Case Name: LIEBER v. WATT (GENERAL MOTORS ACCEPTANCE CORP., Intervener)
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 1932-02-16
Citations: 19 La. App. 650
Docket Number: No. 4102
Parties: LIEBER v. WATT (GENERAL MOTORS ACCEPTANCE CORP., Intervener)
Judges: 
Reporter: Louisiana Court of Appeals Reports
Volume: 19
Pages: 650–659

Head Matter:
No. 4102
Second Circuit
LIEBER v. WATT (GENERAL MOTORS ACCEPTANCE CORP., Intervener)
(February 16, 1932. Opinion and Decree.)
(March 16, 1932. Rehearing Refused.)
Madison & Madison, of Monroe, attorneys for plaintiff, appellee.
Paul Pink, of Monroe, attorney for inter vener, appellant.

Opinion:
STEPHENS, J.
The plaintiff, L. L. Lieber, brought this suit to recover rent from his tenant, the defendant, T. E. Watts. In aid thereof, he provoked the issuance of a writ of provisional seizure and caused to be seized thereunder a certain refrigerating machine together with other property found on the leased premises.
The General Motors Acceptance Corporation intervened in the suit, alleging that the defendant was indebted to it for a portion of the purchase price of the refrigerating machine, which indebtedness was represented by a promissory note and secured by a chattel mortgage on the machine; that said chattel mortgage was filed and recorded prior to the time the machine in question was placed on the leased premises; and that therefore its vendor's lien, and chattel mortgage was superior in rank to the plaintiff's lessor's lien, and that it should be so decreed, and that it should be paid by preference out of the proceeds of the sale of said machine.
A trial of the case resulted in a judgment rejecting the intervener's demand, in so far as it sought recognition of its vendor's lien and chattel mortgage as superior to plaintiff's, lessor's lien. ' Prom that judgment the intervener appeals.
We find the following pertinent facts as disclosed by the record: That the chattel mortgage was in notarial form and regular upon its face; that it was signed by the defendant, the mortgagor, and by one of the attesting witnesses, on the leased premises; that it was signed by the mortgagee, the Monroe Refrigerating Company, and the other attesting witness, in the office of the mortgagee, and by the notary public at his office at another time and place, the mortgagor, mortgagee, and the witnesses not being present; that it was executed in the manner described, filed and recorded on the public records before the mortgaged property was moved on the leased premises; and that the plaintiff lessor had no actual notice or knowledge of the existence of the chattel mortgage until some time after the property had been placed on the leased premises.
Section 2 of Act No. 198 of 1918 provides:
¡it « * jn order to affect (third persons without notice, said instrument must be passed by notarial act and the original or a certified copy thereof shall be recorded in the office of the Recorder of Mortgages in the parish where the property shall then be situated, and also in the parish in which the mortgagor is a resident."
Section 4 of the same act provides:
" that every mortgage shall be a lien on the property mortgaged from the time same is filed for recordation, which filing shall be notice to all parties of the existence of such mortgage, and said lien shall be superior in rank to any privilege or lien arising subsequently thereto."
As we have concluded that the chattel mortgage was executed and recorded prior to the placing of the refrigerating machine in the leased premises, it necessarily follows that the lessor's privilege, having subsequently arisen, was inferior in rank to the chattel mortgage, unless it be shown that the plaintiff lessor was without notice, actual or constructive, of the existence of the mortgage.
Further, as we have concluded as a fact, and that conclusion is amply supported by the evidence, that the lessor had no actual knowledge or notice of the existence of the chattel mortgage, the issues in the case are reduced to the sole question of whether the lessor was given constructive notice by the recordation of the mortgage.
The chattel mortgage as recorded was in the form of a notarial act, regular in every particular upon its face; but its authenticity was successfully attacked by the plaintiff lessor. It was not executed before a notary, or other officer authorized to exercise such functions, in the presence of two witnesses, and was therefore not a notarial act. Civ. Code, art. 2234.
It is contended by the intervener that the proper recordation of an instrument, regardless of its authenticity, is notice to the world. That contention, at least, as. applied to the specific question here presented, is not well founded. The statute provides that in order to affect third persons . without notice, a chattel mortgage must be passed by notarial act, and that said act must be recorded in the office of the recorder of mortgages. There are therefore two essential requirements necessary to constitute effective, constructive notice; The act must he of a certain character, and that act, of that definite character, must be recorded in the mortgage records. In order to convey constructive notice, both requirements must be complied with.
