Moore v. Keystone Driller Co.

• Decision Date: 21 March 1917
• Parties: J. H. MOORE and DANIEL F. REGAN, Respondents, v. KEYSTONE DRILLER COMPANY, a Corporation, and H. C. VANAUSDELN, Appellants
• Court: Idaho Supreme Court

163 P. 1114

30 Idaho 220

J. H. MOORE and DANIEL F. REGAN, Respondents, v. KEYSTONE DRILLER COMPANY, a Corporation, and H. C. VANAUSDELN, Appellants

Supreme Court of Idaho

March 21, 1917

CHATTEL MORTGAGES-COMITY BETWEEN STATES.

If personal property situated in a foreign state is there encumbered by a mortgage duly executed and recorded so as to create a valid lien thereon and if it is thereafter, with the consent of the mortgagee, removed into Idaho and is here sold to a purchaser who has no knowledge of the encumbrance, such purchaser takes title which is not subject to the lien of the mortgage.

[As to removal of mortgaged chattels to another state and effect of same on the lien, see note in 30 Am.St. 324]

APPEAL from the District Court of the Fourth Judicial District, for Twin Falls County. Hon. Wm. A. Babcock, Judge.

Action to enjoin sale of mortgaged property. Judgment for plaintiffs. Affirmed.

Judgment affirmed. Costs awarded to respondents.

James H. Wise, for Appellants.

Possession of personal property is mere prima facie evidence of ownership. If the holder of the property has recently come from an adjoining state, there may be a mortgage upon the property in that state, and a purchaser or creditor must exercise his diligence by inquiring there whether the property is encumbered. (Jones on Chattel Mortgages, 260A; Studebaker Bros. Co. v. Mau, 13 Wyo. 358, 110 Am St. 1001, 80 P. 151; Shapard v. Hynes, 104 F. 449 45 C. C. A. 271, 52 L. R. A. 675; Jones v. North. P. Fish &amp Oil Co., 42 Wash. 332, 114 Am. St. 131, 84 P. 1122, 6 L. R. A., N. S., 940.)

The removal of a mortgagor from town or county in which he resided when the mortgage was executed and where it was duly recorded, and the taking of the mortgaged property with him does not invalidate the record of the mortgage or necessitate the recording of it again in the town or county to which he has moved. (Jones on Chat. Mort., sec. 260; Brigham v. Weaver, 6 Cush. (60 Mass.) 298; Barrows v. Turner, 50 Me. 127; Hoit v. Remick, 11 N.H. 285; Pease v. Odenkirchen, 42 Conn. 415; Elson v. Barrier, 56 Miss. 394; Cool v. Roche, 20 Neb. 550, 31 N.W. 367; Grand Island Banking Co. v. Frey, 25 Neb. 66, 13 Am. St. 478, 40 N.W. 599; Hudmon v. Du Bose, 85 Ala. 446, 5 So. 162, 2 L. R. A. 475; Griffith v. Morrison, 58 Tex. 46; Keenan v. Stimson, 32 Minn. 377, 20 N.W. 364; Harris v. Allen, 104 N.C. 86, 10 S.E. 127; First Nat. Bank v. Weed, 98 Mich. 357, 373, 50 N.W. 864; Bailey v. Costello, 94 Wis. 87, 68 N.W. 663; Farmers & Merchants' State Bank v. Sutherlin, 93 Neb. 707, Ann. Cas. 1914B, 1250, 141 N.W. 827, 46 L. R. A., N. S., 95.)

The law of the place of contract, when this is also the place where the property is, governs as to the nature, validity, construction and effect of a mortgage which will be enforced in another state, as a matter of comity, although not executed or recorded according to the requirements of the law of the latter state. (Jones on Chat. Mort., 5th ed., sec. 299; Blyth & Fargo Co. v. Houtz, 24 Utah 62, 66 P. 611; Handley v. Harris, 48 Kan. 606, 30 Am. St. 322, 29 P. 1145, 17 L. R. A. 703; Ramsey v. Glenn, 33 Kan. 271, 6 P. 265; Douglas v. Douglas, 22 Idaho 336, 125 P. 796.)

C. M. Booth, for Respondents.

The Keystone Driller Co. practically waived their lien as against the purchaser, Daniel E. Regan, as they knew of the removal of the property from Missouri to Idaho, and knew that the property was located in Twin Falls, Idaho, for a period of over two years, during which time they had failed to file their mortgage for record in Twin Falls county. (Adams v. Fellers, 88 S.C. 212, 70 S.E. 722, 35 L. R. A., N. S., 385; Pennington County Bank v. Bauman, 87 Neb. 25, 126 N.W. 654; F. E. Creelman Lumber Co. v. Lesh, 73 Ark. 16, 3 Ann. Cas. 108, 83 S.W. 320.)

It was through the fault of appellant that the respondent Moore was able to have as to this property all the indicia of ownership in Twin Falls county, and by reason of his indicia of ownership the respondent Regan had a right to believe that Moore could legally part with title. (Hare v. Young, 26 Idaho 682, 146 P. 104.)

MORGAN, J. Budge, C. J., and Rice, J., concur.

OPINION

MORGAN, J.

On April 28, 1909, respondent, Moore, executed and delivered to appellant, Keystone Driller Company, hereinafter called the company, three promissory notes for $ 284.97 each in Lawrence county, Missouri, and at the same time and place, to secure the payment thereof, executed, acknowledged and delivered to the company a chattel mortgage upon a drilling outfit situated in that county and state. The mortgage was duly recorded in accordance with the laws of the state of Missouri relating to chattel mortgages on April 30, 1909, and shortly thereafter Moore removed the property to Twin Falls county, Idaho, and on August 1, 1911, sold it to respondent, Regan, in that county. At the time of this sale the mortgage had not been recorded in Idaho and Regan had no notice of any claim or lien of the company to or upon the property. On December 10, 1913, the company instituted proceedings, by affidavit and notice, to foreclose the mortgage and appellant, Vanausdeln, the sheriff of Twin Falls county, was acting under such foreclosure proceedings when enjoined by the court.

It is alleged in the complaint, and denied in the answer, that the removal of the chattels from Missouri was effected with the knowledge and consent of the company, and that Moore, during the year 1909, after the removal, advised it to file a copy of the mortgage for record in Twin Falls county. However, the only testimony offered upon that point supports the allegations of the complaint.

The court rendered judgment in favor of respondents, decreeing that Regan was the owner of the property and that it was free of any lien in favor of the company, and issued a permanent injunction restraining appellants from taking and selling the same. This appeal is from the judgment.

By reason of comity between states the chattel mortgage executed and recorded in Missouri must be treated as a valid lien in this state, and, after the removal of the property to this state, a purchaser here takes title subject to the lien of the mortgage recorded in Missouri, even though it...