Fox v. Cronan

Van Syckel, J. Eox, the plaintiff, held in pledge fifty-nine cattle to secure the sum of $4000, due to him from one Blumenthal, the owner of the cattle. While these cattle wore in the possession of Eox, another creditor of Blumenthal caused an attachment to be issued against him, directed to Cronan, the sheriff of Hudson county. The writ of attachment was placed by the sheriff in the hands of Martin, his special deputy, to be served. When Martin served the writ notice was given to him of the claim of Eox upon the cattle. The sheriff took a bond of indemnity from the plaintiff in attachment, and took possession of and held the cattle under said writ. In his return to the writ he certified that he had attached the fifty-nine cattle, appraised at $23 each, without making any reference to the claim of Eox, the pledgee. The writ was served on the evening of August 8th, 1882, and on the next day an auditor was — 504 — appointed in the attachment proceeding, and the sheriff put the cattle in the possession of the auditor on the same day. Thereupon Fox, the pledgee, brought suit against the sheriff to recover his damages for the taking of the cattle from him. The first question presented by the case is, whether a sheriff by virtue of an execution or attachment in his hands against the pledgor or mortgagor of personal chattels can remove them from the actual custody of the pledgee or mortgagee, and hold possession of them without paying or offering to pay the debt for which they were pledged. It is conceded that while the mortgagor retains possession of goods they may lawfully be seized by virtue of an' execution against him, and his interest in them sold to satisfy the judgment debt. Woodside v. Adams, 11 Vroom 417, is relied upon to support the more advanced doctrine that the goods may be taken out of the possession of the pledgee or mortgagee by the officer under the authority of a writ against the pledgor or mortgagor. In that case the property involved consisted of furniture in a hotel. The mortgagee took possession of it on the 22d of August, but did not remove the goods — he merely inventoried, appraised and advertised them for sale on the 6th of September then next. On the 4th of September a landlord’s warrant was delivered to the defendant, and executed by him by a levy on the furniture. The defendant did not remove or sell them before the replevin was sued out. The Supreme Court, in a very able opinion, in the conclusions of which, as applied to the facts of that case, I fully concur, held that replevin would not lie by the mortgagee. The court said that nothing whatever had been done by the defendant, so far as disclosed by the case, which interfered with the plaintiff’s rights under the mortgage — that the plaintiff might have proceeded with his sale under the mortgage without any interference or embarrassment consequent upon — 505 — the execution of the distress warrant, leaving to the landlord the surplus goods that remained after the mortgage debt was satisfied. The rule formulated by the court “ permitted the officer to take such possession only as would enable him to make a legal sale under his execution,” and the court said that “ this would be consonant with public policy, aud consistent with sound legal principles, provided that, in doing so, no substantial injury be done to the interests of the mortgagee.” With this limitation upon the right of the sheriff to interfere with the estate and possession of the mortgagee, the doctrine announced in Woodside v. Adams will not be controverted. But I cannot agree to the proposition that under authority of a ji. fa. or an attachment an officer can wrest personal property from a pledgee, or mortgagee in possession, and withhold it from him until it is sold under the legal process. Such a rule would be contrary to sound principle, and is without authority to support it. The mortgagee is entitled to the possession ; it is an essential part of his estate in the goods, without which he would be unable to exercise the right, with which the law invests him, to sell the property for the satisfaction of his mortgage debt. He has a right, within reason- . able limits, to select the time and place of sale, and to impose the conditions. This may be of vital importance to the recovery of his demand. He can neither be deprived of this right which is vested in him, nor postponed in the enjoyment of it. The mortgagor could not deprive him of his possession. The sheriff or creditor, who succeeds by operation of law to his rights, can be in no better position than the mortgagor himself. He may take for the satisfaction of the judgment debt the interest of the mortgagor, but he cannot impair the estate of the prior for the benefit of the subsequent creditor. The right of the sheriff to take the goods from the actual possession of the mortgagee imports the right to maintain and withhold the possession until he is required to sell them by — 506 — the exigency .of his writ. It frequently occurs that a stay of execution is ordered pending further litigation after a levy is, made. During all this period the mortgagee might be deprived of his possession, while interest upon his debt would accumulate and the value of' his security become impaired. For the consequent injury he would be remediless, if it be conceded that the sheriff may lawfully assert his right to the actual possession.