Baumann v. Cornez — 15 Daly (N.Y.) 450

Majority

p. 450

Jacob Baumann, Appellant, against Louise Cornez, Respondent.

(Decided February 3d, 1890).

Headnote

A stipulation in a chattel mortgage, that upon default in the payment of the sum secured, or any installment thereof, or upon the removal of the chattel without the consent of the mortgagee, the mortgage debt remaining unpaid shall at once become due and payable without demand, and if not paid, the mortgagee may proceed to take possession, is not unconscionable, and contravenes no law or rule of public policy; and upon such default the mortgagee’s right to possession accrues without prior demand for payment of the mortgage debt.

Appeal from a judgment of the District Court in the City of New York for the Eleventh Judicial District.

This was an action of replevin brought by a mortgagee against the mortgagor to recover possession of the chattels mortgaged, after a default in the payment of an installment of the mortgage debt.

Joseph C. Wolff, for appellant.

On December 4th, 1888, defendant, to . secure the payment of the sum of $182 owing by her, exe

p. 451

cuted and delivered to plaintiff a mortgage upon certain chattels, at the time contained in the premises No. 323 West 17th Street in the City of New York. The" mortgage was duly filed in the office of the register of the City and County .of New York, and provided for the payment of the sum secured as follows : $15 at the time of the execution and delivery of the mortgage, and the remainder in installments of •$ 6.00 on the Tuesday of each and every second week succeeding the date thereof, commencing December 11th, 1888, until the whole sum'be paid. The mortgage also contained a clause that, upon default in the payment of the sum secured or of any part thereof or any of the installments thereof, or in case of any attempt to remove or secrete or to sell or dispose of the mortgaged chattels or any part thereof from the premises in which the chattels were then contained, without the previous written consent of the mortgagee, then the whole amount of the mortgage debt remaining unpaid should become and be due and payable at once without demand, and if not paid, the mortgagee should be empowered to take possession of the chattels and dispose of the same as provided. Also that the mortgagee might, whether any installment was due and unpaid or not, take possession of the chattels at any time and retain 'the same to his own use and benefit, in which latter case, however, the mortgagee should return to the mortgagor all moneys then actually paid by the mortgagor on account of the mortgage debt, after first deducting from such moneys a reasonable sum for cartage and for the depreciation of the chattels from use.

Plaintiff, the mortgagee, thereafter brought replevin proceedings against defendant, the mortgagor, in the District Court of the City of New York for the Eleventh Judicial District, to recover possession of the mortgaged chattels. On the trial, the following facts remained undisputed : Defendant having made default in the payment of several installments ■in accordance with the terms of the mortgage, and having also removed the mortgaged chattels from the premises No. 323 West 17th Street without the previous written consent of the mortgagee, the latter, prior to the commencment of the pro

p. 452

ceedings, demanded possession of the chattels from the defendant, which was refused by her. Defendant, in defense against plaintiff’s claim, contended that plaintiff was not entitled to possession of the chattels, because prior to the demand therefor no demand was made of her for payment of the mortgage debt. The trial justice apparently found that defendant’s contention was well taken, and rendered judgment in her favor, from which plaintiff has appealed to this court.

The facts clearly establish the plaintiff’s right to the possession of the mortgaged chattels, and the same should have been awarded to him. The legal title to the chattels was in the mortgagee, and on default by the mortgagor in the performance. of the condition to be performed by her, his title and right of possession became absolute in law (Briggs v. Oliver, 68 N. Y. 336 ; Parshall v. Eggert, 54 N. Y. 18 ; Miner v. Judson, 2 Hun 441 ; Brown v. Bement, 8 Johns. 796 ).

And though the mortgage debt be payable in installments, the title and right of possession of the mortgagee becomes as perfect upon a default in the payment of an installment as it does upon a default in the payment of the whole debe (Robinson v. Wilcox, 2 N. Y. Leg. Obs. 160 ; Halstead v. Swartz, 46 How. Pr. 289 ).

The mortgagor is in default if he permits the time appointed for payment to pass without making the same, and upon such default the mortgagee’s right to possession accrues without prior demand for payment of the mortgage debt, unless the mortgage in express terms requires such demand. And it has been held that a demand by the mortgagee of payment of . the installments past due constitutes a waiver of the breach of the conditition concerning payment, which he cannot after-wards recall and insist upon forfeiture ( Van Loan v. Willis, New York Common Pleas, 1885, 13 Daly 281 ).

In the present case, however, the parties have expressly stipulated that, upon default in the payment of the sum secured, or of any part thereof, or of any installment, or upon the removal of the chattels without the previous written consent of the mortgagee, the amount of the mortgage debt remaining unpaid should at once be due and payable without

p. 453

demand, and if not paid then the mortgagee may proceed to take possession of the mortgaged chattels. Such a stipulation is not unconscionable, and contravenes no law or rule of public policy. If required by the one party, consented to by the other, and deliberately entered into without fraud or misrepresentation, no sound reason can be advanced against its enforcement (Conkey v. Hart, 14 N. Y. 22 ; Russell v. Butterfield, 21 Wend. 300 ; Huggans v. Fryer, 1 Lans. 276 ). , The judgment should be reversed and a new trial ordered.

Bookstaver J., concurred.

:Judgment reversed and new trial ordered.

Cases cited

Briggs v. Oliver 68 N. Y. 336 N.Y. 1877-01-30 p. 452
Parshall v. Eggert 54 N. Y. 18 N.Y. Comm'n App. p. 452
Halstead v. Swartz 46 How. Pr. 289 N.Y. Sup. Ct. p. 452
Conkey v. Hart 14 N. Y. 22 N.Y. p. 453
Russell v. Butterfield 21 Wend. 300 N.Y. Sup. Ct. p. 453
Huggans v. Fryer 1 Lans. 276 N.Y. Sup. Ct. p. 453