Stedman v. Batchelor , 4 Silv. Sup. 544 ( 1889 )

Merwin, J.

The record before us does not show the grounds upon which the motion upon the minutes for a new trial was made. The question, therefore, whether the verdict was contrary to evidence is not here for decision. Hinman v. Stilwell, 34 Hun, 180. The exceptions taken in the case can, however, be considered. Two questions were litigated at the trial: First, Whether the chattel mortgage of 30th June, 1886, was fraudulent and void as against creditors; and, second, whether, at the time the sheriff took the property, it was in the possession of Charles E. Stedman, the defendant in the process the sheriff held.

At the close of the evidence the plaintiff asked the court.to direct a verdict for the plaintiff upon the ground that, upon the undisputed evidence, the mortgage was fraudulent and void as to creditors, and the property was not in the possession of Charles E. Stedman. This request the court denied, and the plaintiff 'excepted. The question here is whether the exception is a good one as to either of the propositions. The claim of the defendant is that both were for the jury and not for the court to decide. Upon the latter proposition the deputy-sheriff who had the process testified that before he took the property, upon the morning of October 1st, he saw the plaintiff, and asked him if he had anything to do with the store, and he replied that he had nothing to do with it at all; that he then told plaintiff he had some papers in the Richmond matter, and plaintiff replied that he (witness) “would have to see Charley about it." If this testimony was true, the inference would be allowable that the actual possession was still in Charles E.,’ and, if so, the officer would be justified, so far as that was concerned, in taking the property on his process. Bullís v. Montgomery, 50 N. Y. 352. Whether the deputy-sheriff testified truly was for the jury to decide. That question was therefore properly left to the jury.

Upon the other question there is some doubt. The argument of the plaintiff is that the clause in the mortgage “to keep about the same amount of stock on hand” by necessary implication gave the mortgagor authority to sell for cash or on credit, provided only he kept the same amount on hand, and that such an authority or agreement on the face of the mortgage makes it void as matter of law. The case of Edgell v. Hart, 9 N. Y. 213, is claimed to be in point. There the purchaser of a stock of goods in a retail store executed to the vendor a mortgage upon the entire stock, the mortgage also including in its terms all articles of a like nature which might be in the store at the time of default, the mortgagor to continue in possession, but being forbidden by a clause in the mortgage from selling on credit. It was held that the mortgage was in its terms fraudulent..as against creditors, and that there was no question to be submitted to a jury in regard to it. The clause as to selling on credit was: “Said party of the first part not to sell any of the said goods upon credit. ” This, Judge Denio said, by a necessary implication, authorized the mortgagor to sell for cash, and he was of the opinion that this right to sell, if it stood alone, would vitiate the mortgage. In Mittnacht v. Kelly, *42 N. Y. 407, the mortgage covered the whole stock of trade in goods, wares, and merchandise, with the increase and decrease thereof. This was held to be void on its face, as it showed an intent not to create an absolute lien, but a fluctuating one, that should open to release that which should be sold, and take in what should be newly purchased. In Griswold v. Sheldon, 4 N. Y. 581, the mortgage contained on its face a provision that the mortgagor should “keep a good and full assortment of goods, groceries, etc., during the time he remains in said store, and until” the plaintiff’s debt should be fully paid. The court were equally divided on the question whether .this mortgage was upon its face void as to creditors. The case in hand is somewhat different from the first two cases cited, and is more analogous to the last one.

By the statute (4 Rev. St. p. 2593, § 4) the question of fraudulent intent in cases like the present is made a question of fact, and not of law. Still there are cases where the court is required to declare the fact, as where the question depends upon the effect of a written instrument, or when it arises upon an admitted or undisputed state of facts necessarily showing fraud. Denio, J., in Ford v. Williams, 24 N. Y. 364. In Bank v. O'Brien, 6 Hun, 231, 1 Wkly. Dig. 557, the rule is laid down that it is only where an agreement either appears in the mortgage, or was clearly expressed between the parties, the necessary construction of which permits the sales to be made for the benefit of the mortgagor, that the question becomes one purely of law, which the court is required to determine as such. In the present case the question whether there was any agreement, outside of the mortgage, that the mortgagor might sell for his own benefit, was a disputed one. The mortgagee testified there was none. True, it may be said that both sides expected a retail store would be carried on, and, of course, more or less of the goods sold, and in one sense necessarily for the mortgagor’s benefit. This might be said in every case where a stock of goods is sold, and a mortgage taken back for the purchase price. Still no case is cited showing that in such a case, for that circumstance alone, the mortgage must be held fraudulent as matter of law. So that the question here is simply on the effect of the clause in the mortgage, “to keep about the same amount of stock on hand.” Does this necessarily amount to an authority to the mortgagor to sell for Jiis own benefit? The circuit judge thought it did not, under the circumstances of the case, and I think his ruling should not be disturbed. There is no other exception that requires special consideration. It follows the judgment should be affirmed. Judgment and order affirmed, with costs.

Hardin, P. J., and Martin, J., concur in the result.