Case ID: ohio-st_48/html/0237-01.html
Source: Caselaw Access Project
Author: {"author": "DlCKMAN, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Stevenson v. Colopy.
    
      Chattel Mortgage — Record—Copy—Construction.
    1. A mortgagee of chattels who deposits the original mortgage with the township clerk or county recorder, by whom the same is indorsed, entered, and recorded, in all respects, as required by sections 4152 and 4153 of the Revised Statutes, will not, by withdrawing the instrument from the files for other than a temporary purpose, lose his priority of lien as against a judgment creditor of the mortgagor, who causes an execution to be levied on the mortgaged property before the instrument is again deposited with the clerk or the recorder.
    2. The recording of a chattel mortgage in accordance with section 4153 of the Revised Statutes, is a substantial compliance with the statutory requirement, that the mortgage or a true copy thereof, when deposited in the office of the township clerk or county recorder, shall be there kept for the inspection of all persons interested.
    (Decided March 31, 1891.)
    Error to the Circuit Court of Knox county.
    Joseph H. Colopy and Levi F. Colopy the defendants in error, brought their action of replevin in the court of common pleas, against John Gr. Stevenson, sheriff of Knox county, the plaintiff in error, for the recovery of specific personal property, and for damages for its detention. The answer to the petition was a general denial. A jury was waived; the case was submitted to the court; and the court made the following findings of fact and law:
    “ I find the facts to be as follows: That on the 4th day of September, A. D. 1886, J. A. Colopy executed and delivered to Joseph H. Colopy a chattel mortgage on the property therein described, consisting of the property described in the petition of plaintiff, and on the same date a chattel mortgage to Joseph H. and Levi F. Colopy on the same property and therein described and set forth — that the chattel mortgages were executed and affidavits made thereon by the mortgagees in all respects as required by the statutes. That at said date the mortgagor Jonathan Colopy resided in Brown township, in said county of Knox, and has been a resident of said township ever since the execution of said mortgages. That said original mortgages were on the 9th day of September, A. D.-1886, deposited by the mortgagees with the clerk of said Brown township, and were indorsed and entered in a registry and index book direct and reverse provided for that purpose and in all respects as required by the statutes (section 4152). That on the request of the party depositing said mortgages, Levi F. Colopy, for himself and Joseph H. Colopy, the said township clerk copied and recorded the same in a book provided by the township trustees, but not used exclusively for that purpose; that said book was used for the record of chattel mortgages and for other township records, and was a miscellaneous record book for said township; that said record had an index of its contents, and that said mortgages were properly entered in said index. I find further .that the party depositing said mortgages requested said township clerk to deliver said mortgages to him after the same had been recorded, and that said party was acting for himself and for Joseph H. Colopy; that after the same had been recorded, and on the 9th day of September, 1886, the said township clerk did, in pursuance of said request, deliver to said mortgagees said mortgages, and the same were taken possession of and retained by the said mortgagees until the 6th day of Januarjr, A. D. 1887, when they were again deposited with said township clerk. I find further that from the 9th day of September, 1886, until the 6th day of January, 1887, neither the original mortgages nor true copies of the same were on deposit with said township clerk, but that in addition to the registry and index of said mortgages as required by statute, there was during all said time a true copy of said mortgages in said book as recorded therein, and in the possession of said township clerk in his office made by request of the party depositing the same as aforesaid; that on the 8th day of December, 1886, John D. Ewing, a judgment creditor and attorney for himself and the other judgment creditors saw and examined said record; that said mortgages were executed and deposited in good faith to secure a bona fide claim which is still unpaid, and that among other things said mortgages provided that in case of default of payment, or any attempt to remove said property out of the county, or upon seizure of it or any part thereof by process of law, the said mortgagees should have the right to take possession of the same, and that there had been no change of the possession of said property from date of the execution of said mortgages until said levy, said property all of said time remaining in the possession of said J. A. Colopy, and that the judgments against the said Jonathan A. Colopy and upon which executions were issued to defendant, were valid and are still unreversed and unsatisfied.
    “ That on the fifth day of January, 1887, the defendant, as sheriff of said county of Kuox, and by virtue of and under certain, executions, issued upon certain judgments, against the said. Jonathan Colopy levied upon the goods and chattels described and set forth in said chattel mortgages, and took possession of the same as the property of the said Jonathan Colopy. I find that at the time of such levy neither the said original mortgages, nor true copies thereof as required by sec. 4152, wére on deposit with said township clerk, but that said mortgages had been taken from the files on the 9th day of September, 1886, by said mortgagees as aforesaid, and kept off the files until after said levy and until the 6th day of January, 1887, when they were again deposited; that the said mortgages were not taken from said files for any temporary purpose, and that during this time and from the 9th day of September, 1886, and continuously until after said levy was made, the record of said mortgages was in the office and custody of said township clerk. That said records or either of them did not include any record of the indorsement entered on said mortgages at the time of the indorsement and filing of the same. As to the law to be applied to said facts, I find and so hold that under the statutes of Ohio and law of the state as between the mortgagees and judgment creditors, it is essential to the validity of the chattel mortgages, that the original mortgages or a true copy of the same must be on actual deposit with the proper officers unless withdrawn for temporary purpose only. That a record under section 4153 does not dispense with the necessity of having the original mortgages or a true copy thereof, on actual deposit, unless withdrawn for temporary purposes only. That under the facts found herein the said chattel mortgages were void as against the said execution creditor. I find that at the commencement of this suit the said defendant had the right of possession of said property, and do assess his damages at three hundred and sixty-six dollars and seventy cents ($866.70). It is therefore considered and adjudged by me that the defendant, John Gf. Stevenson, sheriff, recover of said plaintiffs, Joseph H. Colopy and Levi F. Colopy the sum of $366.70, his damages, so as aforesaid assessed, together with his costs in his behalf expended, taxed at $-; and that of said judgment for $206.45 to J. S. Ringwalt, $203.45, bear interest at the rate of eight per cent, from this day, for John D. Ewing, making $-in all.”
    To the aforegoing rulings, findings, and judgment, the plaintiffs excepted; and moved to set aside the said findings and judgment, and for a new trial, which motion was overruled, and exception taken.
    The circuit court, on a petition in error, reversed the judgment of the court below, and held that, upon the facts as found by the court of common pleas, the judgment of that court should have been for the said Joseph H. Colopy and Levi F. Colopy, and remanded the cause for further proeeedings.
    To reverse the judgment of the circuit court, this proceeding in error is prosecuted.
    
