Case ID: scl_34/html/0236-01.html
Source: Caselaw Access Project
Author: {"author": "Witi-iebs, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

J. A. Mitchell & Gould & Bulkley v. Wm. T. Smith.
    
    Where a party levied an attachment in this State on certain chattels covered by a deed of trust executed in Virginia, and endeavoured to sustain his lien on the ground that the deed had not been duly recorded — the Court held the .deed good, because it did not appear that the trustee did not originally derive through ii, a good and legal title to the chattels in dispute — because it did not appear that it had not been recorded as required by the Registry Act of Virginia— because it did appear that the attaching party had actual notice of it, prior to the attachment; and because the parties, having been driven into this jurisdiction, the deed was good against, the lien of such an attachment, by the law of South Carolina.
    
      Before Wardlaw, J. at Edgefield, Fall Term, 1848,
    This was an issue, somewhat irregular in form, made by consent, for the purpose of trying the rights of the several parties to certain money in the hands of the sheriff of Edge-field district.
    John Swanson, of Pittsylvania county, Virginia, before October, 1845, had been a manufacturer of Tobacco, and had sent boxes for sale to various consignees in Baltimore, Mobile, Augusta, and other places: of these many had been received and forwarded by the defendant, W. T. Smith, at Lynchburg, Virginia, and some had been consigned to Gould & Bulkley in Augusta.
    On the 16th day of April, 1845, John Swanson, by a memorandum in writing, which Gould and Bulkley produced, acknowledged that he had that day settled with them concerning previous consignments, and that he had received from them an advance of $400 on 28 boxes which he then consigned to them.
    In the latter part of September, 1845, John Swanson sent 40 or more boxes to the defendant, with what instructions or under what agreement, did not exactly appear. Before that time, John Swanson had been in good credit; he then had much property and was known to be largely in debt; soon afterwards he became notoriously insolvent.
    On the 2d day of October, 1845, John Swanson addressed a letter to Gould & Bulkley, saying to them : “ If you have not sold the lot of old tobacco, you may take it at 20 cents. I have sent you some very prime and will send more in a few weeks, worth 25 or 30 cents. On receipt of this please send me a check on New York for $300.” The check was sent. The demand of Gould <fc Bulkley, against John Swanson, which was admitted, consisted of the two advances, $400 and 300, with commissions and interest, reduced by sales of Tobacco, to a balance of $191 30 on 29th January, 1846.
    
