text:
    THE YATES COUNTY NATIONAL BANK OF PENN YAN, Respondent, v. MASON L. BALDWIN, Appellant, Impleaded, etc.

      Assignment of a mortgage — when its record is notice to subsequent purchasers, although it does not in terms assign the bond — who is not a bona 1\d& purchaser for value — pledge — when the pledgee does not lose his lien by delivering the pledge to the pledgor for a special purpose.

    This action was brought to foreclose a mortgage for $1,700, given by Sarah E. Lyon to one Wood. The plaintiff claimed to have acquired title to this bond and mortgage by an assignment executed by Wood, dated May 17, 1884, and recorded on June twenty-first of that year. The defendant, Baldwin, claimed to be entitled to the same bond and mortgage, or to the proceeds arising from the sale of the mortgaged premises, to the extent of $1,000, with interest from October 1, 1883, by virtue of an assignment executed to him by Wood on that day, which assignment was recorded on June 11, 1884
    The General Term held that of the $1,715.86, which the plaintiff agreed to pay for the bond and mortgage, $921.41 was applied upon antecedent debts due to it from Wood, of which debts $887,89 matured after the assignment to Baldwin had been recorded. The-assignment to Baldwin did not in express terms assign the bond, but it stated that the mortgage was made to secure the payment of $1,700 "according to the conditions of a bond accompanying the same.” The plaintiff contended that he could not be charged with notice by the recording of this instrument, for the reason that, as it only purported to convey the mortgage and not the bond, it was a nullity.

      Held, that to the extent to which the pre-existing debt to the plaintiff was paid by the assignment, the plaintiff was not a bona fide purchaser for value as against Baldwin.
    That the registry of the assignment to Baldwin was notice sufficient to put the plaintiff upon inquiry, that, as the bond was in fact transferred with the mortgage, the assignment to Baldwin was valid; that instead of its authorizing the presumption that the bond had not been transferred, it was notice that everything essential to constitute an assignment of the mortgage had been done, nothing appearing in the assignment to the contrary.
    While Baldwin held the bond and mortgage he agreed with Wood that he might negotiate a sale of them and out of the avails pay to Baldwin the amount of the note secured by the assignment, and on one or more occasions Baldwin delivered the bond and mortgage to Wood for that purpose ; they were not sold or negotiated at such times, but on each occasion were returned by Wood to Baldwin. Afterwards, Baldwin, at Woods’ request, allowed him to take the bond and mortgage to get some dates, or for some purpose of Woods other than to sell them or negotiate their sale, and to be returned to Baldwin when W ood should have used them for such purpose. It was on the latter occasion that, without the knowledge or consent of Baldwin, he sold and delivered them to the plaintiff.

      Held, that, conceding that the assignment of the bond and mortgage to Baldwin was a pledge, it could not be held that Baldwin parted with the possession of the bond and mortgage, so as to destroy his lien.
    Appeal from a judgment in favor of the plaintiff, entered in Yates county on the report of a referee.

      M. A. Leary, for the appellant.

      W. T. Morris, for the respondent.
   Smith, P. J.:

Action to foreclose a real estate mortgage, executed by Sarah E. Lynn to Balph T. Wood, to secure payment of the sum of $1,700. The plaintiff claims title to the mortgage and the bond to which ifc is collateral, tinder an assignment executed by Wood to the plaintiff, dated the 17th day of May, 1884, and recorded on the 21st day of June, 1884. The appellant Baldwin, claims to be entitled to the bond and mortgage, or the proceeds arising from a forclosure and sale of the mortgaged premises to the extent of $1,000 and interest from the 1st day of October, 18S3, by virtue of an assignment executed to him by Wood on the day last named, and recorded on the 11th day of June, 1884. The transaction between Wood and Baldwin, as found by the referee, ivas substantially as follows: On or about the 1st of October, 1883, Wood, for the purpose of securing the payment of a promissory note of $1,000, indorsed by him to Baldwin, agreed with Baldwin to sell and assign to him the said bond and mortgage, and thereupon Wood éxecuted and delivered to Baldwin.an assignment of said mortgage in writing, and at the same time delivered to him the bond and mortgage, with the assignment, and thereafter and until about the time of the assignment of the bond and mortgage to the plaintiff, Baldwin held them as collateral security for the payment of said note, in accordance with the terms of the. assignment to him.

Although the assignment to the plaintiff is junior in date and registry to that of the appellant, the plaintiff claims preference, upon the ground that it purchased the bond and mortgage in good faith and for a valuable consideration paid to Wood, without notice of the assignment to the defendant, and upon that ground the referee is understood to have reported in the plaintiff’s favor. Is that claim established ? First, as to the consideration. The, facts bearing upon that point are as follows : The referee found that the sale to the plaintiff was on the 17th of May, 1884, the plaintiff then agreeing to pay Wood $1,715.86 for the bond and mortgage. On the 26th of May, 1884, in pursuance of such agreement, the plaintiff gave Wood credit for that sum upon its books, as a depositor! Wood was at that time a customer of the plaintiff, and said credit was also entered upon his pass-book. At the time of the sale and transfer Wood was indebted upon promissory notes, held by the plaintiff, in an amount exceeding the sum agreed to be paid by the plaintiff for the bond and mortgage, but none of said notes were due at the time said credit was given, and no agreement was then made between Wood and the plaintiff that said credit, or any part of it, should be applied to the payment of said notes. The referee also found that on and after said twenty-sixth of May, and prior to said eleventh of June, the date of the registry of the defendant’s assignment, Wood drew from the bank, upon his cheeks, an amount exceeding the credit given him for the bond and mortgage; but the fact is also proved, upon the admission of the plaintiff, made at the trial, that of said credit of $1,715.86,' the sum of $921041 was paid by the plairitiff, upon checks drawn by Wood upon the plaintiff, to pay and apply upon the notes owned by the plaintiff, upon which Wood was maker or indorser, both of which notes were made and delivered to the plaintiff, for value, prior to the transfer to the plaintiff of said bond and mortgage. From these facts, about which there is no dispute, it seems to follow that, to the amount of $921.41, the only consideration for the transfer of the bond and mortgage to the plaintiff was the application of that sum to the pre-existing debt held by the bank against Wood, and to that extent the plaintiff was not a purchaser for value, as against the appellant. ' On that ground alone the plaintiff’s claim fails, and the appellant is entitled to priority, to the amount last above mentioned.

But we regard the plaintiff’s claim defective also, in respect to notice. Baldwin’s assignment was recorded on the eleventh of June. The referee found, upon the plaintiff’s admission, that Wood’s two notes above mentioned held by the bank became due June ninth and eighteenth, respectively. There is no finding as to the amount of either of said notes separately, or as to how much of said sum of $921.41 was paid at either of the dates above mentioned. It appears in evidence, however, by a statement furnished by the plaintiff, purporting to show the condition of Wood’s account in the plaintiff’s bank, that on the eleventh of June, Wood had a balance in the bank to his credit of $887.89, and that the only charges made against him prior to and including the eighteenth of June were twenty-five dollars on the twelfth, and $1,851.60 on the eighteenth. • This evidence furnished by the plaintiff, and in no way contradicted, seems to show conclusively that of the sum of $921.41 above mentioned, at least $887.89 was not paid until the eleventh of June. So that unless the recording of the defendant’s assignment failed for some reason to operate as constructive notice to the plaintiff of the defendant’s rights in respect to the mortgage. tlie plaintiff’s payments made on and after that date were with notice.

The plaintiff’s counsel contends that the record is not notice, inasmuch as the recorded assignment is of the mortgage alone and does not convey the bond. Doubtless if the - mortgage alone had been assigned, the assignment would have been a nullity, inasmuch as the mortgage was but an incident to the bond and could not be separated from it. The cases cited by the plaintiff’s counsel in which that doctrine has been held were cases in which there was no assignment of the bond in fact, nor was it intended that the bond should accompany the mortgage. (Cooper v. Newland, 17 Abb., 342; Merritt v. Bartholick, 47 Barb., 256 ; S. C., affirmed, 36 N. Y., 44.) ' Here the bond was, in fact, transferred with the mortgage although not mentioned in the written assignment. It was the intent of both parties that it should pass, and it was actually delivered with the mortgage and the assignment. The assignment of the mortgage was therefore not a nullity, as in the cases cited, but was valid (Foster v. Van Reed, 70 N. Y., 19, 27), and the registry was notice of the fact; and instead of its authorizing the presumption that the bond had not been transferred, it was notice that everything essential to constitute an assignment of the mortgage had been done, nothing appearing in the assignment to the contrary. It was enough, at least, to put the plaintiff on inquiry as to the real transaction, and to charge it with notice of that io which reasonably diligent inquiry would have led. The ease of Thomson v. Wilcox (7 Lans., 376), cited in behalf of the plaintiff, does not apply. There, a city lot intended to be mortgaged was described correctly by its street number, but the description, by metes and bounds, was of an adjoining lot; held, that the mortgage was constructive notice of a lien upon the latter lot only, as the description by metes and bounds was controlling. There were two inconsistent descriptions, only one of which could be true. Here, the assignment of the mortgage was not only consistent with the transfer of the bond, but without the latter, the former was of no avail

