195 Ky. 666 | Ky. Ct. App. | 1922
Opinion op the Court by
Sustaining motion for an appeal and reversing judgment.
Tbe appellant and plaintiff below, Cable Piano Company, sold to appellee and defendant below, W. P. Stoner, wbo resided at tbe time in Walker county, Georgia, a piano for tbe agreed price of $475.00, upon wbicb $59.00 was paid in casb at tbe time. Other payments were subsequently -made, reducing tbe balance due to tbe sum of $307.00, witb interest. While still owing that sum defendant removed bimself and family from bis Georgia residence to Bell county, Kentucky, carrying witb bim tbe piano and without reducing bis indebtedness be attempted to sell it to bis co-defendant, tbe appellee, James Lewis, Jr.
The contract for tbe sale of tbe piano to defendant Stoner was in writing and in it plaintiff retained title with tbe usual reserved rights of taking possession until tbe debt was fully discharged, wbicb character of instrument in this jurisdiction has been construed to be nothing more than a mortgage of tbe property by tbe purchaser to secure tbe unpaid purchase price, provided the purchaser bimself duly executes tbe contract, but in tbe one under consideration there was an express agreement, in addition to the retention of title, that tbe piano should be in lien for tbe unpaid purchase money, and it was signed by Stoner, tbe purchaser, and witnessed by a notary public and recorded in tbe office of tbe Superior Court of Walker county, where tbe purchaser and mortgagee resided.
This action was filed by plaintiff against defendants in tbe Bell circuit court seeking to assert its title to tbe piano by recovering possession of it under an order of claim and delivery as provided by sections 180-193, both
Each defendant filed separate answers, but since the court gave personal judgment against Stoner for the full amount claimed, and neither he nor plaintiff is objecting to that judgment on this appeal, it will be unnecessary to consider the issues raised by him, further than to say that his chief defense was that he had paid the entire consideration. Lewis, in his answer, stated that he purchased the piano from Stoner “for a valuable consideration and that at the time he did so, said purchase was made in good faith, he not knowing that plaintiff or any other person or persons had any claim for indebtedness on the said W. P. Stoner or any one against it.” He-furthermore made the general allegation that he used due diligence to learn if there was any mortgage or lien upon the piano and that “said W. P. Stoner represented to him that the title to the said piano was clear and that it was unencumbered. ’ ’ His answer was denied by a reply and upon the trial the court gave the personal judgment against Stoner, as above stated, but declined to enforce the lien against the piano, and dismissed the petition as against Lewis, to reverse which plaintiff has filed a transcript of the record in this court with a motion for an appeal.
No brief has been filed for the appellee, Lewis, and neither the judgment nor the record discloses the grounds for the court’s judgment declining to enforce the lien and we are left to speculate as to what they were.
The proper execution and legal effect of the writing in the state of Georgia, where it was executed and recorded, are neither of them proven according to the prescribed forms of law for the purpose, but two witnesses testified thereto without objection.- They were incompetent witnesses to such facts, but both their incompetency as well as the improper method for proving such facts, if the witnesses were competent, may be waived, and this court has constantly held that where neither the competén'cy of the witness nor his testimony was objected to the error in admitting it was waived and it would be treated as competent for the purposes for which it was introduced. Tolly v. Champion, 191 Ky. 114; Roberson v. Roberson, 183 Ky. 45; Fears v.
