Case Name: James H. Page vs. Thaddeus Street, and others; The Charleston Hotel Company vs. James H. Page, and others; City Council of Charleston vs. James H. Page
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1834-05
Citations: 1 Speers Eq. 159
Docket Number: 
Parties: James H. Page vs. Thaddeus Street, and others. The Charleston Hotel Company vs. James H. Page, and others. City Council of Charleston vs. James H. Page.
Judges: Johnson, Dunkin and Johnston, Chancellors, concurred.
Reporter: South Carolina Equity Reports
Volume: 17
Pages: 159–214

Head Matter:
James H. Page vs. Thaddeus Street, and others. The Charleston Hotel Company vs. James H. Page, and others. City Council of Charleston vs. James H. Page.
1. Complainant P. entered into an agreement with the Charleston Hotel Company, 23d February, 1837, for the keeping of a Hotel then being erected, for the term of seven continuous years, to commence on the day that the building should be finished and furnished. Agreement recorded in the office of the Secretary of State, 29th May, 1838. On the completion and furnishing of the building, complainant entered into possession, but on the night succeeding the day of his doing so, the Hotel was destroyed by fire. The company resolved to re-build, and upon their suggestion the articles of agreement as originally entered into were modified by the parties, signed and sealed 7th July, 1838. Recorded in the office of the Secretary of State 30th March, 1839, and in that of the Register of Mesne Conveyance 12th May, 1840. In this agreement it was stipulated “that the said parties have agreed for the keeping of the Hotel, now in progress of construction, in Meeting street, by the said P., for the term of seven continuous years, to commence on the day the building shall be finished and furnished, which day shall be indorsed by the said parties on this memorandum, upon the following terms, to wit: That the said P., as landlord of the said Hotel, shall provide for the same, but shall contract no debt on account of the concern without first obtaining the sanction of the Board of Directors of the Company: that he shall procure and engage all waiters and servants, and the same discharge at will and pleasure; reside with his family in the Hotel, but free of all charge for board or rent; conduct the same in the manner contemplated by these presents, and have the sole and exclusive management thereof,bestowing upon it his entire attention; that the furniture shall be procured and purchased by the said Charleston Hotel Company, and shall he considered as part of the capital invested; but shall, at the expiration of the said term, be returned to them by the said P., or his personal representative, in the like order and condition in which they will be received by him, (ordinary wear and tear and unavoidable accidents excepted.) It is understood that the amount of forty-five thousand dollars shall be expended in the furniture of the house, and that of that amount, the sum of thirty thousand dollars shall have been purchased and placed in the Hotel, before the house shall be considered ready for occupation, and the balance shall he purchased within six months after commencement of operations, if required by the said P.
2. “ That the said P. shall keep constantly in his employment a competent book-keeper, who shall keep the books of the said Hotel, according, as nearly as possible, to the most approved checks and usages adopted by well regulated mercantile establishments. Should the directors consider the said bookkeeper incompetent, or otherwise disapprove him, he shall, be discharged by the said P. on the aforesaid directors making known that wish to him ; and P. may discharge him at any time, and procure another book-keeper, subject to the same disapproval by the parties. The books of the establishment shall always be open for the examination of any member of the Board of Directors, and shall be balanced on the first day of each and every month, so as clearly to exhibit the gross receipts oí every month, the expenditure of the same, and the cash on hand.” The agreement then provides that the nett profits remaining on hand at the expiration of every year, and after deducting the expenses of the Hotel, should be divided in certain proportions, varying according to the amount of the annual income, but finally provides that if the nett annual income should fall short of ten thousand dollars, the said P. should nevertheless and at all times be entitled to the sum of four thousand dollars, as an annual compensation for his services; and if the nett annual profits amount to any intermediate sum between those specified in the agreement, the sum should be divided between the parties pro rata, according to the scale established. It was further agreed that in ascertaining the nett profits, no- account should be taken as charged against P., either for rent, or interest of capital invested in the building and furniture ; that the company should keep the same under insurance, and in case of the destruction of the same by fire, during the continuance of the term, the same should be re-built and furnished, and again placed under the care ofP., on the same terms and conditions as before mentioned, for the remainder of the term; the said P. to receive, during the re-building and furnishing thereof, the sum of four thousand dollar’s per annum.
3. It was provided, that should the company fail to receive the amount of their policies of insurance, to any material extent, it should not be obligatory on them to re-build and re-furnish the Hotel — that the nett profits appearing on the books, might be drawn by the parties, on the first day of every month, in proportion to their respective interests, according to the scale established; and sums so drawn should be accounted for in the annual division of profits.
4. It was also agreed, that P’s. contract should be “ purely personal, not transferable to any one whatsoever by the said P., nor in any manner liable for his debts.” It was provided, that if P. should die before the expiration of the second year, and before the commencement of the seventh year of the term, the personal representative of the said P. shall receive from the company the sum of five thousand dollars; and if the death of the said P. oc cur at any time during the seventh year of the term, the personal representative of the said P. shall receive from the company a sum of money to he named by three referees, of whom one shall be nominated by either party, and the third by the two so named. A system of strict accountability was to be maintained by P. from the servants or agents under him, such as found in the most approved managed Hotels in the United States. Complainant put in possession 24th October, 1839, the building being finished and furnished.
5. For the’purpose of availing themselves of the benefit of the Acts of the Legislature, “ for re-building the City of Charleston,” the company applied to the Bank of the State of South Carolina for a loan, and on the 21st January, 1839, executed to the Bank a bond in the penalty of $150,000, conditioned for the re-payment of all loans the Bank might make to the company, and a mortgage of the lot on which the Hotel was to be built. Mortgage recorded in the office of the Register of Mesne Conveyance 22nd January, 1839. A loan of $75,000 was effected, but before making it certificates were produced from the various public offices and submitted to the Attorney General, who certified his satisfaction with the title. , There was no certificate, however, produced from the office of the Secretary of State.
6. To procure furniture for the Hotel, the company borrowed the promissory notes of forty individuals, for $1000 each, and to indemnify them, on the 23d May, 1839, executed a penal bond to certain persons, trustees, in trust for the lenders of the notes, and for the same purpose a mortgage of the house and furniture. Upon the execution of the mortgage, at a general meeting of the lenders of the notes, complainant, Page, requested that it might be made subject to his contract, and was told by the President of the Company that he would do nothing to impair his contract.
7. On the 27 th June, 1840, the trustees of the lenders of the notes filed their bill against the Hotel Company to foreclose their mortgage on the house and furniture, and obtained a decree, which, on the filing of complainant’s bill of July, 1840, was suspended until the further order of the Court.
8. Complainant’s bill alleged a prior lien under his contract, and prayed process against the trustees, the President and directors of the Bank, the Hotel Company, and William Kelly, as also for an injunction against the President and Directors of the Bank, to restrain the enforcing of their mortgage, but this not being moved for, under the provisions of the Acts “ for re-building the City of Charleston,” they caused the Hotel to be advertised for sale, which, on the 2nd March, 1841, was purchased by the City Council, who, under the said Acts, had guarantied the loan. The trustees filed their separate answer 8th February, 1841, and the President and Directors of the Bank answered 15th February, 1841, in which all notice or information of complainant’s contract is denied and protection claimed.
9. On the 26th April, 1841, complainant P. filed a supplemental bill to enjoin an execution in the nature of a fi fa, sued out by the trustees, under their decree for foreclosure j also to enjoin an action of trover brought by the trustees for the furniture against complainant, and an action of trespass to try title brought by the City Council, to recover possession of the Hotel. The bill prayed process against the trustees and the City Council The trustees answered on the 15th June, 1841, and on the same day the Hotel Company answered both 'the original and supplemental hills. The City Council answered the supplemental bill 15th June 1841, denying that complainant was entitled to any lien, either in law or equity against them. W. Kelly never filed any answer. The Hotel Company filed a bill against complainant, P.. for an account of his transactions in conducting the Hotel. 'The City Council also, for an account of the profits of the Hotel since they became the purchasers, and for possession of the same.
10. The object of complainant was to enjoin the actions brought against !him, and to be 'quieted in the possession of the premises.
11. This contract, as between complainant and the Hotel Company, held Sufficient to constitute a lease, but not having been recorded, under the provisions of the Act of 1817', (6 Stat. at Large, 67,) he was not entitled to enforce its performance against the City Council.
12. To supply the want of registration, notice must be full, explicit, and clearly proved.
13. Héld, that the Bank and the City Council were not affected with suf-ifieient notice -of'Complainant’s contract
14. Lis pendens, which is notice to rebut an 'equity, will not supply the Want of of registration.
15. The well known ground on which alone courts have thought themselves authorised to dispense with t'he words of a statute, as in the aaala-gous case of the Statute of Frauds, is that the Legislature is not to be supposed to have intended that a statute made for the prevention of fraud, .should itself be made the instrument of fraud.
16. There being no ground of fraud in'the present case, 'the purchaser, having only purchased the reversion with the subsequent accruing rents, 'there could be mo ground to authorize a departure from the positive 'terms of the statute.
17. Held, thát the City Council came within the principle of a purchaser from á lona fid'e purchaser without notice.
18. Held, that the mortgagees -of the furniture were entitled to a delivery 'of it, but müst pay their 'own costs.
20. Delivery of possession 'of the Hotel decreed, and also an aCfrount fob rents and profits.
21. Where there is a decree for delivery of possession, an account'of
mesne profits to the trpe o,wper follows as a, matter of course; though the possession may have been that of a tresspasser, Cruger ys, Daniel, May Term, 1843,
22. In accounting to the City Coupcil after their title accrued, held that P. must account, not for the share of income and profits reserved by his contract with the Charleston Hotel Company, but on the principle of quart* turn valebat
23. P’s, contract being void, as to the City Council, there was no ground on which the \ could sustain a bill for the deliyery of possession, nor any necessity for it; nor could they sustain a bill for mesne profits alone, The City Council, therefore, to pay the costs of' their hill, and P, the costs of their action at law,
24. The mortgagees of the furniture not entitled to an account of hire, quantum valebat Against the Hotel Company, entitled tq interest on their debt.
25. The mortgagees of the furniture, as against P,, held entitled to such proportion of the profits as the Company would have been entitled to for the furniture, as distinguished from the Hotel,
26. The Hotel Company to pay the costs of their bill; and as between complainant and the company, costs to depend on the account to be taken, The qther costs of the bill to be paid by complainant, P,
Before Harper, Oh. at Charleston, Ji$y, 1841.
The original bill, in the first of the above mentioned cases, was filed on the 10th July, 1840, to enjoin the execution of a decree of sale, for foreclosure of a mortgage of the Charleston Hotel, and the furniture therein, which had been obtained by Thaddeus Street, M. T. Mendenhall, A. G. Magrath, J. E. Glover, and William Aiken, trustees, upon a bill filed by them against The Charleston Hotel Company; the complainant alleging a prior lien under certain contracts, entered into with him, by the said company, on the 23d February, 1837, and 7th July, 1838,, The bill also prayed an injunction against the President and Directors of the Bank of the State of South Carolina, to restrain their enforcing a mortgage to them, of the Charleston Hotel, executed by the Charleston Hotel Company, on the 21st January, 1839, to secure re-payment of a loan, made under the provisions of the Act of June, 1838, “for re-building the City of Charleston,” and the Act of December, 1838, to amend the former Act. The bill prayed process of subpoena against Thaddeus Street, M. T. Men-denhall, A. G. Magrath, J. E. Glover, and William Aiken, trustees, The President and Directors of the Bank of the State of South Carolina, The Charleston Hotel Company, and William Kelly.
Upon this bill being filed, an order was made by Chancellor Johnson, in chambers, on the 13th July, 1840, suspending the execution of the order of sale for foreclosure of the mortgage to Thaddeus Street, and others, trustees. The injunction prayed against the President and Directors of the Bank of the State of South Carolina, was never moved for; and on the 2d March, 1841, in pursuance of the provisions of the Acts of June and December, 1838, they caused the Charleston Hotel to be sold, for satisfaction of, the mortgage to them; and the City Council of Charleston, who, in conformity with the requisition of the Acts of June and December, 1838, had become the guarantors of the loan secured by the said mortgage, became the purchasers of the Hotel.
To this bill, Thaddeus Street, and the other trustees, filed their separate answer, on the 8th February, 1841. The Charleston Hotel Company answered the original and the supplemental bill hereinafter mentioned, together; and William Kelly does not appear to have filed any answer.
