16 N.Y.S. 385 | N.Y. Sup. Ct. | 1891
The appeal has been brought upon the judgment roll alone. By the judgment, executions which had been issued upon judgments in favor of the plaintiff and levied upon the personal property of the debtors, were secured a preference over two chattel mortgages executed by the judgment debtors. These mortgages were made on the 25th of September, 1889, but were not filed until the 7th day of the following month of November. Prior to the execution of the chattel mortgages Edward Barr and Herman C. Miller, the mortgagors, made eight promissory notes, payable to the order of H. Miller, who assigned and transferred them to the plaintiff. Five of these notes matured prior to the filing of either of the chattel mortgages, one matured on the same day, and the other two after the filing of the mortgages ; and these notes were included in two judgments recovered by the plaintiff, upon which executions were issued and levied on the property described in the chattel mortgages. The plaintiff also recovered three judgments upon notes made prior to the execution of the mortgages by Belford, Clark & Co., payable to the order of the defendants Edward Barr and Herman G. Miller, and by them indorsed to John Karst, and by him assigned and transferred to the plaintiff. Two of these indorsed notes became due before the filing of the mortgages and four of them afterwards; and executions were issued also upon these judgments, and levied upon the property described in and incumbered by the mortgages. The court held at the trial that these mortgages were void as against all the executions because of the failure of the mortgagees to file them, as that has been required by the statute. Upon this subject it has been provided that every mortgage, or conveyance intended to operate as a mortgage, of goods and chattels, which shall not be accompanied by an immediate delivery, and followed by an actual and continued change of possession of the things mortgaged, shall be absolutely void as against the creditors of the mortgagor and as against subsequent purchasers and mortgagees in good faith, unless the mortgage, or a true copy thereof, shall be filed as directed in the succeeding section of the act. 3 Rev. St. (6th Ed.) p. 143, § 9. But it was objected on behalf of the mortgagees that this section of the statute was designed only for the protection of persons who became creditors of the mortgagors after the execution of the mortgages and prior to the time when they
But as to the indorsements upon which the liability of the judgment debtors had not become fixed at the time when the mortgages were filed a different principle is required to be applied. The case is not one where an actual intent to defraud existed in the disposition of property, which might very well be held to include the indorsee of commercial paper before an absolute liability became fixed, but it is that of a legislative principle applied to declare and define the effect of the omission to file the mortgages, as that was provided for and required by another section of the statute. The neglect to file would not necessarily involve bad faith, or a fraudulent intent, but it was an omission to comply with the directions contained in the statute; and for that omission the law declared the property included in the mortgage to be liable to the outstanding demands of other creditors. But an indorsee of commercial paper, where the liability of the indorsers has not become fixed, is not, in the sense in which this term “creditor” has been used in this stat