Summary
In Parshall v. Eggert (54 N.Y. 18, 23) it is defined to be a present transfer of the title of the property mortgaged, subject to be defeated on payment of the sum or instrument it is given to secure.
Summary of this case from Susman v. WhyardOpinion
Submitted January 18, 1873
Decided March term, 1873
William H. Gurney for the appellants. James C. Brown for the respondent.
If the instrument under which the plaintiffs claimed were a chattel mortgage, it would be void as against the right of Hunter, the creditor, whom the defendant, the sheriff, represents, inasmuch as the instrument had not been filed when the debt of Hunter was created. For this position the case of Thompson v. Van Vechten ( 27 N.Y., 581), is a direct authority. It was there held that the time when the creditor became such, fixed the rights of the parties. That a mortgage not then filed was void as to him, although he should not then be in a position at once to attack its validity. That an attachment against the property of a debtor places the attaching creditor and the officer executing the attachment, as representing the creditor's right in a position to impeach a mortgage as fraudulent, was adjudged in Rinchey v. Stryker (28 N.Y.R., 45), and in Frost v. Mott (34 N.Y.R., 253). At the trial the cause was disposed of upon this view of the law, the judge holding the instrument to be a security in the nature of a chattel mortgage, if it had any legal operation. In this view of the character of the instrument, I think the learned judge was in error. A chattel mortgage is a present transfer of the title to the property mortgaged, subject to be defeated on payment of the sum or instrument it is given to secure. In default of performance by the mortgagor of the condition, the title of the mortgagee becomes absolute. ( Brownell v. Hawkins, 4 Barb., 491; Langdon v. Buel, 9 Wend., 80; Wilson v. Little, 2 Coms., 443.) The instrument now in controversy, executed by Roche, declares the property mentioned in it to be held by him in his store for account of the plaintiffs, subject to their order, as security for his note given that day for $1,450. In the absence of fraud, every instrument is to be construed so that it may have effect according to the intention of the parties, if that can be consistently with the rules of law. Had the property in question been delivered by Roche to the plaintiffs on the terms expressed in this paper, it would have created a valid pledge and not a mortgage. (Story on Bailments, § 286; 4 Kent Com., 138; 2 Kent Com., 581, 582.) It may be considered as showing conclusively against Roche that the property was delivered by him to the plaintiffs, and redelivered by them to him to be held for them, according to the terms of the receipt. If there be any difficulty in maintaining this view, it may be supported on another ground.
I know of no authority denying the right of a party who has a contract for a pledge, ineffectual for want of delivery, to obtain a delivery at a subsequent time, and thus to validate the pledge. Upon general principles, the only obstacle which can prevent such a transaction from being effectual, must be the intervention of fraud. Certainly there is no rule of law which requires a pledge in writing to be filed as a chattel mortgage; nor is it consonant with any rules for the construction of statutes to borrow such a requirement as to pledges from the positive provisions which, when enacted, were introductive of a new rule, and which declared unfiled chattel mortgages absolutely void as against creditors; nor is there any warrant for saying that because a chattel mortgage unfiled could not be afterward filed with the effect to cut off the right of an intermediate creditor to avoid it as under the statute conclusively fraudulent, therefore, a pledge of undelivered goods cannot be made effectual against an intermediate creditor by delivery, in the absence of fraud. Though a contract of pledge should be regarded, when unaccompanied by delivery, as within the other provisions of the statutes in regard to fraudulent conveyances and contracts as to personal property, the question of fraud then arising would be a question of fact upon which the party would have a right to go to the jury. In the absence of any intermediate right, the parties could perfect a written contract of pledge by subsequent delivery. Even between successive pledgees, without any communication with each other, that one who lawfully obtains possession, at the time of the pledge or subsequently, is entitled to be preferred according to the maxims " in pari causa possessor potior haberi debet," and " in æquali jure melior est conditio possidentis." (Story on Bailments, §§ 312, 313.)
A creditor who acquires a specific right to or lien on the thing pledged, may prevent the pledgee's interest in an undelivered chattel from attaching. But such is not the condition of the creditor at large.
The only ground on which he can claim to prevent the perfecting of such a right in the pledgee is that it works a fraud upon him. The transaction is not one which any statute calls fraudulent in itself, and its validity ought therefore to go to a jury. Of that right at least the plaintiffs were deprived by the ruling of the judge that this instrument was to be treated as a chattel mortgage, and absolutely void under the statute. On this ground the plaintiffs are entitled to a new trial, unless we are prepared to hold that the plaintiffs, as between themselves and Roche, were not entitled on either of the grounds above discussed to take possession of the property mentioned in the receipt remaining in his store on the fifth of January; and also that Hause, the salesman and clerk of Roche, left in charge of his store, had no right to give possession of the property in question to the plaintiffs. As the case stands we are bound to assume the identify of the property then in the store with that mentioned in the receipt. ( Kimberly v. Patchin, 19 N Y, 330.) And if any further assent of Roche was necessary to authorize the plaintiffs to take possession, it was a question of fact whether Hause could not give it.
The judgment should be reversed and a new trial ordered.
All concur.
Judgment reversed.