The President and Directors of the Bank of the State of South Carolina filed their answer on the 15th February, 1841, and therein explicitly denied all knowledge, notice, or information of the alleged contracts, under which the complainant claimed a lien on the Charleston Hotel, at the time of their loan to the company, and the date of the mortgage executed to secure the same, and until long after all the instalments of the said loan had been paid and advanced to the said company ; and they averred, that if they had had, received, or heard, any knowledge, information, intimation, or surmise, of such lien, or any other incum-brance on the premises, they would not have made the said loan. They insisted, that as the contracts, undtr which the complainant claims, were not recorded, as required by law, such contracts could not affect the prior lien of the mortgage to these defendants, which had been duly registered in the proper office; and that, independently of their legal title, they had an equity superior to that of the complainant, who could not but have known of the intended loan to the Charleston Hotel Company, by these defendants, on the security of a mortgage of the premises, without which loan, as he well knew, the Hotel, which had been entirely destroyed by fire, could not have been rebuilt ; and yet, he not only give no notice to these defendants, of the lien now claimed by him, but also omitted to put the contracts, under which he claims, on record, as required by law, so that the defendants might have obtained notice of them: the first of the said contracts never having been recorded in the office of the Register of Mesne Conveyances, where alone it was req uisite to record it; and the second contract, which was that on which the present claim was founded, never having been recorded, in any office, until all the instalments of the loan, by these defendants, had been advanced by them to the Hotel Company. And these defendants denied that the complainant had any equity against them ; and they claimed the benefit of the complainant’s want of equity against their legal title, in the same manner as if the same had been specially pleaded.
On the 26th April, 1841, the complainant, James H. Page, filed a supplemental bill, to enjoin a writ of execution, in the nature of a fieri farms, which had been sued out by Thaddeus Street, and others, trustees, under a decree in the foreclosure suit, already mentioned, and which, it was alleged, the said parties were about to enforce, by a levy on the furniture of the Charleston Hotel; and also to enjoin an action of trover, for the recovery of the said furniture, which had been brought against the said James H. Page, by the said Thaddeus Street, and others, trustees. The supplemental bill further prayed, that an action of trespass to try title, which had been brought by the City Council of Charleston, to recover possession of the Hotel, under their purchase from the Bank of the State of South Carolina, might be also enjoined. The bill prayed process of subpoena to answer against the said Thaddeus Street, and others, trustees, and the City Council of Charleston.
Upon this supplemental bill, James W. Gray, Esquire, one of the Masters of the Court, on the 26th April, 1841, granted the injunction prayed for against Thaddeus Street, and others, trustees ; but refused a motion for the injunction prayed for against the City Council of Charleston.
On the 15th June, 1841, the defendants, Thaddeus Street, and others, trustees, filed their answer to the supplemental bill; and on the same day, the Charleston Hotel Company filed an answer to the original and supplemental bills.
The City Council of Charleston filed their answer to the supplemental bill on the 15th June, 1841, denying that the complainant was entitled to any lien, either in law or in equity, against them. And they reiterated the allegations contained in the answer of the President and Directors of the Ranh of the State of South Carolina, from whom the defendants had purchased the mortgaged premises; which they were compelled to do, in order to protect themselves against a guaranty, covering this loan to the Hotel Company, which they had entered into, in conformity to the requisitions of the Acts of June and December, 1838, in order to secure the benefit of those Acts to the citizens of Charleston. These defendants further alleged in their answer, that the lot of land on which the Hotel was built, was originally part of a large square, wiiich was purchased from these defendants, on the 26th April, 1836, by Ker Boyce, Le Roy M. Wiley, Henry W. Cornier, and George H. Kelsey, who mortgaged the same to these defendants, to secure payment of the purchase money, amounting to two hundred and forty-six thousand five hundred dollars ; and that afterwards, Ker Boyce, Le Roy M. Wiley, Henry W. Conner, and George H. Kelsey, having sold the lot of land on which the Hotel, (then recently destroyed by the fire of 27th and 28th April, 1838,) had been erected, to the Charleston Hotel Company, and the company being desirous of re-building the Hotel, but not being able to obtain a loan, under the Acts of June and. December, 1838, to aid them in doing so, unless the title was wholly free from in-cumberaqce, these defendants, on the 26th June, 1838, executed a release, discharging the said lot of land from the lien of the mortgage to them, to enable the company to ex ecute the mortgage to the Bank, under which these defendants now claim. And they pray, that if the latter mortgage is now invalidated, the release of these defendants may also be vacated, and the original mortgage to them, again set up and enforced.
The bill, in the Second of the foregoing cases, was filed by the Charleston Hotel Company, on the 20th April, 1841, for an account of the transactions of James H. Page, in the management of the Hotel. It prayed a sale of the furniture; that the said James H. Page might be enjoined from collecting debts due to the Hotel; that. Le Roy M. Wiley, and James Harrall, and all other persons indebted to the Hotel, might be enjoined from paying such debts to the said James H. Page; and that a receiver might be appointed, and the affairs of the concern wound up. The bill prayed process of subpoena to answer, against James H. Page, the City Council of Charleston, Thaddeus Street, M. T. Mendenhall, A. G. Magrath, J. E. Glover, and Wm. Aiken, trustees, and Le Roy M. Wiley and James Harrall.
On the 15th June, 1841, separate answers to this bill were filed by James H. Page; by the City Council of Charleston; by Le Roy M. Wiley; and by James Har-rall ; and a separate answer was also filed by Thaddeus Street and others, trustees, on the 23d June, 1841.
The bill in the third of the said cases was filed by the City Council of Charleston, on the 15th June, 1841, for an account of the rents and profits of the Hotel, and for the appointment of a receiver. The complainants set forth their title to the Hotel, under their purchase from the Bank of the State of South Carolina; and pray that their title may be quieted, and that they may be put in possession of the Hotel. The bill prayed process of subpoena against the said James H. Page, who, since the hearing before Chancellor Harper, to wit, on the 15th February, 1843, has filed an answer thereto.
After the bill of the Charleston Hotel Company in the second of the above mentioned causes had been filed, a motion for a receiver, injunction, Ac., pursuant to the prayer of that bill, was made before Edward R. Laurens, Esquire, one of the Masters of this Court, who refused the same ; and at the sitting of the court in July, 1841, the two first causes came on for hearing before Harper, Chancellor, and at the same time, a motion was made for a receiver, pursuant to the prayer of the bill in the third cause. On the 13th May, 1842, his Honor filed a decree in the said causes, from which decree, and the foregoing abstract, and the grounds of appeal, and documents thereto appended, the questions arising out of the pleadings and evidence, and made at the hearing, and now submitted to the Court of Appeals, will probably be sufficiently understood.
Harper, Cli. In 1837, the Charleston Hotel Company, being engaged in the construction of a large building, to be used as an hotel, entered into a correspondence with the complainant in the first stated case, then residing in Baltimore, for the purpose of inducing him to take charge of it as landlord. Terms were settled, and on the 23rd of February, 1837, an agreement was entered into between the said complainailt and the Hotel Company, for the keeping of the hotel for the term of seven continuous years, to commence on the day that the building should be finished and furnished. It was recorded on the 9th of May, 1838. The building was finished and furnished, and the complainant entered into possession; but on the night succeeding the day of his taking possession, it was consumed by fire. The Company resolved to rebuild the hotel; but upon their suggestion, it was resolved that there should be a modification of the articles of agreement, as originally entered into. Accordingly, on the 7th of July, 1838, an agreement was signed, entitled, “Articles of agreement, as originally entered into, between the President and Directors of the Charleston Hotel Company, for and on account of the Charleston Hotel Company, and James H. Page, on the 23rd day of February, 1837, and amended and modified by the said parties this 7th day of July, 1838.” By these it was stipulated that “ The said parties have agreed for the keeping of the hotel, now in progress of construction in Meeting-street, by the said James H. Page, for the term of seven continuous years, to commence ón the day the building shall be finished and furnished, which day shall be indorsed by the said parties on this memorandum, upon the following terms, to wit. That the said James H. Page, as landlord of the said hotel, shall provide for the same, but shall contract no debts on account of the concern, without first obtaining the sanction of the board of directors of the company. That he shall procure and engage all waiters and servants, and the same discharge at will and pleasure; reside with his family in the hotel, but free of all charge for board or rent; conduct the same in the manner contemplated by these presents, and have the sole and exclusive management thereof, bestowing upon it his entire attention; that the furniture shall be procured and purchased by the said Charleston Hotel Company, and shall be considered as part of the capital invested, but shall, at the expiration of the said term, be returned to them by the said James H. Page, or his personal representative, in the like order and condition in which they will be received by him, (ordinary wear and tear and unavoidable accidents excepted.) It is understood that the amount of forty-five thousand dollars shall be expended in the furniture of the house, and that of that amount, the sum of thirty thousand dollars shall have been purchased and placed in the hotel, before the house shall be considered-ready for occupation, and the balance shall be purchased within six months after commencement of operations, if required by the said James H. Page.
“ That the said James H. Page shall keep constantly in his employment a competent book-keeper, who shall keep the books of the said hotel, according, as nearly as possible, to the most approved checks and usages adopted by well regulated mercantile establishments. Should the directors consider the said book-keeper incompetent, or otherwise disapprove of him, he shall be discharged by the said James H. Page, on the aforesaid directors making known that wish to him; and James H. Page may discharge him at any time, and procure another book-keeper, subject to the same disapproval by the parties. The books of the establishment shall always be open for the examination of any member of the board of directors, and shall be balanced on the first day of each and every month, so as clearly to exhibit the gross receipts of every month, the expenditure of the same, and the cash on hand. The nett profit's remaining on hand at the expiration of every year, and after deducting the expenses of the hotel, shall be disposed of in the following manner, viz: If the said annual profits shall amount to the sum of ten thousand dollars, the said James H, Page shall be entitled to five thousand dollars, and the said company to the other five thousand dollars. If the said annual profits amount to fourteen thousand dollars, the said James H. Page shall be entitled to six thousand dollars, and the said company to eight thousand dollars. If 'the sum shall amount to sixteen thousand dollars, the said James II, Page shall be entitled to seven thousand dollars, and the said company to nine thousand dollars. If the said annual profits amount to the sum of twenty thousand dollars, the said James H. Page shall be entitled to eight thousand dollars, and the said company to twelve thousand dollars. And if the said annual nett profits exceed the sum of twenty thousand dollars, of the excess over and above the said sum of twenty thousand dollars, the said James H. Page shall be entitled to two-fifth parts, and the said company to three fifth parts. Should the nett annual profits fall short of ten thousand dollars, the said James H, Page shall,- nevertheless, and at all times, be entitled to the sum of four thousand dollars, as an annual compensation for his services; and if the nett annual profits amount to any intermediate sum between those specified in the above, the sum shall be divided between the parties pro rata, according to the said scale. It is further agreed between the said parties, that in ascertaining the said nett profits, no account shall be taken as charged against the said James H. Page, either for rent, or interest of the capital invested in the building and furniture ; and also that the said company shall keep the house and furniture under insurance; and in case of the destruction of the same by fire, during the continuance of the said term of seven years, the same shall be rebuilt and furnished, and again placed under the care of the said James H. Page, on the same terms and conditions as herein mentioned, for the remainder of the said seven years ; the said James H. Page to receive during the rebuilding and furnishing thereof, the sum of four thousand dollars per annum. Provided, that it shall not be obligatory on the said company to rebuild and refurnish the hotel, should they fail, in any material extent, to receive the amount of their policies of insurance. It is further understood and agreed, that on the first day of every month, the nett profits appearing on the books may be drawn by the parties, in proportion to their respective interests, as established by the foregoing scale; and the sums so drawn, shall be accounted for and allowed in the annual division of the nett profits. It is also understood and agreed, that this contract, or agreement, and the right of the said James H. Page to keep the hotel, is purely personal, not transferable to any one whatsoever, by the said James H, Page, nor in any manner liable for his debts. But if the said James H. Page should die before the expiration of the second year, and before the commencement of the seventh year of the term, the personal representative of the said James H. Page shall receive from the company the sum of five thousand dollars; and if the death of the said James H. Page occur at any time during the seventh year of the term, the personal representative of the said James H. Page shall receive from the company a sum of money, to be named by three referees, of whom one shall be nominated by either party, and the third by the two so named. It is also understood and agreed, between the said parties, that the said James H. Page, in the management of the hotel, will establish and maintain a system of strict accountability from the servants or agents under him, to himself, as is to be found in the most approved managed hotel in the United States.” Signed and sealed by the President of the company and James H. Page. This contract was recorded in the Secretary of State’s office, on the 30th of March, 1839. On the 24th of October, 1839, the building being finished and furnished, in pursuance of the contract, the complainant in the first case was put into possession, and a memorandum made on the contract.