      John Swanson was indebted to'Jabez Smith, in large sums amounting to $12,000 or more, secured by various bonds, ,to which Henry C. Swanson, J. M. Swanson and Jesse Carter were sureties. A few days before 2d October, John Swanson told Jabez Smith and others, that his wagons were busily employed in hauling Tobacco to Lynchburg to the care of Wm. T. Smith (the defendant) and that he had sent 40 boxes of prime Tobacco to Augusta to Gould <fc Bulkley and O. H. Lee; which declarations he repeated at the making of the trust deed below mentioned.
    On the 2d of October, 1845, a trust-deed (as it was called) was executed by John Swanson to James A. Mitchell, in trust for the three sureties aforesaid — being in form an Indenture between John Swanson of the first part, J. A. Mitchell of the second part, and the sureties aforesaid of the third part: whereby John Swánson, reciting his indebtedness to' Jabez Smith and the suretyship of the parties of the third part, sells and delivers to James A. Mitchell “ all the manufactured Tobacco I now have on hand at my manufactory, and all the leaf Tobacco and stems at the manufactory,” all the Tobacco in the hands of Grigg of Pittsylvania, certain factors of Baltimore, Columbus, &c., Gould & Bulkley and O. H. Lee in Augusta, and “ all other manufactured Tobacco in Yirg'inia not specified abovein trust, &c. with power for the trustee to sell and pay, <fcc.
    This trust-deed was recorded in Pittsylvania county, 3d Oct., in Lynchburg, 7th Oct., in Richmond, 9th Oct., and in Baltimore 10th October, 1845.
    Samuel J. Jones was a receiving and forwarding agent at Richmond. Virginia, who did not know John Swanson nor anything of the state of accounts between him and the defendant, W. T. Smith, and who had for five months previous to the first of October, 1845, been occasionally receiving Swanson’s Tobacco from the defendant. On 6th Oct. 1845 he shipped on board a schooner, bound for Charleston, 40 boxes of Tobacco, which had, about the first of October, been received from the defendant with instructions. These boxes were, when received, marked John Swanson’s best A A, (which letters were supposed to denote the superior quality.) According to instruction they were forwarded to the Railroad Agent at Charleston, and he, by letter from Jones, was directed to forward 21 boxes to Gould & Bulkley at Augusta, and 19 boxes to O. H. Lee at Augusta. .The bill of lading, signed by the master of the schooner, was in this form: shipped by Jones, on board, etc. 40 boxes, marked “ John Swanson, A A,” to be delivered to the Agent of the R. R. in Charleston ; of this two copies were taken by Jones, one of them he sent to the R. R. Agent, and the other he sent to the defendant, W. T. Smith, who produced it.
    About the 6th Oct. the defendant was at Richmond, and said he was in pursuit of the Tobacco, and that he had not heard of the trust-deed before 5th of October. Soon after ’the shipment, Jones had a letter from J. A. Mitchell, the trustee.
    5 Leigh’s Reports, 520.
    On 19th day of October the boxes reached the R. R. depot in Hamburg, and on the 20th Oct. they were seized by the ■ sheriff, under two writs of attachment sued out that day by W. T. Smith against John Swanson. In Nov. 1845, the 40 boxes were sold by the sheriff, under an order obtained in the attachment cases, for $950 87 nett.
    In Nov. 1847, W. T. Smith recovered judgments in his suits by attachment — one on a note by John Swanson, to Coffee or order ■ the other on an account of which every thing was admitted tobe true that appeared on its face. This account was in this form. John Swanson Dr. to W. T. Smith. 1845, Jan. 30, Balance of account rendered besides notes $ July 19, Sundries per bill $ August Sundries per bill $ (and so on) Cr. sales of Tobacco f> Balance due on 30 Sept. 1845, $783 16.
    All parties, confirming the sale, agreed to contend for the proceeds, and this issue was so framed that recovery against the attaching creditor, W. T. Smith, might be had if either or both of the plaintiffs (James A. Mitchell, trustee, and Gould & Bulkley) could show against him a right to any or all of the Tobacco.
    A certified copy of certain clauses of a registry Act of Virginia, passed 24th Feb. 1819, was produced. By this Act a certain time is allowed for recording a mortgage or a trust-deed of personal property, and it is enacted that such a paper shall not have effect until it be registered in the county where the property to be affected by it may remain. In reference to this statute, opinions of various counsellors in Virginia were read — most of which had been obtained by their exam- . ination under commission, and the case of Lane v. Mason, and other cases from Virginia Reports were cited.
    Gould & Bulkley contended that, as consignees, they were entitled to have payment of the balance due to them for advances.
    J. A. Mitchell contended that, by the delivery of the trust-deed to him, he acquired rights to the Tobacco, which, in Virginia, would have been perfected by his recording the deed in any county there, while the Tobacco was in that county, and which, in South Carolina, where such recording was not required, must, in reference to property rightfully brought within the jurisdiction of our Courts, be considered complete without recording.
    W. T. Smith contended that Gould &. Bulkley never had any actual possession of the Tobacco, nor any constructive possession by means of a bill of lading or otherwise, and so could have no lien : that the trust-deed did not convey the Tobacco in Virginia, for it was never recorded in any county^ there whilst the Tobacco was in that county, or even before it came into that county, and that the removal of the property to South Carolina could not make effectual a disposition of it which was insufficient where the parties resided, and the act of disposition was executed: and even if the trust-deed was here complete, that as factor, William T. Smith had a right to retain the Tobacco for payment of a general balance due to him.
    The plaintiff replied that the defendant had not shown a balance due to him as factor, and that he had so parted with the possession as to have retained no lien.
    Leaving the facts to the jury, the Circuit Judge held that without actual or constructive possession, neither consignee nor factor can have a lien: that the trust-deed, although inchoate in Virginia, was complete here, and conveyed to the trustee whatever rights John Swanson had in the Tobacco, so soon as it came into this State, unless it appeared that the contract contained in the deed was to be executed only in Virginia, or that the removal was contrary to the intention of the parties to the deed: that if his account showed a balance due to him as factor, and he had possession of the Tobacco, Wm. T. Smith could retain for payment of that balance ; but if he had parted with the possession by forwarding it, he had lost his lien, and had no right to stop it in transitu.
    
