First National Bank v. Tufts

The opinion of the court was delivered by HoktoN, C. J.: It is insisted that the verdict and the judgment were contrary to the evidence and the law. The contention is, that there having been no conversion or interference with the rights of Tufts by the bank prior to the taking effect of chapter 255, Laws of 1889, and the bank being then in possession of the property for the purpose of securing the indebtedness to it, it was and became a creditor, with a lien thereon against which Tufts could have no right, under the provisions of the act, until he had complied with its requirements. It is admitted that neither the original agreement nor the notes given by Lichtenthaler to Tufts for the soda-water fountain or apparatus, nor any copy thereof, [712] were deposited in the office of the register of deeds of Pawnee county, where the property was kept. The question involved in this case is whether chapter 255 applies. That chapter provides, among other things, that the title notes or evidence of conditional sales “ shall be void, as against innocent purchasers or the creditors of the vendee, unless the original instrument, or a true copy thereof, shall be deposited in the office of the register pf deeds/’ etc. The purpose of the statute is to prevent the possession of property from being used in fraud by persons relying on facts showing such possession as sufficient indicia of ownership. (20 Am. & Eng. Encyc. of Law, 537.) In interpreting the statute, the purpose of the legislature in passing the same must be considered. We have a similar statute concerning chattel mortgages. (Gen. Stat. of 1889, ¶3903.) This court has held in several cases that actual notice is as effectual as constructive notice by record against subsequent purchasers, and that a creditor stands in no better position. (Cameron v. Marvin, 26 Kas. 612; Corbin v. Kincaid, 33 id. 649; Neerman v. Caldwell, 50 id. 61.) If a purchaser or a creditor has actual notice of the existence of the title notes or evidence of conditional sales before his purchase or obtaining a lien on such property, he cannot be misled or imposed upon if the original instrument, or a true copy thereof, is not deposited for record. The filing of a contract of a conditional sale with a register of deeds is constructive notice only of its existence, and if a party has actual notice of such existence otherwise than by the record, the full purpose of the statute is attained. Actual notice given in time is a substitute for recordation. It is impossible to make any good distinction between actual and constructive notice, though it may be very well said that actual notice is even better than-constructive. Actual notice gives personally to a party full and ample information. (Allen v. McCalla, 25 Iowa, 464; 96 Am. Dec. 56.) We think there was sufficient evidence to sustain the verdict and judgment rendered. Before the bank obtained possession of the soda fountain or apparatus, it had full [713] knowledge of the title notes from Lichtenthaler to Tuffs, and of the amount due thereon. The bank, through its officers, requested permission from Mr. Vernon, the agent of Tufts, to sell the fountain and pay Tufts the amount due on his notes. At that time, they were of the opinion that they could realize something for the bank over and above the notes. Under the facts disclosed in the record, the provisions of said chapter 255 have no application in this case to protect the bank against the rights of Tufts to the property. The judgment will be affirmed. All the Justices concurring.