69 N.Y.S. 623 | N.Y. Sup. Ct. | 1901
This action is brought under section 7, chapter 417, Laws of 1897, which provides that “ A creditor of a deceased insolvent debtor, having a claim against the estate of such debtor, exceeding in amount the sum of one hundred dollars, may, without obtaining a judgment on such claim * * * for the benefit -of himself and other creditors interested in said estate, dis-affirm, treat as void and resist any act done or conveyance, transfer -or agreement made in fraud of creditors or maintain an action to set aside such -act, conveyance, transfer or agreement.”
The transfer which plaintiff attacks as fraudulent is a certain chattel mortgage executed on or about November 14, 1898, by the deceased, F. Peter Kirley, to the defendant Easton. The plaintiff is the owner and holder of notes aggregating several hundred dollars made and delivered by said Kirley to him bef ore the date of the chattel mortgage and the validity of and amount due upon, which were undisputed upon the trial.
It was alleged in the complaint, -and undisputed either by the answers of the various defendants or by any evidence or objection upon the trial, that said Kirley, at the time of his decease, in
Plaintiff in his complaint alleged that said chattel mortgage was void because of failure to file the same, and also because of failure to make -any change in the possession of the mortgaged property after the same was given, but upon the trial his right to succeed became limited to the establishment by him of the proposition and complaint, that after -said chattel mortgage was given by and with the consent of the mortgagee, the mortgagor remained in possession of the mortgaged property, dealing with it and selling from -it for his own benefit the same as before the mortgage was given, the proceeds of such sales being used for his own benefit and in the conduct of his business, and not being applied at all to -the payment of the alleged mortgage debt.
I shall review the evidence given upon the trial as bearing upon the question whether this proposition of plaintiff’s was fairly established. There was little dispute about the facts. The mortgagor, Burley, had a clothing and men’s furnishing store in the village of Lowville, and a tailor shop in connection therewith. Therein he had a stock suitable to his business of clothing, cloths, hats, caps, gloves, mittens, men’s furnishing goods, etc., being, as recited in the chattel mortgage taken by defendant Easton, “ the usual assortment of a clothing, tailoring, hat and cap and gents’ furnishing store.” Upon all of this stock and all of these goods and all fixtures, tools, implements, machines, appliances, etc., contained in -the store, the chattel mortgage in question was, upon the 14th day of November, 1898, made and executed by him to the defendant Easton. Said mortgage recited that Kirley was indebted unto Easton in the sum of $5,000, being for money that day loaned, and it expressed that it was given to secure “the payment of said debt and the interest thereon and also any future advances and as security for any obligations which said Easton might guarantee or become liable on for said Kirley.” As a matter of fact, the mortgagor did not owe the mortgagee a dollar at the time s'aid mortgage was executed, but from a date a few
It seems to me that these facts lead irresistibly to the conclusion that, at the time this mortgage was given, there was an understanding and agreement between the mortgagor and mort
The very fact that this chattel mortgage was never put on file is significant as indicating the intention of the parties not to embarrass Kirley, or do anything which would prevent him from selling the property covered by the chattel mortgage.
It is not violent to infer and find, as a question of fact, from the mortgagee’s continued assent, the sale of goods and the conduct of business for his own benefit and in his own way, by Kir
The view which I take of the facts and the evidence in this case leads necessarily to the conclusion that the chattel mortgage was fraudulent and void, and that it cannot be enforced. Ho treatment of the chattel mortgage and the property thereby covered could well be more opposed to, and more obnoxious to, the course which the law points out in such a case as valid and proper, than the one disclosed by the proofs in this case. Potts v. Hart, 99 N. Y. 168; Southard v. Benner, 72 id. 424; Russell v. Winne, 37 id. 591, 593; Hangen v. Hachemeister, 114 id. 566, 571; Gardner v. McEwen, 19 id. 123, 125; Frost v. Warren, 42 id. 204, 207; Hardin v. Dolge, 46 App. Div. 416, 421.
There are some incidental questions to be taken care of by the findings and judgment in this case.
The defendant Easton, soon after the death of Kirley, started to foreclose his chattel, mortgage, and to sell all of the property in the store, including that acquired after, as well as before, the execution of the mortgage. An injunction was obtained, and an order subsequently made by Mr. Justice Andrews, providing for a separation of the two kinds of property and for a sale thereof, and for the payment of the proceeds of the after-acquired property to the administrators of Kirley, and for the payment of the proceeds of the property covered by the chattel mortgage into court. Hnde-r that arrangement, there is now in court about $3,000 as the proceeds of the latter class of property, and the findings and judgment will be adapted to that condition.
The defendant Easton incurred some expenses in the foreclosure of his mortgage,' and in taking care of the property, and it is insisted by the plaintiff that he should not be allowed any of these costs. Within the principles of Loos v. Wilkinson, 113 N. Y. 485, the defendant is undoubtedly entitled to credit for some of
There was some suggestion in behalf of the administrators that the plaintiff was indebted to the estate of Kirley, on account of certain accounts which he undertook to collect belonging to the former copartnership, composed of plaintiff and Kirley. I am not clear, from the final course of the action, whether this claim is still insisted on or not. If it is, upon like application of the parties, at the time when findings and judgment are perfected, a reference will be ordered to pass upon any questions existing in that connection.
Judgment in favor of plaintiff will he with costs against the 'defendant Easton.
Ordered accordingly.