
    Wm. B. Fairbanks and others v. Smith Bloomfield and another.
    The provisions in the Revised Statutes, relative to chattel mortgages, have no application to a mortgage, executed in a British province, upon a British vessel. It is by the rules of the common law that the validity of such a mortgage must be determined.
    At common law, the continuance in possession of a mortgager of chattels is not per se evidence of a fraudulent intent, rendering the mortgage void, as against creditors and purchasers.
    It is no objection to the validity of a mortgage, that it is given to cover future advances, as well as a present debt.
    It is now settled law, that a mortgage of chattels is not rendered void, as against creditors, by a provision that the mortgager shall retain the possession for a definite period.
    Such a provision gives to the mortgager a legal and exclusive right of possession, during the period so limited.
    As the mortgagee, in this case, has no immediate right to the possession, his omission to take it is not even presumptive evidence of an intent to defraud creditors.
    The possessory right of a mortgager, by force of such a provision in the mortgage, is a proper subject of a levy and seizure, under an attachment, as well as under an execution.
    But if this possessory right is determined while the property mortgaged is still in the hands of the attaching ofBcer, as the title of the mortgagee thereby becomes absolute, he has an immediate right, as owner,- to claim the delivery of the property, and its farther detention, under the attachment, is then an unlawful conversion.
    When the attaching creditor is the sole plaintiff, in the suit in which the attachment is issued, and, as such, is alone entitled to the benefit of the process, he is bound to comply with the demand of a mortgagee, who has become the absolute owner, for the delivery of the property, by directing that delivery to be made by the attaching officer. In such a case, he has the same power to release the property from an attachment, by such a direction, that he would have to release it from an execution; and, by his refusal to give the direction, he renders himself liable for the value of the property.
    The delivery, to which the mortgagee, as owner, is entitled, is unconditional, and he is under no obligation to pay, or tender payment of the costs and expenses of the attachment.
    Judgment for plaintiffs, with costs.
    (Before Oakley, Ch. J., and Duer, J.)
    Heard, February;
    decided, March, 1856.
    The- action was brought to recover damages, against the defendants, for the wrongful conversion, by them, to their own use, of a vessel or brigantine, called “ The Bloomfield,” of which the plaintiffs claimed to be the legal owners, by virtue of a mortgage, executed and delivered to them, on the 23d of May, 1848, at Halifax, in Nova Scotia, by one J. G. D. McLellan, then the sole owner of the vessel. The mortgage was set forth, at large, in the complaint, and by its terms was given to secure to the plaintiffs the payment, in three months from its date, of the sum of £800, Nova Scotia currency, with lawful interest: and it contained a provision that, if default should be made, in the payment of that sum, it should be lawful for the plaintiffs to enter into, possess, occupy, and enjoy the said vessel, and all her appurtenances, and to sell the same, at public or private sale, and give a valid title to the purchaser. The complaint then averred, that the said sum, of £800, was not paid to the plaintiffs, when due, and that they thereby became entitled, on the 23d of August, 1848, to the possession of the vessel, by virtue of the conditions of the mortgage; that, on the 25th of July, 1848, the defendants caused the vessel to be seized and taken possession of, by a constable of the town of Bridgeport, in Connecticut, under and by virtue of a process of attachment, issued out of the Superior Court of that state, at the suit, and for the sole benefit of the defendants, against the said J. G. D. McLellan, and that such seizure was made by the express direction of the defendants; that the plaintiffs, after they became entitled to the possession of the vessel, and whilst the vessel was still in the custody of the constable, demanded, from the defendants, that they would deliver to them the said vessel, or authorize the constable to make such delivery, but that the defendants refused to make such delivery, or give such authority, and thereby converted the vessel to their own use, to the damage of the plaintiffs of $3,200, the amount due to them upon the mortgage.
