Cohen v. 1165 Fulton Avenue Corp.

Kellogg, J. The defendant 1165 Fulton Avenue Corporation was the owner of an apartment house. It purchased a quantity of gas ranges from the defendant Charles Tisch, Inc., under a conditional sale contract which reserved title therein to the seller, placed them in the several apartments of the building and attached the same by couplings to the gas service pipe which distributed gas to the various apartments. Thereafter the defendant owner executed and delivered to the plaintiff a mortgage upon the apartment house premises, in order to secure the repayment of a sum of money borrowed from her. The mortgage, after describing in detail the real estate mortgaged, continued with words descriptive of the subject of the mortgage as follows: “ Together with all fixtures and articles of personalty now or hereafter attached to or used in connection with the premises, all of which are covered by this mortgage.” Within these descriptive words gas ranges belonging to the mortgagor would necessarily be included. In this respect the issues here are widely different from those presented in Madfes v. Beverly Development Corp. (251 N. Y. 12). There the question to be determined was whether or not gas ranges after attachment to a building became real property and, as such, were subjected to the lien of a real estate mortgage. Here the question is: Did the mortgagor have title to the gas ranges, so that they became in part the subject- *27 matter of a mortgage executed by it, which covered not only a building owned by the mortgagor but all articles of personalty attached thereto? The answer is found in the provisions of section 65 of the Personal Property Law (Cons. Laws, ch. 41), added by the Laws of' 1922, chapter 642, section 2. The section provides as follows: “ Every provision in a conditional sale reserving property in the seller shall be void as to any purchaser from or creditor of the buyer, who, without notice of such provision, purchases the goods or acquires by attachment or levy a lien upon them, before the contract or a copy thereof shall be filed as hereinafter provided.” Under section 61 of the same act these definitions are given: “ ‘ Purchase ’ includes mortgage and pledge; ” “ ‘ Purchaser ’ includes mortgagee and pledgee.” The mortgage was taken by the plaintiff without knowledge of the provision of the conditional sale reserving title, prior to the time when the contract had been filed in the appropriate public office. The plaintiff was, therefore, within the meaning of section 65, a “ purchaser ” who “ without notice of such provision ” purchased the gas ranges before the contract for their sale had been filed. Consequently, as to the plaintiff, the condition reserving title was void and the mortgage upon chattels given to her created a hen upon the ranges in the possession of the mortgagor, as fully as would have been the case had an absolute title thereto been acquired by it. For these reasons, and these reasons only, the order appealed from was properly granted. The order should be affirmed, with costs, and the questions certified answered in the negative. Cardozo, Ch. J., Pound, Lehman, O’Brien and Hubbs, JJ., concur with Kellogg, J.; Crane, J., concurs in result for reasons stated in his dissenting opinion in Madfes v. Beverly Development Corp. (251 N. Y. 12). Order affirmed, etc.