98 N.Y.S. 516 | N.Y. App. Div. | 1906
This action was in equity to set aside a sale made under a chattel mortgage and to redeem. There is little, or no -dispute between the parties as to the material facts involved, except as to the' value of the property sold. On the 8th of November^ 1899, John L. Cartier apd Bosa Michaels purchased. from- one Durando the hotel business conducted upon lands situate at One Hundred and Fifty-fourth street -and McCombs Dam in-the city of New York, including the furniture, fixtures',.etc., and for that purpose- borrowed from the Pabst Brewing Company $5,000, as collateral security for the payment of which they delivered to it a chattel mortgage upon the furniture,-, fixtures,, etc. The mortgage was in the usual form, and the condition of it was to pay the $5,000 oh- demand, with interest at the rate of six per cent and all other sums which might thereafter be or become due to the brewing company for mercham dise sold by it. to the mortgagors. Cartier and Michaels continued the business for s.ome time and then organized, or were instrumental in organizing, á corporation known as the Standard Hotel Company,," and after such organization, they sold to it the property covered by the mortgage-. On the 20th of January, 1903, the corporation took from the owner of the-land on which the hotel stood a lease extending from tjmf date until the 1st of May, 1910, at a specified rental, payable at. stated times, the payment of the rent being guaranteed -by the brewing company, and for the purpose of
I am not familiar with any principle, either legal or equitable,' which will permit a judgment obtained upon the foregoing facts to be- sustained. It is, in effect, compelling a mortgagee of personal property, after default has accrued, to purchase the property at its full value. When default occurred in the.payment of the amount secured by the chattel mortgages, that moment the title to the property covered by them: became absolute in the brewing company the mortgagee. (Stoddard v. Denison, 38 How. Pr. 296; Ballou v. Cunningham, 60 Barb. 425.) After default the brewing company held the legal- title and was the owner of the property. Neither the mortgagor (the hotel company) nor any of its creditors could thereafter maintain an action at law, against, it. All that remained to them was a mere naked equity of redemption which could only be enforced in an equitable action. (Charter v. Stevens, 3 Den. 33 ; Bragelman v. Daue, 69 N. Y. 69.) In order to avail themselves of the right to redeem they weré obliged to allege and prove that they were willing and' able to pay such amount or else facts had to be proved which warranted- a judgment directing such payment as a. condition of redemption (Casserly v. Witherbee, 119 N. Y. 522), or that the mortgagee had, by his own act, so dealt with the, property that it could not be restored, in which case a, personal .'judgment might be directed against him for the difference between the amount due and its value.
Appropriate facts were alleged in the complaint entitling plaintiff to redeem, but the facts proved did not sustain the allegations of the complaint, nor do I* think they' justified a judgment entitling
The plaintiff, therefore, if entitled to any relief, can only be given it by taking the place of the brewing company, and this can only be done by her paying the amount of its mortgage and indemnifying it against the liability which it has assumed under the lease.
If the foregoing views be correct then it follows that the judgment appealed from must be reversed and a new trial ordered, with costs to appellant to abide event..
Ingraham, J., concurred; Clarke and Houghton, JJ., concurred in result; O’Brien, P. J., dissented.
Judgment reversed, new trial ordered, costs -to appellant to abide event. Order filed.