Young v. Evans-Snyder-Buel Commission Co.

• Decision Date: 12 November 1900
• Citation: 158 Mo. 395,59 S.W. 113
• Parties: YOUNG et al. v. EVANS-SNYDER-BUEL COMMISSION CO.
• Court: Missouri Supreme Court

59 S.W. 113

158 Mo. 395

YOUNG et al. v. EVANS-SNYDER-BUEL COMMISSION CO.

Supreme Court of Missouri, Division No. 1.

November 12, 1900.

CHATTEL MORTGAGES — PRIORITY OF LIENS.

The acceptance of a chattel mortgage subject to specific liens of prior mortgages, valid between the parties thereto, precludes the mortgagee from claiming priority, though the prior mortgages were not recorded, or were acknowledged so as to invalidate the record thereof and render them void, even as against subsequent lienholders with notice.

Appeal from circuit court, Jackson county; John W. Henry, Judge.

Action by Odus G. Young and others against the Evans-Snyder-Buel Commission Company. From a judgment for defendant, plaintiffs appeal. Affirmed.

Botsford, Deatherage & Young, for appellants. H. M. Pollard, for respondent.

BRACE, P. J.

On the 11th day of November, 1895, Nat Skinner, a resident of the Indian Territory, being the owner and in possession of 879 head of steer cattle, three years old and up, branded S on the right side, in said territory, executed two chattel mortgages of that date, by one of which he conveyed said cattle to A. H. Pierce to secure the payment of a note of the said Skinner of that date for the sum of $14,338, payable nine months after date, given to said Pierce in part payment of the purchase price for said cattle; and by the other he conveyed said cattle, subject to the Pierce mortgage, to H. M. Pollard, in trust to secure the payment of a note of said Skinner of that date to the defendant in the sum of $5,254.17, payable 180 days after date, for $5,000 cash advanced to him by defendant at that date. On the 12th of November, 1895, these two chattel mortgages were recorded in the proper office of the district of the territory in which Skinner resided; and by the terms thereof the cattle, when ready for market, were to be shipped to the defendant, by it sold, and the proceeds, after deducting commissions, applied to the payment of said promissory notes and interest. By section 31 of an act of congress approved May 2, 1890 (26 Stat. 94, 51st Cong. 1889-91), certain general laws of the state of Arkansas, as published in 1884 in the volume known as "Mansfield's Digest of the Statutes of Arkansas," were extended over and put in force in the Indian Territory, among which were the recording acts of said state. It is conceded that neither of these two chattel mortgages was acknowledged in accordance with the requirements of those acts, so as to entitle them to record; the first or Pierce mortgage having no formal acknowledgment to it, and the formal acknowledgment to the second mortgage having in fact been taken by a Missouri notary in the office of the defendant, which was in the state of Kansas, about 20 feet over the boundary line between the two states. Afterwards, on the 28th of February, 1896, the said Skinner executed a third chattel mortgage, by which he conveyed the said cattle, with others, to the plaintiff Odus G. Young, trustee, to secure the payment of his note of that date for the sum of $8,010.25, payable on the 1st day of October, 1896, to said Young, trustee, and by him taken as "additional and collateral security" for the payment of several past-due notes held by him for his co-plaintiffs, the First National Bank of Albany, N. Y., Mechanics' National Bank of New Bedford, Mass., and Third National Bank of St. Louis, Mo. This chattel mortgage was properly acknowledged and duly recorded in the territory. Afterwards 722 head of these cattle, in pursuance of the terms of the first two mortgages, were shipped by Skinner to the defendant, by it sold for the net sum of $15,232.66, and the proceeds applied to the payment of the debts secured by those mortgages, — paying the Pierce mortgage note, of which defendant had become the holder, in full, and the other mortgage of defendant in part. Thereupon the plaintiffs instituted this suit in the Jackson circuit court to recover damages for the conversion of these and other cattle also shipped to and disposed of by defendant, and included in their said mortgage of February 28, 1896. In the circuit court the plaintiffs obtained judgment for $702.12 on account of cattle other than the 722 head aforesaid, but were denied judgment for said sum of $15,232.66 on account of said 722 head, on the issue as to which the plaintiffs asked, and the court refused to give, the following declaration of law: "(2) The court declares to the court, sitting as a jury, that the mortgage read in evidence by defendant, executed by Nat Skinner to A. H. Pierce, dated November 11, 1895, to secure the sum of $14,338, evidenced by note due nine months after that date, was and is not acknowledged according to the laws in force in the Indian Territory at the time of the execution of said mortgage, and the recording of said mortgage was and is therefore null and void; and the court, sitting as a jury, is instructed that said mortgage, not having been recorded as required by law, did not at any time become a lien on the property therein described in favor of the holder thereof, and said mortgage was and is void as to this plaintiff. (3) The court declares to the court, sitting as a jury, that if you find from the evidence that the mortgage executed by Nat Skinner to defendant, dated November 11, 1895, to secure the payment of $5,254.17, was acknowledged by said Skinner within the territorial limits of the state of Kansas by a notary public acting under the laws of the state of Missouri, then said acknowledgment was and is void, and said instrument was not entitled under said acknowledgment to be recorded, and the recording was in such case null and void, and in that case said chattel mortgage did not create a lien on the property therein described, in favor of the said defendant, but in that case said mortgage was and is void as to this plaintiff." Thereupon the court declared the law upon that issue as follows: "That neither the mortgage executed by Skinner to Pierce, nor the mortgage from Skinner to defendant, was acknowledged as required by law, and therefore the record thereof was not valid, and imparted notice to no one of their existence, and created no lien upon the cattle as against subsequent purchasers or mortgagees; but, having taken the cattle subject to specific liens as to amount mentioned in their respective mortgages (being the amounts of the debts mentioned in the Pierce mortgage and the defendant's mortgage, respectively, which were valid and binding upon the parties thereto), plaintiff cannot recover in this action," — and found the issue for the defendant. The plaintiffs excepted to this ruling, appealed, and assign the same for error, contending that under the statutes of Arkansas in force in the Indian Territory as aforesaid, as construed by the supreme court of said state, and as shown by said statute and the decisions of said court given in evidence on the trial, the court ought to have held that the defendant's two chattel mortgages were void and conveyed no title to defendant as against the plaintiffs' chattel mortgage, and should have accordingly rendered judgment in their favor for said sum of $15,232.60.

