Case ID: sc-eq_32/html/0135-01.html
Source: Caselaw Access Project
Author: {"author": "Johnston, Ch.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Anna R. Stokes vs. G. W. Hodges and others. W. L. Hodges vs. the same.
    
      Mortgage — Delivery — Partnership — Interest — Surety— Joint Tenant — Use and Occupation.
    
    An unrecorded mortgage produced by one of the mortgagees, after the death of the mortgagor, held, under the circumstances, to be invalid for want of sufficient proof of delivery.
    One partner, who puts in his proportion of the capital, is not entitled to charge interest because the other partner has failed to put in his proportion; the articles of partnership not stipulating for the payment of interest.
    Where two persons purchased a tract of land as joint tenants, and gave their joint bond tor the purchase money, and one of them paid beyond his proportion, held, that, for the amount paid over his proportion, he was surety, and entitled to set up the bond as a specialty debt against'the estate of his co-tenant.
    Where one joint tenant used and occupied the land for several years after the death of his co-tenant, and on bill to marshal the assets of the co-tenant, was allowed his demands as creditor, held, that he must account for the use of the land, and deduct from his demands a reasonable amount for the use of such proportion as he occupied, over his share.
    BEFORE JOHNSTON, CH., AT ABBEVILLE, JUNE, 1859.
    The decree of his Honor, the Circuit Chancellor, is as follows :
    Johnston, Ch. The first of these bills was brought by-Anna R. Stokes, the widow and administratrix of Joseph H. Stokes; and was filed the 28th of May, 1857. Pending the suit, and after certain proceedings in it, not necessary to be particularly stated here, Mrs. Stokes died, and W. L. Hodges became her administrator, and also administrator de bonis non of Joseph H. Stokes, and filed the second bill to revive her suit, which had abated by her death.
    
