Opinion
November 9, 1967
Cross appeals from a judgment of the Supreme Court which (1) found plaintiff bank entitled to recover from defendant the sum of $1,650, the value of certain farm machinery seized by defendant under a chattel mortgage subordinate to a chattel mortgage held by plaintiff; (2) found defendant entitled to recover on its counterclaim, by virtue of its chattel mortgage, the sum of $8,250, the value of 53 cows seized by plaintiff bank, purportedly under its chattel mortgage, but later determined not to be covered thereby, this in an action by the mortgagor's trustee in bankruptcy against the present plaintiff bank ( Rogers v. Stissing Nat. Bank, 23 A.D.2d 951) upon the court's finding that the cows taken were not identifiable as covered by the bank's chattel mortgage; and the consequent judgment for the amount of their value having been paid by the bank to the trustee; and (3) awarded judgment to defendant for the $6,600 difference. The effect of the judgment, of course, would be to require the bank to pay twice for the value of the cows taken by it as the result of mistaken identification and plaintiff in its reply pleaded res judicata in defense. The 53 cows with which the prior action was concerned were part of the total of 59 actually seized, the trial court in that action finding that the remaining 6 were properly identified as covered and were lawfully taken. In this action, the trial court found res judicata with respect to the 6 animals and denied any recovery on account of their seizure, but held plaintiff estopped to assert the defense with respect to the remaining 53. It is clear that the trustee in bankruptcy, the plaintiff in the prior action, represented the secured creditors, including the defendant in the case now before us, as well as those unsecured, and was authorized to, and did bring the action in their behalf. (Bankruptcy Act, § 60, subd. [a], par. [1]; U.S. Code, tit. 11, § 96, subd. [a], par. [1]; Matter of Newport Planing Mill Co., 46 F.2d 656.) The trustee and the defendant-respondent-appellant being in privity, the prior judgment is a bar. ( Israel v. Wood Dolson Co., 1 N.Y.2d 116; and see B.R. DeWitt, Inc. v. Hall, 19 N.Y.2d 141.) The mistaken impression of one or more of the attorneys in the prior action that no privity existed and the interposition of an objection to testimony on that ground (which the trial court, incidentally, overruled) could in no way give rise to an estoppel against the plaintiff here, and the trial court's holding was in error in that respect. None of the elements necessary to create an estoppel have been demonstrated, the record being barren of proof or inference that anyone relied on the supposed misrepresentation — actually an erroneous statement of the law — or was thereby prejudiced or induced to act or refrain from action or to change his position in any respect. (See Triple Cities Constr. Co. v. Maryland Cas. Co., 4 N.Y.2d 443, 448.) Judgment modified, on the law and the facts, so as (1) to delete the award of damages to defendant, (2) to dismiss the counterclaim and (3) to award to plaintiff damages of $1,650, with appropriate interest and costs; and, as so modified, affirmed, with costs to plaintiff-appellant-respondent. Gibson, P.J., Herlihy, Aulisi, Staley, Jr., and Gabrielli, JJ., concur in memorandum Per Curiam.