Den ex Dem Skinner v. Cox, 15 N.C. 59, 4 Dev. 59 (1833)

Dec. 1833 · Supreme Court of North Carolina

15 N.C. 59, 4 Dev. 59

Den ex Dem Lemuel Skinner, et al. v. John Cox.

A deed executed to secure recited debts, is a mortgage, although it contains neither a proviso for redemption, nor a declaration of its trusts, and the fact of the trust of the surplus being declared in a separate and unregistered paper, -will not vitiate it as a security, for the recited debts»

Ejectment, tried on the last circuit at Chowan, before Seawell Judge*

The plaintiff claimed title under one Halsey, and produced a deed whereby the latter conveyed the- premises in dispute, to the lessors of the plaintiff, by a deed which-recited several debts to which they were his sureties, and that he “was desirous of securing the said Lemuel, &c. “ against any loss or injury they may sustain, by reason of tbeir several obligations aforesaid. Therefore-“for and in consideration of the premises, as well as “ the further consideration of the sum of ten dollars to '“him, &c. he hath bargained, &c.” This deed contained no, proviso for redemption, nor any declaration of the trusts upon which it was executed. It was proved and registered within six months, and the only question was. whether it was avoided by the following facts which wore deposed to by Halsey. He swore that at the execution of, the deed the lessors of the plaintiff “ executed to him a “paper writing or defeasance, in which it was stipulated “that whatever surplus there might be over and above “satisfying the debts for which they were hound, should “he paid over to his creditors.” He also proved the loss of this deed.

His Honor instructed the jury that the deed to the lessors of the plaintiff was upon its face a mortgage, being made to secure specified debts, and that the omission to record the deed executed at the same time, the contents of which were deposed to by Halsey, was. but a circumstance, and did not per se render the deed of Halsey fraudulent in law. A verdict was returned for the plaintiff and the defendant appealed.

Iredell and Devereux for the defendant,

cited Peterson v. Clarke, (15 Johns. R, 205) Erskive v. Townsend, (2 Mass. R. 493,) Jackson v. Green, (4 Johns. R. 186.) Hey Denham. (2 Johnsa Ch. R. 182.) v '

try^of a* separate deciaration of the gag? does noT" affect it, except as declared.

Badger for the plaintiff.

Ruffin, Chief-Justice.

After stating the case proceeded as follows:

The deed from Halsey to the lessors of the plaintiff is, upon its face, a security. It recites several debts to the bargainees, and others for which they were jointly or respectively bound as sureties for the bargainor; and that “he was desirous of securing the said L. S. and J. H. H. against loss by reason thereof.” It then, “ in consideration of the premises and of the sum of ten dollars” conveys to them the premises in dispute and other things. It does not authorise the bargainees to sell and is, though not in the most approved form, substantially a mortgage. It is probable, from the statement of Halsey that it was contemplated by the parties, that the lessors of the plaintiff should sell the estates conveyed, and discharge the debts, although not so provided in the deed. For he says that after he had executed the deed, but on the same day, the lessors of the plaintiff gave him a written paper (which he calls a defeasance) purporting to be an agreement on their part to pay any surplus of the proceeds of sale, after the payment of the debts secured by the deed, to certain others of his creditors, or amongst his creditors. The deéd itself was registered within six months; but the paper delivered to Halsey has never been registered and is now lost. For this reason, the defendant prayed an opinion of the court, that the deed is void : which was refused.

The opinion of this court accords with that of the JudSe who tried the cause. The deed itself is a mortgage on its face, and the registry of it communicates information of the nature of the interests of all the parties, at least so far as the debts mentioned in it extend, and tor the purposes for which it is now used. No evidence was given that those debts have been discharged, so as to shew that the lessors of the plaintiff are now using their legal title as trustees for the persons claiming under the separate instrument. The nature of that instrument appears very indistinctly. It ccr-tainly was not a defeasance though executed at the same time with the deed ; for it did not stipulate for the divesting of the estate conveyed by the deed, but was only a further declaration of other trusts to attach to the proceeds of the sales of the property, It did not form part of the contract on which this deed was given, but was a subsequent and distinct arrangement entered into for the satisfaction of Halsey, as to his having the benefit of any possible surplus. But if it had been, the only effect of not registering it would be to render void those trusts, and repel persons claiming under that paper as against Halsey’s general creditors. The case is very different from what it would be, if the deed to the lessors of the plaintiff was absolute. The whole would then be void, as the Court has decided in Gregory v. Perkins, (Cante p. 50) at this term : because no information could then be gained from it that it was a mere encumbrance. But this deed, as to the demands mentioned in it, imports every thing within the meaning and purposes of the act of 1820; and no other defect being imputed to it, it must be supported.

Per Curiam — Judgmekt aeeirmer',