02, SUPREME .COURT OF ARKANSAS, [35 itr : -Martin et al. vs. O'Bannon. MARTIN et al. vs. 0 2BANNON. - 1. ACKNOWLEDGMENT OF' MORTGAGE : .The word "uses"in, not the same as"consideration.'; Lien, etc. The acknowledgment of the eiecution of' a mortgage for the uses and piirposes therein specified is insufficient to authorize it to be recorded. The word "uses" is not the snme, or of similar import, as the-word "consideration" required by the statute; and Such mortgage, though recorded, is no lien upon the property eXcept between the mortgagor and mortgagee. 2. nECREES Bind onlY parties .to therh. The heirs, of -a deceased mortgagor - are not bound by•a decree 'foreclosing a mortgage executed by him on land, unless they are parties . to the suit; nor are any others who are not parties to it. 3. VENDOR'S LIEN • When passes to assignee of purchase notes.. When one sells land and gives- a-. bend to make title upon- payment -of . the notes given for the purchase-money, his lien, :upon the land is in the nature of a mortgage, and passes to his , assignee of the notes, who has the right, by'subrogation, tO foreclose the lien. ASSIGNMENT oi NOTE : Consideration for, not impeae.huble by one without interest. In'a suit by the assignee of a 'note given for' land, to foreclose a. mort-gage- upon it for ,payment of the . note, a defendant who has no lien upon the land as against the assignee, is in no attitude tp impeach the consideration of the aisignment. 5. FORMER JUDGMENT • Plea of must show parties to the Suit,- etc. A plea in bar of a suit, that the plaintiff, . had instituted a former suit in equity upon the same cauSe of action, and that.. it was, upon final ... hearing; dismissed, bid' not showing whd" were defendants in it, nor that the decree of disniiisal was uPon a 'hearing 'on the merits; is insufficient. APPEAL from Arkansas Circuit Court in Chancery. Hon. J. A. WILLIAMS, Circuit Judge. Dooley, for appellants. ENGLISH, C. J. The bill in this ease was filed on the
3"5- Ark j lqtArKIVIDER ' TERM, 4819: : • .63 •Martin et al. •'s. VBannon. •_ .• ---•. • • • • -•■•• •---4 chanceiy s side6fi, the --ciictit 4Ourt:aof January, 1875, by Thomas W. &Bannon, against Ro13ert J. Martin, Forster, C.-1W. 7Keilhofei -and% Thöihas pay—the laSt ,three Composing the .firin Tdister,.- Keal-hofer & Co.--R. B. Dollarhide,- as adminiStrater. of John° 0: Hare, deceased; George Kéalhofer, and -the froknOwn "heirs of The bill alleges, in substance, that on the eleventh day 'of March, 1871, Jan 0. Hare, 3eink the Owner and in'pos-sossion of lots NoS.' 3 and 4, in - block No 27, Situated in the town Of De Witt, with 'a store-honse: °and '4:3ther ,im-provernents --thereon, - conttacted to ° sell "said lots and sini.7 provements,.- arid - 'some personal property, etc., to defendant Robert C., Martin,. for $3,090, of which' $1;090 -was paid down: $1,000 'to , be' paid. in , Six and $1,000 in eighteen months thereafter, for which:Martin gave his' note,s, and Rar0 entered into a written contract tb rhake, hint a:deed to the lots on payment of the two notes, retaining the legal title as security for their payment; That Hare afterwards, on- the -- ..day"of. : , for a valuable° consideration, indorsed said notes, arid :assigned and delivered them to plaintiff. The contract of said,- signed by Hare and Martin, and a 'copy of the notes, with the indorsement thereon, were' made exhibits, and the original notes afterwards produced and filed by plaintiff. ' ' - In the written contract the notes are described, and de= dared to be a lien on the lots, and Hare . binds himself to execute to Martin a deed on payment of the notes, and in each note the lots are described; -and. the -amount of the notes and interest (at 10 per , cent.) declared to be a lien- upon _them. - .0 The bill . further/alleges ,that'.the -notes ;were long sbiee
64 SUPREME COURT OF ARKANSAS, [35 Ark. . Martin et al..vs. O'Bannon. dile, remained wholly unpaid, and were a: lien on the lots, etc. That defendant George .'Kealhofer was in possession of the lots, and claimed some interest therein, in connection with Forster; Kealhofer & Co., under some pretended _ agreement with Martin' or Hare, which was subordinate and inferior to plaintiff's lien for purchase-money as holder of said nOtes.