Bascom v. . Smith

Joseph Collins and Orange Collins, of the town of Whitehall, in this State, being indebted to the plaintiffs, Oliver Bascom, Thomas T. Vaughn and Henry T. Gaylord, in the sum of $4,500 for their indorsements upon certain notes of said Collins for that amount, on the first day of September, 1857, for the purpose of securing the payment of said debt and saving harmless the plaintiffs on account thereof, made, executed and delivered to them a chattel mortgage upon certain property therein specified. In case of non-payment of said notes by the makers, the plaintiffs were authorized to take possession of the property mortgaged and to sell the same, and out of the avails thereof to pay the said debt, and in case the plaintiffs at any time should deem themselves unsafe, they were authorized to take possession of the mortgaged property and to sell the same at public or private sale. The mortgage was duly filed, and this action was brought to recover the value of two horses covered by the mortgage, and which were owned by the mortgagors, and subsequently taken and converted by the defendant. The horses were taken on an attachment issued by a justice of the peace against the mortgagors, on the application of one Nelson Shurtz, a creditor of said mortgagors. Judgment was perfected *Page 321 on said attachment, and an execution having been issued thereon, the constable who attached the same sold the horses by virtue of said execution, and they were purchased by the defendant in this action, he being the highest bidder therefor at such sale. It appeared on the trial that the plaintiffs had paid the amount of the notes mentioned in the mortgage, and on the 23d of November, 1857, they had demanded of the defendant the possession of said two horses, which he refused. It further appeared on the trial that on the 19th day of October, 1857, the said Joseph and Orange Collins, in consideration of $10,000, executed a bill of sale of all the property used by them in their business to the said plaintiffs and one Alwyn Martin. And the grantors covenanted to warrant and defend the title to the property so sold, except as against a chattel mortgage held upon said property or a portion thereof, by these plaintiffs, and it was declared that said mortgage was thereby confirmed, and that sale was made in subjection thereto. It also appeared that the personal property included in the bill of sale, and not covered by the mortgage, amounted to from $1,500 to $2,000. Joseph Collins testified that the purchasers agreed to pay the three notes mentioned in the chattel mortgage, and to discharge the mortgagors from liability on said notes. That they were to pay about $11,000 for the whole property sold. The witness further testified that he did not think the whole property covered by the bill of sale, if sold in October, 1857, could have brought over $4,000. The defendant moved for a nonsuit on the following grounds: 1. That by the sale of October 19, 1857, and the agreement to pay the mortgage debt, said debt is to be deemed paid, and the plaintiffs' mortgage extinguished. 2. That by the receipt of the $9,000 worth of property under said agreement, the plaintiffs were bound to pay the notes mentioned in the mortgage, and for the purposes of this action said debt is to be deemed paid and the said mortgage extinguished without reaching the two horses in question. *Page 322 3. That the plaintiffs having agreed to pay the said debt, and having sufficient for that purpose, are deemed to have paid the debt and are estopped from denying it. 4. That the possession by the plaintiffs under said mortgage and bill of sale of sufficient property to satisfy their mortgage debt, is to be deemed a satisfaction so far as to relieve the two horses in question from said mortgage; which motion was denied, and the defendant's counsel excepted, and the defendant's counsel then requested the court to rule each of said propositions as matter of law, which the court refused, and the defendant's counsel also excepted. The counsel for the defendant then requested the court to charge the jury: 1. That if they find that before this action was commenced, the plaintiffs had received sufficient property under the purchase of October, 1857, to pay all mortgages and liens thereon, then that said mortgage was satisfied, so far as the two horses in question were concerned, as to the defendant. The court declined so to charge, and the defendant excepted. Also, that if the jury find that the plaintiffs, at the time of said bill of sale, agreed out of the consideration money, first to pay the debts secured by mortgages, and that they received sufficient property under said purchase for that purpose before the demand of the horses in question, then that the plaintiffs have no right to recover in this action for the two horses in question, which the court also refused, and the defendant excepted. Also, that the said bill of sale of