Halstead v. Swartz , 1 Thomp. & Cook 559 ( 1873 )

By the Court, Mullin, P. J.

On default being made in the payment of the debt which a chattel mortgage is given to secure, the mortgagee’s title to the mortgaged property becomes, eo mstanti, absolute at law (Falman agt. Smith, 39 Barb., 390; Butler agt. Miller, 1 N. Y., 496; Fay agt. Burnes, 12 Barb., 677; Brown agt. Bement, 8 J. R., 96 ; Patchin agt. Pierce, 12 Wend., 61). The only right that remains to the mortgagor, after default in payment, is that of redemption, and this right may be barred by a sale of the property at public auction or private sale, without notice (Ballou agt. Cunningham, 60 Barb., 425 ; Chamberlain agt. Mortin, 48 Barb., 607).

The title of the mortgagee is as perfect when the default is in the payment of an installment of the debt, when it is payable in installments, as it is upon default in payment of the whole debt (Robinson agt. Wilcox, 2 N. Y. Legal Obs., 160).

This result necessarily follows from the condition of the mortgage. The title cannot become vested in parcels; it becomes absolute at once or not at all.

To entitle the mortgagor to redeem under such a mortgage he must pay or tender the whole debt (4 Kent, 162, 163, 164; Polls agt. Lord Clinton, 12 Ves., 48-59 ; Patchin agt. Pierce, 12 W., 61). In the case last cited the plaintiff sued in trespass for taking certain personal property which he had mortgaged to one Hickok to secure payment of fifty dollars by the twentieth October following its date. Partial payments were made, but the whole debt was not paid. The assignee of the mortgage seized the property, and the court held that the taking was lawful. Payment after the debt came due did not revest the property in the mortgagor.

The authorities cited do not hold in terms that the whole debt must be paid when an installment of the indebtedness only has become due; but they do hold that if there are several parties interested in the debt the whole debt must be paid or tendered, and that the mortgagor or other party cannot redeem on paying part only of the debt. Authority is not necessary, it seems to me, in support of a proposition resulting so manifestly from the very nature of the interest that the law confers on the mortgagee of chattels on breach of the condition.

The whole title vests and the whole title must be divested by the redemption, and that can only be done on payment of the whole debt.

It is immaterial therefore whether the sale by the mortgagee on the 18th September, 1869, was fraudulent or fair; the title to the boat remained in him, and the mortgagor has not redeemed.

Unless the tender of the $104 was sufficient, no reason is perceived why the sale in October, 1869, to Horley & Doran did not bar the plaintiff’s right to redeem. Ho fraud is pretended as to that sale, and the right to sell was as perfect then as in the September preceding. If, however, the sale to Horley & Doran had no other effect, it prevents a redemption, as it puts it out of defendant’s power to deliver the boat (Stoddard agt. Dennison, 38 How., 296-306).

The plaintiff did not attempt to redeem ; he treated the tender as revesting in him the title to the property; this it could not do; a decree of a court of equity only could revest the title. It is held, in Kortright agt. Cady (21 N. Y., 343), that payment or tender of the amount due on a real estate mortgage terminated its lien on the land, although not paid or tendered on the law day. But the title of the mortgagee of land does not become absolute on default of payment as it does in case of a chattel mortgage, and the case of Patchin agt. Pierce (supra) holds that payment after the day does not discharge the lien.

In an action of trover the plaintiff is entitled to recover the value of the boat as of the time of that sale, and for the loss of the use prior thereto; but he is not entitled to' the value of the use for the season of 1870.

It was his duty to bring his action promptly. If he could wait a year, no reason is perceived why he might not wait two or three years and recover for the use of the boat a sum much greater than her value; as it is, the referee has, by his judgment, taken from the defendant his boat and given it to the plaintiff, without one penny of compensation, and brought him in debt more than $750.

The judgment must be reversed and new trial ordered before another referee, costs to abide the event.