The property in dispute was mortgaged to one Seneca Beebe, in August, 1851. In May, 1852, the plaintiff took a chattel mortgage on it, the instrument stating, in terms, that it was given subject to the claim of Beebe. Beebe did not, within the year, re-file a copy of his mortgage; but in August, 1852, took another mortgage on the same property to secure the same debt. It is not pretended that at this time the debt, to secure which the first mortgage was given, was actually paid. In April, *Page 565 1853, the plaintiff re-filed a copy of his mortgage with a statement of the amount due thereon. Some two months afterwards Beebe sold the property, and, after demand, the plaintiff brought this action against the bailee of the purchaser, claiming title thereto under and in pursuance of his mortgage. Had he acquired a title superior to that of Beebe?
A chattel mortgage is something more than a mere security. It is a conditional sale of the thing mortgaged, and operates to transfer the legal title to the mortgagee, to be defeated only by a full performance of the condition. Nothing short of actual payment, in case of a breach of the condition, before foreclosure or sale, or voluntary waiver or surrender, can re-vest the legal title in the mortgagor. At the time the plaintiff's mortgage was given the legal title to the property had become absolute in Beebe; and the mortgagor had no interest therein except a mere equity of redemption. (Patchin v. Pierce, 12 Wend., 61;Burdick v. McVanner, 2 Denio, 170; Charter v. Stevens, 3 id., 33.) The tender of the debt would not have re-vested the title in him. (Thomas v. Gregory, 20 Wend., 17; Mattison v. Baucus, 1 Comst., 295; Otis v. Wood, 3 Wend., 498.) Nor did the omission to re-file the Beebe mortgage avoid it as against the plaintiff or enure to the benefit of the latter. The plaintiff had actual notice of the Beebe mortgage, for it was mentioned in his own, and the latter was given subject to it. He was not a subsequent mortgagee in good faith, against whom, on account of an omission to re-file, the Beebe mortgage ceased to be valid. (2 R.S., 3d ed., 136, §§ 9, 10, 11; Sanger v.Eastwood, 19 Wend., 515; Gregory v. Thomas, 20 Wend., 17.) He acquired no legal title to the chattels by his mortgage, as the mortgagor could transfer none. He was without such title when this suit was brought, unless there had been a payment of the Beebe debt, or a waiver or surrender of his mortgage, re-vesting the title in the mortgagor, and by relation, or in some other way, in *Page 566 the plaintiff. It is difficult to perceive how this could be, or how, admitting that there had been a satisfaction by or surrender to the mortgagor of the Beebe mortgage, it would enure to the benefit of the plaintiff. All the interest which he had in the chattels was acquired by a mortgage, given subject to or in subordination to that of Beebe. The subsequent acquisition of title by the mortgagor, or even a re-conveyance or release to him by Beebe, could not enlarge the operation or effect of the plaintiff's mortgage, or reform the instrument, so that his interest in the property should not be subordinate to, but independent of the Beebe mortgage. The plaintiff had no other or different title or right to the property, when he demanded it, than at the execution of the instrument, which was a right acknowledged by the instrument to be given and exist in subordination to the Beebe claim. Yet in a controversy, not between the mortgagor and Beebe, but between the plaintiff and one defending under the Beebe title, the court submitted to the jury the determination of the question whether, when the second mortgage was given, it was the understanding between Beebe and the mortgagor, that the first should be extinguished and given up; and substantially instructed them, that if they found that the parties intended that the first mortgage should be relinquished and extinguished, their verdict should be for the plaintiff. The judge did not inform the jury how the annihilation of the security, with or without payment or satisfaction of the debt, would invest the plaintiff with the legal title to the property, transform his mortgage into one not given subject to such security, and enlarge his interest in the property in question, beyond that given by the terms of the original transfer. In any view, the submission and instruction, it seems to me, were erroneous. Conceding that the plaintiff's mortgage gave him an interest in the property beyond the surplus remaining after payment of the debt secured by Beebe's first mortgage, and that an agreement to relinquish and cancel the latter security would *Page 567 operate to invest him with the legal title (without which he could not maintain the action), the case was barren of proof of any express parol agreement to give up or extinguish Beebe's first mortgage. On this point there was no conflict in the evidence, and it was full upon the question that there was no such agreement. Indeed, it established (and it was all drawn out on the part of the plaintiff) the reverse of the proposition submitted by the judge; and this, though in effect he erroneously instructed the jury that they were at liberty to imply an agreement to cancel and extinguish the mortgage, from the act of giving a new one and the surrender of a note mentioned in the first. Whether there had been an agreement for cancellation was, on the undisputed evidence, a question of law and not of fact. It did not belong to the jury; and they were probably misled by the charge of the judge. It was calculated to convey the impression that the Beebe mortgage was given to secure the note instead of the debt, of which the note was merely the evidence; that the mortgage must stand or fall with the note; and that whatever extinguished the note (even though renewed by another) would necessarily extinguish the mortgage, although the debt remained unpaid.