      Joseph H. Stokes died the 7th of August, 1853. In his lifetime, he, with the defendant, Geo. W. Hodges, who was his wife’s father, became the joint purchasers, at commissioner’s sale, of a tract of land for farming purposes, which is described in the pleadings. It was sold as the estate of Mays; and, on effecting the purchase, they gave their penal bond, dated the 4th of November, 1850, to the commissioner, conditioned to pay the price ($3,172) in two equal annual instalments, of $1,586 each; the first payable the 4th of November, 1851, and the second the 4th of November, 1852, and took titles to themselves jointly. Of this price it appears a considerable part was paid by Geo. W. Hodges.
    The parties, each, furnished this land with laborers, mules, provisions, &c., but in unequal proportions. Without any special articles between them, they entered upon the cultivation of the place, and made crops in 1851, 1852 and 1853. Stokes received the proceeds of the crop of 1851, Hodges received those of 1852 and 1853: in the latter of which years, it will be remembered, Stokes died.
    After his death, Mrs. Stokes became administratrix of his estate; and there having been a partial accounting between her husband and her father, Mr. Hodges, a division was also made between them of the personalty, (slaves, mules, &c,,) of Stokes and Hodges, on the plantation; and the share of Stokes was sold by the administratrix; of which she bought the principal portion. The laud remained unpartitioned, by some arrangement, the terms of which do not appear. Mrs. Stokes put in negroes, &c., purchased by her at her husband’s estate sale, and the place continued to be planted in connection with her father, who let his forces remain on it. This enterprise was continued for the years 1854, 1855, 1856, 1857, and till September, 1858. On the bill of Mrs. Stokes, it was sold the 6th of September, 1S58, by order of Court, and brought the sum of $1,997 15; a loss on the original purchase of $1,174 85. Mrs. Stokes died that year.
    At his death, Stokes was much indebted to his father-in-law, and to many other persons; indeed, his estate is insolvent. In his lifetime, he had entered into a mercantile partnership with the defendant, James N. Cochran, by articles bearing date the 21st of July, 1852; in which it was stipulated, that Stokes should “furnish such an amount of means as may, from time to time, be agreed upon by the parties to be necessary for the purpose aforesaid,” and that Cochran should furnish “an equal amount of means” with Stokes. The partnership “to continue for the period of two years, at least, subject to be discontinued or determined at any time by consent of parties, said parties to participate equally in the responsibilities and profits of said business.”
    Stokes fell short of contributing as much capital as Cochran. The concern, which was personally attended to by Stokes, until his death, (August 7th, 1853,) proved quite unprofitable. In fact, it did a losing business. On the death of Stokes, Cochran, the surviving partner, took it in hand, paid its debts, and as soon as convenient, brought it to a close.
    The object of the bill was to obtain a sale of the land held jointly by Stokes and Hodges, and a settlement between them; also, the sale of a store-house and Ipt, held in partnership by Cochran & Stokes, and a settlement of their partnership, and of their mutual liabilities to each other.
    The sale was ordered, and has been made; an account has been taken, as indicated, and also,' as to all the creditors of Stokes, (who were called in;) and now the case is taken up on a report upon these matters, to which exceptions are taken both by plaintiff and defendants.
    The defendant, George W. Hodges, and the plaintiff, join in their exceptions, and these will be first considered—
    1. The first of them is, “Because the commissioner erred in not giving George W. Hodges a lien, under his demands against Stokes, growing out of the plantation partnership, upon so much of the partnership property as was sold as the individual estate of J. H. Stokes. The same was partnership property, which the partner had a specific lien upon, to pay partnership debts.”
    This is an objection proper for George W. Hodges, and not for the plaintiff; and the latter has no right to be heard upon the exception.
    The exception assumes that this joint planting establishment was a partnership; and that the incidents of a partnership proper apply to it; which is very questionable as a general proposition. I shall not dispute, however, that Mr. Hodges might have a right to set up as equitable assignee the claims of creditors of this concern, discharged by him, and claim payment out of any portion of the joint property. The property out of which such payment is claimed here, was not joint property,but the individual property of Stokes; so acknowledged by Hodges when he voluntarily separated it from his own of the same description, and delivered it up to the administratrix to be sold as the estate of her intestate. This act was, also, a waiver of the lien he now sets up, if such lien had existed; and he is to be regarded as an ordinary creditor of Stokes’ estate. This exception is overruled.
    2. The second of these exceptions is, that “the commissioner erred in postponing Hodges’ mortgage, covering the debt paid by him to Clinkscales, to the claim of James N. Cochran, who, it is alleged, is not a creditor subsequent to the date of the mortgage.”
    3. The third is, “Because the Clinkscales money was borrowed by Stokes to pay partnership debts, and James N. Cochran being a partner of the firm of Cochran & Stokes, had actual notice of said mortgage.”
    4. The fourth exception is, “Because, in March, 1853,the mortgage was executed ; and on the 23d December, 1853, the said James N. Cochran himself made an endorsement thereon, recognizing its validity; and it is denied that his claim, now presented, arose, or was due to him, in that interval of time.”
    5. The fifth exception is, “Because the whole of his claim (Cochran’s) against the estate of Stokes, without any regard to how or when it originated, must be referred back to the date of the articles of partnership between him and Stokes,” (i. e., 21st July, 1852.) The facts are only to be gathered as they are dispersed among the papers before me; and it is no little impediment in performing this task, that frequently there is -an omission of dates where they might have been taken down.
    It appears that Stokes, desiring to borrow about $2,500, and expecting to get it from Mr. Dorn, drew up a note for that amount, payable to Dorn, which he procured to- be signed, as surety, by one M. C. Zeigler, saying he intended to get it also signed by George W. Hodges and F. A. Connor; and he exhibited to Zeigler, at the time, the following instrument, which has been denominated a mortgage:
    “ South Carolina,
    Abbeville District, March 2, 1853.
    “Know all men, &c., that I, J. H. Stokes, of District and State aforesaid, do, now and hereafter, relinquish all claim, right and title to, on four negroes, viz: Cato, Julia, Charity and Easter, to Gen. G. W. Hodges, M. C. Zeigler and F. A. Connor, their administrator, executor, or assigns, until the consideration, for which the relinquishment is made, is fully gratified. The object of the above relinquishment is to secure G. W. Hodges, M. C. Zeigler and F. A. Connor, from risk in going security to J. H. Stokes for the amount of $2,500, borrowed money.
    “In case said amount is paid, or said sureties are entirely released in twelve months, the above obligation or relinquishment is null and void. Otherwise to remain in full force and virtue.
    J. H. STOKES, [l. s.]
    Signed, sealed and delivered in the presence of
    J. II. Connor.
    G. M. Connor.”
    
