Court Opinion

ID: 3812126
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:50:21.07199+00
Date Added: 2024-06-11T07:38:17.841524
License: Public Domain

A rehearing was granted in this case upon the ground that the renewal affidavits of the Vinita National Bank mortgage were not in conformity with the law governing such renewals at the time they were made. Upon a more careful examination of the record it appears that the master found "That said mortgage has since been renewed by filing renewal affidavits in the office of the clerk of the United States Court and ex-officio
recorder, at Muskogee, Indian Territory, on the following dates: December 14, 1900; December 12, 1901; December 20, 1902; December 14, 1903; December 12, 1904. That thereafter defendant made payments on said note, and reduced the amount thereof to $729.04, which sum is due said Vinita National Bank from said defendant." No exception was saved to this finding below, nor is there any cross-appeal or assignment of error in this court raising the question by any one who would be injured by the preference given this security. C. M. Keys and Company and Stock Yards Bank acknowledged the validity of the Vinita National Bank mortgage, and as the payment of their claim would more than exhaust the funds accruing from the sale of the property involved, no one else could be benefited by displacing the Vinita *Page 186 
National Bank from its place of vantage as a creditor unless C. M. Keys and Company and Stock Yards Bank could also be displaced.
We believe, however, that we reached the right conclusion in our former opinion, but, as counsel for the defendants in their briefs on rehearing urge with earnestness certain propositions that they touched upon casually in their former brief, we will further notice these propositions here. They are: (1) That the C. M. Keys and Company mortgage was good between the parties, but was not good as against third parties, because not properly acknowledged, and (2) it is further insisted that the said C. M. Keys and Company mortgage was "fraudulent at the time of running the attachment, and the fraud came out from the dealings with reference to the cattle and was actual, and that there was so much actual fraud that on the admitted and proven facts the mortgage was void."
I. The C. M. Keys and Company mortgage was introduced in evidence without objections, the master making no finding as to the sufficiency of the acknowledgment, and the court below did not notice the question in any way, nor did counsel for any of the numerous parties. The first time, as far as the record discloses, that this question was raised was in this court by counsel for First National Bank of Claremore and First National Bank of Vinita in his brief. The point he seeks to make is, that the acknowledgment is not in conformity with section 656, Mansfield's Digest, which was in force in the Indian Territory when the mortgage was executed, in that the words, "and set forth" were omitted from the acknowledgment. Section 656,supra, provides that:
"The acknowledgment of all deeds, instruments in writing, for the conveyance of real estate, or that affect such real estate in law or in equity, shall be by the grantor presented to such court or officer having authority by law to take such acknowledgment, and state that the same was executed for the consideration therein mentioned and set forth."
It is true that the last three words of the above section are omitted from the acknowledgment, but we do not believe that this *Page 187 
omission makes the instrument void. To our mind these words add nothing to the meaning of the language of the section. The words "and set forth" may be a little more appropriate than the word "mentioned" in referring to the contents of a written instrument, but if there is anything in the instrument that is mentioned, it must be also set forth, and if it is "set forth," it must be "mentioned" therein according to the meaning of the words, as used in that section. At any rate the acknowledgment is substantially in the form prescribed by the statute and that, to our mind, is sufficient.
II. As disclosed by the pleadings, this controversy was commenced by the First National Bank of Claremore bringing an original suit on the promissory note and an open account and having an attachment issued. Then all the other parties came in and set up their respective claims. The answer of the First National Bank of Claremore to the interplea of C. M. Keys and Company and Stock Yards Bank discloses the issues upon which the case was tried. Omitting the caption, title and signature thereto, it reads as follows:
"The plaintiff herein for answer to the interplea of C. M. Keys   Co., a partnership composed of John M. Keys and Hugh Mills, and Stock Yards Bank, says: That it has not sufficient knowledge or information to form a belief as to whether or not the defendant, Wat Mayes, is indebted in any manner to the interpleader, and it has not sufficient knowledge or information to form a belief as to whether or not the defendant, Wat Mayes, executed any note to the interpleader, or whether the interpleader holds any note executed by him; and it says it has not sufficient knowledge or information to form a belief as to whether or not the interpleader holds any mortgage executed by Wat Mayes, or anyone else, upon the property attached in this case. Neither has it sufficient knowledge or information to form a belief as to whether or not any mortgage so executed was recorded or filed for record at any place. It therefore denies that the interpleader herein holds any note or mortgage executed by Wat Mayes; and it therefore denies that the interpleader herein has any lien for any sum upon the property attached in this case, and it prays for judgment for its costs." *Page 188 
It will be seen from these pleadings that no question of fraud was alleged by any of the parties against the other. The referee made no finding on the question, and the only intimation that it cut any figure in the case is a finding of the court, "That the mortgage of C. M. Keys and Company is an absolute fraud, by reason of their failure to renew or to advise people in any way, shape or form of the various payments that had been made and the transfers that had been made." The court below adopted the report of the master in toto and inserted it in his decree, just as it was reported, with the exception of the above conclusion. The court below must, of course, have been of the opinion that this conclusion was warranted by the evidence or some finding of fact of the master, but we are unable to find the evidence or finding which to our mind supports it. The case was tried below upon the theory that the chattel mortgages attached were void because they were not transferred to the indexes after the change in the registration laws and formation of new recording districts, and there are no averments in the pleadings, nor was there any evidence offered at the trial, or any findings of fact by the master, upon which to base the conclusion of the court.