    The answer of the defendants, after taking issue upon the exe cution and delivery of the mortgage, admitted that the brigantine Bloomfield was seized and taken possession of, as alleged in the complaint, but denied that any demand of the vessel was made, by the plaintiffs, from the defendants, except in the city of New York, and averred that, when such demand was made, the vessel was still in the custody of the officer, in Connecticut, by virtue of the process mentioned, in the complaint, and that no offer was made to pay his fees, or any of the costs and expenses attending the execution of the process. The answer then denied that the defendants had any control over the attachment, or any power or authority to authorize or compel the officer, who executed the same, to deliver the possession of the vessel to the plaintiffs.
    It then averred that possession of the vessel had never been delivered to the plaintiffs, and that the defendants, as creditors of McLellan, had full authority, under the laws of Connecticut, to issue the attachment, mentioned in the complaint, and, under the same, to seize and retain the possession of the vessel, as alleged in the complaint.
    .Upon these pleadings, the cause was tried, before Slosson, J., and a jury, in June, 1855.
    The following are the material facts established, by the evidence upon the trial:—
    In May, 1848, one McLellan, being indebted to the plaintiffs, merchants in Halifax, executed to them, as security, the chattel mortgage, mentioned in the complaint, upon the vessel, called “ The Bloomfield.” The consideration, mentioned in the instrument, is £800 currency ($3,200.) At the time of such execution, there was actually due, from McLellan to the plaintiffs, the sum of £566 5s. 10cZ., ($2,265,) besides interest, being a portion of moneys advanced by the plaintiffs, previous to the mortgage, in repairing the said vessel, after she had been wrecked. The plaintiffs, at the same time, agreed to advance to McLellan further sums, and did, after-wards, advance to him £51, for the insurance of the vessel, and £35 in cash: the mortgage was intended to cover such future advances. By the terms of the mortgage, the plaintiffs were to become entitled to the possession of the vessel, upon McLellan’s default, in payment, in three months. Such default was made; and, on the 23d day of August, 1848, the plaintiffs became entitled to the possession of the vessel. The plaintiffs held no other security for the indebtedness, and there was now due to them, on account thereof, the sum of £450 currency, ($1,800.)
    In July, 1848, while the vessel was at Bridgeport, in the state of Connecticut, the defendants, who reside, and are merchants, in the city of Hew York, sued, out of the Superior Court in the state of Connecticut, an attachment against the goods, &c., of the said McLellan, under and by virtue whereof the said vessel was seized and taken possession of, by a constable, and was in his possession, under such attachment, on the 23d day of August following. The attachment, which was produced and read on the trial, is in these words:
    “ To the sheriff of the county of Fairfield, or his deputy, or either of the constables of the town of Bridgeport, within said county, greeting:
    By authority of the state of Connecticut, you are hereby commanded to attach, to the value of eight hundred dollars, the goods or estate of John Gr. D. McLellan, of Nova Scotia, British North America, if the same should be found within' the precincts, and summon him to appear before the Superior Court, to be holden at Danbury, within and for the county of Fairfield, on the first Tuesday of October, 1848, then and there to answer, unto Smith Bloomfield and Ellis S. Bloomfield, both of the city, county, and state of New York, copartners in trade, by the name and firm of S. & E. S. Bloomfield, in a plea that, to the plaintiffs, the defendant owes the sum of five hundred and fifty dollars, which, to the plaintiffs, the defendant justly owes, by book, to balance book accounts, as by the books of the plaintiffs, ready in court to be produced, fully appears; which debt the defendant has not paid, .though often requested and demanded, which is to the damage of the plaintiffs the sum of seven hundred dollars, and, for the recovery thereof, with just costs, the plaintiffs bring this suit.”
    The plaintiffs, after they became entitled to the possession, made a demand of the defendants, at the city of New York, for the said vessel. The defendants refused to deliver the vessel, or to authorize its delivery, by the constable, but did not allege that they had no control over the attachment, or that the fees and costs, attending its execution, must be paid. The defendants, subsequent to the commencement of this action, recovered, in the attachment suit, a judgment against McLellan, for $684.57, under which the vessel was advertised for sale. The judgment was assigned by the- defendants, for the benefit of the plaintiffs, who paid the amount thereof, and a stipulation was entered into that the damages, in ease of a recovery against the defendants, should not exceed $684.57, besides damages for detention.
    
