Alonzo C. Yates et al., Appellants, v. John R. Olmsted, Respondent

Alonzo C. Yates et al., Appellants, v. John R. Olmsted, Respondent. (Submitted February 27, 1874; decided March 24, 1874.) A clause in a chattel mortgage upon a stock of goods, which purports to extend the lien of the mortgage over after-acquired property, does not render the mortgage absolutely void, where there is no arrangement permitting the mortgagor to deal with the goods mortgaged, and no knowledge of such dealing on the part of the mortgagee, and the absence of an intent to defraud creditors is affirmatively found. Communications between attorney and client in reference to all matters which are the proper subject of professional employment are privileged. This was an action to recover the possession of a stock of goods upon which plaintiffs had a chattel mortgage. The defendant was the administrator of the mortgagor, and defended upon the ground that the mortgage was fraudulent and void as to creditors. The mortgage contained this clause: This mortgage is to be a continuing lien and security upon ■stock or goods to be hereafter brought ihto the store.” No ■authority was reserved to the mortgagor to sell or deal with the stock while in his possession. The referee found that no such arrangement was made, and that plaintiffs had no actual knowledge of any such sales; also that the mortgage was given in good faith to secure plaintiffs’ debt, and not with intent to hinder, delay or defraud creditors. Held, that the clause in the mortgage did not render it fraudulent. (Gardner v. McEwm, 19 F. Y., 123.) Defendant offered to prove the statements and advice given to plaintiffs’ agent by the attorney employed by the mortgagor and such agent to draw the mortgage, at the time of the execution thereof, in reference thereto. This evidence was rejected. Held, no error, as they were privileged communications, the court stating the rule as above, and citing Britton v. Lorenz (45 F. Y., 47). Wm. J. Wallace for the appellants. Randolph Ballard for the respondent. [MAJORITY — Rapallo, J.,] Rapallo, J., reads for reversal of order granting new trial, and modification of judgment entered upon report of referee, so as to reduce the recovery, if possession of the property is not obtained, to the amount due upon the mortgage, principal and interest, and, as modified, affirming the same. All concur. Judgment accordingly.