Opinion
May 17, 1943.
Present — Hagarty, Carswell, Johnston, Adel and Taylor, JJ. [See post, p. 789.]
On the court's own motion the decision of this court handed down May 7, 1943 [ ante, p. 784], is amended to read as follows: Proceeding under section 696, Civil Practice Act, to determine title to chattels claimed by a mortgagee, which were subjected to levy under an execution issued by judgment creditors against the mortgagor. Cross appeals by the third-party claimant or mortgagee and by the judgment creditors from an order holding that twenty-three specified chattel mortgages were invalid and that one specified chattel mortgage was valid. Order of the City Court of Mount Vernon modified on the law and the facts by striking out decretal paragraphs 1, 2 and 3 and by inserting in place thereof a provision that the chattel mortgages, Items No. 1, 2, 4 to 20 inclusive, 22, 24 and 25 are valid; and that the chattel mortgage, Item No. 23, is void. As thus modified, the order, insofar as appealed from, is unanimously affirmed, without costs. The giving of separate and distinct mortgages on each car mortgaged, with a detailed description thereof, over a period of time from October 14, 1940, to April 2, 1942, in the regular course of the financing of the business of a dealer in used cars, with a shifting stock, does not constitute a mortgaging of merchandise in bulk within the intendment of section 230-a Lien of the Lien Law ( Utica Trust Deposit Co. v. Decker, 244 N.Y. 340; Matter of Rosom Utilities, Inc., 105 F.2d 132, 133; Sorrin v. Pacific Finance Corp., 37 F. Supp. 527; Matter of Sunshine Stores, Inc., v. First Nat. Bank, Dolgeville, 264 App. Div. 930). Hence such mortgages are valid although there was no compliance with the preliminary requirements of that section in respect of a mortgage intended to operate upon a stock of merchandise in bulk, which requirements are essential to the validity of such a mortgage. Findings of fact and conclusions of law inconsistent herewith are reversed and new findings and conclusions will be made. Settle order on notice within ten days from the date of this decision.