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Consumers Brewing Co. v. Braun

147 A.D. 171 Court Second Department, Decision date 1911-11-28 English

Delivered by Jenks, P. J.:

Contents

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p. 171
Consumers Brewing Company of Brooklyn, L. I., Appellant, , v. Alois Braun, Respondent.
Second Department,
November 28, 1911.

Headnote

Mortgage — chattel mortgage — no covenant to pay — collateral to a note — action for deficiency after sale pursuant to mortgage.
Even though a chattel mortgage-does not contain a covenant to pay ad was given as collateral to a note, the mortgagee may enforce the debt secured by a foreclosure of the mortgage.
p. 172
If the mortgage acknowledges an existing debt the personal liability of the mortgagor is implied from its execution.
Where a chattel mortgage recites that, if the mortgagor shall pay to the mortgagee $800, being the amount of a promissory note of the same date executed by the mortgagor to the mortgagee, then the mortgage shall be void, the holder thereof can sue for a deficiency after a sale pursuant to the mortgage and is not relegated to an action on the note.
Appeal by the plaintiff, the Consumers Brewing Company of Brooklyn, L. I., from a judgment of the Municipal Court of the city of New York, borough of Queens, in favor of the defendant, rendered on the 24th day of January, 1911, dismissing the complaint.
William J. Courtney, for the appellant.
John B. Merrill and W. J. Creamer, for the respondent.

We gather from the oral pleadings, which are laconic and abbreviated, that the plaintiff sues for the deficiency after the sale, pursuant to a chattel mortgage executed by the defendant, and that the defendant answered by general denial and a counterclaim for the value of the chattels over and above the amount of the mortgage. The mortgage was upon the express condition that if the mortgagor should pay unto the mortgagee $800, “ being the amount of a certain promissory, note, bearing even date herewith, executed ” by the said mortgagor and “ payable on demand to the order ” of the mortgagee, then the mortgage should be void. The plaintiff produced the said note and read it in evidence. The Municipal Court held that the' action should have been brought upon the note, and for that reason dismissed the plaintiff at the close of the case, without prejudice.

The plaintiff could enforce the debt secured by the mortgage and the note by foreclosure of the mortgage, even if the mortgage did not'Contain a covenant to pay, and must be regarded as collateral to the note. (Pratt v. Huggins, 29 Barb. 277 ; approved in Hulbert v. Clark, 128 N. Y. 295 .) If the mortgage expressly acknowledges an existing debt, then the personal liability of the mortgagor is implied from the execution of the mortgage. (Culver v. Sisson, 3 N. Y. 264 ; Thomas

p. 173
Chat. Mort. 147.) I think that there is in this mortgage such an acknowledgment of a debt of $800 (see Elder v. Rouse, 15 Wend. 218 ), and, therefore, that a suit for deficiency would lie. (Case v. Boughton, 11 Wend. 106 ; Thomas Chat. Mort. supra.) I think, then, that the dismissal was error, and that without expression upon the merits we should reverse the judgment and order a new trial, costs to abide the event.

Hirschberg, Burr, Thomas and Carr, JJ., concurred.

Judgment of the Municipal Court reversed and new trial ordered, costs to abide the event.

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