32 N.Y. 293 | NY | 1865
Lead Opinion
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *297
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *298 The principal questions presented for consideration in this case arise upon the motion for a nonsuit.
It is claimed on the part of the appellant, that such motion should have been granted for the following reasons:
1. That the mortgage was presumptively fraudulent, in consequence of the continued possession of the property in the mortgagor, and that the plaintiff failed to remove the presumption.
2. The amount or consideration mentioned in the mortgage being $25,000, and the actual amount of liabilities and indebtedness at the date of the mortgage being only $13,700, the including of the sum of $11,300 beyond the actual liability was an act of bad faith toward the creditors, intended to deceive and keep them at bay.
3. That the agreement to sell for cash only, and for the plaintiff's exclusive benefit, rendered the mortgage void.
As to the first ground, it is clear that the question of fraudulent intent belonged exclusively to the jury, as a question of fact, and it would have been improper for the court to have withdrawn it from their consideration. The burden was cast upon the plaintiff to make it appear to the jury that the mortgage was made in good faith, and without any intent to defraud creditors or subsequent purchasers. Evidence had been given of the bonafides of the parties to the transaction, and it was for the jury to determine whether or not the plaintiff had removed the presumption of fraud. The verdict of the jury on that question is conclusive in plaintiff's favor. *299
Neither was the amount or consideration named in the mortgage, being larger than the actual amount of indebtedness and liabilities existing at the date thereof, any legal evidence that the same was fraudulent. If that amount was put in there with a fraudulent intent to magnify the plaintiff's debt or liability beyond the actual amount thereof, and to keep the creditors of Ramsdell at bay, such circumstance was a proper element for the consideration of the jury in determining the bona fides of the transaction. It afforded no legal presumption of fraud, coupled as it was with the declaration upon the face of the mortgage, that it was given and intended as a security, not only for any debt, demand or liability then incurred or held, but such as might thereafter be incurred or held by the plaintiff on account of Ramsdell. This was full notice that the sum named did not cover, and was not intended to cover only the actual indebtedness or liabilities existing at the date of the mortgage, but in addition, such as might thereafter be incurred by the mortgagee on account of the mortgagor. But on a security of this character, the sum or amount named as the consideration is of no moment, as the mortgage stands as a security for the amount of liabilities or indebtedness, whatever the sum may be, and it is not essential even that any amount should be named in the security. This point was distinctly ruled in Robinson v. Williams (
It is also claimed that the mortgage was rendered fraudulent by the agreement between the mortgagor and mortgagee that the latter should sell the mortgaged property for cash only, for the exclusive benefit of the mortgagee.
The precise point covered by this objection was decided by this court in Ford v. Williams (
These views dispose of the motion for a nonsuit, and show that it was properly refused.
I am unable to perceive any error in the exclusion of the offer by the defendant to prove that before and at the time of the dissolution of the firm of Ramsdell Miller, and from thence down to, and at the time of the trial, the plaintiff was indemnified by said David S. Miller, against any loss by reason of his indorsements and liabilities for said firm of Ramsdell Miller, and for said Ramsdell, and also against any loss by reason of the indebtedness of said firm and of said Ramsdell to him, including the debts and indorsements which had been proved at the trial. Assuming the fact to be that the plaintiff had such indemnity, it would not follow that he could not enforce the rights secured to him by this mortgage. Nothing appears which would have justified the court in holding that the existence of such indemnity would preclude him from looking to his mortgage security. It may well be that such indemnitor for the liabilities of Ramsdell, — and it was proven on the trial that he held the mortgage for Ramsdell's individual indebtedness, — could have compelled the plaintiff to have resorted to his mortgage security, before calling on him on his indemnity. However that may be, the fact of such indemnity existing created no obstacle to the right of the plaintiff to claim the security of his mortgage, neither would the proof of the fact that such indemnity had been given by the brother of the plaintiff, have warranted the jury in discrediting the testimony given by the plaintiff on the trial. The offer was, therefore, properly overruled. The charge to the jury seems to be unobjectionable. It stated the principles of law correctly, which should govern the jury, and the legal result, if they should find that the mortgage was not fraudulent in fact.
The two requests to charge were properly refused upon the authority heretofore commented upon. The verdict of the jury disposing of the question of fraud in fact adversely to the defendants, the judgment was correct, and should be affirmed.
Dissenting Opinion
The plaintiff claimed title to the goods in question, by virtue of a chattel mortgage given by *302 one Henry Ramsdell. The defendant was the sheriff of Erie county, and claims the title to the same property, by virtue of five several judgments in the Supreme Court against the said Ramsdell, and executions issued thereon to him as sheriff; and by virtue of which he levied on the same goods, being at the time in the possession of said Ramsdell. The goods in question were merchandise, consisting of boots, shoes, trunks, carpet bags and the like. Ramsdell was, and for years had been, a dealer in those articles, and carried on the business of selling at wholesale and retail for cash and for credit, and had applied the proceeds of such sales to his own use, with plaintiff's knowledge and consent. Plaintiff had for several years held mortgages on Ramsdell's stock of merchandise, changing them from time to time. The property was levied upon the 16th October, 1857, and on the trial was proved to be worth, with interest, $9,005.42. The plaintiff's last mortgage, and under which he now claims, was dated 29th September, 1857, seventeen days prior to the levy. The consideration was stated to be $25,000. It described the property in no other wise than as all the stock of boots, shoes, rubbers, trunks, carpet bags, goods, chattels, fixtures and personal property of every nature and description, now being and contained in store No. 166 Main street, Buffalo, as now occupied by the party of the first part. The mortgage stated that "this grant was intended as a security for the payment of any debt, demand or liability now incurred or held, or which may hereafter be incurred or held by the said Miller on account of, or against the said Ramsdell," and also a security against any liability of said Miller by reason of, or on account of any indorsement or undertaking which has been or may hereafter be made or incurred by said Miller for said Ramsdell, and is to be a continuing security for the above, and any and all expenses, costs, c., to the amount of $25,000."