The Hotel Company being desirous to avail themselves of the benefits of the Act of the Legislature of June, 1838, “ for rebuilding the Oity of Charleston,” applied to the Bank of the State of South Carolina for a loan; and on the 21st of January, 1839, executed to the bank a bond, in the penalty of $150,000, conditioned for the repayment of all loans the bank might make to the company, together with a mortgage of the lot on which the hotel was to be built. This mortgage was recorded in the office of the Register of Mesne Conveyances, the day after its execution. On the said 21st of January, 1839, the Bank advanced to the company the sum of $25,000; on the 8th of February, 1839, the further sum of $25,000; and on the 12th of July, 1839, the further sum of $25,000; in all, $75,000. Before making the loan, certificates were produced from the offices of the Clerk of the Court of Common Pleas ; of the Clerk of the City Court; of the Clerk of the Circuit and District Courts of the United States; of the Register in Equity; the Register of Mesne Conveyances ; and the Sheriff of Charleston District. These being-submitted to the Attorney General, he certified his satisfaction with the title, and the loan was effected. No certificate was produced from the Secretary of State’s office. It was stated by the Attorney General, that by the original draft of the regulations for carrying into effect the Fire Loan Act, prepared by himself, no certificate was required from the Secretary of State. It is required by the printed regulations, which were in existence This requisition was said to have been added by the Bank, on account of marriage settlements.
For the purpose of procuring the necessary furniture, the company was desirous of borrowing the promissory notes of a number of individuals, to the number of forty, for $1000 each. These were lent accordingly; and for the purpose of indemnifying the trustees, the company, by their President, executed their bond, dated the 23d day of May, 1839, in the penal sum of forty thousand dollars, to T. Street, M. T. Mendenhall, A. G. Magrath, J. E, Glover and Wm. Aiken, in trust for the lenders of the notes; and for the same purpose, a mortgage of the house and furniture. Schedules of the furniture, as it was afterwards purchased, were made and annexed to the mortgage. There is no doubt, from the evidence, but that the lenders of the notes had full notice of the complainant’s contract. The evidence is, that upon the execution of the mortgage, at a general meeting of the lenders of the notes, the complainant requested that it might be made subject to his contract, and was told by the President of the company, that he would do nothing to impair his contract.
On the 27th of June, 1840, the trustees of the lenders of the notes filed their bill in this court against the Hotel Company, for the purpose of foreclosing their mortgage on the house and furniture. To this the company answered, admitting the charges of the bill, and a decree by consent was obtained, for the sale of the house and furniture. On the filing of the present bill, however, on application to Chancellor Johnson, an order was made, directing the execution of the decree to be suspended until the further order of the court. The trustees, however, issued an execution on their decree, which they “ lodged to bind” in the office of the Sheriff of Charleston District. They have also brought an action of trover for the recovery of the furniture, against the complainant, Page, which has been enjoined by the Master.
The arrears of interest on several instalments of the bond of the Hotel company, to the Bank of the State of South Carolina, being unpaid, the Bank, by virtue of the authority given to it by the “ Act for rebuilding the City of Charleston,” advertised the Hotel for sale; and on the 2d of March, 1841, it was accordingly exposed to sale at public auction, and bid off by the defendants, the City Council of Charleston, at the price of $84,622 23. The said defendants having complied with the terms of sale, the Bank, on the same day, executed to them a conveyance of the lot and hotel in fee simple. The City Council, by their answer, deny that at the time of making the loan, and taking the mortgage, the Bank had notice of complainant’s contract, and claim to be protected as purchasers from a bona fide purchaser without notice. The City Council have commenced an action of trespass to try title against the complainant, Page, to recover possession of the Hotel, having given him notice to quit. The objects of this bill are, that this action at law may be enjoined, as also the action of trover for the recovery of the furniture; and generally, that the complainant may be quieted in his possession of the premises, according to the terms of his contract.
The second bill, that of the Hotel Company, is for an account of the transactions of the defendant, Page, in conducting the Hotel. They charge, that the said defendant, Page, is a partner with them, and jointly liable for the debts of the firm, to the payment of which they pray he may be compelled to contribute. They charge, that he is conducting the business of the firm in his own name, and suing for the debts of the firm in his own name; and more particularly, that he is prosecuting suits against L. M. Wiley and James Harrall, on accounts for boarding, (fee., who are creditors of the firm, holding the notes of the Hotel Company. The said Wiley,and Harrall, who are made defendants, claim to set off their demands against their debts for boarding, &c. The bill prays a sale of the furniture ; that the defendant, Page, may be enjoined from collecting debts ; and that a receiver may be appointed ; and that the affairs of the firm may be wound up.
The third bill, that of the City Council, is likewise for an account of the profits of the Hotel, since they became the purchasers; and that the defendant, Page, may be compelled to give, up the possession. They pray that defendant, Page, may be compelled to give security, for any amount that may be found due to them, or that a receiver may be appointed, and that Page may be enjoined from collecting debts. They charge, that the agreement for the keeping of the Hotel will be an impediment to the successful prosecution of their action of trespass to try title, and pray that he may be enjoined from setting it up.
The first question relates to the relief claimed by the complainant, Page, by the first stated bill; whether the agreement for the keeping of the Hotel is such an one as this court would specifically enforce, or restrain one of the parties from violating; and it will disembarrass the case to consider it, in the^first place, as if it were between the original parties to it, without respect to any claims of purchasers or creditors. That is to say, had there been no sales or mortgages, and supposing this to be merely an equitable agreement, if the Hotel Company had given Page notice to quit, and demanded the furniture, and then brought their actions at law, would they have been restrained by this court 1 I am of opinion that they would. I need not say, that there are many agreements which this court will execute, when there is no adequate remedy at law; and in general, I should say, that the court will execute. any agreement which involves the disposition of land. The books are full of cases in which bills have been sustained, to enforce the specific performance of an agreement for a lease, or the warrant of a lease. So, no doubt, for the performance of an agreement for partition in a specified manner. In Penn vs. Lord Baltimore, 1 Yes. 443, a bill was sustained in England, to enforce the performance of an agreement for settling the boundaries of Provinces in America. In Legará vs. Hodges, 1 Ves. Jun. 477, it is laid down by Lord Thurlow, as a maxim of universal application, “that wherever persons agree concerning any particular subject, that, as against the party himself, and all claiming under him, voluntarily, or with notice, raises a trust.” That w7as a case in which the defendant covenanted to set apart, and pay, one-third of the income of certain specified estates, to certain trustees. He afterwards sold and conveyed the same estates to other ■■ rustees, in trust, to raise £1,000 annually for himself, and • o pay off the debts and incumbrances. It was contended that the covenant was a merely personal one, and the remedy at law; but it was held, that it constituted a lien on the estates. In Ronndell et ux. v. Breary, 2 Vern. 482, there was a covenant to settle lands, of the value of £150 per annum. The covenanter died without -making any settlement, and it was held that the covenant was a lien on his lands in the hands of his heir. The authority of this case was recognized by Lord Hardwicke, in Deacon vs. 8mith, 3 Atk. 327. “ A covenant to settle or convey particular lands, will not, at law, create a lien upon the lands ; but in equity, such a covenant, if for valuable consideration, will be deemed a specific lien on the lands, and decreed against all persons claiming under the covenantor, .except purchasers for valuable consideration without notice.” 1 Fonbl. Eq. 367, n. d. Many covenants to purchase and settle lands, have been specifically enforced. But as to the Hotel itself, and as against the Hotel Company itself, I think there can hardly be any question. Then as to the furniture, there is no doubt that there are many cases, in which this court will enforce an agreement relating merely to personalty, where there is not an adequate remedy at law. In Weymouth vs. Boyer, 1 Yes. Jun. 11-16, there was an agreement for the sale of tobacco, but the property was not transferred. The tobacco was placed in the hands of a factor to be sold, and it was held by Buller, Justice, who heard the case, that although an action for money had and received might have been maintained, yet that, in its nature, it was an equitable action, and that a bill was properly brought to recover the proceeds. Similar in principle is the case of Plunkett vs. Carew, 1 Hill Ch. 169. In the case of Buxton vs. Lister, 3 Atk. 388, Lord Hardwicke puts several instances of cases in which agreements relating to personalty will be enforced, though sounding in damages, where the party cannot otherwise have the full benefit of his contract. But none of the cases are so strong as the present. It is too plain to be argued, that the complainant’s contract in relation to the Hotel, which he has a right to have enforced, would be defeated altogether, unless he could also have the furniture.
This is not, as suggested in argument, a bill to enforce the specific performance of an agreement for a partnership. Though it is said by Lord Hardwicke, in the same case of Buxton vs. Lister, (supra) “Suppose two partners should enter into an agreement, by such a memorandum as is in the present case, to carry on a trade together, and that it should be specified in the memorandum, that articles should be drawn pursuant to if, and before they are drawn, one of the parties flies off. I should be of opinion, upon a bill brought by the other in this court, for a specific performance, that notwithstanding it is in relation to a chattel interest, a specific performance ought to be decreed.” Yet, supposing this to be a partnership, (and possibly there might be such a partnership, though I know of no precedent for such a partnership as that between a corporation and an individual; and there would seem to be an inequality in it, inasmuch as the individual would be liable for partnership debts to the whole extent of his property, while the corporation would only be liable to the extent of the corporate funds,) it was already carried into effect, and in operation. If this be a partnership agreement, the covenant to furnish the house and furniture does not constitute it such. That is merely accessary to the partnership. The house and furniture are the individual property of one of the partners, who has stipulated to provide them for the partnership business. The carrying on of the hotel constitutes the partnership business, and the debts contracted for that purpose, for wines, provisions, servants, wages, (fee. are the partnership debts. One is the dormant partner, and the other the active one, having the exclusive right of control and management. Suppose, in the case of a mercantile partnership, one of the partners to have stipulated to furnish the storehouse and fixtures; that he has done so accordingly; that the goods have been purchased; and the acting partner in possession of them and the house ; and the business of the firm in full operation. Suppose the dormant partner then to give his co-partner notice to quit, and bring his action at law for the house; if there could be no defence at law, would there not be the strongest and plainest equity for this court to restrain him'? How could a jury estimate the damages to result, from being unable to find an equally advantageous situation for the business; from putting an end to the business ; the profits that might be made, or the losses sustained, in the course of the business 1
It is hardly uecessary to say that the complainant, Page, cannot be regarded as a mere agent, and the corporation as the true landlord and keeper of the Hotel, exclusively liable to guests, if it should fail to provide properly for them, or if they should lose their property. That he was to re ceive a part of the profits, would at least make Page a ■partner, and proportionably liable. But it would be a singular agency, in which the principal had no right to interfere with, or in any degree control, his own business. By the terms of the agreement, the members of the company had no right to enter the Hotel, in their character of corporators, unless for the purpose of inspecting the books ; and the only control which the company could exercise, was that, upon signifying their disapprobation, Page was bound by the covenant to dismiss the book-keeper. He was “ to have the sole and exclusive management,” and every thing to b’e conducted absolutely at his discretion.