    The jury found for J. A. Mitchell, trustee, $950 87.
    The defendant appealed from the verdict, on the following grounds:
    1st. Because the defendant was legal owner of the Tobacco, and had the right to the money arising from the sale.
    2nd. Because the defendant, being the factor of John Swanson, the manufacturer of the Tobacco, and being in the legal possession of the same, on the 2d Oct. 1845, had a clear right to retain the amount of the general balance due him by said Swanson.
    3rd. Because the deed of trust of 2d Oct. 1845, from John Swanson to James A. Mitchell, not having been recorded in any county of Virginia, wherein the Tobacco was at the time of recording, was void under the registry Act of that State, offered in evidence, and his Honor erred in charging the jury that the said deed was good between the parties in the State of Virginia, although the Tobacco remained in that State for some days after the execution of the deed.
    4th. Because his Honor erred in charging the jury that the said trust-deed was good in South Carolina, against the attachment of defendant, and against his claim as factor of Swanson.
    5th. Because his Honor erred in allowing the declarations of John Swanson to be given in evidence by the plaintiff.
    
      6 th. Because the verdict was against the law and of evidence the case.
    
      Gray, for defendant.
    
      Copy of the 11th and 12th Sections of the Registry Act of Virginia, entitled,
    
    AN ACT to reduce into one Act the several Acts for regulating conveyances, and concerning wrongful alienations; passed February the twenty-fourth, eighteen hundred and nineteen.
    SectioN 11. Every deed respecting the title of personal chattels, hereafter executed, which, by law, ought to be recorded, shall be recorded in the Court of that county or corporation in which such property shall remain: and if, after-wards, the person claiming title under such deed, shall permit any other person, in whose possession such property may be, to remove with the same or any part thereof, out of the county or corporation in which such deed shall be recorded, and shall not, within twelve months after such removal, cause the deed aforesaid to be certified to the Court of that county or corporation into which such other person shall so have removed, and to be delivered to the Clerk, to be there recorded, such deed, for so long as it shall not be recorded in such last mentioned county or corporation Court, and for so much of the property aforesaid as shall have been so removed. shall be void in law, as to all purchasers thereof for valuable consideration without notice, and as to all creditors.
    Section 12. Every conveyance, covenant, agreement, and other deed in this Act mentioned, except deeds of trust and mortgages, which shall be acknowledged, proved or certified according to law, and delivered to the Clerk of the proper Court, to be recorded, within eight months after the sealing and delivery thereof, shall take effect and be valid as to all persons from the time of such sealing and delivery ; but all deeds of trust and mortgages, whensoever they shall be delivered to the Clerk to be recorded, and all other conveyances, covenants, agreements and deeds, which shall not be acknowledged, proved or certified, and delivered to the Clerk of the proper Court, to be recorded, within eight months after the sealing and delivery thereof, shall take effect and be valid as to all subsequent purchasers for valuable consideration without notice, and as to all creditors, from the time when such deed of trust or mortgage, or such other conveyance, covenant, agreement or deed, shall have been so acknowledged, proved or certified, and delivered to the Clerk of the proper Court, to be recorded, and from that time only.
   Witi-iebs, J.

delivered the opinion of the Court.

It will be convenient first to dispose of certain propositions set forth in the grounds of appeal, which, in the judgment of this Court, do not enter into the true question raised by the t case. 1st. and 2d. It is suggested that the defendant was legal owner of the Tobacco, and therefore entitled to the money in question. This idea is based on the supposition, that he had a lien as factor, for a balance due to him by Swanson in that character. Besides the circumstance, that it nowhere appears that defendant acted in the capacity of fac* tor for Swanson, it is enough that the point was submitted to the jury in a form liable to no exception. The position taken by the Circuit Court was, that without possession, actual or constructive, a factor could have no lien; but if defendant established a balance due to him as factor, and also a possession, {of course actual or constructive.) he could retain for such balance. This question must be taken to have been resolved against him. The 5th ground complains that the declarations of Swanson were admitted in evidence for plaintiff, which touched the question of the legal right in the Tobacco. They did but touch it; for he made no affirmation of right; what he said concerning it was just that which should well proceed from the true owner of it, and he certainly treated it as his own up to the time of the transfer to Mitchell. It is enough for this point to say that every party to this litigation claimed by means of a right derived from Swanson, (voluntarily rendered by him, or wrested from him by the attachment law,) and since all of his declarations, heard on the trial, were such as were made before any right could have accrued to either party, it is not perceived wherefore they should be deemed objectionable.

