of Wyoming, where it was executed and where the property was then situated, was upheld in Emerson-Brantingham Implement Co. V. Ainslie (1917) 38 S. D. 472, 161 N. W. 1001, as against a creditor who, with knowledge of the mortgage, attached the property after its removal without the mortgagee's consent to South Dakota notwithstanding that the mortgage, if tested by the law of South Dakota, would have been a nullity because there was only one witness, and because it did not recite that the mortgagor had received a copy thereof as provided by the South Dakota statute.

The syllabus by the court in Ballard v. Great Western Min. & Mfg. Co. (1894) 39 W. Va. 394, 19 S. E. 510, declares in effect that an attachment will take priority over a deed of trust executed and recorded in another state, but which has never been recorded in this state (West Virginia), in the county where the property is located. It is not clear whether the property was in Kentucky or West Virginia at the time of the execution of the mortgage.

Remedy; procedure.

Questions which relate to the remedy or procedure, as distinguished from the substantive rights of parties, are, of course, to be referred to the law of the forum as such, regardless of the lex loci contractus, lex loci solutionis, or lex situs.

Under the principle that the lex fori determines the remedy, the procedure in an action to foreclose a chattel mortgage is regulated by the laws of the states to which the property is removed and in which the mortgagee seeks to enforce his right, or in which any party interested seeks to pursue some claim against the subject-matter. Haltom v. Nichols & S. Co. (1917) 64 Okla. 184, 166 Pac. 745.

In Denny v. Faulkner (1879) 22 Kan. 89, where the mortgage was executed in Illinois while the property was in Nebraska, the court said: "Where a contract is made in one state and valid by the laws of that state, concerning personal property situated in another state, it may well

be that the latter, conceding its validity inter partes, shall uphold any of its own laws concerning the effect of that contract upon the rights of third parties domiciled within such state." The liability of the mortgagee to the mortgagor on account of the sale of the property by the former without proceeding under the statute to advertise was referred to the law of Kansas, upon the ground that the matter related to the remedy, and was therefore governed by the lex fori.

In Krebs v. Sawyer (1913) 162 Iowa, 593, 144 N. W. 345, an action of replevin in Iowa by the mortgagor against the mortgagee, who had obtained possession of the mortgaged automobile under a writ of replevin in Nebraska, where the mortgage was executed, the court said that, conceding that the defendant was not authorized to hold the car under the legal proceedings commenced by him in Nebraska, he was nevertheless entitled to the possession of it under his mortgage, by virtue of a provision of the Iowa Code, and that the law of Nebraska on the subject was presumed to be the same; but, whether that was so or not, the case must in this respect be settled by the law of Iowa. The court further said that there was nothing in the point that the mortgagee waived his mortgage lien by commencing his action of replevin in Nebraska, since what he did there was in the enforcement of his lien, and not in hostility to it.

Re Hudson Fashion Shoppe (1925) 58 Ont. L. Rep. 130, [1926] 1 D. L. R. 199, is not directly in point in the annotation, as it did not involve a chattel mortgage; but the court there, being of the opinion that a contract of sale of goods shipped from a point in Quebec f. o. b. to a point in Ontario was a Quebec contract, held that the transfer of the goods to Ontario did. not interfere with the vendor's rights, under the law of Quebec, in the goods as against a receiver in bankruptcy of the vendee; specifically, that the vendee's title was subject to a right of resiliation which the Quebec law prescribes, and that there was no accretion to the vendee's title and no

diminution of the vendor's rights when the goods were transported into Ontario, and that the trustee in bankruptcy stood in no higher position towards the vendor than did the bankrupt. It will be observed in this case, the vendor not only knew of and consented to the removal of the goods to Ontario, but such removal was contemplated when the contract was made. (In this connection, however, see cases cited in the annotation in 25 A.L.R. 1158, with reference to conditional sales contracts, where the removal of the goods to another jurisdiction was contemplated at the time the contract was made.)

III. Questions directly affecting rights of third persons.

a. In general.