      I). F. J. I). Fiving, for plaintiff in error.
    The protection afforded a mortgagee of chattels is created by statute, and a right solely created by statute can only be had by a strict compliance with the statute creating the samel 42 Ohio St. 125; 45 Ohio St. 630.
    Sections 4150 and 4151, of the Revised Statutes, distinctly state to a mortgagee of chattels just what he shall do with his chattel mortgage, that he may have a lien by reason thereof upon the chattels therein described that will be valid against judgment creditors of the mortgagor, and by these sections the mortgage is declared void against creditors if the things therein directed to be done are not done. These are the only sections of the statutes of Ohio which declare when a chattel mortgage is void against judgment creditors of the mortgagor. Therefore, this case must be determined by comparing what the defendants in error in this case did with their mortgages, according to the facts found by the common pleas court, with that which they were required to do by section 4151 of the statutes.
    The record of said mortgages did not contain a record of the indorsements placed thereon by the clerk of the township upon receiving them, and which endorsements are required, by section 4152, Revised Statutes, to be placed thereon by the township clerk. Now, clearly, by the statutes above referred to, and 20 Ohio 161, 42 Ohio St. 380, and authorities- therein cited, the taking of the mortgages from the custody of the township clerk and away from his files, and continually keeping them therefrom until after the levy by the sheriff, a period of about four months, placed defendants in the same condition with reference to their rights under their mortgages, they would have occupied if they had never deposited their mortgages with the township clerk, or had not placed said mortgages on file in his office.
    It has been claimed in this case that the record referred to in the finding of the facts by the common pleas court was a sufficient compliance with sections 4151 and 4152 of the Revised Statutes. We think not, because no record of the instrument is necessary to prevent the mortgage from being void against judgment creditors of the mortgagor. No record is required; the mortgagee may have one made if he desires, and section 4156 of Revised Statutes declares the only purpose of such record, and that being an entirely different one from that claimed, surely repels the idea that it could have the effect contended for.
    But, again, section 4152, of Revised Statutes, among other things, says, the clerk shall deposit the instrument in his office to be there kept for the inspection of all persons interested. Now the instrument referred to is the instrument that the mortgagee is required to deposit or file with the township clerk, and that instrument must be either the original chattel mortgage or a true copy thereof, and whichever paper the mortgagee elects to deposit and file with the township clerk is the paper that must be kept on file in the clerk’s office, with its proper indorsements thereon, and for inspection, as above stated, that the mortgagee may have a valid mortgage against any judgment creditor of the mortgagor.
    An instrument on file with an officer is one thing, a record of an instrument is quite another and different thing. Suppose the law required, as it did formerly, that the chattel mortgage should be both filed and recorded, would any one claim that either filing or recording, would alone be sufficient ; or suppose the law required that the chattel mortgage should be recorded in a special record book for that purpose, would any person claim that filing with the clerk and prohibiting the record to be made as required would be sufficient ?
    
