Bennett v. Earll — 21 Wend. 117

Majority

p. 117

Bennett vs. Earll.

Headnote

A bill of sale of personal property, when possession does not accompany the transfer, has no preference over a mortgage of the same property subsequently executed, although that also be unaccompanied by a change of possession. The mortgage being bona fide, holds the property in preference to the bill of sale; a change of possession in respect to it being important only as it regards creditors and subsequent purchasers.

Error from the Onondaga common pleas. Bennett sued Earll in trover, for the conversion of certain personal property. The plaintiff’s claim was founded upon a mortgage •executed to him on the twenty-fourth day of August, 1836, to secure the payment of a sum of money on the first day of September ensuing the date of the mortgage. The defendant set up a claim to the same property .under a bill of sale executed to him on the fifteenth day of August, nine days preceding the date of the mortgage. Possession of the property did not accompany either the bill of sale or the mortgage, the former owners continuing to use it until October, 1836, when the defendant took possession thereof,

p. 118

and carried it away. The court charged the jury that both the plaintiff and defendant being in default in not taking possession of the property at the time of the execution of the instruments, and the defendant having been the first in taking possession, was entitled to the property, as the most vigilant of the two creditors. The jury found for the defendant. The plaintiff having excepted to the charge of the court, sued out a writ of error.

J A. Spencer, for the plaintiff.

B. Davis Noxon for the defendant.

By the Court,

The charge of the court that as both parties were in fault in not taking possession of the property at the time of the execution of the instruments, the defendant was entitled to priority, as the most vigilant, was erroneous. The statute, 2 R. S. 136, § 5, made the bill of sale absolutely fraudulent as against “ subsequent purchasers in good faith which term includes the mortgagee, he being a purchaser sub modo, unless the continued possession by the vendor was sufficiently explained, which is not pretended to have been done here. As regards this prior sale, then, the mortgagee was not under the necessity of taking possession of the .property, this being only important in respect to creditors and subsequent purchasers. It is enough in such cases, that the transaction be bona fide. Gregory v. Thomas, 20 Wendell, 17.

Judgment reversed; venire de nova.