Opinion
December, 1837.
REGISTRATION — EFFECT OF RIGHTS — NOTICE. A prior, mortgagee who registers his mortgage after the mortgagor has again mortgaged or sold the same property, but before the subsequent deed" is registered, is entitled to priority of satisfaction under 1881, 90 (Code, §§ 2072 to 2075), although be had notice of the subsequent deed before the registration of his mortgage.
On 12th day of February, 1828, in Laurens district, South Carolina, the defendant Andrew Park executed to the complainants, Copeland and Park, a mortgage for girl Phillis, to secure them in the sum of $300, for which sum they had become his securities in a note to the complainant James Park. Andrew Park remained in possession of the negro, and soon after the execution of the mortgage he removed to Franklin county, Tennessee, bringing with him the girl Phillis. In 1832 Andrew Park borrowed $450 from the defendant Bennet, and, to secure him, delivered the girl Phillis. On the 2d day of February, 1833, he executed to Bennet a bill of sale, absolute on its face, for the negro Phillis, in consideration of $358.50, part of the $450 previously borrowed. The balance of the $450 was secured by a bill of sale on other property, but which property was afterwards taken to pay a debt. In December, 1833, complainant "William Park went to Bennet's house and demanded Phillis, but Mrs. Bennet refused to give her up. Complainants then procured Andrew Park to acknowledge the execution of their mortgage, before the clerk of the [356] county court of Franklin county, on the 26th of December, 1833, and caused it to be registered in Franklin county the same day. This bill was filed the 15th day of January, 1834. The bill of sale to Bennet was proven and registered the 18th day of December, 1834.
When the bill of sale was executed by Andrew Park to Bennet, it was agreed by the latter that Andrew Park might redeem the girl Phillis by the 25th of December, 1833.
J. Campbell, for complainants, contended: 1. That the proof in the cause proved beyond dispute that the bill of sale from Andrew Park to Bennet was only a mortgage, in which event complainants would have a right to redeem from him.
2. The mortgage to complainants was executed first, and was registered first. This, by the positive provisions of the 6th section of the act of 1831, ch. 90, gives to it priority over the defendants. It is objected that complainants knew when they registered their mortgage that the defendant had purchased, and had a bill of sale, and that, therefore, their mortgage cannot take effect as against the defendants. To affect a purchaser's title by notice of another equitable right, he must be a subsequent purchaser. Act of 1831, ch. 90.
M. Taul, for the defendants. 1. Bennet was a purchaser for a valuable consideration, without notice of complainants' mortgage. The purchaser is the real owner of property, in equity, from the moment he pays the consideration. Cooke, 437.
2. Complainants' mortgage, not having been registered in South Carolina, is void as to subsequent purchasers.
3. It was a fraud on the part of the mortgagees to permit Andrew Park to remove the negro from South Carolina to Tennessee, and be in possession of her here, as the apparent owner, for such a length of time after the debt became due. Vide the case of Maney v. Killough, 7 Yerg. 445.
4. Although complainants' mortgage was first registered, it cannot prevail over Bennet's purchase, because before the acknowledgment and registration complainants had notice. [357] What amounts to, or is evidence of, notice? Vide 2 Fonb. 150, § 3. Complainants admit in their bill that Bennet had possession. For the true construction of the registration act of 1831, see the case of Hays v. McGuire, 8 Yerg. 92.
5. Andrew Park's possession of the negro in Tennessee for more than three years, claiming her as his own, vested in him the absolute right of property. 4 Yerg. 174; Id. 597; 5 Id. 281.
6. James Park, having no interest in the suit, was improperly made a complainant. Although the bill states that the mortgage was made to the complainants, it was in fact made to James Copeland and William Park.
7. The note for $300 was fraudulent so far as James Park was concerned. From his own showing, Andrew Park had only received $246 over and above his share of the estate. It was, therefore, fraudulent in him to take security for a larger amount.
Upon the facts presented in this record two questions are presented.
1. Is the title of Bennet, if he had any, a mortgage or an absolute conveyance? That it is a mortgage we cannot doubt; all the circumstances show, and the parties admit, that it was so originally, but say that the equity of redemption was released before Bennet knew of complainants'. title. If the equity of redemption was released, it was without consideration, and the court will not permit the claims of creditors to be defeated thereby.
2. This court has, in the case of Douglass v. Morford, 8 Yerg. 373, and the case of Payne v. Lassiter, 10 Yerg. 507, decided that a vendee of a negro acquired no title thereto against any person except the vendor unless the conveyance be by bill of sale registered according to law. In this case the mortgage of complainants was registered on 26th day of December, 1833. That from that time it was a good title as against all persons who had not acquired rights to the negro previously thereto is admitted; but it is insisted that Bennet had. It is true he had taken a conveyance of [358] the negro previously, but this conveyance was not registered till the 18th December, 1834, and by the 6th section of the act of 1831, ch. 90, it only took effect from the date of its registration. Complainants' title, then, having been registered first, and being founded on a fair and valuable consideration, must overreach and destroy any claim of Bennet's, arising out of a subsequently registered bill of sale.
But it is said that the complainants at the time they registered their mortgage had notice of Bennet's bill of sale, and that they are there-fore bound by it. This is not the law. The complainants were not subsequent purchasers, and this principle applies to none other. If Bennet's bill of sale had been registered first, and he had had notice of the existence of the complainants' mortgage, he would have been bound. thereby as a subsequent purchaser. For the statute above referred to provides that any deed of conveyance, bill of sale, or other instrument, which shall be last executed but first registered, shall have preference, unless it is proved in a court of equity that such subsequent purchaser had full notice of the previous conveyance.
The decree given in this case will therefore be reversed, and a decree in conformity with the rights of the parties entered in this court.
Decree reversed.