Assuming that the question pertains to the substantive rights of the parties as distinguished from the remedy or procedure, it is clear that the court of the state in which it arises will apply the law of another state which was the situs of all the material factors affecting the mortgage and the subsequent transactions in respect of the property, if that law is properly before the court, and there is no reason in the particular case for refusing, on the ground of the public policy of the forum, to give it effect.

In Bonner v. Stroud Bros.' Gin (1927) 172 Ark. 569, 289 S. W. 766, involving conflicting claims under several mortgages, where the court said that chattel mortgages showed that the cotton which was the subject thereof was to be planted and grown in Oklahoma, and by their terms showed that the contracts which they evidenced were to be performed there and that the law of that state governed in construing them and determining their priority, it does not appear but that they were executed in Oklahoma.

Although, as pointed out supra, II., the law of the place where the property is located at the time of the execution of the mortgage (lex situs) does not necessarily displace the lex loci contractus or the alternative

(lex loci solutionis) as regards questions dependent upon the original validity, construction, or effect of the mortgage as between the mortgagor and mortgagee, or as between the mortgagee and the third person whose rights do not rise above those of the mortgagor, it is otherwise as regards those questions which directly affect the rights of third persons, not dependent upon or limited by those of the mortgagor. As to such rights, according to the great weight of authority, the lex situs, as such governs. As shown in the subsequent subdivisions, however, it is the lex situs in the sense of the law of the state or country in which the property was located at the time the mortgage was executed that governs, rather than the lex situs in the sense of the law of the state or country to which the property is removed, and in which the subsequent transactions in respect of the property take place.

b. Mortgage executed in one state while property in another.

1. Necessity of recording or filing in state in which property located.

In harmony with the principles already referred to, it is established by the great weight of authority that a chattel mortgage executed in one state upon property which at the time was located in another state must be recorded or filed in the latter state, in order to protect the lien as against third persons within the contemplation of a statute of that state which, though not in express terms applicable to mortgages executed out of the state upon property at the time within the state, provides generally that chattel mortgages on property left in possession of the mortgagor shall be void or ineffective as against creditors of, or purchasers from, the mortgagor or other third person without actual notice, unless the mortgage is recorded or filed as therein directed; and that recording or filing in the state where the mortgage was executed and the parties domiciled, in accordance with its law, is not sufficient to protect the lien of the mortgage as against such third person.

Indian Territory. McFadden v. Blocker (1899) 2 Ind. Terr. 260, 58 L.R.A. 878, 48 S. W. 1043 (reversed on other grounds in (1900) 58 L.R.A. 900, 44 C. C. A. 494, 105 Fed. 293, which was affirmed in (1902) 185 U. S. 505, 46 L. ed. 1012, 22 Sup. Ct. Rep. 758).

Iowa. Aultman & T. Machinery Co. v. Kennedy (1901) 114 Iowa, 444, 89 Am. St. Rep. 373, 87 N. W. 435. Missouri. Arkansas City Bank v. Cassidy (1896) 71 Mo. App. 186. New Hampshire. Clark v. Tarbell (1877) 58 N. H. 88.

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New York. Keller v. Paine (1887) 107 N. Y. 83, 13 N. E. 635; Whitman v. Conner (1876) 8 Jones & S. 339.

In Smead v. Chandler (1903) 71 Ark. 505, 65 L.R.A. 353, 76 S. W. 1066, also, it was held that the filing of a chattel mortgage in the state in which the property was situated at the time of the mortgage was necessary, although the mortgage was executed and the parties thereto were domiciled or resided in another state, but in that case the statute expressly provided that, if the mortgagor were a nonresident of the state, the mortgage should be recorded in the county in which the property was situated at the time the mortgage was executed.

