Huggans v. Fryer

Present — Miller, Ingalls and Peckham, JJ. By the Court Miller, P. J. The chattel mortgage upon which the plaintiff claimed to recover in this action contained a condition that,, in case the plaintiff should at anytime deem himself unsafe, it should be lawful for him to take possession of the property mortgaged, and to sell the same at public or private sale, and apply the proceeds to the payment of the debt. The plaintiff, deeming himself unsafe, took possession of the property before the mortgage became due, and sold the same without giving personal notice to the defendant. It is contended by the counsel for the defendant, that the sale [279] was illegal and void for want of such notice, and for this reason the defendant is not liable for the deficiency upon the sale. This position appears to be based upon the ground that the clause in the mortgage referred to, which provides for a sale before the mortgage is due, partakes somewhat of the nature of a pledge and its construction should be governed by the same legal rule which is applicable to pledges of personal property. While it is conceded that the instrument is a mortgage, which conveys a legal title to the property, subject to be defeated by the full performance of the condition, and liable to become an absolute interest at law if not redeemed by a certain time (4 Kent, 3d ed., p. 138; Chamberlain v. Martin, 43 Barb., 607), and not a pledge where a demand of payment, or a notice of sale, or both- of them are necessary before a sale (4 Kent, 3d ed., 138, 139; Wilson v. Little, (2 Coms., 443; Wheeler v. Newbould, 16 N. Y., 392), it is insisted that the rights of the mortgagee after default, and when his title has thus become absolute, are entirely different from what they are befot'e default; and that, in the latter case, he is a mere trustee for the mortgagor. In case of non-payment, as required, the mortgagee is authorized “ to take possession of said property, to sell the same, and the avails,” &c., to apply in payment of the debt; and the condition of the mortgage, in case he deems himself unsafe, makes it lawful for the mortgagee to take possession of such property and to sell the same at public or private sale.” Assuming that in the latter case the mortgagee was bound to sell, I think it does not follow that he was required to sell in any other way or manner, than he had power and authority to sell in, in case of default, or that he was bound to give personal notice of the sale to the mortgagor. Although some of the authorities speak in general terms of a sale upon previous notice to the mortgagor, yet none of the cases cited hold that such notice must be given to the mortgagor personally. In Hart v. Ten Eyck (2 John. Ch. R., 100), the chancellor decides that the creditor who holds goods in pledge, may sell them without a bill of foreclosure, on giving reasonable notice to [280] the debtor to redeem. In Patchin v. Pierce (12 Wend., 63), it was held that the right to redeem may be foreclosed by the mortgagee, without judicial .proceedings; by a sale of the property, upon reasonable, notice ¡to the: mortgagor. (See, also, Charter v. Stevens, 3 Den., 33; Lansing v. Goelet, 9 Cow., 377; Rich v. Milk, 20 Barb., 616; Chamberlain v. Martin, 43 Barb., 610). These cases make no distinction, as to notice, whether the sale is made before or after default. In Chadwick v. Lamb (29 Barb., 518), it was held that where personal property is' mortgaged, and wrongfully converted,, an action to recover its value before the debt is due lies if there is a. clause in the mortgage which authorizes the mortgagee to take possession and. sell the property to satisfy the debt secured by the mortgage, at any time he may deem himself insecure. In such eases the mortgagee acquires not only the right to the possession, of the property, but any interest in it .which the mortgagor had, except the equity of redemption. (See, also, Mattison v. Baucus, 1 Coms., 295; Hill v. Beebe, 3 Kern., 565.) The property being .unsafe, the whole amount of. the mortgage became due, and. the mortgagee acquired - an absolute title to the property, subject to the right to redeem on payment of the amount secured. By the contract,- he was not bound to give the mortgagee personal notice of the sale, and was authorized to sell at private sale, which would be entirely inconsistent with direct notice to the mortgagor of such- a sale. At most, only the right of redemption remained in the mortgagor, by the payment of the sum secured by the mortgage; and, upon a sale being made, that right was gone. The taking possession of the property, and the advertisement of its- sale, was in strict conformity with the condition, that when the mortgagee deemed it unsafe, he. could sell and apply .the proceeds to'the payment of the debt. The whole amount secured having become due by the act of the defendant, .it-is difficult to see how the circumstances existing vary essentially, from a case where the time for the -payment of the debt has expired. For am I able to discover that any fiduciary relation [281] exists between the mortgagor and the mortgagee, except in case of a surplus arising upon a sale under the mortgage. After a careful examination, I am satisfied that the proceedings of the plaintiff, in selling the property, were authorized by the mortgage, and in accordance with the law applicable to such a case; and that no error was committed by the learned judge upon the trial, in admitting evidence .of the mortgage and notice of sale, and in denying the motion made for a nonsuit as to the mortgage. . - I think that the court properly excluded the question put to the plaintiff upon his examination, whether the purchaser had paid him any money upon the sale of the oxen. There was no testimony in the ease establishing fraud in the sale, and it was not asked, according to the case before us, for any such purpose. The evidence given, shows that the defendant applied to the plaintiff to take the oxen back, he having no hay; that the plaintiff said he had no use for them, and if he did, he would be obliged to advertise and sell them; and that about two weeks afterward, he found the cattle, out of the defendant’s possession,- on his father’s or- mother’s farm, run down and thin, and deeming himself unsafe, he took them away and advertised them for sale. The proof of the value of the oxen, for the same reason, was not material. For was there- any objection, in my opinion, to proving that the property was put up and fairly sold. It was also- competent to ask the plaintiff, whether he deemed himself unsafe to' allow the cattle to remain in the defendant’s possession. He was bound to show this to justify the sale, and he, above all others, was competent to speak upon the subject. No other question is made which-requires discussion. The judgment must be affirmed. Judgment affirmed.