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Wray v. Fedderke

43 N.Y. Super. Ct. 335 11 Jones & S. 335 Court N.Y. Super. Ct. Decision date 1878-02-04 English

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p. 335
STEPHEN WRAY, Plaintiff and Respondent, v. FRITZ FEDDERKE, Defendant and Appellant.

Headnote

CHATTEL MORTGAGES.—PRIORITY OF LIENS.
In case of two mortgages executed by the same person upon same property, but to different persons, dated the same day, and filed same minute, where it was the agreement and intention of the parties that one should have a preference and priority over the other as a lien upon the property, that agreement must be sustained (Jones 0. Phelps, 3 Barb. Gh. 440).
This priority of lien of the mortgage and the respective rights of parties having been established, they cannot be affected nor changed by the neglect of the owner of the mortgage that has the prior lien, to refile it, within the year, nor by the diligence of the owner of the other mortgage to refile his in due time. The latter party had notice of the other mortgage, and took his mortgage subject to it. The object or effect of the statute in regard to the annual refiling of a chattel mortgage does not reach his case. He was a mortgagee previous to the omission to refile, and in no sense a subsequent mortgagee in the sense of those words in this statute.
The word subsequent, in this statute, is held to mean after the time when by statute the mortgage should have been refiled (Meech 0. Patchin, 14 JUT. T. 71).
In this case there was evidence of a default in the payment of the first mortgage after a demand was made by the mortgagee from the mortgagor, and this was within the first year after it was given, and thereby the title of the mortgagee to the mortgaged property became absolute (Burdick 0. McVanner, 3 Den. 170 ).
The fact that the mortgagee took subsequent mortgages, upon the same property, from the mortgagor, to secure in part his original debt, did not affect his then existing rights under the first mortgage (Westcott 0. Gunn, 4 Duer, 113 ).
Evidence of the intentions of the parties as to priority, and as to valuable consideration for the execution of the mortgage, may be given debars the instrument itself, for the purpose of rebutting the statutory presumption of fraud, &c., where the possession of the property remains in the mortgagor (Baskins 0. Shannon, 3 K T. 310). /
p. 336
Decided February 4, 1878.
Before Curtis, Ck. J., Sedgwick and Preedmah, JJ.
This is an appeal by defendant from a judgment in favor of plaintiff for $937 81, entered upon a verdict, and from an order denying a motion for a new trial on the minutes. The action was for the conversion of certain billiard tables and implements.
Prior to June 29, 1871, plaintiff leased to August Koch, certain premises, at 208 Eighth-avenue, for a billiard saloon, and Koch owned and had, at said premises, five billiard tables and the usual additional implements and furniture. On November 28, 1870, defendant recovered a judgment against Koch for $1,280.04. On June 21, 1871, an execution on this judgment was issued to the sheriff, who thereupon levied upon Koch’s property in the billiard saloon, and was about to sell it. Under these circumstances plaintiff offered to assist Koch in effecting a settlement. Accordingly, on June 29, 1871, plaintiff, Koch and< defendant met at the office of N. A. Chedsey, defendant’s attorney in that action, and a settlement was carried out. Plaintiff gave to Chedsey, as defendant’s attorney, a check for $900, payable to the order of and indorsed by Koch. Chedsey drafted and Koch executed a chattel mortgage upon his billiard tables and furniture to plaintiff, payable on demand, for $900, borrowed money. Chedsey countermanded the execution, and plaintiff left Chedsey’s office, leaving the others there.
After plaintiff left the office Chedsey drafted and Koch executed a second chattel mortgage to defendant, payable on demand, for $130.82 upon the same property, which had just been mortgaged to plaintiff. The consideration for this mortgage is not stated in it.
p. 337
Koch says it was for fees in the action ; defendant, for a balance due on the judgment.
These two mortgages were each filed in the ¡New York register’s office, on June 29, 1871, at 1.02, p. m. Plaintiff’s mortgage was numbered 3082, and defendant’s 3083. There is no positive proof who filed them. The two mortgages were made by the same person, on the same property, dated the same day, and filed the same minute. The testimony, however, is that plaintiff’s mortgage was executed before defendant’s in point of time, and was intended by the parties to constitute the prior lien. ¡Defendant asserts that he did not know of the plaintiff’s mortgage till some months later. This statement is contradicted by other testimony. Plaintiff demanded payment of his mortgage during the first year after it was given, but it has never been paid. Plaintiff’s mortgage never was refiled. Koch, during the succeeding three years, fell behind in his rent, and in each year executed new mortgages to plaintiff on the same property ; one in 1872 for $1,600, filed July 3, 1872; one in 1873 for $2,000, and another in 1874 for $2,000. The consideration for each mortgage was in part the original loan of $900, and unpaid rent for the residue. Plaintiff did not surrender any of the earlier mortgages. Bach was an additional security. ¡Defendant’s mortgage was duly refiled for several years on June 28, 1872, June 27, 1873, and on June 27, 1874.
At the end of the first year, defendant, supposing that his mortgage had become a prior lien to plaintiff’s, through plaintiff’s omission to refile, applied to his attorney Chedsey, to foreclose his mortgage. He executed a power of attorney to foreclose to one of Chedsey’s clerks. Chedsey had already advised defendant that plaintiff’s mortgage was first, and he refused to act. ¡Defendant thereupon did nothing further for two years and a half. About December 12, 1874, he em
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ployed a lawyer, named Nehrbas, and a city marshal, named Clarke, to foreclose the mortgage. Clarke went to Koch’s billiard room. Plaintiff there met Clarke and notified him that he had the first mortgage on the property. Clarke then went back to Hehrbas and demanded a bond of indemnity. Clarke also searched in the register’s office, and found, as he testifies, “that the mortgage held by Mr. Fedderke was the first mortgage, because it was refiled first. ’ ’ A bond of indemnity was given to Clarke on December 21, 1874. He thereupon put a man in charge, who continued in charge six •or seven days. On December 22, 1874, plaintiff gave -Clarke written notice of his rights. The property was :removed to an auction room late on Saturday night, December 26, 1874, and sold Monday morning, December 28, 1874. Four of the five tables were purchased by the defendant. The gross proceeds of the sale were $155.51, net proceeds, $72.
The plaintiff made a formal demand for the return 'Of this property before suit. Two of the tables defendant still had at the time of the trial; the other two he had sold.
Chauncey Shaffer, for appellant.
George C. Holt, for respondent.

