Case ID: sc-eq_8/html/0001-01.html
Source: Caselaw Access Project
Author: {"author": "Nott, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Robert Martin v. John Sale, Johnson Sale, and Others.
    A purchaser with notice of a prior mortgage takes subject to its lien, although it has not been duly recorded; and he is equally liable, although without actual notice, if the mortgage were recorded prior to his purchase.
    An answer by a purchaser, denying notice of a prior unrecorded mortgage, is sufficiently disproved by the positive oath of a single witness, aided by corroborating circumstances.
    A conveyance of lands not recorded within the period limited by the act of 1785 is void only as against a bona fide purchaser for valuable consideration. And where a voluntary conveyance is absoluteuponitsface,itcannotbesetupagainst a prior unrecorded mortgage, upon the allegation of the parties, unsupported by other evidence, that it was intended as a security, for a creditor of the grantor; nor will it avail, that the grantee subsequently conveyed the land to the use of the creditor, if the mortgage were recorded prior to such conveyance. ■
    Bill for foreclosure, and sale of the mortgaged premises. The defendant, John Sale, on the 9th July, 1825, mortgaged a tract of ^anc^’ s^tuate ™ Edgefield district, to Charles C. Mayson, in fee, to secure payment of a promissory note in favor of complainant, for #4,296.48, dated 1st July, 1825, and payable four months after date, which had been signed by Mayson as surety for the said John Sale. The note not being paid at maturity, judgment was obtained upon it by the complainant against both principal and surety; and Mayson subsequently assigned his mortgage to complainant. The bill charged that the defendant, Johnson Sale, had set up a claim to the land, by a title acquired from John Sale, subsequent to the mortgage to Mayson, and with notice of it, and prayed foreclosure, and a sale of the mortgaged premises in satisfaction of the debt.
    Johnson Sale by his answer denied all knowledge of the mortgage to Mayson ; and stated, that his brother, the defendant John Sale, being guardian of Tabitha and Annis Burton, minors, the children of William Burton, deceased, and being in embarrassed circumstances, and desirous of securing his wards, whose estates were in his hands, on the 27th January, 1826, executed a bill of sale to Tabitha Burton of certain slaves, with the view of securing the amount for which he might be found to be indebted to her’, and and at the same time executed a conveyance in fee to this defendant, of the tract of land now in dispute, which conveyance the defendant alleged was intended to be for the benefit of, and as a like security to, the other infant, Annis Burton. The defendant further stated, that John Sale, being afterwards required by Whitfield Brooks, Esquire, Commissioner in Equity, to give additional security for the fulfilment of his trusts as guardian, this defendant, at his instance, conveyed the same lands to the said Commissioner, in trust for the said Annis Burton, and this defendant had remained in possession ever since merely as tenant of the Commissioner. The answer further set forth, that it appeared by the records in the omce of the Register of Mesne Conveyances of Edgefield district, that the mortgage to Mayson was not recorded until the 6th February, 1826, which was more than six months subsequent to the day, upon which it was alleged to have been executed, and subsequent also to the conveyance to this defendant, which was duly recorded on the day after its execution. And the defendant therefore submitted, that as against the conveyance to this defendant, and all parties claiming under it, the mortgage to Mayson was utterly null and void by the provisions of the act of 1785.
    The answer of John Sale admitted the mortgage to Mayson, but alleged, that Mayson had subsequently agreed to accept a mortgage of other real estate as a substitute, and that the last mentioned real estate had been mortgaged to him accordingly. In other respects the answer of this defendant confirmed that of Johnson Sale.
    The other defendants having answered, the cause came on for hearing before De Saussure, Chancellor, at Edgefield in June, 1829.
    The mortgage to Mayson, and the assignment by him to complainant, and also the conveyance to Johnson Sale, and the conveyance by him to Brooks, together with the bill of sale to Tabitha Burton, were produced and proved. The dates at which the mortgage to Mayson, and the conveyance to Johnson Sale, were the same set forth in the bill and answers. The date of the con voyance to Brooks was subsequent to the recording of the mortgage to Mayson. A mortgage by John Sale and John Marsh to Charles C. Mayson, of certain lots in the town of Hamburg, as a security for the payment of the note to complainant, executed in February, 1826, was also introduced and proved; but there was no evidence of any agreement by Mayson to accept it as a substitute for the former mortgage. The allegations of the answers as to a requisition, made by the Commissioner, of further security from John Sale, as guardian of Tabitha and Annis Burton, and that the conveyance by Johnson Sale was executed in compliance with that requisition in part, were established by reports made at the time by the Commissioner, and remaining on i'ecord in his office.
    Charles C. Mayson was examined as a witness by complainant, and testified, that Johnson Sale was fully aware of the mortgage to witness at the time of its execution.
    The Chancellor overruled the defence set up, and made a decree for sale and foreclosure, conformably to the prayer of the bill.
    The defendants appealed, and moved to reverse the decree on the following grounds.
    1. That the mortgage to Mayson not being recorded within the time prescribed by law, nor until the conveyance to Johnson Sale had been executed and recorded, was absolutely null and void, except as between the parties and their heirs.
    
