Court Opinion

ID: 4914813
Source: CourtListenerOpinion
Date Created: 2021-09-22 00:07:35.505754+00
Date Added: 2024-06-11T08:13:49.947181
License: Public Domain

Mabry, C. J.:
It is entirely clear from the evidence in this case that the debt from J ames K. Munnerlyn to appellants, and evidenced by the' notes, dated November 12th, 1885, and secured by the mortgage of date December 19th of that year on lot six (6), block three (3) of Dwight’s-subdivision of the town of Clear Water Harbor and the wharf extending into the water of said harbor from the foot of Cleveland street, was tona fide and has never been paid. At the time of taking said mortgage Munnerlyn, did not owe any debt except that represented by the notes secured by the mortgage, and appellant supposed he was solvent and prosperous. The testimony of C. B. Rogers, Edward A. Chaplain and James K. Munnerlyn all show that the said mortgage-*597was executed to secure a valid bona fide claim, and there is no verbal testimony to contradict what they say. Appellees introduced no evidence except a chattel mortgage from Munnerlyn to appellants on a stock of goods in a store in Clear Water Harbor, and bearing date the 15th day of December, 1888, to secure the same indebtedness represented in the first mortgage of December 19th, 1885. On the face of the papers as shown in the statement herewith filed, and the chattel mortgage of December 15th, 1888, it is claimed for appellees that the decree dismissing the bill was cor■rect.'
We are unable to conclude that there was any fraud in fact intended by the parties in the execution of the mortgage of December, 1885, or in any of the transactions between the parties, and the uncontradicted evidence of appellants removes any unfavorable inferences of a fraudulent intent in fact that may arise from the failure to record the mortgage for the length of time shown. There was no agreement between the parties not to record the mortgage, as insisted for appellees, and whatever validity attaches to this mortgage must appear upon its face and the course of dealing under it. It is insisted that the martgage is void because it embraces a stock of merchandise and the mortgagor was permitted to retain possession and dispose of the goods in the usual course of trade without .■accounting to the mortgagees for the proceeds. The testimony of Munnerlyn sliovrs that he retained possession of the stock of goods described in the mortgage and disposed of them in his usual course of business, and according to our decisions the mortgage was void as to creditors so far as the merchandise is concerned, Eckman & Vetsburg vs. Munnerlyn, 32 Fla. 367, 13 South. Rep. 922; Einstein & Lehman vs. Mun *598nerlyn, 32 Fla. 381, 13 South. Rep. 926; First National Bank vs. Wittich, 33 Fla. 681, 15 South. Rep. 552.
No claim is made in this suit to the goods, and we have presented the question whether the mortgage is void as to the real estate therein described on account of the clause in reference to the personal property, and the dealings therewith by the mortgagor. This question has never been settled by this court, and the decisions on it in other States are conflicting. The view taken by several courts is that the mortgage deed being void in part, is void as an entirety, but therearg many decisions to the contrary. It is said in United States vs. Bradley, 10 Peters, 343, “that bonds and other deeds may, in many cases, be good in'part and void for the residue, where the residue is founded in illegality, but not malum in se, is a doctrine well funded, in the common law and has been recognized from a very early period.” We will not enter upon a review of the decisions bearing on the question, but will simply state the rule which, in our judgment, is supported by the better reason and authority. It is, that-when a mortgage covers a stock of merchandise, and also real estate, and is constructively void as to the-goods on account of the mortgagor’s right to continue-in possession and sell the goods in the usual course of trade, but there is no fraudulent intent in fact in the execution of the mortgage, it will be valid as to the real estate. Davenport vs. Foulke, 68 Ind. 382, S. C. 34 Am. Rep. 265; Barnet vs. Fergus, 51 Ill. 352, S. C.. 99 Am. Dec. 547; Lund vs. Fletcher, 39 Ark. 325; S. C. 43 Am. Rep. 270; Hayes vs. Wescott, 91 Ala. 143,. 8 South. Rep. 337; Bullene vs. Barrett, 87 Mo. 185; State vs. Tasker, 31 Mo. 445. In New York, and the-States following her decisions, the rule seems to be-different.