The finding of the master in relation to the C. M. Keys and Company transactions with Wat Mayes is to the effect that on the 28th day of October, 1901, the defendant Wat Mayes made, executed, and delivered to C. M. Keys and Company his certain promissory note in the sum of $34,800.04, with interest thereon at the rate of eight per cent. per annum from date thereof; that said defendant, to secure said note, made, executed, and delivered to said C. M. Keys and Company, a chattel mortgage upon certain described property. That said mortgage was filed for record in the office of Charles A. Davidson, clerk of the United States Court and ex-officio recorder in the Northern district of the Indian Territory, at Muskogee, Indian Territory, on the 31st day of October, 1901, at two o'clock p. m., and recorded in Book M, page 286; that thereafter and before said note became due, said C. M. Keys and Company, for a valuable consideration, sold and *Page 189 
transferred said note to Stock Yards Bank, presentment, demand, protest, and notice of protest being waived and payment at maturity guaranteed by said C. M. Keys and Company; that thereafter said defendant made settlement with said Stock Yards Bank by payment of a portion of said note and executed and delivered his promissory note for the remainder thereof, and from time to time thereafter said defendant made various payments upon said indebtedness, and on the 1st day of March, 1905, made, executed, and delivered his promissory note as an evidence of the remaining indebtedness due said C. M. Keys and Company, in the sum of $12,026.74, together with interest thereon at the rate of seven per cent. per annum from date thereof; also one certain promissory note of date January 16, 1905, in the sum of $2,970.95, payable to the order of C. M. Keys and Company, together with interest thereon at the rate of seven per cent. per annum from date thereof; that thereafter, and before said notes became due, for a valuable consideration, said C. M. Keys and Company indorsed, negotiated, and sold to intervenor, Stock Yards Bank, said notes, together with the mortgage heretofore described. That there is now due and unpaid upon said indebtedness the sum of $15,288.69. That all of said indebtedness as evidenced by said notes is included in and covered by said mortgage.
From the foregoing findings of fact it is apparent that the indebtedness to C. M. Keys and Company and Stock Yards Bank was not due at the time the attachment suit was commenced; that there was a large sum due C. M. Keys and Company and Stock Yards Bank from Wat Mayes, and that this sum was secured by the chattel mortgage now under consideration. No exceptions were saved to any of these findings.
Counsel for defendants in error insist that the fraud that vitiated the mortgages of C. M. Keys and Company and Vinita National Bank and made them void as against attaching creditors, is evidenced by the length of time after maturity they had remained unforeclosed, and by reason of the manner in which the evidence shows the cattle had been dealt with by the respective *Page 190 
parties. We cannot agree with counsel in this contention. There is a clause in the part of the mortgage describing the promissory note originally given to C. M. Keys and Company, as follows:
"One note for $34,800.04, dated Oct. 28, 1901, payable one month after date all payable at the office of C. M. Keys   Co., Nat. Stock Yds., Ill., and all with interest thereon at the rate of eight per cent. per annum from date or according to the terms of any renewal or extension of said note which may be made by consent of said second party, its successors or assigns, and may be evidenced by the execution of new note or notes in place of said original note at or after maturity, for the amount of the debt then unpaid and any renewals or extensions thereof, and which said note the party of the first part hereby agrees to pay on maturity thereof."
The findings of fact of the master in chancery do not disclose that said C. M. Keys and Company or their assigns did anything they were not entitled to do by the terms of the mortgage. They had received payments from time to time and extended the time of payment by renewals. All this, by the terms of the mortgage, seems to be proper enough. It does not appear that any of the defendants in error gave Wat Mayes credit on the strength of the cattle covered by this mortgage or that they were prejudiced in any way by the dealings of Wat Mayes with C. M. Keys and Company or their assigns in relation to the property mortgaged. So, aside from the rule that fraud is never presumed, and in order to entitle a party to relief on that ground it is essential that the fraud be distinctly alleged in the pleadings so that it may be put in issue and evidence thereof given, the charge of said fraud, by the defendants in error, upon the merits, seems to be without foundation.
Counsel for the First National Bank of Vinita and the First National Bank of Claremore state in their petition for a rehearing that if the former opinion is followed, "C. M. Keys   Company will receive the proceeds of the lots that on the petition of Vinita National Bank were marshaled in this case, and that C. M. Keys   Company have no lien whatever upon said lots until the claims of First National Bank of Claremore and First National *Page 191 
Bank of Vinita are fully paid." As far as the record and briefs of counsel disclose, there was no dispute over the distribution of the funds arising from the sale of the assets of Wat Mayes, except that occasioned by the ruling of the court below on the question of the validity of the chattel mortgages held by C. M. Keys and Company or their assigns, and Vinita National Bank, and the decree of the court below is only disturbed in so far as it is based upon the court's findings that these chattel mortgages were void as against subsequent creditors or incumbrancers.
The former opinion of the court, as herein supplemented, is adhered to.
All the Justices concur, except Turner, J., disqualified, not participating.