- A further consequence would be that if, after sale under the-execution, the officer failed to subject the goods to the power of the mortgagee to resume possession, he would be guilty of a tort, for which he alone and not his sureties would be responsible. For the trespass of the officer the bondsmen are not held. The officer might be without pecuniary ability to respond in damages. The transfer of the title subject to the mortgage by the act of the mortgagor, cannot enlarge his estate, nor can it diminish that previously granted to the mortgagee. Who will assert that such vendee can legally maintain the right to deprive the ■mortgagee of his possession, and how can he who holds under the legal process be on a better footing ? The recognition of this right in the latter would as clearly appropriate the property of the mortgagee to pay the debt of another for which he was in nowise responsible, as would the former. It is true that there is a line of English cases holding that the interest of one of several partners or joint owners of personal property may be seized and sold under execution, but such partner has an equal right to present possession with all his associates.- Under such sale the purchaser can acquire only the share of the execution debtor in the surplus of the partnership effects, after all the firm obligations are discharged. He becomes tenant in common with the other partners and takes cum, onere. The English doctriue of the right to levy was recognized in this state in Brown v. Bisnett, 1 Zab. 46, but Mr. Justice Carpenter, in delivering the opinion of the Supreme Court,. — 507 — took the precaution to say that “ it was not á question as to the mode of levy in such case, and that it was not necessary to settle whether the sheriff may take the joint property out of the hands of the other partners on an attachment against one for his separate debt.” If the mortgagor’s interest in mortgaged chattels in the lawful possession of the mortgagee cannot be appropriated to the payment of an execution without asserting the right of the sheriff to take actual possession, then I would unhesitatingly say that the mortgagor’s title is not the subject of levy and sale under a fi. fa. This is the rule in New York and in some of the other states, where the subject is not regulated by statute. No justification can be found for stripping the mortgagee of contract rights, of which he is in the enjoyment, in order to establish a subsequent creditor, who can justly succeed to nothing more than his debtor has, in a better position than the debtor himself occupies. In my judgment the interest of the mortgagor of personal property in possession of the mortgagee can be transferred by levy and sale under execution, without impairing the rights of the mortgagee. The rule of the common law that a levy under execution imports an actual taking into the possession of the sheriff, and that to constitute a valid levy the property levied upon must be in the manucaption of the officer, would interpose an insuperable obstacle in the way of subjecting the mortgagor’s estate to execution and levy, where the mortgagee is in possession. Under the settled law of this state the necessity of thus trenching upon the vested rights of the mortgagee is obviated. Not only is the sheriff not bound to take into actual possession, or to remove goods levied upon, but he may make a valid levy from an inventory furnished by the defendant, without seeing the property. He may, therefore, levy upon the right, title and interest of the mortgagor, and his con — 508 — .structive possession of that interest will be consistent with the actual, continued possession of the goods by the mortgagee. Under such levy the officer may advertise the interest of the mortgagor in the property for sale, and on the day of .sale he may require the mortgagee to expose the goods to the view of bidders, and enforce obedience to that duty on the part of the mortgagee by virtue of his execution and levy. This will not necessitate the removal of the property from the possession and control of the mortgagee nor deprive him of any substantial right. The right to levy imports a right to see the goods. .The mortgagor would have that right, if he wished to show the property to one who desired to buy subject to the lien of the mortgage. Otherwise the right to sell would in most cases be futile. The denial of this right would deprive him of the beneficial use of his property, and its refusal would constitute a conversion of his interest by the mortgagee, for which he might maintain an action 'against him, and recover the value of the, goods in excess of the debt for which they were in pledge. The sheriff, armed with a writ of execution or attachment, would logically succeed to the same right, to enable him to make an appraisement of the debtor’s interest, and a sale thereof in obedience to the command of the writ or the ■order of the court. The right of the sheriff to require the mortgagee to permit him to expose the chattels to sale must be incident to that he has to see them for the purpose of making a levy, and his process must be as potent to enforce the one right as the other. This would involve no disturbance of the mortgagee’s possession. To the suggestion that a writ of attachment could not be made available against the interest of a mortgagor in goods in possession of a non-resident mortgagee in transit across the state before they passed out of our jurisdiction, the answer is two-fold. First. There would be manifest injustice in