      Stokes failed to get the money from Dorn. But being still in pressing need of it, he executed a note dated the 10th March, 1S53, endorsed by J. F. Marshall, for $2,500, which was discounted by the Commercial bank at Columbia, and the money “applied to the debts of the firm.” This note was payable at sixty days ; and when it was about to mature, he, through Marshall, got Clinkscales to loan him. $2,500, to pay the bank, on a note drawn by himself, Hodges and Con-nor, (Zeigler being accidentally absent.) This bears date 3d May, 1853, and on it Stokes made the following endorsement: “ The within note is left with' F. B. Clinkscales as collateral security for cash advanced J. H. Stokes, until redeemed by him with another note on F. A. Connor and G-. W. Hodges, 4th May, 1853.
    J. H. STOKES.”
    This instrument was never registered; nor is delivery proved except as evidenced by Plodges’ possession of it.
    On it is the following endorsement, which is proved or admitted to have been drawn up by the defendant, James N. Cochran; and bears date after Stokes’ death:
    
      “ This instrument witnessetb that I, Anna R. Stokes, administratrix of the estate of Joseph H. Stokes, deceased, do hereby give my consent that the negroes, Cato, Julia, Charity and Easter, specified in the within assignment, shall be sold with the balance of the property of said estate, subject, however, to the provisions of said assignment; and that the proceeds of sale of said negroes shall be exclusively applied, first, to the payment of the debt intended to be secured by the aforesaid assignment. Said proceeds not to be made liable to the creditors of said estate generally, until the aforesaid debt be liquidated. The balance, if any, after payment of said debt, to be subject to the estate aforesaid, as witness my hand and seal, 23d December, 1853.
    ANNA R. STOKES, [l. s.]
    Hodges paid Clinkscales, and claims under the mortgage.
    
      The commissioner remarks, in his report, “ Cochran, and other creditors, whose debts arose subsequent to the date of the mortgage, claim that, as to them, the mortgage is void for want of notice. The earliest notice proved to have been received by Cochran, was December 23, 1853, (evidenced by his drawing up Mrs. Stokes’ endorsement of that date, on the paper.) A large part of the debts paid by Cochran was for goods purchased, and debts contracted by the firm subsequent to the date of the mortgage; and between the death of Stokes (August 7, 1853) and the time of the notice of the mortgage, (December 23, 1853,) he paid out debts of the firm to the amount of $3,000 or upwards. I have not the data to state exactly the amounts received and expended by Cochran during that time on account of the firm, but am informed that the expenditure exceeded the receipts. As to Cochran and such other creditors, whose debts were contracted subsequent to the date of the mortgage, and who had no notice, I am of opinion the mortgage cannot avail. This conclusion I have attained with much doubt”—
    And it is to this ruling of the commissioner, the 2d, 3d, 4th and 5th exceptions are taken.
    At the hearing I was strongly disposed to support them; and I have striven to do so; but I cannot find grounds of fact or law to sustain me. These exceptions are therefore overruled.
    6. The sixth of these exceptions is, “Because the commissioner has erred in charging Stokes with the whole amount (to wit: $4,300 81) paid him by Cochran in cash and cotton, to be'applied to the purposes of the firm; and at the same time, with half the same amounts, by adding the same to the reported excess of payments by Cochran over his receipts; thereby making the final indebtedness of Stokes to Cochran $4,112 17; whereas it is submitted that (assuming the correctness of the data upon which the report is founded) only the sum of $4,112 17 — 2,150 41 (half of $4,300 81)— $1,960 76 is due.”
    
