Hayden v. Russell

• Decision Date: 24 March 1920
• Citation: 109 A. 485
• Parties: HAYDEN v. RUSSELL et al.
• Court: Maine Supreme Court

109 A. 485

HAYDEN

v. RUSSELL et al.

Supreme Judicial Court of Maine.

March 24, 1920.

Exceptions from Supreme Judicial Court, Piscataquis County, at Law.

Action by Fred G. Hayden against Manville D. Russell and another. Judgment, was ordered for defendants, and plaintiff excepts. Exceptions overruled.

Argued before WILSON, SPEAR, HANSON, PHILBROOK, and DEASY, JJ.

Hudson & Hudson, of Guilford, for plaintiff.

W. B. Peirce, of Bangor, for defendants.

WILSON, J. An action of trover to recover the value of a horse, which the plaintiff sold to one Hersey, taking back a note for $45 in part payment and a chattel mortgage on the horse as security. Hersey was permitted to retain possession of the horse, but the plaintiff failed to record his mortgage. Afterward Hersey sold the horse to the defendants, and received therefor credit to the amount of $35 on account of pro-existing indebtedness due them. The defendants took the horse without notice of the unrecorded mortgage to the plaintiff. The case at nisi prius was submitted to the court on the above facts by agreement of parties. The court ordered judgment for the defendants. To this ruling exceptions were taken by the plaintiff, and the case is now before this court on exceptions.

The plaintiff contends that under the recording act relating to chattel mortgages (section 1, c. 96, R. S.) a purchaser, to take precedence over an unrecorded chattel mortgage, must be a bona fide purchaser; that to constitute a bona fide purchaser as to prior equities there must be a new consideration moving between the parties; and that merely receiving a conveyance of a chattel in part payment of a pre-existing indebtedness is nor sufficient to constitute one a bona fide purchaser against a prior unrecorded mortgage.

The question is one of new impression in this state. With respect to conveyance of real estate, this court has adopted the rule contended for by the plaintiff, which is the law in most of the other states. Bragg v. Paulk, 42 Me. 502, 517, 11 Corp. Juris, 518, § 194, and cases cited. Courts of acknowledged standing, however, have held, even when the recording act declared unrecorded mortgages void against a subsequent mortgagee "in good faith," that a mortgagee whose mortgage was given to secure a pre-existing debt was a "mortgagee in good faith" as to a prior unrecorded mortgage. Vanaman v. Fliehr, 75 N. J. Eq. 88, 71 Atl. 092. Also see Frey v. Clifford, 44 Cal. 335, and Worley v. Met. Motor Car Co., 72 Wash. 243, 246, 130 Pac. 107.

Neither of the recording acts of this state have ever expressly limited the subsequent purchasers or mortgagees who could take in preference to prior unrecorded conveyances or incumbrances by the words "in good faith" or "for a valuable consideration." Originally they both read substantially alike. Chapter 36, § 1, Laws 1821; chapter 390, Laws 1839. Their purpose has been held to be the same. Griffith v. Douglass, 73 Me. 534, 40 Am. Rep. 395. They have been construed, however, along different lines.

There appears to have been no construction by the court of the chattel mortgage recording act prior to the revision of 1841, but the statute relating to the recording of real estate conveyances had already received a liberal construction as to the good faith required of subsequent purchasers in order to take in preference to unrecorded deeds; and even constructive notice of the unrecorded conveyance was sufficient to prevent a subsequent purchaser or mortgagee from holding against it (Matthews v. Dcmerritt, 22 Me. 312; McKecknie v. Hoskins, 23 Me. 230); this court apparently following the interpretation of the Massachusetts statute by the court of that state from which our statute was adopted (Norcross v. Widgery, 2 Mass. 506).

And in the revision of 1841 (chapter 91, § 26) to the recording act relating to real estate, which before provided that no unrecorded deed should be effectual except against the grantor, the Legislature added the further exception, "and persons having actual notice thereof," thus adopting the construction of the court, but limiting it to persons having "actual notice." The recording act relating to Chattel mortgages, however, remained as before; that an unrecorded chattel mortgage is invalid except between the parties. Chapter 125, § 32, R. S. 1841.

As a result the court inferred from this that it was the intent of the Legislature that the statute relating to chattel mortgages should be construed literally, and held in Rich v. Roberts, 48 Me. 548, that an unrecorded mortgage of chattels was invalid as to a subsequent purchaser or mortgagee even with actual notice of the unrecorded incumbrance. While by reason of the terms of their recording acts or more...