Dolson v. Saxton

Bockes, J.: At tbe trial tbe court directed a verdict for tbe plaintiff; and tbe case comes before us for review on exceptions, ordered to be beard in tbe first instance at General Term. Tbe action is against tbe defendant as sheriff, for not returning two executions issued to bim upon judgments in favor of tbe plaintiff. One against Isaac L. Signor alone, for $321.20; tbe other against Signor and others for $151.19, exclusive -of interest. Tbe evidence introduced on tbe trial by tbe defendant, was submitted with a view to show that tbe defendants in tbe executions bad no property from which tbe money thereby directed to be collected, or any part of it, could have been made. But the court held it wholly insufficient to maintain tbe defense, declined to submit tbe case to tbe jury and directed a verdict for tbe plaintiff, for tbe full amount of tbe executions. [567] The proof showed that the defendants in the executions were, or that one of them was, in possession of leviable property in the defendant’s county when the executions came to his hands; but that all of it (save a very insignificant part, amounting in value to about eight or ten dollars), was under mortgage to third parties, by whom it was claimed; that the mortgagee’s title had become absolute, by the terms of the mortgage before the issuing of the executions; and, that the property was subsequently sold thereunder and was insufficient to satisfy them. There was also evidence showing, and tending to show, that the mortgagor retained the possession of the mortgaged property, with permission from the mortgagees to dispose of it; but it was insisted on the part of the defendant, that under the proof the mortgagor’s right to dispose of it was coupled with a duty to apply the avails, in case of sale, in satisfaction of the mortgage debts. It was shown that the plaintiff directed the defendant to proceed and sell the property under the executions and gave him indemnity. It is also proper here to remark that there was evidence other than that above alluded to bearing on the bona fides of the mortgage, but none of an entirely conclusive character in that regard. The defendant insisted that a case was made for the jury on the evidence, on the question of the bona fides of the mortgages. But the court held otherwise and directed a verdict for the plaintiff for the amount claimed. The learned judge ruled as follows : That when a judgment debtor is in possession of property which is apparently his, over which he is exercising dominion, and such property is claimed by a third person under a chattel mortgage, the law pronounces that fraudulent, and the sheriff with execution, is bound to proceed and sell the property upon sufficient indemnity being given him, and that if he fail so to do, he becomes liable to the plaintiff for the amount of the execution. He further ruled that the mortgage to Morey, one of the claimants of the property, was, under the evidence in the case, fraudulent as matter of law, hence the bona fides of that mortgage was not a subject of examination by the jury as a question of fact, and still further, that until the mortgagee had reduced the property to actual possession, there was a leviable interest in the mortgagor, Which the sheriff could seize under execution against him, and that he was bound to do so, and that if he omitted this he became liable. [568] 'He therefore declined to submit the case to the jury as to the bona fieles of either mortgage, and directed a verdict for the plaintiff for the entire amount claimed. It is not supposed necessary here to examine each of these propositions separately, for, as it seems, the leading and controlling question is, whether the learned judge was right in the general conclusion that the case presented no question of fact for the jury on the evidence. It was undoubtedly true that the plaintiff fully and clearly established his right of action for nominal damages, and perhaps for the value of the ice also, proved to have been worth some eight or ten dollars. The defendant had omitted to make return of the executions, as by law he was required to do, and he was liable prima facie in the full amount of the executions in his hands so unreturned. The amount of the executions vras prima facie the measure of damages. (Ledyard v. Jones, 7 N. Y., 550 ; Swezey v. Lott, 21 id., 481; Bowman v. Cornell, 39 Barb., 69.) But it lay with the defendant to mitigate by showing that the plaintiff had suffered no injury through his neglect. The action is given by the statute for damages sustained,” and while the sum directed to be collected on the executions was prima facie the true measure of damages, the defendant was at liberty to mitigate the amount by showing affirmatively that such full sum could not have been collected in the exercise of due diligence. (Bank of Rome v. Curtiss, 1 Hill, 275 Pandee v. Robertson, 6 id., 550 ; Humphrey v. Hathorn, 24 Barb., 278.) In the last case cited it was held that the sheriff might prove, for the purpose of reducing damages, that the defendant in the execution had no