Case Name: James Frost, Respondent, v. Amos K. Warren, as Sheriff of Chautauqua county, Appellant
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1870-03-26
Citations: 42 N.Y. 204
Docket Number: 
Parties: James Frost, Respondent, v. Amos K. Warren, as Sheriff of Chautauqua county, Appellant.
Judges: 
Reporter: New York Reports
Volume: 42
Pages: 204–212

Head Matter:
James Frost, Respondent, v. Amos K. Warren, as Sheriff of Chautauqua county, Appellant.
A mortgage is not fraudulent in law from tlie mere fact-of its expressing a greater sum secured than the real amount of the debt which the mortgagor owes to the mortgagee.
The fact that the mortgagor continues to sell the mortgaged property (goods in a store), with the knowledge of the mortgagee, in the absence of proof that this was pursuant to an agreement between the parties, does not render the mortgage fraudulent in law, as against other creditors.
The question of baud, in both respects, is properly submitted to the jury.
(Submitted January, 1870;
decided March 26,1870.)
Appeal from an order of the General Term of the Supreme Court in the eight district, affirming an order of the Special Term denying a new trial.
Michael' Greiner gave a chattel mortgage to the plaintiff, who was his father-in-law, to secure, as therein expressed, an indebtedness of §1,825.57, which mortgage was upon all the- goods in a store, consisting of “ a general grocery stock.” It contained • a provision that, in case the mortgagee should at any time deem himself unsafe, it should be lawful for him to take possession of and sell the property “.for the payment of the said debt,” and was duly filed in the proper office. About one week after this mortgage was given, the plaintiff took possession of the goods, and the same day, or within two or three days thereafter, the defendant, as sheriff, levied upon them by virtue of an attachment duly issued in an action against Greiner, which action was prosecuted to judgment, execution issued thereon, and the property in question was sold by the defendant thereon. The plaintiff brings this action for a conversion, founded upon the seizure and sale above mentioned.
It appeared that when Greiner commenced business, about two years previously, the plaintiff made an arrangement with a firm in Buffalo, by which they were to furnish goods to Greiner, and the plaintiff gave his bond and mortgage upon real estate as a continuing security to the amount of $1,000, against any loss they might sustain by so furnishing goods. It was also understood that these goods were to be forwarded in the name of the plaintiff.
Greiner and his wife boarded with the plaintiff; and plaintiff’s son was a clerk in the store. The plaintiff himself made some purchases at the store, one small item being charged to him but one or two days before he took possession.
There was some evidence of an attempt on the part of Greiner to secrete some of the goods, but not with the knowledge or consent of the plaintiff.
It was proved that, before the mortgage to the plaintiff was given, he had told Greiner that he must have a mortgage or he would close the store.
During the few days intervening between the date of the mortgage and the time when the plaintiff took possession, Greiner continued to sell the goods at retail, his clerk being a son of the plaintiff and both of them members of the plaintiff’s family, as above stated.
On the trial, the evidence being closed, the defendant requested the court to direct á verdict for the défóndaüt, which the court refused to do and the defendant excepted.
The defendant also requested the court to cliarge the jury “ that the insertion in'the mortgage of an amount greater thaii the debt, with the agreement to pay such fietitióüs debt, rendered the mortgage fraudulent and void as against creditors.”
The court refused tó só charge, and the defendant excepted.
The defendant also requested the court to charge the jury that, if thejisliall find that the plaintiff' allowed the mortgagor to sell at retail on his 'own aceomit, the mortgage was void as against creditors. This request was also refused and the defendant excepted.
The jury were instructed, as to both points, that these facts were only badges of fraud, ail'd it was left for them to decide whether the mortgage was received by the plaintiff with-intent to defraud creditors.
The jury rendered a vér'dict in favor of the plaintiff, for the value of the property; which ivas a less ainouUt than the liability of the plaintiff upon his own mortgage to the firm in Buffalo.
The defendant moved for a new trial, which ivas denied. He appealed to the Gfeh'eral Term, where the order denying a hew trial ivas affirmed: Júdgmeht was then entered upon the verdict, and the defendant appealed tó this court.
John N. Hill, for the appellant,
cited Conkling v. Shelley (28 N. Y., 360); Gardiner v. McEwen (19 N. Y., 123); Russell v. Winne (37 N. Y., 591); Mitnacht v. Kelley (2 Trans. App., 342); Edgell v. Hart (5 Seld., 213); Ford v. Williams (24 N. Y., 364); Story v. Brennan (15 N. Y., 527); The People v. Cooke (8 N. Y., 73); Woodburn v. Chamberlain (17 Barb.) 446); Griffin v. Marquardt (17 N. Y., 28); Bailey v. Burton (8 Wend., 339); Webb v. Daggett (2 Barb., 9); Am. Ex. Bk. v. Webb (36 Barb., 291); Cavanaugh v. Beckwith (41 Barb., 192); Babcock v. Eckler (24 N. Y., 632); Williston v. James (6 Duer., 504) ; Griswold v. Sheldon (4, Comst:, 585, 593); Wood v. Lowry (17 Wend., 492)
Charles D. Murray, for the respondent,
cited Smith v. Acker (23 Wend., 652); Edgell v. Hart (9 N. Y., 213); Miller v. Lockwood (32 N. Y., 293); Gardiner v. McEwen (19 N. Y., 123); Conkling v. Shelly (28 N. Y., 360); Johnson v. Carnley (10 N. Y., 570); Frost v. Moot (34 N. Y., 253); Galon v. Brown (22 N. Y., 39); Hall v. Sampson (35 N. Y., 277); Brown v. Platt (8 Bosw., 384).

Opinion:
Foster, J.
There aré only two questions in the case, arising oh thé charge of the judge, and his refusal tó direct a verdict, although the counsel for the defendant raises the point that thé judgment should bé reversed, because thé court charged: "If the jury should find that Michael intended a fraud by giving the mortgage, still the mortgage was a valid instrument, unless the plaintiff was himself a party to the fráudulént intent." In reference to this, it need only bé said, that there is ño éxception to it; and, of course, the question is not properly before us, and judging from the opinion delivered in the court below, it was not presented there, but appears now for the first time.
The réal questions are, whether the amount which was stated in thé chattel mortgage, and which was greater than thé actual liability of the plaintiff for the mortgagor, and for the security of which it was givén, rendered it void per se. And so, also; whether thé proof given on thé trial showed that the mortgageé had given the mortgagor such permission to dispose of thé mortgaged property, as rendered the mortgage void in law. For if so, in either respect, thé chaige was not only erroneous, but the court erred in not ordering á verdict for the defendant.
. In regard tó the amount stated in the nioftgáge, the language of it does not come fully up, in stating it as a security for future liabilities, to that in thé case of Miller v. Lockwood, and yet it referred to the direct and collateral security which the mortgagee had' "assumed, and comes within thé principle of that case, and, at mbst, was "a badge of fraud, to be passed upon by the jury.
•As to the proof given upon the subject of the sales made by the mortgagor after the mortgage was executed, there was no such direct proof as rendered the question palpably plain, but it was to be decided upon all the facts and circumstances proved; and the inferences to be drawn from them were peculiarly for the jury. And in regard to that, I think the charge was as favorable to the defendant as the case called for.
The case shows that the goods in question were mainly obtained upon the credit of the plaintiff, and were manifestly less in amount than tire direct responsibility which he had incurred. And the jury having passed upon all the questions "of fact, and found no fraudulent intent, the judgment should be affirmed.