Mills v. Smith

• Citation: 177 F. 652
• Decision Date: 07 February 1910
• Docket Number: 1,763.
• Parties: MILLS v. SMITH
• Court: U.S. Court of Appeals — Ninth Circuit

177 F. 652

MILLS v. SMITH

No. 1,763.

United States Court of Appeals, Ninth Circuit.

February 7, 1910

The trustee in bankruptcy of the Wolverine Lumber Company, a bankrupt, brings before this court, both by petition for revision and appeal, the order of the district judge modifying an order made by the referee in bankruptcy respecting the claim of the respondent and appellee. On or about June 24, 1907, the corporation by its president and secretary signed a mortgage covering all the property of the corporation to secure a pre-existing indebtedness. The mortgage was in form a combination real and chattel mortgage. A certificate of acknowledgment was affixed to the mortgage but both the referee and the district judge found that the president of the corporation never appeared before a notary public to acknowledge the same. About a month after the date of the mortgage, an affidavit of good faith, as required by section 4558, Ballinger's Codes of Washington (Pierce's Code, Sec. 6531), was prepared and mailed by the mortgagee to the president of the corporation, who affixed his signature thereto and returned it by mail to the mortgagee, and a jurat was affixed thereafter thereto by a notary public. The affidavit was then attached to the mortgage. These facts were also found by the referee and by the district judge. In the referee's opinion it is said 'It is conceded in the briefs for the claimant that, if the mortgage was accepted and placed upon record without the affidavit of good faith, it is void as against creditors, and for the greater reason it must be held that, if such mortgage was not acknowledged by the officers of the corporation, it is without force. ' The conclusion reached by the referee was that the mortgage was void and without force as against the creditors represented by the trustee, and he therefore allowed the claim as an unsecured claim. Upon a petition for review the district judge modified the order of the referee holding the instrument void as a mortgage of real estate, but valid as a chattel mortgage, upon the ground that section 4558 of the Code had been repealed by the act of the Legislature approved March 13, 1899 (Laws Wash. 1899, c. 98). Section 4558 provides as follows: 'A mortgage of personal property is void as against creditors of the mortgagor, or subsequent purchasers and incumbrances of the property for value and in good faith, unless it is accompanied by the affidavit of the mortgagor, that it is made in good faith and without any design to hinder, delay or defraud creditors, and it is acknowledged and recorded in the same manner as is required by law in conveyance of real property. ' The act approved March 13, 1899, is entitled 'Chattel mortgages may be filed,' 'An act relating to chattel mortgages and the filing thereof, and repealing of laws in conflict therewith,' but there is in the act itself no repealing clause whatever.

The portions of the act pertinent to the question here involved are the following:

'Section 1. Mortgages may be made upon all kinds of personal property, and upon the rolling stock of a railroad company and upon all kinds of machinery, and upon boats and vessels, and upon portable mills, and such like property and upon growing crops and upon crops before the seed thereof shall have been sown or planted: Provided, that the mortgaging of crops before the seed thereof shall have been sown or planted, for more than one year in advance, is hereby forbidden, and all securities or mortgages hereafter executed on such unsown or unplanted crops are declared void and of no effect, unless such crops are to be sown and planted within one year from the time of the execution of the mortgage.

'2. Every such instrument within ten days from the time of the execution thereof shall be filed in the office of the county auditor of the county in which the mortgaged property is situated, and such auditor shall file all such instruments when presented for the purpose, upon the payment of the proper fees therefor, indorse thereon the time of reception, the number thereof, and shall enter in a suitable book to be provided by him at the expense of his county, with an alphabetical index thereto, used exclusively for that purpose, ruled into separate columns with appropriate heads: 'The time of filing,' 'Name of mortgagor,' 'Name of mortgagee,' 'Date of instrument,' 'Amount secured,' 'When due,' and 'Date of release.' An index to said book shall be kept in the manner required for indexing deeds to real estate, and the county auditor shall receive for the services required by this act the sum of fifteen cents for every instrument, and the moneys so collected shall be accounted for as other fees of his office. Such instrument shall remain on file for the inspection of the public.

