value of the chattels was abundantly sufficient to cover both mortgages.
The defendant acquired no rights that can affect the issues in this action, by the purchase of the chattels in question at the sale under the foreclosure of the Jewett mortgage, which mortgage had been previously assigned to said Róy, and which, although by its terms not yet due, was considered due by virtue of the arrangement entered into between the defendant and said Roy. Whatever right of action the plaintiff had, at the time of the service of the summons and complaint herein, could not be taken away from him, without his knowledge or consent. Livermore v. Northrup, 44. N. Y. 112. The plaintiff was not a party to said agreement between Roy and defendant, and did not directly or indirectly acquiesce therein or assent thereto.
It was not claimed at the trial below,, nor upon the argument at general term, that the Yonkers Brass Works did not have a good title to the chattels in question, at the time they executed and delivered the mortgage to the plaintiff, and did not have the lawful right to execute said mortgage, subject, of course, to the prior lien of the Jewett mortgage. The subsequent bill of sale of the chattels in question by the plaintiff's mortgagor to the defendant, although it did not specify in any way or recognize the plaintiff's mortgage, cannot and did not deprive the plaintiff of any rights under said mortgage. The defendant's rights to the chattels in question were acquired by the bill of sale, executed by the Yonkers Brass Works, and delivered to the defendant, with full knowledge and notice of the existence of both the Jewett mortgage and the plaintiff's mortgage, as both had been duly filed. If defendant wished to retain possession of the property, it could hope to do so only after satisfying the claims of said mortgagees.
It is conceded that the Yonkers Brass Works owed the plaintiff, at the time of the execution of said mortgage to the plaintiff, the sum of $2,850. The mortgage seems to have been in proper form; no objection has been taken to its sufficiency in that regard, nor to the regularity of its execution and filing. We quote from the mortgage as follows: " for securing the payment of the indebtedness hereinafter mentioned, and in consideration of the sum of one dollar to them " (Yonkers Brass Works) " duly paid " " have bargained and sold," etc., " upon condition that if we, the said parties of the first part," (Yonkers Brass Works) " shall and do well and truly pay unto the said party of the second part," (plaintiff) " his executors, administrators or assigns, the sum of $2,350, within 80 days from this date, then these presents shall be void," etc. No other or further consideration than as above set forth is expressed in said mortgage, nor is any condition imposed, except the foregoing.
If the mortgage to the plaintiff was what it purports to be on its face; if it was properly foreclosed, and if there was sufficient evidence to justify the jury in believing that there was a conversion of the chattels in question by the defendant, the judgment and order appealed from should be affirmed.
But the defendant claims that there was more to the mortgage than appears upon its face. It alleges that the mortgage was given to the plaintiff by the Yonkers Brass Works "upon the express understanding and condition that the plaintiff should, within the time mentioned in said instrument, to wit, thirty days from its date, start and establish the persons composing the Yonkers Brass Works, or furnish the means for the persons to start and establish the business formerly carried on by them at said city of Yonkers; " and that plaintiff has failed to comply with this condition.
The principal error assigned by defendant, and the one upon which it mainly relies for a reversal of the judgment herein, is the refusal of the court below to permit the defendant to show the foregoing alleged understanding and condition. When the plaintiff was on the stand, the defendant undertook, upon cross-examination, to show a conversation that took place between the plaintiff and his mortgagors, at the time the chattel mortgage now under consideration was given. In the midst of this line of examination, he was interrupted by the court as follows:—
Court: " I see you have a defence of that kind. The court is of opinion that the facts stated in your third defence " (that being the defence last above indicated) " do not constitute a defence. That would not constitute a defence, conceding that he did promise to advance the money to continue the business, if they would give him a chattel mortgage,—the promise was made without consideration."
Defendant's counsel: "I shall endeavor to show that the chattel mortgage was given in consideration of that promise."
Court: " The chattel mortgage does not contain that consideration."
Defendant's counsel: "It says ' a consideration,' and I can show that it was different from the one mentioned in the instrument. I offer by the line of questions which I have been pursuing to prove, or attempt to prove, that apart of the consideration for the giving of the alleged chattel mortgage, under which he claims, was a promise on his part to start in business again the persons who gave the chattel mortgage, before the expiration of the time mentioned in the mortgage." Plaintiff's counsel: "I object to that line of proof." Court: " You say 'to start in business again,' do you mean by advancing more money or goods?"
Defendant's counsel: "No; the bald statement that he was to start them up in business again, if they gave him the chattel mortgage."
Court: " The objection is sustained."
To this ruling, the defendant's counsel duly excepted.
Subsequently, and after the plaintiff had rested his case, the defendant, as a part of its defence, called one Siebert, one of the members of the co-partnership known as the Yonkers Brass Works, and who signed the mortgage in question, and asked him the following questions: Q. "Was there any condition attached to the giving of that mortgage?" Q. "Was there any consideration for the giving of that mortgage other than the consideration expressed in the instrument ? "
To both of these questions, plaintiff's counsel objected, and the court sustained the objections, and defendant's counsel duly excepted.