The Arkansas statute directly in question and read in evidence by the plaintiffs, is as follows:

"Sec. 4742. 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." Rev. St. c. 101, § 1, as amended by Act March 1, 1877.

"Sec. 4743. Every mortgage, whether for real or personal property, shall be a lien on the mortgaged property from the time the same is filed (b) in the recorder's office for record, and not before, which filing shall be notice to all persons of the existence of such mortgage." Mansf. Dig. 1884, c. 110, pp. 935, 936.

The decisions of the supreme court of that state offered in evidence by the plaintiffs are the following: Dodd v. Parker, 40 Ark. 536; Main v. Alexander, 9 Ark. 112; Hannah v. Carrington, 18 Ark. 105; Jacoway v. Gault, 20 Ark. 190; Carnall v. Duval, 22 Ark. 136; Haskill v. Sevier, 25 Ark. 158; Connor v. Abbott, 35 Ark. 365; Martin v. Ogden, 41 Ark. 186, 191; Challis v. Bank, 56 Ark. 88, 19 S. W. 115.

Counsel for plaintiffs, to support their contention, rely upon the construction of this statute by the supreme court of Arkansas in the foregoing decisions, as manifested by the following extracts therefrom, partially set out in their brief:

In the case of Main v. Alexander, 9 Ark. 112, the syllabus is as follows: "A mortgage is good between the parties, though not acknowledged and recorded; but under our registry acts it constitutes no lien upon the mortgaged property, as against strangers, unless it is acknowledged and recorded as required by the act, even though they may have actual notice of its existence. The registry of a mortgage without acknowledgment does not constitute such constructive notice to the world as contemplated by the act. A mortgage was executed upon a slave, and recorded without acknowledgment. Afterwards the slave was attached by creditors of the mortgagor. On a bill to foreclose against the mortgagor and attaching creditors, held, that the lien of the attachments was paramount to the mortgage."

In the case of Carnall v. Duval, 22 Ark. 141, 142, the court used the following language: "Carnall certainly had notice of the mortgage, being the act and deed of Johnson before his purchase. Before the rendition of the judgments on which the executions under which he bought were issued he saw the power of attorney from Johnson to Grimes, and that it was acknowledged. But actual notice of a mortgage is construed not to be binding notice. Nothing but its being filed for...