- That John 0. Hare, since he transferred the notes to plaintiff, had died, without executing said contract of sale, or conveying' said lots to Martin, and that the title thereto descended to his legal heirs, subject to plaintiff's lien for purchase-money. That the 'names of his heirs were unknown to plaintiff, and 'non-residents of the state, and, hence, were made defendants by description of the unknown heirs of John 0. Hare, deceased; and - that defendant IL B. Dollarhide was the administrator of the estate of said Hare. Prayer for decree against Martin for the amount of the notes 'and interest, that the same be declared a lien upon the lots, and that they be condemned and sold for the satisfaction of the decree, etc. • An affidavit was attached to the bill that its allegations were true, and that the defendants, composing the firm of Forster, Kealhofer & Co., and the unknown heirs of John 0. Hare, deceased, were non-residents of the state, as to whom pUblication" was ordered, and made, and an attorney ad litem appointed for them. The other defendants were served with process. Day, Kealhofer & Co., applied to he made - defendants 'to the hill in place of :FOrster, Kealhofer & Co., stating that they were a firm of merchants, of Memphis, composed of-Thomas- Day , and Charles' W;-- Kealhofer, under' the stYle
35 Ark] NOVEMBER TERM, 1879. 65 .Martin et al. vs. O'Bannon. of Day, Kealhofer & Co., and as such the 'successors of the dissolved firm of Forster, Kealhofer & Co., and the real parties in interest; and they were accordingly substituted. Day, Kealhofer & Co., with Robert C. Martin, demurred to the bill; the demurrer was overruled, and said firm answered, in substance, as follows: • That as the successors of Forster, Kealhofer & Co., which firm was dissolved the sixteenth of June, 1874, they are the owners and in possession of the lots described in the bill. - That on the twenty-first 'of February, 1871, said John 0. Hare, then owner of the lots, mortgaged them to Forster, Keal-hofer & Co., to secure a debt of $1,500, with interest, etc., which mortgage was executed and recorded before the sale of the lots by Hare to Robert C. Martin, eleventh of August, 1871. (Copy of mortgage exhibited.) That on the sixth of August, 1872, Forster, ' Kealhofer & Co. brought suit in the same court to foreclose the mortgage, and on the — day of March, 1873, a decree was rendered in their favor for their debt, ete., and for sale of the premises. , (Copy of decree, etc., made exhibit.) That the court appointed A. L. Truman a commissioner to sell the lots who made the sale the twenty-first of April, 1873, and they were purchased by Forster, Kealhofer & CO " to whom the commissioner executed a deed, the twenty-second of July following, approved by the court, a copy of which is exhibited. That if the notes sued on in this case were assigned ioy Hare to plaintiff, he took them with knowledge of said mortgdge, etc., but "they deny that plaintiff came into possession of said notes for a valuable consideration or any consideration whatever." The remainder of the answer is in these words: "Defendants do plead and hereby set up as a defense to the complaint, in this case, former • judgment, that' on the 35 Ark-5
SUPREM.E . COURT OF ARKAN -SAS, [3 ' 5 Ark. -- - -Martin et .al. vs. O'Bannon. daY of , 187-, this plaintiff filed in this Court a
coMplaint, the - Subject matter of which was-, -and . is the same as and identical with this complaint herein responded to, and that thereafter, to wit, on the — day of —, 187—, a final judgment of dismissal was , given a nd entered by this court on said anterior complaint, appeal prayed, and neVer prosecuted. "Wherefore, the premises considered, defendants pray to be dismissed, etc." - The plaintiff filed a demurrer to the answer of Day, Keal-hofer & Co., which the court sustained, and they rested. Defendant, Robert C. Martin, rested on his demurrer to the bill. Dollarhide, the administrator of Hare, who was served with process, Made no defense, and none was made for the unknown heirs of Hare. The court rendered a decree in favor ofplaintiff against defendant, Martin, for the amount of the two notes sued on, 'with interest, declared the notes a lien in the hands of plaintiff on the lots, foreclosed the lien, and condemned the lots to be sold . to satisfy the decree, etc. The defendants, who pleaded, appealed. No question is made by counsel for appellantS as to the sufficiency of the origin'al bill. 1. Acknow- ledgment I. There is no averment in ,the answer of of Mort- Day, Kealhofer & Co. that the mortgage upon ga T g he e word "uses" tn, the lots in controversy executed by John 0. not the same as Hare to Forster, eItalhofer & Co., was as...know- "consider- ation." ledged in due form, etc. On looking at the copy of the mortgage, made an exhibit to the answer, we find the certificate of acknowledgment to be as follows: "THE STATE- OF ARKANSAS, Arkansas County. ',"Before me, the undersigned, clerk of the - circuit court
