Blake v. Corbett — 31 N.Y. St. Rep. 31

Majority

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Henry A. Blake, Resp’t, v. Isabella Corbett, App’lt.^[1]

(Court of Appeals, Second Division,

Filed May 2, 1890. )

Headnote

Chattel mobtga&e—What amounts to.

Defendant, Isabella Corbett, in consideration of an indebtedness by Richard Crowley to plaintiff, gave the latter the following instrument: “ For value received I, Isabella Corbett, do hereby sell and assign the above mentioned and described books to Henry A. Blake, his heirs and assigns, I to hold and retain possession of said books for eight months from this sale, and if, during that period, the sum of indebtedness to said Blake now owing to him by Richard Crowley is paid or satisfied, for the payment of which this assignment is made as security, then this conveyance shall be null and void.” Held, that the instrument was a chattel mortgage, and an action in equity would lie for a foreclosure.

Appeal from a judgment of the general term of the supreme court, second department, affirming a judgment entered upon the decision of the Westchester circuit.

William J. Bulger, for app’lt; Porter Norton, for resp’t.

This action was brought to foreclose a lien. The complaint in substance alleges that one Richard Crowley was indebted to the plaintiff in the sum of $5,896.42 upon three promissory notes; that on or about the 4th day of January, 1886, the defendant Corbett, in consideration of said indebtedness and for other good and sufficient consideration, executed and delivered to the plaintiff the following instrument: “ For value received I, Isabella Corbett, do hereby sell and assign the above mentioned and described books to Henry A. Blake, his heirs and assigns, I to hold and retain possession of said books for eight months from this sale, and if during that period the sum of indebtedness to said Blake now owing to him by Richard Crowley is paid or satisfied, for the payment of which this assignment is made as security, then this conveyance shall be null and void.” The complaint further alleged in substance that the defendant was left in possession of such property, that more than eight months had expired and that the indebtedness of Crowley to plaintiff had not been paid except the sum of $1,155, w'hich had been received and credited on his account; that payment had been duly demanded and that the property still remained in the possession of the defendant or Crowley who had neglected and refused to deliver the same to the plaintiff; that Crowley had, or claims to have, some interest in the property or in the result of the action.

The answer of the defendant Corbett denies upon information and belief that Crowley was at the time of the commencement of the action indebted to the plaintiff as set forth in the complaint and alleges upon information and belief that the sum of Crowley’s indebtedness to the plaintiff had been paid.

Crowley had been joined with the defendant Corbett as a defendant in the action. Upon the trial a non-suit was granted as to him, but upon appeal that judgment was reversed, and a new trial granted. As to the defendant Corbett the trial proceeded, resulting in a judgment for the foreclosure of such lien, and for a

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sale of the property, and that the proceeds of such sale be applied to the payment of the indebtedness of Crowley to the plaintiff. Erom the affirmance of this judgment in thé general term the defendant Corbett appealed to this court. Exceptions were taken to the findings of facts made by the trial court. These findings follow the allegations of facts'alleged in the complaint, and inasmuch as they are not denied by the answer, they must, so far as the defendant Corbett is concerned, be deemed to be admitted, and consequently the exceptions were unavailable upon this review It is also contended that the general term erred in reversing the judgment of non-suit as to the defendant Crowley, but inasmuch as he has not appealed, that question cannot now be reviewed. The rights of the defendant Corbett are not changed or affected by that judgment.

The only question left for our consideration is as to the character of the instrument upon which the plaintiff seeks to establish his lien. He claiming that it is a chattel mortgage; the defendant claiming that it'is not It is true it is not in the form in which chattel mortgages are usually drawn. It does not state the sum of money for which it is given as a security, but it does state that it is given for the indebtedness to Blake now owing to him by Crowley. That indebtedness was specific and then owing as appears from the promissory notes introduced in evidence upon the trial. Corbett does not promise to pay a debt, ór become liable therefor, but the instrument, is executed and delivered as a security for such payment by Crowley. It does not in express terms state that the plaintiff shall have the right to take the possession of the goods, but it is an absolute sale of them to him, the defendant Corbett retaining the possession for the period of eight months, after which the right of the plaintiff to take ¡Dossession must be understood and implied from the terms of the instrument.

It appears to us that all of the essentials constituting a chattel mortgage are here to be found.

Jones in his work on Chattel Mortgages, page 1, defines a mortgage of personal property to be “A conditional sale of it as security for the payment of a debt or the performance of some other obligation. The condition is that the sale shall be void upon the performance of the condition named. If the condition be not performed according to its terms the thing mortgaged is irredeem able a.t law, though there may be a redemption in equity or by the force of statute. Such a mortgage is something more than a mere security. It is a conditional sale of chattels and operates to transfer the legal title to the mortgagee, to be defeated only by a full performance of the condition. Hpon breach of the condition the mortgagee may take possession of the property, and so far as the legal rights of the parties are concerned he may thenceforth treat it as his own.” Again, on page 2, he says “any words which serve to transfer the property as security for a debt or obligation of any kind are sufficient to constitute an informal mortgage which will still be a mortgage at law whatever language may be' used; if it is shown that the parties intended a sale of chattels as security the instrument will be construed to be a mortgage.”

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In the case of Smith v. Beattie, 31 N. Y., 542 , it was held that a bill of sale absolute upon its face transferring property to be held as security for the payment of a debt due the vendee is in character and effect a mortgage and is to be treated as such.

In the case of Parshall v. Eggert, 54 N. Y., 18 -23, a chattel mortgage was defined to be a present transfer of the title of»the property mortgaged subject to be defeated on payment of the sum or instrument it is given to secure, and in the default of performance by the mortgagor of the condition the title of the mortgagee becomes absolute.

See also McCaffrey v. Woodin, 65 N. Y., 465 ; Bragelman v. Daue, 69 id., 69.

If, as we have seen, the instrument was in effect a chattel mortgage an action in equity would lie for a foreclosure. Code Civ. Pro., § 1737; Briggs v. Oliver, 68 N. Y., 336 .

The judgment should be affirmed, with costs.

All concur.