*599The next contention in favor of the decree is, that appellants can not enforce their mortgage of December, 1885, against appellees, Eckman & Vetsburgand Einstein & Lehman, because it was not recorded until after their debts against Munnerlyn were contracted, and that they were subsequent creditors of Munnerlyn without notice of the mortgage. Our statute provides that no conveyance, transfer or mortgage of iea'1 property, or of any interest therein, shall be good or 'effectual in law or in equity against creditors or subsequent purchasers for a valuable consideration and without notice, unless the same shall be recorded. McClellan’s Digest, p. 215, sec. 6. The proper construction to be placed on this statute was considerably discussed in the case of Massey vs. Hubbard, 18 Fla. 688. This decision places creditors and subsequent purchasers upon the same footing in respect to notice of a prior conveyance not recorded. A purchaser of real estate after a prior conveyance thereof to another party has been put on record, though its record has long been postponed, would not be an innocent purchaser, because of the constructive notice given by registration at the time of his purchase. This court said in Doyle vs. Wade, 23 Fla. 90, 1 South. Rep. 516, that a “judgment is a lien on real estate which has been conveyed by deed by the defendant in execution prior to the rendition of the judgment, but which was not recorded, and of which the judgment creditor did not have actual notice at the time of entering such judgment. If the judgment creditor had no notice of the deed, either actual or constructive, his lien was complete, and a purchaser at a sale thereunder would take such title as the records showed to be in the defendant in the judgment without regard to whether the purchaser had notice of it or not.” See, also, *600Lusk vs. Reel, decided at this term. Where the creditor obtains a judgment and secures a lien on real estate before a prior deed from the judgment debtor is recorded, it is settled that the judgment creditor has the superior right to satisfaction out of the property; but what about a creditor who has not secured any judgment lien? Does “creditor” in the statute mean a creditor at large, or'one who has secured a lien by judgment or attachment? In Massey vs. Hubbard, supra, this court followed the decisions in Alabama and New Jersey, where statutes similar to ours existed, and according to the decisions in those States, the creditors referred to in the statutes did not mean creditors at large, but such as had obtained liens on the recovery of judgments. Smith vs. Zurcher, 9 Ala. 208; Daniel vs. Sorrells, Ibid, 436; Wallis vs. Rhea & Ross, 10 Ala. 451; Wyatt vs. Stewart, 34 Ala. 716. As sustaining the same view, see Cameron, Hull & Co. vs. Marvin, 26 Kansas, 612; Commercial National Bank vs. Colton, 17 R. I. 226, 21 Atl. Rep. 349.
The facts in the case are, that Munnerlyn became indebted to Eckman & Yetsburg and Einstein & Lehman after the execution of the mortgage of December, 1885, and before its record in 1888, but they did not sue out attachments and seize the property of Munnerlyn until something over two months after said mortgage had been recorded. They had knowledge of this mortgage before, any attachment suits were instituted by them, and, in our judgment, their liens were subordinate to the lien of the mortgage of 1885. Prom what has been said it is apparent that the court erred in dismissing appellant’s bill. As to lot six (6) and the wharf described in the first mortgage, they had a superior lien and it should have been enforced. It is conceded on the record that tile attachments sued out *601by Eckman & Vetsburg and Einstein & Lehman against Munnerlyn had been dissolved in the Circuit Court, but they had prosecuted appeals from the orders dissolving the attachments, and the appeals were pending in this court at the final'decree in the present case. The appeals have been decided in this court, and resulted in a reversal of the orders dissolving the attachments (Eckman & Vetsburg vs. Munnerlyn, and Einstein & Lehman vs. Munnerlyn, supra). As to the other lots described in the mortgages subsequent to the one executed in 1888, the priorities of liens of the mortgages and attachments should be adjusted according to the dates of levies of the attachments and the record of the mortgages or notice thereof. No rights are asserted under the deed of assignment, and nothing is determined in reference to it.
The decree is reversed for further proceedings in accordance with this opinion. Ordered accordingly.