Associates Discount Corp. v. McKinney

Sea well, J. The pertinent North Carolina recording statute is G.S. 47-20. It provides that in case of personal estate where the donor, bar-gainor or mortgagor resides out of the State, the registration, to be valid, must be had “in the county where the said personal estate or some part of the same is situated.” The statute was amended by the Session Laws of 1949, Chapter 1129, but since the transaction under review transpired before the ratification of that act it has no bearing upon the rights of the parties. Encyclopedic references and collations of authority in annotated cases support the proposition that in the absence of a statute in the State of attempted enforcement a mortgage or conditional sales contract made in another state and timely and properly registered according to the laws of that state will be respected elsewhere on the principle of comity and there enforced. 14 C.J.S. 607, sec. 15; Mercantile Acceptance Co. v. Frank, 265 P. 190, 57 A.L.R. 696, Anno., p. 702; Hornthal v. Burwell, 109 N.C. 10, 13 S.E. 721; Applewhite Co. v. Ethridge, 210 N.C. 433, 187 S.E. 588. On the other hand it is generally conceded that where the full faith and credit clause of the Federal Constitution is not invaded, the State statute, to the extent it may modify that principle, is controlling. The State may extend that degree of comity it requires or none at all. “Comity is not permitted to operate within a State in opposition to its settled *732 policy as expressed in its statutes, or so as to override the express provisions of its legislative enactments;” Credit Corporation v. Walters, ante, 443, loc. cit., p. 445; citing Applewhite Co. v. Etheridge, supra, and Southern Gem Coal Corp., 12 F. 2d 605. Tbe Michigan statute concerned requires that to be valid against subsequent purchasers for value the instrument, when made by a resident of that state, shall be filed and registered in the office of the register of deeds of the county where the goods or chattels are located and also where the mortgagor resides. Section 13424, Compiled Laws of 1929, as amended; Mason Supp. 1935. The North Carolina statute lends itself to the interpretation that where they are made by nonresidents it intends to leave within its protection only those mortgages on personal property and similar lien contracts, (including conditional sales, G.S. 47-23), which are registered in the county of the situs in this State, whether that situs be acquired before or after the foreign registry. And that view is presented on this appeal. The following cases, q.v., touch upon this matter: Discount Corp. v. Radecky, 205 N.C. 163, 164, 170 S.E. 640; Weaver v. Chunn, 99 N.C. 431, 6 S.E. 370; Bank v. Cox, 171 N.C. 76, 87 S.E. 967; Sloan Bros. v. Sawyer-Felder Co., 175 N.C. 657, 96 S.E. 39; Truck Corp. v. Wilkins, 219 N.C. 327, 13 S.E. 2d 478; Applewhite Co. v. Etheridge, supra; Hornthal v. Burwell, supra. In a very recent case, Finance Corp. v. Clary, 227 N.C. 247, 248, 41 S.E. 2d 760, the Court observes: “Whether, as a general rule, a chattel mortgage executed by a nonresident on property then situated at the domicile of the mortgagor and duly recorded there must also be recorded in this State in order to be valid against subsequent purchasers, is not presented in this case.” (Italics supplied.) See Finance Corp. v. Hodges, ante, 580. Since the defendant challenged the Michigan registry on its factual aspects and was successful before the jury, the necessity of discussion of this phase of the case does not arise; for if there was no valid registry in Michigan, there was none anywhere. The defendant contends that the plaintiff has not carried the burden of showing by evidence of constituent facts that the conditional sales contract was registered in compliance with the Michigan statute — particularly with regard to the residence of the mortgagor, or maker of the contract. Recording acts are inspired with the hope that actual notice of instruments affecting the title to personalty may reach the diligent purchaser by requiring the information to be recorded where it is most likely to be sought or found. The necessity of certainty and of effectiveness of the registration, however, has eliminated much controversy by substituting constructive notice for actual notice as sufficient, when the legal require *733 ments incident to registration Lave been complied with. But back of these requirements lies a body of evidential fact affecting the validity of the registration. As to this, the courts can make no assumption. It is clear that it is incumbent on the plaintiff who depends on a lien •created in a state foreign to the forum of its attempted enforcement to show that it was valid in the state of registration, in order to invoke the principle of comity at all; and to further show that the facts supporting the registration bring the ease within the protection of the rule as modified hy the local state law. A more serious question arises as to how that burden may be carried. Since recording statutes operate ex propria vigore without deference to privity of title between the original mortgagor and the purchaser for value, it would seem that the recitals of residence contained in the instrument, and oral representations of the mortgagor in that respect, should be regarded as res inter alia acta. On this principle it is difficult to square the admission of parol evidence of the declarations of the mortgagor pending the negotiations with rules of evidence we ordinarily apply. But conceding for the purposes of decision that evidence of that character is available, the evidence was submitted to the jury upon its merits and the verdict was unfavorable to the plaintiff. We do not find that the jury was misled by either of the exceptive instructions; in fact, we have the impression that both were more favorable to the plaintiff than it had reason to expect. In the first instruction above quoted, Judge Bless no doubt was attempting to give the philosophy of recording statutes, and his illustration was apt. From it, however, the jury might have received the impression that although the plaintiff may have selected the wrong county, his diligence in the matter might condone the error. But validity of the registration depends upon the ultimate fact of record in the proper county and not upon the diligence addressed to its accomplishment. The second exceptive instruction (see above statement) was immediately followed and qualified by the following: “But if it were registered under those circumstances, that is, while Ledford lived in Detroit, and the automobile was there in Detroit, then there would be no way that Yirginia Silver or Kenneth McKinney or anybody else could get a good title out of Detroit, and you would answer that issue Yes, under those circumstances.” The exceptions are without merit. Determination of the controversy lay largely in the realm of fact. The evidence was submitted to the jury and the issue answered favorably to the defendant. We find nothing in the record that would justify us in disturbing the result. We find No error.