Case Name: SHELDON v. McFEE et al.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1914-01-21
Citations: 145 N.Y.S. 624
Docket Number: 
Parties: SHELDON v. McFEE et al.
Judges: 
Reporter: West's New York Supplement
Volume: 145
Pages: 624–628

Head Matter:
(160 App. Div. 361)
SHELDON v. McFEE et al.
(Supreme Court, Appellate Division, Third Department.
January 21, 1914.)
1. Chattel Mortgages (§ 6*)—What Constitutes. One W. sold an interest in his business and gave the purchaser a bill of sale. The purchaser resold the interest to W., and to secure a loan from plaintiff W. had the purchaser give him the bill of sale. Held, that the transaction constituted a chattel mortgage, and the filing of the mortgage with the city clerk gave constructive notice of the mortgagee’s title, and persons purchasing the property covered by the bill of sale took subject to the mortgage.
[Ed. Note.—For other cases, see Chattel Mortgages, Cent. Dig. §§ 23-41; Dec. Dig. § 6.*]
2. Chattel Mortgages (§ 229*)—Ratification of Exchange of Mortgaged Property. In a suit for the conversion of property subject to a chattel mortgage, evidence held insufficient to overturn the verdict that there had been no ratification by the mortgagee of an exchange of the mortgaged property.
[Ed. Note.—For other cases, see Chattel Mortgages, Cent. Dig. §§ 479-483; Dec. Dig. § 229.*]
Kellogg and Howard, JJ., dissenting.
Appeal from Trial Term, Otsego County.
Action by Burton H. Sheldon against Frank McFee and others. From a judgment for plaintiff, and an order denying their order for new trial, defendants appeal. Affirmed.
See, also, 156 App. Div. 877, 140 N. Y. Supp. 818.
Argued before SMITH, P. J., and KELLOGG, LYON, HOWARD, and WOODWARD, JJ.
George Wohlleben, of Oneonta, for appellants.
Alva Seybolt, of Oneonta, for respondent.

Opinion:
SMITH, P. J.
[ 1 ] One White was the owner of an insurance business in Oneonta, N. Y., and of some office furniture used in connection therewith, including a safe which is here in controversy. Upon the 17th of November, 1909, White sold to one Fleming a three-fourths interest in the insurance business and transferred all of the office- furniture, including this safe. It seems that Fleming's mother went on the bond of the firm to account for insurance moneys. Thereafter Fleming retired from the business and sold his interest back to White. White was to furnish $700' to pay to insurance companies moneys owing, in order to release Mrs. Fleming from her bond. That $700 was borrowed of plaintiff, and to secure him Fleming, at request of White, gave to him the bill of sale of the office furniture including the safe. This was security for some notes given to plaintiff by White to repay the amount furnished. The bill of sale went direct from Fleming to plaintiff, instead of going to White, and from her to plaintiff. This bill of sale was filed with the city clerk, where it should have been filed if a chattel mortgage. Thereafter White traded the old safe for a new one, which was smaller, with the Carey Safe Company. Of this trade plaintiff was ignorant. These defendants claim title through the Carey Safe Company. Plaintiff demanded the safe, which was refused, and this action was brought for conversion.
The transfer from Fleming to plaintiff was to secure to plaintiff ^payment of the notes given by White. It was therefore a chattel mortgage, and being properly filed was notice to the Carey Safe Company and all the world, so that defendants are not purchasers in good faith. The plaintiff then had the right to the possession of the safe, and the refusal to surrender the same constituted conversion.
This case was here before on a judgment for plaintiff, and we reversed the judgment on the law and facts, on the ground that it appeared that plaintiff had ratified the exchange of safes. After the exchange White sold out her business to Ceperly & Morgan, and, with plaintiff's consent, sold to them certain of the office furniture, "excepting the typewriter and the safe." Afterwards White gave to plaintiff a bill of sale of the new small safe, which plaintiff sold for $50. We were of opinion that plaintiff must have known of the exchange when he took a bill of sale of the new safe and thereafter sold it. On the first trial plaintiff was not sworn. On this trial he was, and swore that he did not know of the exchange, and supposed the new safe was a new purchase. This question was squarely submitted to the jury, which found for the plaintiff. I hardly think we should reverse a second verdict on this finding of fact.
The judgment and order should be affirmed, with costs.
Judgment and order affirmed with costs. All concur, except KELLOGG, J., dissenting in opinion, in which HOWARD, J., concurs.