Manning v. Monaghan.

Court which had enjoined him from selling. He has no such justification of process, as the Sheriff had in the Hull and Carnley case.

The action is not brought for an injury to a right of possession in the plaintiff at the time the property was taken and sold, but to recover damages for the illegal and wrongful act of the Receiver and Monaghan, in taking and selling the property without reference to or recognition of his rights under the mortgage, in consequence whereof he has lost his security.

If the Receiver can in any sense be said to be justified in taking the property, he was bound to keep it until the mortgage became due, or if he sold it, to sell only the right of Schenck in it, which was a mere right of temporary possession, with an equity of redemption. He could have or acquire no better or greater right in the property than Schenck had, and is as much a trespasser as Schenck would have been, had he then undertaken to sell the property in parcels and appropriate the proceeds.

We are clearly of opinion that the plaintiff is entitled to recover against these defendants, as damages, the full face of his mortgage and interest, with interest on the aggregate amount from the time it became due.

In respect to the defendant Gosling, the only demand made of him for the delivery of the property purchased by him was made in January, 1856, some three months after the mortgage fell due. Gosling was a bona fide purchaser without notice of the exist ence of the mortgage.

It is contended, on his behalf, on the strength of Gregory v. Thomas (20 Wendell Rep. 17), that as a copy of the mortgage was not refiled within the 30 days before the expiration of the year after the first filing, which was on the 11th day of October, 1854, the mortgage as against him had ceased to be valid. (2 R. S. 136, marg. § 11.)

In the case relied upon, a first mortgagee who had neglected to refile his mortgage, took possession of the property some three months after his mortgage fell due, and the Court held that his mortgage would have been void as against the plaintiff who was a subsequent mortgagee of the same property if it had not been proved, that when he took his mortgage, he had actual notice of the existence of the first (defendant's) mortgage, and the Court

Manning v. Monaghan.

held by reason of such actual notice he was not a subsequent mortgagee "in good faith" within the meaning of the Statute.

In the present case Gosling was a purchaser without notice, and therefore a purchaser "in good faith," and I do not see why the principle of that decision does not fully protect him, unless the fact that in that case the goods when taken were in the actual possession of the mortgagor and had been so for the whole period after the mortgage fell due, and in the case at bar, the property had been long taken from the mortgagor's possession, shall be held to constitute a controlling difference.

The statute (section 9,) requires the mortgage to be filed in all cases where the property remains in the hands of the mortgagor, as was the case in the present instance.

Section 11 provides, that "every mortgage filed in pursuance of this act shall cease to be valid as against the creditors of the person making the same, or against subsequent purchasers or mortgagees in good faith after the expiration of one year from the filing thereof, unless within thirty days next preceding the expiration of said term of one year a true copy," &c., be again filed, &c.

The necessity for the original filing having once existed, and the mortgage, in consequence, having once been filed, I do not see how we can hold that the fact, that before the year expires the property has been taken from the possession of the mortgagor, relieves the mortgagee from the necessity of refiling a copy, if he wishes to retain his lien as against a subsequent purchaser or mortgagee without violating the letter of the statute.* We think therefore that as against Gosling the complaint should be dismissed, and judgment rendered in his favor.t

Was the mortgage void as against Gosling, merely because it was not refiled within thirty days before the expiration of a year from the filing thereof, with such a statement as the statute prescribes? Must he not have been a purchaser after the expiration of the time for the refiling of the mortgage, to enable him to say it had become void as to him, as a subsequent purchaser in good faith? Does not the word "subsequent," as used in the act of 1833, p. 402, mean subsequent to the time when the mortgage should have been refiled? See Meech et al. v. Patchin, 14 New York R. 71.

+ At the November General Term, 1857, on the authority of the decision in this case, it was also held by this Court in Goulet v. Asseler & Meyer, that a sale of per

Manning v. Monaghan.

Judgment was ordered in favor of the plaintiff against the defendants, Monaghan & Cavanagh, and the complaint, as to the defendant Gosling, was dismissed.

sonal property, covered by a valid chattel mortgage, in parcels, out and out, to different purchasers, in disregard of the mortgagee's right, subjected the execution creditor of the mortgagor, by whose direction such sale was made, in an action by the mortgagee brought after the mortgage became due, to damages equal to the value of the property, less such deduction for its use during the time the mortgagor had a right to possess and enjoy it, as was just. In the opinion delivered in that case, Fenn et al. v. Bittleston et al., 8 Eng. L. and Eq. 483, was cited as a case in point, and appears to be a decision of the precise question. Since then Hull v. Carnley, after a second trial had in this Court, has been a second time before the Court of Appeals. (17 N. Y. R. 202.)

On the second trial it was proved, that although the Sheriff sold the property in parcels and absolutely, instead of merely selling the mortgagor's interest, it was all sold to one person, and it appeared that all of the property was in the possession of the mortgagor when the action was commenced, he having hired the use of it from the purchaser.

The Court of Appeals held that the Sheriff was not liable as a trespasser for seizing the property, nor for a conversion of it, although he sold it absolutely in parcels, on the ground that, at the time of such seizure and sale the mortgagee was neither in possession nor entitled to the possession of the property. The opinion of the Court concludes thus: "We would not be deemed as holding, at this time, that a mortgagee has any action at law against the Sheriff, in such case, but if he has any, it would be for consequential damages for the injury to his lien; and if such an action had been brought it could not have been maintained in this case, for the reason that, although sold in parcels, it was all bid in by one man, and remained in the possession of the mortgagor at the time of the commencement of this suit. It is manifest, therefore, that he sustained no actual damage.”—Ib. 204–205.

