46 A.D. 416 | N.Y. App. Div. | 1899
As incidental to the main contention of the defendants’ counsel it is urged that the property covered by the mortgage in suit is not the property of the mortgagor, hut of the firm of Alfred Dolge & Son, and upon these assumed premises it is argued that such mortgage is a lien upon only the individual interest of the member of the firm who executed the same.
Without entering into any extended discussion of this proposition, we think it is sufficiently answered by the fact, conceded upon the trial, that at the date of the mortgage the record title to the property embraced therein was in Alfred Dolge, and that it remained in him down to the time of the general, assignment in -April, 1898.
It is true that, under some arrangement between the firm and ' Alfred Dolge, the property was occupied by the firm, but whether that arrangement was in the nature of a lease, or what it was, does not appear; nor is there any evidence sufficient to charge the plaintiff or his cesiuis que trust with notice that Rudolph Dolge had or
But even were this not the case, it is undisputed that the firm had the full benefit of the mortgage and never in any manner questioned the right of Alfred Dolge to execute it. In these circumstances it would, therefore, seem but just and equitable that the mortgage should be enforced against the property of the firm.
There is, also, some question made as to whether the mortgage in suit was a lien upon the personal property embraced therein, the contention being that in so far as it related, to that class of property it was a chattel mortgage and should have been filed as such, and that inasmuch as it was not so filed, it was invalid as to creditors.
We see no occasion, however, to consider this feature of the case, inasmuch as the learned trial court expressly held that all the machinery, etc., not attached to the freehold belongs either to the defendant Mills, as receiver, or to the defendant Hernán, as assignee, and left the question as to their respective interests therein for future determination. This, undoubtedly, was equivalent to holding that the omission to file the mortgage invalidated it as to the personal property embraced therein, but did not affect its validity as a lien upon real estate ; and so far as this latter postulate is concerned we think the decision of the trial court may be sustained upon both principle and authority (Hoyle v. Plattsburgh, etc., R. R. Co., 54 N. Y. 314; Merrill v. Ag. Ins. Co., 73 id. 452; Com. Bank v. Bolton, 20 App. Div. 70); for a chattel mortgage which is neither filed nor accompanied by an immediate delivery of the property mortgaged is not absolutely void. On the contrary, it is valid as between the parties and as to every one else, save judgment or attaching creditors. .In short, as has been said, it is “ not void as malum in se, but as malum prohibitum.” (Button v. Rathbone, 126 N. Y. 187; Stephens v. M. B. Co., 160 id. 178; Bullard v. Kenyon, 21 N. Y. Supp. 32.)
We come then to a consideration of the vital question at issue between the parties, which is whether the plaintiff, as trustee for the two banks which he represents, has forfeited the security of his
In the case first aboye cited it was said by Andrews, J., that “ to .-authorize the finding of an estoppel in pais against the legal owner •of land, there must be shown, we think, either actual fraud or fault ■or negligence equivalent to fraud on his part, in concealing his title; ■or that he was silent when the circumstances would impel an honest man to speak, or such actual intervention on his part, * * *
as to render it-just that as between him and the party acting upon his "suggestion, he should bear the loss.”
And in cases like the present one, where the doctrine is invoked -against the owner of an unrecorded mortgage, it should also be ■shown that the mortgagor was insolvent, and that the creditors who •assail the mortgage gave credit to the debtor in reliance upon his •Unincumbered title to the mortgaged property.
The case under review seems quite destitute of all or nearly all •nf these elements. So far as any allegation of actual fraud is con■cerned, there is not a scintilla of proof to sustain it. On the contrary, the uncontradicted evidence is that neither the plaintiff nor -any of the parties whom he represents, either directly or indirectly, ■entered into an agreement with the mortgagor to withhold the mortgage from record. Nor does it appear that at the time of the execution of the mortgage the mortgagor was insolvent, or that any credit ■was extended to him by creditors who relied upon the exemption of Ms property from incumbrances. Indeed, the evidence all tends to show that at the time the mortgage was executed Dolge believed himself to be in good circumstances and conducting a profitable and successful business. From time to time he reported to the plaintiff and to the bank officials that he was making money and reducing
Obviously then the most potent circumstance upon Avhicli the defendants rest their contention of fraud in fact is the omission of the plaintiff to record his mortgage. But the mere failure to record a mortgage, of itself, furnishes no ground for declaring it invalid. It is at best only a circumstance which may be considered in connection with other proof of a preconceived purpose to deceive and defraud, but as an independent, isolated fact, disconnected from other suspicious circumstances, it is insufficient to establish a fraudulent intent. (Blennerhassett v. Sherman, 105 U. S. 100; Delaney v. Valentine, 154 N. Y. 692; Folsom v. Clemence, 100 Mass. 273 Curry v. McGauley, 20 Fed. Rep. 583; First Fat. Bank v. Jaffray, 41 kans. 694; Day v. Good bar, 69 Miss. 687.)
What other circumstances are disclosed by the record which in: any degree tend to reinforce the defendants’ contention ? It is said: that the execution of this mortgage was not disclosed to the world at large. It is true that neither the plaintiff nor his cestuis que trust proclaimed from the housetops that they held this mortgage, but immediately upon its execution the plaintiff did take steps to perfect the-insurance upon the mortgaged property by having the same made-payable to him as trustee and mortgagee. This was accomplished through the medium of some sixty policies issued by as many different companies, and was of itself a pretty liberal advertisement of' the situation. On the other hand, there is no evidence that any affirmative attempt Avas made to keep the fact that the plaintiff held this mortgage a secret, and for aught that appears in the record, its. existence was known to all the creditors of the mortgagor.
Again, it is said that'the omission of Mr. Clark, the president of: the American Exchange National Bank, to mention the fact that-, the plaintiff held this mortgage, in replying to two letters of inquiry as to the financial standing of Dolge received by him shortly befofeDolge’s failure, is some evidence of fraudulent concealment. Doubt
All concurred, except Hardin, P. J., not sitting.
-Judgment affirmed, with costs.
