Court Opinion

ID: 7807367
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:08:10.845908+00
Date Added: 2024-06-11T16:30:22.003239
License: Public Domain

Kirby, J., (after stating the facts). (1) A vendor’s lien Was retained in the recorded deed from Olmstead to Mackey to- secure the unpaid- purchase money evidenced by the 150 $20 negotiable promissory notes, as- recited in the deed, and Fellheimer, in the usual course of trade for value, and before maturity, purchased 100 of said notes and the same were endorsed and delivered to him. By said purchase he became the innocent holder thereof and entitled to enforce the lien for their payment. Section 510, Kirby’s Digest; Smith v. Butler, 72 Ark. 350; Pullen v. Ward, 60 Ark. 90.  (2) The later reconveyance of these lands from Mackey to Olmstead for .a recited consideration acknowledged received, did not have effect to displace the lien nor deprive Fellheimer, the bona fide holder of the purchase money notes to whom it passed as an incident to the transfer of the notes, of the benefit thereof and the right to enforce same. Fellheimer had no authority to prevent any such conveyance, and all those who took or were interested in the different conveyances of the property after Olmstead’s deed to Mackey, reciting a portion of the consideration unpaid and expressly retaining a lien to secure the payment thereof was recorded, were necessarily affected with notice of the lien retained for the benefit of the vendor and the assignee of any of the purchase money notes. Sections 762-3, Kirby’s Digest; Turman v. Sanford, 69 Ark. 95; Green v. Maddox, 97 Ark. 402.  (3) Although the lien reserved in the face of the deed to secure 'the payment of the purchase money notes passing as an incident thereto upon the assignment of the notes, is .analogous to a mortgage executed to secure the payment of a note and controlled by the same rules of law (Pullen v. Ward, supra), still the notes are not instruments affecting the title to real estate within the meaning of the recording act, and no record of them, nor their transfer, is required by it. The law does not require a notation of the assignment of the purchase money note made upon the margin of the record of the deed reserving the lien and the purchaser of said notes acquired the right to enforce the lien for the payment thereof superior to any right thereafter acquired by Hebert and Thornton under their contracts. The lien passes with the transfer of the notes and expires when they are paid.  (4-5) It is argued that the recorded conveyances of the land by Mackey to Olmstead for a consideration acknowledged paid released the vendor’s lien reserved in his deed for the payment of the purchase money and that subsequent purchasers and lien holders could not but have understood therefrom that the consideration in the first deed was paid and the lien extinguished. Said deed, however, did not recite that the said consideration was paid nor was there any notation upon the margin of the record of the deed reserving the lien indicating that such was the fact. It is also true that the record did not disclose the transfer of these purchase money notes nor the owner thereof, but it did disclose that a lien was retained for their payment which inures, under the law, to the assignee of the notes without'any record notation of the assignment made. It is also well known that the maker of a negotiable note takes the risk of payment of it to the payee and is not discharged from his obligation to the holder thereof if it has. been transferred. Koen v. Miller, 105 Ark. 152, 150 S. W. 412. It was there said: ‘ ‘ A mortgagor executing a mortgage as security for a negotiable note is charged with the knowledge that the note is negotiable, and he makes .payment to the original mortgagee without the production of the note at his peril, and the payments so made are of no effect as against an endorsee thereof who had possession at the time the payments were made. ’ ’ Appellants can not complain that Fell'heimer gave them no notice that he was the owner of the purchase money notes with t'he right to enforce the lien for payment since nothing more was required of him by the law than that Ms lien should be expressly reserved in the deed retaining it. The state of this record does not appear to require a decision of the question as between appellants, whose lien is superior, and furthermore, it discloses that the lands were sold and purchased by appellee for a much less sum than Ms judgment called for, thus precluding the possibility of either of appellants obtaining anything from the proceeds of the sale, without regard to the priority of the lien. The question as between them is not therefore, decided. Finding no error in the record, the decree is affirmed.