It is contended by the plaintiff’s counsel that the assignment of the bond and mortgage to Baldwin was a pledge, and that Baldwin lost his lien by parting with the possession. That the transaction was a pledge to secure the payment of the $1,000 note is probably true. The facts in regard to Baldwin’s parting with the possession, as found by the referee, are in substance as follows: While Baldwin held the bond and mortgage, he agreed with Wood that he might negotiate a sale of them, and, out of the avails, pay to Baldwin the amount of the note secured by the assignment, and on one or more occasions Baldwin delivered the bond and mortgage to Wood for that purpose; they were not sold or negotiated at such times, but on each occasion were returned by Wood to Baldwin. Afterwards, Baldwin, at Wood’s request, allowed him to take the bond and mortgage, to get some dates, or for some other purpose of Wood’s other than to sell them or negotiate their sale, and to be returned to Baldwin when Wood should have used them for such purpose. It was on the latter occasion, while Wood had the bond and mortgage in his possession, that, without the knowledge or consent of Baldwin, he sold and delivered them to the plaintiff. Upon this statement of facts, we think it cannot be held that Baldwin parted with the possession. . On each occasion, the possession of Wood was Baldwin’s' possession, Wood having them in his hands merely as the agent of the pledger. In White v. Platt (5 Den., 269), securities for money were transferred as collateral security for a debt of the party transferring them, and although the creditor afterwards redelivered them to the debtor to collect and secure them as against the parties indebted in the securities, it was held that he still retained his special property. In Hays v. Riddle (1 Sandf., 248), it was held that when the pledgee of a bond delivers it to the pledger for a particular purpose, as to be exchanged for stock, and to return the latter, and the pledger converts the bond to his own use, the pledgee may maintain trover; and that the delivery of a pledge to the pledger for a temporary purpose, as ' agent or special bailee for the pledgee, does not impair the title or possession of the latter. Hays v. Riddle was an action against the pledger, but the rule is the same against one deriving title from the pledger, not a purchaser for value and in good faith. (Story on Agency, § 299; Macomber v. Parker (14 Pick., 497). See, also, Macauley v. Hopkins (35 Hun, 556), and Parshall v. Eggert (54 N. Y., 18).

It is true that if Wood had sold the bond and mortgage, or negotiated their sale, to a purchaser in good faith and for value, on either occasion -when he held them for that purpose, with the consent of Baldwin, the title would have passed and the pledge would have attached to the avails in his hands, but the referee has found that he did not so dispose of them on either of those occasions. The authority to so dispose of them ceased when he returned the securities; and the referee has found that, at the time when he assumed to sell the bond and mortgage to the plaintiff, he had possession of them for some purpose other than to sell or negotiate them, with the understanding that they were to be returned to Baldwin when such purpose was accomplished. These findings are warranted by the evidence, and, in the face of them, it cannot be held that the transfer to the plaintiff was in pursuance of the authority to sell given on the previous occasions.

The result is that the appellant has priority to the extent of the sum of $921.41, with interest from the lltli of June, 1884. If the plaintiff stipulates, within twenty days, to modify the judgment so as to award to the appellant a preference to the extent of that sum out of the avails of the foreclosure sale, or a first lien upon the bond and mortgage to that extent, unless a sale be had, and to strike out the award of costs against Baldwin, and to insert in lieu thereof costs of the defense to said Baldwin against the' plaintiff, with costs of this appeal, the judgment, as so modified, is affirmed, otherwise the judgment against the appellant is reversed and a new trial of the issues between him and the plaintiff is ordered before another referee, costs of this appeal to abide the event.

Barker, Haight and Bradley, J J., concurred.

So ordered.


source: Caselaw Access Project

author: Smith, P J.:

license: Public Domain

text:
    HIRAM P. BENTON, Respondent, v. EDWARD W. HATCH, Appellant, Impleaded, etc.

      Sale under a judgment— a redemption by a senior judgment creditor extinguishes the debt of the latter, provided that the value of the land is equal to the amount of his debt and bid.

    This action was brought by the plaintiff to recover land to which he claimed title by virtue of a sheriff's deed, given pursuant to a sale under a judgment recovered by G-. S. Jones against Q-, W Stephens The defendant alleged, by way of defense, that the judgment was paid and extinguished before the execution was issued. The judgment in favor of Jones was recovered on February 9, 1875, and was the first lien upon a large tract of land then owned by Stephens. On the eleventh of the same month four other judgments were recovered by different creditors of Stephens. Portions of the land were sold under each of the said junior judgments, and were successively redeemed by Jones, under his senior judgment, deeds thereof being executed by the sheriff to Jones, or to those to whom he had assigned the certificates of redemption. More than five years afterwards Jones issued an execution on his judgment, pursuant to an order of the court authorizing him so to do, by virtue of which the land in controversy was sold and conveyed to the plaintiff.
    Upon the trial the defendant offered, but was not allowed, to prove that the parcels of land redeemed by Jones were worth much more than the amount of his judgment and the sums paid by him to redeem. .

      Held, that the court erred in excluding the evidence, as the redemption by a senior judgment creditor, of lands sold under a junior judgment, operates as a payment of the senior judgment, provided the lands are of sufficient value to pay the amount of his bid and of his own judgment.
    That the evidence offered was admissible under the pleadings.
    Appeal from a judgment in favor of tlie plaintiff, entered in Allegany county on tlie report of a referee.

      Charles E. Forsyth and M. 11. Pede, for the appellant.

      W. H. Sanford and 11 Bemis, for the respondent.
   Smith, P J.:

Ejectment. Plaintiff claims title by virtue of a sheriff’s deed given pursuant to a sale under an execution issued upon a judgment recovered in this court by George S. Jones against George W. Stephens. Defendant alleges" by way of defense, that the judgment was paid and extinguished before execution issued, and he also sets up an alleged adverse possession.

Stephens owned a large tract of land in Allegany county. Judgments were recovered against him in the following order: On the 9th of February, 1875, tlie judgment above mentioned in favor of Jones, which amounted to $404.13, and was the first lien. On the eleventh of the same month a judgment in favor of the Cuba National Bank for $1,376.80; one in favor of Benjamin Colerick for $374.61; one in favor of Isaac Miles for $3,145.17, and one in favor of the Eirst National Bank of Angelica for $529.22. Other judgments were recovered at a later date which need not be more particularly mentioned.

Portions of the land were sold under each of the junior judgments above particularly mentioned, and were successively redeemed by Jones, under his senior judgment, and deeds thereof -were executed by the sheriff to Jones or his assignees of the certificates of redemption. More than five years afterwards Jones issued an execution on his judgments, he having first obtained an order of the court authorizing it, by virtue of which the land in controversy was sold and conveyed to the plaintiff, and that constitutes the plaintiff’s title.

At the trial the defendant offered to prove that the parcels of land redeemed by Jones were worth much more than the amount of his judgment and the sums paid by him to redeem, but the offer was rejected and the defendant’s counsel excepted. The appellant's counsel contends that, assuming the value of the parcels redeemed to be as offered to be shown, the Jones judgment was paid, or extinguished by the use made of it, in each or all of said redemptions. The position of the counsel is understood to be that, while a junior judgment creditor may redeem- lands sold under a senior judgment, without in any way affecting such junior judgment, either at law or in eqnity, a senior judgment creditor cannot redeem lands sold under a junior judgment without such redemption operating as payment of the senior judgment, provided the lands are of sufficient value to pay the amount of the bid and of his own judgment.

The right of redemption is created by statute. As this case arose before the chapter of the Code of Civil Procedure relating to the redemption of real estate sold on execution took effect, it is controlled by the provisions of the Reviséd Statutes. Under those provisions it was held that a senior as well as a junior judgment creditor may redeem. (People ex rel. Post v. Fleming, 4 Den., 137; S. C. on appeal, 2 N. Y., 484.) The same was held under the act of 1820 (chap. 184), the substance of which was incorporated into the Revised Statutes. (Ex parte Peru Iron. Co., 7 Cow., 540.) But the statute has not declared what shall be the effect upon a senior judgment of a redemption under it, nor .has the research of counsel discovered any adjudication upon the question. We are, therefore, to consider it upon principle and in the light of analogous cases

In The People v. Fleming (supra), Bronson, Ch. J., said that the end of the statute was “ to make the land bring its utmost value by means of an auction among the creditors, preserving to each one his right according to the seniority of his lien. The mode of conducting the auction, so far as it has been plainly prescribed, must be followed, whether it be reasonable or unreasonable, unless the party who has the right to insist upon performance chooses to dispense with it. When the meaning of.' the statute is doubtful, that construction should be adopted which will secure the rights of all the creditors according to the seniority of their respective liens, and keep up the auction until the best price has been obtained. . And the same great end should be steadily kept in view in disposing of all questions upon which the statute is silent.”

