SUPREME COURT OF NEW YORK, APPELLATE DIVISION, THIRD DEPARTMENT
April 29, 1968
NATIONAL BANK OF WINDHAM, RESPONDENT,
MILROY CHEVROLET, INC., APPELLANT
Herlihy, J. P., Reynolds, Aulisi, Staley, Jr., and Gabrielli, JJ., concur in memorandum decision by Herlihy, J. P.
Appeal from a judgment in favor of the plaintiff following a trial without a jury. In July, 1963 the plaintiff bank loaned an automobile dealer $3,000 as evidenced by a note which was secured by a chattel mortgage on two automobiles. In early October the plaintiff and the automobile dealer mutually agreed to substitute the automobile here in question -- a Chevrolet Corvette Stingray -- for the existing security and a duly executed chattel mortgage was thereupon filed in the Town Clerk's office on October 17, which is not in issue. On October 21 the automobile dealer, apparently being in serious financial difficulty, and at the request of the defendant, conveyed the said automobile to it with the admonition that "all I [automobile dealer] had was a little equity in this car". The automobile dealer thereafter defaulted on the payment of the loan to the plaintiff and the present action was commenced to secure the return of the said automobile, or in the alternative, its value. The defendant at the trial contended that at the time of the giving of the chattel mortgage to the plaintiff, the automobile dealer did not own the same, having signed a motor vehicle form stating that the automobile was sold to one Gormley, which knowledge the defendant did not possess at the time of its taking title. The defendant had a search made at the Town Clerk's office on October 19, and was advised that there were no liens on file. The motor vehicle form allegedly conveying the said automobile from the dealer to Gormley constituted some evidence of a transfer of ownership. However, the said dealer's uncontradicted testimony at the trial refuted such evidence and the court could and did very properly find that the plaintiff had acquired a valid lien on the said automobile prior to any claim on the part of the defendant.
Judgment affirmed, with costs.
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