Case ID: scl_34/html/0073-01.html
Source: Caselaw Access Project
Author: {"author": "Withers, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Jacob Barr, George A. Sligh and Samuel Montgomery v. H. H. Kinard.
    
    The Act of 1843 deprives a prior mortgagee of his advantage (unless his mortgage he recorded as it prescribes) over a subsequent creditor or purchaser “ without notice,'” but no description of notice is specified.
    It is not necessary, under the Act of 1843, that the subsequent creditor or purchaser should have notice of the time when the mortgage was given, or of the amount to be secured. Notice of the fact that there is an existing lien, of A particular description, in favor of a certain party, upon the property in the view of one about to become subsequent creditor or purchaser, is altogether equivalent to that required by the Act.
    
      Before O’Neall, J. at Newberry — April, Extra Term, 1848,
    This was an issue made up under an order of the Court, and by consent of parties, to ascertain eertain facts necessary to the decision of a rule against the ex-sheriff, John P. Kinard.
    The first question was whether the defendant, Kinard, was a creditor prior to the dates of the respective mortgages to the plaintiffs ? The second was — if he was a subsequent creditor, then had he notice, before his debt arose, of the mortgages? . ’
    About the first question, there seemed no doubt that the defendant was a subsequent creditor to the mortgages; the jury found accordingly, and there is no appeal on that question, and hence it is not necessary to report minutely the facts in reference to it.
    
      The mortgages to the plaintiffs bore date, tíie first, 9th 1845; second, 15th July, 1845. They Averejecorded in the Secretary of State’s office, but not in the Register’s 0f[\ce_ at Newberry.
    The defendant, with a man of the name of James Gaunt, was the security of Nicholas Sligh, in the contract for the purchase of a tract of land, the property of Mrs. Harriet Swann. The contract bore date 17th December, 1844. It stipulated, that as the title to the land had to be made under the authority of the Court of Equity, the purchaser, Nicholas Sligh, should, on titles being made, enter into bond and security for the payment of the purchase money, $3,000, with interest from the 1st of January, 1845.
    As a means of protecting him from the liability which he, Kinard, was then under, and was to incur, by becoming one of Sligh’s securities, Nicholas Sligh made a note to the defendant, dated the 25th of February, 1846, but it probably was made on the day on which the cozrfession was made; it bore date the 26th, the judgment was signed the 27th, and from .the testimony, it seemed very probable that the defendant, Sligh, confessed judgment on that day, and that the confession was dated back one day, and the note one day still further back. On the next day, the 28th, the defendant, Kinard, Gaunt and Sligh, executed their bond for the purchase money, $3,000, and interest, to Henry Summer, trustee for Mrs. Harriet Swann. Titles were made, and in some way secured to Kinard, for the indemnity of himself and Gaunt. The land has been sold for $1,800. At the same time, Sligh assigned to Kinard his interest in his father’s estate, from which some sums had been received. It was spoken of by Sligh, as being worth probably 800 or $1000. Nicholas Sligh was put on the stand to prove notice, but after some hesitation^ and after admitting he had told the plaintiffs, and their attorneys, that he gave notice to Kinard, of the plaintiffs’s mortgages, said he did not; but that he told him of a mortgage to Wm. McMorris.
    William Welch proved, that he met with Kinard, and asked him how he came on about* securing himself with Sligh. He said, he could get him to do nothing, and that Gaunt, his surety, was so inert he would do nothing. This witness said, he told Kinard it was useless to trouble himself further than to secure the land, for which he was surety, as all the balance of Sligh’s property was covered by mortgages to the plaintiffs. He said he would go to the Clerk’s (the Register’s) office, and examine. He did so; returned and said he asked no odds of the mortgages, they were not on record. This witness said, that this conversation was before the confession to Kinard.
    David Boozer, (to whom the plaintiffs were liable, as Sligh’s securities, and to indemnify them on that account, one of the mortgages was executed; the other was executed to indemnify them, as sureties, in a bond executed by Sligh to the Commissioner in Equity, as committee of some one,) was examined, and proved that oh his return from the Springs, he met with Kinard, who was joking him about his expertness in saving himself; and witness then told him about the mortgages, (this was after the confession.) Kinard replied, that he disregarded the mortgages. The witness said he told Kinard, that he knew all about the mortgages to the plaintiffs. He would not answer it. He said the mortgages were executed in the Commissioner’s office, and were notorious in the village where Kinard resided.
    The questions were submitted to the Jury. They were told, in reference to the Act of 1843, that the question, what would be notice, had not been decided. That under oúr previous recording laws, it had been held, that notice must foe explicit, and to be so, it must be as full as if the deed had been spread on the record. The_circuit Judge told the jury that that decision required more than he would have required had it not been so decided. His own notion would have been, that whatever was sufficient to put the party on the enquiry would be sufficient. But he told them, the law was decided, in Tate v. Crawford, that the notice must be explicit, and equal to spreading the deed on the record.
    They were told to examine Welch’s and Boozer’s testimony, with that of Sligh, and if they were satisfied from them, and especially Welch’s, that Kinard knew of the existence and contents of the mortgages, that then they might find notice.
    The jury found that Kinard was a creditor subsequent to the mortgages, but that he had notice of the same, before the debt arose.
    The defendant appealed, and moved the Court of Appeals for a new trial, on the following grounds, to wit:
    