constraining the non-resident mortgagee who has the prior and paramount — 509 — right to leave his property in the charge- of a forum which may be remote from his. domicile for the benefit of a creditor who can take only subject to his title, unless the mortgage debt is tendered. Secondly. If the attaching creditor desires the sheriff totaled actual possession of the property he must pay or offer to pay the mortgage debt. If there is a well-grounded apprehension that a resident mortgagee may remove the goods beyond the jurisdiction in which they are seized, he may be enjoined at the instance of the subsequent creditor. Such unlawful removal would constitute a conversion on the part of the mortgagee for which he would be liable to the sheriff in an action of trover. Such is the doctrine which prevails in the Pennsylvania, courts. In Srodes v. Caven, 3 Watts 258, the court .said that. “ goods pawned or gaged for a debt or leased for years cannot be taken in execution, but the sheriff may sell the goods-pawned or leased subject to the rights of the lessee or pawnee. But although the sheriff has the right to sell he cannot seize them, because the pawner or lessor has no present right to-possession. It is reasonable that whatever interest the debtor himself-may sell the sheriff may sell, although it may not be-capable of actual seizure or delivery.” The language of Mr. Justice Strong in Welsh v. Bell, 32. Penna. St. 12, is to the same effect: “The sheriff may levy upon and sell the interest of the debtor in personal property although the immediate possession and right to it be in another. If the debtor have bailed or demised the goods, this interest may be seized and sold, subject, however, to the-rights of the bailee or lessee. But the possession of the latter may not be disturbed. The levy can only be on the interest of the debtor. A levy upon the thing itself disturbs the possession and is a trespass. In no mode other than that here indicated can the right of the mortgagor in mortgaged chattels in possession of the mortgagee be made the subject of levy and sale under execution or — 510 — attachment, without substantially impairing the rights of the mortgagee, which Woodside v. Adams concedes it is unlawful to do. Public policy as well as sound reason manifestly requires that the power of the officer over mortgaged goods in such case shall take no wider range. Conspicuous injustice will result in many instances if personal chattels may be taken by legal process from one who has the rightful exclusive possession, in order to enforce payment of the debt of another. The interest of the lessor in goods demised for a term, unquestionably is and should be subject to levy and sale under execution, but the right of the sheriff to withhold the leased property from the possession of the lessor cannot be admitted. Suppose a line of stages to be in possession of the lessee for a term unexpired, can the officer, armed with an execution against the lessor, seize the horses and vehicles and retain them until sale ? If so, the lessee is deprived of his property, which consists in the right to the uninterrupted use during the full term for which he holds it. Deprivation of possession is pro tanto destruction of his estate. Eor such deprivation, if the sheriff may lawfully take possession, the lessee is without remedy. Such a doctrine cannot be permitted to prevail without a misconception of correct legal principles. The sheriff in this case in my judgment became a trespasser by attaching the cattle, and turning them over to the auditor. There is also another ground upon which the'pledgee can clearly support his action. The sheriff attached, not the interest of the pledgor in the cattle, but the cattle themselves, the interest of the pledgee as well as the interest of the pledgor. Notwithstanding the notice to his deputy of the pledgee’s claim, he took a bond of indemnity from the attaching creditor, levied on the cattle, and certified to the. court in his return to the writ of attachment, that he had levied on the cattle — 511 — ■without intimating that the pledgee had any interest in them, and then turned them over to the auditor. Thereupon the court ordered the auditor to sell the cattle, .as if the title of the pledgee was absolute. The order could not, under the return of the sheriff, have been made otherwise. The auditor sold, in pursuance of the order of the court, the entire property. The sheriff, by the exigency of his writ, was commanded to attach the property of the defendant in attachment, and if by mistake he attached the property of the plaintiff in error, he was a trespasser. The auditor in attachment was the mere arm of the court to ■execute its order to sell specific property, and for so doing he is no more liable to respond in damages to the true owner, than the judge who made the order, or a sheriff who executes .a writ of replevin. The mortgagee must look to the sheriff, who wrongfully .subjected his estate in the cattle to the process of attachment for the debt of the mortgagor; the sheriff is the trespasser, and he must respond in damages. The sale by the auditor did not divest the mortgagee of his title, and although he might have regained his property from the purchaser at the .attachment sale, that fact constitutes no defence to the trespass committed by the officer, and cannot defeat the plaintiff’s right of action against him. The judgment of non-suit was erroneous, and should be reversed.