Evans v. Finley

• Decision Date: 01 April 1941
• Citation: 111 P.2d 833,166 Or. 227
• Parties: EVANS <I>v.</I> FINLEY ET AL.
• Court: Oregon Supreme Court

166 Or. 227

111 P.2d 833

EVANS

v. FINLEY ET AL.

Supreme Court of Oregon.

Argued March 18, 1941.

Affirmed April 1, 1941.

Limitation of actions — Remedy

1. Statutes of limitation affect only the remedy and do not extinguish the right.

Limitation of actions — Constitutional law

2. The legislature may enact a statute which limits the time within which actions may be brought to enforce demands where there was previously no period of limitation or which shortens the existing time of limitations, and such a law may operate upon existing contracts without necessarily being invalid on ground that it "impairs obligation of contract", but the rule is subject to the limitation that a reasonable time must be given for the commencement of an action before the bar takes effect.

Chattel mortgages — Effect of recording

3. The effect of statute providing that the effect of recording of chattel mortgage shall cease upon expiration of three years from date of maturity of obligation unless prior to expiration of the period of three years the mortgagee or his assignee makes and files an affidavit of renewal, is merely to cut off the remedy of foreclosure upon expiration of three years after maturity of the obligation, leaving mortgagee's every substantial right unimpaired, and even that result can be avoided by the filing of the renewal affidavit.

Constitutional law — Chattel mortgages — Recording

4. The statute providing that the effect of recording of chattel mortgage shall cease upon expiration of three years from date of maturity of obligation unless prior to expiration of three years the mortgagee or successor in interest files an affidavit of renewal, and that holder of recorded mortgage executed prior to passage of act, the lien of which had expired under the act, should have six months from date of passage of act within which to file affidavit of renewal, does not "impair obligation of contract" and is constitutional.

Chattel mortgages — Limitation of actions

5. Where note matured March 22, 1934, and statute providing that the effect of recording of chattel mortgage shall cease upon expiration of three years from date of maturity of obligation, unless prior to expiration of three years mortgagee or successor in interest shall file affidavit of renewal, did not take effect until June 12, 1935, the holder of mortgage had until March 22, 1937, in which to foreclose chattel mortgage or file the prescribed affidavit of renewal, and where the holder failed to do so, the chattel mortgage could not be enforced as against holder of subsequently executed mortgage.

Limitation of actions — Legislative question

6. The mischief which statutes of limitation are intended to remedy is the general inconvenience resulting from delays in the assertion of a legal right which it is practicable to assert, but the question whether such mischief exists and the means to be taken to curb it is for the legislature, not the courts.

Constitutional law — Limitation of actions

7. In determining validity of statute providing that the effect of recording of chattel mortgage shall cease upon expiration of three years from date of maturity of obligation unless prior to expiration of three years the mortgagee or successor in interest shall file affidavit of renewal, court assumed that it was the judgment of legislature that hardships and injustices, perhaps frauds, had been suffered under prior law and that the new law, by requiring a more prompt enforcement in courts of rights of mortgagees, or in lieu thereof the filing of the prescribed affidavit, would prevent or lessen the evils, and court could not say that there was no reasonable basis for such determination.

                  See 12 Am. Jur. 89; 17 R.C.L. 672 (6 Perm. Supp., 4335)
                  14 C.J.S., Chattel Mortgages, § 169
                

Before KELLY, Chief Justice, and BAILEY, LUSK, RAND and ROSSMAN, Associate Justices.

Appeal from the Circuit Court, Linn County.

L.G. LEWELLING, Judge.

Suit to foreclose a chattel mortgage by Estella F. Evans against George Finley, Mattie E. Finley, executrix of the estate of Mary A. King, deceased, and others. From an adverse decree, Mattie E. Finley, executrix of the estate of Mary A. King, deceased, appeals.

AFFIRMED.

William S. Risley, of Albany, for appellant.

Orval N. Thompson, of Albany (Weatherford & Thompson, of Albany, on the brief), for Estella F. Evans, and others.

On March 23, 1933, the defendant and respondent, George Finley, executed to Mary A. King, now deceased, his promissory note for $3,000 due one year after date, and to secure payment thereof a chattel mortgage on six horses and other personal property. Among the horses so mortgaged were three mares, which are the subject matter of this suit. The mortgage was recorded in the records of chattel mortgages for Linn county on April 1, 1933.