Let us look at the case in the light of these comments upon the statute. A senior judgment creditor may put up the land at auction by selling under his own judgment, or he may waive that right and become a non-bidding purchaser; by redeeming from a sale made under a junior judgment. Any junior creditor may do the same, but with this difference, that he takes subject to all prior liens, while the senior creditor, if he redeems from a sale under the lien next below him, as Jones did in this case, takes free from all other liens, except that of his own judgment. If the senior creditor takes the former course, above pointed out, and becomes the purchaser at a sale under his own lien, his bid, or so much of it as is necessary for the purpose, is applied to the extinguishment of his judgment. Why should not the same result follow when he acquires the title, or the right to a deed/ by redeeming from a sale under a junior lien, instead of continuing the auction and subjecting himself to the chances of competition at a sale under his own judgment? The sale from which he redeems was made subject to his lien, and he comes in upon the same terms. He takes the place of the purchaser at the sale, and his position is the same, in legal effect, as if he had been such purchaser and had bid off the property, subject, in terms to his own lien. In other words, the payment of his own debt is a part of the consideration of his purchase.

Although the lien of the judgment held by Jones extended to all the real estate of the judgment debtor, it was specific as to each portion, and, in that respect, analagous to .a lien created by mortgage. It was said in Spencer v. Harford ( 4 Wend., 381), that if a mortgagee of real estate foreclose without sale and enter into possession his debt is paid, if the property is of sufficient value at the time to satisfy it. (Per Savage, Ch. J., p. 385.) And it was held in that case, that the same result follows, if the mortgagee obtains a release of the equity of redemption, the property being then equal in value to the debt for which it was mortgaged. So, when the mortgagee enters, into possession of the mortgaged premises by virtue of a foreclosure, and his title thereto becomes absolute provided the mortgaged premises are equal to the value of the debt. (Morgan v. Plumb, 9 Wend., 287.) The same principle is applicable to mortgages of chattels, and it was held in Case v. Boughton (11 Wend., 106), that taking possession of the chattel after default, is a satisfaction of the debt, provided the chattel be of sufficient •value for the purpose. See, also, Charter v. Stevens (3 Den., 35); Olcott v. Tioga Railroad Company (27 N. Y., 545, per Selden, J. ip. 565). Why does not the same rule apply to a senior creditor whose lien is by judgment instead of mortgage, and who obtains .absolute title and possession through the process of redemption ? His-. hold of the property is- as complete as if he had derived it •through a sale upon -his judgment. Why should he not account for .its value to the extent of his debt % Of course, his accountability is not lessened by the fact that he sells the property to a third -person for less than its value. Having used his prior judgment to .redeem, and having taken a sheriff’s deed, under the junior sale, he is to be regarded as a purchaser, as already suggested, the consideration of his purchase being the amount of the bid and of his senior lien, provided the value of the property was equal to that amount. In that view of the case, Jones’ judgment was satisfied and «extinguished. ' ■ • • .

It follows that the evidence of value offered by the defendant .and excluded by the referee was material. That it was admissible -under the pleadings, we do not doubt. Under a general denial of .all the allegations in the complaint, the defendant may controvert, by evidence, any and every fact by which the plaintiff seeks to ■establish his cause of action. (Andrews v. Bond, 16 Barb., 633 ; Raynor v. Timerson, 46 id., 518, 525.) He may also show that the ■plaintiff never had a cause of action against him. (Creque v. Sears, 47 Hun, 123, 125 ; Schwarz. v. Oppold, 74 N. Y., 307.) The exclusion of the evidence was error, and for that reason there must be a new trial. These views render it unnecessary to consider whether the defense of adverse possession was made out, as that depended upon questions of fact in regard to which the evidence may be different on another trial.

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

Barker, Haight and Bradley, JJ., concurred.

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


author: Haight, J.:

text:
    NELSON L. BUTTON, Plaintiff, v. RATHBONE, SARD & CO., Defendant.

      Chattel mortgage — is valid, though not filed, against the claim, of a general creditor — 8 S. S. (7th ed) 2249.
    This action was brought by the plaintiff to recover the value of a number of stoves, alleged to have been wrongfully converted by the defendant, a corporation, to which the stoves had been delivered by one Tulley, in satisfaction of a pre-existing debt. The defendant took possession of the stoves, and removed them to the city of Albany. The plaintiff, who claimed title to the stoves through a chattel mortgage executed by Tulley, which was not filed until after their removal, forbid the defendant from removing them, and informed its agent of his chattel mortgage.

      Held, that, as the defendant’s claim had never been reduced to judgment, the defendant was not a creditor within the meaning of the statute providing for the filing of chattel mortgages, and could not claim the benefit thereby conferred upon judgment creditors.

      Jones v. Graham (77 N. Y., 628) followed.
    M ition for new trial by the defendant, on exceptions taken at the Monroe Circuit, and ordered to be heard at the General Term in the first instánee.

      Horace McGuire, for the plaintiff.

      G. L. Stedman, for the defendant.
   Haight, J.:

This action was brought to recover the value of a number of stoves alleged to have been wrongfully converted by the defendant. The plaintiff claimed title to the stoves through a chattel mortgage executed by one Tulley. The defendant, a corporation, claimed title as a creditor of Tulley, the stoves having been tnrned out to it in satisfaction of a pre-existing debt. The defendant took possession of the stoves and removed them to the city of Albany. The plaintiff forbid their removal, and at that time informed the defendant’s agent of his chattel mortgage. The chattel mortgage was not filed until after such removal. The defendant’s claim had never been reduced to judgment. The parties having agreed that the value of the property was $850, at the conclusion of the evidence the court directed a verdict in favor of the plaintiff for that amount. It is now claimed, first, that the chattel mortgage was absolutely void as against the defendant, the creditor of the mortgagor in possession of the property before the mortage was filed; second, that the court erred in refusing to allow the defendant to show that the mortgage was fraudulent.

The statute provides that a mortgage, or conveyance intended to operate as a mortgage, of goods and chattels which shall not be accompanied by immediate delivery, etc., shall be absolutely void as against the creditors of the mortgagor and as against subsequent purchasers and mortgagees in good faith, unless the mortgage or a true copy thereof, shall be filed as directed by the statute. (3 R. S. [7th ed.], 2249.) The question necessarily turns upon the construction of this statute. In the case of Southard v. Benner (72 N. Y., 424), Allen, J., in delivering the opinion of the court'says: “A creditor at large cannot assail an assignment or other transfer of property by the debtor as fraudulent against creditors, but must first establish his debt by the judgment of a court of competent jurisdiction, and either acquire a lien upon the specific property or be in a situation to perfect a lien thereon, and subject it to the payment of his judgment upon the removal of the obstacle presented by the fraudulent assignment or transfer.” And, after referring to •the statute, he again proceeds, saying, “ The term ‘ creditors,’ as used in the statute, includes all persons who are creditors of the vendor or assignor at any time whilst the goods remain in his possession or under his control. (2 R. S., 136, §§ 5, 6) A creditor, by simple contract, is within the protection of the statute as much as a 'creditor by judgment, but, until he has a. judgment and a lien, or a right to a lien upon the specific property, he is not in a condition to assert his rights by action as a creditor.” (See, also, Thompson v. Van Vechten, 27 N. Y., 568; Stewart v. Beale, 7 Hun, 405 ; S. C., affirmed, 68 N. Y., 629; The Manufacturers’ National Bank v. Rober, 19 Weekly Dig., 476; Niagara County National Bank v. Lord, 33 Hun, 557-564.)

But it is contended on the part of the defendant that it is not proceeding to seize and take into its possession the mortgaged property ; that it is simply defending the possession previously acquired, and that to defend such possession it is not necessary that it should be a judgment creditor. We are, however, inclined to the view that no such distinction exists in the defendant’s favor. The fact that it took possession of the goods and removed them, without process, after having been forbidden so to do by the plaintiff, does not improve or strengthen its position, or make defenses available that did not previously exist. Had the plaintiff forcibly resisted the taking of the goods, the defendant would have had to proceed by process, or else violate the public peace. If it was required to first procure a judgment establishing the validity and amount of its claim before it could proceed by process against the goods, it would seem to follow that it should have its claim established, by a judgment, in order to defend the possession of the goods.

In the case of Jones v. Graham (77 N. Y., 628) the plaintiff claimed under a mortgage upon an engine, boiler, saw mill, planer, belts, saws, tables and other machinery, The mortgage was not filed as a chattel mortgage. The defendant claimed under the two subsequent mortgages which were filed, one of which was given to hinder, delay and defraud creditors, and the other was given to secure a pre-existing debt. The defendant removed the planer from the mill and converted it to his own use. It was held that the plaintiffs were entitled to recover; that the mortgage to Jones was, as between the parties, a valid mortgage of the chatties therein mentioned, and was void, because not recorded as a chattel mortgage, only as against creditors and purchasers in good faith ; that the defendant, not having a judgment and execution, was not a creditor within the statute, etc. This case appears to be squarely in point, and we think must control the question under consideration. The defendant, not having a judgment, is not in position to claim the benefit of the statute, and' conld not attack tlie mortgage as fraudulent.