In the insta-nt case neither requirement was complied with. The chattel mortgage was not a notarial act in fact, but only in form. The recordation which was effected was not the recordation of a chattel mortgage passed by notarial act.
The essential requirements expressed by the statute to affect third persons with constructive notice of the existence of a chattel mortgage are exclusive. "Expressio unius est exclusio alterius." Where a statute directs the performance of a certain thing in a particular manner, it forbids by implication every other manner of performance. It was therefore not sufficient, for the purpose of affecting the lessor with constructive notice, to pass a chattel mortgage by private act and cause it, as thus executed, to be recorded.
It was held by this court in the case of Union Securities Co. v. Neal, Watts, Third Opponent, 9 La. App. 494, 121 So. 316, that a chattel mortgage, under private signature, duly recorded, did not affect third persons without actual notice. That case is identical .with this, in that the chattel mortgage was not in fact passed by notarial act, but is unlike the present case in that the mortgage did not conform to the requirements of a notarial act upon its face.
However, the identical question here presented was answered by the Orleans Court of Appeal in Dainello v. McCoy, 15 La. App. 358, 131 So. 608, 609, in the following language:
"We find it unnecessary to consider the question of fact which is thus presented for the reason that the record leaves us no other alternative than to hold that, under the chattel mortgage laws of this state, the document purporting to be a chattel mortgage by notarial act, and on which intervener's claim is based, is nothing more than an act under private signature and that, thus, in the absence of proof that the landlord had actual knowledge of its existence, he cannot be bound thereby."
In Dainello v. McCoy, as in the instant case, the chattel mortgage was recorded and was regular in form, but it was not in fact passed by notarial act.
It is contended by the intervener that the plaintiff necessarily had knowledge of the existence of the chattel mortgage pri- or to the institution of the suit, and that therefore his lessor's privilege was inferior in rank to the lien resulting from the chattel mortgage. That contention is not in point. The question here is whether the plaintiff acquired actual knowledge or was constructively notified of the existence of the chattel mortgage before the mortgaged property was placed on the leased premises. If he acquired such knowledge, or was chargeable with such notice at such time, his lessor's lien and privilege must be classified as "arising subsequently" and inferior in rank to the chattel mortgage; but, on the contrary, if he had no such notice, actual or constructive, at such time, the chattel mortgage, and the lien incident thereto, which is superior in rank only to liens and privileges subsequently arising, did not exist, in so far as.,they affected him, and the refrigerating machine was placed on the leased premises and the lessor's lien attached thereto while it was unincumbered by mortgage.
The fact that plaintiff learned after the refrigerating machine had been placed on the leased premises that the chattel mortgage existed is clearly irrelevant and immaterial, as it existed with reference to him only from the time of the acquisition of such knowledge, and as his lessor's lien had already attached to the property in question at the time he acquired such knowledge, it could not properly be designated as a lien or privilege subsequently arising.
The intervener relies on the case of Shevnin v. Grimmer et al., 10 La. App. 393, 119 So. 894, 896, as authority for its position here. In that case this court in its opinion stated that the lessor must have had actual knowledge of the existence of the chattel mortgage because he filed the suit. The question as to whether he acquired that knowledge prior or subsequent to the time of placing the mortgaged property on the leased premises was not discussed. The mere expression that the lessor had knowledge of the existence of the chattel mortgage because he filed the suit, a self-evident fact, is dehors the issue, which was the relative rank of the lessor's lien and privilege and the chattel mortgage lien, which rank could only be affected in .the absence of constructive notice, by knowledge of the lessor of the existence of the chattel mortgage at the time or before the mortgaged property was placed on the leased premises.
The mortgage in question in the Shevnin case was a private act duly recorded. This court with reference to the effect of its recordation used the following language;
"If plaintiff (the lessor) did not have actual notice of the existence of the mortgage, he must be held to have had constructive notice of it arising from its recordation, and therefore it affected him."
The statement as thus made is clearly in conflict with and cannot be reconciled with the decisions in the Union Securities Company and Dainello cases, supra, nor the conclusions herein reached, and in the interest of clarifying the jurisprudence upon the question, it is repudiated and expressly overruled.
For the reasons assigned, the judgment appealed from is affirmed.