Babbitt v. Bent County Bank

50 Colo. 258

Opinion

Mr. Justice Bailey

delivered the opinion of the court:

There are two questions for consideration:

First — Had the bank, under its mortgage, if properly acknowledged, the first lien?

Second- — -Was the bank’s mortgage, as acknowledged and certified, entitled to record, and is such record constructive notice to- Babbitt?

On the authority of Cassell v. Deisher, 39 Colo. 372, which involves the same question, as to priorities of chattel mortgages on the same property-, the second mortgage, as here, by its express terms, being subject to a prior one, the first question must be answered in the affirmative. The court in that case held in substance and effect, following the like rule laid down in Brereton v. Bennett, 15 Colo. 254, and Standley v. Coal & Coke Co., 24 Colo. 103, that where the prior mortgagee fails to take possession of the.mortgaged property, within a reasonable time after maturity of his note — thirty (30) days being fixed by statute as such reasonable time, to secure the payment of which the mortgage is given— he loses the priority of his lien. As between the bank and Babbitt there is here no question of equitable cognizance, the former stands, as it may well do, upon its strict legal right. Upon the failure of Babbitt, for a period of about eleven months, either to renew or extend his first mortgage, or thereunder to take possession of the property, under the statute relative to the sale and delivery of personal property, and our decisions, clearly his prior lien was extinguished, as against a subsequent, valid, subsisting mortgage. In addition to the foregoing cases to this point We cite: Allen v. Steiger, 17 Colo. 552; Atchison v. Graham, 14 Colo. 217; Sweeney v. Coe, 12 Colo. 485; Bassinger v. Spangler, 9 Colo. 175; Wilcox v. Jackson, 7 Colo. 521; and Cook v. Mann, 6 Colo. 21.

Upon the claim that the acknowledgment of the mortgage to the bank was taken before a notary who was the cashier of, and a stockholder in, that corporation, and the mortgage therefore invalid, it is to be observed that on its face the mortgage was fair and entitled to record. The taking of this acknowledgment, unlike that of a married woman, where separate examination is required, was purely ministerial. The alleged infirmity is a matter outside the record, that may not be taken advantage of except for fraud. If there was fraud in fact, of which there is no intimation, it should have been averred and proven. In the absence of such averment and proof, the record of the mortgage must be held to have been constructive notice to Babbitt. To say otherwise wonld be to overturn the purpose of the law providing for this notice. Such policy would destroy the reliability of records, and lead to mischievous dissentions, rather than to the stability and security of property rights. The rule here announced is well settled. — Brereton v. Bennett, supra; Bank v. Hove, 45 Minn. 40; Heilburn v. Hammond, 13 Hun. (N. Y.) 475; Bank v. Conway, U. S. Cir. Ct., 4th Dist., 1 Hughes 37.

No error appearing in the record, the judgment is affirmed.

Affirmed.

Chief Justice Steele and Mr. Justice White concur.