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Abrams v. Proctor

148 N.Y.S. 213 Court Argued June term, 1914, before SEABURY, PAGE, and BIJUR, JJ_ Decision date 1914-06-18 English

Delivered by PAGE, J.

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p. 213
ABRAMS v. PROCTOR.
(Supreme Court, Appellate Term, First Department.
June 18, 1914.)

Headnote

Chattel Mortgages (§ 225[1] )—Validity—Disposition op Proceeds oe Property.
In an action by the assignee of a stock of goods against a mortgagee of the goods for conversion, whether there was a tacit understanding between such mortgagee and the mortgagor that the mortgagor could dispose of the goods and apply the proceeds otherwise than in the reduction of the debt, and thus render the mortgage void, should have been submitted to the jury.
[Ed. Note.—For other cases, see Chattel Mortgages, Cent. Dig. §§ 468-470; Dec. Dig. § 225.*]
Appeal from City Court of New York, Trial Term.
Action by William Abrams against Frederick F. Proctor. _ Judgment for plaintiff, and defendant appeals.
_ Reversed, and new trial granted.
Argued June term, 1914, before SEABURY, PAGE, and BIJUR, JJ_
_ Hart & Tompkins, of New York City (Millard F. Tompkins and Sumner B. Stiles, both of New York City, of counsel), for appellant.
Newman & Butler, of New York City (Myron Butler, of New York City, of counsel), for respondent.

Plaintiff sues in conversion. He is both the assignee of the stock of goods of a drug store from the original owner and also the assignee of one who purchased the stock on a sheriff’s sale. Defendant was the druggist’s landlord, also the holder of a second chattel mortgage on the stock; there being a first mortgage in favor of third parties.

Appellant’s point is that, default having occurred in favor both of the first mortgagees and of himself, prior to the acquisition of plaintiff’s title, the title vested at once in the mortgagees, and plaintiff had no title to sustain an action in conversion.

The real controversy apparently centers upon the validity of the chattel mortgages. Respondent’s point is that a chattel mortgage which in terms permits the mortgagor to remain in possession and dispose of the goods and apply the proceeds otherwise than in reduction of the debt is fraudulent and void as to creditors, and that, even if no such express provision be contained in the mortgage, one may be implied from circumstances, citing Hangen v. Hachemeister, 114 N. Y. 566 , 21 N. E. 1046 , 5 L. R. A. 137 , 11 Am. St. Rep. 691 . No such provision is contained in either of these mortgages, plaintiff claiming only that they may be implied from the circumstances. On this point, however, he obtained the direction of a verdict, although he himself necessarily concedes by his claim that the question whether such an agreement should be implied must necessarily'be one of fact to be submitted to the jury.

Judgment reversed, and new trial granted, with costs to appellant to abide the event. All concur.

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