      When the plaintiffs rested, the counsel for the defendants moved that the complaint should be dismissed, upon the following grounds:
    1. That the mortgage was fraudulent, and void, as against the defendants, the creditors of McLellan.
    2. That the plaintiffs had failed to show title, or a right to the possession of the vessel.
    3. That the taking of the vessel, under the attachment, was lawful, and the plaintiff’s only remedy was against the officer, in Connecticut.
    4. That there was no proof of the conversion of the vessel by the defendants.
    The court refused to grant such motion; to which refusal, the counsel for the defendants then and there excepted.
    And thereupon the jury, by direction of the court, found a verdict for the said plaintiffs, for six hundred and eighty-four dollars and fifty-seven cents, subject to the opinion of the court at General Term, upon a case to be made, with liberty to turn the same into a bill of exceptions, and with liberty to the said defendants, upon ■ the hearing, to move that the complaint be dismissed.
    Ebb. 7.—The cause was now argued upon the case so made.
    
      B. S. Emmet, for the plaintiffs.
    We insist that the plaintiffs are entitled to judgment upon the ■verdict. The mortgage was a valid transfer to the plaintiffs, of a limited property in the vessel, and of the right of future possession, if the debt, to which the mortgage related, should be unpaid when it became due. It is no evidence of fraud that the mortgager remained in possession, until default of payment. (Bissell v. Hopkins, 3 Cow. 166; Hall v. Tuttle, 8 Wend. 375; Holbrook v. Baker, 5 Greenleaf, 309.) ETor is it any objection to the validity of the mortgage that it was given to secure future advances as well as a present debt. The fact that the indebtedness was less than the amount mentioned on the mortgage can only affect the question of damages, and the sum actually due greatly exceeded the amount of the verdict. (McGowan v. Young, 2 Stew. 276.)
    The detention of the vessel by the defendants, and their refusal to deliver it to the plaintiffs, when the latter, by force of the mortgage, had become entitled to the possession, was a tortious conversion. If the original seizure of the vessel was lawful at all, it was only so in respect to the interest of the mortgager, who was then in possession, but when his right of possession ceased, and that of the plaintiffs, as mortgagees, accrued, the further detention of the vessel, against the will of the plaintiffs, was illegal, for the plain reason that the mortgager had no longer an attachable interest. (Murray v. Burling, 10 John. 172; Newman v. Van, Antwerp, 2 Cow. 553; Mattison v. Barcus, 1 Comst. 295; Hull v. Carnley, 1 Kern. 501; vide, also, Stuart v. Taylor, 7 How. Pr. R. 251; Fenn v. Bettleston, 8 Law & Eq. R. 483.)
    The demand was properly made, in this city, where the defendants resided, and the possession of the officer was, in judgment of law, the possession of the defendants. Moreover, in their answer, they admit and justify their possession and detention of the vessel. (Libby v. Soule, 1 Shep. 310; Calkins v. Lockwoods, 17 Connec. 154; Forbes v. March, 15 id. 385; Robinson v. Armstrong, 34 Maine, 145.)
    
      C. Jones, for the defendants.
    The defendants are entitled to a judgment, dismissing the complaint, with costs.
    The mortgage was fraudulent and void, as against the defendants, as creditors of the mortgager. He continued in the use and possession of the vessel after the mortgage was given, and she was in his possession when seized under the attachment, and this, by the laws of Connecticut, by which the rights of the parties must be determined, was conclusive evidence of fraud. (Potter v. Smith, 5 Connec. R. 196; Swift v. Thompson, 9 id. 63: 2 Kent Comm. 525,) and for the same reason the mortgage was void by the common law of this state, as it existed before the Revised Statutes. (Sturtevant v. Ballard, 9 John. 337; Jennings v. Carter, 2 Wend. 446; Divver v. McLaughlin, id. 596.) The mortgage was, moreover, given for a larger sum than was advanced by the plaintiffs, and this was also a badge of fraud. But, passing over the objections to the title of the plaintiffs, we insist that there was no proof of a conversion of the property, by the defendants. The seizure of the vessel was lawful, and the defendants are not chargeable in this action for having directed the officer to make it. After the seizure they were not in the possession of the vessel, which, from that time, was in the custody of the law, and remained so, when ■the delivery of the possession was demanded from the defendants and it was not their duty, nor is it shown to have been in their power, to comply with the demand. On this point the case of Jenner v. Jolliffe, (6 John. 9, S. C.; 9 John. 581,) is a decisive authority. At any rate, the demand of the defendants, in the city of New York, was insufficient, especially as no tender was made of the officer’s fees. But we contend that the defendants were not ■liable at all, and could not be made so, and that if the plaintiffs were entitled to any remedy whatever, their only remedy was against the officer in Connecticut.
    