But it required something more than an understanding or agreement to be inferred from the acts of the parties, to satisfy and extinguish the mortgage. The taking of a new mortgage to secure the same debt and a surrender of the old note was no satisfaction or extinguishment of the original debt; nor by a surrender of the note was the first mortgage annihilated. The mortgages were but collateral securities for the debt. The debt was not paid, and until that was done all collateral securities should stand. (Butler v. Miller, 1 Comst., 500; Gregory v. Thomas, 20 Wend., 17.) A subsequent security for a debt of equal degree with a former, for the same debt, will not by operation of law extinguish it. (Manhood v. Cuch, Cro. Eliz., 716; Higgins' Case, 6 Rep., 45; Gregory v. Thomas, 20Wend., 17; Phelps *Page 568 v. Johnson, 8 Johns. R., 54; Preston v. Preston, Cro.Eliz., 817; Mumford v. Stocker, 1 Cow. R., 178; Cornell v. Lamb, 20 Johns. R., 407; Enis' case, Lit. R., 58.) In this case it was not pretended that the debt was paid by the giving of the second mortgage. The most that is claimed from the transaction is, that it was equivalent to a payment of the first note, and that being satisfied and surrendered up, the mortgage, which was but an accessory or incident to the debt, was annihilated by such payment. But the difficulty is, that the mortgage was a security for the debt and not for the note, which was merely evidence of the debt and not the debt itself. Surrendering the old note and taking a new one could not be a satisfaction or payment of the debt, and the mortgage, being a security for the latter, would not be extinguished short of such payment. The debt was not merged in the first note, so that, by operation of law, the note being surrendered and a new one substituted, the debt was satisfied. The transaction was but taking another security, of equal degree with a former one, for the same debt, which had not the legal effect to extinguish the first. Nor would an express parol agreement at the time of giving and receiving the second mortgage, that the first should be deemed satisfied, have operated to extinguish the first mortgage. To constitute the second mortgage a bar to the first, there must have been an express release, or an implied, or one arising out of a covenant not to sue. This rule rests on adjudged cases, and, I think, on principle. (Gregory v. Thomas, 20 Wend., 17;Phelps v. Johnson, 8 Johns. R., 54.) In Day v. Leal (14Johns. R., 404) it was held that even a security of a higher nature, if it be taken expressly as collateral security, will not extinguish the inferior; and in Higgins' case it was said that, where the securities are of equal degree, they shall be intended and held to be distinct and independent, although both are liens upon property. Had an express parol agreement been shown that Beebe's first mortgage should be satisfied by the second, the transaction *Page 569 in legal effect would not have been a satisfaction or extinguishment of the prior security. But it is unnecessary to hold that Beebe's first mortgage could only be extinguished by an express release, or one to be implied from a covenant not to sue, as there was no express parol agreement shown that it should be satisfied by the second mortgage, and no evidence to go to the jury upon which such a question could be properly predicated. In legal effect the first security was not merged in the second; nor was a former security satisfied by the act of receiving a subsequent one for the same debt. The judge, therefore, erred in leaving to the jury to imply an agreement from the transaction of the 19th August, 1852, and virtually instructing them that if they should find that the parties intended that the first mortgage should be relinquished and extinguished the respondent was entitled to recover.
The judgment should be reversed and a new trial ordered.
Judgment accordingly.