property, or not sufficientpropertp, out of which he could have satisfied the execution by using the diligence required of him. The action is given for “ the damages sustained,” whatever these damages may be. Therefore, in this case, the court was not authorized to direct a verdict for the full amount of the executions simply because there was indisputably a small sum which might have been made on them. The verdict could be directed only for such sum as by the evidence stood incontestably proved as the damages sustained. If there was a question on the proof as to the amount, the case was for the jury. [569] It is proper here to remark, inasmuch as the point is raised by counsel, that the damages were a legitimate subject of proof under the pleadings. Ve are, then, brought to the question, whether the learned judge was right in holding that the mortgages were fraudulent and void in law, as against the creditors of the mortgagor, and in refusing to submit their bonafides to the jury as a question of fact. In this ruling I am of the opinion he was in error. The mortgages were in due form, and had been duly filed and renewed. Their consideration, as sworn to by the witnesses, was not in any respect illegal. The circumstances under which the property was permitted to remain in the possession of the mortgagor were given to the jury, and such evidence was admissible, as it bore on the question of the bona fides of the mortgages. Now, let it he admitted that the mortgagor was allowed to retain the property and use it in his business, and even to sell it for the purpose of raising money to pay off the mortgage debts, and the bona fides of the transaction became a question of fact for the jury. It then became a question of intent whether the mortgages were made or were kept on foot to hinder, delay or defraud the creditors of the mortgagor. True, it stands decided that an agreement' between the mortgagor and mortgagee, to the effect that the former may sell and dispose of the mortgaged property as his own, and appropriate the proceeds to his own use and benefit, the debt remaining unpaid, renders the mortgage fraudulent and void as to his creditors. (Griswold v. Sheldon, 4 N. Y., 581; Russell v. Winne, 37 id., 591, and other cases.) But it is also equally well settled that if the agreement be that the mortgagor may sell and pay over the proceeds to apply on the mortgage debt, the agreement will not render the mortgage fraudulent $er se. (Conkling v. Shelley, 28 N. Y., 360; Ford v. Williams, 24 id., 359; Miller v. Lockwood, 32 id., 293; Chatham Bank v. O'Brien, 13 N. Y. Sup. Ct. Rep. [6 Hun], 231; Frost v. Warren, 42 N. Y., 204.) Hnder such agreement (as these cases held) the question of good faith is for the jury. (See cases above cited, especially remarks of Denio, J., in Ford v. Williams.) Now, the proof here tended to show an agreement between the mortgagor and mortgagee of the character last mentioned; hence, according to the decisions cited, the case was for the jury on the bonafides of the mortgages. The [570] learned judge, therefore, erred in holding those instruments fraudulent and void as to the plaintiff, as matter of law. Pie should have submitted the bona fides of those instruments to-the jury as a question of fact. It is further insisted that the court was right in directing a verdict for the full amount claimed, because the plaintiff indemnified the defendant against injury growing out of a sale under the executions; that being indemnified, the defendant was bound to proceed and sell. In support of this proposition, we are cited to Van Cleef v. Feet (15 Johns., 175) and to Curtis v. Patterson (8 Cow., 65). Those cases, with others, however,, were examined in the more recent case of Lummis v. Kasson (43 Barb., 373), and in so far as they have application to this in hand, are there overruled. It is there decided that a sheriff is not bound to proceed, although indemnified, provided he acts in good faith; but may protect himself by proving a want of property in the defendant from which to satisfy the execution. The case of I/wrrwms v. Kasson received careful consideration by Mr. Justice Smith, whose opinion was concurred in by both of his associates; and I will add, that for myself I am satisfied with his conclusion. It is a General Term decision, and we should follow it until condemned by the 'appellate court. These conclusions necessitate a new trial in this case, and we need not now examine the point that one of the defendants in the small execution had money in bank, which, by possibility, might have been reached on proceedings supplementary to execution had the defendant made return as he ought to have done. This suggestion only applies to the small execution, and however the question in that regard should beMetermined, it would not here obviate the necessity for a new trial. "We shall not, therefore, here consider that question. Perhaps on the retrial the case on this point may be quite different from the present. A new trial must be granted, with costs to abide the event. Boardman, J., concurred in the result.