Union Stockyards Bank of Wichita v. Hamilton

McCALL, District Judge. This is a suit in equity to enforce a chattel mortgage. The court below denied the relief prayed and dismissed the bill, and the defendants appealed. Several errors are assigned, but only two were urged at the hearing. One presents a question of law, the other a question of fact. We shall consider them in the order stated. The question of law arises on the construction of section 5224, chapter 82, article 2, of the General Statutes of Kansas of 1909, which is as follows: “Kvery mortgage or conveyance Intended to operate as a mortgage of personal property, which shall not be accompanied by an immediate delivery and be followed by an actual and continued chang'e of possession of the things mortgaged, shall be absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers and mortgagees in good faith, unless the mortgage or a true copy thereof shall be forthwith deposited in the office of the register of deeds in the county where the property shall then be situated, or if the mortgagor be a resident of this state, then of the county of which he shall at the time be a resident.” We are concerned now only with the words “a true copy thereof.” The Supreme Court of Kansas, in the case of Central National Bank of Topeka v. Brecheisen, 65 Kan. 807, 70 Pac. 895 (a case very similar to the present one), in considering the statute in question said: “The use of the words ‘true copy’ in the statute relative to the recording of chattel mortgages does not require that a literal and verbatim copy of the Instrument must be filed, but a, copy substantially true, so that creditors of the mortgagees or subsequent purchasers in good faith may not be misled to their detriment.” (Italics ours.) And the court held that the copy of the instrument deposited with the register of deeds, which described the live stock covered by the mortgage as being in township 11, range 11, was a substantially true [586] copy of the original, wherein the stock was described as being in township 16, range 16, and met the requirements of the statute. To like effect are Gillespie v. Brown, 16 Neb. 457, 20 N. W. 632, Payne v. King, 141 Mo. App. 246, 124 S. W. 1066, and National Register Co. v. Slater, 156 Mo. App. 733, 137 S. W. 13, in construing similar statutes in those states. [1] The construction and interpretation of a statute of á state, made by the highest court of that state is binding on federal courts. Duncan v. McCall, 139 U. S. 449, 11 Sup. Ct. 573, 35 L. Ed. 219; Etheridge v. Sperry, 139 U. S. 266, 11 Sup. Ct. 565, 35 L. Ed. 171; Norton v. Shelby Co., 118 U. S. 425, 6 Sup. Ct. 1121, 30 L. Ed. 178. In so far, therefore, as the construction of section 5224 of the Statutes of Kansas and its application made in Central National Bank v. Brecheisen, 65 Kan. 807, 70 Pac. 895, is applicable here, we must follow it. [2] The undisputed facts relating to the question now being considered are substantially as follows: On November 11, 1914, one Westbrook executed and delivered to the plaintiff a chattel mortgage, on 74 head of cattle, to secure the payment of a promissory note of even date for $3,265.25, due March 11, 1915. Tt carried a clause providing for the precipitation of its maturity under certain conditions which arose. An instrument purporting to be a true copy of the original mortgage was 'filed with the register of deeds for Marion county, Kan. Westbrook, the mortgagor, resided in, and the cattle mortgaged were in, Marion county. The cattle were described in the original mortgage as follows: “Seventy-four (74) head of coming two (2) year old native steers. Ninety per cent. (90%) are red, balance mixed colors. Average weight about 680 pounds. Branded W on right hip. All of the above-described cattle are now located on the northwest quarter of section 16, township 22, range 4 east, in Peabody township, Marion county, Kansas, where they are to remain during the life of this loan.” As a part of the description in the original mortgage, it is stated that tire cattle were “branded W” on the right hip. In the copy filed with the register of deeds the letter W does not appear, and. the sentence reads “branded on the right hip.” Considering-in its entirety the description of the cattle in the original, the question arises — is the copy that was filed a substantially true copy of the original, notwithstanding the letter W does not appear therein, “so that creditors of the mortgagor or subsequent purchaser in good faith may not be misled to their detriment?” The question of “true copy” aside, we think the description given in the copy filed is sufficient to have enabled one of ordinary intelligence and reasonably conversant with the cattle business to have readily found and identified the cattle intended to be covered therein, at the date of its execution, and if the description of the property is sufficient to give notice of the identity of the cattle to one who had actual knowledge’ of the contents of the mortgage, then it is, when registered, sufficient constructive notice to strangers. In Gillespie v. Brown, supra, the Supreme Court of Nebraska, in considering a very similar statute, said: [587] “The evident object and purpose of the statute in requiring a copy to be filed is to give notice of the existence of a mortgage, together with Us terms and conditions” —and this for the information of creditors, purchasers, and lien-holders. We are of the opinion that the discrepancy was immaterial, and that the instrument filed with the register of deeds was a true copy of the original mortgage within the meaning of the statute. This conclusion leads to the result that the plaintiff is entitled to a decree for the value of all the cattle purchased by the defendants, branded W on the right hip, that were in their possession at the time the suit was brought. [3] It is alleged in the bill that there were 74 head of cattle so branded, and covered by the mortgage, in the possession of the defendants. This allegation is denied in the answer, and much evidence was taken on the issue. Judge Rvans, in his finding of facts, said: “(1) Thai the 74 cattle covered by the mortgage were each and all branded on the right hip with the letter W, and not otherwise. “(2) That they were kept together, and separate from other herds, until about December 2(i, 1014, when, after being driven to the railroad station in Peabody, Kan., for shipment to Kansas City, Mo., they became mixed with other cattle before shipment, and probably further mixed with others after reaching the cattle yards in that city, and that, while so mixed with other cattle, the 74 head claimed by plaintiff to have been included in the 175 bought by defendants were bought by the latter and carried to Owensboro, Ky. “(8) That only 6 of the 74 head embraced in plaintiff’s mortgage and branded on the right hip with the letter W were among the cattle bought and shipped by the defendants. “(4) That the value of the 6 was §300.” It is insisted for the plaintiff that the third finding is inconsistent with the findings 1 and 2. We think the finding not fairly subject to this criticism. The court found that the 74 cattle covered by the mortgage were all branded W on the right hip; they became mixed with other cattle, and the 74 head claimed by plaintiff to have been included in the 175 bought by defendant were so bought and carried to Owens-boro, Ky., but that, of the 74 so bought by defendants, only 6 in fact were branded W on the right hip. We agree with the lower court in its finding on this issue, and to this extent the decree below is affirmed; in other respects it is reversed, and a decree will be entered for the plaintiff for $360, the value of the 6 head of cattle, and costs.