35 Ark." , • NOVEMBER TERM, 1879. • • 67 , Martin et al. ys. O'Bannon. of said county, this day personally came Jahn O. Hare, and acknowledged that he signed, sealed and executed the foregoing instrument of writing far the uses and . purposes therein specified; and I do so hereby , certify. Witness my hand and the seai . of said court, this twenty-second of Febru.-, ary, 1871.. [SEAL.] "A. C. WILEY", Clerk." It appears that the mortgage was filed far registration•on the same day, and afterwards recorded. • The word "uses," in the certificate, is not of similar im4 port, or substantially the same as the word "consideration" required by the statUte, (Gantt's Dig.; sec. 18460 and - the certificate was invalid, and the mortgage was not legally recorded, and was no lien upon the lots except between the mortgagor and mortgagees. Jacoway v. Gantt, Ad. of Loupe, 20 Ark., 190; Li,ttle, trustee, v. Podge, guardian; 32 lb., 458. II. The answer does not allege who Were • B Dineciesr On: ly inade defendants to the foreclosure bill of Fors-parties to it. ter; Kealhofer & Co. It appearz from the copy of the decree, made an exhibit to the answer, that the suit was brought against John O. T[are, George Kealhofer and Robert C. Martin; and when the decree ivals \tak:= en; the death of Hare was suggested, and the suit abated as ta him,, and revived against his admin'tstrator, R R Dollarhide Who entered his appearance and consented to a decree; where: upon the bill was dismissed as to the other defendants and a decree of foreclosure, and for sale of the lots, take , n. against Da larhide, as such administrator 'alone. The decree was not binding, or conclusive upOn . the heirs of }rare, nor , upon Martin, nor upon. appellee, who were not parties to it As to them the mortgage still stood open and unforeclosed. ffaskill, Ad., v. The S ' tate it al., 31 Ark.:, 91.
68 SUPREME COURT OF ARKANSAS, [35 Ark. -Martin et al. vs. 013annon. When this suit was brought, therefore, all the claim that Day, Kealhofer & Co., as successors of Forster, Kealhofer & Co., had upon the lots in controversy, was an unrecorded, and unforeclosed mortgage, valid only as between them and the administrator and heirs of Hare. Haskill v. Sevier et a2., 25 Ark., 152. The lien of Hare upon the lots to secure the purchase-8. Vendor's money notes executed to him by Martin, was Lien: When .in the nature of a mortgage, and when he trans-passes to assignee of purchase • ferred the notes to appellee, the lien passed with notes. them, and appellee had the right, by subroga-tion, to foreclose the lien. Garrett v. Williams et al., 31 Ark., 240. - The bill alleges that appellee took the notes for a valuable consideration, which the answer denies, and the demurrer to the ansWer admits this to be true. But Day, Kealhofer & Co., having no lien upon the lots except 2. Assign- as against Hare, his heirs and administrator, men t of Note : under their unrecorded mortgage, were in no Not im-r peachable attitude to impeach the consideration for the by one with- out inter- transfer of the notes by Hare to appellee. As est. to appellee, their mortgage was as 'if never made. Nor had they any lien or claim upon the notes in suit, and whether appellee paid Hare little or much for them was of no consequence to them or Martin. This court has repeatedly declined to depart from the decision in Main v. Alexander, 9 Ark., 112, which was founded upon the strong and peculiar language of the mortgage statute, and became a rule of property, that an unrecorded mortgage is not a lien as against strangers, though they have actual knowledge of its existence. If a man makes a mortgage to another, and before its registration makes a second mortgage, or sells the pasm-ises to a third person, who has actual notice of the first mortgage, this, in the general law of conveyancing, is a
35 Ark.] NOVEMBER TERM, 1879. 69 fraud upon the first mortgagee, and makes a strong case for relief ; but none is afforded under our statute, as constrted in the above case, regulating the registration of mortgages. The party holding the unrecorded mortgage, and therefore having no lien upon the premises, is in no attitude to question subsequent sales or incumbrances, or the consideration for the transfer of notes executed upon such sales. To open the door to him for such purposes would be a departure frm the absolute rule, and lead to other departures, and finally, perhaps to the mischief of unsettling a rule of property. Persons taking mortgages must protect themselves by care in their execution and acknowledgment, and diligence in filing them for registration. The trusting to unskillful persons in conveyancing has been an evil and occasioned much loss. - IV. The attempt in the answer to plead a former decree in bar of the bill was a failure. It does not al-5. Former lege who were defendants in the former suit udgments: Plea of, nor that the decree of dismissal was upon a must show the parties hearing on the merits, nor is the answer aided to it, etc. by bringing into the record of this case the decree relied on as a bar. The decree must be affirmed.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.