Our attention has been, called to the case of Reynolds v. Ellis (34 Hun, 47). In that case we held that a lease containing a mortgage clause, which was not filed in accordance with the provisions of the statute, was void as against an, assignee for the benefit of creditors. This case has recently been affirmed in the Court of Appeals. (7 Eastern Rep., 342.) Danforth, J., in delivering the opinion of the court, says: The defendant (the assignee) represents creditors, and may treat as void all agreements made in fraud of their rights. (Laws of 1858, chap. 314.) He has greater power for this purpose than the creditor himself. The creditor can assert no right until by judgment and execution he has a lien, or a right to a lien, upon the specific property; but in favor of an assignee for His benefit, the legislature have substituted a statutory right in place of these conditions.” This distinction may also serve to harmonize the authorities cited by the defendants’ counsel, bearing upon the question of attaching creditors where the sheriff is proceeding under special power given by the statute. No other question is presented which we consider it necessary to discuss.

The. motion for a new trial should be denied, and judgment ordered for the plaintiff upon the verdict.

Bradley and Childs, J'J., concurred; Angle, J., not sitting.

Motion • for new trial denied, and judgment ordered for the plaintiff on the verdict.


text:
    LAURA A. KNOWLES, Plaintiff, v. WILLIAM J. ERWIN, Defendant.

      Consideration — when the moral duty of a father to provide for a child, is a sufficient one — when a contract cannot be altered by the parties who made it, without the consent of the persons who are to receive a benefit thereunder.

    On or about February 11, 1866, Jared Erwin, in consideration of natural love and affection and the sum of one dollar, executed and delivered to his sen, the defendant, a deed of a farm, and at about the same time executed and delivered to him a bill of sale of all .of his personal property. The defendant thereupon executed and delivered to Jared a contract, dated February 12, 1866, in which he undertook and agreed to pay the plaintiff, a daughter of Jared, $500, without interest, payable $100 annually, payment to commence November 15,1879. In October, Jared delivered the paper to a son-in-law to be kept safely, and subsequently the same was delivered to the .plaintiff, who brought this action to recover the $500, with the interest accrued thereon.

      Held, as it was quite evident from the papers executed that it was the purpose of the father to make a distribution of his estate between his children, that the relation of parent and child which existed between Jared and the plaintiff was a sufficient consideration to support the-promise of the defendant;
    That the plaintiff was entitled •to maintain an action to'recover the amount which the defendant had promised to pay to her.
    It was alleged in the answer that a subsequent agreement was made between Jared and the defendant, by which the defendant was released from paying the plaintiff the $500.

      Held, that it was to be inferred that the contract was delivered to the son-in-law for the benefit of the plaintiff and other daughters of Jared, to whom by its terms money was to be paid, and that at that time it became an executed gift, and the rights of the daughters thereby became fixed and could not thereafter^ be altered by Jared and the defendant without the daughter’s consent.
    Motion by the defendant for a new trial, upon a case and exceptions, ordered by the court to be heard i'n the first instance at the General Term after a verdict had been directed at the Livingston Circuit in favor of the plaintiff.

      Noyes & Noyes, for the plaintiff.

      F. O. Peak, for the defendant.
   Haight, J.:

Jared Erwin was the father of the plaintiff and defendant. On or about the 11th day of February, 1866, he executed and delivered to his son, the defendant herein, a deed of his farm, consisting of about 100 acres of land, in consideration of natural love and affection and the sum .of one dollar,, and, at about.the same .time, executed and delivered to him a bill of sale of all of his personal property. The defendant thereupon executed and delivered to Jared Erwin a contract dated February 12, 1866, in which he undertook and agreed to pay the plaintiff $500, without interest, payable $100 annually, payment to commence November 15, 1879. Subsequently, and in the month of October, Jared Erwin delivered the paper to one Carroll M. Humphrey, a son-in-law, to be kept safely, and subsequently .the same was delivered to the plaintiff.

This action was brought to recover the $500, with the interest accrued thereon. At the conclusion of the plaintiff’s evidence, the defendant moved for a nonsuit, on the ground that no cause of action was made out against the defendant; that the plaintiff had failed to prove any interest in the contract. This motion was denied, and the case was opened for the defendant, whereupon the plaintiff moved for judgment; thereupon the court held and decided that the answer did not set up a defense to the action, and directed a verdict for the plaintiff for the amount due under the contract. The answer, in substance, alleged a subsequent agreement between Jared Erwin and the defendant, in and by which the defendant was released from paying the plaintiff the $500 under the contract sued upon. The questions thus presented are, first, whether the plaintiff can maintain an action under the contract; and, second, whether or not the subsequent agreement alleged to have been made between the father and son is available as a defense.

It is contended, in the first place, that there was no privity of contract between the plaintiff and defendant; that the relation of creditor and debtor did not exist between Jared Erwin and the plaintiff; that he owed her no legal duty; and that, consequently, she could not maintain the action upon the contract.

It is true that the relation of creditor and debtor did not exist, but that of parent and child did, and it is quite evident, by the papers executed, that it was the purpose of the father to make a distribution of his estate between his children. And where such relationship 'exists, it has always been held to present a sufficient consideration to support the promise. (Dutton v. Pool, 1 Ventris, 318-332.)

The child is the proper object for the bounty of the parent, and, in the final distribution of the parent’s estate, he is deemed under a moral d uty to provide for it. This doctrine was even recognized by Comstock, J., in his dissenting opinion, in the ease of Lawrence v. Fox (20 N. Y., 268, 279). The consideration being such as is recognized by the courts, the case presents the simple question of a promise from one person to another to pay a debt to a third person. The right of the third person to recover of the promissor for such debt is unquestioned. (Dutton v. Pool, supra; Schemerhorn v. Vanderheyden, 1 Johns., 139 ; King v. Whitely, 10 Paige, 465; Lawrence v. Fox, 20 N. Y., 268; Burr v. Beers, 24 id., 178; The Rogers Locomotive and Machine Works v. Kelley, 88 id., 234.)

. We are aware that the case of Lawrence v. Fox has been distinguished and limited ; as, for instance, it has been held that the person for whose benefit the promise was made, cannot maintain an action to enforce the promise, when the promise is void as between the promisscr and the promissee, because of the want of consideration, or of fraud. (Dunning v. Leavitt, 85 N. Y., 30; Crowe v. Lewin, 95 id., 423.) But in all eases to which our attention has been called, not one has attempted to overrule or disapprove of the principle involved in and decided in that case.

In the case of Wheat v. Rice (97 N. Y., 296), the action was to reform a contract by striking out certain clauses of the contract to pay creditors, which, it was alleged, had been inserted by mistake of the scrivener and without the knowledge or consent of the parties. It was held that the creditors were not necessary parties, and that their appeal was properly dismissed.- That a creditor of a firm cannot maintain an action upon an agreement made with the firm by one not a member, to pay a portion of the firm’s indebtedness, as no one creditor can show from the contract that it was intended for his benefit or .covers any part of his debt. It will readily be observed that this case is not in conflict with Lawrence v. Fox.

Upon the second question, as we have seen, the contract had been delivered to Humphrey. Jared Erwin had other daughters to whom money was to be paid under the contract. The inference is that it was delivered to him for their benefit, and that at that time it must be considered as an executed gift. If, as we have seen, the consideration was valid and sufficient to support the promise, then the rights of these daughters, on the delivery of the instrument, became fixed, and Jared Erwin and the defendant were thereafter powerless to change the same without their consent.

It would, consequently, follow that the trial court properly disposed of the case, and that the motion for a new trial should be denied and judgment ordered for the plaintiff on the verdict.

Bradley, J., concurred.

Motion for new trial denied and judgment ordered for the plaintiff on the verdict.


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    THE PFAUDLER BARM EXTRACTING BUNGING APPARATUS COMPANY, Respondent, v. JAMES SARGENT and Others, Appellants.

      Costs — the fee for a copy of the stenographer's minutes cannot he taxed — an appeal from a judgment is a waiver of a right to move for a retaxation of costs.

    The fees of a stenographer for a copy of his minutes are not a taxable item of disbursement, even when procured for the purpose of enabling a party to propose amendments to a case.
    An appeal from a judgment, entered upon an order of the General Term affirming a judgment of the court below, is a waiver of the right to move for a retaxation of the costs.

      Quclcenheimer v. Angevine (16 Hun, 453) followed.
    Appeal from an order of the Monroe Special Term, denying defendants’ motion for a retaxation of costs.

      J. & 2. Van Voorhis, for the appellants.

      Theodore Baeon, for the respondent.
   Haight, J.:

After the trial of this action, the plaintiff procured a copy of the stenographer’s minutes, and paid his fees therefor, amounting to thirty-nine' dollars and forty-five cents, which sum the clerk taxed as costs in the original judgment. This taxation was approved by the Special Term, but, upon appeal to the General Term, the item was disallowed. (39 Hun, 192.) An appeal was also taken to the General Term from the judgment, which was affirmed. On entering the judgment of the General Term, plaintiff again presented to the clerk the item for stenographer’s fees, with an affidavit to the effect that the minutes were necessary in order to enable him to propose amendments to the case. The clerk again taxed this item, and on motion at the Special Term for relaxation, such act was approved and the defendant again appeals to this court.

There is no question in our minds but that the item was improperly taxed by the clerk. There is no pretense that the plaintiff did, or that it was necessary for it to procure two copies of the stenographer’s minutes. The copy that was procured, as we have seen, was procured before the taxing of the costs upon the entry of the original judgment. The question as to whether or not that item was properly taxable has been once determined in this court, and the question is consequently res adyudicata. If there was any purpose for which the stenographer’s minutes were necessary when procured, it was the duty of the plaintiff to have shown it upon that hearing.