It will be observed that defendant's counsel relied upon "the bald statement that he (plaintiff) was to start them (the Yonkers Brass Works) up in business again, if they gave him a chattel mortgage." Defendant's counsel would not state whether the " start up " was.to be by advancing money or goods. It does not appear that it was intended that the original delivery of the mortgage in question was to be conditional. The defendant's claim is that an agreement, which was to take effect thereafter, was orally made between the plaintiff and the Yonkers Brass Works, at the time of the execution of said mortgage. The question here presented is not on the admission of parol evidence to explain, vary or contradict a written instrument, nor is it a question as to the admission of parol evidence tending to establish an independent agreement. No agreement between the plaintiff and the defendant is claimed. The defendant in this action cannot avail himself of a breach of contract, if any such existed, between plaintiff and the Yonkers Brass Works. We are of the opinion that if such an agreement existed, and was .a part of the consideration for the mortgage in question, it would not be a defence here. The Yonkers Brass Works mio'ht main-O tain a separate action for the damage, if there had been a violation of such a covenant. If the Yonkers Brass Works ever had any such right, they do not appear to have transferred it to the defendant, or any other person, by assignment or otherwise; and the right, therefore, rests with them, and with them only. Lasher v. Williamson, 55 N. Y. 619; Bellows v. Folsom, 2 Robt. 138.
Even if the defendant's claim that a part of the consideration was to start the Yonkers Brass Works in business again be correct, the contract between the plaintiff and the Yonkers Brass Works would not fail, as the rest of the consideration wras good, to-wit, the existing indebtedness; and the Yonkers Brass Works' remedy would.be a separate action against the plaintiff, for damages. Bellows v. Folsom, supra. Defendant only claims that the agreement, if such existed, to start the Yonkers Brass Works in business again, formed " a part of the consideration." The rulings of the trial court, upon this question, were proper.
The plaintiff became entitled to the property described in said mortgage upon the 27th day of November, 1889, the day said mortgage fell due and was not paid, subject, of course, to the Jewett mortgage, not yet due. Jewett was not in possession of the property, nor was he entitled to the possession. The Yonkers Brass Works, the mortgagor, having defaulted in payment, the conditional title in the plaintiff, the mortgagee, became absolute, leaving to the mortgagor, or his assigns, only a right of redemption in equity. Campbell v. Birsch, 60 N. Y. 214, 218; Coe v. Cassidy, 72 Ib. 133, 138 ; Judson v. Easton, 58 Ib. 664; Bragelman v. Dane, 69 Ib. 69, 74. The rule is the same where the mortgagee is not in possession. See Bragelman v. Dane, supra.
There is abundant evidence to justify the conclusion that the defendant was in possession of the property at the time of the foreclosure of plaintiff's mortgage. On the day following the maturity of plaintiff's mortgage, the defendant actually sold a portion of the property covered by plaintiff's mortgage; the foreclosure sale under the plaintiff's mortgage took place in front of the Yonkers Brass Works, at Yonkers; the defendant was represented at the sale by its attorney, Mr. Perry; a demand for the key was made by the plaintiff upon said Perry, who refused the plaintiff admission to the building, where the chattels were, and stated that the goods and chattels belonged to the defendant; the sale pro-ceded in front of said premises of the Yonkers Brass Works, where said goods were, and they were bought in by plaintiff, but defendant refused to allow the plaintiff to take possession or to enter said building. On December 10, 1889, plaintiff served a written demand on the defendant for said chattels; the representative of defendant refused to comply with said demand, say-' ing "you can't have it; it belongs to the Prentiss Tool and Machine Company; I propose to hold on to it." Plaintiff said, " Do you mean to rob me ? " Defendant's representative and agent replied, " I do not know anything about that, but we propose to hold on to that' property."
The facts also indicate clearly a demand for the property upon the defendant, and its refusal to surrender the same,—two facts necessary to be established by the plaintiff to entitle him to maintain this action. These facts, together with the other evidence in the case, show a conversion of the property in question by the defendant. After demand, the defendant exercised dominion and control over the property, asserted its title thereto, and said to the plaintiff, "You can't have it." Pease v. Smith, 61 N. Y. 477, 481; Heald v. McGowan, 5 N. Y. Supp. 450, 451, 452.
If the case were free from acts of the defendant, indicating an exercise of ownership, we think the words of defendant might safely be relied on to constitute conversion. In Gillet v. Roberts, 57 N. Y. 28, Judge Earl, in the course of his opinion, says, " It is true that to constitute a conversion a manual taking' is not nec essary; but where words are relied upon, they must be uttered under such circumstances, in proximity to the property, as to show a defiance of the owner's right, a determination to exercise dominion and control over the property, and to exclude the owner from the exercise of his rights."
The rights to the property that defendant had, were acquired, as we have already said, with full notice of both the Jewett mortgage and plaintiff's mortgage; and it is no hardship to the defendant to subject it to the operation of those instruments.
Several exceptions to the admission and rejection of evidence, not heretofore noticed, were taken by the defendant. They were not, however, urged upon the argument here. We have examined them, but do not consider -them of sufficient importance to require discussion here.
There is, for the reasons stated, no ground for the reversal of the judgment and-order appealed from; they must, therefore, be affirmed, with costs.
Freedman and Dugro, JJ., concurred.