Doig v. Haverly , 72 N.Y. St. Rep. 728 ( 1895 )

Pee CueiaM :

At the close of the evidence given in the case the parties expressly waived a jury and submitted the questions of fact and of law to the court. Thereafter, findings of fact were made and a conclusion of law stated. We are of the opinion that the evidence warranted the findings of fact made by the trial judge. The questions of law are clearly and fully discussed in an opinion delivered by the trial judge, which meets with our approval, and we, therefore, affirm the judgment upon the opinion of the trial judge;

Present — IIaRdxN, P. J., MabtiN and MbewiN, JJ.

Judgment affirmed with costs on the opinion of PaeKee, J., delivered at the Circuit.

The following is the opinion referred to:

Charles E. Paekee, J.:

The defendants, Ilaverly and Wilcox, on the 30th of November, 1891, took a chattel mortgage from one Thomas Milward to secure an indebtedness that had for some time existed from him to them. Milward was then living in the town of Tompkins, Delaware county, and such mortgage was filed in the town of Walton. No sufficient copy was ever filed in the town of Tompkins. Milward subsequently removed to the town of Walton, and a copy of such mort- ' gage was refiled in that town December 1, 1S92, and copy was refiled in such town November 25, 1893.

On the 2d day of June, 1893, the plaintiff, without actual knowledge of the defendant’s mortgage, took from said Milward a chattel mortgage on the same property to secure the payment of a note which he then held against Milward for the sum of $122.82. Such mortgage was filed on that day in the town of Walton, where Mil-ward then resided, but it was never refiled. On the 18th of July, 1894, the defendants took the property described in such mortgages and sold it for the satisfaction of their said debt, and the plaintiff brings this action to recover the value of the property so sold.

The question is, who has the better right to the mortgaged property ? If the plaintiff was . a mortgagee in good faith, the defendants’ mortgage was utterly void as against him, because it had never been properly filed. (Laws of 1833, chap 279, § 1.) And the fact that plaintiff’s mortgage was not refiled within the year, and that on July 18, 1894, when defendants took the property, neither mortgage Avas properly on file does not alter the case. Though defendants Avere creditors of the mortgagor at that time, they Avere not such creditoi’S as could avail themselves of plaintiff’s omission to refile his mortgage. They Avere not armed Avith any legal process Avbicli authorized them to seize the property. (Button v. Rathbone, Sard & Co., 126 N. Y. 187.)

But the defendants’ mortgage being prior in point of time it gave them the prior right to the property, unless their omission to file it rendered it void as against the plaintiff, and it did not become void under the statute unless the plaintiff occupied the position of a subsequent mortgagee in good faith. It appears from his complaint that on or about May 17, 1893, he sold feed to Milward of the Aralue of $122.82, and took his note for that amount, dated on that day and payable in ninety days. On June 2, 1893, lie took the mortgage in question, from which it also appears that the indebtedness was incurred as above stated, and that the mortgage AA-as given to secure it.

It seems clear, therefore, that the mortgage was given to secure a precedent debt, and for such reason he was not a bona fide mortgagee within the meaning of the statute. (Jones v. Graham, 77 N. Y. 628; Button v. Rathbone, Sard & Co., 126 id. 187.)

The plaintiff, however, seeks to avoid the operation of this rule by testifying that at the time the mortgage was taken Milward said that he could not pay the note when it became due, and that he would like further time on the note, and that he would give the security on condition that the note was to be renewed, and that thereupon the mortgage was taken. There is no extension of time provided for in the mortgage, nor does the evidence disclose that any valid agreement to extend the time of payment for a definite period was ever concluded. Possibly Milward expected that the note would be renewed, but plaintiff does not testify that lie agreed to do so, nor does the evidence show that he was under any contract to do so. Had he sued the note when it became due no fact is disclosed that would have prevented his recovering judgment thereon, though probably he could not in that event have held the mortgaged property. Moreover, if there was a contract to extónd the time of payment for a definite period, on condition that the mortgage be given, we would hardly expect the mortgage to have been so drawn that the mortgagor would be in default on the very day the note became due. It does not appear that the plaintiff parted with any value, or gave up any right on the faith of the mortgage, and hence he is not a mortgagee in good faith. (Cary v. White, 52 N. Y. 138.)

T conclude, therefore, that the defendants were entitled to the property in question, as against the plaintiff, and that this action cannot be maintained.