Again, the fees of the stenographer for a copy of his minutes are not a taxable item of disbursement, even for. the purpose of enabling a party to propose amendments to a case. A party upon trial has the right to take minutes, or to procure others to take minutes for him, but his own services in taking the minutes, or the services of the person procured by him to take them, could not be taxed as disbursements under the Code. If a party sees fit to rely upon the stenographer for the minutes of the trial, hq may do so; but the amount paid him therefor is not a taxable item of disbursement, any more than the amount which he had paid a cleric to keep the minutes would be. (Hamilton v. Butler, 30 How., 36 ; Spring v. Day, 44 How., 390; Colton v. Simmons, 14 Hun, 75; Provost v. Farrell, 13 Hun, 303-306.) The case of Sebley v. Nichols (32 How., 182) has not been followed or approved.

But there is a doubt in reference to our power now to grant relief. It appears that the defendant appealed from the judgment entered upon the decision of the General Term, to the Court of Appeals, on the 13th day of May, 1886; that the return upon appeal was filed with the clerk of the Court of Appeals, May 15, 1886 ; that the appeal was noticed for argument by both the appellant and respondent • that on the 22d day of May, 1886, the motion papers herein were served for a retaxation of costs. In the case of Guckenheimer v. Angevine (16 Hun, 453), it was held in this court that an appeal from the judgment was a waiver of the right to move for a retaxation. This decision does not appear to have been reversed or questioned, and we now fail to discover any reason why it should not be followed. For this reason, the order appealed from is affirmed, but without costs of this appeal to either party.

Bradley Angle and Childs, JJ., concurred.

Order affirmed, without costs of this appeal to either party.


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    JOHN SIMSON, Respondent, v. BANK OF COMMERCE, in Bufealo, Appellant, Impleaded with JOHN A. BLISS and Others.

      Delivery of a deed in escrow — when the grantor is estopped from, questioning tjie title of a purchaser in good faith from, a grantee who has fraudulently obtained possession of the deed.

    On January 31, 1883, tlie plaintiff, who was the owner in fee of a lot of land in the city of Buffalo, entered into an agreement with the defendant Bliss, who then occupied the premises as the plaintiff’s tenant, to sell and convey the land to Bliss for the sum of $1,000. A deed was made and executed by the plaintiff to Bliss, which was, by agreement, delivered to one Betis, who was to procure a loan for Bliss, and when the loan was made and the $1,000 had been received by Betts, then, and not until then, the deed was to be delivered to Bliss. Thereafter Bliss asked Betts to let him take the deed to show it to the defendant, the Bank of Commerce, from which he was to get a loan. Betts allowed him take the'deed to show to the bank. Bliss took the deed to the bank, arranged for the loan, and then, without the knowledge of the plaintiff, caused the same to be recorded in the office of the clerk of Erie county, Subsequently, and on or about March first, Betts made for Bliss an abstract of title,' putting therein the conveyance from the plaintiff to Bliss and the record thereof, and subsequently took the certificate of acknowledgment of Bliss and his wife to a mortgage for $20,000, which was executed and delivered to the bank as collateral security for a loan made to Bliss. At the time of taking the mortgage the bank had no knowledge that Bliss had obtained the possession of the deed of the premises by fraud, or that the consideration had not been paid to the plaintiff. The mortgage having been foreclosed, and the property having been bid in by the bank, the plaintiff brought this action to have the unpaid purchase-money declared a lien upon the premises prior to the claim of the bank.

      Held, that the plaintiff was estopped from questioning the title acquired by the bank.

      Simpson v. Del Hoyo (94 ÍT. Y., 189) followed.
    Appeal from a judgment entered upon the decision of the Erie Special Term, and also from an order denying a motion to vacate a judgment for irregularity.

      M. m.. Whitney, for the appellant.

      B. S. Farrington, for the responaent.
   Haight, J.:

This action was brought to have the unpaid purchase-price of the real estate described in the complaint made a lien thereon prior to the appellant’s claim. The facts, as found by the trial court, are in substance as follows: That on the 31st day of January, 1883, the plaintiff was the owner in fee of the land in question and the defendant, Joseph A. Bliss, occupied the land as liis tenant; that on that day the plaintiff entered into an agreement with the defendant, Bliss, to sell and convey to him the land for the sum of $1,000; that a deed was made and executed by the plaintiff to Bliss and by agreement was delivered to Benjamin F. Betts to be delivered to Bliss when Bliss should pay the $1,000 ; that Bliss never paid the $1,000, but by false and fraudulent representations made to Betts obtained the possession of the deed without the knowledge of the plaintiff and caused the same to be recorded in the office of the clerk of Erie county, that thereafter and on the 19th of'March, 1883, Bliss executed and delivered to the defendant, the Bank of Commerce, a mortgage on the premises for $20,000 as a collateral and continuing security for the payment of all indebtedness that Bliss was owing the bank; that thereafter the mortgage was foreclosed and the property bid in by the bank; that at the time of taking the mortgage the bank had no knowledge that Bliss had obtained the possession of the deed of the premises by fraud, or that the consideration had not been paid to the plaintiff.

The defendant excepted to the finding that the deed was obtained by false and fraudulent representations, and requested the court to find that the plaintiff placed the deed in the hands of Betts with authority to make use of the same in procuring a loan upon the property therein described in the name and interest of the grantee as a means of raising the $1,000 purchase-money to be paid the plaintiff when so obtained, and that, after the recording of the deed, and on or about March 1,1883, Bliss furnished and presented to the bank an abstract of title of the lands and premises described in the complaint which was made by and in the handwriting of Betts which set forth the deed from the plaintiff to Bliss and the recording thereof as aforesaid, and that Bliss then and there made application to the bank for an extension ‘of time and for renewals of divers pieces of commercial paper upon which he was liable as maker or indorser, and which had been theretofore discounted for his benefit and were held by the bank, which amounted in the aggregate to several thousand dollars, and also for further loans and discounts for which he then and there proposed to give the bank security by way of mortgage upon the land, all of which was assented to by the bank; that on the 1st day of March, 1883, the Bank of Commerce caused a mortgage to be drawn up and prepared, dated on that day, upon the lands described in the complaint for Bliss and wife to execute as a collateral and continuing security to the bank for the payment of all promissory notes or bills of exchange which then had been or which should hereafter be made, drawn, indorsed or accepted by Bliss, and which had theretofore been or should at any time be discounted by the bank for his benefit as the same should become due and payable, and also for the payment, upon demand, of any and all over-drafts, balances of account or sums of money which should at any time be due or owing by him to the bank upon any account whatever, and a mortgage was thereafter and on the 19th day of March, 1883, executed by Bliss and wife and a certificate of acknowledgment thereof was made by the said B. F. Betts as notary public; that after the making and delivery of the mortgage by Bliss to the Bank of Commerce and prior to April 15, 1883, and in good faith, relying upon the security afforded thereby and without any notice of any claim whatever of the plaintiff for or on account of the unpaid purchase-price of the lands and premises, or any question of title thereto in the said Bliss at any time prior thereto, the Bank of Commerce, at the request and for the benefit of Bliss, discounted divers promissory notes made by or indorsed by Bliss amounting in the aggregate to $30,000 and upwards, and advanced the proceeds thereof to Bliss, and advanced to Bliss in money more than sufficient to pay the purchase price of the land in question. These requests to find were refused and the defendant’s counsel duly excepted.

The evidence upon the trial is undisputed. The plaintiff testified that when he executed the deed to Bliss that he left it with Betts to fix a loan for Bliss, and when the loan was made Betts was to get the money for him; that the deed was not to be delivered until the money was paid. Betts, who was sworn as a witness for the plaintiff, testified that the deed was left with him for the purpose of procuring a loan for Bliss, and when procured he was to receive the $1,000 and deliver the deed. He further testified that he was endeavoring to procure a loan for Bliss upon the property; that he met him by appointment in the city of Buffalo, and that Bliss said to him that he thought he could do better with the Bank of Commerce ; said he could get the money to pay from them, and a line of discounts that would be worth more to him than the $10,000 Betts proposed to loan; that he wished Betts would, let him take the deed to show to the Bank of Commerce; that thereupon the witness let him take the deed, and that that was the last that he ever saw it. It further appeared that Bliss took the deed to the Bank of Commerce, arranged for the loan, and then left the deed at the county clerk’s office to be recorded; that subsequently, and about the first of March, Betts made for Bliss an abstract of title, putting thereon the conveyance from the plaintiff to Bliss, and the record thereof, and subsequently, and on the- nineteenth of March, took the certificate of acknowledgment of Bliss and wife to the mortgage given to the bank. It further appeared that the abstract of title so prepared by Betts was delivered to the attorney of the bank, who examined the same and recommended the loan. "Whilst there were no false statements made by Bliss to procure the possession of the deed, after procuring it for the purpose of showing the bank, he took it to the clerk’s office and caused the same to be recorded, and in doing so violated the arrangement by which he procured it, and perpetrated a fraud upon the plaintiff. As to the requests to find, to which we have alluded, they were all in accordance with the undisputed evidence given and should have been found. The question thus presented is whether or not the plaintiff can recover when the possession of the deed was obtained from him under the circumstances disclosed.

