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MCFADDIN v. EVANS-SNIDER-BUEL COMPANY

May 19, 1902

MCFADDIN
v.
EVANS-SNIDER-BUEL COMPANY



ERROR TO THE CIRCUIT COURT OF APPEALS FOR THE EIGHTH CIRCUIT

Fuller, Harlan, Brewer, Brown, Shiras, Jr., Peckham, McKenna; Mr. Justice Gray and Mr. Justice White took no part in the decision.

Author: Shiras

[ 185 U.S. Page 507]

 MR. JUSTICE SHIRAS, after making the above statement, delivered the opinion of the court.

The controversy in this case is between mortgagee creditors and judgment creditors of John R. Blocker. The mortgages were given to secure the payment of notes executed by Blocker to the amount of about $130,000, which were held by the Evans-Snider-Buel Company, and represented money that had been advanced by that company to Blocker to enable him to purchase the cattle embraced in the mortgage. The mortgages were

[ 185 U.S. Page 508]

     recorded, within a day or two after their execution, in the clerk's office of the United States Court for the Northern District of the Indian Territory, that being the district in which the mortgaged property was situated.

William McFaddin & Son had obtained a judgment against Blocker in Jefferson County, Texas, in May, 1887, and on June 17, 1896, they sued out an attachment on that judgment in the United States Court for the Northern District of the Indian Territory, and levied on the cattle described in the mortgages.

It is not denied that McFaddin & Son had actual knowledge of the existence of the mortgages at the time they sued out their writ of attachment. Indeed, it appears that the description of the cattle was taken by their attorneys from the record of the mortgages before the attachment was issued.

But it is claimed that, under the laws of the State of Arkansas, in force by act of Congress in the Indian Territory, as construed by the Supreme Court of Arkansas, the mortgages as recorded did not constitute a lien on the property described as against third parties, although they had actual notice of their existence, and that as McFaddin & Son had levied their attachment and obtained judgment against Blocker before the act of Congress of February 3, 1897, validating the mortgages and their record, was passed, such legislation was invalid and ineffectual to postpone the lien of the attachment and judgment to the lien of the mortgages.

Elaborate arguments, oral and written, have been advanced, pro and contra, on the propositions that an attaching creditor is not a purchaser for value; that an unrecorded deed or mortgage creating a lien will take precedence over a subsequent attachment; that notice to a subsequent purchaser of an unrecorded mortgage is conclusive evidence of mala fides on his part; that a chattel mortgage, not fraudulent as to creditors, made in good faith to secure an honest debt, is at common law superior to a subsequent attachment of the same property by a creditor of the mortgagor; that actual notice is equivalent in law to constructive notice. But as we are of opinion that the judgment of the Circuit Court of Appeals, sustaining the validity

[ 185 U.S. Page 509]

     of the act of February 3, 1897, as applicable to the present case, is sound, we do not consider it necessary to discuss the other propositions urged upon us by the counsel of the defendants in error.

The Fifth Amendment to the Federal Constitution, which declares that "no person shall be deprived of life, liberty or property without due process of law," is a limitation on the power of Congress, and the question is open whether the act in question, held applicable by the Circuit Court of Appeals to the present case, ...


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