Moore v. Keystone Driller Co.

MORGAN, J. On April 28, 1909, respondent, Moore, executed and delivered to appellant, Keystone Driller Company, hereinafter called the company, three promissory notes for $284.97 each in Lawrence county, Missouri, and at the same time and place, to secure the payment thereof, executed, acknowledged and delivered to the company a chattel mortgage upon a drilling outfit situated in that county and state. The mortgage was duly recorded in accordance with the laws of the state of Missouri relating to chattel mortgages on April 30, 1909, and shortly thereafter Moore removed the property to Twin Falls county, Idaho, and on August 1, 1911, sold it to respondent, Regan, in that county. At the time of this sale the mortgage had not been recorded in Idaho and Regan had no notice of any claim or lien of the company to or upon the property. On December 10, 1913, the company instituted proceedings, by affidavit and notice, to foreclose the mortgage and appellant, Vanausdeln, the sheriff of Twin Falls county, was acting under such foreclosure proceedings when enjoined by the court. It is alleged in the complaint, and denied in the answer, that the removal of the chattels from Missouri was effected with the knowledge and consent of the company, and that Moore, during the year 1909, after the removal, advised it to file a copy of the mortgage for record in Twin Falls county. However, the only testimony offered upon that point supports the allegations of the complaint. [223] The court rendered judgment in favor of respondents, decreeing that Regan was the owner of the property and that it was free of any lien in favor of the company, and issued a permanent injunction restraining appellants from taking and selling the same. This appeal is from the judgment. By reason of comity between states the chattel mortgage executed and recorded in Missouri must be treated as a valid lien in this state, and, after the removal of the property to this state, a purchaser here takes title subject to the lien of the mortgage recorded in Missouri, even though it has not been recorded here. (Smith v. Consolidated Wagon & Machine Co., ante, p. 148, 163 Pac. 609, and cases therein cited.) The only question to be decided in this ease is whether or not this comity is to be extended in instances where the removal of the chattels was effected with the knowledge and consent of the mortgagee. Most of the decisions holding to the rule of comity are silent as to the effect the consent by the mortgagee to the removal of the property would have upon the application of the rule. The decisions which do discuss this phase of the question are hopelessly divided. (5 R. C. L., pp. 398-400.) The case of Shapard v. Hynes, 104 Fed. 449, 45 C. C. A. 271, 52 L. R. A. 675, is sometimes referred to as an authority holding that the rule of comity is extended in cases where the mortgaged chattels were removed with the consent of the mortgagee, but in that case the decision of the court upon that point was not necessary, as the question of consent was not in issue. In the case of F. E. Creelman Lumber Co. v. Lesh, 73 Ark. 16, 3 Ann. Cas. 108, 83 S. W. 320, the doctrine of comity was adhered to, but Mr. Justice Wood, who wrote the opinion, stated that the court would not decide what effect consent to removal would have as that question had not been raised. Hill, C. J., in a specially concurring opinion, however, deemed it advisable to settle the question, and held that consent to removal does not qualify the rule. We hold, however, that when we recognize, as a valid lien, a chattel mortgage given upon property in another state, [224] which property is thereafter removed to Idaho without the knowledge or consent of the mortgagee, we have accorded the sister state the full measure of courtesy contemplated by the rule of comity. To go further and hold that the rule applies where the removal was effected with the mortgagee’s consent, that the mortgage need not be recorded here, but that the innocent purchaser is chargeable with notice which the mortgagee could have and in good conscience should have given him and did not, is beyond the spirit of the rule and in violation of the rights of citizens of our own state. By such consent the mortgagee negligently places it in the power of the mortgagor to deceive and defraud innocent people in the state into which the property is taken. He should be and is deemed to have waived his lien against such innocent parties upon the principle that where one of two persons must suffer by reason of the wrongful act of a third, the injury must be borne by him by whose conduct the wrongful act has been made possible. The following are authorities holding that the rule of comity does not apply where the removal was with the consent of the mortgagee. (Jones v. North Pacific Fish & Oil Co., 42 Wash. 332, 114 Am. St. 131, 84 Pac. 1122, 6 L. R. A., N. S., 940; Blythe v. Crump, 28 Tex. Civ. 327, 66 S. W. 885; Greene v. Bentley, 114 Fed. 112, 52 C. C. A. 60; Pennington County Bank v. Bauman, 87 Neb. 25, 126 N. W. 654; Newsum v. Hoffman, 124 Tenn. 369, 137 S. W. 490.) The judgment appealed from is affirmed. Costs are awarded to respondents. Budge, C. J., and Rice, J., concur.