      This exception is founded upon a misapprehension of the report, as will be seen by examining it, and the report on this exception.
    This exception is overruled.
    7. The seventh exception was abandoned. It was in these words: “Because the commissioner erred in deducting the profits (of Cochran & Stokes) to wit: $413 46,from the doubtful and bad debts; whereas they should be divided, allowing the estate of Stokes one half thereof, to wit: $206 73.”
    8. The eighth exception is, “ Because the proof is that Stokes put $2,500 into the firm (the money borrowed of the bank) and the commissioner erred in not adding that to his payments, as he did the payment of $4,300 81 to him-by Cochran, to Cochran’s payments. Both sums were used for, and in the firm: and if one partner gets credit for his payment, the other should also.”
    9. The ninth exception, as it now stands, is long and obscure. As originally filed, it was, “ Because the commissioner erred in allowing more to J. N. Cochran on his partnership claim than he is properly entitled to receive; especially that he has erred in the following particulars: That he has given Cochran the whole amount of $4,300 81, said to have been paid into the firm by him — when he should have charged Stokes with only one-half of that sum — that he has not charged Cochran with interest upon the amounts and notes received by him, -and in other particulars allowed the said James N. Cochran more than he ought to receive.”
    This was the form of the 7th, Sth and 9th exceptions as put in and argued before the commissioner. On these he remarks in his report upon exceptions: “As to the 7th, 8th and 9th exceptions it can only be said, that there never were any profits of the firm to divide. There was an excess of sales over purchases, but when the bad debts were taken into consideration, that excess was completely absorbed.
    “The $2,500 applied by Stokes to the firm’s debts — the proceeds of the note endorsed by Marshall and discounted in bank — he has been allowed credit for, in the payments credited to him; and he clearly cannot be entitled to credit for the debts paid with that sum, and also claim credit for so much cash contributed to the capital of the concern. The complainant’s exceptions are therefore overruled.”
    The 7th exception was abandoned at the hearing before me; and if it had not been abandoned, I would have overruled it for the reason given by the commissioner.
    I overrule the 8th exception, for the reasons given by the commissioner for his judgment upon it.
    It will be observed that the commissioner has made no observation on the 9th exception as presented to him; I have nevertheless no difficulty in overruling that exception as presented, and I do so.
    But at the hearing, by consent of counsel, the exception was amended, by adding to it: “That he (the commissioner) has erred in allowing Cochran credit for $447 68, as a payment for freight, appearing by J. F. Hodges’ receipt, which in the language of the accountant, Wm. Hill, to whom the books of the firm, by agreement, were referred, is ‘ vague and indefinite;’ and also, in charging the estate of Stokes with $484 98 as a part of the proceeds of the cotton money (the J. C. Cochran draft) alleged to have gone into his hands, more than appears by evidence he has received ; and further, in charging the estate of Stokes with $1,300 81 as proceeds of the cotton money, alleged to have been received by him, when, by the showing of Cochran, the net amount of said cotton money was only $1,249 34.”
    This part of that exception I cannot understand without a report upon it. I, therefore, recommit it to the commissioner.
    Counsel cannot be prevailed on to go into references early enough to allow the commissioner time for a full and deliberate statement of their matters before him; and then they hurry both him and the Court at the hearing. The commissioner might procure time, by assigning early days for references; and, after giving notice of it, if counsel and parties thwarted him, he might refuse to make up any other report, except of the Course he had taken, and how it had been frustrated. This course, adopted by the late Mr. Miller, of Sumter, proved successful. Nothing short of it is likely to succeed.
    10. The tenth of these exceptions, and the last of them, is, “Because the commissioner erred in not allowing a reasonable compensation to J. H. Stokes for his personal attention to the business of the firm, from its commencement to his death. It is insisted that his services rendered in this behalf were worth, at least, $500 per year. He gave his entire attention to the firm, and boarded himself in the meantime.”
    I suppose the counsel are aware, that it has been repeatedly decided that compensation for such services must depend on the partnership agreement. Parties have an opportunity to agree respecting compensation, if they choose to allow it; and if they make no bargain, they cannot expect the Court to make a bargain for them. This is the uniform rule. No decision to the contrary; and the counsel must be supposed to have put in this exception with the mere desire to impose the labor of hearing and overruling it. It is overruled.
    In closing what I have to say on these exceptions I would observe, that confusion is apt to arise from comprehending in the same class of exceptions divers interests.
    I am now to consider exceptions put in by“J. N. Cochran, on behalf of himself and others, creditors of J. H. Stokes.”
    1. The first is: “Because G. W. Hodges has not been charged with rent of the partnership plantation for the years 1854, 1855, 1856, 1857 and 1858, to wit: the sum of $400, annually, with interest.”
    The commissioner remarks, that this exception “proceeds as your commissioner conceives, from the confounding of a joint tenancy with a partnership in the land. The purchase was joint; but the land was purchased with no common fund. The partnership appears to the commissioner to have consisted, not in the land, but in the farming operations. It is true, real estate, under our statutes, is made liable for the payment of debts upon the deficiency of the personalty; for that purpose, the creditors had a right to call upon it in aid of personalty. But is the right to rent from a co-tenant incident to this right of creditors ?
    “Under our statutes, upon the death of a joint tenant, his interest descends, as in tenancy in common, and becomes liable to distribution among heirs and distributees; subject, of course, to the rights of creditors. The jus accrescendi is taken away, and the right of partition accrues.”
    There is no doubt that the jus accrescendi being abolished by statute as to lands held in joint tenancy, (which I regard this land to have been,) the necessary consequence is, that the portion of the deceased owner descends for distribution, in the absence of a will.
    The operations on these lands for the years indicated, after Stokes’ death, were not conducted in privity with him, but with his widow, as an individual, acting for herself and her infant co-distributees.
    If Hodges’ use of the premises exceeded his share, which I do not see, and was contrary to their interests, for this abuse, he was primarily accountable to them. Though the-widow was administratrix, yet as administratrix she had* nothing to do with the land, so as to establish a privity in-this matter with creditors. The land was liable for debts, and is so still. This liability is created by statute, and the statute creating it is, perhaps, the measure of the liability.
    Where is the right to rent given? Besides, there is nothing in these pleadings to raise the point. Must not the creditors resort to a bill for the purpose of claiming this liability ?
    If the widow and children are liable to creditors for their occupancy — which I doubt, until it is demanded by bill — ■ that is not what this exception claims. Their ancestor’s portion of the land descended upon them; and in occupying it they occupied not rented premises, but land legally their own. It would be startling to announce to persons in this condition, which is a very common case, that while occupying their own land, as to which their ancestor was not chargeable with rent, and of whose insolvency, if that made any difference, they might be utterly unconscious, they were all the time accumulating rent upon themselves. The exception is overruled.
    
