Wattson v. Campbell

Woodruff, J.

There is, I think, no- serious question in this case, except that which arises from the unqualified charge of the Judge to the jury, that “ the Plaintiffs’ mortgage is a valid mortgage,” and therefore that “ the only material question for' the jury to determine is, whether the Plaintiffs took possession before the levy.”

The Plaintiffs, the mortgagees, and Ayres, the mortgagor, re *338 sided in Pennsylvania. Tbe mortgage was there made upon the vessel, registered in Pennsylvania, upon which the Defendant levied. The creditor in the judgment on which the execution was issued, also resided there. Some of the notes which were secured by the mortgage became due and were unpaid. If the mortgage to the Plaintiffs was a valid mortgage, and the Plaintiffs, the mortgagees, were in possession at the time of the levy, then the Plaintiffs were entitled to recover. Those were, in fact, the only questions involved in the controversy.

The jury have found that the Plaintiffs were in possession, and there was evidence to that effect which it was proper to submit to the jury. If, upon the proofs, the Judge was warranted in deciding unqualifiedly that the mortgage was a valid mortgage, the other questions arising on the Defendant’s exception, either to the admission or rejection of evidence, or to his charge, are of no moment, or are clearly untenable.

It was not erroneous to refuse to charge that Wilson could not give up the possession of the vessel without the consent of the mortgagor.

The mortgage debt was in part due, the mortgagees (if the mortgage was valid) had a right to take possession without the consent of the mortgagor, and even in spite of his resistance.

There was evidence that Wilson and his partner acted under express instructions of the mortgagees, and took and held possession on their behalf.

Whether their relations to the mortgagor made it their duty to apprise him, does not alter the result if, in fact, they took possession for the mortgagees.

So it was not erroneous to charge that a sale to the G-overnment, not consummated by delivery, did not prevent a recovery by the Plaintiffs. They had possession, and (even though a sale had been agreed upon) a lien for the price, and a duty to perform, that required continued possession. It requires no argument nor (citation of authority to show that this entitled them to maintain trespass or replevin in the cepit against a tort-feasor.

If the Defendant had pleaded as a defence, property in the *339 United States, the cases cited in the appeal might have had some application to the subject ( 1 Hill, 353 ; 3 Denio, 244 ). But even then the possession, with a lien for the price, would sustain the Plaintiffs’ action. "Without such a plea, the evidence was wholly immaterial.

The Plaintiffs offered in evidence a writing signed by the mortgagor, dated after the levy complained of, certifying the existence and non-payment of the notes given by him to the Plaintiffs. The evidence was objected to, arid the Defendant excepted to the ruling by which it was allowed to be read.

I do not perceive any ground upon which that paper, made after the Defendant had levied, was admissible as evidence against him.

Ayres, the mortgagor, had been examined as a witness on behalf of the Defendant; he had testified, on the direct examination, to nothing which that paper would contradict; and although he had mentioned the signing of a paper, he had not stated its contents. On cross-examination, he had stated that the paper which he signed included a certain note; and even this the.paper did not contradict.

The witness, when on the stand, might have been examined as to every fact contained in the paper, if the Plaintiffs desired. On no ground, therefore, was it competent to read against the Defendant such a paper, made out of Court, after the levy, in no sense so connected with the mortgage as to form a part of the res gestee, and not being one of the vouchers or securities for the debt for which the mortgage was given.

On the other hand, there was no controversy as to the indebtedness, and that was all which this paper certified. The notes were produced, and the liability of the mortgagor therein was not disputed. With this paper out of the case, the Plaintiffs would have been entitled to a peremptory ruling, that the indebtedness was established. If the allowance of the reading of this paper in evidence be the only ground for reversal, the judgment must be affirmed, for it was wholly immaterial, and could in nowise prejudice the Defendant.

