Schwab Manufacturing Co. v. Aizenman

The judgment demanded in the complaint was for a return of property converted, or, in case possession of the same could not be given, that a recovery be had in damages for the value. The action is essentially an action for conversion. It appeared that the property converted was a Sanborn embossing press, owned by the firm of Spiegel & Bresant. Upon the 24th day of May, 1901, a chattel mortgage was executed, covering the said press, by Spiegel & Bresant to the defendant, to secure the payment of $100. Said mortgage was filed upon the same day in the office of the register of the county of New York. It was subsequently assigned to Herman Radzinsky, and at the time of the conversion of the property Radzinsky was the owner. On the 14th day of October, 1901, another chattel mortgage was executed by Spiegel & Bresant to Louis Weiler. It covered the property in question. On the 17th day of January, 1902, this mortgage was assigned to the plaintiff, but the assignment was not delivered to it until some time in the following June, and it was recorded on the 18th day of that month. Upon the 22d day of June, 1902, the plaintiff, by a city marshal, acting as his agent, took" possession of the said press by virtue of the mortgage thus assigned to it. The marshal left it in the care of Morris Spiegel until he could arrange for its removal. He instructed Spiegel to notify all persons that the press was in his possession by virtue of the mortgage owned by the plaintiff. After the plaintiff had thus taken possession of the press, the defendant made claim to the same by virtue of his mortgage of May 24, 1901. He was informed by Spiegel that the marshal had taken possession of the press for the plaintiff under his mortgage. The defendant nevertheless seized the press and removed it from the premises.

The mortgage held by Radzinsky had not been refiled, as required by sections 92 and 95 of the lien law (Laws 1897, pp. 537, 538, c. 418) ; and the plaintiff claims that the failure to refile rendered such mortgage inoperative as a lien against its mortgage under which it took possession, and that plaintiff’s mortgage became a lien to which the defendant’s mortgage was subordinate. This contention upon the part of the plaintiff was long ago exploded. Meech v. Patchin, 14 N. Y. 71 ; Beskin v. Feigenspan, 32 App. Div. 29 , 52 N. Y. Supp. 750 . The plaintiff also claims that it is a creditor of Spiegel & Bresant, and therefore had the right to take the property independent of-its mortgage. While the failure to refile the defendant’s mortgage made it unenforceable as against subsequent creditors and mortgagees, yet, before such creditor acquires a lien upon the property which he can enforce as against the mortgage, he must have invoked the judicial process of the court, either by obtaining a judgment and levying upon the property by execution, or by placing it in the custody of the court through the medium of a receiver. Kitchen v. Lowry, 127 N. Y. 53 , 27 N. E. 357 . Such doctrine is announced in Stephens v. Perrine, 143 N. Y. 476 , 39 N.

“I will concede, for the purpose of this action, that we are responsible for taking that machine out. We are willing to take that responsibility. The Court: I shall so charge, and that it matters not who owns the mortgage [defendant’s], and, if you are entitled to recover at all, you are entitled to recover against this man.”

The effect of this admission and the ruling of the court was that, if the defendant’s assigned mortgage, was valid as against plaintiff’s mortgage, there existed in the defendant the right to seize and take the press from the possession of the marshal, even though he had no interest in such mortgage. In this regard the court further held and stated, upon a motion for the direction of a verdict by the plaintiff, “that the Weiler mortgage is out of the case. I do not see how it can have any standing here.” In the charge to the jury the court said, speaking of the plaintiff’s and of the Weiler mortgage, “They could not keep that mortgage alive by transferring it from Weiler’s debt, as a security for that debt, to the plaintiff’s debt, and that attempt was a failure.” And again, in speaking with reference to the plaintiff and the mortgage, the court said, “They got no more rights than Spiegel had, and consequently Spiegel could not defeat the defendant’s mortgage because it was not refiled.” The learned court was clearly wrong in this ruling. The assignment from Weiler carried with it all his rights to enforce the

This' error was not cured by the testimony of the defendant’s attorney respecting the demand, in view of the express concession made by the defendant, and the ruling of the court in connection therewith. Such holding shut off further inquiry by the plaintiff as to the Radzinsky assignment, and forestalled any attack thereon. The statement of counsel that he represented, in making the demand, both the defendant and Radzinsky, was in direct contradiction of his admission, and was incompetent, under the ruling of the-court. It is also evident that he did not know Radzinsky, and had had no communication with him. The case went to the jury upon the theory that the plaintiff was a mere trespasser, and had no-rights under its mortgage. In point of fact and law, it had the clear- legal right to seize thereunder, while it stands admitted that the defendant was a stranger, and therefore'a wrongdoer.

It follows that the judgment and order should be reversed, and a new trial granted, with costs to the appellant to abide the event. All concur.