Bloomingdale v. Gaudio

Guy, J. This action was brought to recover $437 unpaid instalments upon the purchase price, $475, of a piano, to secure the payment of which defendant executed a purchase money chattel mortgage. The purchase money was payable in instalments at the rate of $8 per month. The sale took place in December, 1912. In May, 1913, defendant moved to Philadelphia, and plaintiffs, finding the piano in the possession of a stranger, with only $38 of the purchase price paid, took it into their custody. Plaintiffs claim to hold the piano as trustee for the defendant. The security clause in the mortgage authorized the mortgagees, in the' event of any default or of the property coming into the possession of any third person, to take and carry away the chattel, sell and dispose of it at public or private sale, with or without notice, and render any overplus to the mortgagor, who covenanted to pay any deficiency. On July 17, 1913, [391] plaintiffs notified defendant that the piano which he deserted had been placed in storage for his account under the security clause of the contract. v The trial justice dismissed the complaint, holding that the chattel mortgage did not authorize plaintiffs to take the piano, store it for defendant’s account and then sue him for the entire unpaid balance .of the purchase price; that defendant’s failure to answer plaintiffs’ letter notifying him what they were going to do was not an assent to a modification of the chattel mortgage, and that defendant’s only liability was for the deficiency, if any, on a sale. The action, not being upon a contract of- conditional sale where title is only to vest upon full payment, but being one to recover instalments due, is maintainable. Mun. Ct. Act, § 139 ; Toledo Computing Scale Co. v. Borick, 64 Misc. Rep. 63, 65. Where goods sold subject to a chattel mortgage are abandoned by the mortgagor, the mortgagee may retake possession, sue for the amount unpaid, hold the goods as security for his claim, and sell them under his execution, if the latter is not otherwise satisfied. Lathers v. Hunt, 16 Daly, 135, 136 ; Beadleston & Woerz v. Morton, 16 Misc. Rep. 72, 73, 74 ; Gourd v. Healy, 206 N. Y. 423, 433. It is only where the mortgagee appropriates a retaken chattel to his own use, that the mortgage debt is satisfied by his possession of it. Levy v. Reich, 78 Misc. Rep. 413, 414. Judgment reversed, with costs, and judgment awarded to plaintiffs for $437, besides costs. Page and Whitaker, JJ., concur. Judgment reversed, with costs.