But I am of opinion, that this was a lease at law from the Hotel Company to the complainant, Page, and not merely an equitable agreement for one, or that he should have possession. What is a lease? It is said, (Co. Lit. 48 b.) that no particular form of words is necessary to constitute a lease. According to Bla'ckstone’s definition, (2 Com. 315,) “A •lease is .properly a conveyance of any lands or tenements, ’(usually in consideration of rent, or some other annual recompense,) made for life, for years, or at Will; but always for ■a less time than the lessor hath in the premises, for if it be •for the whole interest, it is more properly an assignment than a lease.” The words demise, lease, and to farm-let, ■are the proper ones to constitute a lease; but any other words which shew the intention of the parties, that one ¡shall divest himself of the possession, and the other come into it, for a certain time, whether they are in the form of a ■covenant, a licence, oran agreement, are of themselves sufficient, and will, in construction of law, amount to a lease, ■as effectually as if the most proper words had been used for that purpose. 4 Cruise's Dig. 67. If there be a license -to come upon land, and take the profits for a year, ■this is a lease fora year. Anon. 3 Salk-. 223, In Roe vs. Ashburner, 5 T. R. 163, by articles of agreement, one of the patties covenanted that the other u shall enjoy, and I engage to give Mm a lease,” of certain premises, frota a certain day. There was also a stipulation, that the first party should purchase some additional land to be added to the premises. It was said by Lord Kenyon, delivering the ■opinion of the court, that if there had been nothing more than the stipulation that the party should enjoy the pre-. mises, this would have amounted to a lesse; but the ad-, ditional words, “ I engage to give him a lease,” shewed that the contract was executory ; which was strengthened by the circumstance, that an additional piece of ground was to be purchased, without which there was to be no lease. And iu Goodtitle vs. Jfay, 1 T. R. 735, there was. a similar stipulation for a future lease. There is some ‘discrepancy in the cases, which are collected 4 Cruise’s Dig. 68, et seq. but there is no case, in which it has been sufficiently expressed that the party shall have possession and enjoyment of the premises for a certain time,, without, any agreement for a future assurance, that has not been held to amount to a lease. It is said, that a lease must have a certain commencement, and a certain termination ; but that is certain which can be rendered certain. As in the case of Barry vs. N'ugent, cited in Dm vs. Ashburner, {supra,) where the party devised the premises from the time he should recover them, or where a lease was grants ed for twenty-one years, if the lessee should so long live, So it is said, that although a lease must have a certain beginning, and a certain termination, yet the continuance may be uncertain, for it may cease and revive again, Co. Lit 46, a.
Now, taking the whole of this agreement together, .can there be any question but that the Hotel Company do agree to divest themselves of the possession for the sped-, fied time, and that Page shall have the exclusive posses-, sion, receiving the entire issues and profits'? He is to have the exclusive management and control. The agreement, too, uses technical words, appropriate to a lease. It provides for the re-building of the Hotel, if it should be burnt during the continuance of the term, and makes provision for the contingency of Page’s dying during the continuance of the term. Lease and term, for years, are often used as. words .convertible. That the matter was so understood, by the company itself, is unquestionable. In the first over-, ture of their agent to Page., he is requested to become a candidate for the lease of the Hotel. On the minutes, of the company, which were in evidence, the resolution of the 16th February, 1837, provides for letting out the Hofei, and renting the stores. Again and again, the contract, on the minutes of the company, is spoken of as a lease, and Page as their tenant.
Nor does it make any difference, that instead of a fixed annual sum, the lessee was to pay a specified proportion of the issues and profits, as rent. As observed by Blackstone, (2 Com. 318,) originally the common mode of renting lands, was to reserve a portion of the produce; and this is still, at least in some portions of this country, no uncommon practice. The words, to farm-let, technically imply this sort of reservation of rent. Nor does the stipulation, that if the profits shall not amount to $10,000, annually, the lessee shall still be entitled to the annual sum of $4,000, make a difference, any more than if, in the case of a farm, it were agreed that if the profits did not amount to a certain sum, the tenant should take them for his personal services. Nor do I think it would have made a difference, if it had been stipulated, that if the profits did not amount to $4,000 per annum, the company should pay, and make up to Page, that sum, though such are not the terms of the contract, the parties, probably, not contemplating the possibility of their falling below that sum. Nor that it is stipulated, that Page shall reside with his family in the Hotel, without, being charged for rent, or the interest on capital. Taking the whole contract together, it means, that he shall pay no other rent than the specified share of profits. When rent is to be paid in kind, or by a share of the profits, there is always a contingency, that the landlord will receive nothing; for it may always happen, that the expenses will exceed the profits. Nor do I think it makes a difference, that the contract is declared to be strictly and purely personal to Page himself, and not transferable to any other person. This was a covenant on his part, (a very common one,) not to underlet. There is rather a curious analogy, in several particulars, between the case of Right vs. Proctor, 4 Burr. 2208, and the present. Green, the owner of a brew-house, who had covenanted to sell an undivided portion of it, covenanted that the trade should be carried on between Green, Ekins and Proctor, and that £300, allotted for the yearly rent of the house, should be paid by Green, (the owner.) He covenants, also, thatProc tor should reside and dwell in the house, free of all rent, except taxes, and should be allowed certain perquisites, and receive £6, 6s. weekly, for his trouble, &c.; and covenanted, that if he should die, his executor should renew the lease to Proctor. In an action of ejectment by Green, against Proctor, for the house, Lord Mansfield said, he could not recover against his own covenant. The house was to be appropriated to the use of the trade, and Proctor to have the use and occupation of it, and receive perquisites. It was said by Mr. Justice Yates, that even as a license to inhabit, it amounts to a lease. Justices Aston and Willis concurred. In the case of Marker vs. Birkbeck, 3 Burr. 1556, which was cited in argument, the writing could not be given in evidence as a lease, for want of being stamped, as required by the English law; and it shewed that the alleged lessee was not entitled to the exclusive possession. It was a license to raise lead ore, and the alleged lessor was to keep up a smelting furnace on the premises, and to smelt the ore, and receive every sixth pig of metal. Lord Mansfield is made to say, that this is no lease, because nothing is reserved to the lessor. But if the lessees had been entitled to the exclusive possession, covenanting to pay one-sixth part of the lead they should raise on the premises, I do not know how it could be said that nothing was reserved.
I have thus far considered the case as if the Hotel Company were alone concerned. With respect to the mortgagees of the furniture, there is no doubt but that they had full notice, and can stand in no better condition than the company itself.
There is more doubt with respect to the City Council. If there be a lease, good at law, I suppose it would prevail both against the Bank and the City Council, unless there were something to invalidate it. It is alleged that it is void, for want of being recorded within three months. If there be an Act of the Legislature requiring a lease to be recorded within three months, it has escaped me. The Act of 1785, requiring conveyances to be recorded within six months, does not relate to leases for years. It relates only to the conveyances of “ any estate of inheritance, in fee simple, or any estate for life or lives.” If it is embraced by any statute, it must be that of 1698, declaring that the first sale, mortgage, or conveyance of lands, recorded in the office of the Register of Mesne Conveyances, and the first sale of chattels recorded in the Secretary of State’s office, shall have priority. Now, in one sense, a lease for years is certainly a conveyance of lands. Yet it is not commonly so spoken of, and in construction of law, it is regarded as the sale of a chattel interest. The reason may be found Bac, Ab. Tit. Leases and Terms for years. Originally, the term itself was not recoverable, but only damages for breach of covenant, I cannot say that this lease was not properly recorded.
The contract of the 22d February, 1837, was recorded before the mortgage to the Bank. The modifications of it, by the agreement of the 7th July, 1838, are such as do not concern the Bank or creditors. It is no less substantially the same contract, than if,the modifications only had been written down, leaving the former to stand as the subsisting contract. The term, by both, was the same, viz: seven continuous years from the time of taking possession. Regarding this as notice, according to the decision in Thayer vs. Owner, 1 M’C. Ch, 395, and the view I have taken in Thayer vs. Davidson, 1 Bail. Eq. 412, the Bank had sufficient notice.
But independently of this, I have some difficulty in saying that the lease to Page was an incumbrance, against which the Bank had a right to be protected, if the mortgage was taken without notice of it. In England, a leuse by a mortgagor after the mortgage, is void against the mortgagee; because the mortgagee is the legal owner of t,he land. But this will hardly apply in this country, and the lease in question was made before the mortgage. Of course, the Bank knew that the Hotel was to be rented. If was involved in the very nature of the transaction. The corporation could not, in proper person, be the keeper and landlord of the Hotel, and it must have been known, that it was to be kept under some lease, or contract; and this added to the security of the Bank. Undoubtedly, the value of the property would have depreciated, if it had been left tenantless. By the terms of the loan, under the Act of Assembly, the first instalment was to be re-paid within three years, and the last, after a lapse of thirteen years. Was the house to remain untenanted during all that time? According to the evidence of Major Black, the former President of the company, this particular contract with Page was regarded as an advantage, and as adding to the value of the property, on account of his qualifications as a landlord.
Then it was said in argument, that if there is a lease, this is a defence at law, and this court ought not to interfere. But the answer of the City Council takes no exception to the jurisdiction, on the ground of adequate remedy at law; and according to the decision in Miller vs. Furse, 1 Bail. Eq. 187, this is necessary to be done , and the objection cannot be taken for the first time at the hearing. On the contrary, so far as in its power, it has given jurisdiction. It alleges that the agreement of the Hotel Company is an obstacle to a recovery at law, and claims the interposition of this court. And it alleges truly. At law, there is no plea of bona fide purchaser Without notice, and whatever defence would be good against the Hotel Company, would be good against the City Council; and according to the decision of Lord Mansfield, in Right vs. Proctor, and in Marker vs. Birkbeck, supposing the agreement to be only a covenant for possession, this is a good defence at law. So in Weakley vs. Bucknell, Doug. 473, he held an agreement for a lease to be a good defence at law.
But regarding it as merely an equitable agreement. It is said, that to supply the want of registration, full and explicit notice is necessary; to repel the plea of purchaser without notice, any thing that is enough to put the party on enquiry, will suffice. Now, in point of fact, I have not die slightest doubt, but that at the time the loan was made and the mortgage taken, every director and every officer of the Bank, knew that Page was to keep the Hotel, when finished; and of course, to keep it under some contract, entitling him to the possession. This, according to authorities, to Which I shall advert hereafter, was enough to put them on enquiry. The Attorney General, who examined and approved the title, stated that he had heard it. This, I should have thought sufficient notice, but for the principle laid down by Lord Hardwicke, in Warrick vs. Warrick, 3 Atk. 294, that where the same person is agent for the mortgagor and mortgagee, notice to such agent will not affect the mortgagee. The Attorney General was at the same time agent of the Hotel Company, for the purpose of clearing up the title. Several members of the Hotel Company were Directors of the Bank. The witness, Major Black, stated that it was notorious that Page was to keep the Hotel. Mr. Logan said, he believed that every body in town knew that Page was to keep the hotel.
Then with respect to the City Council, even although the Bank might have resisted the performance of this agreement, I do not think it comes within the principle, that a purchaser from a bona fide purchaser without notice, though having notice himself, is to be protected. That they purchased pendente lite, is, of itself, enough to affect them with notice. Bat it is a general principle of equity, that a purchaser of land, knowing it to be in possession of another at the time of the purchase, is presumed to have notice of every equity which the tenant has, in relation to the land; as where there was a covenant for the renewal of a lease, or the tenant had contracted for the purchase of the land. Taylor vs. Stibberl, 2 Yes. Jun. 437; Hiarn vs. Mill, 13 Yes. 114; Daniels vs. Davidson, 16 Ves. 249. It is not questioned, but that the City Council had full knowledge of Page’s being in possession.
I feel more satisfaction in arriving at my conclusion, because it is evidently conformable to the right and justice of the case. As I have said, there can be no doubt but that the Bank, in making the loan, and the City Council in making the purchase, had substantial notice of Page’s contract, and consequently, that it ought to be enforced against them, as well as against the Hotel Company itself. A sort of soreness seemed to be felt, on the part of those who were concerned in the constructing of the Hotel, that while it has been a source of loss to all others engaged in a public spirited enterprize, it has afforded large profits to the landlord, Page. But I think it will be found, upon calmer reflection, that these views and feelings are entirely misconceived. Either the hotel Company complain that they have made too liberal a contract, too favorable to Page, and seek to get rid of it on that ground, which I am sure they wou,d not be willing to do, or they complain that their enterprize, so far as he is concerned, has been too successful. If he has made large profits for himself, he has made larger for the company. It is true, ño money has been paid over to them ; but it appeared in evidence, that up to the 27th of May, 1840, in pursuance of a resolution to that effect, the entire profits were consumed in completing and furnishing the house. But this was no less to the advantage of the company, and its creditors, than if the money had been paid over. More so, indeed. By enlarging the power of affording accommodation, the profits were to be increased, and the furniture Would remain for their benefit, at the expiration of the contract. If these profits were not properly applied, Page is accountable for them, as well as for any he has made since. For any thing that appeared in the cause, he has honestly, diligently, and skilfully performed his part of the contract. It would be obvious and gross injustice, when he has been induced to quit a similar employment, for the purpose of taking charge of this, now to turn him adrift, leaving him to his action for damages, against a Company which avers itself to be utterly insolvent.
