
    Lenore Chandless, Respondent, v. The Globe Storage & Carpet Cleaning Co., Appellant.
    (Supreme Court, Appellate Term,
    February, 1906.)
    Replevin — Right of action and defenses — Title in third person.
    Where the owner of chattels sold them and took back a series of notes secured by a mortgage for the purchase price and afterwards endorsed part of the notes over to the broker who had effected the sale in payment of his commissions; and where the original owner thereafter became repossessed of the chattels for the failure of the purchaser to pay the notes retained by her and thereafter sold them and all her right, title and interest in the mortgage to plaintiff, the notes she had transferred to the broker being still outstanding and unpaid, in an action to recover the goods from the defendant, a storage company, the latter, under section 116 of the Municipal Court Act (L. 1902, ch. 580) was entitled to judgment in its favor upon establishing such facts, and a judgment in .favor of the plaintiff should be reversed.
    Appeal by the defendant from a judgment of the Municipal Court of the city of Eew York, tenth district, borough •of Manhattan, rendered in favor of the plaintiff.
    
      John 0. Shaw, for appellant
    Louis Jersawitz, for respondent.
   Greenbaum, J.

Plaintiff brought replevin against de.fendant, a warehouse company, with whom she had stored the chattels, the subject-matter of this action.

The only defense involved on this appeal is that a third person, one John E. Shaw, was entitled to the chattels and that the testimony warranted a finding to that effect.

Section 116 of the ¡New York Municipal Court Act provides: “The defendant may, by answer, defend, on the .ground that a third person was entitled to the chattel, without connecting himself with the latter’s title.”

The facts are as follows: One. Olga Bums was originally the owner of the chattels which consisted of a lot of household effects used in connection with a boarding-house; •said Bums, through the agency of one Dora H. Blakeley, .sold them to one Sadie H. Bicknell for $2,000' by the payment of $500 in cash and the balance in a series of notes of :$50 each, aggregating $1,500, secured by a chattel mortgage ■on the property sold; upon the consummation of the transaction, the vendor Burns, who became indebted in the sum ■of $150 to said Blakeley for commissions in effecting the sale, instead of paying her in cash, delivered to her the first three ■of the series of notes received from Bicknell,■ aggregating $150, indorsed by said Bums, together with a written instrument, duly signed, whereby the latter duly transferred to Dora H. Blakeley all her “right, title and interest to the payments to be made by Sadie H. Bicknell” on the first three notes above described and which are specifically •stated in said instrument as “ secured by a certain chattel mortgage executed to me by the said Sadie ¡H. Bicknell ”, the mortgage being further identified as that covering the •chattels in suit.

It appears that plaintiff’s title to the goods is based upon .•a written instrument, executed some time after the transactions above set forth by Olga Bums, which purports to be an absolute bill of sale of chattels “ sold to me (Olga Bums) by Belle Phillips by bill of sale January 17, 1905”, and which also contains the following language: “ also all my right, title and interest in the chattel mortgage for $1,500» made by Sadie H. Bicknell to me, dated on or about May 5, 1905.”

It may be inferred from the testimony, which is not satisfactorily nor concisely presented, that Olga Burns became repossessed of the household effects on account of the-default in the payment of the notes and that the last described instrument was designed to vest the title, to the chattels in plaintiff by bill of sale and by a surrender of the mortgage and $1,350 of unpaid notes, the balance of the $1,500 notes in the hands of Bums, for which the mortgage was given as security.

The three notes held by Blakeley were not paid and were duly protested for nonpayment.

The effect of the judgment rendered in behalf of plaintiff was to declare that Shaw was not, under the proofs, shown tc have been entitled to the chattels.

The transfer of the three notes by Bums to Blakeley passed an interest to the latter in the mortgage, without any formal assignment of the mortgage. Jackson v. Blodget, 5 Cow. 202; Jackson v. Willard, 4 Johns. 41; Kortright v. Cady, 21 N. Y. 343.

The circumstances attending the alleged transfer of title from Burns to plaintiff lead to the conclusion that the notes amounting to $1,350 were discharged, so that the only outstanding claims against the mortgaged property were the three notes delivered to Blakeley and by her assigned to-Shaw.

Ho question of priority of rights under the mortgage a® •between Shaw and defendant can arise, where the mortgage is effective only to the extent of the three unpaid notes.

Tndeéd, if there could be any question of priority, it must necessarily be resolved in favor of Shaw, because the notes held by him are indorsed by Burns, making her personally liable thereon and, necessarily, subordinating her rights under the mortgage to those of Shaw.

It seems clear that defendant established that John E. Shaw, a third person, was entitled to the chattels.

As it appears that appellants have given notice of an application for an order of restitution, as required by see-don 323 of the Municipal Court Act, the judgment will be reversed and restitution of the replevied chattels and a new trial ordered, with costs to the appellant to abide the event.

Scott and Giegerich, JJ., concur.

Judgment reversed and restitution of replevied chattels and new trial ordered, with costs to appellant to abide event.  