American Exch. Nat. Bank of Dallas v. Colonial Trust Co.

The appellant bank predicates error in subordinating the lien of its deed of trust, which was prior in point of execution, to that of the judgment lien of the trust company, which was junior in point of creation. And the question is dependent, it is thought, upon whether or not the bank continued and protected the priority of the deed of trust by having the deed of trust, as required by article 6824, R.S., "filed with the clerk, to be recorded as required by law," at the time of the creation of the judgment lien. The requirement of the article, in order to continue and protect the priority of the deed of trust, is simply that it be "filed with the clerk, to be recorded as required by law," at the time of the creation of the subsequent lien. And in this respect the article seems to be similar to other provisions of the statute which deem an instrument as recorded and effectual as notice from the time it "was deposited for record" in the county clerk's office (article 6791) and "when delivered to the clerk of the proper court to be recorded" (article 6828). The term "filed with the clerk, to be recorded as required by law," therefore should be regarded, it is thought, as intended to mean and be the equivalent of the words "deposited for record in the county clerk's office," or "delivered to the clerk, to be recorded." Hence an instrument is "filed with the clerk," within the meaning of the article, when it is delivered to the clerk and by him received in his official custody. v. Chevaillier, 14 Tex. 337; Snider v. Methvin. 60 Tex. 487; Lessing v. Gilbert, 8 Tex. Civ. App. 174,27 S.W. 751.

Now, according to the evidence here, the clerk, acting by the deputy, after making a demand for his recording fees, indorsed on the back of the instrument the date of its receipt by him in his office, and held and retained such indorsed deed of trust in his official custody with intention and purpose to actually enter of record, if the recording fee was remitted, at any time during the time so held. If the acts of the clerk operated to be In legal effect a filing of the deed of trust for record, then the clerk may not destroy the status of the deed of trust by his subsequent acts. Article 3862 provides:

"No county clerk shall be compelled to file or record any instrument of writing permitted or required by law to be recorded, until after payment or tender of payment of all legal fees for such filing or recording has been made."

By this article the clerk is merely authorized to demand in advance "all legal fees for such filing or recording" of the instrument. The words "compelled to file or record." as used, evidently have reference only to doing the services required by law In each respect of making entry on the file register and of recording; for it is made the duty of the county clerk when an instrument is "deposited" in his office for record to: (1) Make a memorandum thereof on the file register (article 6789); and (2) record it; and (3) do the indexing (article 6792). While the clerk may under this article have the personal 4 privilege of requiring payment of his fees, he is not, as seen, forbidden to receive and retain in his office custody for record an authorized instrument until there is payment or prepayment of the recording fee. Therefore, if he has the legal right to refuse to receive an instrument in his official custody unless the fees for recording be paid to him in advance, it must, it is thought, be immediately or seasonably exercised upon the tender of the instrument for record. By so doing and refusing to receive the instrument in his official custody for record the legal effect would not attach of being deemed filed for record. But, when the clerk receives and retains the instrument in his official custody, it is filed within the meaning of the law. It is not intended by the article to clothe the clerk with the power of making or defeating rights respecting registration. And it would be within the power of a clerk to make or defeat rights if the article be not construed as above. Under this article as so construed, therefore, the clerk may refuse to receive in his official custody an instrument for record unless his recording fees are paid or tendered in advance. If the clerk, though, receives and retains the instrument in his official custody awaiting payment of his fees, he, in legal effect, waives his personal privilege of requiring payment, and must file and record, as required by law, the instrument so received. In this case the clerk did not refuse to receive from the bank the deed of trust, nor undertake to mail it back to the bank during the course of the day, but indorsed on the instrument the date of its receipt by him in his office, and held and continued possession of it in his official custody. The clerk's indorsing on the deed of trust the date of its reception, and holding and retaining it in his official custody with intention to actually enter of record if the recording fee was remitted, would constitute, It is thought, the instrument as filed within the meaning of the law. And, the deed of trust being in legal contemplation filed with the clerk, it operated to give notice to the trust company. Throckmorton v. Price, 28 Tex. 606, 91 Am.Dec. 334; Carlisle v. King, 103 Tex. 620,133 S.W. 241, 864.

It is believed the judgment should be modified so as to give priority to the lien of the deed of trust, and as so modified will be affirmed. The costs of appeal will be taxed against the Colonial Trust Company.

Modified and affirmed.