Robert J. Sharp, Appellant and Respondent, v. George H. Lamy, as Sheriff of Erie County, Respondent and Appellant

Robert J. Sharp, Appellant and Respondent, v. George H. Lamy, as Sheriff of Erie County, Respondent and Appellant. Sheriff’s sale — sale under execution of goods in possession of a party, other than the judgment debtor, who held part of them under a bill of sale from a stranger, and part under a mortgage given by the judgment debtor — duty of the sheriff having notice of tJmfact. Where property, upon which a sheriff has levied an execution, is sold by him after notice given at the sale by the person in possession thereof, that it consists partly of goods which had for nearly three months been held by him under a chattel mortgage executed to him by the execution debtor, and partly of goods held under a bill of sale from a stranger, it is the duty of the sheriff, if he wishes to make any distinction in his sale between the two classes of goods, to ask the person in possession to point out those which he claims under the chattel mortgage and those which he claims under the bill of sale. In such a case the testimony of the sheriff’s deputy, that a young man in charge of the store where the goods were, had said on the day of the sale that the articles in question belonged to the execution debtor, is incompetent, as such statement of the clerk is no part of his duty. Cross-appeals by the plaintiff and the defendant from a judgment of the Supreme Court, entered in the office of the clerk of the county of Erie on the 14tli day of March, 1898, upon the report of a referee stating separately the facts found and the conclusions of law. This action was begun September 30, 1897, to recover damages for the alleged conversion of a stock of drugs and drug store furniture contained in a retail drug store, known as the German-American Pharmacy, at the corner of Oak and Virginia streets, in the city of Buffalo. The .plaintiff asserts that he is the owner of part of the stock and furniture by a purchase from one Blackney, and of the remainder of the stock and furniture by reason of having taken possession under a chattel mortgage executed to him by Oscar G-. Crandall. The defendant alleges that Oscar G. Crandall and the plaintiff were partners in conducting the drug store, and that he took the property by virtue of an execution against Crandall and sold it October 4, 1897, for $100. November 7, 1895, Benedict Weber owned the stock and furniture in a retail drug store at No. 574 Oak street, in the city of Buffalo, which on that day he sold to Willard T. McElroy in consideration of $1,400. This retail store was then, and has ever since been, known as the German-American Pharmacy. Afterwards, the date not appearing, McElroy sold the drug store and furniture to Rowell & Hopkins, who sold it January 7, 1897, to Oscar G. Crandall. At this date Crandall was justly indebted, in the sum of $1,200, to Dr. Robert J. Sharp, the plaintiff herein, and for the purpose of securing the payment of that sum Oscar G. Crandall, January 9, 1897, gave to Dr. Sharp a chattel mortgage on the drug store and furniture by which Crandall agreed to pay Dr. Sharp $1,200, with interest, as follows: $300 April 9, 1897; $300 July 9, 1897; $300 October 9, 1897, and $300 January 9, 1898, which mortgage was, January 9, 1897, duly filed in the office of the clerk of the county of Erie. The mortgage is in the ordinary form of chattel mortgages, and conveys the legal title of this property to the mortgagee, subject to a defeasance in case of payment. The mortgage contains no provision in respect to the sale of the mortgaged chattels, nor in respect to the disposition of the avails of the sales. The referee finds upon undisputed evidence that, at the time the mortgage was executed, it was orally agreed between the mortgagor and the mortgagee that the mortgagor should continue the business of the store, paying out of the avails the bills, clerk hire and rent, and should keep up the stock and apply the balance upon the mortgage. This finding is not challenged by either litigant. The mortgagor made no payments on this mortgage. About April 12, 1897, the plaintiff purchased another stock of drugs, a soda fountain and drug store furniture of one Blackney, which were immediately removed to and joined with the stock in the German-American Pharmacy. This Blackney stock was found by the referee to have been worth $785, the soda fountain being worth $450 and the remainder of the property $335. The plaintiff gave in payment for the Blackney stock fifteen shares of the Riverside Cemetery Association of the par value of $100 each. When the Blackney stock ivas removed to the German-American Pharmacy it was agreed between Crandall and Hr. Sharp that it should be sold by the former, and that after the latter had received seventy-five per cent of the par value of the cemetery stock, which equals $1,125, the remainder received from the Blackney stock should be equally divided between -them. After this addition to the original stock of the store, the united stocks continued to be retailed by Crandall as before, until June 22, 1897, when, nothing having been paid on the mortgage, or on account of sales from the Blackney stock, Hr. Sharp took possession of the mortgaged chattels by virtue of his aforesaid mortgage and • of the Blackney stock by virtue of his title thereto. At this date Crandall, having purchased a hotel, left the store and thereafter gave no attention to its business, Hr. Sharp employing and paying the help, and opening a new set of books, which he continued until the property was seized by the defendant. July 19, 1897, Benedict Weber began an action in the Supreme Court against Oscar G.'Crandall, and September 17, 1897, recovered a judgment therein