The various questions made by the answers, and cross-bills, for the most part result from that confusion of ideas which is apt to be occasioned when the same parties stand in various relations. The Hotel Company, and the City Council, claim an account, and to this they are entitled. But the bill of the Hotel Company prays that Page may be declared a partner with them, and liable for the partnership debts. Supposing a partnership to have existed, undoubtedly he is liable for the partnership debts. But, as I have said, the partnership debts were those contracted for supplies to the hotel, servants’s wages, <fec. The firm consisted of the Hotel Company and Page. If, as alleged, he was a member of the Company, his individuality was merged in his character of copartner. The debt to the mortgagees of the furniture, to the Bank, <fcc., were the private debts of one of the partners. So with respect to the debts of Harrall and Wiley. At law, you cannot set off the debt of one part ner, in an action by the firm. And in equity, the right of creditors oí assignees, of one partner, is to the amount that may be found due to him, on the final winding up of the concern. But this is a question for the Court of Law. I know of -no principle of equity by which Page should be restrained from collecting the partnership debts. When there is an acting and a dormant partner, it is common that suits should be brought in the name of the former. His name is the style of the firm. There would be something unusual in a suit by the Charleston Hotel Company, and James H. Page, hotel keepers, under that style and title. There was no evidence at ail shewing the necessity of appointing a receiver. Whether this court' would carry specifically into effect an agreement for a partnership, or not, when it is in the independent power of the acting partner to carry on the business, it will not interfere to dissolve it at the instance of the other partner, and contrary to his agreement.
It is ordered and decreed, that the complainant, in the first cause, account before the Master, for the income and profits of the hotel, since he has been in possession of it; the share of the profits reserved to the Hotel Company, to be paid to the parties entitled to them, according to their respective interests ; and that the Master report how the said profits ought to be apportioned, between the mortgagees of the furniture and the owners of the hotel. And it is further ordered, that the City Council of Charleston be enjoined, until the further order of the Court, from prosecuting their action at law7, to recover the possession of the said hotel; and the mortgagees of the furniture, from prosecuting their action of trover ; and that they be also restrained from enforcing their execution, under the decree of this Court for foreclosure.
Grounds of Appeal by the Bank of the Slate of South Carolina.
Tire President and Directors of the Bank of the State of South Carolina, parties defendants to the original bill in this cause, and from whom the City Council of Charleston purchased the premises in dispute, at a sale made during the prendency of the suit, under the mortgage to these defendants; the said City Council of Charleston being guarantors of the debt to these defendants, which the said mortgage was intended to secure; and no injunction against the said sale having been granted, or moved for, by the complainant, as prayed for in his bill, although due notice was given, and ample time allowed for making such motion, the said sale not having been made until nearly ten months after complainant’s said bill was filed; respectfully appeal from so much of his Honor’s decree as declares that the complainant is entitled, under his contract with the Charleston Hotel Company, to hold the premises in dispute against the mortgage to these defendants executed by the said company, and enjoins the said City Council of Charleston from prosecuting their action at law, against the complainant, to recover poséession of the said premises, by virtue of their purchase aforesaid from these defendants. And in support of their said appeal, they rely upon the following grounds.
1. That the complainant’s original contract with the Charleston Hotel Company, which bears date the 23d February, 1837, was not recorded in the office of the Secretary of State, until the 29th May, 1838, and was never recorded in the office of the Register of Mesne Conveyances at any time; that by the provisions of this contract, the complainant’s term of seven years was to commence from the day of his being put in possession, and it appears by the decree, that, he was put in possession, and that his term commenced, on the 26th April, 1838; but that his contract was modified, and, in fact, rescinded, by the second contract, of the 7th July, 1838, which substituted a new term of seven years, to commence from the complainant’s being put in possession of the new building, which took place on the 24th October, 1839 ; and that this second contract, although bearing date the 7th July, 1838, was not recorded in the office of the Secretary of State until the 30tíi March, 1839, nor in the office of the Register of Mesne Conveyances, until the 12th May, 1840; both of these last mentioned dates being subsequent to that of the mortgage to these defendants, which was executed on the 21st January, 1839, and duly recorded in the office of Register of Mesne Conveyances on the 22d January, 1830. Wherefore it is respectfully submitted, that even if the original contract were not rescinded by the second, and if either, or both of them, could be regarded as more than a merely personal contract, for a breach of which his only remedy is a compensation in damages, and whether the same be a lease, or a contract of any sort, which equity would specifically enforce by a decree for possession, yet, in any and every character, they are wholly unavailing against the mortgage to these defendants; first, under the 1st section of the Act of 1698, 2 Statutes at Large, 137, which, according to the construction given to it by the unanimous judgment of the Constitutional Court in the case of Ex Parte Leland, 1 N. & M. 460, requires leases for years, as well as other conveyances of lands, to be recorded in the Register’s office, and gives the preference to that which is first recorded there; and second, under the 1st section of the Act of 1817, which provides, “ that all leases, or contracts in writing, hereafter to be made between landlord and tenant, for a longer term than twelve months, shall not be valid in law against the rights and claims of third persons, unless the same shall have been recorded in the office of Mesne Conveyances, at least within three months from the time of the execution thereof; nor shall any payment made in anticipation of rent for a longer period than twelve months, be considered a valid discount against the claims and rights of third persons.” Vide 6 Statutes at Large. 67.
2. That the proposition intimated in the decree, to wit: li that the lease to complainant was not an incumbrance, against which the bank had a right to be protected, if the mortgage was taken without notice of it,” cannot be sustained by principle or authority, and is equally inconsistent with the letter and the spirit of the registry Acts; it being respectfully submitted, that whatever confers upon a third party a right to the possession or to the enjoyment of any interest, which the mortgagor himself is precluded by his mortgage from setting up, exercising or enjoying, against the mortgagee, is an incumbrance, against which the mortgagee is protected by want of legal notice; and if the instrument by which such right or interest is created or granted, has not been recorded in the manner which the registry Acts require, for the purpose of giving notice, then, by the express provisions of these Acts, such right or interest, as well at law as in equity, “ shall not be valid against the rights and claims” of the mortgagee.
3. That although actual notice may supply the place of recording, yet in this case, there was not only no direct proof of notice to these defendants, nor proof of any facts from which notice could be reasonably inferred to them, or to any of them, or to any of their officers, but notice is most explicitly denied in their answer; and it was, moreover, distinctly proved, at the hearing, that the officer on whom, by law, devolved the duty of making the investigation in this case, had no notice whatever of the claims of complainant, at the time of the loan to the Charleston Hotel Company, on the security of the mortgage to these defendants, and that the loan would have been arrested, if there had been the slightest information, intimation or surmise, that such claims existed.
4. That his Honor was mistaken in supposing that the printed regulations established by the Bank, among which was one requiring certificates from the office oí the Secre-tacy of State to be produced on applications for loans under the Act of 1838, for re-building the city of Charleston, were in existence at the time of the loan by these defendants to the Charleston Hotel Company; the evidence being distinct, that the regulation in question was not introduced, nor were any of the regulations printed, until some time after that loan had been made. And even if such regulation had existed, it could not avail against the positive proof, that the office of the Secretary of State was not in fact searched ; nor, if it had been searched, is there ■•my reasonable probability, that such search would have led to a discovery of the complainant’s claims; the contract of 7th July, 1838, not having been recorded at that time, even in the office of the Secretary of State; and the contract of 23d February, 1837, not being in the corporate name of the Charleston Hotel Company, which was then incorporated, nor in the names of the persons in whom the legal title to the land was then vested, which were the only names the most careful examiner could have thought of searching for. Besides which, an actual in spection of that contract would scarcely have suggested that it was regarded as a conveyance of, or a lien on, the land, being declared in the body of it to be “ strictly and purely personal.”
5. The proposition maintained in the decree, that the knowledge, by these defendants, of the general rumor that the complainant was to be keeper of the hotel, when finished, was sufficient to put these defendants upon inquiry, and, therefore, to fix them with notice of what is now declared to be a lease, if it be tenable at all, must be limited to fixing these defendants with notice of a parol lease, and such lease, by the third section of the Act of 1817, cannot avail to give a right to the possession for a longer period than the term of twelve months. Vide 6 Statutes at Large, 67.
6. That if general rumors, of an intended connexion in business between parties, are sufficient, in any case, to put the community upon enquiry, and to fix all persons, whom such rumors may reach, with notice of a secret lien or in-cumbrance., held by one of the parties, on the property of the other, the rule must be limited to cases where the want of notice is relied on as an equitable defence against an otherwise valid title to relief; but such notice can never, of itself, constitute a sufficient ground of relief against a title valid at law; and that to make it a ground of relief, against a legal title, cannot fail to produce vast injury and injustice, and is fraught with the most disastrous consequences to the rights of property, and to the best interests of society. It would unsettle every title in the State; and particularly, render the whole mass of securities taken by the Bank, for the large sums loaned out to individuals by the State, under the provisions of the Act of 1838, an easy prey to the machinations of the fraudulent and unprincipled, although every care and precaution which the law has prescribed, or common prudence could suggest, may have been taken, to ascertain that the property was free of incumbrances.
7. That whatever may have been the rule, independently of the registry Acts, it is respectfully submitted, that, merely equitable notice, of every sort, is rendered wholly unavailing as to subsequent purchasers or incumbrancers, without actual notice, by the provisions of those Acts; which were intended to relieve purchasers or incumbrancers from the necessity of making inquiry any where, but at the proper registry office, and expressly imposes upon every one who claims under a prior conveyance or incum-brance, the duty and obligation of giving implied notice to the world, by recording in the proper office, unless he is prepared to prove express notice of his claim to the junior purchaser or incumbrancer, under the penalty of losing his priority. Vide Acts of 1698, and 1817, (supra,) and Act of 1785, §45, 7 Statutes at Large, 232, 233.
8. That a junior conveyance, or incumbrance, duly recorded, ought not, on principles of common equity, to be affected by a senior conveyance or incumbrance which has not been duly recorded, without proof of actual fraud, or such explicit notice of the claim as amounts to presumptive proof of fraud, or of a wilful disregard of the rights of the senior incumbrancer, which cannot be distinguished from fraud ; inasmuch, as a party who forbears to record the instrument which confers upon him the right to a lien or incumbrance, may, with great justice, be inferred to have withheld, it from publication, for the express purpose of leaving his grantor unembarrassed, in dealing with other persons; of which the present case affords a pregnant instance.
• 9. That whatever rule the courts may be at liberty to adopt in other cases, a mortgage under the Act of 1838, is protected against all prior incumbrances not duly recorded^ by the 2nd clause 4th section of that Act, which declares that a purchaser under such mortgage, “shall be deemed seized of a good and absolute and legal estate in fee simple of the premises purchased, as against all persons whomsoever, their heirs and assigns, not claiming by or under a paramount titlewhich enactment was intended to protect the State against secret liens by equitable or implied notice, or notice of any sort, to the agents of the State, and in effect excludes all liens and incumbrances not duly and regularly recorded, conformably to the strict requirements of law. Vide 7 Statutes at Large, 157.
10. That if the legal rights of these defendants could be affected by notice of any sort, it was necessary that such notice should have been given to the officer to whom the examination of titles, on applications for loans, is by law committed, and at the time when the title of the Charleston Hotel Company was examined : it being respectfully submitted, that a corporation can in no case be affected by notice, unless the notice be given to the agent charged with the business to which it relates, and at the time when he is engaged in the transaction of that business.
11. That no fraud on the part of these defendants has been alleged, or pretended, or attempted to be proved; and i'f the decree, as it affects them, and. the interests they represent, is to be sustained on this ground, they humbly hope that they may be allowed an opportunity of meeting the charge, and that an issue may be ordered for the purpose of trying it.