      
      
        Vide 2 Duer, 249. The complaint was amended, in conformity to the decision then made.
    
   By the Court. Duer, J.

The plaintiffs, in our opinion, are entitled to judgment upon the verdict, for the amount, with interest and costs, for which it was rendered.

We can allow no weight to the objections that have been taken to the validity of the mortgage. It was executed in Nova Scotia, upon a British registered vessel, and it is, therefore, certain, that, in judging of its validity, we must be governed by the rules of the common law, and not by the provisions of the Revised Statutes, which can only apply to mortgages executed within, or relating to property at the time within, the jurisdiction of the state. As to the common law, without entering upon a discussion of the authorities, we are satisfied, that there never has been a period in its history, when the continuance in possession of a mortgager, until a default in payment, has been deemed per se evidence of a fraud, rendering the security void as against creditors or purchasers; nor have we been able to discover, nor can we believe, that, prior to the adoption of the Revised Statutes, an opposite doctrine ever prevailed in the courts of this state. The cases to which we were referred upon the argument, were all of them cases in which the instrument of transfer was, not a mortgage, but an absolute bill of sale.

The objection that the mortgage, with a view to cover future advances, was given for a larger sum than the plaintiffs had advanced at the time of its date, was not much pressed upon the argument, and is plainly untenable. The mortgage, when given, was certainly valid for the sum which the plaintiffs had then advanced, and was certainly valid, when they asserted their title, for the sum that was then due to them, and which, it appears, without including subsequent advances, largely exceeded the amount for which the verdict was rendered.

Even were the provisions of the Revised Statutes applicable to the case before us, we should still entertain no doubt as to the validity of the mortgage. We consider the law in this state as now settled, that when the mortgager of chattels, by the terms of the mortgage is to retain the possession until a default in payment, the provision does not render the mortgage void, but gives to the mortgager a legal right of possession during the period so limited; and it is a necessary consequence that the mortgagee can have no right to interfere with or disturb the possession, which he has thus agreed that the mortgager shall retain. This doctrine was recognized by this court as the established law, in Hull v. Carnley, (2 Duer, 99,) and although our judgment in that case has since been reversed in the Court of Appeals, this particular doctrine was not only unquestioned, but was distinctly affirmed, and was even made a ground of the decision. The chattels mortgaged, in that case, were sold by the sheriff, under an execution, during the time the mortgager, by the terms of the mortgage, was entitled to the possession, and the plaintiff, the mortgagee, claimed to recover the value of the property upon the ground that the sale, being absolute and not limited to the possessory right of the debtor, was unwarranted and wrongful. The Court of Appeals held that the mortgage was a valid instrument, but reversed our judgment—which was in favor of the plaintiff—upon two grounds: First, that the sale was justified by the process under which the sheriff acted; and, second, that the plaintiff, not having the right of possession when the alleged injury was committed, was not warranted to bring the action. (1 Ker. p. 506-10.)

By the terms of the present mortgage, the plaintiffs were not to enter into the possession of the vessel until the expiration of three months from its date, and by a necessary implibation the debtor, McLellan, was to retain the possession during this period. The plaintiffs, therefore, so far from being bound to take immediate possession, would have violated the rights of the mortgager, and rendered themselves liable as trespassers, had they attempted to do so. If it was neither their duty, nor within their power, to take the possession, it is impossible to say that their omission to do so was evidence of a fraudulent intent.

I shall close my observations on this branch of the case by referring to a somewhat recent decision in the Court of Exchequer, which it is, perhaps, to be regretted, escaped the attention both of this court and of the Court of Appeals in Hull v. Carnley. The decision has a direct bearing upon the questions before us, and affords a very clear illustration of the law, as now understood in England.

