Evans-Snider-Buel Co. v. McFadden

• Decision Date: 19 November 1900
• Docket Number: 1,403.
• Citation: 105 F. 293
• Parties: EVANS-SNIDER-BUEL CO. et al. v. McFADDEN et al.
• Court: U.S. Court of Appeals — Eighth Circuit

105 F. 293

EVANS-SNIDER-BUEL CO. et al. v. McFADDEN et al.

No. 1,403.

United States Court of Appeals, Eighth Circuit.

November 19, 1900

The record in this case discloses the following facts, in the light of which it is to be determined: On June 17, 1896, the Evans-Snider-Buel Company, the principal plaintiff in error held two deeds of trust in the nature of mortgages, one dated April 23, 1896, and the other May 19, 1896, covering about 6,775 head of cattle, which deeds of trust had been executed by John R. Blocker, who was at the time a resident and citizen of Bexar county, state of Texas. The cattle described and covered by the two deeds of trust were at the time in pasture near the town of Muscogee, in the Creek Nation of the Indian Territory. The deeds of trust were given to secure the payment of notes executed by John R. Blocker to the amount of about $130,000, which were held at the time by the Evans-Snider-Buel Company, and represented money that had been advanced by that company to Blocker to enable him to purchase the cattle in controversy. The testimony shows without any contradiction that Blocker had not advanced any money of his own to purchase the cattle, but that they had been acquired with funds furnished for that purpose by the Evans-Snider-Buel Company. Both deeds of trust were filed for record and were recorded, within a day or two after their execution, in the clerk's office of the United States court for the Northern district of the Indian Territory, that being the district in which the mortgaged property was located. One of the mortgages--being the one that was first executed to secure notes to the amount of $122,184.60-- was also recorded, the day after it was executed, in Bexar county, Tex., where the mortgagor resided. On June 17, 1896 William McFadden & Son, the defendants in error, commenced a suit by attachment against John R. Blocker in the United States court for the Northern district of the Indian Territory upon a judgment in the sum of $55,875.71, which the attaching creditors had recovered against John R. Blocker in Jefferson county, Tex., on May 26, 1887. On June 29 1896, they caused the writ of attachment in that suit to be levied on the cattle covered by the aforesaid deeds of trust which were then in pasture near Muscogee, in the Indian Territory. At the time of directing the levy of the writ of attachment, McFadden & Son were aware of the existence of the two deeds of trust aforesaid, they having obtained a description of the cattle on which they directed the levy to be made by examining the description contained in said deeds of trust as then recorded in the Indian Territory. On July 14, 1896, the Evans-Snider-Buel Company gave bond as interpleader in the cause in the sum of $150,000, and, having given such bond in accordance with law, was permitted to retain possession of the attached cattle. The writ issued in the attachment suit was returnable on the 3d day of December, 1896, and at the return term of the writ, to wit, on January 27, 1897, the Evans-Snider-Buel Company filed its interplea in due form, asserting therein that the cattle were not subject to seizure and sale as the property of John R. Blocker, but were its property. Two days later, to wit, January 29, 1897, judgment by default in the sum of $55,875.71 was rendered against J. R. Blocker in the attachment suit, he having failed to make answer to the complaint. Subsequently the issue arising on the interplea in the case as between the Evans-Snider-Buel Company and William McFadden & Son was twice tried, and resulted on each occasion in a verdict in favor of the interpleader and against the attaching creditor, which judgments, however, were in each instance reversed on appeal by the United States court of appeals in the Indian Territory. The opinion of that court on the first appeal is reported in 48 S.W. 1043. On the last reversal the United States court of appeals in the Indian Territory rendered a judgment in favor of the attaching creditors and against the interpleader and the sureties on its bond in the sum of $72,250.35. The interpleader has brought the case to this court for review.

U. M. Rose and H. M. Pollard (C. B. Stuart, W. E. Hemingway, and G. B. Rose, on the brief), for plaintiffs in error.

W. T. Hutchings and N. B. Maxey (J. B. Clayton, on the brief), for defendants in error.

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

THAYER Circuit Judge, after stating the case as above, .

