Case ID: ohio-cir-dec_5/html/0331-01.html
Source: Caselaw Access Project
Author: {"author": "Smith, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

CHATTEL MORTGAGE.,
    [Warren Circuit Court,
    October Term, 1895.]
    Swing, Cox and Smith, JJ.
    The Huber Manufacturing Co. v. Sweney et al.
    No. 2.
    Priority of Chattel mortgages.
    Where A. executes a chattel mortgage, which was duly and legally filed, on cef tain property to B. to secure a debt and subsequently A. executes another mortgage on the same property to C. who had knowledge of the prior mortgage of B. and who properly filed and subsequently refiled his mortgage, but B. failed to duly refile her mortgage, whereupon A. executed to B. another mortgage, which was duly filed, and A. afterwards made an assignment for creditors: Held., that the failure of B. to refile her first mortgage as required by law, it thereby became absolutely void as against the assignee of A. mid it C« took, its mortgage with actual notice of the prior mortgage of B. therefore as between the mortgages of B. and C, B. would be entitled to priority as to the proceed» of the property covered by the mortgages.
    Error to the Court of Common Pleas of Warren county.
   Smith, J.

The admitted or established facts in this case briefly stated are these —On March 18, 1892, James W. Sweney. executed to Clara W. Sweney, his mother, a chattel mortgage on one new Huber engine and other personal property, to secure a debt of $500, which was duly and legally filed March 23, 1892. About May 20,1892, James W. Sweney agreed to purchaáe of The Huber Manufacturing Co., a separator, and at the same time agreed to execute and deliver to said company, upon its receipt, a chattel mortgage thereon, and also on the Huber engine before mortgaged to Mrs. Sweney, and at the same time Sweney told the agent of the company with whom the contract was made, that his mother had then a mortgage on the engine. The separator was duly delivered to Sweney, and on July 29, 1892, lie gave bis notes for tbe purchase price thereof ($450), and executed to tbe company bis chattel mortgage on both tbe engine and tbe separator to secure the payment of tbe notes. It is a question whether at tbe time tbe mortgage to tbe Huber company was given, anything was then said about Mrs. Sweney having a prior mortgage on the engine, but we understand tbe evidence to be that it was then mentioned. At all events, tbe agent said that at tbe time -it was given, be knew that be was taking a second mortgage on tbe engine. This mortgage of tbe Huber company was duly filed September 13, 1892, and duly refiled August 16, 1893. Mrs. Sweney failed' to refile her mortgage, and on May 17, 1893, James W. Sweney executed to her another mortgage upon tbe engine and some other property to secure tbe same debt which bad been secured by her first mortgage.' This was duly filed July 1, 1893, and on January 1, 1894, James W. Sweney made an assignment of all bis property, including that so mortgaged, to Mr. Brandon, for tbe benefit of creditors, and tbe property was taken possession of by him, and sold, and tbe assignee filed in the probate court his petition or application asking tbe court to determine and find tbe rights and priorities of tbe parties to tbe proceeds of tbe sale of this mortgaged property. Tbe mortgagees set up their claims, and a finding was made by tbe probate court, and an appeal taken to tbe common pleas., Tbe judgment there was in favor of Mrs. Sweney, and tbe Huber company prosecuted this petition in error, claiming that on tbe evidence tbe judgment was erroneous; and that tbe motion for a new trial should have been granted.

It further appears from tbe papers in tbe case that tbe engine sold for $300, and that after applying on each mortgage tbe proceeds of tbe other mortgaged property covered by it, Mrs. Sweney’s claim and that of tbe Huber company, also, amounts to more than $300, so that if Mrs. Sweney’s mortgage has priority over that of tbe Huber company, it will consume all of the proceeds of the sale of tbe engine; and if tbe Huber company mortgage has priority, it will take tbe whole of the fund. So that in any event, as both tbe Huber company mortgage and tbe second mortgage of Mrs. Sweney are good as against the assignee and the creditors of Sweney, tbe question for decision is, which of those two has priority as to the fund arising from tbe sale of tbe engine.

It is admitted on all bands, that by reason oí tbe failure'of Mrs. Sweney to refile her first mortgage, as required by law, it became absolutely void as against tbe assignee and tbe general creditors of Sweney. If tbe Huber company took its mortgage on tbe engine, with actual notice of tbe prior' mortgage oí Mrs. Sweney thereon (as is confessed it did), as between her mortgage and that of tbe Huber company, she was entitled to priority tinder tbe express holdings of the supreme court in 7th Ohio St., 198, and 14 Ohio St., 488, unless tbe fact that Sweney made an assignment for tbe benefit of bis creditors, alters tbe rule. We cannot see why it should. In this case tbe creditors have not tbe slightest interest in tbe controversy — no part of tbe proceeds of tbe sale of tbe engine can in any event come to them, for there are two mortgages valid as to them, either of which will consume tbe fund in dispute. It is therefore a simple question of priority between tbe mortagees, under tbe principles of law stated. Tbe rule, we think, is stated in tbe closing part of the decision of tbe supreme court in tbe case of Day v. Munson, 14 Ohio St., 488, on page 493. We are of tbe opinion then that under her first mortgage, Mrs. Sweney has priority over the Huber company, and her last claim is good against the assignee and creditors. And this having been the judgment of the common pleas court, that judgment will be affirmed.