—The evidence clearly establishes that the plaintiff’s chattel mortgage was executed before the defendant’s, in point of time, and was intended by the parties to constitute the first lien. Though the two mortgages were made by the same person, on the same property, dated the same day and filed the same minute, yet effect must be given to the agreement and intention of all parties, that the plaintiff’s mortgage should have a preference over the defendant’s as a prior lien upon the mortgaged chattels (Jones v. Phelps, 2 Barb. Ch. 440 ).

p. 339
The priority of the plaintiff’s mortgage, and the respective rights of the parties having been established, they were not affected, as between the parties, by the plaintiff’s omission to refile his mortgage within the .year, or by the defendant’s diligence in duly refiling his. The defendant had notice of the plaintiff’s mortgage, and his was taken subject to it. The object of the statute enacting that a chattel mortgage unless thus refiled should “cease to be valid, as against the creditors of the person making the same, or against subsequent purchasers or mortgagees in good faith,” does not reach a case like the defendant’s. He was a mortgagee previous to the omission to refile, and in no-sense a subsequent mortgagee.

The word “subsequent” is held to mean after the time when it should have been refiled (Meech v. Patchin, 14 N. Y. 71 ).

It also is shown that the plaintiff demanded payment of his mortgage during the first year after it was given, which not being complied with, his title to the mortgaged property became absolute (Burdick v. Mc-Vanner, 2 Den. 170 ). The plaintiff was thus placed in a position to maintain an action for the conversion of this property, and his taking subsequent chattel mortgages upon the same property to secure in part his original debt, did not affect his existing rights under the first mortgage (Westcott v. Gunn, 4 Duer, 112 ).

The defendant excepted at the trial, to the admission of evidence of the conversation between the parties, when the chattel mortgages were executed and the money paid by the plaintiff. It was competent to show the agreement and intention of the parties as to priority, and that the mortgage to plaintiff was executed for a valuable consideration paid by the plaintiff, and for the benefit of the defendant. This may be shown by evidence dehors the instrument itself, to rebut the statutory presumption of fraud, under which a chattel

p. 340
mortgage unaccompanied by a change of possession was given (Baskins v. Shannon, 3 N. Y. 310 ).

" The defendant excepted to the allowance of this question asked by the plaintiff of the person who drew the two chattel mortgages, and who was then the at-, torney of the defendant, and whom he called as a witness: “Have you never stated subsequently to this time (the time he drew the first mortgage, and the defendant’s mortgage) in reference to those two mortgages, that the mortgage of Mr. Wray was the first.” As a general rule, proof of statements made by a witness out of court, in order to corroborate what he testifies to at the trial, are inadmissible (Robb v. Hackley, 2 3 Wend. 50 ). But it will be observed, that in the present case, the question was asked upon the re-direct examination of the witness, and after the defendant, upon his cross-examination, had introduced the subject and asked him questions as to what he had said at any time respecting it. Under the circumstances the question was admissible.

Several witnesses were examined as to the value of the mortgaged chattels when taken possession of by the defendant. There was some conflict of testimony on this point, and manufacturers and dealers in the articles were examined, but in considering it as a whole, there is no sufficient reason for disturbing the finding of the jury on the question of the amount of damages.

The evidence shows that the mortgage to the plaintiff was executed in good faith, that the plaintiff parted with and paid the full consideration mentioned in it, and that it passed to the defendant’s benefit. There is nothing that conflicts with this, or that tends to show any fraud or fraudulent intent on the part of the plaintiff. The consideration 'of each of his subsequent mortgages was shown, there was nothing in them that tended to impeach the fairness of the first mortgage, or

p. 341
to show that they were not executed in good faith, and these subsequent mortgages were not claimed on the trial to. have any priority over the defendant’s mortgage. Under such circumstances, the court was not called upon to present this question of fact to the jury, the evidence concerning it being so conclusive that a verdict- contrary to it should be set aside (Carnes v. Platt, 7 Abb. Pr. N. S. 47).

The exceptions of the defendant are insufficient to warrant the reversal of the judgment and the granting of a new trial.

The judgment appealed from, and qrder denying the defendant’s motion for a new trial, should be affirmed with costs.

Sedgwick and Freedman, JJ., concurred.

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