Court Opinion

ID: 7819989
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:50:36.395691+00
Date Added: 2024-06-11T16:30:42.864448
License: Public Domain

John A. Fogleman, Justice, dissenting. I cannot agree that, at the time of the alleged offense, as between the First National Bank and appellant, there was no lien on the automobile. There is no question about the invalidity of the security interest as to third parties who acted in reliance upon the erroneous release. The important consideration is the status of the lien as between the bank and Mrs. Austin. Ark. Stat. Ann. § 41-1928 (Repl. 1964) was not enacted for the protection of third parties. The sole and only purpose of the statute is the protection of the secured party. 15 Am. Jur. 2d 401, Chattel Mortgages § 242. In Arkansas, we have recognized that the question of the validity of the mortgage as to third parties is of no consequence in prosecutions under the statute. Insofar as the existence of the lien or security interest is concerned, the only question is whether there is a valid, enforceable lien as between the parties. McClaskey v. State, 168 Ark. 339, 270 S.W. 498. In this case, the evidence is quite clear that the release was made through mistake. Viewed in the light most favorable to the state, there is also cogent evidence tending to show that appellant knew it was a mistake and knew that the debt had not been paid. The financing arrangement had been made in August 1973. The amount of the debt was $4500. The 36 monthly payments of $149.09 each commenced on September 1, 1973. The erroneous release was dated March 6, 1974, and the certificate of title on which it was endorsed mailed to appellant. Appellant received the loan papers and thereafter, on March 15, 1974, transferred the title to her son, who later gave a security interest of the automobile to an innocent third party, whose priority was recognized by the First National Bank. On April 9, 1974, Joe Roberts, the bank’s auditor and Mike Brewer, a loan administration officer of the bank called on appellant. According to Roberts, Mrs. Austin acknowledged she knew she had not “paid off the car,” or “paid off the note.” Brewer testified that appellant indicated that “she knew there was something there that wasn’t right at the time,” and that she realized that she had not paid off the loan on the car. Appellant admitted that she knew that she had not paid off the loan, but said she felt it had been paid because her son was making the payments and she “thought it could have been insurance. ” Of course, resolution of factual questions including appellant’s intent and good faith or the lack of it was for the jury. Any assertion that the lien was not in effect where it resulted from mistake is based upon estoppel. Where the want of record would not bar a valid lien as between the parties, the mere discharge of the mortgage by release or satisfaction on the record cannot prevent the enforcement of the lien against the mortgagor-borrower where the debt has not actually been paid or satisfied. Lee v. Wagner, 71 Wis. 191, 36 N.W. 597 (1888). The signing of a satisfaction reciting payment of a mortgage debt, when nothing was in fact paid, made through mistake is of no effect. Linn v. Ziegler, 68 Kan. 528, 75 P. 489 (1904). Of course, in Arkansas an unrecorded mortgage is valid between the parties. Barnett v. State, 65 Ark. 80, 44 S.W. 1037; McClaskey v. State, supra. Even equitable mortgages and liens some within the coverage of such statutes. Farmer v. State 18 Ga. App. 307, 89 S.E. 382 (1916); Courtney v. State, 10 Ala. App. 141, 65 So. 433 (1914); Williams v. State, 40 Ala. App. 687, 122 So. 2d 549 (1960). See also, Beard v. State, 43 Ark. 284. To say the very least, there is evidence of the existence of an equitable mortgage or security interest in spite of the release. The questions of the intent and good faith of appellant were for the jury. I would affirm the judgment.