16 N.W.2d 194 | S.D. | 1944
This action is between the holder of a chattel mortgage and the administrator of the deceased mortgagor, and involves the proceeds of the sale of the mortgaged property. On the theory that the mortgage ceased to be valid as against creditors six years after the date of its filing in the office of the register of deeds, the court awarded the proceeds to the administrator. The plaintiff, the holder of the mortgage, has appealed.
The mortgage in question was delivered and filed on the 13th day of April, 1935. The mortgagor died intestate on the 29th day of December 1942. Thereafter defendant was appointed and qualified as administrator of the estate of the mortgagor and took possession of the mortgaged property which had theretofore been in the possession of the mortgagor. After the holder of the mortgage had instituted foreclosure proceedings, it was agreed that the property should be sold and the proceeds deposited with the clerk of courts to abide the outcome of the litigation. The administrator asserted in his answer that the mortgage is void under SDC 39.0411. The insolvency of the estate was not pleaded, established, nor found by the court. In fact, the record fails to reveal whether the deceased had creditors or whether claims had been allowed in the probate proceeding.
[1, 2] It is provided by SDC 39.0411 that: "A mortgage of personal property ceases to be valid as against creditors of the mortgagor, and subsequent purchasers, or incumbrancers in good faith after the expiration of six years from the filing thereof." Under the holdings of this court, neither the failure to file a mortgage, as provided by SDC 39.0408, nor the expiration of the six-year period described in the quoted statute, renders the mortgage absolutely void as against all creditors of the mortgagor. Only in the case of a creditor, who has extended credit while a mortgage is withheld from record, has it been held to be absolutely void. Hollenbeck v. Louden,
In other jurisidctions, under similar statutes, it has been held that the administrator or executor of a deceased mortgagor may attack an unfiled or unrenewed mortgage for the benefit of general creditors if the estate is insolvent. It is the view of these courts that an administrator of such an insolvent estate is in the position of a creditor armed with a levy under process. This view has been well exemplified in Wasatch Livestock Loan Co. v. Nielson et al.,
These authorities were urged but not discussed in Brown Grain Company v. Coughlin, supra. That action was between a mortgagee and the administrator of the insolvent estate of the mortgagor and involved a mortgage which had been withheld from record until after the death of the mortgagee. The opinion recognizes the right of the administrator to attack the mortgage in the right of creditors whose claims originated while it was withheld from record, as to whom it was absolutely void. In dealing with creditors as to whom the mortgage was conditionally void while unfiled, it was there said [
[3] Support for the judgment below cannot be found in these authorities. Obviously, if the estate of the above named deceased is solvent, the result of the judgment below is to invalidate the mortgage for the benefit of the heirs of the mortgagor. The mortgage did not cease to be valid as against the heirs of the mortgagor. In Wasatch Livestock Loan Co. v. Nielson, supra [
The judgment of the trial court is therefore reversed.
All the Judges concur. *178