On October 2, 1937, Perry Music executed to the Bank of Shedd his promissory note for $400, payable six months after date, and to secure payment thereof a chattel mortgage on certain horses, including the three mares hereinabove mentioned. On the same day this mortgage was recorded in the records of chattel mortgages of Linn county. On March 30, 1938, the Bank of Shedd, for a valuable consideration, endorsed and delivered this promissory note to the plaintiff and respondent, Estella F. Evans, and executed to her an assignment of the chattel mortgage given to secure its payment.

On August 24, 1939, the plaintiff's note not having been paid, she commenced this suit to foreclose her mortgage. Included among the defendants was Mattie E. Finley, executrix of the estate of Mary A. King, deceased, who will hereinafter be referred to as the defendant. She answered, setting up the prior mortgage given to Mary A. King which, with respect to the three mares in question, was alleged to be superior in right to the plaintiff's mortgage, and she prayed for a decree, declaring the King mortgage to be a first lien on the three mares and that it be foreclosed.

Other persons were made parties defendant as claiming some interest in the mortgaged property but no further reference need be made to them as the sole controversy in this court is between the plaintiff, Estella Evans, and the defendant, Mattie E. Finley, executrix. The trial court held that the King mortgage was barred by the statute of limitations, and entered a decree foreclosing the plaintiff's mortgage. The defendant Mattie E. Finley, executrix, has appealed.

LUSK, J.

In the view that the court takes of this case the only question that need be discussed is the propriety of the circuit court's ruling that the defendant's mortgage is barred by the statute of limitations. That question involves the constitutional validity of a statute enacted by the legislature in 1935 relating to chattel mortgages: § 3, Ch. 200, Oregon Laws 1935. Before the 1935 amendment the statute read as follows:

"Every mortgage, deed of trust, conveyance, or instrument of writing intended to operate as a mortgage of personal property, either alone or with real property, hereafter made, which shall not be accompanied with immediate delivery and followed by the actual and continual change of possession of the personal property mortgaged, or which shall not be recorded as provided in section 54-202, shall be void as against subsequent purchasers and mortgagees in good faith and for a valuable consideration of the same personal property, or any portion thereof." § 54-205, Oregon Code 1930.

The amendment of 1935 added the following language (omitting portions not here material):

"But the effect of such recording or filing shall cease as to all persons upon the expiration of three years from the date of maturity of such obligation (or if the indebtedness is not disclosed by the mortgage itself, then the date of execution of such mortgage shall be deemed the date of the maturity of the obligation or indebtedness secured or evidenced by such mortgage), unless prior to the expiration of said period of three years the mortgagee or his assignee or other successor in interest or one of them, if there are more than one, makes and files an affidavit showing the date of the mortgage, the names of the parties, the date of filing, and the amount of the debt justly owing at the date of the making of such affidavit, or the condition of the obligation then unfulfilled. * * * The affidavit must be filed in the office where the mortgage therein described is filed, and thereupon the county clerk or recorder of such county must attach the same to the mortgage therein described and note the date of filing opposite the entries of such mortgage in the indexes; whereupon the effect of filing of the original mortgage shall continue in full force and effect for the period of three years from the date of filing said affidavit. * * *

"Provided that the holder of a duly filed or recorded mortgage on personal property, executed prior to the passage of this act, the lien of which has expired under the provisions of this act, shall have a period of six months from and after the passage of this act within which to make and file an affidavit of renewal, as herein provided, thereby continuing the effect of the filing or recording of the mortgage for a period of three years from the date of filing the renewal affidavit."

The entire section, as amended, is § 68-203, O.C.L.A.

The three mares were not delivered to Mary A. King, at the time of the execution of the mortgage to her, and neither she nor her executrix has ever had possession of them. The King mortgage was recorded, but no affidavit such as the statute requires was ever filed, notwithstanding that, at the time that the plaintiff's mortgage was given, more than three years had elapsed from the date of the maturity of the obligation secured by the King mortgage. It is not claimed that the Bank of Shedd, or its assignee the plaintiff, had actual knowledge of the King mortgage; and it, therefore, follows that, if the statute be...