Court Opinion

ID: 5459586
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:30:46.567743+00
Date Added: 2024-06-11T08:32:49.304390
License: Public Domain

By the Court, Johnson, J.
I am satisfied, upon a careful consideration of this case, that the chattel mortgage, offered by the defendant in evidence, ought to have been received. It was proved to have been given to secure the purchase money of the property in question, and taken by the mortgagee in good faith. The defendant, in one of his answers, alleged that he was not, at the time of the alleged conversion, the owner of the property.
It is to be assumed, for the purposes of this question, that the mortgage was a valid subsisting one, at the time the plaintiff received his appointment.
This being so, what interest did the plaintiff take, by virtue of his appointment ? He took only the interest which the defendant then had, which was the mere equity of redemption. Eddy, the mortgagee, had the legal title, and the defendant the right to acquire it by paying off the mortgage. The mortgage, it will be seen, by its terms, gave the defendant no right to the possession of the building for any definite period of time, but the mortgagee might take possession, and sell at any time before the day of payment, when he should feel unsafe. The defendant, therefore, had no legal property in the building, conceding it to be personal property, as it *75undoubtedly was, from the evidence in the case, but a mere equitable right. This right was not the subject of sale upon execution; (Mattison v. Baucus, 1 Comst. 295;) and if an action could be maintained for the conversion of such an interest as the defendant had in the property, what measure of damages could the plaintiff recover ? The demand by the plaintiff, and the refusal by the defendant, upon which this action was brought, was about the first of June, 1854, nearly a year and a half after the title of Eddy, under the mortgage, had became absolute, at all events as against the defendant, and of necessity against all others standing in his shoes, also. The plaintiff, it seems to me,.beyond all doubt stood exactly in the defendant's shoes, in respect to this mortgage. He took all the interest the defendant had in the property, and no more, the day he filed his bond, as receiver, which related back to the day of his appointment, on the 4th of August, 1852, which was before forfeiture, and while the mortgage was good against all the world. At any time before the first of January, 1853, before the mortgage debt became due, he might have paid it off, and vested the whole legal title in himself. But he had neglected to do so, and consequently the right of the mortgagee had become absolute, as against the plaintiff, long before he made a demand of the defendant. Neither the defendant nor the plaintiff had any interest in the property which could be the subject, legally speaking, of a conversion, when the demand and refusal occurred.
The mortgage was excluded as evidence, on the ground that a true copy was not filed, with a statement exhibiting the interest of the mortgagee in the property, according to the statute, and that it was consequently void as against the creditors of the mortgagor. But the plaintiff was not a creditor, nor did he represent one, within the contemplation of the statute, as respects this mortgage, at the time the demand was made of the defendant. He occupied the position of the mortgagor; and the mortgagee was no more bound to keep a copy and statement filed as against him, than he was against *76the mortgagor himself. The interest of the mortgagor had, by virtue of the appointment of the receiver, been applied to the benefit of the .creditors, or transferred to the receiver for the creditors’ benefit, so that the defendant had been entirely divested of it; and if it was of any value the creditors lost the benefit of it, through the neglect and default of the receiver.
The creditor had no farther right or claim upon that property. His remedy in respect to it had been exhausted, and he was no longer a creditor of the defendant as regards that property. The statute makes the mortgage void where a copy and statement is not filed as therein prescribed, as against such creditors only as have not enforced their remedy against the mortgagor’s interest in the mortgaged property. After the rights of the creditor, in pursuing his remedy, had become fixed and certain as between him and the mortgagee, they could not be enlarged by any subsequent neglect of such mortgagee, although they might become forfeited by his own neglect to redeem. (Hill v. Beebe, 3 Kern. 556. Meek v. Patchin, 4 id. 71.) But suppose the action can be' maintained, all the plaintiff can recover is, the value of the interest he had in the property at the time of the alleged conversion, which was, if any thing, but the value of the right of redemption. The defendant had set up in his answer that he wras not the-owner of the property, and I do not see why, in any view of the case, he was not entitled to the evidence in mitigation of damages. But; I confess, there seems to me much graver difficulties in the case than this.
The defendant has not interfered with the plaintiff’s right of redemption in any respect, so far as the evidence shows. He has not converted or destroyed that right, even if it were a subject of conversion for which an action at law would lie. All he has done is to refuse to surrender a mere possession, to which neither he nor the plaintiff had any legal right, and which he held only by sufferance.
I entertain no doubt of the right of a receiver to maintain an- action against the judgment debtor where he has really *77converted the property after it has become vested in such receiver, either by sale or destruction, so that no delivery can be made. It is well settled that he may maintain it against a stranger, and I see ho reason why he may not against the debtor himself. (Wilson v. Allen, 6 Barb. 542. Gillet v. Fairchild, 4 Denio, 82. Brouwer v. Hill, 1 Sand. 627. Porter v. Williams, 5 Seld. 142.)
[Monroe General Term,
September 6, 1858.
Welles, Smith and Johnson, Justices,]
I think the ruling at the circuit was right upon all the points raised, except the exclusion of the mortgage.
The judgment must be reversed, and a new trial ordered, with costs to abide the event.