Bryson & Hardin v. Penix

1. Under the eighth section of the act concerning fraudulent conveyances, (K. C. 1845,) the purchaser of personal property from a mortgagor in possession, will hold against a prior unrecorded mortgage, even though he had notice of it. 2. It seems, however, that such would not be the case if the mortgage was recorded within a reasonable time after its execution.

Appeal from PiJee Circuit Court. This was an action commenced by Bryson and Hardin against Penix and the administrator o£ James M. Parks, to recover the amount of four notes executed by Parks, in his life-time, and secured by a mortgage on certain beef cattle. The administrators of Henry Early were subsequently made parties defendants. The cause was submitted to the court upon the following agreed statement of facts : 11 On the 24th of September, 1849, James M. Parks executed, acknowledged and delivered a mortgage on the cattle to secure his indebtedness to the plaintiffs. Parks remained in possession of the cattle and there'was no delivery to the mortgagee. The defendant, Penix, with notice of the execution of said mortgage to the plaintiffs, on the 26th of September, 1849, obtained from Parks a mortgage on the same cattle, to secure himself and Early against certain liabilities thex-ein mentioned, which was filed for registry on the day of its execution, and before the plaintiffs’ mortgage, which was not filed until September 28, 1849. In the spring of 1850, the cattle were carried off and sold, with the consent of Parks, and Penix received the proceeds. It is admitted that the debt due from Parks to the plaintiffs remains unpaid, and that Parks died insolvent, leaving no means to pay the liabilities for which Penix and Early were bound, and to secure which the mortgage to them was executed.” Upon these facts, the court gave judgment for the defendants, and the plaintiffs appealed. All the provisions of the act concerning fraudulent conveyances must be construed together, and, if possible, made to harmonize. The construction of the eighth section coixtended for by the respondents completely nullifies the provisions of the second and third sections ; for, by that construction, the mere registry of a mortgage on personal property makes it valid against all the world, whether fraudulent or not, and whether the mortgagee was a party or privy to the fraud or not. The eighth section could only have been intended to place mortgages on personal property on the same footing with deeds for land, and to make registry constructive notice. Shepherd v. Trigg, 7 -Mo. Eep. 151. Ross v. Crutzinger, ib. 245, 8 ib. 332. 11 ib. 369. The act was intended to prevent frauds and not to be used as an instrument of fraud. Penix is a subsequent purchaser, with full notice of a prior bona fide conveyance. By the eighth section of the act, where the mortgagor of personal property remains in possession, the mortgage is not valid, except between the parties to it, until it is filed for record. The mortgage of the. defendants, being first recorded, secured to them the first lien. The parties are equal in point of equity, and the law is in favor of the defendants. The act makes registry the sole test of the.validity of the mortgage against subsequent purchasers or incumbrancers, and excludes the doctrine of notice. In Cook v. Clifford, 12 Mo. Rep. 3T9, this construction was given to the fifth section of the same act. In "Virginia, they have given a like construction to an act somewhat similar. 2 Munf. 548.