Watson v. Thompson Lumber Co.

• Decision Date: 16 April 1887
• Citation: 4 S.W. 62
• Parties: WATSON, Assignee, etc., <I>v.</I> THOMPSON LUMBER CO. and others.
• Court: Arkansas Supreme Court

4 S.W. 62

WATSON, Assignee, etc.,v.

THOMPSON LUMBER CO. and others.

Supreme Court of Arkansas.

April 16, 1887.

Appeal from circuit court, Clay county. In chancery.

J. C. Hawthorne, for appellant.

BATTLE, J.

The Thompson Lumber Company, a foreign corporation, being indebted to McMillion & Ebbert, in the sum of $14,569.05, executed to them its three promissory notes for the same, and a trust mortgage to secure the payment thereof. The property mortgaged consisted of lands and personal property, and remained in the possession of the mortgagor until seized by its creditors under execution. The mortgage was filed, after it was acknowledged, for record in Clay county, in this state, where the mortgagor at that time was doing business, and all the mortgaged property was situated. McMillion & Ebbert, being involved in debt, assigned the notes and mortgage, with other property, to Howard Watson, for the benefit of their creditors. Thirty-five of the creditors of the Thompson Lumber Company sued and recovered judgments against it before a justice of the peace of Clay county, and, after the mortgage was filed for record, sued out executions on their several judgments, and caused the same to be levied on a portion of the personal property which was mortgaged. After they were issued and levied, Watson brought this action to foreclose the mortgage, making the Thompson Lumber Company, the 35 creditors, and others defendants therein. As to the property seized under execution, the court below found and decreed in favor of the 35 creditors, and, as to the remainder, in favor of plaintiff, and plaintiff appealed.

It has been repeatedly held by this court that "a mortgage is good between the parties thereto, though not acknowledged and recorded, but constitutes no lien upon the mortgaged property as against strangers, unless it is acknowledged and recorded, even though they may have actual notice of its existence." Main v. Alexander, 9 Ark. 112; Jacoway v. Gault, 20 Ark. 190; Hannah v. Carrington, 18 Ark. 105.

Section 4742 of Mansfield's Digest reads as follows: "All mortgages, whether for real or personal estate, shall be proved or acknowledged in the same manner that deeds for the conveyance of real estate are now required by law to be proved or acknowledged; and, when so proved or acknowledged, shall be recorded, if for lands, in the county or counties in which the lands lie, and, if for personal property, in the county in which the mortgagor resides." It follows, then, that, while the mortgage sued on was good as between the parties, it was no lien on the personal property seized under execution, as against the creditors suing out the executions, unless it was acknowledged or proved, and filed for record in the county of the mortgagor's residence. The mortgagor was a foreign corporation, and was actively and continuously engaged in business in Clay county, in this state, at and before the time the mortgage was executed and filed for record. Where did it reside?

Chief Justice TANEY, in delivering the opinion of the...