Ashland Finance Co. v. Dudley
| Decision Date | 24 February 1925 |
| Docket Number | 5211. |
| Citation | 127 S.E. 33,98 W.Va. 255 |
| Parties | ASHLAND FINANCE CO. v. DUDLEY. |
| Court | West Virginia Supreme Court |
Submitted February 17, 1925.
Syllabus by the Court.
Where a mortgagor removed a mortgaged automobile into this state from the state of Kentucky, where the mortgage thereon was duly recorded, the mortgage lien was superior to an attachment lien subsequently secured on the automobile in this state; it not appearing that the mortgagee consented to, or had notice of, such removal.
Point 3 of the syllabus in the case of Ballard v. Great Western M. & M. Co., 39 W.Va. 394, 19 S.E. 510, disapproved.
Error to Circuit Court, Cabell County.
Action by the Ashland Finance Company against J. M. Dudley. From a judgment for defendant, plaintiff brings error. Reversed and remanded.
T Selden Jones, of Huntington, for plaintiff in error.
J Blackburn Watts, of Charleston, for defendant in error.
The Ashland Finance Company has brought this case here on error from the judgment of the circuit court of Cabell county. A jury was waived and the case submitted to the court on an agreed statement of facts, which being brief, is here copied in full:
"Statement of Case, and Agreed Statement of Facts.
The Ashland Finance Company, a corporation existing under the laws of the state of Kentucky, having its principal office at Ashland, in the county of Boyd, and state of Kentucky, holds a chattel mortgage on a certain Buick automobile. The chattel mortgage is dated April 25, 1924, and executed by one Swift to secure the payment of $450 as purchase money for said automobile, which said sum of $450 is payable for 10 months at the rate of $45 per month.
The said Swift is a resident of the city of Ashland, Boyd county Ky. and the chattel mortgage was recorded in the Boyd county court clerk's office, of Boyd county, Ky. on the 25th day of April, 1924.
On the 28th day of May, 1924, the said Swift was driving said automobile in the state of West Virginia, and had an accident with one J. M. Dudley, at the town of Milton, Cabell county W.Va. Suit was instituted by the said Dudley against the said Swift on the 28th day of May, 1924, and the said automobile was attached on that day, pending the outcome of said suit. On the 9th day of June, 1924, the said Dudley obtained judgment against Swift for the sum of $300, and the said attachment was sustained. The aforesaid chattel mortgage has not been recorded in the state of West Virginia.
The Ashland Finance Company claims the prior lien on said automobile by virtue of their chattel mortgage, recorded in the county of Boyd, and state of Kentucky, while the said J. M. Dudley claims the prior lien on said automobile by virtue of his attachment. The question is which of the respective parties have the prior lien?"
The answer of the trial court to the question asked in the closing sentence of the foregoing statement was in favor of Dudley, and judgment was entered accordingly.
The general rule, as stated in the text-books and encyclopedias, and adopted by courts of last resort in nearly all the states, is that a chattel mortgage executed in good faith and valid under the laws of the state where executed will be held to be valid by the courts of a sister state to which the property may be removed. If valid where made and properly recorded under the laws of the state where executed, it will be enforced in the courts of another state as a matter of comity, although not recorded there. In case a lien is secured against such property in the state to which it is removed, the lien will be treated as secondary to the lien of the chattel mortgage, unless the transaction contravenes the statute, the law, or the policy of the former. 11 C.J. 424, par. 33; Minor, Conflict of Laws, par. 132; Wharton, Conflict of Laws, par. 355b; Jones on Chattel Mortgages (5th Ed.) par. 301; Creelman Lumber Co. v. Lesh, 73 Ark. 16, 83 S.W. 320, 3 Ann. Cas. 108. (See note to the foregoing case, citing a large number of cases.) Bank of U.S. v. Lee et al., 13 Pet. 107, 10 L.Ed. 81; Adams v. Fellers, 88 S.C. 212, 70 S.E. 722, 35 L. R. A. (N. S.) 385; In re Shannahan & Wrightson Hdwe. Co. (Del. Super.) 118 A. 599.
Further citation of authority in support of this principle is not necessary as it is so universally established throughout the states that in four states only, to wit, Louisiana, Michigan, Pennsylvania, and Texas, has a contrary rule been judicially adopted. 11 C.J. 426.
Our statute rendering chattel mortgages void as to creditors and subsequent purchasers without notice (see section 5, c. 74 of Barnes' Code) makes no specific reference to recording in this state mortgages made outside of the state. Consequently by the weight of authority, no registration of a mortgage properly executed and recorded in a sister state is obligatory in this state, by reason of that statute.
Jones on Chattel Mortgages, par. 303.
To the same effect is the holding of the court in the case of Craig v. Williams, 90 Va. 500, 18 S.E. 899, 44 Am. St. Rep. 934. In its opinion, the court said:
"If the mortgage be duly recorded in the state where it was executed, and the mortgagor afterwards takes the property with him into another state, no registration of the mortgage is necessary, unless made so by positive statute of that state."
See opinion which cites quite an array of authorities. The Virginia case, decided in 1894, also held as follows, supporting the general rule in regard to chattel mortgages:
"A trust deed of chattels, valid and recorded in another state, is valid in this state, though not recorded here."
Since that date, the Legislature...
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