Fenn and others v. Bettleston and others, (8 Law & Eq. E. 483, S. C. 21; Law Jour. Excheq. N. S. 41.) The action was trover for goods, and the material facts of the case were these:—

A. conveyed the goods in question to B. by a deed, which, as it was conditioned to be void on the payment of a certain sum on a future day, was in effect a mortgage. The deed contained a provision that, until a default in payment of the principal sum or interest, A., the mortgager, his executors, &e., should be allowed to hold and enjoy the possession of the goods. A., during the time he was thus entitled to the possession, became a bankrupt, and the goods passed into the possession of his assignees, by whom, but while the right of possession given by the deed still continued, they were subsequently sold. B., the mortgagee, before that time, had transferred his title to the plaintiffs, who brought the action against the assignees to recover the value of the goods, upon the ground that the sale made by them, being absolute, was a wrongful conversion.

The Judge, upon the trial, directed a verdict for the plaintiffs, for the value of the goods, with leave to the defendants to move to set it aside, and enter a nonsuit. The cause was before the court upon this motion.

The validity of the deed was not contested, nor doubted; but the argument turned entirely upon the questions, whether the agreement, that the mortgager should retain the possession of the goods until the day fixed for the payment of the debt, gave him a legal right of possession for the stipulated term, or was a mere covenant, not affecting an immediate right of possession in the mortgagee; and whether the sale, made by the assignees, was justifiable, or a wrongful conversion. Upon the first question, the court held, that the effect of the agreement was not to give to the mortgager the possession and use of the goods, as a mere bailee, but a right of possession until the end of the stipulated term; and, consequently, that, had the goods been taken by a third person from the custody of the mortgager, during the term, the plaintiffs, having then no present right of possession, could not have maintained an action for their recovery. But, upon the second question, they held, that the voluntary act of the assignees, in selling the goods, absolutely, during the term, as it prevented their delivery to the plaintiffs, in case of a default in payment, at the end of the term, was a conversion, which entitled the plaintiffs to judgment upon the verdict.

Overruling, as we must do, all the objections that have been raised, in the present case, to the validity of the mortgage, it follows, that the plaintiffs, on the 23d of August, became, at law, the absolute owners of the vessel, as there was then a default in the payment of their debt, and the temporary right of possession in the mortgager was then determined. The plaintiffs, therefore, from that day, were entitled, as owners, to demand and recover the vessel, or its value, from any and every person by whom the possession, no matter under what pretext or title, might then be held. If the vessel, therefore, was, on that day, and subsequently, in the possession, or under the control of the defendants, and they refused, upon a proper demand, to surrender her to the plaintiffs, they must be liable in the present action.

The defendants, on the preceding 25th of July, had caused the vessel to be seized, under an attachment against the property of McLellan, the former owner, and the complaint avers, and the answer, by not denying the allegation, admits, that the seizure Was made by their express direction. The attachment, it appears, from its terms, was not issued for the general benefit of the creditors of McLellan, but was a process, in the commencement of a suit,

. instituted by the defendants, in their own names, and for their own exclusive benefit. It was, therefore, a proceeding, subject, like all other proceedings in the action, to their personal control, to be prosecuted and enforced, or revoked and abandoned, at their pleasure.

The regularity of the attachment, and the jurisdiction of the court, by which it was issued, are not denied; and, as the temporary interest of McLellan in the vessel had not then ceased, it is not denied that the original seizure was justifiable and-lawful. Such an interest, it has been decided, in our own courts, is a proper subject of levy, under an execution, and, therefore, under an attachment; and it was conceded, by the counsel for the plaintiffs, and we shall, therefore, concede, that such is also the law in Connecticut. But, on the 23d of August, the interest of McLellan in the vessel wholly ceased, and we can perceive no reasons for doubting that, from that time, the detention of the vessel, under the attachment, contrary to the will of the plaintiffs, the true and only owners, was just as unlawful, as the original seizure would have been, if they had possessed, at that time, the same exclusive title. Hence, if this detention may be justly attributed to the acts or authority of the defendants, it is a necessary conclusion, that they were guilty of the conversion with which they are charged. As the answer admits that the delivery of the vessel was demanded from the defendants, on behalf of the plaintiffs, after the 23d of August, and before the commencement of this action, and as the fact was very clearly proved, upon the trial, it is evident that the subsequent detention of the vessel must be attributed to them, if it was in their power, and it was their duty, to have complied with the demand.

We think, that they had the legal power, and that it was their legal duty, to comply with the demand, and that they have rendered themselves liable to the plaintiffs, by their refusal.

