Wells v. Dice

• Decision Date: 09 February 1929
• Docket Number: No. 3180.,3180.
• Citation: 33 N.M. 647,275 P. 90
• Parties: WELLSv.DICE et al.
• Court: New Mexico Supreme Court

33 N.M. 647

275 P. 90

WELLS

v.DICE et al.

No. 3180.

Supreme Court of New Mexico.

Feb. 9, 1929.

Syllabus by the Court.

The sections embodied in the codification of 1915 are taken or adopted from existing statutes and are to be construed as continuations thereof.

Findings supported by substantial evidence will not be disturbed.

Additional Syllabus by Editorial Staff.

Unrecorded mortgage was good as against mortgagor's creditors, notwithstanding Code 1915, § 4791, in that such section was repealed before its codification by sections 4786-4788, and did not by reason of its subsequent codification become a new enactment of equal dignity with repealing provisions.

Appeal from District Court, Curry County; Hatch, Judge.

Suit by C. F. Wells, trustee in bankruptcy of George P. Kuykendall, against F. E. Dice and others. Judgment for defendants, and plaintiff appeals. Affirmed.

Sections embodied in codification of laws are to be construed as continuations thereof.

Douglas K. Fitzhugh, of Clovis, for appellant.

C. M. Compton, Jr., of Portales, for appellees.

WATSON, J.

This is a suit by the trustee in bankruptcy of G. P. Kuykendall to recover from the receiver of the Security State Bank of Portales what is alleged to have been a preference under section 60b of the National Bankruptcy Act (11 USCA § 96). The relief was denied, and the trustee has appealed.

The main facts upon which the judgment was based were found substantially as follows: Kuykendall gave his note to the bank in December, 1920, for $5,548, and, to secure it, gave a mortgage upon his residence in Clovis, in the execution of which he was joined by his wife. It was understood at the time between Kuykendall and the officials of the bank that the mortgage was not to be recorded, but that the bank was at liberty to record it if it desired. Thereafter, with the consent of the bank, Kuykendall secured a loan of $3,500 by giving a mortgage upon the same property to one Sulier. $3,000 of the money derived from this source was paid to the bank and credited upon Kuykendall's indebtedness, which left the principal of the indebtedness, after payment of the accrued interest, at the sum of $3,128, for which sum Kuykendall gave the bank a new note, dated December 10, 1922; it being agreed at the time that the mortgage previously given should stand as security for the last-mentioned note. On March 1, 1924, Kuykendall, with the consent of the bank, conveyed the residence to defendant Dice for $5,600, Dice assuming payment of the Sulier mortgage and himself executing a mortgage to the bank to secure his several notes aggregating $1,500, the remainder of the consideration being paid to Kuykendall, the Dice notes for $1,500 being credited upon Kuykendall's note of December 10, 1922. Kuykendall was insolvent at all times subsequent to January 8, 1924, and was adjudged a voluntary bankrupt April 7, 1924. As to whether the bank is chargeable with notice or knowledge of Kuykendall's insolvency on March 1, 1924, the findings are not entirely clear. We shall assume, for the purposes of this decision, that such was the fact. The trial court denied the relief prayed for upon the theory that the unrecorded mortgage, given in 1920, was valid as against creditors, and that the new note, given in 1922, was but a renewal of the unpaid balance of the original note, the mortgage continuing as security therefor, and that the Dice notes and mortgage were a payment upon the old notes and a continuation of the old security. He held, in other words, that the Dice notes and mortgage were not a preference, but were merely a realization by the bank upon its pre-existing security.

[3] Most of appellant's propositions are based upon the contention or assumption that the court erred in holding that the unrecorded mortgage was good as against creditors. His reliance is upon Code 1915, § 4791, which reads as follows: “None of said writings shall be valid except to the parties interested and those who have actual notice of the same, until it shall be deposited in the office of the clerk to be registered.” He does not overlook the fact that in Chetham-Strode v. Blake, 19 N. M. 335, 142 P. 1130, this section, originally adopted in 1852, was held repealed by sections 4786, 4787, and 4788, adopted in 1887.

Section 4788 reads as follows: “No deed, mortgage or other instrument in writing, not recorded in accordance with section 4786 shall affect the title or rights to, in any real estate, of any purchaser or mortgagee in good faith, without knowledge of the existence of such unrecorded instruments.” He points out, however, that, after this decision, section 4791 was included by the Legislature in the 1915 “Act to Codify the Laws of the State of New Mexico.” So, he contends, the two sections (4788 and 4791) became of “equal dates and dignity,” and are to be interpreted together. He then attempts to harmonize them.

Appellee points to the repealing and saving clause of the Code which, among other things, provides: “The provisions of the foregoing sections taken or adopted from existing statutes, shall be construed as continuations thereof, and not as new enactments.”

It is plain that, unless section 4791 is to be regarded as a new enactment, there is no virtue in appellant's contention that sections 4788 and 4791 are of “equal dates and dignity.” The only possible basis for holding section 4791 a new enactment is the...