Randall Co. v. Glendenning

Opinion of the court by Irwin. J.: The contention of plaintiff in error is that the action of the court in sustaining the motion for judgment on the pleadings in favor of the defendant was error for the reason the pleadings show that the note in question was transferred by the original payee, Bunnell & Eno Investment Company, to plaint *479 iff in error prior to the payment, and that at the time said payment was made by the' defendant the Bunnell & Eno Investment Company were not the owners of the note, and had no right to collect the money due thereon. But we take the rule of law to be that where a non-negotiable note is transferred to another, although that party is an innocent purchaser, and the transfer is made before maturity and for a valuable consideration, yet, if made with-cut notice, either actual or constructive, to the makers thereof, it is subject to all the legal defenses which might be interposed against the note in the hands of the original payee. Now, if this note is a non-negotiable note, and under the facts as shown by the pleadings in the case, the original payee, Bunnell & Eno Investment Company, could not recover thereon, then the plaintiff in error could not recover, unless the pleadings show that the defendants had either actual or constructive notice of the assignment by Bunnell & Eno Investment Company to plaintiff in error. That this note is a non-negotiable note is conceded by counsel for plaintiff in error in their brief, on page 6, at the bottom of the page, at the very outset of their argument, in which they confess that this court has decided that a note in terms similiar to the one in suit here is a non-negotiable note, and they concede that this is conclusive in this case, and consequently that this is a non-negotiable note under the laws as interpreted by the supreme court of this territory. Now, this being conceded, then the other proposition that, unless it can be shown that the defendants in the court below had actual or constructive notice of the transfer of the note from the Bunnel & Eno Investment Company to plaintiff in error, a payment by the defendant in error to the original holder of the note would be a complete defense to an action on the note. This court in the case of Dickerson v. Higgins et al., 15 Okla. 588, 82 Pac. 649, in the syllabus, uses this language: “Where the makers of a non-negotiable note and-interest coupons have neither actual nor constructive notice of. the assignment of the note -and coupons, or of the mortgage securing the *480 same, proof of the payment of the note and coupons to the payee in accordance with the terms and tenor of the note and mortgage is a complete defense to an action upon the same.” Now, the pleadings in this case concede that the payment in full of this note, both principal and interest, was made by the defendants to the Bunnell & Eno Investment Company the original payees in the note. The pleadings further disclose that the only assignment of this note and mortgage which was ever recorded was one which was not attested by the secretary of said corporation as required by running section 921, page 331 of Wilson’s Statutes of the territory of Oklahoma, 1903. That section of the statute provides: “Every deed or other instrument affecting real estate, executed by a corporation, except when executed by an attorney in fact, must be attested by the secretary or clerk of such corporation with the corporate seal attached.” The pleadings in this case disclose that this section of the statute was not complied with, or any attempt made'to comply with it. Now, we think the rule is that, where the statute points out the manner in which an instrument filed for record must be attested in order to be of any avail as notice to the parties interested and the public generally, it must be attested in the manner required by statute. This court, in the case of Richardson v. Shelby, 3 Okla. 68, 41 Pac. 378, in the syllabus, on page 70, say: “In order to have the effect of notice to creditors, a chattel mortgage, or copy of it, must be such as is by the statute declared to be sufficient and effective for that purpose, and the registry must have been made in compliance with the law, otherwise the registry will be treated as a mere nullity.” Constructive notice from the record being dependent upon purely statutory provisions, it naturally follows that effect will not be given to any and every recorded instrument, but only to such as fall within the statute. If an instrument be not of a kind authorized by law to' be recorded or not, though within the contemplation of the statute it be not entitled to record because of its defective *481 execution or failure to comply with some of the prerequisites to entitle it to be made a matter of record, it will be treated as a nullity, and will not operate to give constructive notice. In 24 American & English Ency. of Law (2 Ed.) page 100, this doctrine is enunciated: "In order that the effects of registration may attach to an instrument, it must be a valid instrument; the record of a void instrument is of no effect. Where signing and sealing are necessary to the validity, of a deed, mortgage, or other instrument, such instrument is not entitled to record unless it be properly sigued and sealed.” Under our statute, the only persons authorized to execute an instrument affecting real estate made by a corporation must be an attorney in fact of said corporation, or by the president or vice president of said corporation, and their signature must be attested by the secretary or clerk with the seal attached; so the signature of two officers of a corporation must be signed to every instrument affecting real estate, otherwise, the same is void, and a void instrument, under the authorities, is not eligible of 'record. Another very strong reason why this assignment and the recording of it should not, in equity, be allowed to effect the rights of the defendants is that the pleadings disclose that the payments made by the defendants were made in January, 1902, and this assignment of the mortgage by Bunnell & Eno Investment Company to plaintiff in error was not made a matter of record until March 14, 1902, about two months after the payments were made. So, under the admission of the pleadings, the payments of the principle and interest of this note was made by the defendants to the Bunnell & Eno Investment Company, the original payees of the note, without any actual or constructive notice, as the recording of this assignment,, which was not made a matter of record until two months after the payment was made, could not be held to be constructive notice, 'and there is nowhere any claim in the pleadings made that actual notice of the assignment was ever, given to the defendants. Hence we think the action of the district *482 court in rendering judgment on the pleadings in favor of the defendants is fully sustained by law. Finding no error in the record, the judgment of the district court is affirmed, at the costs of the plaintiff in error. Ilainer, J., who presided in the court below, not sitting; Pancoast and Garber, JJ., absent; all the other Justices concurring.