      2. The second exception is, “Because if G. W. Hodges is not chargeable with the partnership premises for the years 1854, ’55, ’56, ’57, ’58, the estate of Anna R. Stokes, adminis-tratrix of J. H. Stokes, is chargeable with the same, with interest.”
    The commissioner remarks, “ As to creditors’ second exception, the claim of Anna R. Stokes does not seem to come within the scope of the bill,” [nor any part of the record.]
    “ Her authority as administratrix extended to the personalty only; and her possession and enjoyment of the land was, in virtue of the descent, cast upon her by operation of law. The said land was used for the support and maintenance of the family, and I do not think the claim for rent should prevail.”
    I concur with these observations, and overrule the exceptions.
    
      3. The third exception is, “ Because the commissioner should have allowed interest to J. N. Cochran on the amount of his capital, $4,300 81, from the time of its investment; and also, interest for payments made for the firm from the time of such payments.”
    The claim for interest upon a partner’s stock paid in, in the absence of a stipulation for it in the articles, is, I believe, unprecedented. The capital is risked for profits, which are the substitute for interest on the money. The claim of interest upon the payments made by Cochran,.so far as made out of his own funds, is, I think, right, upon principle. He stands, in such case, as a creditor of the firm. If. therefore. the account allows interest to Stokes for his payments, it should be allowed to Cochran. Both parties should be allowed interest.
    4. The fourth exception is, that “ J. N. Cochran, in addition to half the losses of the firm, should be allowed to go against the estate of his partner, J. H. Stokes, with the full amount of said J. H. Stokes’ individual indebtedness to the firm, viz: $529 75 and $27 23.”
    • The commissioner has sustained this exception, and I concur with him in the principle, that each member of a firm is liable to it for the full amount of his contracts, as an individual, with it. There is danger, however, of sustaining every part of an exception so sweeping as this. It was unnecessary to the exception to state the amount of Stokes’ debts to the firm, or to claim that he should be charged with it, in addition to half the losses. I refrain from sustaining the exception as to these particulars, though they may be right. One cannot be too vigilant.
    5. The fifth exception is, “ Because the commissioner has not charged J. H. Stokes’ estate with $809 50, the amount of partnership money applied to his private debts.”
    The commissioner, in his report, speaking of this claim, says: “ I have not allowed it, as it appears that he has been charged with the full amounts received by him, and after allowing the proper credits, a balance remains in his hands, of only $27 23.”
    This appears to be satisfactory. If Stokes was already charged with all he received from the firm, this $809 50 is acounted for, and should not be charged again. The exception is overruled.
    6. The sixth exception is, “Because the commissioner improperly held the paper dated the 2d of March, 1853, to be a valid and subsisting mortgage of certain slaves to G. W. Hodges and others, to indemnify them as sureties of J. H. Stokes, on the Clinkscales note of $2,500, dated May 3d, 1852.”
    