Among the numerous chapters of Mansfield's Digest of the Laws of Arkansas which were extended over and put in force in the Indian Territory by the act of congress of May 2, 1890 (26 Stat. 81, 95, c. 182), was chapter 110, entitled 'Mortgages,' which chapter contains, among others, the following sections:

'Sec. 4742. All mortgages, whether for real or personal estate, shall be proved or acknowledged in the same manner that deeds for the conveyance of real estate are now required by law to be proved or acknowledged; and when so proved or acknowledged shall be recorded-- if for lands, in the county or counties in which the lands lie, and, if for personal property, in the county in which the mortgagor resides.

'Sec. 4743. Every mortgage, whether for real or personal property, shall be a lien on the mortgaged property from the time the same is filed in the recorder's office for record, and not before; which filing shall be notice to all persons of the existence of such mortgage.'

Prior to the adoption of the chapter concerning mortgages as the law of the Indian Territory, it had been decided by the supreme court of Arkansas in Main v. Alexander, 9 Ark. 112, that by force of the aforesaid sections a mortgage on personal property executed in that state was good as between the parties thereto, though not acknowledged and recorded; but that it constitutes no lien upon the mortgaged property as against strangers until it is acknowledged and recorded in the mode prescribed by the statute, although they have actual notice of its existence. The doctrine last stated had been recognized and enforced in the state of Arkansas in several other cases prior to May 2, 1890, but in some cases-- notably in Mitchell v. Wade, 39 Ark. 377, 386, Martin v. Ogden, 41 Ark. 186, 192, and in Ford v. Burks, 37 Ark. 91, 94-- it had been criticised as harsh and unjust, and not in harmony with equitable principles as they prevail elsewhere. It had also been decided as early as 1886 in Watson v. Lumber Co., 49 Ark. 83, 4 S.W. 62, that a foreign corporation, not being a resident of that state, could not execute a mortgage on personal property located in that state which it owned, and, by placing it of record, create a lien which would be good as against strangers. In Main v. Alexander the controversy arose between a mortgagee whose mortgage was recorded, but not properly acknowledged, and a creditor of the mortgagor, who had attached the mortgaged property subsequent to the execution and record of the mortgage; and it was decided that the lien of the attaching creditor was paramount. In the case of Watson v. Lumber Co. the controversy arose between a mortgagee who held a mortgage executed by a foreign corporation that was recorded in the county where the property was situated and certain judgment creditors of the mortgagor company who had caused executions to be levied on the mortgaged property subsequent to the execution and recording of the mortgage, and it was held that the lien of the judgment creditors was paramount to that of the mortgagee. On February 3, 1897 (29 Stat. 510, c. 136), congress passed an act to the following effect:

'That section forty-seven hundred and forty-two of Mansfield's Digest of the Laws of Arkansas, heretofore put in force in the Indian Territory, is hereby amended by adding to said section the following: 'Provided, that if the mortgagor is a non-resident of the Indian Territory the mortgage shall be recorded in the judicial district in which the property is situated at the time the mortgage is executed. All mortgages of personal property in the Indian Territory heretofore executed and recorded in the judicial district thereof in which the property was situated at the time they were executed are hereby validated."

As this statute in express terms validated all mortgages theretofore made by nonresidents of the Indian Territory on personal property there located which had been recorded in the judicial district where the property was situated, and therefore embraced and validated the two mortgages that had been executed by J. R. Blocker in favor of the Evans-Snider-Buel Company, one of the principal questions discussed before this court concerns the power of congress to enact the statute aforesaid, and give to it such retrospective operation. It will be observed that William McFadden & Son, hereafter referred to as the attaching creditors, caused the writ of attachment in the action brought by them against J. R. Blocker, the mortgagor, to be levied on the cattle that were conveyed by the mortgage, about seven months before the act of congress validating the mortgage was approved; also that the judgment by default was entered in that case against the attached debtor five days before the law was enacted. But when the act was approved the interplea of the Evans-Snider-Buel Company in the attachment suit was still pending and undetermined, as well as when the judgment by default was taken, and no trial of the issue existing between the interpleader and the attaching creditors was had until several months thereafter, to wit, on April 20, 1897.

We deem it wholly unnecessary to indulge in any extended discussion of the question which has been mooted whether the act of congress aforesaid impairs the obligation of a contract,...