12. That if, in the. absence of explicit notice, to these defendants, of the claims now set up by the complainant, general rumors, of complainant’s connexion with the hotel, are to avail for the purpose of affecting their legal rights with an equity in favor of the complainant, they respectfully submit, that such an equity may be rebutted by a counter eqffity in the same way. That it was not more notorious, that the hotel was to be kept by the complainant, when it was rebuilt, than it was that the hotel was to be rebuilt with the aid of a loan from these defendants, under the Act of 1838: that this could not but have been known to the complainant; that he knew that the hotel could not be rebuilt without the aid of such a loan; that he could not but know the terms of such loan, as they were presribed by law, and that by law it could not be made, if there existed any lien, or incumbrance, of any soft whatever, upon the land; and that he must have known, that if he had set up any claim under his contract, as prior in lien to the mortgage for that loan, the loan would have been arrested, and he would have been left to a barren contract, unless such claim of prior lien were distictly waived: and yet he neither gave notice of his contract, or any intimation of such a claim as he has now set up, but actually withheld his contract from record in any office, and kept it, in effect, concealed, until the loan was effected; and even then did not record it in the proper of fice, nor in any office until the entire loan of $75,000 had been advanced by these defendants. That although the reasons, or motives, for pursuing this course do not appear, yet, even if the omission to record the deed, or to give notice of the claim, originated in inadvertence merely, and not in a purpose to avoid a disclosure, which would have obstructed the loan from these defendants, and thus have defeated all the objects of complainant’s contract, it has nevertheless produced precisely the same effects as if that had been the purpose: and it is submitted, that it is contrary to every notion of equity, to permit the complainant now to set up his contract, to defeat, impair, hinder, or delay, the mortgage executed to secure that loan; and to enjoy the premises built with the money of these defendants, without even paying the moderate annual interest due thereon, and which he was invited to pay, in order to exempt these defendants from the performance of the duty, enjoined on them by law, of foreclosing the mortgage, for default of such payment.
13. That at the date of the complainant’s original contract with the Charleston Hotel Company, the land in dispute was under a prior mortgage to the City Council of Charleston, and the mortgage was duly recorded; and that satisfaction was entered on this mortgage, expressly for the purpose, as it was proved at the hearing, of enabling the Company to mortgage an unincumbered title to these defendants ; wherefore it is submitted, that these defendants are entitled to be subrogated to the rights of the City Council under the said mortgage, and to have the same same set up against the contract of the complainant.
14. That the complainant has exhibited no ground of equity against these defendants, and the ground upon which his contract has been sustained by the decree, would have been as available at Law as in Equity; and as these defendant have by their answer claimed the benefit of the complainant’s want of equity, in the same manner as if it had been specially pleaded, they have a right to insist upon the objection, either for themselves or their co-defendants, the City Council of Charleston, to whom these defendants may be answerable over.
15. That if the complainants have a legal title, and there were no objection to the jurisdiction, yet these defendants, being purchasers for valuable consideration, without notice, have at least an equal equity with the complainant, and are entitled to be protected, by the well settled rule of the court; and the rule is the same if the complainant’s title be merely equitable, for where equities are equal, the Court will in no case interfere.
16. That, in fact, the complainant’s title, if he have any, is merely equitable: for even if his contract be regarded as a lease, yet not having been duly recorded, it is void at law, as to these defendants, under the registry Acts ; besides that the Charleston Hotel Company, under whom he claims, had at the time but an equitable estate in the premises. But that in truth his contract cannot be regarded in law as a lease, and even if it be such a contract as equity would enforce by a decree for possession, yet it can give only an equitable title, which, as to all persons but the immediate parties to the contract, is a mere equity. And it is respectfully submitted, that however a mere equity may avail as defence in equity, yet without any allegation, t pretence, or proof, of fraud, accident, mistake, trust, or other acknowledged foundation of equity jurisdiction, it cannot afford a ground for enjoining a legal title, without merging the whole law in, and rendering all titles dependent upon, the arbitrary discretion of a Chancellor.
Grounds of Appeal by the City Council of Charleston.
1. That the contract set forth in the complainant’s bill, between him and the Charleston Hotel Company, is purely a personal contract, for a breach of which the complainant may be entitled to a compensation in damages ; but that the same does not give him any legal lien on the lot, or buildings, constituting the Charleston Hotel, or any right to the possession thereof, otherwise than as the agent, or steward, of the Company: and that the said contract cannot be regarded in Law or Equity as a lease.
2. That the said contract is wholly void and unavailing as to the President and Directors of the Bank of the State, and the City Council, who derive their title from the Bank, inasmuch as the said contract was not recorded in the office of the Register of Mesne Conveyances, for Charleston district, within three months from the execution thereof, as required by the Act of Assembly of 1817. And the President and Directors of the Bank of the State had no knowledge, notice, or information, of any lien, or claim of lien, or of any right, or claim of right, or title, to the said lot, and buildings, by, or in favor of, the complainant, either before, or at the time, when the bond and mortgage of the Charleston Hotel Company, to the President and Directors of the Bank of the State, were executed.
3. That the complainant well knew of the intention of the Company to apply to the Bank of the State, for the fire loan, and never placed his alleged contract on record, in the proper office, nor gave notice to the Bank, of any claim of lien, or right, or title, to the said lot, or buildings thereon, but stood by, and permitted the President and Directors of the Bank of the State to accept of the said bond and mortgage, and to pay and advance the several loans, or instalments, thereon, with which the said buildings were erected, without interposing any such claim as is now set up in his bill, whereby, as it is respectfully submitted, the complainant did, in effect, waive all claim, if any he had, which could have created a lien on the said lot and buildings.
4. That there was no evidence to shew that the President and Directors of the Bank of the State, prior to or at the time when the bond and mortgage were executed and the loans made, had any notice, whatever, of the claim now set up by the said James H. Page; and when the loans were made, the premises were vacant, the buildings not erected, and no one in possession, but the Charleston Hotel Company.
5. That the President and Directors of the Bank of the State, under their mortgage, were bona fide purchasers, for valuable consideration, without notice of such outstanding incumbrance as is now set up by the complainant ; and that the City Council of Charleston are subroga-ted to all the rights, legal and equitable, of the Bank, and consequently, are also purchasers, for valuable consideration, without notice, and they should not have been post poned, by the decree, to the contract of the complainant with the Company.
6. That there is no such rule, as that a mere general rumor in the community, of a connexion in business, between third parties, can be considered as notice of a special lien, on lands especially, existing from one to another, when the proper offices for incumbrances on lands are examined, and no such liens are found there recorded.
7. That a person who has purchased under the Bank of the Stale, is, by the Act of 1838, entitled to hold against all who have not paramount titles; which enactment was intended, by the Legislature, to exclude all implied or secret liens, in favor of the security of a fund from which a great public charity, or benefit, was to be extended to the whole community.
8. That the premises, mortgaged by the Charleston Hotel Company to the President and Directors of the Bank of the State, were regularly sold, according to the provisions of the Fire Loan Acts; and the premises, having been purchased by the City Council, who have received titles therefor, from the President and Directors of the Bank of the State, they are thereby seized of an absolute estate, in fee simple, as against the said James H. Page, and to the exclusion of his said contract.
9. That under all the circumstances, set forth and averred in the answers of the President and Directors of the Bank of the State, and the City Council, in relation to the proceedings to obtain the loan, the loan itself, and the sale made to the City Council, the. defendants were entitled to the decree, and the Chancellor should have dismissed the bill of the complainant, so far as concerned the Bank and the City Council.
10. That the evidence did not make out a case sufficient to put the Bank of the State upon inquiry, when the mortgage wTas accepted, as to the nature of the contract between the complainant and the Company, for the keeping of the Hotel; nor was there any testimony of any kind to shew that the President and Directors of the Bank, or the Attorney General, were aware of the conditions of that contract, when the loan was obtained by the Company.
11. That the City Council stand in the same position as the bank, and are within the principle of protection to a bona fide purchaser, for valuable consideration, without notice.
12. That the contract between the complainant and the company, is not such an agreement as should be specifically enforced against the Bank, or City Council.
13. That the Chancellor erred, in his decree, in supposing that there was no Act of the Legislature requiring leases to be recorded within three months ; and also, in deciding, that the record of a lease, in the office of the Secretary of State, was legal, which is contrary to the decree of the Court, in Ex Parle Leland, 1 N. &. M. 460.
14. That under all the circumstances, the Court of Equity had no jurisdiction, to restrain the City Council in the prosecution of their action of trespass to try title, and the question of jurisdiction was properly before the Court.
15. That James H. Page, not having complied with the registry Act, cannot claim the aid of this Court, against a subsequent purchaser, without fraud.
16. That when a purchaser has laid out money in improvements, the rule-in equity is, to allow for those improvements ; so that, at all events, the City Council, and the Bank, are entitled to relief, as their advances were expressly for improvements.
17. That the City Council stand not in relation merely as a purchaser, but as a guarantor of the original loan, by which the buildings were erected.
18. That the City Council, as the guarantors, and the Bank, as the lender, stand in the condition of benefactors, both to Page and the Hotel Company; and Page has the benefit of the money, laid out by the bank, in the building, without the least consideration moving from him to the bank; and the plain and obvious equity is, at the least, to require Page to keep down the interest, and to meet the instalments, or submit to a sale, and take his remedy against the Company.
19. That his Honor the Chancellor, in attempting to distinguish the case of the City Council from the Bank, has omitted to notice the equity and privity of the City Council, as to the original loan, by being the guarantors; and has overlooked the numerous cases by which it is well settled, that a person with notice may safely purchase from one who purchased bona fide, and without notice.
20. That in order to constitute a notice, the Chancellor has been obliged to resort to the evidence of A. Black and
G. W. Logan, as to rumors ; whereas, reports from strangers, it is well settled, are not notice.
21. That a director of the bank, being a member of the company, what may be known to him as a member of the company, is not notice to the bank.
22. That the wide scope which the Chancellor has given to the effect of notice is contrary to the settled principles of the Court.
23. That James H. Page had notice, as an Act of the Legislature is notice to every one in the community.
24. That the contract between James H. .Page and the Hotel Company, not having been recorded within three months from the time of the execution thereof, in the office of the register of mesne conveyances, could not give James
H. Page a right of possession, in any view of that contract, for a longer time than twelve months from the time of his entering on the premises.
Grounds of appeal on behalf of the mortgagees of the furniture.
1. That the agreement of Mr. Page, with the Charleston Hotel Company, was merely a contract for his services, and binding on Mr. Page and the Hotel Company, but giving him no lien on the property of the Hotel Company.
2. That the furniture was purchased with the knowledge of Mr. Page of the mortgage that would bind it; and that the request of Mr. Page, that his agreement should be protected in the mortgage, and the refusal of the mortgagees to do so; with the knowledge of Mr. Page, that the money would not have been loaned if he had insisted on his agreement being so recognized; and the subsequent acquiescence of Mr. Page, in not insisting on his agreement, but receiving the furniture; amount to a fraud upon the mortgagees, if he insists on his agreement; and equity will not protect him.
3. That Mr. Page can have no higner right in the case than the Hotel Company, through whom he claims, and that company could not retain the furniture, upon the failure to pay the notes for which the furniture was pledged, without fraud.
4. That the mortgagees of the furniture are creditors of the Charleston Hotel Company, and the division of profits between that corporation and Mr. Page, make the said corporation and Mr. Page mutually responsible for the debts or contracts of the said corporation. And one co-partner cannot give a lien on co-partnership property, to his co-partner, in exclusion of co-partnership creditors.
5. That the company having failed to pay the notes for which the mortgage was given, the estate of the company in the furniture has become forfeited, and the same is now the property of the mortgagees; and as the possession of Mr. Page is based upon the right of property in the company, whatever determines the one, wili determine the other.
6. That a mortgage given to secure the purchase money, is a lien, paramount to all others, and one which will always be protected in a Court of Equity ; and if Mr. Page could not establish his agreement, so as to prevent a sale of the furniture, for the payment of those from whom the furniture was originally purchased, he cannot establish it against those who have advanced the money, and are entitled to all the rights of the original vendors of the furniture.
7. That, it is respectfully submitted, as the decree is, in other respects, against equity. ;
Grounds of appeal of the Charleston Hotel Company.
1. That the company having become insolvent, and having been divested of all legal interest in the Hotel, by its sale to the City Council; and in the furniture of the Hotel, by reason of the forfeiture of the mortgage thereof, and the sale aforesaid; they were entitled to have the concern wound up, and to enjoin the said James H. Page, their agent, or partner, in the concern, from continuing to carry on the business for his private benefit, and from sueing debtors of the concern in his own name.
2. That the decree is in other respects contrary to equity.
Copy of the first contract between James II. Page and the Charleston Hotel Company, dated the 23d February, 183?. Recorded in the office of the Secretary of State, the 29lh May, 1838.
City of Charleston, ¿
In the State of South Carolina,.