      The commissioner overruled this exception. I cannot concur with him, though I differ from his judgment with hesitation. I am of opinion the mortgage which was created to secure another and prior note cannot be connected with this, which had no existence till two months afterwards.
    The want of registration is also fatal to the mortgage. Notice of it in December, 1853, was notice of its defects. And payments made after that time, by Cochran, to which he was obliged by anterior contracts of the firm, or of himself on behalf of the firm, should be referred to the anterior obligations, and not considered voluntary contracts or payments after notice. This view is different from that I strongly expressed at the hearing; but I must be at liberty to correct a hasty judgment.
    It was argued that the mortgage should prevail as to creditors who became such after notice, such as Cochran obtained in December, 1853, when he drew Mrs. Stokes’ endorsement on the mortgage. As to Cochran, the only creditor affected by such notice, I have stated that his payments after that time should be referred back to the date of the contracts, which compelled him to make them. But I have now to observe, that the mortgage being incapable of being connected with the note to Clinkscales, the only debt claimed under it, is no mortgage; and all the notice in the world could not make it one, as against persons having such notice, more than against other persons who had no notice at all.
    It has been said also, that this money being borrowed to replace money borrowed from the bank to pay debts, was gotten for partnership purposes; and so Cochran being a partner was chargeable with notice. But in this matter, the claim being through and in behalf of Stokes, the parties were acting apart, and at arms’ length; and the maxim relied on cannot rightfully apply. Stokes had credit for his payments made with the $2,500 borrowed, and still remains a debtor to the firm; which precludes the idea of subrogating Hodges to his rights under the payments made by him.
    
