Zeiter v. Bowman & Linscott

| N.Y. Sup. Ct. | Mar 6, 1849

By the Court, Allen, J.

Although the chattel mortgage under which the defendants seek to justify was not assignable or negotiable at law, still by the assignment Bowman had acquired rights and an interest in the debt secured and the property pledged, which courts of law as well as of equity will recognize and protect. (Jackson v. Blodget, 5 Cowen, 202. Anderson v. Van Allen, 12 John. 343. 9 Id. 64.) The replication does not aver that Bowman was a party to the suit for the foreclosure of the mortgage, or had notice of, and an opportunity to be heard on, the application for the order under which'the plaintiff claims to have paid rent to the receiver in that suit, and by such payment to have discharged the chattel mortgage under which the defendants claim the property in question.

But it is claimed on the part of the plaintiff that he, having rented the mortgaged premises and given the chattel mortgage to secure the rent after the commencement of the suit to foreclose the mortgage, all parties are bound by the order of the court requiring him to attorn to the receiver in that cause. The maxim pendente lite nihil innovetur prevails to the extent that whoever purchases or acquires the title to property pendente lite takes it subject to any decree which may be made in respect to it in the pending suit. (Story’s Eq. Jar. §§ 405, 6, 908, and note (5) to last section.) But the order under which the plaintiff claims to have satisfied the mortgage of Bowman, by payment to a third person, was not a decree in that suit affecting the title to the property in litigation, but was an interlocutory order made in a proceeding collateral to the principal cause, and not necessarily incident to that suit. The defendant Bowman doubtless took the assignment of the chattel mortgage subject to all the equities and legal infirmities which could attach to it by reason of the final decree in the cause, although he was not a party to the suit, but he was not bound by any proceeding to compel the tenant to attorn and pay rent to the receiver, without notice of the application, and an opportunity to be heard. (Sea Ins. Co. v. Stebbins, 8 Paige, 567.) So far as his claim under the chat* tel mortgage was concerned he stood in the place of the landlord and lessor, and was entitled to be heard on the application.

A court of equity will examine the equities of the several claimants of the rents, issues and profits of mortgaged premises during the pendency of proceedings to foreclose the mortgage, without reference to the time of the accruing of the equities, and whether they accrued pendente lite or before the commencement of the proceedings. It is not a claim of right on the part of the complainant, founded upon his contract, but an equitable claim addressed to the sound discretion of the court; and in this respect it differs from his claim to a decree for foreclosure of the mortgage and sale of the mortgaged premises. The complainant in the foreclosure suit had neglected to take a specific pledge of the rents and profits of the mortgaged premises, for the security of his debt, and he therefore had no equitable right to them as against Bowman. (Bank of Ogdensburgh v. Arnold, 5 Paige, 38.) This was undoubtedly true as to the rent which had accrued up to the time of the application for the order upon the tenant to attorn ; and all that the complainant then had a right to was a right to the immediate possession of the premises as security for the payment of his debt; that is, he was only entitled to an order against the tenant, the plaintiff in this suit, that he, having gone into possession pendente lite, yield possession or pay rent from that time, to a receiver. But he was not entitled in any event to an order, especially as against the equitable rights of others, which should, in effect, vest him with the possession nunc pro tunc as of a time long anterior to the application.

In no event can the order be held to have authorized the payment to the receiver of rent as for the use and occupation for time past; and if the order was valid as against Bowman as to the residue of the time, the rent should have been apportioned and a pro rata share paid to Bowman as the assignee; and that not having been done the seizure of the goods by the defendants was justified; and the replication is bad.

But we think that the defendant Bowman was not bound by ■ the order, or the acts of the plaintiff in obedience to it. It was the duty of the plaintiff, having notice of Bowman’s rights, to give him notice of the proceeding ; and if such notice had been given and the application opposed, there is but little reason to suppose that it would have been successful. The whole amount of the mortgage money was not due, and as against third persons having equitable rights, it would have required a peculiar case to authorize the order. (Bank of Ogdensburgh v. Arnold, supra.) But we can not review that order. It is sufficient that Bowman was not a party to the suit, and had no notice of the application for an order which it is now claimed so seriously affected his right, not to the property in dispute but to an independent security.

Judgment must be given for the defendants on the demurrer, with leave to the plaintiff to amend on payment of costs.