214 A.D. 296 | N.Y. App. Div. | 1925
The action was brought to obtain adjudication that two certain instruments in writing constituted a chattel mortgage, and for the foreclosure thereof for non-payment of certain annual payments of $125 each. The answer consisted of denials without pleading payment or any other affirmative defense. The trial court held that the plaintiffs failed to prove the allegations of their complaint or to establish a cause of action; that the instruments sued on did not constitute a chattel mortgage; that the action being an equitable one to enforce a lien and not an instrument for the payment of money only, plaintiffs were bound to prove nonpayment to establish their cause of action, which they had failed to do.
On the trial plaintiffs put in evidence the instruments in question and showed without dispute that they had demanded payment of the two installments falling due after Hodges’ decease and that defendant had refused to pay the same. Plaintiffs also put in evidence a check from Hodges for $1,500 to the order of the defendant bearing the same date as the instruments in question and containing the defendant’s indorsement. The defendant testified to certain matters in explanation of this check. After the submission of the case for decision, the trial court refused admission of the check, although the defendant had not objected or excepted to its reception in evidence and sought only to explain it. This was error. The evidence as to this check is material and is properly in the case. There is also evidence in the record that the defendant gave to Hodges a check for $82.93 marked “ payment in full to date ” and used by Hodges, which check was likewise dated January 5, 1921, the same date as the instruments of sale and lease which respectively recited a consideration of $2,000 and a right to repurchase at $2,000. The court found that the said parties had previous business transactions together unrelated to the instruments in question. It was shown on the trial that in 1919 defendant went into bankruptcy. Whether he received a discharge did not appear but it was shown that about a year thereafter Hodges had an auto truck from defendant and sold him a team. The team was included in the bill of sale in question, under which the defendant purported to sell in his own name horses, cows, harness, wagons, sleighs, milking machine and all farming tools and implements of every kind then on his farm.
The bill of sale and lease physically annexed thereto, duly signed, sealed and acknowledged, reciting the payment of $2,000 to defendant by Hodges, and containing the agreement of defendant to pay annual rental in installments of $125, and providing for a resale of all the property to defendant at any time within five years thereafter for $2,000, the property to remain in the possession of the defendant, are presumed to have been made for some valid purpose. The presumption also arises therefrom that the $2,000 consideration had been received by the defendant from Hodges. The instruments having been executed at one time as parts of one transaction, must be read together. The instruments as well as other proof show that the property remained in the possession of the defendant after the purported sale and the intent of the parties that the instruments should operate as security for a loan is shown from the defeasance clause appearing therein. (Sheldon v. McFee, 216 N. Y. 618, 621, 622; Dickinson v. Oliver, 195 id. 238, 246; Mooney v. Byrne, 163 id. 86, 92; Brown v. Bement, 8 Johns. 96; Clark v. Henry, 2 Cow. 324.) In Sheldon v. McFee (supra, 621) the court said: “ The right to redeem is the essential characteristic of a mortgage, and a bill of sale of chattels with a separate defeasance is as clearly a mortgage as if the defeasance formed a part of the bill of sale. (Mooney v. Byrne, 163 N. Y. 86, 92; Brown v. Bement, 8 Johns. 96; Jones on Chattel Mortgages, § 19.) An agreement to sell the same property, for the same price, made at the same time, and between the same parties, is a defeasance. (Dickinson v. Oliver, 195 N. Y. 238, 246.) A bill of sale absolute on its face transferring property to be held as security for the payment of a debt due the vendee is in character and effect a mortgage and is to be treated as such. * * * The intention may be manifested by the instrument itself, or by a written instrument of defeasance executed simultaneously with the conveyance or by the parol declaration or even the acts of the
The prima facie case proved by the plaintiffs was not overcome and the court was in error in holding that “ plaintiffs were bound to prove non-payment to establish their cause of action.” The instruments sued upon created an obligation for the payment of money. (Civ. Prac. Act, § 242; Camp v. Horn, 208 App. Div. 122, 126; Conkling v. Weatherwax, 181 N. Y. 258; Dowling v. Hastings, 211 id. 199, 200; Redmond v. Hughes, 151 App. Div. 99; Gamble v. Lewis, 88 Misc. 139, 142; Sea Gate Hotel Co. v. Nahmmacher, 112 id. 100.) “ Nor is the rule different in an action in equity.” (Conkling v. Weatherwax, supra, 274.) The burden of alleging and proving payment rested with the defendant. This defense was neither pleaded nor proved. Certainly there was no presumption under all the facts in this case that the chattel mortgage had been paid when the instruments were still in the possession of the plaintiffs uncanceled and unaccompanied by a release under seal, both instruments having been under seal; nor that any installments had been paid before they became due. (Fitzmahony v. Caulfield, supra.) The plaintiffs showed that two of the installments which became due after Hodges’ death had not been paid and that is not disputed. The plaintiffs have shown themselves entitled to the relief demanded in their complaint.
The judgment should be reversed upon the law and the facts and judgment directed for the plaintiffs, with costs, the court finding as facts and conclusions of law in accordance with plaintiffs’
All concur.
Judgment reversed on the law and facts, and judgment directed for the plaintiffs in accordance with their requested conclusions of law, with costs, the court finding in accordance with plaintiffs’ proposed findings of fact 6, 7 and 10, in addition to the facts already found.