Dickinson v. Oliver

89 N.Y.S. 52 | N.Y. App. Div. | 1904

Smith, J. :

The inference is to my mind irresistible that these papers were executed simply to give security to Oliver for the moneys owing. That in legal effect constituted a chattel mortgage which was void as against the plaintiff because not filed. Although the bill of sale was signed and delivered upon November ninth the mortgage and note, which were to be replaced thereby, were not surrendered until-the twelfth, at which time the defendant assumed to take possession of the property and upon which date this lease was executed. The bill of sale, therefore, and the lease must be construed together to determine the legal effect of the transaction.

These papers were but a substitute for a note and chattel mortgage already held by defendant, which, chattel mortgage Dickson had requested should not be filed. Dickson retained actual possession. All of the property purchased was leased by Oliver to Dickson for $42, the exact amount of the legal interest upon the $700 owing by Dickson to Oliver. The right of repurchase was there given which would seem to preclude any right in Oliver to sell the same until the time for the repurchase had elapsed. The rental value of the property leased was much in excess, as appears, by the evidence, of the $42, and much of the property leased was property from which Dickson could obtain no profit by leasing and which would be to him simply an expense, as for instance the young stock he was required to feed. This inference is not only reached from the testimony of Oliver in connection with the construction of the papers executed, but would follow logically the testimony of Johnson, Oliver’s attorney, as to what transpired at the time of the execution of the so-called bill of sale. All of the evidence seems to. point unerringly to.the conclusion that Oliver was simply taking a security which he thought would not have to be filed. In Susman v. Whyard (149 N. Y. 127) the head note, reads : “ When the provisions of an instrument, which is in form an absolute bill of sale, taken in connection with the surrounding facts, indicate that the parties contemplated a loan of money and a sale of the property upon the condition, however, that the property should be returned upon payment of the monéy so loaned, the instrument is in effect a chattel mortgage; and. the fact that it employs the term ‘ resale ’ will not change its meaning when no other sum than the amount of the loan is mentioned or contemplated as the price of such resale.” It is- very evident that if papers such as were here executed can have the effect claimed for them they constitute a lawful substitute for a chattel mortgage without the necessity of filing the same, and the provision of law as; to the filing of a chattel mortgage may thus be evaded. That provision of law is a salutary one made for the protection of creditors as- against secret’liens. The courts should not be-astute to find ways of rendering nugatory a salutary pro-. vision of law for the protection of innocent creditors. We are of opinion, therefore, that the. trial court erred in submitting this as a question of fact to the jury and should have held as matter of' law •that these papers did in effect constitute a chattel mortgage which Was void as against the plaintiff.

The respondent insists that the appellant is hot entitled to raise this, question on. appeal because no motion for a directed verdict was made at the trial, and no exception was taken to the charge, of the court submitting the question to the jury. That the appellant may raise the question here without having moved for a directed verdict at the trial has been established in this department in the case of McGrath v. Home Insurance Co. (88 App. Div. 153).

All concurred, except Parker, P. J., and Houghton, J. dissenting..

Judgment and order reversed and new trial granted, with costs to appellant to abide event.