      I, therefore, sustain this exception.
    7. The seventh exception is, “ that the commissioner has improperly held the $1,180 92, paid by Hodges on bond to the estate of Mrs. Mays, to rank as a specialty debt; said bond having been given jointly by Stokes & Hodges for the. purchase money of the partnership plantation.”
    The bond was not produced; but I understand it to be admitted that it was joint, and not joint and several.
    The cases of Pride vs. Boyce, Rice Eq., 286, and King vs. JLughiry, 3 Strob. Eq., 156, in which it was held, that such a bond might be reformed into a joint and several obligation, on the ground of presumed mistake, and set up as such against an estate, were cases of sureties applying to have an equity enforced against their principal. This is the case where the applicant was himself debtor along with him whose estate he seeks to affect, and equally bound with him to pay the debt.
    But I think the true principle of these cases is, that wherever a party is exposed to pay a sum of money, which (as between himself and his co-obligor) the co-obligor is bound, in equity, to pay, he is entitled to a remedy either by reforming the contract, or otherwise, if practicable, to throw the burden of payment on him.
    For his own half of the bond, Hodges, on this principle, is entitled to no remedy. But for the other half, Stokes was equitably exclusively bound as between himself and Hodges; and Hodges was, as between the two, only his surety; and having paid off the bond to the extent it was left unpaid by the proceeds of re-sale, I am of the opinion he is entitled to set up the bond to the extent of his payments for Stokes, (making proper calculations,) against the estate of Stokes. And in this view, I overrule the exception.
    8. The eighth exception is intended to apply this ruling, to some extent, to the other side. It is, that “ J. N. Cochran, having paid the debts of the partnership (of Cochran & Stokes) to the amount of $8,224 34, as appears by the account, should be subrogated to all the rights of partnership creditors, and allowed with the whole partnership debt paid by him, to share his joro raía with the other private creditors out of the private estate of J. H. Stokes.”
    To the extent of the excess of his payments out of his own funds, beyond his half, Cochran is a creditor of Stokes, like any other of his creditors. The payment, per se, made him only a simple contract creditor. But, occupying essentially the position of Stokes’ surety, as to the amount which Stokes should in equity have paid, and which he has been obliged to pay out of his own funds, he is, in my opinion (entertained with hesitation,) entitled, as far as he has paid specialty debts, if any, to rely upon them to place himself, as creditor, in a higher rank among Stokes’ creditors, limiting that privilege, however, to the extent which his payments have made him a creditor of Stokes. He has no right to come in for the whole amount he has paid, but only for half his excess of payments; thus leaving himself to sustain one-half the losses of the firm.
    In this view, and to this extent, the exception is sustained.
    9. The ninth exception is, “ Because 6. W. Hodges has not been charged with the value of the cotton seed of the crop of 1853 (to wit: about 1,200 bushels,) and also for cattle and other property belonging to the partnership of Hodges & Stokes, and also interest upon the value of the same.”
    The commissioner says: “ The ninth exception is overruled. The testimony of W. N. Munday and Wm. S. Smith proves that the appraisers intended to divide the partnership property equally between Hodges and the estate of Stokes; and though neither cotton seed nor cows appear in the sale bill of said estate, it is probable their value was compensated in some other way.”
    I shall not undertake to say the commissioner is not right. I overrule the exception.
    10. The tenth exception does not appear to have been before the commissioner. It is, therefore, recommitted, with the report, to him.
    11. The eleventh exception is, “Because the commissioner has altogether overlooked the individual demand of J. N. Cochran against the estate of J. H. Stokes, viz: to the amount of $150, and interest thereon'; all of which were proved.”
    It is admitted these demands were overlooked. Therefore let them be recommitted, and let the report be remanded to the commissioner.
    The defendant,' Cochran, appealed on the grounds:
    1. It is respectfully submitted that the Medy Mays tract of land was partnership property, and so treated by the partners. And whether it be regarded as partnership property or a joint tenancy, it is insisted that G. W". Hodges, having the possession and cultivation of it, is bound to account for the rent of the premises, and interest thereon, from the death of J. H. Stokes till the sale of the land.
    2. In the event that G. W. Hodges is not bound to account for the rent of the premises, it is respectfully submitted that Anna R. Stokes, administratrix, or her representative, is bound to account for the same and interest.
    3. Because according to the partnership articles each partner being bound to advance an equal amount of capital, and J. H. Stokes failing to advance any; it is respectfully submitted that the Chancellor erred in refusing to allow J. N. Cochran interest on his capital, $4,300 81, from the time of its investment.
    4. Because J. N. Cochran, as against the estate of his partner, J. H. Stokes, should have been allowed the whole amount of his capital, $4,300 81, and interest thereon, and as to the amount of the partnership debt paid by him, ($3,923 53,) should be subrogated to all the rights of partnership creditors, and allowed with the sum of his capital ($4,300 81) and interest, the partnership debt 'paid by him ($3,923 53) and interest, and the individual indebtedness of Stokes to the firm ($556 98) to share his pro rata with other private creditors out of the private estate of J. H. Stokes.
    The defendant, Hodges, appealed upon the grounds :
    1. The mortgage or assignment to George W. Hodges and others, should have been held valid, and allowed a specific lien upon the negroes Cato, Julia, Charity and Easter, because the proof was clear that the parties substituted for the Dorn note, the note to Clinkscales, and intended the mortgage to secure the “ borrowed money” covered by this latter note.
    
      2. Assuming the validity of the mortgage, it is submitted that James N. Cochran is not a subsequent creditor without notice, or entitled to take advantage of the want of registry of the said paper.
    
      JYoble, Wilson, for Cochran.
    
      McGowan, Jones, for Hodges.
   The opinion of the Court was delivered by

Johnston, Ch.