In the ease of the Commercial Bank of Buffalo v. Kortright (22 Wend., 348) one Parker was the owner of a certificate of 100 ■shares of the stock of the bank. He sent the certificate of stock, together with his promissory note for $10,000, to one Bartow to obtain a loan. Before transmitting the stock he indorsed his name upon it. Bartow, instead of making a loan to Barker upon the security so transmitted to him, negotiated a loan from Kortright, the plaintiff, of $25,000, and then absconded. It was held that the plaintiff, having made the $25,000 loan in good faith, was protected and had the right to hold the stock until the money was repaid to him. Senator Yer Planok, in delivering the opinion of the court, says : “ JBartow was intrusted with * * * the usual external indicia of the right of disposing of the property. On the faith of these external indicia Kortright lent twenty-five thousand dollars upon the aggregate security of this and other stocks. If the law should now hold this transaction to be void, it would indeed, as Judge Story says, operate as a fraud upon the unsuspecting confidence of the other party.”

In the case of McNeil v. The Tenth National Bank of the City of New York (46 N. Y., 325) the plaintiff was the owner of 134 shares of the stock of the First National Bank of St. Johnsville, the certificate of vhich he delivered to his stock brokers to secure any balance of account. Upon the certificate was indorsed a blank assignment and power of attorney to transfer, signed by the plaintiff, purporting on its face to have been executed for value received. Plaintiff’s indebtedness on the account was $3,000. His brokers, without authority and without his knowledge, pledged the stock, with other securities, to the defendant to secure an advance to themselves of $45,000. It was held that the defendant was eútitled to hold the stock for the payment of the amount of the advance.

In the case of Moore v. The Metropolitan National Bank (55 N. Y., 41) the action was to restrain the defendant from disposing of a certificate of indebtedness of the State of New York for $10,000, issued by the new capitol commissioners, which had been assigned to one Miller, who had transferred the same to the defendant, upon the ground that the assignment to Miller was induced by fraud. The defendant was a bona fide purchaser of Miller for value. It was held that the plaintiff, having conferred the apparent ownership upon Miller, and the purchase of the defendant having been made upon the faith of such apparent ownership, the defendant obtained a valid title, as against the plaintiff, and that the plaintiff was estopped from asserting his title.

In the case of Simpson v. Del Hoyo (94 N. Y., 189), the action was to foreclose a mortgage upon real estate. Mi’s. Del Hoyo, the defendant, was induced, by the fraud of Henry M. Lowenstein, to convey real estate to his daughter, Rosa H. Lowenstein, who executed a mortgage thereon to her father. The mortgage in his hands was void. It was, however, subsequently assigned to the plaintiff, who, acting in good faith, with no knowledge of the fraud, paid value for the same. The answer of the defendant alleged the fraud under which the mortgage was procured. It was held to be no defense as against a purchaser of a mortgage in good faith and for value. (See also Paddon v. Taylor, 44 N. Y., 371; Smart v. Bement, 4 Abb. Ct. App. Dec., 253 ; Griffith v. Griffith, 9 Paige, 315-318; Bumpus v. Planter, 1 Johns. Ch., 213; Jarvis v. Rogers, 13 Mass., 105,)

It is a general and familiar rule that the purchaser of a nonnegotiable chose in action, takes it subject to all the equities existing between the original parties thereto. But this rule, as we have seen, has its exceptions, and the exception is, where a party has, by his own voluntary act, placed the indicia of title in another, the purchaser in good faith, for value, will be protected. In the case under consideration, Simson, of his own voluntary act, executed the deed to Bliss; he delivered it to Betts, to be delivered to Bliss, upon receiving one thousand dollars. It was understood by him that Beg;s was to aid Bliss in making a loan. For that purpose Betts let Bliss take the deed to the Bank of Commerce. Thus, through the act of Simpson and of his agent, Betts, Bliss was invested with the indicia of title to. the premises. He was given the power to procure the deed to be recorded, Jo deceive the bank and procure a Joan upon the premises. It consequently appears to .us, that the plaintiff is estopped from questioning the title of the bank. It is contended that this case is distinguishable from the case of Simpson v Del Hoyo for the reason that there was no delivery of the deed , but in that case the deed was procured through fraud and in this case, as the court has found, the delivery of the deed was procured through fraud. We see no reason why the rule in the one case should not'be applied in the other.

The motion to vacate the judgment on the ground of irregularity was properly disposed of and that order should be affirmed, without costs.

As to the judgment, it should be reversed and a new trial granted, costs to abide event.

Bradley, J., concurred.

Judgment reversed and new trial ordered, costs to abide event.


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    THE YATES COUNTY NATIONAL BANK OF PENN YAN, Respondent, v. ZARA H. BLAKE, Appellant.

      Practice — Code of Civil Procedure, sec. 982 — does not include an action to compel an assignment of a mortgage.

    'Thp plaintiff, the owner of a mortgage upon real estate in the county of Living ston, brought this action against the defendant, the owner of a first mortgage upon the sáme premises, io compel him to assign his mortgage to the plaintiff upon the payment of the amount secured thereby.

      ¡Held, that the action was not a local action, within the provisions of section 982 of the Code of Civil Procedure, requiring such action to be tried in the county in which the subject of the action was situated.
    Appeal from an order of the Monroe Special Term, denying a -motion to change the place of trial from the county of Yates to the ■county of 'Livingston, under section 982 of the Code of Civil Procedure.

      J. A. Vanderlip, for the appellant.

      William T. Morris, for the respondent.
   Haight, J.:

The plaintiff is the owner of a mortgage upon real estate in the county of Livingston. The defendant is the owner of a first mortgage upon .the same lands. .The action was brought to compel the ■defendant to assign to the plaintiff his mortgage, upon the Dayment -to him of the amount, secured thereby

The question is whether'of not this action is within the provisions ■of the section named. The section provides that “each of the following actions must be tried in the county, m, which the subject ■of the action, or some part thereof, is situated: An action of ejectment ; for the partition of real property, for dower; to foreclose ■a mortgage upon real property, or upon a chattel real; to compel the determination of a claim to real property j for waste; for a nuisance, or to procure a judgment directing a conveyance of real property, and every other action to recover or to procure a judgment establishing, determining, defining, forfeiting, annulling or ■otherwise affecting an estate, right, title, lien or other interest in real property or a chattel real.”

It has been held that an action brought to restrain the erection of a bridge over a public highway, to connect buildings on opposite sides of such highway, on the ground that such erection will injure property, is locai and not transitory. (Leland v. Hathorn, 42 N. Y., 547.)

That an action brought to set aside an assignment for the benefit of creditors, on the ground of fraud, where the assigned property consists in part of real estate, is within the provisions of the section. (Acker v. Leland, 96 N. Y., 383.)

That an action to recover a penalty of the agent of a foreign insurance company, who effects or procures an insurance against fire, within the limits of a city or incorporated village, without having first given a bond to the treasurer of the fire department of the municipality, conditioned for the payment to such treasurer of a percentage on premiums received in accordance with the statute, is also within the provisions of the section. (Ithaca Fire Department v. Beecher, 99 N. Y., 429.)

That an action to have a deed of land declared a mortgage and for the conveyance • thereof, is local within the provisions of the Code. (Bush v. Treadwell, 11 Abb. [N. S.], 27.)

That an action by a receiver to set aside a conveyance or assignment of rea.1 property made to defraud creditors is also within the provisions of the Code. (Thompson v. Heidenrich, 66 How., 391.) That an action for trespass to real estate is also local. (Easton v. Booth, 19 N. Y. Weekly Dig., 552.)

But it will be observed that none of these authorities cover the question under consideration. A mortgage undoubtedly creates a lien upon real estate, and the question is whether or not such a lien is affected by this action. The relief sought is not to change the mortgage or the amount that it was given to secure; that remains the same even though the plaintiff should recover in this action. The action is simply to have the lien created by the mortgage transfered from the plaintiff to the defendant. In the hands of the plaintiff it would remain the same lien and for the same amount. The lien upon the. real estate would not be affected by the action, (The Knickerbocker Life Ins. Co. v. Clark, 22 Hun, 506.)

We are, consequently,-of the opinion that-it is not, within the pro: visions of the section, a local action, and that the motion was. properly disposed of by the Special Term. The order should, therefore, be affirmed, with ten dollars costs and disbursements.

Bradley, Angle and Childs, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements.


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    EDMOND STEWARD, Appellant, v. GEORGE W. COLE, Respondent.

      O hattel mortgage — a failure to refile a copy does not render it void as against a receiver of the mortgagor.

    A failure to refile a true copy of a chattel mortgage, together with a statement exhibiting the interest of the mortgagee in the.property, within the thirty days next preceding the expiration of a year from the time of the filing of the original, does not render the mortgage void as to the mortgagor, nor as to a receiver appointed in supplementary proceeding instituted upon a judgment recovered against him after the expiration of the year, and before any copy had been refiled.

      Gardner v. Smith (29 Barb., 68) followed ; Qla/rlc v. Gilbert (10 Daly, 816) distinguished.
    Appeal from a judgment of the Cattaraugus County Court, reversing the judgment of a Justice’s Court in favor of the plaintiff.

