Abraham v. American Nat. Bank

HEFNER, J. This action was begun in the district court of Creek county by Louis Abraham, executor of the estate of Joe Abraham, deceased, against the American National Bank, of Sapulpa, Okla., to de- *88 (ermine priority of liens claimed by the parties on certain garage tools and accessories whieli belonged to Jueksch Garage Company. Plaintiff claimed a lien against the property for the nonpayment of rent in the sum of $1,425 under and by virtue of the provisions of a written lease contract. Defendant claimed a lien under a chattel mortgage given to secure a note in the sum of $4,600. The xiroperty involved was sold by agreement of the parties for the sum of $2,000 and the proceeds deposited with the court clerk to await the judgment of the court. The cause was submitted to the court on an agreed statement of facts and resulted in a judgment in favor of defendant. The court held its lien superior to that of plaintiff. and entered a decree ordering the payment of the funds deposited in court to defendant. The parties entered into a stipulation which,, among other things, provided that on the 1st day of February, 1928, plaintiff leased to the garage company, under a written contract, certain premises located in the city of Sapulpa; that the lease provided plaintiff should have a lien on all property installed by lessee and used in or about the leased premises to secure the payment of rents. Plaintiff’s lease contract was recorded on February 10, 1928, as an instrument affecting real estate, and, immediately after being recorded, was returned to him. No copy of the lease was at that time left on file in the office of the county clerk, but thereafter, and on September 25, 1928, the original lease was filed with him as a chattel mortgage and properly indexed. It is further stipulated that on and after June 13, 1928, the garage company was indebted to defendant in the sum of $4,600 on two promissory notes, one in the sum of $3,600 due May 30, 1928, and one for $1,200 due June li, 1928; and on June 13, 192S, the garage company executed to defendant, in lieu of the two past due notes, a renewal note for $4,600 due and payable on September 11, 1928, and in order to secure the payment thereof executed a chattel mortgage on the property here involved. Defendant duly filed the chattel mortgage in the office of the county clerk on June 14. 1928. and the same was properly indexed. Defendant had! no actual knowledge that plaintiff claimed a lien against the property under its lease contract. Plaintiff ■contends that because he deposited his lease contract with the county clerk, prior to the execution of defendant’s chattel mortgage, such deposit was sufficient to impart notice thereof to third parties, and that he cannot be compelled to suffer loss because of the negligence of the county clerk to properly file and index the instrument as a chattel mortgage. In support of this contention, he cites the. case of Dabney v. Hathaway, 51 Okla. 658, 152 P. 77. It is there said: “Under section 4081, Rev. Laws 1930, which makes a chattel mortgage void as against creditors of the mortgagor, and subsequent purchasers and incumbrancers of the property for value, unless the mortgage ‘be filed by depositing the same in the office of the register of deeds of the comity where (he property mortgaged, or any part thereof, is at such time situated.’ held, that the mortgagee has done all the law requires of him when he has filed the mortgage by depositing it in the office of the register of deeds; and, if the instrument is not then properly recorded, and indexed, it is the fault of the register of deeds, and the mortgagee will not lose his rights, nor be made to suffer by reason of the laches of the register of deeds.” We think the above case inapplicable to the facts here involved. I11 the cited case, the 'instrument discussed was nothing but a chattel mortgage, and, upon its deposit in the office of the register of deeds, it was his duty under the law to properly fife and index it in the manner provided by law. The mortgagee did ail that was required of him under the Jaw when he deposited the instrument in the proper office for filing. The court held, under those circumstances, that he could not be held liable because of the negligence of the register of deeds in failing to properly file and index the instrument. In the instant case, the instrument was one affecting both real and personal property. Tt consisted, 'in the main, of an 'instrument conveying an interest in real estate, and it was therefore the duty of the clerk to record it as such. He did so record it and immediately returned it to plaintiff. It was held by plaintiff until September 25, 1928, and until after the filing of defendant's mortgage, at which time it was filed by Mm in the office of the county clerk as a chattel mortgage. Plaintiff had ample time after return of his lease contract — and prior to the execution of defendant’s mortgage — to have filed the same as a chattel mortgage. Pie failed to do so.' He also failed to advise the county clerk that, in addition to having the instrument recorded as one affecting real estate, he also desired it filed as a chattel mortgage. Under these circumstances, it cannot be said that the failure to file the instrument as a chattel mortgage was due solely to the negligence of the county clerk. *89 In the case of Bonneviere v. Cole (Wash.) 156 P. 527, that court said: “Under sections'3061, 3G6S, chattel mortgages must he recorded or indexed in books kept exclusively for that purpose, and tlie inclusion of chattels in a real estate mortgage and the recording of such instrument in the records of real estate mortgages does not afford constructive notice of any lien upon the personal property and is void as to subsequent creditors.” The recording of tlio instrument here involved as one affecting real estate was insufficient to impart notice to third parties that plaintiff had a lien against (he property. Plaintiff urges that his lieu 'is superior to defendant's chattel mortgage for the reason that defendant, under tlie agreed statement of facts, is not an incumbrancer for value. In this connection it is argued that defendant’s mortgage was taken to secure a preexisting debt and he is therefore not an in-cumbrancer for value within tlie meaning of the recording act. It is stipulated that the note in question was given to renew two old notes then past due and that the time, of payment was extended by the renewal note, and the chattel mortgage was gievn to secure the renewal note. Under these facts, defendant is an incumbrancer for value within the meaning of the recording act. Hudson-Houston Lbr. Co. v. First State Bank, 132 Okla. 325, 269 P. 1054. Plaintiff also contends that defendant’s mortgage is void as to it for the reason that it is not properly executed. It is executed for and nn behalf of the corporation by Frank Jueksoli. It was stipulated that he had been president and general manag’d and in the silo and exclusive control of the business of tlie corporation since June 15. 1925. Under this stipulation, he had authority to execute the mortgage. Natl. Surety Co. v. Wingate, 153 Okla. 132, 5 P. (2d) 376. It was stipulated that, at the time of tlie execution of defendant's mortgage, it had knowledge that the relationship of landlord and tenant existed between plaintiff and the garage company. It is plaintiff's contention that because of this knowledge defendant is chargeable with notice and knowledge of the lien created in favor of plaintiff by tlie terms of the lease contract. We do not agree with this contention. The mere fact that defendant knew of the relationship which existed between plaintiff and his lessee is insufficient to charge it with knowledge that plaintiff claimed a lien or held a chattel mortgage against the personal property used in connection with the business of lessee. The trial court was correct in holding defendant’s mortgage lien superior to the Tien of plaintiff under his lease contract. The judgment is affirmed. RILEY, CULLISON, ANDREWS, MC-NEILL, and KORNEGAY, JJ. concur. LESTER, O. J., CLARK, Y. O. J., and SWINDALL, J., absent.