And it further provided, that upon default being made by said Ramsdell to pay any debt or obligation held by said Miller, or on which he might be liable when presented for payment or at maturity, said Miller might take possession *303 of the said property and sell the same at public auction after giving five days' notice thereof in any daily paper in the city of Buffalo, or might sell the same at private sale, at such time and on such terms and in such manner as said Miller might deem most advantageous to the parties. There was no time fixed by the terms of the mortgage for the payment of the sum named in it, other than is expressed above, nor was the character of the indebtedness otherwise given than naming the consideration to be $25,000. When the mortgage was given, the amount due to the plaintiff by Ramsdell, as proved by plaintiff on the trial, was between $5,000 and $6,000. The plaintiff was liable beyond this as indorser for him to the amount of $8,000 or $9,000; the aggregate of debt and contingent liability was $13,700.
This chattel mortgage under which the plaintiff claims title to the property in question had no schedule attached, nor was there any other enumeration of the items of property claimed to be covered by it. There was only in the body of the mortgage a general description of the character or nature of the property in which the mortgagor was dealing. This character of property was the necessary consequence of his business as a wholesale or retail dealer, and would necessarily be constantly changing. The items of goods on hand on any given day, to wit, on a day on which a mortgage was given, would not, of course, if business of buying and selling continued, be the same on any other or subsequent day. Though the quantity of goods in store might be increased by purchases, the articles mortgaged must of course be constantly diminishing by sales, so that, at the end of two or three weeks, there would be no absolute certainty that any one single item of the mortgaged property remained; and yet it will be seen that such an indefinite and general description as this mortgage contains, would cover just as well an entirely different and even a larger stock of goods of the same character, as it did the goods on hand at its date. If such a mortgage is not void for uncertainty of description of the property, it at least throws the burden of proof upon the party claiming under it, to show that the articles of property taken by a *304 judgment creditor are the same property that is covered by his mortgage. This was not done by the plaintiff; he produced no proof that the property levied upon was the property mortgaged. Besides, interpreting this mortgage by its own terms, which stated "that it was to be a continuing security" for $25,000, when there was only a contingent liability of the plaintiff for $13,700, no day of payment of the sum mentioned being named, being given to secure the plaintiff, not only for existing demands and liabilities, but such as might thereafter be incurred, and being given also as security for indorsements for Ramsdell which plaintiff might thereafter make, it must be held to have been intended by the parties to it that Ramsdell should continue to purchase and sell goods as a merchant, as he had done for years previous, under other and prior mortgages held by the plaintiff, either for cash or on credit; and that the mortgage should "be a continuing security" and lien, all the time on all goods of such description as was mentioned in the mortgage, as at any time might be and remain in the possession of the mortgagor. If this is to be held to be the legal intent of this written agreement, it was void as to creditors, and the judge erred in not nonsuiting the plaintiff on the trial.
The terms of the mortgage necessarily implies an intent, and the circumstantial proof confirms it, that the mortgagor was to continue to buy and sell goods according to the ordinary custom of wholesale and retail merchants; and to receive the proceeds to his own use, as he had done for years, with plaintiffs' knowledge and assent. And in this respect I cannot distinguish this case, in principle, from the case of Edgell v. Hart (
And it is only such written agreements that have been filed
that are good against creditors. (Sess. Laws, 1833, p. 402; Bankof Rochester v. Jones, 4 Comst., 498; Thompson v.Blanchard, 4 id., 308.) No one will question the position, that with full knowledge of all the terms of the mortgage, any party purchasing goods of the mortgagor, by items or in gross, for cash or on credit, would obtain good title to the article purchased of the mortgagor. The statute puts creditors upon an equality of rights with purchasers. The case of McKinstee v. Babcock
(
I think the judge on the trial erred in the admission of the evidence offered by the plaintiff, of conversations between himself and the mortgagor, at various times, before the execution of the mortgage, and on the same day, and on days subsequent. These conversations related to matters of business of the mortgagor, of advice to him by the plaintiff about his manner of conducting his business in future. These *308 conversations were objected to as evidence by the defendant, the objections overruled by the judge, and the defendant duly excepted. We are furnished with no authority to sustain these rulings. Acts, and even sometimes declarations of the parties to a transaction, may be proved as forming part of the "resgestae," showing the character of the principal fact. This evidence does not come within that rule, it is put upon no such ground, nor could it be. It seems to me to be clearly error. If, against a case of presumptive fraud, a party can prove his own avowal of integrity to establish his bona fides, he would never be defeated, he would be sure to make them strong. The evidence of presumptions could never avail against him. The error, it seems to me, to be too palpable to admit of discussion. I think the judgment should be reversed, a new trial ordered, costs to abide the event.
BROWN, J., concurred with POTTER.
Judgment affirmed. *309