The priority of the lien of the mortgagee of chattels, Avhose mortgage was properly recorded at the situs of the property, as against an innocent party without actual notice, and who acquired his rights in another jurisdiction to which the property was removed by the mortgagor, is a question about which the courts do not altogether agree. The great weight of authority, however, is that the constructive notice furnished by the recording of the mortgage will follow the property into whatever state or jurisdiction it may be carried and will affect purchasers, encumbrancers and creditors of the mortgagor to the same extent as it would if the rig'hts were acquired at the place where the mortgage was recorded; and this is especially true if the mortgagee did not consent to the removal of the property. The preservation of the mortgagee’s priority through the constructive notice furnished by his recorded mortgage is rested upon comity existing between foreign jurisdictions and which applies as betAveen the different states of the Union as well as between foreign countries. It is, therefore, competent for a state to refuse to enforce the rule, which a small number of them do, while others have enacted statutes requiring such foreign mortgages to be re-recorded upon the removal of' the property into their jurisdictions, but we have no such statute here. The general- rule upon the subject is thus stated in 11 'O. J. 424: “The great weight of authority is to the effect that a chattel mortgage, properly executed and recorded according to the law of the place where the mortgage is executed and the property is located, will, if valid there, be held valid as against creditors and purchasers m good faith in another state to which property is removed by .the mortgager, unless there is some statute in that state to the contrary, or unless the transaction contravenes the settled law or policy of the forum. In some jurisdictions this is held to be the rule without regard to the presence or absence of consent or knowledge on the part of the mortgagee as to the, removal, but by the better authority it seems that, where the mortgagee has consented to the removal of the property, he will forfeit his rights to a lien unless he takes such steps as are required for its protection by the statutes of the state into which the property is removed.
The Tennessee case of Snider v. Yates, supra, held that the lien of the mortgagee was not good in such cases unless re-recorded in the jurisdiction to which the property was removed, but that case was overruled by the same court in the later one of Newsum v. Hoffman, 124 Tenn. 369, 137 S. W. R. 490. In the annotation to the Moore case the present condition of the law upon the subject in the great majority of jurisdictions is thus stated: < ‘ The rule sustained by the weight of authority as shown in the earlier notes, that, unless the legislature has expressly or by clear implication provided otherwise, a chattel mortgage given and duly recorded in the state where the property was then situated will by comity be enforced in another state to which the mortgaged chattel is subsequently removed without re-recording in the latter state, even as against an innocent purchaser or encumbrancer for value, at least where the mortgagee did not consent to its removal, is sustained by later cases,” which statement is followed by cases from a number of the states.
The exact question does not seem to have heretofore been before this court, although we have held that constructive notice of a properly recorded mortgage would bind a purchaser or encumbrancer in another county to
The doctrine of the text and, as we have seen, that of a great majority of the courts was in effect adopted by this court in the case of Barney and Smith Mfg. Co. v. Hart, 8 Ky. L. R. 223, in which there was involved a contract very similar to the one in the instant case. Priority of the mortgagee, however, was denied because the contract creating the lien had not been recorded in the state where it was executed, which was the situs of the property, the effect of which Folding was that if it had been so recorded the court was of the opinion the mortgage lien would prevail in this jurisdiction, to which the property had been removed. We need not and do not determine in this case whether the lien would be good here if the plaintiff had consented to the removal of the piano from Georgia into this state, since we are convinced from the testimony in the record that no such consent was given. In the absence of such consent we feel ourselves constrained to hold in accordance with the great majority of cases, which to our minds is supported by reason and logic, that in the absence of a statute to the contrary a duly executed and recorded chattel mortgage in another jurisdiction will operate to give constructive notice to all persons dealing with the property after its removal to this state even though they have no actual knowledge of the existence of the mortgage.
But we are not confined to record or constructive notice alone in support of the conclusions we have reached. Defendant, Lewis, alleged and testified in general terms that he purchased the piano “for a valuable consideration. ” It is extremely doubtful if such general language is sufficient to constitute him a bona fide purchaser, since it states a conclusion rather 'than a fact. He neither alleged nor proved what he paid or agreed to pay for
We, therefore, conclude that the evidence is sufficient to charge defendant, Lewis, with actual knowledge of the existence of the mortgage, and for this reason also he is not entitled to priority as an innocent purchaser over plaintiff’s claim. It results, therefore, that the court erred in dismissing the petition as to defendant Lewis and in declining to subject the piano to the payment of the judgment rendered against Stoner.