Babbitt v. Bent County Bank of Las Animas

• Decision Date: 02 May 1910
• Citation: 50 Colo. 258,108 P. 1003
• Parties: BABBITT v. BENT COUNTY BANK OF LAS ANIMAS.
• Court: Colorado Supreme Court

108 P. 1003

50 Colo. 258

BABBITT v. BENT COUNTY BANK OF LAS ANIMAS.

Supreme Court of Colorado

May 2, 1910

Appeal from District Court, Bent County; Henry Hunter, Judge.

Action by the Bent County Bank of Las Animas against William Babbitt. From a judgment for plaintiff, defendant appealed. Affirmed.

This cause comes here on appeal by the defendant below, William Babbitt, from a judgment in favor of plaintiff below, the Bent County Bank of Las Animas, a Colorado corporation. The contest is between the above parties, as to the priority of chattel mortgage liens, held respectively by them on the same property. On July 23, 1902, the Baileys, owners and in possession of the property covered by the mortgages in question, executed their two promissory notes for $10,241.19 to the defendant, the last one of which fell due July 23 1904, and secured the same by chattel mortgage, regularly certified and recorded, on the property described in the complaint. Before maturity $8,000 was paid on this indebtedness, leaving a balance due thereon of $2,569.76. On July 30, 1903, the Baileys executed their note to the plaintiff bank for $739.30 due in six months after date, and another one for $1, due two years after date, and secured their payment by chattel mortgage on the same property subject to the Babbitt mortgage, which bank mortgage was duly recorded in the offices of the respective county clerks of the counties in which the property was located. The regularity of the acknowledgment of the latter mortgage however, is questioned, as hereinafter pointed out. On July 23, 1904, when the last note, to secure the payment of which the first mortgage was given, matured, Babbitt took a new mortgage on the same property to secure new notes from the Baileys, aggregating $3,219, one thereof for $3,000 due in one year, and the other for $219 due in two years. These new notes covered $2,569.76 of the old, and $649.24 of the new indebtedness the latter being for advances made meanwhile by Babbitt to the Baileys, in connection with the care and keep of, and in additions to the mortgaged property. The original notes were not surrendered, nor was the first Babbitt mortgage released of record. The second Babbitt mortgage made no mention of his first one, neither was it extended by affidavit under the statute or otherwise. Each of the mortgages provided that possession of the property should remain with the mortgagors until default made. The acknowledgment of the bank mortgage was taken before P. G Scott, notary, who was at the time the cashier, a director of and a stockholder in the bank corporation. Because of this fact defendant says the acknowledgment was no acknowledgment and therefore that the bank's mortgage was not entitled to record, is a void instrument and creates no lien. Not until about 11 months after the first Babbitt mortgage matured did he make any attempt to take possession of the property covered thereby, the bank mortgage meanwhile being in full force and effect. When he then did so the bank commenced this suit in replevin, claiming its mortgage as first lien. Judgment below was for the bank.

Allen M. Lambright, for appellant.

H. L. Lubers, for appellee.

BAILEY, J. (after stating the facts as above).

There are two questions for consideration:

First. Had the bank, under its mortgage, if properly acknowledged, the first lien?

Second. Was the bank's mortgage, as acknowledged and certified, entitled to record, and is such record constructive notice to Babbitt?

On the authority of Cassell...