Memorandum of an agreement, entered into, this twenty-third day of February, eighteen hundred and thirty-seven, between the President and Directors of the Charleston Hotel Company, and James H. Page, of the city of Baltimore. The said parties have agreed for the keeping of the hotel, contemplated by the company, and now in progress of construction, in Meeting-street, by the said James H. Page, for the term of seven continuousyears, to commence on the day that the building shall be finished and furnished, which day shall, be endorsed, by the said parties, on this memorandum, upon the following terms, to wit; That the said James H. Page, as landlord of the said hotel, shall provide for the same, procure and engage all waiters and servants, and the same discharge at will and pleasure, reside with his family in the hotel, (but free of all charge for board or rent,) conduct the same in the manner contemplated by these presents, and to have the sole and exclusive management thereof, bestowing upon it his entire attention. That the furniture shall be procured and purchased by the said President and directors, and shall be considered as a part of the capital invested, but shall, at the expiration of the aforementioned term, be returned to them by the said James H. Page, or his personal representative, in the like manner and condition in which they will be received by him, ordinary wear and tear and unavoidable losses and accidents excepted. That the said James H. Page shall keep constantly in his employment a competent book-keeper, whose duty shall be to take charge of the books of the establishment, and enter thereon all the daily receipts and expenditures, wThich books shall always be open for the examination of every member of the board of directors, and shall be balanced on the first day of each and every month, so as clearly to exhibit the gross receipts of every month, the expenditures of the same, and the cash on hand ; the nett profits remaining on hand at the expiration of every year, and after deducting the contingent expenses of the hotel, shall be disposed of in the following manner, viz: If the said annual profits amount to the sum of ten thousand dollars, the said James H. Page shall be entitled to five thousand dollars, and the said President and Directors to the other five thousand dollars ; if the said nett annual profits amount to fourteen thousand dollars, the said James H. Page shall be entitled to six thousand dollars, and the said President and Directors to eight thousand dollars ; if the same shall amount to sixteen thousand dollars, the said James H. Page shall be entitled to seven thousand dollars, and the said President and Directors to nine thousand dollars; if the said annual nett profits amount to the sum of twenty thousand dollars, the said James H. Page shall be entitled to eight thousand dollars, and the said President and Directors to twelve thousand dollars; and if the said annual nett profits exceed the sum of twenty thousand dollars, of the excess over and above the said sum of twenty thousand dollars, the said James H. Page shall be entitled to two fifth parts, and the President and Directors to three fifth parts; should the nett annual profits fall short of the sum of ten thousand dollars, the said James H. Page shall, nevertheless, and at all events, be entitled to the sum of four thousand dollars, as an annual compensation for his services ; and if the nett annual profits amount to any intermediate sum between those specified in the above scale, the same shall be divided between the said parties, pro rata, according to the said scale. It is further agreed between the said parties, that. in ascertaining the said nett profits, no account shall be taken or charged against the said James H. Page either for rent or for the interest of the capital invested in the building and furniture ; and also, that the said President and Directors shall keep the house and kitchen furniture under insurance; and in case of the destruction of the same by fire, during the continuance of the said term of seven years, the same shall be rebuilt, and furnished, and again placed under the care of the said James H. Page, on the same terms and conditions as above mentioned, for the remainder of the said seven years, the said James H. Page to receive, during the rebuilding and refurnishing thereof, the sum of four thousand dollars per annum; provided, that it shall not be obligatory upon the President and Directors to rebuild and refurnish the hotel, should they fail to receive the amount of their policies of insurance. It is further understood and agreed, that on the first day of every month, the nett profits appearing upon the books may be drawn by the parties, in proportion to their respective interests established by the foregoing scale, and the sums so drawn shall be accounted for and allowed in the annual division of the nett profits. It is also understood, and distinctly agreed, that this contract or agreement, and the right of the said James H. Page to keep the hotel, is strictly and purely personal, not transferable to any one whomsoever, by the said James H. Page, and in no manner liable for his debts. But if the said James H. Page should die, after the expiration of the second year, and before the commencement of the seventh year of the term, the personal representatives of the said James H. Page shall receive from the said President and Directors the sum of five thousand dollars; and if the death of the said James H. Page should occur at any time during the seventh year of the term, the personal representatives of the said James H. Page shall receive from the President and Directors a sum of money, to be named and assessed by three referees, of whom one shall be nominated by either party, and the third by the two so nominated.
Witness the hands and seals of the said parties, on the date and year above mentioned.
Alex. Black,
President Charleston Hotel Company, [l. s.]
, James H. Page. [l. s.]
Signed and sealed ) Thos. É. Deveaux.
in the presence of) Geo, Wm. Logan.
South-Carolina, )
Charleston District. $
Personally appeared George Wm. Logan, and made oath that he saw Alex. Black and James H. Page sign, seal and execute the within instrument of writing, and that he, together with Thomas E. Deveaux, witnessed the same.
Sworn to, before me, this ) T T7- kt * i
T T7- kt * 29th May, 1838. j Km8MiN’ #<*■
Recorded, 29th May, 1838.
Secretary op State’s Office, )
Charleston, So. Ca. May 26, 1842. \
The foregoing Deed is a correct copy of the Record, in this office, in Miscellaneous Record Book, 5 IJ’s, pages 208, 209 and 210. Examined and certified.
The words, (in which they will be received by him, ordinary) interlined on first page, between eight and nine lines from the bottom.
Thos. S. Jones, Dep. Sec. State. The record of the foregoing deed is entered in the Index as follows:
Black, Alexander, P. C. H. C. to James H. Page, 208. Page, James H., to Alexander Black, Pres. C. H. Co. 208. And not in any other name or names.
Thos. S. Jones, Dep. Sec. State.
Copy of the second contract between James H. Page and the Charleston Hotel Company, dated 1th July, 1838. Recorded in the office of the Secretary of State, on the 30th March, 1839; and in the office of the Register of Mesne Conveyances, on the 12th May, 1840.
The State of South Carolina, )
City of Charleston. y
Articles of Agreement, as originally entered into, between the President and Directors of the Charleston Hotel Company, for and on account of the Charleston Hotel Company, and James H. Page, on the twenty-third day of February, eighteen hundred and thirty-seven, and amended and modified, by the said parties, this seventh day of July, in the year of our Lord one thousand eight hundred and thirty-eight. The said parties have agreed for the keeping of the Hotel, contemplated by the company, now in progress of construction in Meeting street, by the said James H. Page, for the term oí seven continuous years, to commence on the day that the building shall be finished and furnished, which day shall be indorsed, by the said parties, on this memorandum, upon the following terms, to wit: That the said James H. Page, as the landlord oí said Hotel, shall provide for the same, but shall contract no debts on account of the concern, without first obtaining the sanction of the board of directors of the company. That he shall procure and obtain all waiters and servants, and the same discharge at will and pleasure; reside with his family in the Hotel, (but free of all charge for board or rent;) conduct the same in the manner contemplated in these presents, and to have the whole and exclusive management thereof, bestowing upon it his entire attention. That the furniture shall be procured and purchased by the said Charleston Hotel Company, and shall be considered as a part of the capital invested, but shall, at the expiration of the aforementioned term, be returned to them, by the said James H. Page, or his personal representative, in the like order and condition in which they will be received by him, ordinary wear and tear and unavoidable losses and accidents excepted. It is understood that the amount of forty-five thousand dollars shall be expended in the furniture of the house ; and that, of that amount, the sum of thirty thousand dollars shall have been purchased, and placed in the Hotel, before the house shall be considered ready for occupation ; and the balance shall be purchased within six months after the commencement of operations, if required by the said James H. Page. That the said James H. Page shall keep constantly in his employment a competent book-keeper, who shall keep the accounts of the hotel, according, as nearly as possible, to the most approved checks and usages adopted by well regulated mercantile establishments. Should the directors consider the said book-keeper incompetent, or otherwise disapprove of him, he shall be'discharged by said James H. Page, on the aforesaid directors making known that wish to him; and James H. Page may discharge him at any time, and procure another book-keeper, subject to the same disapproval by the parties. The books of the establishment shall always be open for the examination of any member of the board of directors, and shall be balanced on the first day of each and every month, so as to clearly exhibit the gross receipts of every month, the expenditures of the same, and the cash on hand. The nett profits remaining on hand, at the expiration of every year, and after deducting the ex-pences of the Hotel, shall be disposed of in the following manner, viz: If the said annual profits amount to the sum of ten thousand dollars, the said James H. Page shall be entitled to five thousand dollars, and the said company to the other five thousand dollars. If the said nett annual profits amount to fourteen thousand dollars, the said James H. Page shall be entitled to six thousand dollars, and the said company to eight thousand dollars. If the same shall amount to sixteen thousand dollars, the said James II. Page shall be entitled to seven thousand dollars, and the said company to nine thousand dollars. If the said nett annual profits amount to the sum of twenty thousand dollars, the said James H. Page shall be entitled to eight thousand dollars, and the said company to twelve thousand dollars. And if the said annual nett profits exceed the sum of twenty thousand dollars, of the excess over and above the said sum of twenty thousand dollars, the said James H. Page shall be entitled to two-fifth parts, and the. said company to three-fifth parts. Should the nett annual profits fall short of the sum of ten thousand dollars, the said James H. Page shall, nevertheless, and at all events, be entitled to the sum of four thousand dollars, as an annual compensation for his services; and if the nett annual profits amount to any intermediate sum between those specified in the above scale, the same shall be divided between the said parties, prorata, according to the said scale. It is further agreed between the said parties, that in ascertaining the said nett profits, no account shall be taken or charged against the said James H. Page, either for rent, or for interest of the capital invested in the building and furniture ; and also, that the said company shall keep the house and furniture under insurance; and in case of the destruction of the same by fire, during the continuance of the said term of seven years, the same shall be re-built and furnished, and again placed under the care of the said James H. Page, on the same terms and conditions as herein mentioned, for the remainder of the said seven years. The said James H. Page to receive, during the re-building and re-furnishing thereof, the sum of four thousand dollars per annnm. Provided, that it shall not be obligatory upon the said company to re-build and re-furnish the Hotel, should they fail, in any material extent, to receive the amount of their policies of insurance. It is further understood and agreed, that on the first day of every month, the nett profits appearing upon the books may be drawn by the parties, in proportion to their respective interests, as established by the foregoing scale; and the sums so drawn shall be accounted for and allowed in the annual division of the nett profits. It is also understood and distinctly agreed, that this contract or agreement, and the right of the said James H. Page to keep the Hotel, is strictly and purely personal, and not transferable to any one whomsoever, by the said James H. Page, nor in any manner liable for his debts ; but if the said James H. Page should die, after the ¡expiration of the second year, and before the commencement of the seventh year of the term, the personal representatives of the said James H. Page shall receive from the said company the sum of five thousand dollars; and if the death of the said James H. Page should occur at any time during the seventh year of the term, the personal representatives of the said James H. Page shall receive from the company a sum of money, to be named by three referees, of whom one shall be nominated by either party, and the third by the two so named.
It is also understood and agreed, between the said parties, that the said James H. Page,- in the management of the Hotel, will establish and maintain a system of as strict accountability from the servants or agents under him, to himself, as is to be found in the most approved managed Hotel in the United States.
Witness, the seal of the said company, and the hand and seal of the said James H. Page, on the day and year aforesaid. Alexander Black, [l. s.]
President Charleston Hotel Company.
James H. Page. [l. s.]
Signed, sealed, and delivered, in the presence of, (the word “ annual,” being first interlined in the third page, fourth line.) George Wm. Logan.
Charleston, October 24th, 1839.
This day, the Charleston Hotel was finished and furnished, agreeable to the within contract.
James H. Page.
By order of the board.
Alexander Black, [l. s.]
President Charleston Hotel Company.
Attest, G. Wm. Logan,
Secretary and Treasurer Charleston Hotel Co.
South Carolina — Charleston District:
Personally appeared before me, George Wm. Logan, and made oath, that he was present and saw Alexander Black, President of the Charleston Hotel Company, and James H. Page, severally sign, seal, and deliver, the annexed instrument, between Alexander Black, as President Charleston Hotel Company, and James H. Page, and that he witnessed the same. Sworn to before me, this twelfth day of May, 1840. Richard Irwing, j. p.
George W. Logan.
Recorded and examined, this 12th day of May, 1840.
M. I. Keith, Register.
Register Mesne Conveyances Office, )
Charleston District. \
I herewith certify, that the foregoing is a correct copy from the record in this office, from Book E., No. 11, pages 156 to 160, the 21st May, 1840.
Richard Irwing, Deputy Register.