Whether a mortgagee, who has been wholly deprived of his security by reason of a sale and delivery of the mortgaged property to different purchasers, under such circumstances that the mortgagee is unable to find it, and compel its application to the payment of the mortgage debt, is a question that may be regarded as not affected by the decision last made by the Court of Appeals, in Hull v. Carnley (17 N. Y. R. 202).

And the question remains, whether Cavanagh, as receiver, considering the circumstances under which he seized and sold the property, is entitled to the protection which the law extends to a Sheriff in executing a valid process, which it is his duty to execute?

The question of Cavanagh's liability to the mortgagee, for impairing the value of his security by an abuse of the mortgaged property, is not affected by the decision in Hull v. Carnley. Whether Monaghan, or Cavanagh, as against the plaintiff, can, in any event, retain the excess for which the property was sold, over and above the amount of Monaghan's judgment against Schenck, may be a question of some importance, when properly presented for the judgment of the Court.

Grosvenor v. The Atlantic Fire Ins. Co. of Brooklyn.

SETH GROSVENOR v. THE ATLANTIC FIRE INSURANCE COMPANY of BROOKLYN.

Eugene W. McCarty, being the owner of a dwelling house, (covered by a mortgage owned by the plaintiff,) insured the same against loss by fire; the loss, if any, being, by the terms of the policy, made payable to "Seth Grosvenor" (the plaintiff), "mortgagee." In an action by the plaintiff upon the policy, this Court, holding in obedience to The Traders' Ins. Co. v. Robert, and to Tillou v. Kingston Mu. Ins. Co. that, no acts of the mortgagor, done after the issuing of the policy, could affect the rights of the mortgagee under it, or to recover upon it; also held, that the admission of evidence that, when the defendants were applied to, to issue the policy, they were told that the interest of the mortgagee was to be insured, and they advised, as the best mode, the insertion of his name in the policy, as it was done; could not prejudice the defendants, and was not, therefore, an error entitling them to a new trial: The mortgage, owned by the plaintiff, being one that the insured had executed to E. Kellogg, and the latter had assigned to the plaintiff, at the same time guaranteeing its payment; it was also held that Kellogg was, under the code, a competent witness for the plaintiff: The action cannot, by reason of Kellogg having given such a guaranty to the plaintiff, be said to be prosecuted for the immediate benefit of Kellogg. At most, he is merely interested in the result.

The fact, that the mortgage has been foreclosed, and the mortgaged property sold, and a part of the mortgage debt thereby paid, cannot be made available to the insurer, as a partial defence to an action on the policy, when no such defence is set up in his answer.

(Before BOSWORTH and WOODRUFF, J.J.)

Heard, June 2; decided, June 27, 1857.

THIS action comes before the Court, at General Term, on a verdict for the plaintiff, taken subject to the opinion of the Court, on a question of law, arising at the trial, and there directed to be heard at the General Term, in the first instance. It was tried before Mr. Justice BOSWORTH and a jury, on the 6th of November, 1856.

The complaint states, that the defendants, by a policy, dated the 14th of November, 1853, for a certain premium paid by, or on behalf of the plaintiff, insured the plaintiff as mortgagee, against loss or damage by fire, on a three story brick dwelling house, (described in the complaint,) for one year, from the date of the policy, to the amount of $7,000; the destruction of the

Grosvenor v. The Atlantic Fire Ins. Co. of Brooklyn.

building by fire, on the 24th of February, 1854; that at the time the policy was executed, and at the time of the fire, there was due to the plaintiff as mortgagee, $6,250, with interest thereon from the 1st of November, 1853: that notice, in writing, of such loss by fire, was given to the defendants as soon as possible, to wit on the 10th of March, 1854, with the proper preliminary proofs required by the policy; and also avers due performance by the plaintiff of all the conditions on his part, contained in the policy, wherefore, as it alleges, the defendants became liable to pay to the plaintiff the said sum so due to him as such mortgagee.

The complaint then states, that the defendants, by their policy, dated on the 14th of November, 1853, for a certain premium paid, did "insure Eugene W. McCarty upon his three story brick dwelling house," &c., against loss or damage by fire, to the amount of $7,000.

That McCarty on the day of the date of the policy, to secure the plaintiff the payment of the money due on a mortgage of the premises, made by McCarty, and a bond accompanying the same, then held and owned by the plaintiff, did, by, and with the consent of the defendants, assign the policy to the plaintiff, and direct that the money, payable in case of any loss under the policy, should be paid to the plaintiff. It then states, as before, the total destruction of the building by fire, the like amount to be due to the plaintiff as mortgagee, notice of the loss, and service of preliminary proofs, and due performance by him of the conditions on his part pursuant to the requirements of the policy, whereby the defendants became liable, to pay to him, on the 11th of May, 1854, $6,388 15, and prays judgment for that amount, with interest from that date.

The answer denies that, the defendants insured the plaintiff as mortgagee, or that he was ever mortgagee of said premises, or that they are indebted to him, in any sum whatever. It then admits that they insured McCarty as alleged, and puts at issue the allegations that he assigned the policy to the plaintiff, or that they consented to any such assignment, and avers that, if it was assigned; that fact, by the terms of the policy, avoids it. It avers that no proofs of loss were ever served on them by McCarty, that this was required by the policy, even though he