Hangen v. Hachemeister

• Citation: 21 N.E. 1046,114 N.Y. 566
• Parties: HANGEN v. HACHEMEISTER.
• Decision Date: 18 June 1889
• Court: New York Court of Appeals

114 N.Y. 566

21 N.E. 1046

HANGEN

v.HACHEMEISTER.¹

Court of Appeals of New York, Second Division.

June 18, 1889.

Appeal from superior court of New York city, general term.

Henry Daily, Jr., for appellant.

Richard L. Sweezy, for respondent.

HAIGHT, J.

This action was brought to recover the value of certain personal property, consisting of bar fixtures, gas fixtures,water fixtures, pumps, counters, tables, chairs, glass-ware, window-shades, and other property contained in the saloon at No. 44 Clinton place, in the city of New York, which it is alleged was wrongfully and unlawfully taken from the plaintiff by the defendant, carried away, and converted to his own use; and also for damages for breaking up and injuring the plaintiff's business, reputation, and credit. The defense is that the property was taken by virtue of a chattel mortgage. It appears that in the year 1877 a young man by the name of George A. Von Rauscher was engaged in conducting a saloon at the place in question, and that upon the 19th day of October, 1877, he died; that the public administrator of the city was appointed the administrator of his estate, and as such took possession of his personal property, and thereafter, and on the 27th of October, 1877, sold at public auction the furniture, fixtures, and appurtenances of the saloon to the plaintiff, for the sum of $483, who thereupon entered into the possession of the place, and continued the business with the property thus purchased; that about the middle of November thereafter the defendant, who is a member of the firm of Geroge Ringler & Co., entered the premises with a number of men, and took and carried away the property in controversy. It further appears that on the 1st day of November, 1876, Von Rauscher executed to one August Von Rauscher a chattel mortgage upon the wines, liquors, articles of furniture belonging to him, and all other goods and chattels mentioned in a schedule annexed, that was at that time in the saloon at 44 Clinton place, New York, to secure the payment of a promissory note for $340, payable in one year from date. The mortgage provided that until default be made in the payment the mortgagor was to remain and continue in the quiet and peaceable possession of the said goods and chattels, and the full and free enjoyment of the same. The schedule annexed enumerated the chairs, tables, counters, bar fixtures, etc., contained in the saloon, including the stock of wines, ales, liquors, and cigars. This mortgage was subsequently assigned to the firm of George Ringler & Co., who were the owners of it at the time the property was taken by the defendant. Upon the trial the plaintiff claimed that the mortgage was fraudulent and void for the reasons- First, that Van Rauscher, the mortgagor, at the time it was executed, was an infant under the age of 21 years; and, second, that it was executed under an agreement that he should continue in the possession of the property, and have the full and free enjoyment of it, with the right to sell and dispose of the wines, ales, liquors, and cigars for his own benefit and advantage, without applying the proceeds upon the mortgage debt.

As to the claim of infancy the trial court held and decided that it was not established, and only submitted to the jury the question as to whether there was an agreement that the mortgagor was to have the right to sell and dispose of the property mentioned, and to retain the proceeds thereof. The jury found a verdict in favor of the plaintiff for the value of the property taken, thus finding that such agreement was made. In the case of Southard v. Benner, 72 N. Y. 424, it was held that if, at the time of the execution of a chattel mortgage upon a stock of merchandise, it is understood and agreed between the parties that the mortgagor may sell the stock and use the proceeds in his business, and the agreement is carried out, the mortgagor making the sales with the knowledge of the mortgagee, the transaction is fraudulent in law, as against the creditors of the mortgagor. It was further held in that case that such an agreement might be proved by parol, or inferred from the fact that the mortgagee had permitted the sales to be made. In the case of Potts v. Hart, 99 N. Y. 168, 1 N. E. Rep. 605, it was held that the mortgage would be void, when it is given with a tacit understanding that such sales may be made; and in the case of Russell v. Winne, 37 N. Y. 591, it was held that an agreement that the mortgagor may remain in possession, and sell or dispose of the mortgaged property for his own use, rendered the mortgage fraudulent as to creditors, whether the agreement be contained in the instrument, or was independent of it, and that, if it was void as to a part of the chattels covered by it, it was void as to the whole. The wines, ales, liquors, and cigars constituted the stock of merchandise embraced in the mortgage. The administrator represented the creditors as well as the estate. As such he had the right to disaffirm...