Secretary of State’s Office, >
Charleston, South-Carolina, ‘¿Mh April, 1843. )
I do hereby certify, that the amended and modified lease and agreement between the Charleston Hotel Company and James H. Page, of which the foregoing is certified to be a copy, is recorded in this office, in Miscellaneous Record Book, 5 IPs., 378, 379, 380 and 381, on the 30th day of March, 1839.
Thomas S. Jones, Dep. Sec. State.
Copy of the release of the City Council of Charleston, to the Charleston Hotel Company, dated 26th June, 1838. Recorded in the office of the Register of Mesne Conveyances, 14i/i December, 1838.
State of South-Carolina.
To all to whom these presents shall come, or be made known, or whom the same may in any wise concern, the City Council of Charleston, in the State aforesaid, sends greeting: Whereas Ker Boyce, Leroy M. Wiley, Henry W. Connor and George H. Kelsey, in and by their deed, duly executed, and bearing date the first day of April, in the year of our Lord one thousand eight hundred and thirty-six, did grant, bargain, sell, and release, by way of mortgage, unto the said City Council of Charleston, all those several lots, pieces or parcels of land, situate, lying and being in the City of Charleston, in the State aforesaid, butting and bounding to the north on Pinckney street, to the east, on Anson street, to the south, on Market street, and to the west, on Meeting street, which said mortgage was made by the said Ker Boyce, Le Roy M. Wiley, Henry W. Connor and George H. Kelsey, to secure payment of their bond to the said City Council of Charleston, in the penal sum of four hundred and twenty-three thousand dollars, with condition for the payment of two hundred and fifty-six thousand five hundred dollars; all which, in and by the said mortgage, duly recorded in the office of the Register of Mesne Conveyances, for the district of Charleston, in the State aforesaid, in Book N., No. 10, page 191, reference being thereunto had, will more fully appear; and whereas, since the date of the said mortgage, the said Ker Boyce, Le Roy M. Wiley, Henry W. Connor and George H. Kelsey, have granted and sold, or otherwise disposed of, the two adjoining lots, pieces, or parcels of land, hereinafter mentioned and described, being part and parcel of the mortgaged premises aforesaid; which said lots were purchased by, or for the use of, the Charleston Hotel Company, and by proper conveyances have now become vested in the said Company, in fee simple, and the whole purchase money thereof, amounting to twenty-eight thousand, six hundred and six dollars, has been advanced by the said Charleston Hotel Company, and paid to the said Ker Boyce, Le Roy M. Wiley, Henry W. Connor and George 14. Kelsey, and by them expended in erecting valuable buildings on the other portions of the said mortgaged premises, whereby the value of the said premises has been enhanced and the security of the said mortgage increased; and whereas, also, a costly hotel erected by the said Charleston Hotel Company, on the land so purchased by the said Company, as aforesaid, has been lately destroyed by fire, and the said company are unwilling to re-build the same, unless the said two lots, pieces, or parcels of land, are first discharged and released from the lien and operation of the said mortgage; and inasmuch as the re-building of the said Hotel would not only be greatly for the benefit and improvement of the said City of Charleston, but will also enhance the value of the residue of the mortgaged premises aforesaid, and increase the security of the said mortgage, the said City Council of Charleston are willing to discharge and release the said two lots, pieces or parcels of land, from the lien and operation of the said mortgage. Now know ye, that the City Council of Charleston, aforesaid, in consideration of the premises, and also in consideration of the sum of five dollars, to them paid by the said Charleston Hotel Company, at and before the sealing and delivery of these presents, the receipt whereof is hereby acknowledged, have remised, released, discharged and forever quitted claim, and by these presents do remise, release, discharge, and forever quit claim, to the said Charleston Hotel Company, their successors and assigns, all those two adjoining lots, pieces, or parcels of land, situate, lying, and being in the City of Charleston and State aforesaid, butting and bounding to the south, on Pearl street; to the west, on Meeting street; to the north, on Pinckney street; and to the east, on lands of the said Ker Boyce, Le Roy M. Wiley,. Henry W. Connor and George H. Kelsey, and measuring and containing in front, on Meeting street, and also, on the east, or back line, one hundred and fifty feet; and in depth, from Meeting street, to the east, or back line, one hundred and ninety-five feet; together with all and singular, the rights, members, hereditaments and appurtenances to the said two lots, pieces, or parcels of land, belonging or in anywise incident or appertaining; and also, all the estate, right, title, interest, property and claim of the said City Council of Charleston, of, in, or to, the same, or any part thereof, by .virtue of the aforesaid mortgage of the same; and also, all action and actions, suit and suits, judgments, decrees, executions and claims or demands whatsoever, in law or in equity, which the said City Council of Charleston ever had, now have, or can or may have, against the said Charleston Hotel Company, for or on account of the said two lots, pieces, or parcels of land, and the said mortgage thereof, and the covenants and provisions therein contained.
In witness whereof, the said City Council of Charleston have caused their corporate seal to be hereunto affixed, and attested by the hand of the Honorable Henry L. Pinck-ney, Mayor of the said City, this twenty-sixth day of June, in the year of our Lord one thousand eight hundred and thirty-eight, and of American Independence the sixty-second.
Henry L. Pinckney, (Corporate Seal.)
Mayor of the City of Charleston.
By the Mayor.
William Poach, Clerk of Council.
We, Ker Boyce, Le Roy M. Wiley, Henry W. Connor, and George H. Kelsey, above named, do hereby assent to the foregoing release, and agree that the same shall not impair the lien of the City Council of Charleston on the residue of the mortgaged premises above mentioned, nor affect our liability for the debt which the said mortgage was intended to secure,
South-Carolina — Charleston District;
Personally appeared, Henry Bailey, and made oath that he saw the within named Ker Boyce and Le Roy M; Whiley, sign, seal and deliver the within instrument of writing-, and that he, with B. C. Presley and C. R. Brewster, witnessed the same.
H. Bailey.
Sworn to before me, this 14th day of December, 1838;
James Kinsman,- Notary Public.
South-Carolina — Charleston District;
Personally appeared, George Wm. Logaii, and jtnadei oath that he saw Henry W. Connor and George H. Kelsey, severally sign, seal and deliver this deed, for the purposes therein mentioned, and that he, with John H. Gayei’j witnessed the execution of the same.
George Wm. Logan.
Sworn to before me, this 8th day of November, 1838;
James Kingman, Notary Public.
Recorded and examined, this 14th day of Dec. 1838.
Richard Irwing; Deputy Register-.
Office of the Register of Mesne Conveyances, )
Charleston District. )
I hereby certify that the foregoing deed of release is correctly copied from the record in this office, from Book V’s., No. 10; pages 461, 462 and 463, this 22d day of April; 1843. Examined and certified by
Richard Irwing, Deputy Register.
This is a mistake. The printed regulations were not in existence, at • the time of the loan to the Hotel Company, 21st January, 1839, nor until some time after that date. The original draft of the regulations, prepared by the Attorney General, did not require certificates from the Secretary of State, and these original regulations constituted the rule in the examination of titles, until his departure for the circuit, towards the close of March, 1839. The regulations were printed by the Bank, as he believes, during his absence ; at least, he saw them, for the first time, after his return from the circuit, some time in April, when he learned that the requisition of certificates from the office of the Secretary of State had been inserted, under the impression that marriage settlements registered in that office, prior to the Act of 1824, might be entitled to priority of lien, even as to the lands included in them, under the marriage settlement Act of 1785, although not recorded in the office of the Register of Mesne Conveyances. See 4th ground of appeal by the Bank, post. H. B.

Opinion:
Curia, per Harper, Ch.
I am satisfied that the decree was erroneous, from the circumstance of my having overlooked the Act of Assembly of 1817, which provides, in very explicit terms, " that all leases or contracts in writing, hereafter to be made between landlord and tenant; for a longer term than twelve months, shall not be valid in law, against the rights and claims of third persons, unless the same shall have been recorded in the office of Mesne Conveyances, at least within three months from the time of the execution thereof." In the circuit decree, I have adverted to the distinction between the notice to supply the defect of registration and to rebut an equity — a distinction which seems to be generally recognized.
It is not necessary to refer to the numerous authorities cited in argument, which fully establish what was contended for; that to supply the want of registration, the notice must be full, explicit, and clearly proved; nor did I intend to determine, by the decree, that the notice which I supposed to be proved in the present case, was sufficient for this purpose. Lis pendens, which is notice to rebut an equity, will not supply the want of registration. Wyatt vs. Barwell, 19 Ves. 439. In Harris vs. Anderson, 1 Bail. 315, which was cited on behalf of the appellee, it is said that the notice must be express. In Price vs. White, 1 Bail. 266, Judge Colcock thinks the courts have gone too far in permitting any notice to avail against the express words of the statute. In Martin vs. Sale, 1 Bail. Eq. 4, and in numerous other cases, it is put on the ground of fraud; the party ought not to derive a benefit from his own fraud. Indeed, the well known principle, on which alone courts have thought themselves authorized to dispense with the words of a statute, as in the analogous case of the statute of Frauds, is that you are not to suppose the Legislature to have intended that a statute made for the prevention of frauds, should itself be made the instrument of fraud. Then, if according to the argument on behalf of the appellee, there can be no question of fraud in the present case, as the purchaser shall be intended to have purchased only the reversion with the subsequently accruing rents, there is no ground whatever on which the court would be authorized to depart from the positive terms of the statute. I think, too, that it was mistakenly said in the decree, that though the Bank itself might have resisted performance, on the ground of want of notice, the City Council does not come within the principle that a purchaser from a bona fide purchaser without notice is to be protected.
Then, as to the mortgagees of the furniture; as performance of the principal contract, for the house itself, cannot be enforced, the only ground of equity on which the court would enforce the performance of a contract relating to personalty, that of being incidental to the former, and necessary to give it beneficial effect, fails, and the furniture musí be delivered them. They must, however, pay their own costs. I think, too, the court must decree the delivery of the possession of the Hotel. It is the well known rule of the court, that having jurisdiction and possession of the cause, it will do complete justice between the parties, and make an end of litigation. When the court restrains proceedings at law, for the recovery of money, it is the familiar practice of the court, if relief be refused at the hearing, to direct the payment of the money by its own decree. Here, the complainant, Page, has delayed the City Council from recovering at law, and the mortgagees of the furniture from seizing it under the decree for foreclosure, as we have concluded they were entitled to do, and it would be inequitable that he should still further delay them until the suits at law can be terminated. And an account of rents and profits must also follow. In the case of Cruger vs. Daniel, decided during the present sitting, it has been held that when there is a decree for the delivery of possession, an account of mesne profits to the true owner, follows of course; though the possession may .have been that of a trespasser. But in accounting to the City Council after their title accrued, he must account not for the share of income and profits reserved by his contract with the Charleston Hotel Company, but on the principle of quantum valebat. But this is decreed on the bill of Page. This contract, whether lease or no, being void as to the City Council, there was no ground on which they could sustain a bill for the delivery of possession, nor any necessity for it; nor could they sustain a bill for mesne profits alone. They must therefore pay the costs of that bill. Page, however, must pay the costs of their action at law.
I do not suppose that the mortgagees of the furniture are entitled to an account of hire, quantum valebat. Against the Hotel Company, they would be entitled to interest on their debt. But having notice of Page's contract, and as I think, bound by it, they, as against him, are entitled to such proportion of the profits as the company would have been entitled to for the furniture, as distinguished from the Hotel. The account must be taken and the apportionment made as directed by the decree.
Badly and Brewster, Solicitors for the Bank of the State of South Carolina.
Eckhard, City Attorney, for the City Council.
A. G. Magrath, for the mortgagees of the furniture;
Yeaclon and McBeth, for the Hotel Company;
Hunt and Petigru, for Page;
As to the bill of the Hotel Company, the only ground on which it could have been sustained was that it demanded an account. But for this purpose it was unnecessary, as the account could have been taken on the bill of Page. That bill demanded a money balance as due by them to him, whicU could only be established as the result of an account. It was in effect an offer to account, nor does it appear that he ever refused an account. The costs of that bill must, therefore, be awarded against the company.
On the bill of Page, the costs as between tbe complainant and the Hotel Company must depend on the account to be taken, and follow the balance, as it may be found one way or the other. All the other costs of the bill must be paid by the complainant, Page.
It is ordered and decreed, that so much of the decree as establishes the right of the complainant, Page, to enforce performance of his contract, as against the City Council, be reversed; that possession of the Hotel and furniture be delivered as directed; and that the account be taken and the costs paid as before expressed and directed;
Johnson, Dunkin and Johnston, Chancellors, concurred.