42 N.Y. 204 | NY | 1870
Lead Opinion
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *206 There are only two questions in the case, arising on the charge of the judge, and his refusal to direct a verdict, although the counsel for the defendant raises the point that the judgment should be reversed, because the court charged: "If the jury should find that Michael intended a fraud by giving the mortgage, still the mortgage was a valid instrument, unless the plaintiff was himself a party to the fraudulent intent." In reference to this, it need only be said, that there is no exception to it; and, of course, the question is not properly before us, and judging from the opinion delivered in the court below, it was not presented there, but appears now for the first time.
The real questions are, whether the amount which was stated in the chattel mortgage, and which was greater than the actual liability of the plaintiff for the mortgagor, and for the security of which it was given, rendered it void per se. And so, also, whether the proof given on the trial showed that the mortgagee had given the mortgagor such permission to dispose of the mortgaged property, as rendered the mortgage void in law. For if so, in either respect, the charge was not only erroneous, but the court erred in not ordering a verdict for the defendant.
In regard to the amount stated in the mortgage, the language of it does not come fully up, in stating it as a security for future liabilities, to that in the case of Miller v. Lockwood, and yet it referred to the direct and collateral security which the mortgagee had assumed, and comes within the principle of that case, and, at most, was a badge of fraud, to be passed upon by the jury. *208
As to the proof given upon the subject of the sales made by the mortgagor after the mortgage was executed, there was no such direct proof as rendered the question palpably plain, but it was to be decided upon all the facts and circumstances proved; and the inferences to be drawn from them were peculiarly for the jury. And in regard to that, I think the charge was as favorable to the defendant as the case called for.
The case shows that the goods in question were mainly obtained upon the credit of the plaintiff, and were manifestly less in amount than the direct responsibility which he had incurred. And the jury having passed upon all the questions of fact, and found no fraudulent intent, the judgment should be affirmed.
Dissenting Opinion
The exception taken to the refusal of the judge to direct a verdict for the defendant, can be sustained only upon the ground that the mortgage under which the plaintiff made title was, by the proof given, shown to be fraudulent as against the creditors of the mortgagor, in whose right the defendant justified the taking and conversion of the property; and that the proof in this respect was so conclusive that it was improper to submit any question arising thereon to the jury. In considering this question, it is necessary first to determine whether an agreement made by parol, at the time of giving a mortgage upon chattels, by the parties thereto, that the mortgagor might at any time thereafter sell and dispose of the chattels mortgaged, and appropriate the proceeds to his own use, the debt remaining unpaid, renders such mortgage fraudulent as against the creditors of the mortgagor; and, if so, second, whether the evidence proved that such agreement was made, or was so conflicting upon that point as to make the submission of that question to the jury proper. In Edgell v. Hart (5 Seld., 213), it was held by this court that an agreement, contained in the mortgage, that the mortgagor should retain possession of the property, and have the right of selling and disposing of the same on his own account, rendered the mortgage fraudulent as against the *209
creditors of the mortgagor, and that, in such a case, it was the duty of the judge to dispose of the question as one of law, and that its submission to the jury was error. This was upon the principle that the agreement conclusively established that the mortgage was not taken in good faith for the exclusive purpose of securing the debt, but that other purposes were involved therewith. Upon principle this is clearly so. A mortgage given upon chattels with the right reserved by the mortgagor to retain possession and convert them at his pleasure to his own use, if any security to the mortgagee, could only be one of a very shadowy character; one that no creditor, designing only to secure his debt, would ever take, as it would be in the power of the mortgagor at any time to defeat it. In Gardner v. McEwen
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For affirmance, FOSTER, SMITH, LOTT, INGALLS and SUTHERLAND, JJ., and EARL, Ch. J.
For reversal, GROVER and HUNT, JJ.
Judgment affirmed.