American Type Founder Co. v. First Nat. Bank of Teague

Findings of Fact. JENKINS, J. On July 19, 1907, one L. O. Kirgin bought of appellant a complete outfit for a printing office, and in payment of the same executed his promissory notes, due from October 19, 1907, to January 19, 1909, respectively, and to secure said notes executed to appellant a mortgage on the property so purchased, particularly describing the same, which mortgage was duly recorded in Freestone county, where the property was situated, on July 31, 1907. A few months thereafter Kirgin sold said printing office outfit to T. B. Childs, who assumed the payment of said indebtedness, and did not pay any other consideration. On the 8th day of September, 1909, said Childs executed his note to the appellee, the First National Bank of Teague for $1,500, and to secure the same gave a mortgage on said property, which mortgage was filed in said Freestone county on September 9, 1909. On the 8th day of March, 1910, the Kirgin notes beihg due and unpaid, the said Childs, in consideration of an extension of time for the payment of same, executed to said Type Founder Company his three several notes for the sum of $423 each, due in one, two, and three years, and to secure the same executed to said Type Founder Company a mortgage on the same property, which was filed in said county on the 8th day of March, 1910. Thereupon appellant, the said Type Founder Company, delivered said Kirgin notes to said Childs, stamped “Paid.” There was no other consideration for the execution of the last notes mentioned, except the extension of time for the payment of the original debt evidenced by the Kirgin notes, and said debt has never been paid. The issue in this case was as to the priority of said mortgages. The court below found in favor of appellee on said issue, and held that the mortgage given by said Childs to said bank was superior to thé other mortgages. The mortgage given by Kirgin was never released by appellant. Opinion. [1] The record of a chattel mortgage, as required by law, is constructive notice to all parties: The giving of a second mortgage to secure the identical debt for which the first mortgage was given, the consideration therefor being merely the extension of time for the payment of said debt, does not amount to a payment of said debt, and does not release the property from the mortgage lien. The release of the original debtor Kirgin, by stamping the notes “Paid,” and surrendering them in lieu of new notes taken for the same debt, did not operate as an extinguishment of said debt, nor a cancellation of the mortgage lien given by Kirgin. Article 3328, R. S. 1895; Willis v. Sanger, 15 Tex. Civ. App. 655, 40 S. W. 233; Bank [301] of Springfield v. Bank of Commerce, 139 S. W. 665; Ross v. Commission Co., 18 Tex. Civ. App. 698, 46 S. W. 398. Por the reasons above given, the judgment of the trial court herein is reversed and here rendered for appellant. Reversed and rendered.