Baldwin v. Crow

• Decision Date: 14 February 1888
• Citation: 7 S.W. 146,86 Ky. 679
• Parties: BALDWIN et al. v. CROW et al.
• Court: Kentucky Court of Appeals

7 S.W. 146

86 Ky. 679

BALDWIN et al. v. CROW et al.

Court of Appeals of Kentucky.

February 14, 1888

Appeal from circuit court, Jessamine county.

Ben. P Campbell, Wm. Cromwell, and Simrall & Bodley, for appellants.

Bronaugh & Bronaugh, for appellees.

LEWIS J.

Baldwin & Co. instituted this action to recover of the sheriff a piano levied on as the property of one Dennis under an execution against him in favor of Crow, and, the law and facts having been submitted to the court, it was adjudged the property was subject to the execution, and that the action be dismissed. It appears that, several years subsequent to the date of the judgment in favor of Crow, the piano was delivered to Dennis, who executed therefor to Baldwin & Co. three notes for $150 each, payable in 6, 12, and 18 months and containing the following provision: "This note is one of a series given for the purchase of the instrument mentioned below, the conditions of which purchase are that said instrument remains the property of D. H. Baldwin & Co. until all notes given for the instrument are paid; and in default of payment of any of said notes at maturity, or at any time after such default before accepting payment of amount thus due, or in case said instrument, before payment in full, is removed from Nicholasville, Kentucky, without written consent of D. H Baldwin & Co., they may receive possession of said instrument without any liability on their part to refund any money previously paid on account of said purchase. Loss, in case of fire, to be borne by me. A. I. DENNIS."

In determining whether a contract is to be regarded as a conditional sale or mortgage, "the particular form or words of the conveyance are important, and it may be laid down as a general rule, subject to few exceptions, that whenever a conveyance, assignment, or other instrument transferring an estate, is originally intended between the parties as a security for money, or for any other incumbrance, whether the intention appears from the same instrument or from any other, is always considered in equity a mortgage." 2 Story, Eq. Jur. § 1018. It is manifest the object of the contract under consideration was to secure payment of the agreed purchase price, and it should therefore be regarded as an absolute sale and mortgage back; and such has been the uniform ruling of this court in similar cases. Greer v. Church, 13 Bush, 430; Manufacturing Co. v. Hart, 1 S.W. 414. To decide otherwise in this case would give validity to conditions in the contract which no court of equity could consistently enforce. If, then, this action had been against Dennis, who acquired the legal title, as well as possession, of the piano, the plaintiffs could not have recovered it. But it seems he, having paid no part of the consideration, voluntarily surrendered to them whatever claim or title he had. Consequently, the single issue now involved may be passed on without objection to the form of action, as was done in the lower court, and the right of the parties--Dennis not being one--ascertained and determined as the record stands.

We will therefore consider the question whether a lien upon personal property, secured by an unrecorded mortgage of which a contesting creditor of the mortgagor had no notice until after his execution was levied, can be enforced in preference to that acquired by the levy, if asserted before a sale by the officer. The decision of that question depends upon the construction of section 10, c. 24, Gen. St., as follows: "No deed of trust or mortgage conveying a legal or equitable title to real or personal estate shall be valid against a purchaser for a valuable consideration without notice thereof, or against creditors, until such deed shall be acknowledged or proved according to law, and lodged for record." If the inquiry whether, by that section, creditors generally were intended to be affected by notice of such conveyances and transfer of property to debtors in the same way and to the same extent as purchasers, was an original one, there would, looking alone to the language used, be some difficulty in reaching a satisfactory conclusion. But there is no reason whatever why a creditor, whose debt has been created prior to the conveyance, as was that of appellee Crow, and who has not been defrauded or injured thereby, should occupy a better attitude than a purchaser with notice. However, the question before us is rather how the section has heretofore been construed and applied by this court than how it should now be. For as section 4 of the act of 1820, (M. & B. St. 449,) and section 11, c. 24, Rev. St., having the same general purpose, and being substantially the same in phraseology, have each been passed on and construed from time to time, it is to be presumed the statute as it now exists was intended to conform to such judicial construction.

In Helm v. Logan's Heirs, 4 Bibb 78, (decided in 1815,) it was held that "a purchaser under execution is not affected by his notice of a mortgage which was not recorded, and therefore void as to creditors." On the contrary, in Campbell v. Moseby, Litt. Sel. Cas. *358, a majority of the court decided that the equity of the holder of a bond for a conveyance was superior to the title of a purchaser under execution with notice, and also that the equity of the purchaser by unrecorded deed was superior to and would prevail in a contest with the general creditor, or a subsequent purchaser under execution with notice. But in Graham v. Samuel, 1 Dana, 166, the principle decided in Helm v. Logan was sustained, and Campbell v. Moseby overruled. In Morton v. Robards, 4 Dana, 258, however,...