Case Name: Crane et al. v. Chandler
Court: Colorado Supreme Court
Jurisdiction: Colorado
Decision Date: 1879-04
Citations: 5 Colo. 21
Docket Number: 
Parties: Crane et al. v. Chandler.
Judges: 
Reporter: Colorado Reports
Volume: 5
Pages: 21–23

Head Matter:
Crane et al. v. Chandler.
1. The chattel mortgage act, upon compliance with which the mortgagor may retain possession of the property mortgaged, is in derogatiSh of the common law and must be'strictly construed. To be valid as against third persons no provision of the act can be neglected.
2. Section 10, p 124 Gen. Laws, does not dispense with the requisites to the validity of a chattel mortgage, except the recording thereof when the adversary party has actual notice.
3. Without au acknowledgment or memorandum a chattel mortgage may be valid as between the parties, but it has no effect upon the rights of third parties acting in good faith.
Appeal from District Court of Arapahoe County.
The facts are stated in the opinion.
Mr. J. W. Hornee and Mr. B,. D. Thompson, for appellants.
Messrs. Miles and Andrews, for appellee.

Opinion:
Thatcher, O. J.
The appellants brought suit in attachment against one H. M. Behymer, and under tbe writ the sheriff seized a certain lot of personal property. Mrs. Chandler filed her interplea, claiming tbe property. At tbe trial of the issue on tbe interplea, she sought to establish her right to the property by introducing in evidence two certain chattel mortgages. It was objected that .tbe notary public before whom the mortgages were acknowledged, had failed to make a memorandum thereof in bis dpcket, in conformity with the statute. Is the memorandum essential to the validity of a mortgage as against the rights and interests of third persons?
Tbe chattel mortgage act, upon compliance with which the mortgagor may retain possession of the personalty mortgaged, is in derogation of the common law, and therefore to be strictly construed. To be valid as against third persons, no pro vision of the act can be neglected. It is necessary, first, that the notary or justice of the peace in the precinct where the mortgagor resides, shall take the acknowledgment of the mortgage in the manner prescribed by the act; second, that such notary or justice of the peace shall make in his docket a meihorandum thereof, in which he shall set out the names of the mortgagor and mortgagee, a description of the property mortgaged, and the date of the acknowledgment; third, that the mortgage shall be then duly recorded in the office of the recorder of the county wherein the property mortgaged is situated. The court below ruled in conformity with the views here expressed, but held that if an attaching creditor had actual notice of such mortgage, it was, as to such creditor, as valid as though all the requirements of the statute had been complied with.
The court based its ruling upon section ten of the act (Gen'l Laws. p. 124):—"Any person who may buy or otherwise obtain any interest in any personal property which is mortgaged in pursuance of this act-, but the mortgage of which has not been recorded, and with actual notice of such mortgage, shall be deemed to have bought or obtained such interest in such property subject to such mortgage, the same as though such mortgage had been properly recorded." There was some evidence tending to show that the appellants had notice of the mortgages. Upon no reasonable construction of section ten, can it be asserted that any of the requisites to the validity of a chattel mortgage are dispensed with (where the adversary party has actual notice), except the recording thereof. As the statute in such case only waives the recording of the instrument, it is clear that it must still be executed, acknowledged, and a memorandum thereof taken by the certifying officer as in other cases. Without an acknowledgment or memorandum, a chattel mortgage is valid as between the parties, but it has no effect upon the rights of third parties acting in good faith, and " there is no want of good faith on the part of a creditor in levying upon his. debtor's property, Included in a chattel mortgage which the law declares void as to him." Porter v. Dement, 35 Ill. 478; McDowell v. Stew art, 83 Ill. 540. The ruling of the court was erroneous in admitting the mortgages to be read in evidence, without the demanded proof that they were duly acknowledged and a memorandum thereof taken. As the mortgages are not set out in the statement on appeal, we are not even informed whether there was a stipulation therein allowing the mortgagor to retain possession of the property, nor whether aside from the memorandum, the acknowledgment was properly taken. Judgment reversed and cause remanded.
Reversed.