Den on Demise of Kerr v. Davidson, 32 N.C. 269, 10 Ired. 269 (1849)

Aug. 1849 · Supreme Court of North Carolina

32 N.C. 269, 10 Ired. 269

DEN ON DEMISE OF JAMES M. KERR vs. ROBERT DAVIDSON.

A. conveyed to B. a tract of land by a deed absolute on its face, but intended merely as a security for money loaned, and B. gave a bond for the re-conveyance of the land, when the money was repaid; afterwards B. sold the land to C. for a full and valuable consideratioh, and then the creditors of 'A. sold the land by execution, and D. became the purchaser. Held, that D. only acquired the right of A., that is, the right to demand in Equity a conveyance of the land from C., upon "paying what remained due of the money loaned by B. to A.

Appeal from the Superior Court of Law of Mecklenburg County, at the Special Term in November, 1846, his Honor Judge Pearson presiding.

This was ejectment. The defendant admitted himself to be in possession. Both parties claimed under one John Kerr. The plaintiff read in evidence a magistrate’s judgment against the said Kerr, dated February 1842, a levy under an execution issued January 1843, an order of sale and venditioni exponas in 1844, and a sheriff’s deed to the lessors dated February 1845.

The defendant read in evidence a deed from the said John Krit to one James McKnit.t AJex'mde", <1. ' -•!..• !■ ■ ri t: '> ,-.-oh'. ¡ i 1 ■'•..(!!, ,. , ... *" ■ - ” „ ¡i ; ", ' ¡í1 ' deed from sam Alexander to the. defendant for the consideration of @2850 00, which he proved was actually paid to the said Alexander. This deed was dated in 1843. The plaintiff called John Kerr. He swore that in 1820 he borrowed of Alexander $855 ; and agreed to make him an absolute deed for the land to secure the repayment of the money and interest, and Alexander agreed to give him a bond to reconvey; that he got the motley and made the deed, which had been read by the defendant, and Alexander executed to him a bond for the reconveyance. The loss of the bond was satisfactorily shown, and the witness allowed to speak of the contents. He further stated, that, when he made the deed, the land was worth ¿83000 00, and he conveyed, merely to secure the repayment of $855; that he had retained possession since 1820, until he was put off in 1843 by the defendant treating it as his own, without ever paying rent; but he made several small payments towards the interest, on which occasions, Alexander would take up the old bond and give him a new one ; that none of the bonds are registered. He had the lost bond proved, in order to be registered, after the defendant had purchased of Alexander, but the bond was lost. He further stated, that, before the defendant bought of Alexander, he called on the witness to see the land, and know the condition in which it stood. The witness told him,that Alexander held the title, to secure the repayment of borrowed money ; that if he and the witness could agree upon the price, Alexander’s money must be paid and the balance of the purchase money be paid to the witness. Alexander could then take up his bond, and, between them, the defendant could get a clear title. He was not consulted by the defendant any further. The defendant’s counsel moved the Court, first, that being a bona fide purchaser for valuable consideration, he had a good title, even if he had notice of the bond held by Kerr before he purchased; secondly, that there was no sufficient notice of the nature of the conveyance, made by Kerr to Alexander, proven, and so he was a purchaser for valuable consideration without notice, even if a want of notice was necessary to protect him.

The Court charged the jury, that, if the deed to Alexander, although absolute od its face, was in fact given to secure the repayment of money loaned, leaving a valuable interest in Kerr, as was shown by the bond and testimony of Kerr, then the conveyance was void, as to creditors, for want of registration ; the registration of the deed not being sufficient, because that did not show the truth of the transaction, and that it was in fact a mere security : that Davidson, being a purchaser for valuable consideration, would acquire a good title and be protected, provided he could be placed iii the light of a purchaser without notice, but that a want of notice, as well as a valuable consideration, was necessary: that, if the jury relied upon the testimony of Kerr, it was sufficient to shew what, in law, would amount to notice, or such information, as would put a man of ordinary prudence on his guard, and cause him to enquire.

The jury found for the plaintiff. A rule was moved for a new trial, because the Court refused to charge as requested, and upon the following grounds : First, because it did not appear, that five days notice had been given to Kerr, the debtor in the execution, before the order of sale; secondly, because the levy was not sufficiently definite to identify the land ; thirdly, because there was no endorsement on the execution, that it was levied on land for the want of goods and chattels, nor did it appear to have been shown to the County Court, before the order of sale, that there were no goods and chat-ties. These last three objections were not taken, until .after the trial and verdict, and, being objected to for that reason by the plaintiffs’s counsel, were not entertained by the Court, especially as some explanation might have been offered by testimony, if the objections had been taken during the trial. Rule for new trial discharged» Judgment for the plaintiff; appeal by the defendant,

Boyden, for the plaintiff.

Guión, Osborne, Alexander and Bynum, for the defendant.

Pearson, J.

The conveyance from Kerr to Alexander, being absolute on its face, although in fact a mere security for the $850 00 lent, and not being registered so as to show, that it was a mere security, was, under the Act of 1820, void against the creditors of Kerr and purchasers from him. The sale to Davidson, the defendant, being absolute and for full value, passed the title, although. Davidson had notice, that there was a right of redemption outstanding in Kerr, subject to this right of redemption, which .was a right in Equity, and did not affect the legal title. Davidson became the owner of the land by his purchase. The lessors of the plaintiff by their purchase acquired the right to represent Kerr and call upon Davidson, in Equity, to have the land, upon payment of the original sum lent and interest, or such part thereof as remained unpaid. The Judge below misconceived the ap. plication of the Act of 1840, chapter 28, which provides, that a volunteer or a purchaser for consideration shall hold the land against a subsequent purchaser for value, if such purchaser have notice of a previous voluntary conveyance.' This case, however, does not fall within the provisions of that Act, for here, Davidson, the defendant, is a' purchaser for. value from Alexander, and tho lessors of the. plaintiff aré subsequent purchasers, not from Alexander, but from Kerr, and have therefore no right in a Court of Law, under the 13th or 27th of Eliz., or under the Act of 1840, to impeach the title of Davidson, the defendant, who had, by payment of a full price, taken'the title from Alexander, before they, became creditors of Kerr, or, by their purchase made at sheriff’s .sale, acquired the right to represent creditors. ■ ,

Per Curiam.

Judgment reversed*