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This case has been before this court upon a demurrer to the complaint. A majority of the court overruled the demurrer, holding that the count which set up an equitable lien upon the property belonging to the plaintiff, and charged that defendant had wrongfully sold and converted the property to its own use, and deprived the plaintiff of his lien, was good. (49 N.Y., 626.) There was no allegation of right or title in the defendant. The case now comes up upon appeal from the judgment after trial upon exceptions to the findings of the judge before whom it was tried. It now appears, and is found, that the defendant sold the property by virtue of two chattel mortgages, one executed by Cozzens Company to the plaintiff, and assigned to the defendant, and the other by Cozzens Company to the defendant. It is not claimed that the plaintiff can maintain this action as an action of trover or trespass, but it is
affirmed that it is maintainable upon the ground that the defendant has so conducted himself, in the exercise of a legal right, as unnecessarily to reduce the value of the plaintiff's lien, and injure or destroy his reversionary interest. It has been intimated by able judges that such an action might be maintained against subsequent mortgagees and creditors by a prior incumbrancer, but we have been referred to no case where precisely such an action has been sustained. (22 N.Y., 225; 28 id., 585; 42 id., 322; 1 Kern., 501; 17 N.Y., 202.) Conceding that the defendant's mortgages are to be regarded as subordinate to the equitable lien claimed by the plaintiff, nearly all the elements necessary to sustain an action for injury to the reversionary interest, as it is called, are wanting in this case. It does not appear that the property was sold in parcels, or was scattered or dissipated. The judge finds that there was no evidence on the subject, of how it was sold, in this respect. It is not found that it was sold to bona fide purchasers without notice of the plaintiff's lien. It is not found that the property was sold in hostility to the plaintiff's rights. On the contrary, it is expressly found that only the rights and interest of the mortgagors and of the defendant were sold. For aught that appears, the property remained together after the sale as accessible to any claim which the plaintiff could enforce as it was before the seizure and sale by the defendant. The only fact found tending to establish a hostile proceeding is, that the property sold at its full value, but this fact is not sufficient, nor is it inconsistent with the right of the plaintiff to enforce his lien, although it may indicate that the purchaser intended to contest it. Assuming the most favorable state of facts for the plaintiff, and regarding the defendant as a subsequent incumbrancer, the defendant did nothing but exercise its legal right to foreclose its mortgages, and sell the interest of the mortgagors in the property, and there is no principle of law or equity which renders it liable for such an act. (Cases before cited.) In doing this it did not act as trustee for the plaintiff, but acted for itself.
These views render it unnecessary to examine the question whether the defendant is to be regarded as a bona fide
mortgagor or not. Nor is it necessary to determine whether such an action can be maintained, nor, if it may, what facts will suffice for that purpose. Those questions will arise when a case is presented, showing that the prior lien has been impaired or destroyed.
The judgment must be affirmed.
All concur.
Judgment affirmed.