Union Nat. Bank of Bartlesville v. Leidecker Tool Co.

• Decision Date: 13 January 1919
• Docket Number: 8802.
• Citation: 178 P. 690,72 Okla. 121,1919 OK 20
• Parties: UNION NAT. BANK OF BARTLESVILLE v. LEIDECKER TOOL CO. et al.
• Court: Oklahoma Supreme Court

178 P. 690

72 Okla. 121, 1919 OK 20

UNION NAT. BANK OF BARTLESVILLE v. LEIDECKER TOOL CO. et al.

No. 8802.

Supreme Court of Oklahoma

Jan. 13, 1919

Rehearing Denied March 4, 1919.

Syllabus by the Court.

Where at the time of the sale of certain property and as a part of the transaction the buyer agrees to give to the seller a mortgage upon the property purchased to secure the purchase price thereof, the agreement is sufficient in equity to create an equitable lien upon the property, and is treated in equity as a mortgage thereon.

A mortgage upon property to be acquired after its execution by the mortgagor is valid, and the lien created thereby attaches to such property as soon as it is acquired by the mortgagor to the extent of the interest acquired by him.

The lien created by an "after-acquired property clause" in a chattel mortgage upon property thereafter acquired by the mortgagor is subject to all liens and equities against the property at the time of its execution.

Error from District Court, Washington County; R. H. Hudson, Judge.

Suit between the Union National Bank of Bartlesville, Okl., and the Leidecker Tool Company, P. H. Mitchell, P. H. Mitchell & Co., and another. Judgment for the latter, and the former brings error. Affirmed.

H. H Montgomery and Burdette Blue, both of Bartlesville, for plaintiff in error.

Foster & O'Neil and Rowland & Talbot, all of Bartlesville, for defendants in error.

HARDY J.

P. H Mitchell, doing business at times under the name of P. H Mitchell & Co., executed a mortgage upon one string of No. 20 Leidecker drilling machine complete, including boiler and all tools, an undivided one-half interest in two strings No. 24 Leidecker drilling machine complete, together with any and all increase and all other personal property of like kind which the mortgagor might thereafter in any way acquire, as security for the payment of certain promissory notes payable to the Union National Bank. On September 9, 1912, and on October 30, 1912, Mitchell purchased of the Leidecker Tool Company other property of like character, and, as a part of the contract of purchase, agreed to execute to the Leidecker Tool Company notes and mortgages upon said property to secure the purchase price thereof, blanks for which purpose were furnished at the time the property was delivered, but execution was delayed for some time thereafter. The controlling question involved in this litigation is whether the prior mortgage, with the "after-acquired property" clause of the Union National Bank, is superior to the mortgages of the Leidecker Tool Company to secure the purchase price of the property sold by it to Mitchell. The trial court held the latter to be superior, and in this there was no error. Section 3829, Revised Laws 1910, is as follows:

"An agreement may be made to create a lien upon property not yet acquired by the party agreeing to give the lien, or not yet in existence. In such case the lien agreed for attaches from the time when the party agreeing to give it acquires an interest in the thing to the extent of such interest."

Construing this statute, it has been held in a number of cases that a mortgage upon property to be thereafter acquired by the mortgagor is valid, and the lien...