Opinion
Argued June 10, 1881
Decided October 4, 1881
Esek Cowen for appellant. Nelson Davenport for respondent.
There is but little that needs to be said in this case, in addition to what is contained in the opinion of the General Term.
1. The defendant was properly held to account for the excess of the purchase-price of the property sold on the chattel mortgage beyond the legal claims secured thereby. He assumed to sell all the mortgaged property under the power of sale contained in the mortgage, and afterward took possession of and claimed the property under this title. The mortgagor could elect to treat the entire sale as valid, and to regard the amount for which the property sold beyond the amount applicable to the mortgage debts as unpaid purchase-money in the hands of the defendant. The receiver succeeded to the rights of the mortgagor, and can enforce the payment of the surplus in this action.
2. The finding below as to the amount of the claims secured by the mortgage was based upon evidence, and although the evidence was conflicting, the conclusion of the trial court having been approved by the General Term, is conclusive on this appeal. The claim, that the sum of $400, received by Nelson McChesney out of the proceeds of the note of December 10, 1874, was secured by the mortgage and should have been credited to the defendant, is not tenable for several reasons: first, the note was an accommodation note made by the defendant, and is not a liability within the strict terms of the mortgage, or secured thereby; second, the note was not made until nearly two months after the mortgage had been foreclosed by a sale of all the property embraced therein, which was an extinguishment of the security by the act of the defendant; and third, the note was not paid by the defendant until after proceedings supplementary to execution had been instituted, and an equitable lien on the fund or debt acquired by the judgment creditor.
3. The surplus on the execution sale had not been paid to the sheriff. It seems that his fees were paid, and so far as appears, he makes no claim, and none is asserted in his behalf. If the surplus had been paid to the sheriff, he would have held it for the judgment debtor. We think an action could have been maintained by the judgment debtor to recover the surplus in the hands of the defendant, and this right passed to the receiver. If there is any counter-claim or equity which should debar the judgment debtor or the receiver from maintaining an action to recover this surplus, this claim or equity should have been asserted by the defendant and established on the trial.
4. The finding that the defendant had in his hands moneys, etc., to the amount for which judgment was rendered, may not be technically correct. But the finding, construed in connection with the pleadings and evidence, is, in substance, that the defendant was indebted in the sum mentioned, by reason of the matters referred to. The exception to the form of the finding does not call for a reversal of the judgment.
The judgment should be affirmed.
All concur.
Judgment affirmed.