Court Opinion

ID: 7129598
Source: CourtListenerOpinion
Date Created: 2022-07-24 15:17:20.459662+00
Date Added: 2024-06-11T16:14:25.303042
License: Public Domain

Judge Stites
delivered the opinion of the court:
The petition of appellants avows that the arrangement between their agents and Sherrod, was to withhold the mortgage from registration for the purpose 0f sustaining the latter in business and “not to record ° the same unless there was clanger oí* Sherrod’s failure> which danger was to be suggested to Throop &c.”
This allegation and the withholding of the mort£a»e ff°m record, together with failure to insert the day or month of its execution, tend strongly to corrobórate the statements of Sherrod, who proves, that he was to have free access to the instrument, and, J 7 *783should the danger from other creditors become imminent in the absence of the attorney, was to fill up the blanks and forthwith lodge the instrument for record.
The effect of the arrangement, though it may not . . , . , „ , . ., have originated m any actual fraudulent or evil purpose, was to secrete from the public eye the true condition of the debtor, and thereby enable him, under the semblance of being the owner of unincumbered real estate, to deceive and mislead other persons by inducing them, upon the faith of his supposed unembarrassed condition, to give him credit which would otherwise have been withheld.
Such contrivances or' acts, though not designed to perpetrate an actual fraud upon other persons, have an inevitable tendency that way, and are obviously opposed to the general policy of the law requiring the public registration of all liens and incumbrances upon property permitted to be retained and claimed by debtors.
If not directly within that class of acts which the law denominates constructive frauds, it approximates so nearly to it, that the party avowing himself a participant in such transaction, ought not to receive the countenance or aid of the chancellor in enforcing any lien or claim growing out of it as against third persons.
Without therefore determining the sufficiency of the allegded notice to the trustees, or the effect thereof as to the beneficiaries'of the deed, it seems to us, for the reasons stated, that the chancellor below properly denied any help to appellants in the attitude in ■which they presented themselves.
Wherefore, the judgment of the court dismissing the petition as to Brown and Neal, and the beneficiaries in the deed to them; is affirmed.