October 19 was in effect a foreclosure of the plaintiffs' chattel mortgage, and if the jury find that the property received under said bill of sale was sufficient to satisfy the mortgage in question and all expenses, then the said mortgage is to be deemed satisfied or foreclosed or merged, and equity will not revive it for the purpose of collecting the value of these two horses to pay their value over to the creditor who had no lien thereon. The court also refused so to charge, and the defendant excepted. *Page 323 The plaintiff objected to the introduction of the proof of the proceedings in the justice's court, the judgment and execution and sale of the property in question on various grounds, and the court overruled the objections, and admitted the same, to which the plaintiffs' counsel excepted. The jury rendered a verdict for the plaintiffs, upon which judgment was entered, and the same was affirmed at the General Term. The defendant now appeals to this court. The preceding exceptions present all the questions which arise for the consideration of this court: First. As to the motion for nonsuit: the first ground for this motion was, that by the sale of October 19, 1857, and the agreement made by the purchaser at that sale to pay the mortgage debt, said debt is to be deemed paid, and the plaintiffs' mortgage extinguished. There is no sound foundation for these propositions. If the sale had been made to the plaintiffs solely, and they had been the sole purchasers, then there would have been some plausibility for the argument. But such we have seen was not the fact. The purchase was made by the plaintiffs and another person, and the agreement was made by them in conjunction with that other person, and not by themselves solely. But it is apparent, from the terms of the bill of sale, that it was made subject to the plaintiffs' mortgage, and with the declared intent to confirm the same. The mortgage cannot be regarded as extinguished, or as merged. (Champney v. Coope,32 N.Y., 543.) The second request to charge contained an assumption not warranted by the proof, viz., that the property assigned was worth over $9,000. The proof is, from the only witness who speaks of its value, that it could not have been sold for over $4,000 in October, 1857. The judge at the circuit would greatly have erred if he had either decided this as matter of law, or had so charged the jury. The third proposition contains, also, an erroneous assumption in this, that the plaintiffs had agreed to pay the debt secured by the chattel mortgage, and that they had received sufficient for that purpose. The proof was, that the agreement to pay was made by the purchasers named in the bill of sale, and not by the plaintiffs exclusively, and *Page 324 there was no proof that the plaintiffs had in fact received anything. The fourth and last proposition was equally unsound, and for similar reasons. The plaintiffs had not the possession, under the bill of sale, of sufficient property to satisfy the debt secured by the mortgage. Their possession was jointly with the other purchaser; and no merger of the mortgage could take place by a sale and transfer of the mortgaged property to the mortgagees in conjunction with another. Merger never takes place except where the legal and equitable estate are united in the same person, which was clearly not the case in the present instance. But merger in such a contingency may always be prevented when the intent of the parties to the transaction is clearly shown to have been that it should not take place. (Champney v. Coope, supra.) Here it was distinctly stated in the bill of sale that it was not only made in subjection to the mortgage, but the mortgage to the plaintiffs was expressly ratified and confirmed. The requests to charge contain the same vice as is found in the grounds for the motion to nonsuit the plaintiffs. As they have been already sufficiently commented upon in the consideration of that motion, it cannot be necessary to recapitulate them. It is unnecessary to consider the exception of the plaintiffs to the admission of the evidence of the attachment and proceedings thereon, by virtue of which the defendant claimed title to the two horses. If we had arrived at a different conclusion upon the defendant's motion and exceptions than that already stated, then such examination would have been essential, and we should have had to dispose of that question. But as we think that the defendant's exceptions are untenable, it is unimportant to pass upon the plaintiffs' exceptions to the admission of proof of the defendant's title, as clearly he had not any title to the horses at the time the attachment was issued and served, and at the time of the sale; provided, the mortgage to the plaintiffs was valid and a subsisting security. Being clearly of opinion that it was, and that nothing had been shown to impair its validity, the judgment appealed from should be affirmed, with costs. *Page 325