Hart v. Oliver Farm Equipment Sales Co.

• Decision Date: 17 April 1933
• Docket Number: 3698.
• Parties: HART v. OLIVER FARM EQUIPMENT SALES CO.
• Court: New Mexico Supreme Court

21 P.2d 96

37 N.M. 267, 1933 -NMSC- 037

HART
v.
OLIVER FARM EQUIPMENT SALES CO.

No. 3698.

Supreme Court of New Mexico

April 17, 1933

Appeal from District Court, Colfax County; Kiker, Judge.

Suit by C. B. Hart, doing business as the Hart Oil Company, against W. B. Thompson, in which the Oliver Farm Equipment Sales Company intervened. From an adverse judgment, the intervener appeals.

Affirmed in part and reversed in part. [21 P.2d 97]

H. M. Rodrick, of Raton, for appellant.

F. S. Merriau, of Raton, for appellee.

HUDSPETH, Justice.

The facts material to the issues now before the court were, as found by the trial court, briefly as follows:

In January, 1930, the defendant, W. B. Thompson, who was then residing in Hartley, Tex., executed and delivered to the B. M. Golloday Implement Company, intervener's assignor, a chattel mortgage upon a Hart-Parr tractor and a conditional sale contract upon an Oliver ten-foot one-way plow. The former was given as security for the payment of certain promissory notes, and the latter to secure the balance of the purchase price of the plow. The transactions took place in Texas, where the property was at the time situated. The mortgage and conditional sale contract were properly and regularly filed for record in Hartley county, Tex., in accordance with the laws of Texas then in effect. Subsequently, Thompson, without the knowledge or consent of the mortgagee and conditional vendor, and in violation of the express terms of the mortgage and contract and of the civil and criminal statutes of Texas, removed the tractor and plow from Texas to Colfax county, N.M. The mortgage and contract were not recorded in New Mexico. On July 29, 1930, plaintiff, C. B. Hart, doing business as the Hart Oil Company, began suit by attachment against Thompson in the district court of Colfax county to recover for goods sold and delivered to defendant and upon some bad checks issued by him. The plaintiff had no knowledge of the existence of any incumbrances upon the tractor and plow at the time he levied his attachment thereon. Subsequently, the Oliver Farm Equipment Sales Company, assignee and holder of the mortgage and conditional sales contract, intervened in the plaintiff's suit against Thompson, attacking the sufficiency of plaintiff's levy of attachment, and setting up, among other things, its claim to a lien upon the property covered by its mortgage and contract superior to that of plaintiff's attachment. Upon a trial of the case on February 19, 1931, the plaintiff was given judgment in rem against the defendant, who had not appeared in the action, for the full amount of his claim. In its conclusion of law No. 4 the court held that although the intervener had a valid lien upon the tractor covered by its mortgage, plaintiff's attachment lien was "prior and superior to intervenor's claim to lien by its chattel mortgage upon said tractor under the rule of comity and reciprocity between sister states and because of the generally adopted [21 P.2d 98] position of the courts of the State of Texas in giving priority to attaching creditors, subsequent purchasers and incumbrancers in the state of Texas over foreign mortgages or other liens or reservations of title on personal property, even though they may have been duly lodged for record according to the laws of said foreign state." In its conclusion of law No. 5, the court held "plaintiff's said lien is prior and superior in all respects to any right, claim, title, interest or lien of intervenor in or to said so-called Gold Digger Plow under its conditional sale contract for the same reasons as those set forth in the last preceding paragraph and for the further reason that said conditional sale contract itself is so defective as to description and location of the property purported to be covered thereby as to be wholly invalid as to subsequent purchasers, encumbrancers or attaching creditors."

From the judgment and findings of the court, the intervener prosecutes an appeal to this court.

Appellant bases points for reversal upon three distinct propositions, namely: (1) That the plaintiff's attempted levy of attachment upon the tractor and plow was insufficient, and that therefore plaintiff had never acquired a valid attachment lien thereon; (2) that, even though plaintiff had acquired the status of an attachment creditor, appellant's mortgage and vendor's liens were entitled to priority over plaintiff's attachment lien; (3) that the description of the plow contained in appellant's conditional sale contract was sufficiently definite to render the incumbrance valid as against attaching creditors of the conditional vendee.

For reasons which will hereafter appear, we think that the findings of the trial court should be upheld in so far as they relate to the first and third of the appellant's propositions. However, the question raised by the second of appellant's allegations of error, which is directed to the trial court's conclusion of law No. 4, is one of considerable importance and one which has never before been passed upon by this court.

The validity of the intervener's mortgage as against the mortgagor, which is to be tested by the law of Texas, the place where the mortgage was executed and where the property was situated at the time of its execution, is undisputed. The question of the priority of the mortgage lien as against plaintiff's attachment lien is to be determined not by the law of Texas, but by the law of New Mexico, by virtue of its being not only the forum, but also the place where the property was situated at the time of the levy of attachment. See Wharton on Conflict of Laws, Vol. I, § 324 (2d Ed.); of. United States Fidelity & Guaranty Co. v. Northwest Engineering Co., 146 Miss. 476, 112 So. 580, 57 A.L.R. 530; Marvin Safe Co. v. Norton, 48 N. J. Law, 410, 7 A. 418, 57 Am.Rep. 566; Weinstein v. Freyer, 93 Ala. 257, 9 So. 285, 12 L.R.A. 700; Public Parks Amusement Co. v. Embree-McLean Carriage Co., 64 Ark. 29, 40 S.W. 582; Aultman & T. Mach. Co. v. Kennedy, 114 Iowa 444, 87 N.W. 435, 89 Am.St.Rep. 373.

Section 21-102 of the New Mexico Statutes, 1929 Compilation, provides that: "Every chattel mortgage shall be acknowledged in the manner provided by law for the acknowledgment of conveyances affecting real estate, and such chattel mortgage, or a copy thereof, shall be filed in the office of the county clerk of the county in which the property affected is located or is about to be removed. Failure to so file such chattel mortgage, or copy thereof, shall render the same void as to subsequent purchasers or mortgagees without notice, as to judgment or attaching creditors from the date of entry of such judgment or levy of such attachment. ***"

Similar statutes, differing from the New Mexico statute in details, are found on the statute books of several states, among them Texas. However, the generally accepted view is that these local recording statutes, as comprehensive in their terms as that of New Mexico, are inapplicable to mortgages given on property which is located outside of the state at the time of the execution of the mortgage and subsequently brought within the borders of the state without the knowledge or consent of the mortgagee. Jones, Chattel Mortgages (5th Ed.) § 260-a; Bank of U.S. v. Lee, 13 Pet. 107, 10 L.Ed. 81, 88; Parr v. Brady, 37 N. J. Law, 201; Shapard v. Hynes, 45 C.C.A. 271, 104 F. 449, 52 L.R.A. 675; Barker v. Stacy, 25 Miss. 471; Hornthal v. Burwell, 109 N.C. 10, 13 S.E. 721, 13 L.R.A. 740, 26 Am.St.Rep. 556; Greenville National Bank v. Evans-Snyder-Buel Co., 9 Okl. 353, 60 P. 249; see, also, notes, 64 L.R.A. 357 and 57 A.L.R. 723. Indeed, there are suggestions that recording statutes, interpreted to include within their scope such foreign mortgages, may be unconstitutional. See Greenville v. Evans-Snyder-Buel Co., supra; Beale, Jurisdiction over...