The mortgaged property being situated in Iowa when the mortgage was made, record of it in Nebraska, even though the mortgagor had resided there, would have been wholly ineffective in Iowa as constructive notice to creditors of or purchasers from the mortgagor. Such a mortgage is governed by the law of the place where the chattels are situated at the time

it was made, and the question of its priority, as between different lien holders, is to be determined by the law of such place. Re Brannock (Fed.) supra. In this case, however, the mortgage was executed in Iowa where the property was situated at the time, and there was apparently no basis for the contention that recording in Nebraska would protect the lien, except the claim that the mortgagor was a resident of that state.

The rule was applied in Aultman & T. Machinery Co. v. Kennedy (Iowa) supra, as to the part of the property which was in Iowa at the time of the giving and recording of the mortgage in North Dakota, although the mortgagor was a resident of the latter state and part of the property covered by the mortgage was in that state, the other part being only temporarily in Iowa.

In McFadden v. Blocker (Ind. Terr.) supra, it was held that a chattel mortgage executed and recorded in Texas upon property at the time in Indian Territory was not valid as against a subsequent attachment of the property while in possession of the mortgagor in Indian Territory, notwithstanding that the statute in force in the territory required mortgages to be recorded at the mortgagor's place of residence, and did not provide for the case where the property was in the territory at the time of the giving of the mortgage but the mortgagor was a nonresident of the territory.

It was held in Bridges v. Barrett (Ill.) supra, that the filing of the mortgage in Tennessee after the removal of the property to Illinois was ineffectual to preserve the lien as against an attaching creditor in the latter state, even though the property was in Tennessee at the time the mortgage was executed in that state; since, the property being in Illinois at the time of the filing of the mortgage in Tennessee, it was subject to, and governed by, the law of its situs at that time, and not by the law of its owner's domicil.

In Runyon v. Groshon (1858) 12 N. J. Eq. 86, however, the court ap

plied the rule in New Jersey, to the effect that the retention of possession by the mortgagor was merely prima facie, and not conclusive, evidence of fraud, to a chattel mortgage executed in that state between parties there domiciled, upon the property at the time in New York, and accordingly held that the mortgage prevailed over the title of one who in good faith purchased the property in New York from the mortgagor, notwithstanding that the mortgage had not been filed in the latter state as required by the laws of that state. The action was by the mortgagee in New Jersey against the vendee to enforce the mortgage. The decision rests upon the ground that the courts, in New Jersey would apply their own law to the situation, notwithstanding the concession that, if the property had remained in New York and the suit had been brought in that state, the law of New York would have applied. The court observed that the complainant asked no protection for his mortgage from the state of New York, but rested upon the laws of New Jersey; the transfer, although the property was in New York, was valid because the domicil of the parties was in New Jersey, and the transfer (mortgage) was made in conformity to the laws of that state. In reply to the defendant's contention that, the property being in New York at the time of the transfer, the lex rei sitæ must prevail, the court said: "In such case the rule must govern that, where such conflict of law occurs, as one or the other of the parties must give way, the laws prevailing where relief is sought must have preference."

The view apparently taken in Lally v. Holland (1852) 1 Swan (Tenn.) 399, that the registration of a chattel mortgage in accordance with the law of the state in which the owner was domiciled and the mortgage executed, although the property at the time was in another state, would protect the lien of the mortgage as against a subsequent bona fide purchaser from the mortgagor, although not recorded in the latter state, is against the great weight of authority. The ultimate

decision in this case was against the mortgagee on the ground that the mortgage was not effectively filed in the state where it was executed.

The question as to the form of the oath with reference to the purpose for which the mortgage is given was referred to the law of New Hampshire, where the property was located at the time of the mortgage, although the mortgage itself was executed in Vermont, in Sherman v. Estey Organ Co. (1897) 69 Vt. 355, 38 Atl. 70.

2. Necessity of recording or filing in state in which mortgage executed.

As to cases where property was in state where mortgage was executed, but was subsequently removed to another state, see infra, III. c, 2.

By the converse of the rule shown supra, II. b, 1, which requires the mortgage to be recorded or filed in the state in which the property is located at the time of its execution, though executed in another state, it would seem, if it is effectively recorded or filed there, it would not be necessary to record or file it in the state in which it was executed, in order to protect the lien as against third persons, assuming that, by the law of that state, filing or recording is not necessary to the validity of the mortgage as between the parties.

