Van Slyck v. Newton — 17 N.Y. Sup. Ct. 554

Majority

p. 554

EDWARD VAN SLYCK and EDWARD W. FOOTE, Respondents, v. FRANCIS B. NEWTON, Appellant.

Headnote

Mortgage for existing debt — mortgagee not bona fide pwrehas&r — Judgment reeom'ed against one as assignee — whm binding on him indimdnially — how far binding on his co-mortgagee.

Where a chattel mortgage is given to secure an existing indebtedness, the mortgagee is not entitled to the rights of a bona fide purchaser for a valuable consideration, as against one from whom the mortgagor has obtained the property by fraud.

On January 4,1876, Foote and Van Slyck were in possession of certain personal property, claiming to be entitled thereto by virtue of a chattel mortgage given by one Stearns to secure them for indorsements. On the twenty-seventh of January, Stearns made a general assignment to Van Slyck, who accepted the

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same. On the twenty-eighth of January, an action of replevin was commenced hy one Barnard against Stearns and Yan Slyck, as assignee, to recover the property, on the ground that Stearns had obtained the same from him by fraud. The property was seized by the sheriff, and a judgment having been recovered by Barnard, the same was delivered to him. In this action, brought by Foote and Yan Slyck against the sheriff, held, (1) that the plaintiffs were not Iona fide purchasers for a valuable consideration; (2) that as against Yan Slyck the judgment recovered in the first action was conclusive, and as against Foote, competent evidence to prove that the property belonged to Barnard at the time of the seizure.

Appeal from a judgment in favor of the plaintiffs entered upon the. verdict of a jury, and from an order denying a motion for a new trial, made upon the minutes of the justice before whom the action was tried.

One Stearns, being in possession of a stock of goods in a store, mortgaged them, December 18,1875, to Campbell, who took immediate possession. On the twentieth of December, he executed another mortgage to the plaintiffs on the same property, to secure them as indorsers, and Campbell agreed to remain in possession as their agent. On the fourth of January following, possession of the property was surrendered to the plaintiffs by Stearns. This, however, seems, in some way, to have been subject to Campbell’s claim. For one of the plaintiffs testified that Campbell’s claim was paid up finally, February twelfth. On the 27th of January, 1876, Stearns made, a general assignment to Yan Slyck, one of the plaintiffs, for the benefit of creditors, which assignment Yan Slyck accepted.

On the 28th of January, 1876, Oharles E. Barnard and others commenced an action of claim and delivery against Stearns and Yan Slyck, as assignee. In this, the plaintiffs claimed that certain goods were obtained from them by Stearns, fraudulently, when he was insolvent. In that action Newton, the present defendant, a deputy sheriff, took the goods in question on the twenty-eighth day of January, under the usual direction of the plaintiffs’ attorney. The defendants in that action, both Stearns and Yan Slyck, appeared and answered and then withdrew the answer they had put in, and judgment was perfected for the plaintiffs, Barnards, therein against the defendants.

Yan Slyck and Foote, the present plaintiffs, now sue the deputy sheriff, Newton, for the taking of those goods, claiming them under

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tbeir mortgage, and averring tbat tbe title and possession was in tbem by virtue of said mortgage. Tbe court beld tbat there was no question for tbe jury but tbe value of tbe property, and tbat tbe plamtiffs were entitled to recover.

John W. Boyle, for tbe appellant.

A. W. Sheldon, for tbe respondents.

TJpon tbe pleadings tbe title and possession of tbe plaintiffs to tbe property are in issue. If, as against the plaintiffs, the Barnards bad title, and if tbe defendant took tbe property by tbeir authority, be is entitled to succeed in tbe action.

Tbe plaintiffs’ mortgage was given to secure a prior liability. It has been decided tbat such mortgagees are not l)ona fide purchasers for a valuable consideration, as against one from whom tbeir mortgagor obtained tbe property .by fraud. (Woodburn v. Chamberlin, 17 Barb., 446 .) In tbe case of Malcom v. Loveridge ( 13 Barb., 372 ), and similar cases cited by tbe plaintiffs, tbe mortgagee parted with value on tbe credit of tbe property. If it be proved then, in this action, tbat Stearns obtained tbe property by fraud from tbe Barnards, so tbat they could have recovered it from Stearns, and if Newton took it as tbeir agent, then tbe plaintiffs could not recover against Newton, any more than Stearns could have recovered against him.

But, perhaps, it is not necessary to rely upon tbat principle to dispose of this case. Tbe question seems to be as to tbe effect of tbe judgment recovered in tbe case of tbe Barnards against Stearns and Yan Slyck, as evidence on tbe present trial of tbe title of tbe Barnards. Tbe complaint, in tbat action, averred tbe ownership of tbe property by tbe plaintiffs tbei’ein, and tbe possession and wrongful detention by tbe defendants. Tbe judgment, after proof taken, was tbat tbe. plaintiffs were tbe owners of tbe property, and entitled to retain it and to recover damages for tbe detention and costs. Tbe right of tbe plaintiffs, thus adjudicated, must have referred to January 28, 18Y6. Yan Slyck was a party to tbat action, and is bound by tbe result. As against him, it is adjudicated tbat on tbe 28th of January, 18Y6, tbe Barnards owned this property and tbat be was

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wrongfully detaining it. If the rights which he now seeks to set up in this action were valid, as against the Barnards, they would have afforded a successful defense to that action. For if he, either alone or jointly with another, owned or was entitled to the possession of the property, that fact would, if shown, have defeated the Barnard action. That he was described in the title of the complaint as assignee, did not prevent him from showing any fact which would entitle him to possession, or would prove ownership in him. Yan Slyck, therefore, cannot recover against Newton for taking, as the Barnards’ agent, property which, as between him and them, has been adjudged to be theirs.

The alleged title and ownership of Yan Slyck and Foote were joint. They were co-mortgagees, and they aver that as such they were in possession at the time of the alleged taking. The possession which Yan Slyck had was, as these plaintiffs aver, their possession.

Whether or not the Barnard judgment was conclusive, against Foote, it was evidence against him (G-reenlf. Ev., § 171, et seg.), and the evidence was not contradicted; that is, there was nothing shown to contradict the title of the Barnards.

When Yan Slyck was sued by the Barnards, if he was not solely in possession, and if he and Foote were in possession jointly, I do not see why Yan Slyck might not have averred a defect of parties defendant in his answer. (Wooster v. Chamberlain, 28 Barb., 602 .) Thus Foote might have been brought in as defendant.

The judgment should be reversed and a new trial ordered, costs to abide the event.

Present — Learned, P. J., Bockes and Boardman, JJ.

Judgment and order reversed, new trial granted, costs to abide event.