      1 Faust, 65.
    Act of 1791, 1 Faust, 38.
    
      2. That there was not sufficient evidence of notice to Johnson Sale of the mortgage to Mayson, even if notice could have dispensed with the necessity of recording: notice being' denied by the answer, and the evidence in contradiction being insufficient to rebut the defendant’s oath.
    3. That the question of notice, or no notice, was in itself wholly immaterial; the act of 1791 having fixed the test of the validity or priority of mortgages upon the recording, and not upon notice.
    
    4. That Johnson Sale was not a more volunteer, but a trustee for the benefit of Annis Burton, who was, and still is, a meritorious creditor of John Sale, to more than the value of the land.-
    
      5. That the title to the land is now, and was, long before the commencement of this suit, in Brooks, as Commissioner hi Equity, in trust for Annis Burton; and that he purchased without actual notice of the mortgage to Mayson.
    6. That the land mortgaged was the patrimonial inheritance of Tabitha and Annis Burton ; and although it had been sold for partition, and bid off by John Sale, it had never been paid for, and their right to payment of the purchase money constituted a lien on the land paramount to complainant’s mortgage.
    Bauskett, for Appellants.
    Butler, contra.
    
   Nott, J.

delivered the opinion of the Court.

The first and second grounds of appeal in this case may be considered together.

It has been settled in this State, long before any of our printed cases, that notice of a previous conveyance, to a subsequent purchaser, was equivalent to recording. And that is not a peculiar doctrine of our Courts. It is a principle well settled in all civilized nations where registry acts are required; and for the best of all possible reasons. The object of recording is to give notice, and thereby to prevent fraud ; but if the party has actual notice, the purpose is as effectually answered as it can be by notice implied from recording : and a person purchasing with notice is guilty of a fraud himself, and ought not to derive a benefit from his own fraudulent act. Notice must be proved like any other fact; but the evidence ought to be clear and satisfactory. And the only question now is, whether the evidence in this case was of that sort.

Mr. Mayson swears, that Johnson Sale undoubtedly had notice ; for that .he, Mayson, conversed with him on the subject, and expressed his doubts whether the property was sufficient to make him secure. The relation too, in which Johnson Sale stood to the parties, and all the circumstances attending the transaction, go to establish the fact. The goods, to obtain possession of which the mortgage was given, were in the hands of Mr. Rodgers, and would not be delivered out until the arrangement was effected ; and Johnson Sale, was the brother and confidential clerk of the mortgagor, and must necessarily have been acquainted with the fact. This view of the ground also answers another objection, that there was but one witness opposed to the answer of this defendant. The testimony of Mr. Mayson, taken in connection with the other circumstances, was abundantly sufficient to answer that objection. Possibly a difference of opinion may exist on this question, but the Chancellor has decided upon it, and I see no reason to be dissatisfied with his decision.

I am also of opinion that the decree may be supported as against this defendant on another ground. The act makes the prior unrecorded deed void, only as against a subsequent bona Jirle purchaser for a valuable consideration; and there is no evidence that the defendant is of that description. The pretence is, that the land was conveyed to him as trustee for his brother’s ward ; but there is not a tittle of evidence of that fact. Johnson Sale stood in no such relation to the infants as to entitle him to their confidence. Nor dees it appear, that they, or any friend of theirs, had solicited such a favour; or that they had intimated such a wish ; or that it was necessary for their security. It was then a voluntary deed of John Sale the Guardian. And we have no evidence that his motives were such as are now pretended, but his own declarations, which certainly are entitled to no confidence. The deed speaks a different language : and if his object was that which is now alleged, why was it not so declared on the face of the deed 1 As between him and his wards his declaration might be evidence against himself; but they were not evidence against others, and particularly to defeat his own deed. We do not see that the measure was called for by the occasion. He had given security for the faithful performance ^'s ^uty as guar<ban: and it does not appear that the security was not ampie. I can see no other motive, therefore, but to defraud his creditor, and his friend, and to make his brother his tenant, t0 hold for him, for any purpose that he might afterwards desire. I consider it not only a voluntary deed but one contaminated throughout with actual fraud. It was made to his brother as an absolute unconditional deed, without any declaration of trust, and without any consideration, as is admitted by both. It was immediately put upon record in older to secure it against the prior mortgage : and then the brother might convey to any future uses as occasion might require.

On both of these grounds I am therefore of opinion that the mortgage to the complainant is to be preferred.

In relation to the third ground, the question can only now arise as between the mortgage to Mayson and the one to Brooks ; and it is conceded in the language of the defendant’s brief that “ the act of 1791 has fixed the test of the validity and priority of mortgages upon the recording, and not upon notice.” But it never was doubted, that recording was notice to all the world; and the mortgage to Mayson having been made, and recorded, before that to Brooks was executed, was undoubtedly entitled to a preference.

The fourth and fifth grounds are already embraced in the observations made on the other grounds. On the sixth ground no evidence has been given by which we can ascertain to what merit it isintitled; but I am inclined to think, that upon John Sale being appointed guardian, and titles being executed to him, and the funds being thus placed in his hands, the land would be released from the legal lien previously created. However that may be, the minors are not prejudiced by this decree, as they are not parties to the suit.

I am of opinion therefore that the decree ought to be affirmed and it is ordered and adjudged accordingly.

Decree affirmed.