      Charles Z. Lincoln, for the appellant.
    jP. B. Coxe, for the respondent.
   Haight, J.:

This action was brought to recover the possession of a pair of ■oxen. Plaintiff claimed the property by virtue of a chattel mortgage executed by Horace B. Brown, September 22, 1884, to secure the payment of $500 in one year from the date thereof. The defendant claimed the property as thp receiver of Brown, appointed in supplementary proceedings upon a judgment. The mortgage was filed September 22, 1884, and the money for which the mortgage was given as a collateral security became due on the 22d day of September, 1885, and was not paid. The mortgage was not fefiled until October 19, 1885 On the 23d of September, 1885, the order for the examination of Brown, the judgment debtor, was served, and the defendant was appointed receiver November second and took possession of the oxen on November seventeenth thereafter.

The question presented upon this appeal is whether or not the mortgage is void as to the receiver, by reason of its not having been refiled within the time prescribed by the statute. The statute provides that every mortgage or conveyance intended to operate as a mortgage of goods and chattels, which shall not be accompanied by immediate delivery, etc., shall be absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers and mortgagees in good faith, unless the mortgage or a true copy thereof shall be filed as directed by the statute; and that every mortgage filed shall cease to be valid as against the creditors of the mortgagor, or against subsequent purchasers or mortgagees in good faith, after the expiration of one year from the filing thereof, unless within thirty days next preceding the expiration of the year a true copy of the mortgage, together with a statement exhibiting the interest of the mortgagee in the property, shall be again filed. (2 R. S. [2d ed.], 71, §§ 9 and 11.)

It will thus be observed that the failure to refile the mortgage renders it void as to the creditors and subsequent purchasers or mortgagees in good faith. It is not void as to the mortgagor. As to him, the mortgage remains of full force and effect, even though it was never filed. Under the Code, a receiver, when appointed and qualified, is vested with the preperty of the judgment debtor from the time of filing the order appointing liim, and, where the appointment was made in proceedings supplementary to an execution, his title to personal property relates back to the time the special proceeding was instituted. The receiver becomes vested with all the rights and property of the judgment debtor. (Pettibone v. Drakeford, 37 Hun, 628.)

In the case under consideration the receiver acquired the same interest in the mortgaged property that Brown had. He took the title as a trustee, commissioned to dispose of it and pay the judgment creditor. The receiver was not a creditor, and did not stand in the place of one. His rights and duties were entirely different. The plaintiff was not bound to keep his mortgage filed as against the receiver any more than he was against the mortgagor, and inasmuch as the mortgage was valid as against the mortgagor, it was also valid as against the receiver. The debt of the mortgagor was past due. The plaintiff had the right at any time to take the mortgaged property into his possession, and no one but a creditor or subsequent purchaser or mortgagee in good faith had the right to interfere. (Gardner v. Smith, 29 Barb., 68 ; Niagara Co. Nat. Bank v. Lord, 33 Hun, 557, 564; Dubois v. Cassidy, 75 N. Y., 298; Tinkey v. Langdon, 13 Weekly Dig., 384; Campbell v. Genet, 2 Hilt., 290.)

We are aware that the case of Clark v. Gilbert (10 Daly, 316) is, in some respects, in conflict with the views as above expressed. The case, however, is distinguishable from the one under consideration, and it does not attempt to disprove of the doctrine promulgated in the case of Gardner v. Smith {supra), which we regard as controlling in this case. The judgment creditor had the right to issue an execution and levy upon the oxen in question, and had he done so after the expiration of the year, and before the mortgage had been refiled, his right to sell would have been unquestioned. (Ely v. Carnley, 19 N. Y., 496 ; Fraser v. Gilbert, 11 Hun, 634; Steele v. Benham, 84 N. Y., 634.) But having failed to make such levy, his remedy is gone. No claim of fraud is made on the part of the mortgagor or mortgagee, and consequently the case is not brought within the provisions of chapter 314, Laws of 1858.

The judgment of the County Court should be reversed, and that of the Justice Court affirmed.

Bradley and Angle, JJ., concurred.

Judgment of the County Court reversen and that of the justice affirmed.


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    HOBART F. ATKINSON, as Receiver of the Rochester City Bank, Respondent, v. THE ROCHESTER PRINTING COMPANY, Appellant.

      Transfer of the property of an insolvent bank —1883, chap. 409, secs. 186, 187.— when the question of intent is unimportant — a transfer of seven drafts each less than, but thesum of which exceeds, $1,000, is forbidden — evidence of the opinions of a witness as to the value of commercial paper is not admissible — rule for determining its value.

    This action was brought by the receiver of the City Bank of Rochester, to recover the value of certain drafts, amounting in the aggregate to the sum of $3,180.83, transferred to the defendant in violation of sections 186 and 187 of chapter 409 of 1883, and with an intent of giving it a preference over other creditors of the bank. It appeared that the defendant made deposits in the bank on the 16th, 17th, 18th and 19th days of December, 1883, and that, at the close of business on the nineteenth, there was a balance due to it of $3,004.33; that during these days the bank was insolvent, and that this fact was known to its financial officers ; that, at a meeting of the directors on the • evening of the nineteenth, it was resolved to discontinue business and apply for the appointment of a receiver ; that, on the morning of the twentieth, the cashier, knowing of the insolvency of the bank and of the action of the directors, telephoned for an officer of the-defendant, and when he arrived, gave him certain drafts belonging to the bank, no one of which amounted to $1,000, but which amounted in all to $3,180.33, and took the defendant’s cheek therefor, dated December nineteenth. The. bank was not again opened for business. All the drafts so transferred were paid to the defendant, but one, upon which an action was brought by the defendant.

      Held, that, as no resolution was ever passed by the board of directors authorizing the transfer of the drafts, and, as the transfer was not a payment “ in specie or other current money or in bank bills” within the exception contained in the said section, the court did not err in refusing to' submit to the jury the question of the intent with which the transfer was made.
    That as drafts, amounting to $8,180.33, were all inclosed in one envelope and transferred at the same time, and as a single transaction, therfaet that no 'one draft exceeded $1,000 was unimportant.
    Upon the trial the defendant proved that it had no knowledge of the embarrassed condition of the bank when it made its deposits, and offered, but was not allowed, to prove, that it would not have made the deposits or left its money in the bank if it had known that the bank was insolvent, and asked to go to the jury upon the question of the fraud of the officers of the bank in obtaining and retaining the deposits, knowing the bank to be insolvent.

      Held, that the evidence was properly excluded and the request properly denied, as the defendant was not following property deposited by him in the bank or defending the possession of such property, the drafts transferred to it not being drafts which had been deposited by it in the bank.

      It seems, that if they had been, a different question would have been presented Upon the trial the defendant sought to show the value of the one draft which was not paid ánd upon which an action had been brought, by a witness who testified that his experience was teaching him something of the worth and worthlessness of commercial paper. He was then asked, but not allowed to answer, questions to show that in his opinion the draft was not worth thirty-five cents on the dollar.

      Held, that it was proper to exclude this evidence; that the measure of damages in such cases is the nominal or face value of the paper, unless it be reduced by showing payment, insolvency or some fact to invalidate the paper.
    The defendant offered in evidence the summons and complaint, and the answer served by the defendant in the action upon the draft. An objection to their admission was taken by the defendant and sustained by the court.

      Reid, that it erred in so doing, as the defendant had a right to show that a defense had been interposed, and that it was true, in order to prove the worthlessness of the draft.
    Appeal from a judgment entered upon a verdict directed by the court, in favor of the plaintiff, at the Monroe Circuit, and from an order of the Monroe Special Term,'denying a motion for a new trial.

      J. <& 1. Yan Yoorhis for the appellant.

      Smith db Briggs, for the respondent.
   Haight, J.:

, Tbis action was brought, under the statute, to recover back the value of certain drafts, amounting in the aggregate to the sum of $3,180.32, which, it is claimed, were transferred to the defendant in violation of the statute and with the intent of giving a preference over other creditors of the bank of which the plaintiff is the receiver.

It appears, from the evidence taken upon the trial, that the defendant was a depositor in the City Bank, of Rochester, and that it made deposits in the bank on the 16th, 17th, 18th and 19th days of December, 1882, and that, on the close of business on the nineteenth, there was a balance due the defendant from the bank of $3,004.22; that during these days the bank was insolvent, and tbis fact was known to its financial officers; that on the evening of the nineteenth of December there was a meeting of its directors, who resolved to discontinue business and apply for a receiver; that, on the morning of the twentieth the cashier, knowing of the insolvency and of the action of the directors, telephoned for an officer of the. and, when that officer arrived at the bank, gave him certain drafts belonging to the bank, which amounted in the aggregate to $3,180.32, and took the defendant’s check therefor, dated December nineteenth; that the bank was not again opened for business. On the twentieth of December an action was commenced by the people for the dissolution of the corporation, and on the twenty-third of December judgment was entered in that action, dissolving the corporation on the ground of its insolvency, and appointing the plaintiff its receiver. No resolution was ever passed by the board of directors authorizing the transfer of the drafts to the defendant. No one draft amounted to $1,000, but altogether amounted to the sum before stated. All of the drafts so transferred were paid to the defendant but one, which went to protest, and action was brought by the defendant to recover the amount thereof. After the plaintiff was appointed receiver, and before knowledge of the fact of the transfer of these drafts, on the morning of the twentieth, he called upon the defendant for the amount of the overdraft, which was paid to him, and subsequently, on discovering the facts, demanded of the defendant the return of the drafts, less the amount repaid, which was refused. At the conclusion of the evidence, the court directed a verdict in favor of the plaintiff for the amount of the drafts, with interest, less the amount repaid as an overdraft. The appellant took numerous exceptions to the rejection and admission of evidence and to the refusal to submit certain questions to the jury.