The grounds of appeal in this case, which it is deemed necessary to notice, relate:

1. To the mortgage given by Stokes to indemnify his sureties for money borrowed.

2. To the non-allowance of interest to Cochran on his capital put in.

3. To the advantages decreed to George W. Hodges, in respect to payments made by him beyond his share for the land bought by himself and Stokes from the commissioner; and

4. To the refusal to make Hodges account for the rent of this land after Stokes’ death.

1. As to the mortgage. There would be much difficulty in relation to this instrument, if it had been made to appear that it had been put into operation. Among other matters of difficulty, would be the determination of its effect upon creditors, under the circumstances stated in the case. Was Cochran a subsequent creditor anterior to the notice which he appears to have obtained on the 5th of December? and many other points. But all these inquiries are superseded by the opinion entertained by this Court,to wit: that the instrument was never delivered, and never went into operation.

No conclusion in favor of delivery should be drawn from the fact, that in the attestation it purports to have been “ signed, sealed and delivered.” It was in that condition when shewn by Stokes to Zeigler; and it is certain that at that time it had not issued from the hands of Stokes. It still remained with him when he procured the accommodation of Marshall. Nor would it seem to have been delivered at the time the money was borrowed from Clinkscales ; with whom a note was left “as collateral security,” until 'another note could be procured and substituted.

Had the mortgage been registered, that circumstance might have been insisted on as evidence of delivery.- But secret, unregistered conveyances or liens are not to be favored, unless there is reasonable proof that, during the time they remained out of the range of public observation, everything that purports to have been done was actually and bona fide done. There is no proof that either of the mortgagees was ever in the possession of the instrument during Stokes’ life. The-last evidence we have of it leaves it in Stokes’ possession: and we are to infer that it remained in his hands at his death, unless the subsequent production of it by George W. Hodges is proof, that he acquired possession by the hands of Stokes. But when we consider his intimate connection with the administration of Stokes’ estate, whose administra-trix was his own daughter, for whom he acted as principal agent, we hesitate to admit that his possession must have been acquired from the intestate. We disclaim all disparaging imputation whatever, but.we think it would be unsafe to presume a delivery under the circumstances.

2. The next point relates to the interest claimed on the capital put in by Cochran. The exception was, that the commissioner, in his report, had not allowed this interest. The Court must confine itself to the exceptions put in ; and it expects that they shall be such as to point out the specific errors complained of. The argument here, is, not so much, that interest should be allowed to Cochran on his advance of capital, as that Stokes, the other party, should have been charged for capital which he failed to put in — with interest on what he withheld. That might have been a proper exception to the report; but it was not taken; and it would have been extraordinary if the Court had substituted and sustained an exception omitted, in place of the one put in, as the basis for its judgment.

On the exception actually put in, this Court is of opinion the Chancellor’s decision was correct. As between partners the object of putting in capital is profits and not interest. The profits are the substitute of interest; and without some stipulation in the articles, each partner is only entitled to have his capital back. This is the drift of the case of Cameron vs. Watson, 10 Rich. Eq., 64.

It is not intended to say that in the account Stokes is not chargeable with the amount of capital he failed to put in. But, as I have said, that is a very different thing from sustaining the claim now advanced.

3. This Court approves the ruling of the Chancellor, in respect to the amount paid by Hodges beyond his own half of the bond ; and the point requires no further observation.

4. The fourth point relates to the rent claimed from Hodges for his occupation after Stokes’ death.

There has been an accounting as to all other matters beyond this rent. It is not necessary to inquire whether there may or may not be a partnership in land. We are of opinion there was no partnership in this land. The parties were, by the conveyance to them, joint tenants. The land was the mere basis of operations, in which operations slaves and live stock were contributed for the purposes of common profits or losses. As to these contributions there was a partnership ; of which the accounts have been taken.

But I am instructed by the Court to announce its opinion that an account should have been taken, charging Hodges, not for rent, eo nomine, but in respect to his occupation beyond 'his just proportion of the land.

The bill is to call in creditors of the estate of Stokes, and to apportion its assets among them. Hodges has come in and has preferred his demands as such creditor, and they have been established. But I am instructed to say that these should not have been allowed, without deducting from them what he owes for undue occupation of these premises. It is conceived that this would not be just to the other creditors. Therefore the direction of this Court is, that for any occupation by Hodges, exceeding the share to which he was entitled (to wit: beyond half the premises) he should be charged with reasonable compensation, to be deducted from the amount allowed him on his demands against the estate of Stokes.

Let the decree be modified according to this opinion ; and in all other respects affirmed.

Dunkin and Wardlaw, CC., concurred.

Decree modified.