6 Kan.App. 57, 49 P. 636

Court of Appeals of Kansas, Northern Department, E. D.

MACKEY et al. v. PETTYJOHN et al.

July 16, 1897.

Syllabus by the Court.

1. A chattel mortgage made in Missouri by a person domiciled there to a citizen of this state, upon property situated in this state, is governed by the law of Kansas, and not by the law of Missouri, as the place of the contract:

2. The laws of another state will not be given force in this state in such case as a matter of comity, where it would be, in effect, to overturn the policy of this state with respect to such cases, or be in violation of our express statute.

Error from district court, Johnson county; John T. Burris, Judge.

Action by J. L. Pettyjohn and George W. Pettyjohn, partners, under the name of J. L. Pettyjohn & Co., against S. E. Mackey and J. T. Nichols. Judgment for plaintiffs. Defendants bring error. Reversed.

[*636]  A. Smith Devenney, for plaintiffs in error.

F. R. Ogg and S. T. Seaton, for defendants in error.

MAHAN, P. J.

This is an action begun in the district court of Johnson county by the defendants in error, in the nature of a bill in equity, in which they seek to have the plaintiffs in error declared trustees of a fund arising from the sale of personal property for their use. It appears that Clark owned and ran a dairy in Johnson county, Kan., shipping milk therefrom to Kansas City, and, while there, became indebted to both the plaintiffs and defendants. He subsequently moved to Kansas City, and established his domicile in the state of Missouri; and, being so domiciled, he made and delivered to the plaintiffs in error; at Kansas City, Mo., a mortgage upon his dairy stock, comprising cows, fixtures, grain, and other personal property, to secure a valid bona fide indebtedness to them. There is no question made of the bona fides of the transaction between the parties. The property was situated on the farm of Clark, in Johnson county, Kan., where it had been prior to the removal of Clark to Missouri. The defendants in error proceeded, and the court held with them, on the ground that the chattel mortgage was a Missouri contract, to be construed in all respects by the laws of Missouri; that inasmuch as the circuit court of the United States had established a rule of decision respecting mortgages of the character of this one, in the United States circuit court for the district of Missouri, that mortgages made under certain circumstances in that state were, in contemplation of the laws of Missouri, general assignments for the benefit of creditors; that the mortgage came within the purview of these decisions, and was a general assignment. The allegation in the petition is that the laws of Missouri make such a mortgage as this one is claimed to be a general assignment. The district court overruled a demurrer on behalf of the plaintiffs in error (defendants below) to the petition of the defendants in error, and to their evidence in support thereof. The plaintiffs in error stood upon their demurrer, and judgment was rendered against them, the court making certain findings of fact and conclusions of law thereon at the request of the parties.

There are a number of questions raised by brief of counsel upon several assignments of error, but it is only necessary to consider two of them. The first is: Was this such a contract as claimed by the defendants in error and found by the court,—that is, a contract to be governed by the laws of Missouri as its place, or was the contract made with respect to the laws of Kansas, to be governed by the  [*637]  laws of Kansas? And, second, even though the contract might be said to be a Missouri contract, is there such a conflict between the laws of Missouri and our statutory law, and does the law of Missouri, as claimed by the plaintiffs and found by the court below, contravene the policy of the state of Kansas or its express statute, so that the rule of comity must give way thereto?

We are clearly of the opinion, in the first place, that under the law as it exists, as declared by the law writers and the courts, this is a Kansas contract; that the parties had expressly in view the laws of Kansas in respect thereto at the time of its execution and delivery; and that the law is well settled that where a chattel mortgage or other contract is made in one state by a person domiciled there, to one domiciled in a different state, where the property mortgaged or with respect to which the contract is made is situated, and is to be enforced and performed in such other state, the law of the state in which such property is situated governs in all respects. In support of this proposition, vide Jones, Chat. Mortg. § 305; 3 Am. & Eng. Enc. Law, 561, under title of “Contracts Made in One State to be Performed in Another,” and authorities cited in note 5; Green v. Van Buskirk, 7 Wall. 145; Scudder v. Bank, 91 U. S. 406; Prichard v. Norton, 106 U. S. 124, 1 Sup. Ct. 102; McDaniel v. Railway Co., 24 Iowa, 416; Boyd v. Ellis, 11 Iowa, 97; 2 Kent, Comm. p. 459; Denny v. Faulkner, 22 Kan. 100; 2 Pars. Cont. § 5, p. 582; Cox v. U.S., 6 Pet. 172; Andrews v. Pond, 13 Pet. 65; Bell v. Bruen, 1 How. 169.

It is further apparent that this rule of decision in the state of Missouri cannot be permitted to have application to this contract in the state of Kansas, because it does contravene the policy of the state of Kansas with respect to the property mortgaged, and is in conflict with the express statute of the state, which is, in effect, that a chattel mortgage made by a resident of another state (the property situated in this state), filed in the office of the register of deeds in the county in which the property is situated, is a valid mortgage, and gives notice, when properly filed, to all the world with respect thereto. Our supreme court has held that even though a chattel mortgage does cover all, or practically all, of the property of the mortgagor, and even though he is insolvent, if the mortgage is made in good faith to secure a valid debt, as the court found this to be in this case, said mortgage is a valid mortgage. To allow the rule of decision of Missouri to prevail would be to overturn our policy with respect to mortgages on personal property in this state, and to render nugatory the provision of our statute in relation thereto. The rule of giving operation to the laws of other states as a matter of comity only, is never extended to such cases. It follows, necessarily, that the court erred in overruling the defendants’ demurrer to the plaintiffs’ petition, and erred in overruling the defendants’ demurrer to the plaintiffs’ evidence, and erred in rendering judgment upon the special findings of fact for the plaintiffs, and against the defendants, and in refusing a new trial upon the defendants’ motion. The judgment is reversed, and the case remanded, with directions to the district court to enter judgment for the defendants upon the findings of fact.

All the judges concurring.