      S. II and JR. M. Greer, Oooper £ Moore, and O. F. Col-ville, for defendants in error.
    The decision of this question, of course, depends upon the statute relating to the filing, depositing and recording of chattel mortgages, and in construing these statutes the court will give great consideration to the purpose of the legislature in making these enactments and the result to be thereby secured, which we submit was simply to inform and notify all parties interested and the public generally, of the nature and extent of the lien of the mortgages. See Jones on Chattel Mortgages, secs. 176, 190.
    We assume that it will be conceded that this object can be at least quite as well attained by the recording of the instrument in the proper office as by filing and keeping the same on file there. In some of the states the mortgagee of chattels is required to have his mortgage recorded as in the case of a mortgage upon real property; in other states the only provision for the required notice is the filing, and keeping on file of the original instrument or a copy thereof— while our state has as we understand our statute provided for either method.
    In Ohio, prior to 1876 there was no provision by statute for the recording of chattel mortgages. In 1876 our legislature, following the precedent of several other states^ enacted a law requiring chattel mortgages in all cases to be recorded either by the township clerk or county recorder. No lien being created upon the property unless the mortgage was recorded. This enactment, being followed of course by the usual outcry about increase of costs and fees, the legislature the following year passed the present stature, different from that of any other state, embodying, as we understand it, the features of both the former statutes.
    
      Counsel for the plaintiff in error answer that it is to enable the mortgagee to use a copy of the record in evidence under section 4156; but we submit that such a construction renders the statute concerning the recording of the mortgage not only worthless, but a snare and pitfall to parties undertaking to comply therewith, for under section 4156 the mortgagee can use in evidence a certified copy of the original instrument or a copy thereof, which he had merely filed and left with the officer, quite as well as he can a copy of the record of the instrument, so that he gains nothing whatever in this respect by having his mortgage recorded, and yet for this he is to have his mortgage recorded, to pay for the same, and is required to have added to the record at his own expense at each renewal of the mortgage the new affidavit required, also all credits or statements of any kind which have been placed on the instrument after it was recorded, and in addition thereto he is required when the mortgage has been satisfied to forthwith inform the officer who made the record thereof, who is commanded without delay to note such cancellation and satisfaction upon the record.
    Is it possible that the legislature intended or expected any man to do all this without some corresponding benefit therefor? Is it not manifest that the legislature intended to place the recording substantially upon the same plane with the recording of mortgages upon real estate ? And this view is strengthened by sections 4148 and 4156, by which the copy of the record of a chattel mortgage is made evidence of as high a character as the copy of the record of a mortgage upon real property.
    We also call attention to the fact that in this case the judgment creditors had actual notice of the lien of the defendants in error, and upon this point refer to Jones on Chattel Mortgages, section 308.
   DlCKMAN, J.

When there is not an immediate delivery of goods to the mortgagee at the time the mortgage is executed, followed by an actual and continued change of possession of the things mortgaged, the mortgage will be absolutely void as against creditors of the mortgagor, subsequent purchasers, and mortgagees in good faith, unless the instrument or a true copy thereof, is forthwith after its execution deposited either with the township clerk or county recorder, as the case may be, in accordance with the requirements of the statute. Revised Statutes, § 4150.

It is made the duty of the officer receiving such instrument, to indorse thereon the time of receiving it and its consecutive number; to enter in a book, provided by the township trustees or county recorder, the names of all the parties to the instrument alphabetically arranged, with the number of the instrument, its date, the day of filing it, and the amount secured thereby; and to deposit the instrument in his office, to be there kept for the inspection of all persons interested. Revised Statutes, § 4152.

The statute, however, provides, that if the party depositing the instrument may desire to have it recorded, the officer shall record the same, at the expense of the person making the request, in a book, provided by the township trustees or county recorder; and shall enter upon the margin of such record when the instrument is re-filed, any affidavit, credit, or statement, placed thereon after it was recorded. Revised Statutes, § 4153.

It is contended that notwithstanding the recording of the chattel mortgages in controversy, they ceased to be valid liens on the mortgaged property, as against the executions levied upon valid and subsisting judgments, for the reason that from the 9th day of September, 1886, until the 6th day of January, 1887, neither the original mortgages nor true copies thereof, were on deposit, having been on request of the mortgagees Joseph H. Colopy and Levi F. Colopy, delivered to them by the township clerk, and by them retained until the day after the 1’evy of the executions, when they were again deposited with the township clerk.

