McFaddin v. Evans-Snider-Buel Co.

Background

John H. Blocker borrowed about $130,000 from a company that advanced money to buy cattle, and the company took and promptly recorded chattel mortgages on those cattle in the federal court clerk’s office where the animals were kept. William McFaddin & Son had a long‑standing judgment against Blocker from Texas and, in June 1896, sued out an attachment in the same federal court and levied on the same cattle; their lawyers had actual knowledge of the recorded mortgages. Under the Arkansas law then applied in the Indian Territory, courts had held that mortgages by non‑residents recorded under the local registry did not create enforceable liens against third parties, so McFaddin & Son argued their attachment took priority because it preceded an act of Congress that later validated those records.

Reasoning

The central question was whether the act of Congress of February 3, 1897, could retroactively validate mortgages that had been recorded earlier and thus affect the parties’ competing claims. The Court found the statute’s language plainly reached past mortgages recorded in the correct district and held that Congress has power to supply such a remedial validation. Citing earlier decisions supporting legislative correction of defects, the Court concluded the statute validly gave legal effect to the mortgagees’ liens and that the mortgages therefore took priority over the later attachment.

Real world impact

The ruling means the company that advanced money to buy the cattle keeps its lien ahead of the later attaching creditor, although the attachment judgment still survives to claim any remaining surplus after mortgage liens are satisfied. The decision affirms Congress’s authority to validate past recordings and resolves which creditors get paid first from the specific property.