We may approach, then, the only real question, which may be stated thus: Did Mitchell, the trustee, derive from Swanson (the owner of the Tobacco when he made the deed of Oct. 2d,) a good and legal title to it ? If Mitchell did, at that time, derive such title to the Tobacco, then the subsequent lien upon it aimed at by Smith, the defendant, through the operation of our attachment law,, was of course wholly unavailing.

Smith, the attaching creditor, attacks the trust-deed through the recording law of Virginia, and he affirms that it is void, by the terms of that law, because it was not placed on record in pursuance thereof.

The 11th and 12th sections of that law, printed with the report of this case, should be read in the outset of this inquiry, and read in connection. Here the effort will be made to state the substance. Such a deed as the one in question, it is declared, “ ought to be recordedand if recorded, this shall be done “ in the Court of that county or corporation in which such property shall remain.” If a trust-deed be thus recorded, or acknowledged, proved, and delivered for that purpose to the Clerk of the proper Court, it shall take effect and be valid as to all the subsequent purchasers for valuable consideration without notice, and as to all creditors, from the time when such deed of trust shall have been so acknowledged, proved or certified, and delivered to the Clerk.” Such is the substance of the recording law, for the purposes of this case.

Now the allegation is, that the trust-deed, involved in this case, was not recorded according to law, and the argument deduced from it is, that it is void between the parties, that is, Swanson and his trustee. For the moment conceding that it has not been duly recorded, what word or provision is there in the registry Act cited, which will bear the interpretation that the paper is void absolutely 1 The object of the 12th section is to fix a time at and from which the deed shall have validity against two classes of persons, to wit: subsequent purchasers for valuable consideration without notice,” and “ all creditors.” So far as the registry law is brought to our notice, it is only to be inferred that prior to such time a trust-deed would be void even as against such persons. It may be fairly implied, if implication is required, that as a time is fixed at which the instrument shall be valid in regard to the persons described, it shall not be efficacious prior to that period as to them. But suppose there be no such persons to impute invalidity, who else shall complain 1 Suppose such a deed made and well founded, as to every thing else but its registry; should the distributees (for example) of the party executing it, be heard to impute the want of recording as fatal to the legal right of the trustee ? If so, then conceive that the defendant, in this case, being no creditor in any sense, should, as tart feaser, have seized the Tobacco in controversy, and the trustee (Mitchell) should have brought his action in trover, detinue, or other proper form, the argument urged here for the defendant, would, in the case supposed, equally protect him — for that argument would be, as it is, — . the deed through which only the plaintiff can claim is void, and hence he fails to establish title.

Then there are only certain persons who may successfully attack such a deed as we are considering. If the defendant can, it must be only as creditor — he assumes no other character. To invest him with this right, what sort of creditor must he be ? To some of us, at any rate, it seems very reasonable to hold that he must be a creditor subsequent to the date of the deed. Certainly the one who complains as purchaser must be subsequent to the date of the deed, and before it is recorded or delivered for registry. He cannot complain if he buys after registry — the case could not arise if he bought before the deed was made. Now wherefore shall a subsisting creditor, at the date of the deed, be allowed to impute a want of recording ? How has such omission to register affected him ? If he can maintain a successful war upon such a deed, it- surely must be waged on some other ground than want of recording. If the goods, transferred by the deed, had been delivered to the creditors who are to be benefited by its provisions, or to the trustee who is made their agent, the creditor now before us could not attack the preference upon any thing in the registry law. It does not appear to some of us what more he can find in that law to aid him, as a subsisting creditor, under the circumstances actually surrounding the case. In the exigency of a removal of the goods from the county where the deed is first recorded, to another, by virtue of the terms used in the last clause of the 11th section, the deed would be good not only as between the parties but as to all the world, subsequent creditors and purchasers included, without recording in the other county, fol-ia months; and there, too, it seems inevitable that the creditors and purchasers meant must be subsequent, that is to the first recording, though the word subsequent is not used as to either. The language properly interpreted seems to be, thus: after due registry of the deed, subsequent purchasers and creditors shall not resist it, but until then it shall be no barrier to subsequent purchasers and creditors — that is, subsequent to the date of the deed.

Probably, however, it may be considered hazardous to rely upon a view not presented at the bar, nor (so far as we are apprised) suggested by certain counsellors of the State of Virginia, examined in this cause. Then let us inquire whether it is not a mistake to assume that the deed has not, in fact, been recorded as the law prescribed.