It is now provided by the statutes of many of the states, that mortgages of personal property, like those of real estate, shall be publicly recorded, in order to give them validity against any but the parties themselves, unless the mortgagee take and retain possession of the. property; in which case, registration is dispensed with, because the purpose of it, notice of the encumbrance, is accomplished in another way. 2 Hilliard on Mortgages, 244. Registration in those states becomes a substitute for delivery, and enables the mortgagor to hold possession until default. It gives notice to the world of the liens which are held on property by persons not in possession, so as to prevent credit from being given to the holders on account of the possession of it. In lieu of a delivery of possession of the mortgaged property, the purpose is accomplished by substituting a record or a filing of the mortgage. Mr. Jones, in his treatise on chattel mortgages, § 190, says: “ In almost all the states of the United States, the statutes in effect make a recording or filing of the instrument equivalent to a change of possession of the property.” But the main object of either filing or recording is to give the requisite notoriety to the mortgage transaction, although, by extending the mortgage upon the record, notice of its contents may be more effectually preserved than by simply keeping the instrument on file until it is canceled.

A compliance with the statute requires, that the instrument when deposited shall be kept in the offiee for the inspection of all persons who may be interested. The instrument referred to is the original mortgage or a true copy thereof. If the original is not placed on file, a copy must be substituted. But such copy, within the meaning of the statute, may, we think, be either in the form of the original mortgage and so filed, or it may be a transcript which is spread out in extenso in the book designed for the recording of chattel mortgages. To protect creditors of the mortgagor, subsequent purchasers, and mortgagees in good faith, from the imposition which might be practised upon them by persons appearing to be the absolute owners of goods which are really subject to encumbrance, it is evident that as full, clear and explicit notice of such encumbrance may be given by means of a public record, as by depositing the instrument, or a copy of it, with the township clerk or county recorder, as directed by statute.

It is a legal presumption, that all persons subject to any law which has been duly promulgated, must be supposed to be acquainted with its provisions sufficiently for their own personal guidance. A judgment creditor, therefore, will be held to have knowledge, that the law has made provision not only for depositing but also for recording mortgages of goods; and by examination at the proper office, he may readily learn whether his debtor has or has not encumbered his property. If the creditor levies execution upon goods embraced in a mortgage that has been already recorded, though the original be not on file, he will do so with constructive notice of and subject to the prior encumbrance. But in the case at bar, the notice was actual, for, by the finding of facts it is shown, that long before the levy — as early as the 8th day of December, 1886 — a judgment creditor and attorney, for himself and the other judgment creditors, saw and examined the record of the mortgages executed by J. A. Colopy. Although the original mortgages had been taken from the files and not returned, yet, the township clerk upon receiving them, having made the required indorsements thereon, and having entered them in a registry and index book, direct and reverse, provided for that purpose — and having afterwards, at the request of the mortgagees, copied and recorded the instruments in the regular record book with an index of its contents, the judgment creditors readily acquired, as contemplated by the statute, the same notice and knowledge which they would have received, had the instruments remained on file without being recorded.

By the act of April 30, 1877, (74 Ohio Laws 149,) it was made the duty of the township clerk to record any chattel mortgage deposited with him, at the expense of the person depositing it. Chattel mortgages were thereby placed, as to recording, upon a level with mortgages of real estate: It evidently was not the intent of the law, after a copy of the original mortgage was thus required to be perpetuated on the record, that the original might not be withdrawn from the clerk’s office otherwise than temporarily, without destroying its force as a prior lien. The act of April 30 was repealed by the act of May 11,1878, (75 Ohio Laws, 519,) but it was then enacted, as provided in section 4158 of the Revised Statutes, that it shall be the duty of the recorder or cleric to record any chattel mortgage at the expense of the person depositing the same, “ if the party depositing such mortgage shall desire the same recorded.” If the priority of the lien is not to be lost by a withdrawal of the instrument when the' recording of' it was made compulsory, we do not think that a different rule should prevail when the recording was at the desire of the party. The chief purpose of the record is attained in the one case as completely as in the other.

It is said in behalf of the plaintiff in error, that the only object of the statute in authorizing chattel mortgages to be recorded, is to enable a duly certified copy of the record of the instrument to be admitted in evidence, as provided in section 4156 of the Revised Statutes. That the use of a certified copy of the record in evidence might be an important incident to, and benefit from the recording of the mortgage, is manifest; but such use can no more be deemed the primary object of recording a chattel mortgage, than the admission in evidence of a duly certified copy of the record can be regarded as the main object of recording mortgages of real estate.

Our conclusion, therefore, is, that by recording the original mortgages the defendants in error substantially complied with the statutory provision for depositing a true copy of the instruments with the township clerk; and that by withdrawing the originals from the files, the mortgagees did not lose their priority of lien as against the levies made by the sheriff.

Judgment affirmed.