Court Opinion

ID: 3868879
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:03:05.395453+00
Date Added: 2024-06-11T13:51:38.157901
License: Public Domain

This is a suit in equity whereby the complainant seeks to restrain the respondent from taking possession of certain personal property and from foreclosing or treating as valid a certain mortgage upon the same and to have said mortgage delivered up and canceled. *Page 42 
A restraining order was issued which was continued after a hearing upon the motion for a preliminary injunction and is still in force. Subsequently, after the pleadings were closed and after a hearing in the Superior Court upon the entry of a final decree, the case was certified to this court under Sec. 35, Chap. 289, Gen. Laws of R.I., upon an agreed statement of facts.
From the facts, as stated, it appears that on or before September 28th, 1910, Julia M. Vaill, now deceased, executed and delivered to the respondent, the mortgage under consideration covering personal property then owned by Miss Vaill and located in New Shoreham, Rhode Island. The respondent never took possession of the mortgaged chattels nor did he have the said mortgage recorded within five days from the date of the signing thereof, but the same was placed on record in New Shoreham on October 26, 1910. Later, on July 18, 1911, Miss Vaill, by a bill of sale, sold and conveyed the chattels described in the said mortgage to the complainant who thereupon took, and has since retained, possession of the same.
The complainant at the time when she purchased the property — July 18, 1911 — knew of the existence of the said mortgage to the respondent and that the same then appeared of record. The indebtedness for which the said mortgage was given has not been paid, the interest thereon is in default, and, therefore, the respondent claims the right to take possession of and sell the property covered by said mortgage under the provisions thereof. The respondent also claims that the mortgage is valid as to the complainant because the complainant knew of its existence and record prior to her alleged purchase of the property which the mortgage describes.
On the other hand, the complainant claims that said mortgage has no validity whatever, it not having been recorded within five days from the date of the signing thereof as required by Sec. 10, Chap. 258 of the Gen. Laws of 1909. *Page 43 
The case presents but a single issue, and that is, whether or not a mortgagee, who has neither taken possession of the mortgaged property nor recorded his mortgage within the time required by statute, can still maintain his mortgage as against the mortgagor's vendee who purchases the property with full knowledge of the existence of the mortgage. The statute which fixes the time within which mortgages of personal property shall be recorded is Sec. 10, Chap. 258, Gen. Laws of R.I., and is as follows: "Sec. 10. No mortgage of personal property hereafter made shall be valid as to the assignee in insolvency of the mortgagor, or any other person except the parties there to and their executors and administrators, until possession of the mortgaged property be delivered to and retained by the mortgagee, or the said mortgage be recorded in the records of mortgages of personal property in the town or city where the mortgagor shall reside, if in this state; and if not in this state, then in the town where the property is at the time of making said mortgage; which said recording or taking and retention of possession as aforesaid shall be made or taken within five days from the date of the signing thereof: Provided, that nothing herein contained shall be so construed as to affect any transfer of property under bottomry or respondentia bonds, or of any ship or goods at sea or abroad, if the mortgagee shall take possession thereof as soon as may be after the arrival of the same in this state."
The respondent claims that, notwithstanding the specific terms of the statute, the recording of a personal property mortgage, after the expiration of more than five days from the date of the signing thereof acts as a constructive notice to those who may take a conveyance subsequent to such recording and that as against them such a mortgage would be valid.
