Brannon v. Brannon

2 Disney (Ohio) 224
Ohio Superior Court, Cincinnati·Decided June 15, 1858·No. No. 8,996·Published

Opinion

Spencer, J.

On the part of the plaintiff) it is claimed that this instrument of mortgage, although executed in Kentucky, was not so executed as to entitle it to be recorded by the laws of Kentucky, nor was it executed in conformity with the laws of Ohio, and is, therefore, of no validity as against 'the plaintiff; wherefore he asks that it may be declared of no effect as against him, and his title quieted.

On the part of the defendants, it is insisted that said mortgage was duly executed in conformity with the laws of [228] Kentucky. That the defendants, at the time of executing the same, were liable as indorsers for A. O. Smith, in a sum exceeding $80,000; that some of the defendants have since paid a portion of these liabilities, to the amount of upward of $12,000, and have been sued for payment of some $31,000 additional.

Defendants claim that plaintiff gave no value for the conveyance to him, but that it was merely executed to secure creditors, and that forasmuch as plaintiff had notice of the mortgage, he has no equity against it.

Ther.e is nothing in the framework of the petition seeking to charge the property in the hands of defendants, (assuming the mortgage to be effective) as being conveyed in trust for the benefit of all the creditors. Put such a claim has been made in the argument, on the hearing, and if necessary so to do, we are authorized to allow an amendment to the petition for that purpose. It was further claimed in argument, on the part of the plaintiff) that by a statute of Kentucky, in force when the mortgage was executed, it became, ipso facto, an assignment in trust for the equal benefit of all the creditors, and that effect must be given to it in Ohio, agreeably to the laws of Kentucky.

The only evidence we have, as to the laws of Kentucky, in relation to the execution of deeds and mortgages, is found in the “ Revised Statutes of Kentucky,” title — “ Conveyances ;” — Chapter XXIV, pp. 196 to 202. Section 1 provides that “no seal,scroll, or indentation shall be necessary to give effect to a deed, except (it be) the deed of a corporation.” Section 11. “No deed of trust or mortgage shall be valid against a purchaser for a valuable consideration, without notice thereof, or against any creditor, until such deed shall be acknowledged or proved according to law, and lodged for record.”

Section 16. “ Deeds executed in this State,” etc., may be admitted to record, 1st. On the acknowledgment before the proper clerk, by the party making the deed; or 2d, by the proof of two subscribing witnesses, etc.; or 5th, on the certifl[229] cate of a clerk of a county court of this State, that the same had been acknowledged or proved before him, as required by this section.”

Section 24 provides that “ the clerk of each county court shall record all instruments of writing embraced in any section of this chapter which shall be lodged for record, properly certified, or which shall be acknowledged or proved before Mm as required by law.”

The law of Kentucky in regard to fraudulent assignments, in trust for creditors, etc., (Laws of Kentucky for ’56, 107,) provides: Section 1. “ That every sale, mortgage or assign-

ment, which shall be made by debtors in contemplation of insolvency, and with the design to prefer one or more creditors, to the exclusion, in whole or in part, of others, shall operate as an assignment and transfer of all the property and effects of such debtor, and inure to the benefit of all his creditors,” etc. — “excepting any mortgage made in good faith, to secure any debt or liability, contracted simultaneously with such mortgage, and lodged for record, within thirty days after its execution.” The other sections of the statute provide how such trusts shall be wound up, etc.

I. It is not necessary to consider what would have been the effect of this mortgage, had it embraced lands within the State of Kentucky, under the statute just cited. The property embraced in the mortgage is situate wholly within the State of Ohio, and it is plain that the law of Kentucky was intended only to apply to property within that State, such property as could be administered upon by her courts of justice. The law of Kentucky may control contracts made within that State; to be executed and enforced within her borders; or may declare the effect of such; it has no extra territorial operation; it can not act upon property beyond her jurisdiction, nor prevent parties from controlling property in other States, agreeably to the laws of such States. It will hardly be contended that if A. O. Smith had possessed other property in Cincinnati, not embraced in the mortgage, that that would have also passed to the mortgagee, as gen[230] eral assignee, by virtue of the statute of Kentucky; and yet such, undoubtedly, would be the operation of the instrument in Kentucky.

II. Nor is it absolutely necessary to decide whether this mortgage (assuming it to have been properly executed and recorded) is to be regarded under the statute of Ohio as a conveyance in trust for the equal benefit of all the creditors of A. O. Smith; though such would seem to me to be its legal effect. The statute declares (3 Curwen, 2,239) that “ all assignments of property in trust, which shall be made by debtors to trustees, in contemplation of insolvency, with the design to prefer one or more creditors to the exclusion of others, shall be held to inure to the benefit of all,” etc.

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Brannon v. Brannon, 2 Disney (Ohio) 224 (Ohio Super. Ct. 1858).

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