155 N.Y. 224 | NY | 1898
One Sawyer, being indebted to the plaintiff and to the defendant Caspar Iba, made an agreement with them that the plaintiff should lend him the further sum of nine hundred dollars, and accept as security for the entire indebtedness a chattel mortgage which should be a first lien upon certain personal property of Sawyer's, Sawyer to turn over such sum of nine hundred dollars to Iba, to whom he owed one thousand nine hundred and twenty-five dollars, and give to him a second chattel mortgage on the same property to secure the sum of one thousand and twenty-five dollars. Not only was the mortgage from Sawyer to Iba second in point of fact, but it was agreed between the three parties mentioned that it should be second.
Iba, however, filed his mortgage first and a few days later assigned it to the defendants Lewis, to whom he was indebted in the sum of one thousand and thirteen dollars, they paying him the difference in cash. They knew nothing of the agreement between their assignor, the plaintiff and Sawyer, that the plaintiff's mortgage should be the first lien on the property. There was some controversy about the facts upon the trial, but the record comes to us with the facts found of which the above is a summary. *227
The trial court determined that plaintiff's mortgage was the first lien upon the property, and awarded a money judgment against the defendants Lewis for its value, they, under their mortgage a few days after its date, having taken possession of it against the protest of the plaintiff.
The learned counsel for the appellants, while recognizing the existence of the general rule that a bona fide purchaser for value of a non-negotiable chose in action takes it subject to all the equities existing against it in the hands of the assignor, insists that it is not applicable to latent equities held by third parties. By third parties he refers to those outside of the original debtor, and the subsequent transferees in the line of ownership of the chose in action. Formerly the view was entertained by some judges that the rule was thus confined, but in Greene v. Warnick (
Later on the question was presented in Decker v. Boice
(
The doctrine laid down by the decisions to which we have referred has since been regarded as settled in this state, but the appellants refer to one of the latest cases in this court touching that subject (Rapps v. Gottlieb,
Thus is stated briefly, but accurately, the effect of the rule.
Iba, the defendants' assignor, as mortgagee acquired only a second lien upon the property described in it. Filing the mortgage did not help him. It was still affected by the agreement that it should be a second mortgage, and that agreement the plaintiff, as owner of the first mortgage, could enforce, not only as against Iba, but also as against any subsequent purchaser of his mortgage.
The judgment should be affirmed, with costs.
All concur, except GRAY, J., absent.
Judgment affirmed.