      1, Because his Honor erred in charging the jury, that it was not neeessary that the same explicit notice which had heretofore been held to be necessary to invalidate a deed for want of recording, should be proved under the Act of 1843, requiring mortgages to be recorded in the office of the Register of Mesne Conveyances, to allow subsequent creditors to avail themselves of the benefit of said Act against unrecorded mortgages.
    
      2. Because his Honor erred in charging the jury, that the conversation between the witness Welch, (who was a mere stranger to the parties,) and defendant Kinard, if they believed it, was before the judgment was taken by Kinard from Sligh, was a sufficient notice of the plaintiffs’s mortgage to Kinard, to deprive him of the benefit of the Act of 1843, although nothing was said by Welch to show the time when the mortgage was given, the amount to be secured, or anything else, so as to give Kinard sufficient information as to the mortgage, to answer in place of recording; and that although the defendant Kinard, went immediate to the Register's office, and found that no mortgage was recorded, and so informed witness, that it could not be so; when nothing further was said by witness, to show that the mortgage was in existence, but not on record.
    11 Stat.356.
    3. Because his Honor should have instructed the jury that the notice required by the Act of 1843, which would stand in the place of recording, should be such as would furnish to the subsequent creditors, certain and correct information, not only of the existence of the mortgage, but of the time when given, as well as the debt secured by it, in some reliable manner, and not such as might be gathered from a casual conversation with a stranger, such as was held between Kinard and the witness Welch.
    Fair, for the motion.
    Pope, contra.
   Withers, J.

delivered the opinion of the Court.

The jury have found that H. H. Kinard, the defendant, was a creditor of Nicholas Sligh, subsequent to the date of his mortgages to the plaintiffs; but that he had notice of the same before the debt arose. We shall, therefore, consider Kinard as occupying the position of a creditor, although it is foreseen, that a state of relations may possibly exist, arising out of collateral liens to secure an endorser or surety, that may make it rather difficult to determine whether one be legitimately a creditor. In this case, however, the parties all appear to occupy the same relation to Kinard, in that respect.

The complaint here is, that the notice, traced to Kinard, of the existence of the prior mortgages, was not sufficiently full and complete, as to the terms and character of the mortgages, to answer the purposes of the Act of 1843. That Act deprives a prior mortgagee of his advantage (unless his mortgage be recorded as it prescribes, which was not done in this instance) over a subsequent creditor nr purchaser “ without notice." No description of notice is specified. None more perfect and particular could have been required by the defendant than that to which the Circuit Judge held he was entitled — for he told the jury that it “ must be explicit and equal to spreading the deed on the record

They have responded affirmatively to this instruction. Yet, there is no testimony to shew that the notice received by Kinard conveyed to him intelligence as ample and perfect of the provisions of the mortgages as he might have procured had they been spread upon the records. Nor are we prepared to rule that the Act of 1843, heretofore cited, entitled him to such notice. The notice required under former Acts has been characterized, in Tate v. Crawford, as necessary to be “ actual” and “ explicit.” But notice of what ? Scarcely of the particulars mentioned in the 2d ground of appeal. But rather, it seems to us, of the fact that there was an existing.lien, of a particular description, in favor of a certain party, upon the property in the view of one about to become subsequent creditor or purchaser. Would not this subserve all the purposes supposed to be in contemplation of the law — the leading end being to admonish a purchaser or creditor of a snare ? In such case, would not a reasonably prudent man seek further information, if he needed it, from the morgages; or require the person who proposed to deal with him to furnish it 1 In this case the fullest information might have been procured by Kinard from the office of Secretary of State, one of the places where the mortgages were required to be recorded, and were recorded. Yet he did not seek it there. Recognising the existence of the mortgages, he said he did not regard them, because they were not recorded in the Register’s office. It is hence pretty manifest that he did not go upon the notion that he had no notice of them in fact, but on the legal theory that they were void as to him for want of being recorded.

1 McC. 265.

We think that he had notice altogether equivalent to that required by the late Act; the charge on the subject was fully as strong in his behalf, notwithstanding the 1st and 3d grounds of appeal, as he had any pretence to claim; and therefore the motion is refused.

Richardson, J. O’Neall, J. Evans, J. and Frost, J. concurred.

Motion refused.