Crutts v. Daly

Pound, J. This is an action of replevin, brought by plaintiff as holder of a chattel mortgage, covering chattels taken by the defendant as sheriff of Niagara county, by virtue of a warrant of attachment issued in an action brought in the Supreme Court by William E. Shaeffer against the owner and mortgagor of such chattels. Prior to the time of the levy, the plaintiff had actually taken possession of a team of horses covered by the mortgage and after the levy he demanded possession of all chattels covered by the mortgage and seized by the sheriff. ■ The mortgage was given in January, 1913, and duly filed, but in October following, on payment of $400, a team had been released from the lien thereof and mortgagor had given plaintiff another chattel mortgage covering chattels not affected by this suit. Shortly before the levy of the attachment was made, mortgagor had absconded, leaving the chattels on the farm of which he was a tenant. ■ Where chattels covered by a chattel mortgage are seized by virtue of an attachment against the mortgagor, who has absconded, the mortgagee is justified in taking possession of the property under an insecurity clause in the mortgage, although the mortgage be not due, provided he acts in good faith, and he may maintain an action of replevin against the sheriff to recover possession of the chattels, notwithstanding the seizure under the warrant of attachment, if at the time of the commencement of the action he has the right to reduce the chattels to his possession. 7 Cyc. 12, 13, 20 and cases cited; Code Civ. Pro., § 1690, subd. 3; Depew v. Beakes, 16 App. Div. 631; Hall v. [194] Sampson, 35 N. Y. 274; Allen v. Vose, 34 Hun, 57; Smith v. Smalley, 19 App. Div. 519; Oppenheimer v. Moore, 107 id. 301. Can it be urged that plaintiff was not justified in feeling- himself insecure when the mortgagor had absconded and creditors were attaching the property? It cannot be said that taking possession of the property under such circumstances was 11 a mere pretence for the purpose of enforcing payment of the security before maturity.” It was rather a reasonable precaution to protect his rights. Where the mortgagee has actually taken possession of chattels under the insecurity, clause, they are no longer the subject of levy upon execution against the mortgagor, although the mortgage debt is not yet due. Prior to default or taking' possession, the mortgagor has an interest in the mortgaged property which may be levied upon. The mortgagee is not, by such levy, deprived of his right to treat the conditions of the mortg-age as broken and to demand possession of the chattels. The authority of the sheriff ends when the right of the mortgagor to possession ends and proper demand is made. Hall v. Sampson, 35 N. Y. 274; Hathaway v. Brayman, 42 id. 322; Keller v. Robinson & Co., 153 Ill. 458. Since the amendment of 1894 to section 1690, Code of Civil Procedure, subdivision 3, it is no longer necessary for the mortgagee, when the sheriff has seized the property under attachment while it is still in the possession of the mortgagor, “ to follow the property into .the hands of the purchaser ” as suggested in Hathaway v. Brayman, supra. That was the rule when replevin could -not be maintained against the sheriff when ‘ ‘ at the time of the seizure ’ ’ plaintiff had not the right to reduce the chattels into his pos [195] session. As clearly indicated in Depew v. Beakes, supra, by the amendment of 1894 (Laws of 1894, chap. 305), cases cited by defendant as controlling are inapplicable to the facts in this case, for “ at the time of the commencement of the action ’ ’ plaintiff had the right to reduce the chattels to his possession. It follows that the horses were not subject to attachment and that the other chattels should have been delivered to plaintiff when he demanded possession thereof under his chattel mortgage, provided always that the mortgage was valid as against the attaching creditor. Defendant relies on the words of the October mortgage “ take up outstanding mortgages covering part of the property hereinafter described ” as evidence that the January mortgage under which plaintiff now claims had been “ taken up ” by the October mortgage. If part of the property described in the two mortgages was the same, some force might be found in this contention, but the property described in the two mortgages is not the same, except possibly as to two or three small items. On the contrary, it appears that the two horses covered by the January mortgage were, on payment of $400, released from the January mortgage and new security taken on other chattels to cover that amount, and that the release was duly filed. To that extent only, the January mortgage was “ taken up.” It is not claimed that the mortgage debt was paid. The files of the town clerk contain nothing to mislead one into the conclusion that the January mortgage had been wholly “ taken up.” There, were no ‘ ‘ mortgages ’ ’ on any substantial part of the property described in the October mortgage and plaintiff held no mortgage on any substantial part of the property therein described. An ambiguity exists, but read as a whole the clause does not under the circumstances [196] imply the discharge of the January mortgage. The property described in the October mortgage is in the main not affected by the January, mortgage nor by this suit. The January mortgage seems to have been valid and existing when this action was brought, as against the defendant in this suit. Questions of pleading have arisen. The complaint must contain: “A plain and concise statement of the facts constituting each cause of action.” Code Civ. Pro., § 481. It shows facts upon which plaintiff was entitled to the possession of the chattels at the time of the commencement of the action. It was unnecessary for him to say that he ‘ ‘ deemed himself unsafe. ’ ’ The proofs follow the allegations of the complaint. This is a possessory action. Possession is claimed under the chattel mortgage. Unlawful detention is alleged. Plaintiff’s complaint is clear on this point. Code Civ. Pro., §§ 1720, 1721. It is also urged that the failure of plaintiff to refile his mortgage at the end of the year and after the commencement of this action invalidates the same and deprives him of his remedy. Lien Law, § 235. If he had taken possession of the chattels, a subsequent refiling would have been unnecessary. Breeze v. Bayne, 202 N. Y. 206. The Code of Civil Procedure (§ 1718) provides that “ The plaintiff may proceed in the action, and recover therein the chattel, or its value, although he has not required the sheriff to replevy it.” The commencement of the action was the equivalent of taking possession as against the sheriff and the rights of the parties were fixed thereby. “ The policy and intent of the enactment were, to protect creditors and honest dealers with the property, against hidden or unknown liens; they had no [197] thought of guarding wrong-doers.” Marsden v. Cornell, 62 N. Y. 215, 221. Defendant, wrongfully withholding possession, could not claim the protection of the statute. Taking the mortgage to he valid, as on the evidence we must, it is a prior lien to the attachment and the mortgagee is entitled to the property or to the amount of his claim. Plaintiff is, therefore, entitled to the possession of the chattels or the amount of his mortgage indebtedness. Judgment for plaintiff.