What are the grounds, I propose next to consider, upon which this liability of the defendants, is denied ?

It is said, that the vessel, when its delivery was demanded, was still held, by the officer in Connecticut, under the attachment, and was, therefore, in the custody of the law; and we were told that, where property is thus situated, it is settled law that the owner can maintain no action, for its recovery or value, but must seek his remedy in an application to the court under whose process, or order, the property is held; and, in support of this broad proposition, we were referred to the decision of the Supreme Court, in the early case of Jenner v. Jolliffe, as a controlling authority. (6 John. 9; 9 id. 381.)

The proposition, that property, in the custody of the law, cannot be made the subject of a new and separate action, when properly understood and limited, is undeniably true, and the case to which we were referred, the purport of which was greatly misunderstood, well illustrates the true meaning and application of the rule.

The plaintiff, in Jenner v. Jolliffe, brought the action, which was trover, to recover the value of a quantity of timber, of which he was the owner, and which the defendants had caused to be seized, under an attachment, in Canada; but, as it appeared, that the process was regular, on its face, was issued by a court of full jurisdiction, and, by its terms, directed the seizure of the very property in question, as that of the plaintiff, who was named as the defendant in the suit, the Supreme Court properly, and necessarily, held, ¡that the action was not maintainable. This case, therefore, only proves what, probably, has never been denied, or doubted, that a defendant, in a suit in which his property is seized or attached, under a process or order of the court, and to abide its final determination, is not permitted to try the validity of the proceeding—when the jurisdiction of the court is undoubted—as plaintiff in a separate action; for this is the very question to be determined in that to which he is already a party, as the defendant

But the ease is widely different, when the property seized is that óf a stranger to the action, and the seizure is not directed by the terms of the process. The property seized is not then in the custody of the law, for the seizure is, itself, an unlawful act, which renders the officer making, and the plaintiff directing it, at once, liable as trespassers, and gives, to the true owner, an immediate right of action against them. The familiar case is, where the goods of A. are seized, under an execution against the property of B.; and whether the seizure is made under an execution, or under an attachment, is plainly immaterial. What has been said of an unlawful seizure, must be equally true of an unlawful detention. Where the goods detained belong to a stranger to the action, and their detention is not justified by the terms of the process, they are not in the custody of the law, and the owner is, at once, entitled to the remedy, by an action against those who wrongfully withhold from him the possession to which he is entitled. Here, the vessel, when the interest of McLellan had ceased, was no longer in the custody of the law, and, as its detention was no longer justified by the terms of an attachment, which related to the property of McLellan alone, the plaintiffs had an immediate right of action against those to whom the wrongful detention was imputable.

We think, that in reason, and in law, it was imputable to the defendants.

The demand of the vessel was properly made Rom the defendants themselves, and was properly made in the place where they were found. They were the sole plaintiffs in the suit in which the attachment was issued—it was by their direction that the vessel was seized, and hence, the officer, holding the attachment, acted as them agent in making the seizure. It was not a manual delivery of the vessel that was asked, but an order, directing the officer, as their agent, to make that delivery to the plaintiffs. It was at them own peril—the peril of showing that the plaintiffs were not, as they claimed to be, the owners of the vessel, that they refused to comply with such a demand; and, as to their power, to direct a delivery by the officer, we cannot doubt that they had the same right, to release the property from an attachment, in which they alone were interested, that they would have had to release it from an execution, had such been the form and nature of the process by which it was held; and, if such was their right, its exercise was them duty.

As to the objection, that, when the vessel was demanded, no tender was made of the fees of the officer, and of the other costs of the attachment, it scarcely deserves attention. No such payment, or tender, was required; and, had it been required, the plaintiffs were under no obligation to comply with the request. The delivery, to which, as owners of the vessel, they were entitled, was unconditional, and, by refusing to make it, the defendants converted the property to their own use. It is plain, from the evidence, that they refused to deliver the vessel, because they meant to retain it, under the attachment, in order that its proceeds, when sold, might be applied to the satisfaction of their own debt. It is plain, that, with this view, they meant to deny, wholly, the title of the plaintiffs ; and, as the denial has proved to be groundless, they have no right to complain that judgment is rendered against them.

Judgment for plaintiffs, with costs.  