Conderman v. Smith , 41 Barb. 404 ( 1863 )

By the Court, Johnson, J.

Upon the principle adopted in Van Hoozer v. Cory, (34 Barb. 10,) the title to the cheese in question vested in the plaintiff by virtue of the mortgage, and of the contract of the 16th of July, 1860. That contract was not an agreement to sell at a future day, but an absolute unconditional present sale, for a specified price, to he applied in payment of the accrued and accruing rent. It is impossible to distinguish this case in principle from that above cited. That case, like this, was an action by the lessor and purchaser, against a creditor of the lessee who had taken and sold the products of the farm and dairy upon execution; and the court held that it did not fall within the rule which prohibits the selling or mortgaging property not in existence or not owned at the time by the vendor or mortgagor. It was the product of property which the vendor owned at the time, and was, as it is expressed in the books, potentially his and therefore the subject of sale. This is a very old and well settled doctrine, which is laid down in most of the elementary works, and is very fully and carefully examined and stated in Van Hoozer v. Cory, (supra,) where many of the authorities are cited. The same principle is fully conceded in Otis v. Sill, (8 Barb. 111, 112.) The case is clearly distinguishable from that of a sale or mortgage of property to which the seller or mortgagor has no right at the time of the sale or the mortgage, cither actual or potential, but in which he expects he shall or may acquire some title or right at a future day. In such case the sale or mortgage is void, as all the hooks and cases agree. That was the case of Otis v. Sill, (supra,) and also of Gardner v. McEwen, (19 N. Y. Rep. 123,) as to that part of the mortgage held to he void.

This doctrine seems to have undergone a good deal of discussion recently in the courts in England, and it has finally been settled in the house of lords, in the case of Holroyd v. Marshall, (9 Jur. N. S. 213,) that at law a mortgage or sale of future acquired personal property, the mortgagor neither having acquired the thing nor the agent of its production at the time of making the contract, creates no valid subsisting property. But if the future acquired property he the product of present property in the mortgagor, as the wool growing on a flock of sheep, or the produce of a dairy, or a farm, or any thing of that character, the mortgage will take effect upon the property as soon as it comes into existence, and will he perfectly binding at law. (3 Am. Law Reg. N. S. p. 31, 32, n.) This is entirely in accordance with the determination in Van Hoozer v. Cory, and there can be no doubt, I think, that it is the true rule. The defendant's counsel relies upon the case of Milliman v. Neher, (20 Barb. 37.) But that was not the case either of an absolute sale, or of a mortgage. It was a mere contract for a lien by way of security; and was not regarded as a mortgage, or a sale, by the court, as expressly appears at page 40 of the opinion. The point discussed and apparently decided did not therefore arise in the case. This is noticed by the learned judge who delivered the opinion in Van Hoozer v. Cory, as distinguishing Milliman v. Neher from the case then under consideration. The same distinction is applicable to the present case. I think Milliman v. Neher was correctly decided upon the facts appearing in the case, but it is not to be regarded as deciding the question of • the validity of a mortgage, or of an absolute sale of similar property, bona fide between parties similarly situated. The mortgage in this case would only apply to the • cheese manufactured prior to the date of the contract of the 16th of July. The contract imports an absolute sale of the cheese to be manufactured thereafter, and to that extent must be regarded as an extinguishment of the right of redemption of the mortgagors in that property. But each having been made for a valuable consideration, is valid if made otherwise in good faith, and without any intent to hinder, delay or defraud the creditors of the vendor and mortgagor.

It does not appear upon what precise ground the justice placed his decision. If he held the sale void as of property not in being at the time, it was erroneous in point of law. And if he held that either the mortgage or the contract of the 16th Jtily Was fraudulent and void because it was not made to appear sufficiently on the part of the plaintiff that the absolute sale and the mortgage were made in good faith and without any intent to hinder, delay or defraud the creditors of the mortgagor and vendor, the judgment was properly reversed in the county court for erroneous rulings by the justice in the course of the trial. On this point two instances will suffice." The plaintiff, to excuse the absence of an immediate delivery of the property and a continued change" of possession, offered to prove that there was no other cheese house in the neighborhood than the one on the premises, where the cheese could be taken to be cured or dried until it would be proper and safe to remove them. This evidence, upon objection by the defendant, was excluded. This was pertinent evidence to show a reason for the continuance of the property on the farm where the mortgagor resided, and the exclusion of it was erroneous.

It also appears by the evidence that the defendant had purchased one cheese of the mortgagor before the contract of the 16th of July, and which cheese had been manufactured and was in existence at the time the mortgage was executed. No demand had been made of it before the action was brought, and the plaintiff attempted to show that it had been consumed by the defendant or in his family, or otherwise disposed of by him. The defendant testified that it had not been consumed in his family. The plaintiff then proposed to prove by him that he had disposed of it otherwise. This was objected to and excluded by the justice. This was error, as the plaintiff was thus prevented from proving an actual conversion of this article of property. There is considerable evidence in the case as to whether the deputy sheriff, at the sale upon the execution, sold any thing more than the right and interest of Sweet, the tenant and mortgagor. But this is of no consequence, as it appears expressly that the defendant, who was the purchaser at such sale, had sold the cheese so purchased.

[Monroe General Term, December 7, 1863.

The judgment of the justice was therefore properly reversed by the county court, and the judgment of reversal must be affirmed.

Johnson, E. D. Smith and J. C. Smith, Justices.