It is contended, in the first place, that the court erred in refusing to submit to the jury the question of the intent with which the drafts were transferred to the defendant. The statute under which the action is brought provides as follows:

Section 186. “ No conveyance, assignment or transfer not author ized by a previous resolution of its board of directors, shall be made by any such corporation of any of its real estate or any of its effects exceeding the value of one thousand dollars; but this section shall not apply to the issuing of promissory notes, or other evidences of debt, by the officers of the company in the transaction oi its ordinary business, nor to payments in specie or other current money, or in bank bills, made by such officers; nor shall it be construed to render void any conveyance, assignment or transfer in the hands of a purchaser for a valuable consideration and without notice.”

Section 187. No such conveyance, assignment or transfer, nor any payment made, judgment suffered, lien created, or security given by any such corporation when insolvent, or in contemplation of insolvency, with the intent of giving a preference to any particular creditor over other creditors of the company, shall be valid in law; and every person receiving by means of any such conveyance, assignment, transfer, lien, security or payment, any of the effects of the corporation shall be bound to account therefor to its creditors or stockholders, or their trustees, as the case shall require.” (Laws of 1882, chap. 409.)

It will be observed that under the first section of the statute quoted an assignment or transfer of the effects of a bank exceeding the value of $1,000, not authorized by a previous resolution of the board of directors is prohibited except in the cases reserved by the statute. The defendant was not paid in specie or other current money, and did not part with any valuable consideration on the receipt of the drafts. It was consequently not within the exceptions, and we do not understand that under this section the question of intent is involved. The transfer of the drafts was one transaction. They were all inclosed in one envelope. The amount of them exceeded one thousand dollars. The fact that no one draft exceeded that sum is unimportant, for the statute evidently intended to protect the bank from the illegal and unauthorized acts of its officer or agent, and to limit the power of transfer of any of its effects. To hold otherwise would, in fact, nullify the statute and permit the cashier to transfer, in one body and to one person, every note, draft or other paper under $1,000 in value, held by the bank, even though the aggregate value exceeded $100,000.

The other section of the statute prohibits the conveyance, assignment, transfer or payment by the corporation, when insolvent or in contemplation of insolvency, with the intent of giving a preference to any particular creditor, etc. Under this section the question of intent is involved and ordinarily becomes a question for the jury. But in this case the evidence as to the transfer by tlie cashier of the bank is undisputed, and the rule is that a party must intend the necessary consequences of his own act. It was conceded, upon the trial, that the bank was insolvent and had been for some days. The cashier knew this' fact and of the action of the board of directors the evening before. The taking from the bank of the drafts in question and transferring them to the defendant, of necessity, preferred their claim over' that of the other creditors. Whether or not the defendant knew of the insolvency of the bank or of the purpose of the cashier in transferring the drafts was immaterial. The evidence upon this subject being undisputed, the court properly refused to submit the questions to the jury. (National Security Bank v. Price, Receiver, 22 Federal Rep., 697.)

Upon the trial the defendant proved that it had no knowledge of the embarrassed condition of the bank when it made its deposits, and sought to prove that it would not have made the deposits or left its money in the bank if it had known that the bank was insolvent. This evidence was excluded and exception taken. The defendant also asked to go to the jury upon the question of the fraud of the officers of the bank in obtaining and retaining the defendant’s deposits, knowing the bank to be insolvent, which was refused, and exception taken.

Undoubtedly a bank may, in a legal sense, be guilty of a fraud, and where one has been induced to part with property by the fraud of an officer thereof, the party defrauded may, upon discovery of the fraud, rescind the contract and reeover the property or the proceeds thereof, unless it has come to the possession of a tona fide holder. . (Cragie v. Hadley, 99 N. Y., 131; The National Bank v. Insurance Co., 104 U. S. R., 54 ; The People v. The City Bank of Rochester, 96 N. Y., 32; The Metropolitan National Bank v Loyd, 90 id., 530.) But the difficulty with the appellant’s position is that it was not following the property deposited in the City Bank, or defending the possession of such property. The drafts that were -transferred to the defendant were not drafts deposited by it in the bank. Had they been, a different question would have been presented. The right of the defendant to restoration of the property deposited or to defend its possession is founded upon ownership. If a fraud was practiced upon the defendant to induce it to make the deposit, the bank obtained no title to the deposit by reason of the fraud, and consequently the defendant would have the right to a restoration of that which belonged to it, and it could properly have defended its possession. The right to restoration also depends upon the identity of the property which it is sought to have restored, and the right to defend the possession of the property must also depend upon such identity. The drafts transferred to the defendant not being those previously owned by it and deposited in the City Bank, the trial court properly excluded the evidence offered, and refused to submit this branch of the case to the jury.

It is also claimed by the appellant that the plaintiff’s statement in reference to the account of the bank, and the payment of the overdraft, was an account stated between the plaintiff and the defendant, and by that act the plaintiff’s claim was settled. The plaintiff had recently been appointed the receiver of the corporation, and had had to acquaint himself with the affairs of the bank. As we have seen, the defendant’s check, that was given upon the receipt of the drafts, was dated back to the nineteenth day of December, the day upon which the bank did business. The plaintiff, it appears, did not know at the time of the repayment of the overdraft the circumstances under which the drafts were transferred to the defendant. It consequently cannot be regarded as a settlement between the parties of the right of the plaintiff, as receiver, to have the drafts or their proceeds restored.

Among the drafts transferred to the defendant was one drawn on Loomis & Woodworth for $983.63, dated the 19th of December, 1882. This draft had been presented for payment by the defendant and payment refused. An action had been brought to recover the amount thereof, and an answer had been interposed by Loomis & Woodworth. Upon the trial the defendant sought to show the value of this draft by Mr. Pond, a witness. He was asked if he was acquainted wdth the value of commercial paper, and if he had owned and known of its being bought and sold; he answered that his experience was teaching him something of the worth and worth lessness of commercial paper. He was also asked whether, in his judgment, the draft was worth its face, at the time the defendant got it, under the circumstances which have since been disclosed. This was objected to as immaterial and incompetent and the objection sustained. The defendant’s counsel offered to show by the witness that he was acquainted with the value of such paper, and that this paper was not worth thirty-five cents on the dollar, in his opinion. This was also excluded.

The rule is that where promissory notes or commercial paper is converted, the measure of damages is the nominal or face value of the paper, unless it be reduced by showing payment, insolvency or some' fact to invalidate the paper. (Ingalls v. Lord, 1 Cow., 240; Allen v. Boyd, 20 Wend., 321; Decker v. Matthews, 5 Sandf., 439; Thayer v. Manley, 8 Iiun, 550.) It is undoubtedly proper to show the value of property by witnesses who are famibar with the property and its value; but as to choses in action, such as commercial paper, a different rule exists. The paper itself is of no value, but it is the evidence of debt or an agreement to pay. The question is, therefore, as to the ability to pay of the maker or person who, by the terms of the instrument, is to pay the same, and as to whether the instrument is valid. It would have been competent for the defendant to have shown the insolvency of Loomis & Wood-worth, or that the draft had been paid, or that it was worthless by reason of a valid defense existing thereto. But, in the absence of such evidenee, the presumption is that the paper was worth the amount called for by it. (Potter v. The Merchants’ Bank, 28 N. Y., 641-655.)

It appeared, as we have seen, that Loomis & Woodworth had interposed an answer in the action brought by the defendant to recover the amount of the draft. The defendant offered the summons and complaint and answer in evidenee. They were objected to, and the objection was sustained by the court and the defendant excepted.

We are inclined to the opinion that this evidence was competent. The defendant had the right to show that an action had been brought, that a defense had been interposed, what the defense was, and that it was true. If Loomis & Woodworth had any defense to the draft, such defense would necessarily be disclosed by the answer. After the defense had been disclosed the defendant might have shown that it was true, and that the draft was, consequently, worthless. It appearing that an answer had been interposed by Loomis & Woodworth, they were bound by the defense set forth in their answer. The defendant in this action had. the right to show what the defense was for the purpose of establishing the fact that it was not attempting to show, or rely upon, defenses not actually made by the parties charged with its payment.

For these reasons the judgment should be reversed and a new trial granted, with costs to abide the event, unless the plaintiff stipulates within twenty days that the judgment may be reduced in the amount of the Loomis & Woodworth draft, to wit, $983.63, and interest thereon from December 19, 1882, in which event the judgment be so modified, and as so modified affirmed, without costs of this appeal to either nartv.

Bradley and Angle, JJ., concurred.

So ordered.