Gasconade Development Co. v. Mcilroy Bank & Trust Co.

• Decision Date: 17 January 1938
• Docket Number: 4-4890
• Citation: 112 S.W.2d 653,195 Ark. 404
• Parties: GASCONADE DEVELOPMENT COMPANY v. MCILROY BANK & TRUST COMPANY
• Court: Arkansas Supreme Court

112 S.W.2d 653

195 Ark. 404

GASCONADE DEVELOPMENT COMPANY v. MCILROY BANK & TRUST COMPANY

4-4890

Supreme Court of Arkansas

January 17, 1938

Appeal from Washington Chancery Court; Lee Seamster, Chancellor affirmed.

Decree affirmed.

O E. & Earl N. Williams, for appellant.

Clifton Wade, for appellee.

OPINION

SMITH, J.

Appellant says that the sole question to be decided on this appeal is whether a certain mortgage, executed to the H Ehrlich & Sons Manufacturing Company, and by the latter assigned to it, was sufficiently indorsed, when filed with the recorder of deeds, to constitute it a lien against a third party upon the property therein described, under the provisions of § 9438 of Pope's Digest.

The outside page or wrapper on the mortgage contained the following written and printed matter:

"To be Filed and not Recorded (printed)

Baker & Horton (in pencil)

To

H. Ehrlich & Sons Manufacturing Co.

(printed)

St. Joseph, Missouri

To be Filed and not Recorded in

the Recorder's Office (printed)

State of Arkansas, County of Washington--

I, Henry B. Walker, recorder of deeds of said county, do hereby certify that the within instrument of writing was, at 8 o'clock and 30 minutes a. m., on the 6th day of August, A. D. 1936, duly filed ... in this office.

Henry B. Walker,

Recorder.

...

Deputy."

Section 9438 of Pope's Digest prescribes the conditions upon which a mortgage or conveyance of personal property intended to operate as a mortgage may be filed with any recorder in this state so as to become a lien upon the property therein described without being recorded. This is done by indorsing upon the instrument the words, "This instrument is to be filed, but not recorded."

This is a right of statutory creation, and a substantial compliance with the provisions of the statute are sufficient to its establishment.

A number of cases have declared that a substantial compliance is essential and sufficient to confer upon the mortgagee the benefit of the statute. The cases of Lesser-Goldman Cotton Co. v. Hembree, 163 Ark. 88, 259 S.W. 5, and Leach v. Bald Knob State Bank, 163 Ark. 91, 259 S.W. 3, define what is a substantial compliance.

In the first-mentioned case it was held that where a chattel mortgage had a printed indorsement, "This instrument to be filed, but not recorded," followed by the mortgagee's name, likewise printed, there was a sufficient compliance with the statute as to make the mortgage so filed constructive notice to third parties.

The Leach case, supra, which cites prior cases on the subject, is to the same effect, and quotes from Continental Supply Co. v. Thomas, 130 Ark. 287, 197 S.W. 683, the statement that "This court has held that a substantial compliance with the statute is all that is required in order to create a lien good as against strangers on the personal property described in a chattel mortgage."

But in the Leach case, supra, it was also said that "Our statutes, supra, require the name of the mortgagee to be signed to the words, 'This instrument is to be filed, but not recorded,' indorsed on the back of the instrument, and whenever the name appears at that place whether it be written or printed, it is sufficient; and where the mortgagee is a corporation, as it was in the case in hand, it is a sufficient signature, under the statute, where the name of the...