Hyperlawhypertext legal database Hedges v. Polhemus 62 N.Y. St. Rep. 267

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Hedges v. Polhemus

62 N.Y. St. Rep. 267 Court N.Y.C.P. English

Delivered by Pryor,'J.

Contents

Majority

p. 267
Job E. Hedges, as Receiver, etc., Pl’ff, v. John Polhemus et al., Def'ts.
(New York Common Pleas, Equity Term,
Filed October, 1894.)

Headnote

1. Chattel mortgage—Reservation—Void.
A reservation in a chattel mortgage of the use, by the mortgagor, of consumable mortgaged property avoids the mortgage in toto Against creditors.
2. Same—Possession.
The taking possession by the mortgagee does not validate such mortgage. 8. Same—Right op creditors.
A creditor can enforce his right the moment he perfects his lien by judgment and execution.
4. Same—Receiver.
A receiver in supplementary proceedings may avoid the mortgage in behalf of the creditor he represents.
Charles M. Earle, for pl’ff; James Parker, for def’ts.

On behalf of creditors, plaintiff, a receiver in supplementary proceedings, challenges the validity of a chattel mortgage on the ground that it reserves to the mortgagor, not only the possession but the “use” of the things mortgaged.

p. 268
Of these things the use of which is permitted to the mortgagor, some are-necessarily consumed by the use; e. g., “cash in hand,” for the restitution of which no provision is made; “paper, envelopes, stationery, etc.” As to these, indisputably, the mortgage is void. Hangen v. Hachemeister, 114 N. Y. 566 ; 24 St. Rep. 526 ; Brackett v. Harvey, 91 N. Y. 214 . And if void in part it is void in toto. Russell v. Winne, 37 N. Y. 591 .

Assuming the mortgage invalid as to creditors, still the mortgagee contends that his title is un impeach able, because he got possession and disposed of the goods in payment of his debt before the creditors were in a position to attack the mortgage.

If the infirmity in the mortgage were merely that it were not accompanied by possession, then a supply of the defect before the lien of creditors attached might be available to the .mortgagee. But here the fact that vitiates the mortgage is what the law characterizes and condemns as fraud in itself, not simply evidence of fraud; and since the possession and sale by the mortgagee were under and by virtue of the mortgage, in law a void instrument, it is clear to demonstration that, as against pursuing creditors, he acquired the things mortgaged by no valid title. The mortgage was void ab initio, and so incapable of cure or confirmation. Mandeville v. Avery, 124 N. Y. 376 , 385; 36 St. Rep. 338 ; Karst v. Gane, 136 N. Y. 316 , 325; 49 St. Rep. 740 .

True, the creditor could not assert his right against the mortgage until armed with proper process; but the right nevertheless existed, and was• susceptible of enforcement the moment he perfected his lien by judgment and execution. Karst v. Gane, 136 N. Y. 316 ; 49 St. Rep. 740 .

That the plaintiff may impeach the mortgage is settled beyond controversy. Mandeville v. Avery, 124 N. Y. 376 , 385; 36 St. Rep. 338 .

Indeed, the adjudications in that case are quite conclusive on all the points in dispute between these litigants.

Judgment for plaintiff, with costs.

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