Our statute, before quoted, contains the imperative provision that no mortgage of personal property shall be valid until the mortgagee shall take possession of the mortgaged property or until he shall record his mortgage, and that such *Page 44 
possession or recording shall take place within five days from the date upon which the mortgage is signed. As the court said inHaythorn v. Van Keuren  Son, 74 A. 502: "The presumption is that the word `shall' in a statute is used in an imperative and not in a directory sense. If a different interpretation is sought, it must rest upon something in the character of the legislation or in the context which will justify a different meaning." In thus making the record of the mortgage imperative within a specified time, the legislature must have had some object in view and must have intended that the failure to record should have some bearing and some effect on the validity of the instrument. It seems to me that the legislature, in using the language which we find in the statute, intended that a mortgage which remained unrecorded for a period of five days should have no further legal existence, except as between the parties. The fixing of a definite period within which a mortgage must be recorded places the mortgage upon a different footing from mortgages made under statutes where no special time for recording is fixed. This difference has been recognized by this court in the case of Burdick v. Coates, 22 R.I. 410, in which the court, referring to the case of Commercial Bank v. Colton,17 R.I. 226, used the following language: "The mortgage was recorded prior to the assignment, and there was no provision in the statute as to the time when it should be recorded. The present statute is quite different; and under a similar statute in Massachusetts it was held, in Drew v. Streeter,137 Mass. 460, that an attachment made before the mortgage was recorded, even though the record was within the statutory period, took precedence of the mortgage."
In the later case of Ziegler v. Thayer, 34 R.I. 288, the court said in quoting from In re Ronk, 111 Fed. 154: "It is apparent that it was the purpose of the legislature to allow no valid claim, lien, or secret equity to be created on goods unless public disclosure was made either by delivery of the goods to the assignee or mortgagee and the retention thereof by him, or by recording the assignment or mortgage within 10 *Page 45 
days. To hold otherwise would be to defeat the beneficial effect of the recording statute."
There are, however, some authorities which support the respondent's contention that recording, however long delayed, acts as constructive notice to those who take a conveyance subsequent to such recording. In support of this contention the respondent cites cases from Ohio, Kansas, Michigan, Texas and New York. In only there of these states, Kansas, Texas and Ohio, does the statute fix any time for recording. In Kansas and Texas the statute provides for recording "forthwith" and in Ohio within six months. The courts in those states hold that the later record of the mortgage is a notice to parties who may subsequently deal with the property in question.
In Burdick v. Coates, supra, this court held that a chattel mortgage could have no validity whatever if the mortgagee failed to take possession of the property or to record his mortgage within five days from the date of the signing thereof, quoting Drew v. Streeter, 137 Mass. 460.
The conclusions reached by this court in Burdick v.Coates, supra, is in accord with the decisions of the courts of many other states. See Sheldon, Adm'r v. Connor, 48 Me. 584;Kennedy v. Shaw, et al., 38 Ind. 474; Simpson v. Harris,et al., 21 Nev. 353; Gassner v. Patterson, et al., 23 Cal. 299;  Sage v. Browning, 51 Ill. 217; The People v.Hamilton, et al., 17 Bradw. 599; Lockwood v. Slevin, etal., 26 Ind. 124; Parroski v. Goldberg, 80 Wis. 339;Bevans v. Bolton, 31 Mo. 437; Rawlings v. Bean, et al.,
80 Mo. 614; Garland v. Plummer, 72 Me. 397; Sidener v.Bible, 43 Ind. 230; McDowell, et al. v. Stewart, 83 Ill. 538.
These authorities are equally applicable to another contention of the respondent that an unrecorded chattel mortgage is valid against a subsequent purchaser with actual knowledge of the mortgage.
The respondent also cites cases to the effect that an unrecorded conveyance of real estate is valid against a subsequent purchaser with notice of the prior conveyance. It *Page 46 
does not however, appear that the questions submitted in the cases cited by the respondent upon this point arose under any statute peremptorily fixing a time within which conveyances of real estate shall be recorded, but that they were determined by the well settled and well understood equitable principles governing such matters.
While, as before stated, there is authority supporting the respondent's contention regarding both constructive and actual notice, the weight of authority seems to support the law as laid down by this court in Burdick v. Coates, supra, and I see no reason for changing the views therein expressed regarding the interpretation of the statute in question.
I think that the complainant is entitled to a decree as prayed for in her bill of complaint.
PARKHURST, J., concurs in opinion of VINCENT, J.