In regard to the validity of the mortgage, and the instruction *340 given to the jury on that point, I think the Plaintiffs’ case greatly embarrassed by the oral testimony produced by the Defendant, t>and given by Maximilian Goepp, that “by the law of Pennsylvania, chattel mortgages, unaccompanied by a change of possession, are, and always have been, fraudulent and void.”

This -testimony stands in the case wholly uncontradicted, and yet it does not appear to have been regarded by the Judge at the trial, or by the Supreme Court in General Term, as of the slightest importance.

It is clear that the validity of the mortgage must be determined by the laws of Pennsylvania, where it was made, where the vessel was registered, and where all the parties to the mortgage resided (The Ætna Insurance Co.

v. Aldrich et al., 26 N. Y. 92 ); and it appeal's by the testimony of the same witness that “ there is no statute in the State of Pennsylvania on the subject.”

The testimony, therefore, is to the effect that a chattel mortgage, unaccompanied by a change of possession, is, by the common or unwritten law of Pennsylvania, fraudulent cmd void.

Not merely presumptively fraudulent and void, but unquali-fiedly so.

Though given in good faith to secure future advances (which would be a perfectly legal consideration), it is void. Though given in good faith to secure an actual advance of money, it is void.

Though, by the terms of the mortgage, the right of possession did not arise till forfeiture by non-payment of the debt, or some part thereof, it is void.

Though the property, at the time of the execution of the mortgage, be so situated that it cannot be presently delivered, as, for instance, a vessel at sea, still the mortgage is void.

Such, I apprehend, is the import of the testimony of this witness. It leaVes to the Plaintiffs no room for explanation, no room to say that the want of immediate change of possession is only presumptive evidence of fraud, as held in many of the States; no room to say that the mortgagees did,' in fact, take possession as soon as the vessel came within the jurisdiction, and even sooner, by pursuing the property to this State; no room to say that the *341 presumption in case of a mortgage only arises when the debt becomes due (as held in many of the States), and that after forfeiture the Plaintiffs did, in fact, so soon as the vessel returned from sea, take immediate possession.

For be it observed here, that one of the notes secured 'became due April 15 th, another April 24th, and the other two were not yet payable. The vessel left the port of New York for Sicily the previous December, and had not returned when the notes became due, but arrived at the port of New York June 4th, was reported on the 5th, and on the 7th the Plaintiffs took possession. This was not suffering the mortgagor to remain in possession after forfeiture. Both parties lived in Philadelphia, and very few hours were lost, after advice of the ship’s return to the United States, if it was at all the duty of the Plaintiffs to pursue the ship beyond the jurisdiction.

And still further, it left no room to say that although, while the possession of the mortgagor continued, the presumption of fraud existed, yet, when the Plaintiffs did in fact take possession, that presumption ceased, and thenceforth (if in truth the mortgage was given in good faith, to secure an actual indebtedness Avithout intent to defraud) the title of the Plaintiffs, under the mortgage was unimpeachable (see Eberle v. Mayer, 1 Rawle, 366 ; Mentz v. Hamman, 5 Whart. 150 ; Hoofsmith v. Cope, 6 Whart. 53 ; Born v. Shaw, 29 Penn. State R. 288; Jordan v. Braekenridge, 3 id. 442; McVicker v. May, 3 id. 224).

Our reading has taught us that, upon some of these questions, there is a diversity of decision in the various States; but the law of Pennsylvania is, in this case, declared by the witness, and it stands uncontradicted, and to the effect that this mortgage was fraudulent and void. How, then, could the Court below say, that because the mortgagees took possession before the levy of the execution, or because of any other fact proved, the mortgage was valid.

On this point, I think, the charge was not warranted; what on another trial the law of Pennsylvania may be proved to be, under the somewhat peculiar situation of the mortgaged property — ' *342 mortgaged for a debt not due, and not suffered to remain in tbe possession of the mortgagor after forfeiture — we cannot assume to know.

For the reason stated, the judgment must be reversed, and a new trial ordered, with costs to abide the event.

JOEL TIFFANY, State Reporter.