for $1,430.55 damages and costs, and on the same day issued an execution to the sheriff of the county of Erie. On the next day, September 18, 1897, the sheriff by virtue of the execution levied upon all the goods and furniture in the German-American Pharmacy. On the 21st of September, 1897, the sheriff closed the store, took the key, and October 4, 1897, sold the stock and furniture for $100 to the plaintiff in the execution. Frank Brundage, for the plaintiff. Frederick Haller, for the defendant. [MAJORITY — Follett, J. :] Follett, J. : The defendant appeals from the judgment awarding $450 damages for converting the soda fountain, and urges that the judgment should be reversed because the plaintiff in the action did not specifically point out the fountain and assert his title as purchaser from Blackney, and cites in support of his contention Duke v. Welsh (16 J. & S. 516). In that case it does not appear that the goods taken by the sheriff on the execution were in the possession of the plaintiff. Moreover, after the goods had been seized, the defendant, and the plaintiff were both present in the store and the defendant spoke of the goods as his, and the plaintiff failed to point out the-articles claimed to be owned by him. The facts in the case at bar-are quite different. The defendant in the execution was not in possession of any of the goods taken by the sheriff, and had not. been for nearly three months, during which, time, as the referee finds, the plaintiff was in possession. Besides the facts referred to in the statement of facts, it appears by the uncontradicted, evidence that the plaintiff after he took possession advertised the* contents of the store for sale. When he advertised the goods, or how they were advertised, does not clearly appear. The evidence: in tins respect, as in many others, is lacking in particularity. Had the defendant in the execution been in possession of the goods at. the time of the levy, so that the sheriff apparently had a right to-seize them, it would have been the duty of the plaintiff to point out the goods which he claimed under the chattel mortgage and those: which he claimed as purchaser. The plaintiff, not having fraudulently intermingled goods, was clearly entitled to recover for those goods which he had purchased of Blackney, and which the defendant in the execution had no interest in nor possession of. (Davis v. Stone, 120 Mass. 228 ; 22 Am. & Eng. Ency. of Law, 536, et seq., and cases cited.) The deputy of the sheriff who executed the execution testified that when the property was sold the plaintiff served a typewritten notice on the witness not to sell. The notice-was not read in evidence, but a statement of its contents is found, at folio 126, by which it appears that the plaintiff asserted that he-owned part of the goods by virtue of a chattel mortgage, and the: remainder absolutely. Having this notice, it was the duty of the sheriff, if he wished to make any distinction in his sale of the two-classes of goods, to ask the plaintiff to point out those which he. claimed under the chattel mortgage, and those which he claimed by original purchase. (Brush v. Batten, 15 N. Y. St. Repr. 548; affd.,. 134 N. Y. 617.) It follows that the plaintiff having the right to recover for the soda fountain, the defendant has no ground for appeal. In addition to the soda fountain it appears that the defendant took five show cases, show bottles, scales and counters, purchased by the plaintiff from Blackney. It is not asserted that these articles were so mingled with the property mortgaged that they were not easily identified, and the plaintiff’s right to recover for these articles is as clear as his right to recover for the soda fountain, and the referee erred in limiting the plaintiff’s recovery to the value of the soda fountain. The defendant was permitted to prove by the sheriff’s deputy that on September 18, 1897, a young man in charge of the store said that it belonged to Mr. Crandall. This was error. This, statement of the clerk was no part of his duty, and what he said was not competent on the question, who owned the property % For these errors the judgment shoidd be reversed, and a new trial granted. It is neither necessary nor wise to consider the question discussed as to the validity of the mortgage. • The mortgage was valid on its face. The case is barren of evidence showing precisely what was done by the mortgagor and mortgagee in performance of the oral contract under which some of the chattels mortgaged were retailed by Crandall, between the date of the mortgage, January 9, 1897, and June 22, 1897, when the plaintiff took possession. It does not definitely appear what the sales made by Crandall amounted to nor how the avails were applied. It does not appear how much new stock was purchased, how much paid for, and how much left unpaid for. It does appear that some goods were purchased by Crandall of a firm in Buffalo, for which the plaintiff subsequently paid, in whole or in part, but whether other goods were purchased by Crandall does not appear. It does appear that sixty dollars, arising from sales made by Crandall, were misapplied for his own benefit, without the knowledge of the plaintiff. The omitted facts referred to, and very likely other important facts, will be developed on a new trial, and the court will be better enabled to determine, as a question of fact, whether the mortgage, by virtue of the oral agreement between the mortgagor and mortgagee, as carried out by them, rendered the mortgage fraudulent. The judgment should be reversed and a new trial granted, with costs to the appellant to abide the event. All concurred, except Wabd, J., not voting. Judgment reversed and a new trial ordered, with costs to the plaintiff, appellant, to abide the event.