So, while in general the validity of a chattel mortgage is to be determined according to the lex loci contractus, yet where the mortgaged property at the time of the execution of the mortgage is situated in a state other than that in which the mortgagor is domiciled and the mortgage executed, the question of the preservation of the lien acquired by the mortgage under the laws in reference to registration, and the priority of such lien over the rights and interests subsequently acquired by third persons, is to be determined by the law of the place where the property is situated at the time the mortgage is executed. Re Nuckols (1912; D. C.) 201 Fed. 437. It was accordingly held in this case that the mortgagee acquired a valid lien upon the property in question by registration of the mortgage in the

state of Kentucky, where the property was situated at the time the mortgage was executed, and still remained, which was prior to a quasi judgment creditors' lien subsequently acquired by virtue of bankruptcy proceedings, notwithstanding that the mortgage was not filed in Tennessee, where the parties resided and the mortgage was executed.

So, the filing of a mortgage in Connecticut, where the property was situated at the time of the execution of the mortgage, is sufficient to protect the lien as against the trustee in bankruptcy, although the mortgage was not filed in New York, where it was executed and where both the mortgagor and mortgagee then resided. Re Greene (1904; D. C.) 134 Fed. 137. The court observed that it was a rather startling proposition that a mortgage on local chattels which was faultless in form, properly executed and recorded in full obedience to the statutes of Connecticut, must lose its efficacy because the parties thereto, being residents of another state, overlooked or neglected her statutes. (The question arose in a Federal court sitting in Connecticut.)

In Third Nat. Bank v. National Bank (1911) - Tex. Civ. App. —, 139 S. W. 665, the court declared it to be well settled that the lex situs governed when a chattel mortgage is executed in a state other than that in which the property is situated, and the record of the mortgage in the county in Texas where the property was located was constructive notice to third persons dealing with the mortgagor.

In Pyeatt v. Powell (1892) 2 C. C. A. 367, 10 U. S. App. 200, 51 Fed. 551, where a chattel mortgage was executed in Kansas upon property in Indian Territory by a resident of the territory, the Kansas statute requiring the recording of chattel mortgages was held inapplicable. The decision was in favor of the mortgagee as against a creditor who seized the property under execution in Indian Territory, upon the ground that, in the absence of proof to the contrary, the rule that a chattel mortgage unaccom

panied by a change of possession is only prima facie, and not conclusively fraudulent, would be applied.

c. Removal of property into another state after lien of mortgage has attached.

1. Necessity of recording or filing in state to which property removed.

(a) Majority rule.

The question under discussion in this subdivision presupposes that the party attacking the mortgage acquired his right or interest in the property in such circumstances as would have entitled him to the protection of the recording or filing act if it had been a purely local mortgage. It is also assumed for the purposes of the question, that the right or interest asserted against the mortgage would have been inferior and subordinate to the lien of a mortgage duly filed in accordance with the local law. And so a case like Willys-Overland Co. v. Evans (1919) 104 Kan. 632, 180 Pac. 235, does not present the distinctive question, since it was apparently assumed that the mechanics' lien for work done upon an automobile in Kansas at the instance of the mortgagor in a mortgage executed and filed in Missouri while the car was in that state would have been superior to the mortgage, even if it had been filed in Kansas.

Although, as previously shown (supra, III. b, 1), it is necessary, in order to protect the lien of a chattel mortgage as against third persons, to file or record the same in the state in which the property is located at the time the mortgage is executed in another state, even though the statute of the former state in relation to recording or filing does not in express terms cover mortgages executed out of the state upon property at the time in the state, it is otherwise when a chattel mortgage valid between the parties by the law of the state in which it was executed, and in which the property was then located, is recorded or filed in that state in accordance with its law to protect the lien as against third persons, and the property thus subject to a valid, per