Court Opinion

ID: 7006481
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:51:23.334713+00
Date Added: 2024-06-11T16:10:05.973150
License: Public Domain

Mr. Justice Freeman delivered the opinion of the court. It is suggested by counsel for appellees, though not urged, that the proceeding in this case was irregular; but it does not seem to be seriously contended that a bill in equity may not lie in a case of this kind. Assuming therefore that such a bill may be maintained where there are successive liens or incumbrances upon mortgaged property, the question is whether under the averments of the bill appellants are entitled to the relief sought. It is contended in their behalf that personal property taken temporarily out of the state in the regular course of the owner’s business to be thereafter returned, is in legal contemplation at all times within the state, and that the trust deed set forth in the bill created a binding lien on the horses therein described, enforceable in this state. It is not questioned in behalf of appellees that a lien created in a foreign state will be given as a matter of comity the same effect in this state that it would have in the state where it was created, but it is insisted such lien will be given no greater effect here than there, and that in the case at bar no lien was created by the trust deed referred to, which was ever valid in Tennessee upon the property in controversy, and none therefore which can be given effect in- Illinois. It appears from the bill that the chattel mortgage securing complainants’ notes was executed and acknowledged in Memphis, Shelby county, Tennessee, April 20, 1904. It was not recorded there, however, until July 28th following. Meantime, in May, 1904, the mortgaged horses, with one exception, were taken from Shelby county, Tennessee, to Kentucky and subsequently brought into this state. When they left Tennessee the trust deed which conveyed them to secure complainants’ notes had not been registered and under the laws of that state was not as yet a valid lien. The subsequent registration of the trust deed in Shelby county, Tennessee, when the property was no longer in that state and when it was within the jurisdiction of Illinois, had no effect anywhere. If valid in Tennessee, the lien of the trust deed would be given the same effect in this state. Ames Iron Works v. Warren, 76 Ind. 512; Mumford v. Canty, 50 Ill.370-376. But it never became valid there. It is difficult to see, therefore, upon what basis it is possible to give it effect here or to exempt it from the operation of our laws. In Jones on Chattel Mortgages, section 305, it is said: “ The lex situs governs where a mortgage is executed in a State other than that in which the property is situate. Though it be executed according to the requirements of the law of the domicile of the owner in another State, the mortgage will be invalid as against attaching creditors in the State where the property is located, unless the mortgage .conforms to the laws of the latter State. The mortgage to be valid must be executed, acknowledged and recorded according to the law of the place where the property is at the time.” To the same effect is Golden v. Cockril, 1 Kans. 259-270, and in Bank v. Hill, 99 Tenn. 42-44, it is said: “By the laws of both States (Arkansas and Tennessee) bona fi'le claimants under duly registered mortgages are protected whenever the property conveyed was within the limits of the State when such registration took place and as long as the courts of that State can exercise jurisdiction over it.” When the trust deed in controversy was registerod in- Shelby county, Tennessee, the horses were in Illinois. It is urged, however, by appellants that in “ contemplation of law the property never left the county of Shelby,” that all the judgment creditors had notice of the trust deed and the indebtedness thereby secured prior to and at the time of the commencement of the various suits. But in fact as well as in legal contemplation the property did leave that county and state without any valid lien upon it. Nor is it material whether the judgment creditors knew of the existence of the unregistered trust deed conveying personalty or not, under the laws of Tennessee as construed by its own court. In Coward v. Culver, 59 Tenn. 540-544, it is said that “ creditors are not affected by actual notice of unregistered deeds.” See also Martin v. Potter, 34 Vt. 87. An assignment of personal property by way of mortgage is an. exception to the. general rule that personal property is governed by the law of the domicile of the owner and not by the law of the situs of the property, and as to chattel mortgages, the situs and not lex domicilii governs. ¿Tones on Chattel Mortgages, sec. 305, supra; Ames Iron Works v. Warren, 76 Ind. 512. Had the property been in Shelby county, Tennessee, when upon July 28th the trust deed in controversy was registered, the latter might for aught that appears have then become a valid lien in that state. But being then in Illinois the property was subject to and governed by the law of its situs at that time, and not by the law of its owner’s domicile. Finding no material error, the decree of the Superior Court must be affirmed. Affirmed.