Let it be remembered that, as the evidence imports, Swanson sent the Tobacco, in question, to defendant in the latter part of September, that is, to Lynchburg. The same Tobacco reached Richmond about the 1st of October, to be thence shipped to Charleston, and by Rail Road forwarded to Augusta, to certain persons named. On the 2d Oct. Swanson informed Gould & Bulkley, who were to receive 20 boxes of the Tobacco, that he had sent to them some very prime, referring, it is not questioned, to the Tobacco aforesaid ; and he wished a check on New York for $300, which he obtained, whether as an advance upon the said Tobacco, or on another lot referred to by him, and offered on sale to Gould & Bulkley, does not appear with certainty — it was probably an advancement on account. It results from this that the Tobacco, here in contest, was, when the deed was made, not stationary, that it did not “ remain” (which is the word-in the registry Act,) in any county in Virginia, and was not intended to be stationary, or so to remain — it was in fact, and was contemplated to be, in transitu. It was shipped on the 6th Oct. four days after the date of the deed, from Richmond, and three days prior to the recording of the deed in Rich'"’mond. Now then, allowing the registry Act to be'applicable to a commodity, an article of commerce, in such a condition of progressive motion towards a market beyond Virginia, and that the word “remain” means is in other words, the recording is required to be made where the property is at the time of registry, where was this Tobacco, in legal contemplation, on the 3d of Oct. when the deed was recorded in the county of Swanson’s residence? Several members of the Court consider it to have then been, in the eye of law, at the owner’s place of residence, since it could not, in legal view, be said to exist, be, or remain, in any particular county in Virginia, and therefore attended the person of the owner, according to the general presumption of law, implying that idea touching personal property. If this doctrine be substantial, the question is decided ; for then the deed was duly recorded, and the only objection to the right of Mitchell ceases.

Dargan v. Richardson, Cheyes, 197.

Again, if the parties to the deed designed that it should not be executed in Virginia, but elsewhere, so far as the 40 boxes of Tobacco were concerned, then the lex loci contrac-tus would not govern; and if circumstances drove the parties to the execution of the deed in our jurisdiction, (as they have done,) what law can apply to its construction, or affect its validity, except our own ? It requires no argument to shew that, according to our law, the right of Mitchell, under such a transfer, would be perfect against the lien of an attachment, subsequent to the date of the instrument of transfer. We have decided that a letter transferring notes, though not received, will fix the rights of the assignee so as to take precedence to the lien of an attachment levied after the date of the letter of assignment, but before it was received and accepted by the assignee. If it be insisted that the contract or transfer was understood to have been made with reference to, and to be carried into effect in pursuance of, the law of Georgia, and that such law rendered the transaction void, (which indeed was argued before us,) then it may well be replied that the defendant himself prevented the commodity from reaching a place where the law of Georgia could apply, and he has forced this question into our forum by his own voluntary act. It is, however, by no means intended to affirm or admit that if we were constrained to import the statute of Georgia into this case, it would, in any wise, profit the defendant. Vfe do not perceive the occasion to rule any thing upon the subject.

There is yet another consideration which has entered into our investigation of this subject. It is this : according to our interpretation of our own registry laws, actual notice is equivalent to recording. Now, in the absence of any contrary evidence, we should naturally conclude the same rule would prevail in Virginia. The proof is, that as early as the 5th day of Oct. the defendant had notice of the deed of trust.— It was on the 20th of the same month he caused his attachment to be levied on the Tobacco. This was his first lien, for he had none in Virginia, so far as he has shewn. With such actual notice of the trustee’s title, how can the defendant transpose the position of the parties, and drive the trustee behind him? Suppose he had bought the Tobacco from Swanson, or another, in derogation of the trustee’s title, could he stand up in our Courts, and shelter himself under the presumed ignorance of the claim arising from the want of recording ?

In every aspect of the case, it must be remembered that the only objection to the deed of trust urged by the defendant, is that it has not been duly recorded, and for that reason, and not for any fraud or other illegality, is void.

Probably every member of the Court would not, with equal clearness and confidence, insist upon each of the views herein before presented, as interposing an obstacle to the defendant’s claim. Each, however, has had its weight, and combined together they have served to conduct the Court to the conclusion, unanimously, that the verdict on circuit ought not to be disturbed, and that the motion ought to be dismissed.

The whole Court concurred.

Motion refused.