'3. Every mortgage filed and indexed in pursuance of this act shall be held and considered to be full and sufficient notice to all the world, of the existence and conditions thereof, but shall cease to be notice, as against creditors of the mortgagors and subsequent purchasers and mortgagees in good faith, after the expiration of the time such mortgage becomes due, unless before the expiration of two years after the time such mortgage becomes due, the mortgagee, his agent or attorney, shall make and file as aforesaid an affidavit setting forth the amount due upon the mortgage, which affidavit shall be annexed to the instrument to which it relates and the auditor shall indorse on said affidavit the time it was filed.'

Section 5 prescribes the form of a chattel mortgage for $100 or less. It was the opinion of the district judge that the act of 1899 was a revision of the chattel mortgage law previously in force, and that it must be regarded as a complete substitute therefor, 'the effect of it being to repeal the statutory requirements as to the acknowledgment and affidavit of good faith.'

J. Y. Kennedy and L. A. Merrick, for appellant.

Jay C. Allen, Smith & Cole, and Shorett & Shorett, for appellee.

Before GILBERT and MORROW, Circuit Judges, and HUNT, District Judge.

GILBERT Circuit Judge (after stating the facts as above).

Upon a careful consideration of the question, we are unable to agree that the purpose and effect of the act of 1899 was to repeal the statutory requirement that a chattel mortgage be acknowledged and accompanied by an affidavit of good faith. Where two acts of different dates cover the same subject-matter, the later will operate as a repeal of the earlier only where that intention is plainly manifest and unmistakable, and it is the duty of a court to adopt any reasonable construction which will give effect to both acts. In Wood v. United States, 16 Pet. 363, 10 L.Ed. 987, Mr. Justice Story said of repeal by implication:

'It is not sufficient to establish that subsequent laws cover some or even all of the cases provided for by it, for they may be merely affirmative or cumulative or auxiliary, but there must be a positive repugnance between the provisions of the new law and those of the old; and even then the old law is repealed by implication only pro tanto to the extent of the repugnance.' Section 4558 of the Code is not mentioned in the act of 1899. That section provides for the affidavit of good faith, the acknowledgment and the recordation of chattel mortgages. The act of 1899 provides for the filing of chattel mortgages within 10 days from the execution thereof, and the indexing of the same, and declares that such filing and indexing shall be considered sufficient notice to the world. It does not deal at all with the subject of the execution or authentication of chattel mortgages. Its purpose was to dispense with the necessity of recording chattel mortgages and to substitute a different registration therefor, leaving it optional with the mortgagee to record mortgages of $300 and more in accordance with the prior act in addition to filing them in accordance with the new. As we construe it, it does not dispense with the existing requisites of the execution, to wit, the affidavit of good faith and the acknowledgment. It is not to be supposed that the Legislature would repeal the statute requiring that a chattel mortgage shall be accompanied by an affidavit of good faith, a statute based upon a sound principle of public policy, and in existence for many years, without clearly expressing that intention. Here there is not only an absence of such intention expressed or implied, but there is in the later act evidence that the Legislature had in mind the continued existence of the former act. It is shown by the language of section 6 of the act of 1899, which provides:

'A mortgage given to secure the sum of $300, or more, exclusive of interest, costs and attorney's fees or counsel fees, may be recorded and indexed with like force and effect as if this act had not been passed, but such mortgage, or a copy thereof must also be filed and indexed as required by this act.'

Also by an act passed and approved on the same day (Laws Wash. 1899, c. 72), entitled, 'An act relating to the filing and recording of mixed chattel and real estate mortgages in the state of Washington, and curative provisions relative thereto,' the first section of which provides that mortgages on real and personal property when acknowledged in the manner provided by law may be recorded as a real estate mortgage, and that the original thereof or a certified copy may be filed, and upon such filing shall constitute notice. The second section is partly curative, but refers also to mortgages to be recorded in the future. It provides as follows:

'In case any mortgage covering mixed real estate and personal property has heretofore been or may hereafter be recorded in the record of mortgages of real estate, or in the record of

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