Smith v. Washington, 16 N.C. 318, 1 Dev. Eq. 318 (1829)

June 1829 · Supreme Court of North Carolina

16 N.C. 318, 1 Dev. Eq. 318

James H. Smith, adm’r. v. John Washington & David Thomson,

From Johnston.

A conveyance of a chose in action in trust to pay a debt, is within the act of 1820, (Bevisal ch. 1037,) and unless registered within sis months of its dale, is void against a subsequent bona fide assignee without notice.

The bill charged that the Plaintiff’s intestate being surety for one Robert H. Helme to a large amount, and Helme being anxious to indemnify him, conveyed to the Plaintiff, in trust for the intestate, by deed dated November 17th, 1825, a decree for a sum of money which be, Helme, had obtained against the firm of John Williams and Company, of which he was a member. The deed was filed as an exhibit and appeared to have been proved on the 25th of August, 1826, and recorded the 2d of September following.

The Defendants claimed under an assignment of the same decree made by Helme to them, junior in point of date, but proved and recorded within six months of its execution, and denied notice of the prior assignment to the Plaintiff.

The only question discussed was, whether the conveyance of a chose in action, in trust to secure a debt, was a. conveyance which the act of 1820 required to be proved and registered within six months after its execution..

Badger & Bevereux, for the Plaintiff.

S caw ell & Gaston, for the Defendant.

Hall, Judge.

—The object in registering mortgages and deeds of trust is, to guard against fraud and deception, by giving notice of the real situation of the debtor to all who may be interested in knowing it. To that end the Legislature have declared, that no mortgage or deed in trust for any estate, whether real or persona shall be good against creditors or purchasers, proved and registered within six months. (Jlct of 1820, Revisal ch. 1037.)

The obvious intent of the act, so far as creditors and purchasers are concerned, is to give publicity to conveyances which transfer the title of property to others, when the debtor retains the possession of it, and uses it as his own. it is true, generally speaking, that there cannot be such a possession of dioses in action, when separated from the right, as would be so likely to deceive third persons. But it is in suppression of the mischief, and in furtherance of the remedy, to require that mortgages and deeds of trust of chases in action, should also be registered. Chases in action are rights which may give a credit to the person in whom they are vested, and a transfer of them in secret, contrary to the reputed right, might readily tend to fraud and deception. Chases in action, judgments, debts, &c. are certainly included in the term personal estate. And that they come within the mischief intended to he remedied, is proved by the present controversy. Blackstone, (vol. 2, 398,) divides personal property into that which is in possession and that which is in action.

From the premises, I must conclude that the debt due from John Williams & Co. to Helme, evidenced, the bill states, by a decree, is personal estate, and that a conveyance of it in trust must be registered according to the act of Assembly, herein before recited.

Per Curiam.

— Dismiss the bill with costs.