Court Opinion

ID: 3929750
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:55:19.197029+00
Date Added: 2024-06-11T14:16:41.511422
License: Public Domain

On the original submission of this case I concurred in the result, under the impression that the case of Crosby v. Huston, 1 Tex. 203, 238, was controlling authority on us so long as it was not overruled or modified by the Supreme Court. A reconsideration of that case, however, has convinced me that it should not be so regarded. The question now squarely before this court was but meagerly and incidentally mentioned in a lengthy opinion in that case, devoted largely to other questions, and the court prefaces its discussion of the law as announced in the decision by this statement:
"Under these circumstances we will not undertake to determine the controversy and establish, not the real rights of the parties, but what they would have been had the whole transaction and the acts of all the parties transpired in this republic before the introduction of the common law."
The courts of sister states administering a common system of laws, under one national government, whose citizens are closely associated in social and commercial enterprises, would be disposed to apply the principles of comity more liberally in favor of contracts entered into in a sister state, and with a citizen of such state, than in favor of contracts executed in foreign nations and between its citizens. On account of this fact and the great change which has taken place since the decision of Judge Hemphill, announced in the case of Crosby v. Huston, I do not believe that our courts should now regard the passing expression of an opinion in that case, under the circumstances, as being controlling in a question of comity arising as it does in this case.
Ordinarily the purchaser of personal property, except commercial paper, acquires only such rights and title to the property as his vendor had. Certain exceptions to this rule were adopted by the law to prevent fraud; among these the common-law rule that a chattel mortgage, when possession of the property remains with the mortgagor, was fraudulent as to creditors, etc. Most of the states, including our own, have adopted registration statutes, which take the place of the possession by the common law to render the mortgage valid. These statutes usually simply declare that chattel mortgages which shall not be accompanied by change of possession shall be void as to creditors and purchasers without notice, unless recorded in a prescribed manner. When the mortgage is so recorded, it then becomes effective against the world, in so far as the laws of the state under which it was recorded can make it so, in the same manner as if possession had been delivered to the mortgagee; and the overwhelming weight of authority is to the effect that, when one has complied with the law of the state where the property is situated and supposed to remain in such manner as to create a valid mortgage against purchasers and creditors, and the property is, without the mortgagee's consent, removed to another state, the courts of the state to which the property is removed will, under the doctrine of comity, recognize the validity of such mortgage as it existed under the laws of the state where the property is situated, and enforce it against even purchasers and creditors without notice. Blythe v. Crump, 28 Tex. Civ. App. 327,66 S.W. 885; Scaling v. First Nat. Bank, 39 Tex. Civ. App. 154,87 S.W. 715; Jones on Chattel Mortgages, § 260a: Cyc. vol. 6, p. 1089; notes to Snider v. Yates. 64 L.R.A. 357. This rule seems to me to be founded in good reason and justice and should be applied by our courts unless its enforcement is against the policy of our law.
Let us for a moment examine our statutes on the subject:
Article 5655 declares that:
Every chattel mortgage, etc., "which shall not be accompanied by an immediate delivery and be followed by an actual and continued change of possession of the property mortgaged or pledged by such instrument, shall be absolutely void as against the creditors of the mortgagor or person making same, and as against subsequent purchasers and mortgagees, or lienholders in good faith, unless such instrument or a true copy thereof shall be forthwith deposited with and filed in the office of the county clerk of the county where the property shall then be situated, or if the mortgagor or person making the same be a resident of this state, then, of the county of which he shall at that time be a resident."
Under this statute the mortgagee has the option of recording the mortgage either in the county of the residence of the mortgagor or of the county where the property is situated when the mortgage is given.
Article 6841 of Revised Statutes provides that:
Mortgage, etc., of personal property shall he recorded in the clerk's office of the county in which the property shall remain. "and if afterwards the person claiming title under such deed, mortgage, or other writing, shall permit any other person in whose possession such *Page 347 
property may be to remove with the same, or any part thereof, out of the county in which the same shall be recorded, and shall not, within four months after such removal, cause the same to be recorded in the county to which such property shall be removed, such deed, mortgage, or other writing, for so long as it shall not be recorded in such last mentioned county, and for so much of the property aforesaid as shall have been removed, shall be void as to all creditors and purchasers thereof for valuable consideration without notice."
We find no provision with reference to the recording of a mortgage here on property removed to this state from another state. Obviously the provisions of the articles above referred to were not intended to apply to such mortgages, and I do not think any policy with reference to the enforcement of a foreign mortgage here can be fairly deduced from these provisions of the statute. To my mind, they no more evidence an intention to protect innocent purchasers and creditors than an intention to protect the mortgage holder when he has complied with the law in the record of his mortgage. Indeed, it might more properly he said that these laws evidence a policy to protect the mortgage holder in his rights here property is removed without his knowledge and consent and relieve him of the duty of constant knowledge of the location of the mortgaged property, for it has been held that, where the property is removed from the county of its location, without the knowledge or consent of the mortgagor, he does not have to follow it up in its new location with the record of his mortgage in order to protect the mortgage against innocent purchasers. Spikes v. Brown, 49 S.W. 725; Thos. Goggan  Bros. v. Synnott, 134 S.W. 1184. Nearly all the states in which the question has been considered have registration statutes very similar to our own, and the courts of those states have deduced no such policy as announced by this court from such statutes.
Neither do I think it a wise policy, nor one that will in the end subserve the best interest of the citizens of this state, to deny the Oklahoma citizen the enforcement of his mortgage against property feloniously perhaps brought to this state because in the particular instance a citizen of this state will suffer. The Supreme Court of Iowa makes such an appropriate observation on this subject that I here quote it:
"The argument based upon the hardships of this and similar cases fails to convince us, that justice and the interest of the people of this state require a modification of the rule, lex loci contractus. * * * That there may be instances of innocent persons sustaining loss, as did the defendant in this case, in its application to instruments executed in another state, may readily be admitted; but these occasional instances of hardship are amply counterbalanced by the benefits which the people of the state receive in the application of the rule in other states to contracts entered into here. We could illy afford to establish a precedent disregarding and setting aside, in our administration of justice, those rules of comity which have here-tofore been recognized by all civilized nations. It might return upon us with most mischievous results." Smith  Co. v. McLean, 24 Iowa 329.
The application of this doctrine may work hardships in some instances, but equally hard is the result if one who has done everything required of him by law to secure his rights may be deprived of them by the criminal act of another, done without his knowledge or consent. The innocent purchaser of stolen property suffers equally when the property is taken from him by the rightful owner. If this property had been removed from the southern part of this state to Lipscomb county, a distance of nearly 1,000 miles and had been bought by Farmer under the same circumstances, a mortgage recorded against the property located in a different part of the state before its removal would be enforced against it. Here the mortgaged property is removed just across the line of one state into another, and is sold within one month after its removal and yet the mortgagee, without fault, is denied the enforcement of his mortgage because taken in another state. 1 do not think that the courts of our state will go so far to protect its own citizens against the rights of a citizen of our sister state.
For these reasons, I respectfully dissent from the disposition of the case as made by the majority of the court.