Davidson v. Osborne , 136 N.Y.S. 247 ( 1912 )

Kellogg, J.:

While the terms of the lease were disputed, the decision of the justice established that Wagar was working the farms of the plaintiff on the understanding that the plaintiff was to sell the stock and produce, and to give the defendant one-third of the proceeds from such sales. Wagar gave a chattel mortgage to the plaintiff upon a horse he owned, and his interest in the crops. While the mortgage remained partly unpaid Wagar removed from a farm hay of the value of ninety dollars and delivered it to the defendant. Wagar owed the defendant a grocery bill, and from time to time had agreed to pay him from the produce of the farm, and at the time the hay was delivered the grocery bill amounted to seventy-four dollars.

The plaintiff’s chattel mortgage was given June 15, 1910, and was not filed until November 10, 1910. At the time of the execution of the mortgage Wagar owed the defendant thirty -dollars. The amount of the indebtedness at the time of filing does not appear. The defendant had knowledge of the unfiled chattel mortgage.

The judgment of the Justice’s Court was reversed upon the ground that the defendant received the hay as a creditor, and the plaintiff’s unfiled chattel mortgage was void as to him. The complaint alleged that the plaintiff was the owner of the hay which was produced upon his lands and was entitled to the possession thereof. Irrespective of the validity of the chattel mortgage Wagar could not transfer to the defendant a valid title to the hay as against the plaintiff. The judgment of the Justice’s Court was, therefore, proper.

The defendant was not a purchaser in good faith as against the unfiled chattel mortgage, nor was he a creditor within the meaning of the law relating to the filing of chattel mortgages. Ordinarily,-a creditor, to assert the invalidity of an unfiled chattel mortgage, must be a judgment or execution creditor, or one whose rights are being enforced as a creditor in due legal proceedings. (Stephens v. Meriden Britannia Co., 160 N. Y. 178.)

“With us the mortgage is void as to simple contract creditors, but such creditors cannot attack it until the recovery of a judgment and issue of execution.” (Skilton v. Codington, 185 N. Y. 89.)

The latter case indicates that, although the creditor has not a judgment and execution, if there is a direct legal proceeding, seeking to enforce his rights as creditor, the validity of the mortgage may be questioned in his behalf.

The defendant established no right to this property as a creditor. The alleged agreement when he was furnishing the groceries that he was to be paid from the produce gave him no lien or claim upon the property as a creditor, and the delivery of the hay was, in effect a mere sale to apply upon the indebtedness. The defendant was a purchaser of the hay with a part of the purchase price paid. The position most favorable to the defendant necessarily results in making him a purchaser of the hay, at least, to the extent of its value over and above his debt, for by receiving ninety dollars’ worth of hay he became indebted to Wagar to the amount of sixteen dollars, after deducting the grocery bill.

The judgment of the County Court should, therefore, be reversed, with costs, and the judgment of the Justice’s Court affirmed, with costs.

All concurred.

Judgment of County Court reversed, with costs, and judgment of Justice’s Court affirmed, with costs.