Walker v. Coltraine, 41 N.C. 79, 6 Ired. Eq. 79 (1849)

June 1849 · Supreme Court of North Carolina

41 N.C. 79, 6 Ired. Eq. 79

JESSE WALKER & AL. vs. WILLIAM COLTRAINE.

An unregistered deed does not confer merely an equity. It Is a legal conveyance, and, although it cannot be given in evidence until it is registered, and, therefore, it is not a perfect legal title, yet it has, as a deed, an operation from its delivery, and so cannot be re-delivered.

Such a deed will be set up in Equity, whether voluntary or for value.

The cases of Tolar v. Tolar, 1 Dev. Eq. 456, and Plummer v Baskervill, 1 Ire. Eq. 452, cited and approved.

Cause removed from the Court of Equity of Randolph County, at the Spring Term 1849.

In 1S33, the defendant purchased from Philip Horney a tract of land containing 400 acres, and took a conveyance in fee. Soon afterwards the defendant contracted to sell one undivided part of 200 acres of the land to one Gray, and executed to him a deed of bargain and sale, including a mill. In 1837 the defendant and Gray contracted to sell to Nathan Henly, in fee, the 200 acres including the mill; and, as the deed to Gray had not been registered,’! t was agreed that it should be surrendered and cancelled, and that the land should be conveyed by the defendant to Henly ; which was then accordingly done, and Henly entered into possession. The price ‘which Henly was to give was $2000, payable annually in several succeeding years, with interest from the date. He paid $300 thereof, and then, on the 7th of February 1833, he gave to Gray and Coltraine his bonds for the residue of the purchase money, with the plaintiffs Walker and James Dicks as sureties thereon ; and, on the same day, Henly conveyed the same land and mill to Benjamin Swaim, two horses, a few cattle, and some furniture, upon trust to raise money by the sale thereof to pay the said debts to Gray and Coltraine, and also a debt for #105 which Henly owed the plaintiff Walker by bond of same the date. The deed of trust was executed by Henly, Swaim, Dicks, and Walker; and it was proved and registered on the 28th of February 1838. On the 12th of August 1839, Coltraine re-purchased the 200 acres and the mill from Henly for the balance then due to him and Gray for the original purchase money. The deed, which Coltraine had made to Henly, had not been registered ; and, instead of taking a conveyance from Henly, the deb ndant gave him up his bonds and took back the unregistered deed, which he had made in 1837. After that transaction, Henly continued to reside on the land, until the month of November 1839, though he let Coltraine into the immediate possession of the mill, and, in November, Coltraine took possession of the land and dwelling house also. Swaim, the trustee, died in 1844 intestate, leaving his heirs infants, and Henly is insolvent and has no visible property.

The bill was filed on the 3rd of September 1S46 against Henly, Gray, Coltraine and the heirs of Swaim, praying that the.debts to Graj' and Coltraine, secured in the deed of trust, may be declared to have been satisfied, and that the defendants, Henly and Coltraine, or one of them, may be decreed to pay to the plaintiff, Walker, the sum due on the bond to him, or that it may be raised by a sale of the property conveyed in the deed of trust, under the direction of the Court, and that, in order to complete the title and make the land sell for enough to satisfy the plaintiff’s debt, the defendant Coltraine may be decreed to produce the deed, which he made to Henly, that it may be registered.

The answer oí Coltraine states, that the reason why he did not take a conveyance from Henly upon his re-purchase, was merely to save the trouble of writing the deed and the expense of registering if, as it was considered by them, that, by taking up the deed, which he had made, before registration, he would have a good title under Horney’s deed to him. He admits, that he has in his possession the deed he made to Henly; but he says he is unwilling to produce it and have it registered, and insists, that he ought not to be compelled to do so, because itwas re-delivered to him, in order that it might be cancelled. He says, that he had known that Henly was indebted to Walker, but that, at the time of his last contract with Henly, he had no reason to believe that the debt had not been paid ; and that it was some considerable time after he had rescinded the contract with Henly, before he heard from any person, that in the deed of trust, taken by Walker and Dicks to indemnify them as sureties, a debt to Walker was included; and that then, upon enquiry of Henly, he informed this defendant, that it would be paid out of the personal property conveyed. And he insists, that there was a sufficiency of personal property for that purpose, if the' plaintiff had caused it to be sold and had not allowed Henly to consume or dispose of it.

The answer further states, that, upon his purchase from Henly, this defendant entered on the 13th of August, 1833, claiming under Horney’s deed to him, and continued in possession more than seven years before the filing of the bill, and he insists on the statute of limitations, as a bar to any claim under the deed of trust.

The defendant also insists, that, for want of the registration of the deed to Henly, the legal title remained during all the time in the defendant under Horney’s deed, and therefore, that Henly at no time had more than an equity in the land, and his deed of trust assigned no more ; and that the defendant re-purchased from Henly without no] tice and is entitled to hold the land against the deed of trust.

No counsel for the plaintiffs.

Iredell, for the defendant.

Ruffin, C. J.

It seems to the Court that the plaintiffs are clearly entitled to the relief they ask. It is error to say, that an unregistered deed confers only an equity. It is a legal conveyance, and, although it cannot be given in evidence until it be registered, and therefore it is not a perfect legal title, yet it has, as a deed, an operation from its delivery, and so cannot be re-delivered. It may be true, that the party may have to resort to a Court of Equity to render such a deed effectual; but it will there be set up, whether voluntary or for value. Tolar v. Tolar, 1 Dev. Eq. 456. Plummer v. Baskervill, 1 Ire. Eq. 252. Those cases show, that, at the instance of the person, to whom the deed was made, and, of course, of his vendee, the Court of Equity will compel one, who withholds a deed from registration, to produce it for that purpose, or, if he has destroyed it, to supply its place by another. The relief is founded purely on the Ipgal right of the party? by force of the deed executed, and the obstruction to that right by the destruction or suppression of the instrument. Therefore, it would not seem material, whether the defendant had notice of the deed of trust or not; that is, for the purposes of the relief prayed, however it might have availed him, if he had insisted on it as a bar to the discovery. For, the ignorance of a legal title in another does not impair it, as against a second purchaser. But it is not necessary? to decide this point of law, for several reasons. For it is almost impossible to believe, that this defendant had no knowledge of the deed made by Henly of the premises sold to him, as a security for the debts to the defendants for the purchase money?, and made on the very day the bonds for it were executed, and registered in a few days afterwards. Indeed, the answer seems to imply a knowledge of it to some extent-; for it states only, that the defendant had not heard, that the debt to Walker was included in the deed. Now, by a knowledge of the deed, hé is affected with notice of every part of its contents. However that may be, the defendant cannot defeat the operation of the deed of trust by suppressing his deed to Henly, whether the deed of trust be regarded as either the conveyance of the legal estate, or the assignment of an equity. For, in the second place, if Henly had but an equity, the deed of trust was the first assignment of it and was for value and in writing; and it left nothing in Henly, which he could assign to Coltraine, but the resulting trust after the satisfaction of the debts secured in the deed. But even for that the defendant’s contract was by parol and of no efficiency, by the statute of frauds; and equity follows the law in that respect. Of course, the defendant, as the purchaser of an equity, could get nothing more than his vendor had; and that would leave the deed of trust in full force. The defendant insists, also, on the statute of limitations. But that cannot avail him. If Henly’s title was equitable only, by reason that his deed had not been registered, then Coltraine held the legal title in trust for him, by his own contract; and his possession, though for seven years, would not bar the cestui que trust or his assignee. If Henly is to be regarded as the legal owner, notwithstanding the deed was unregistered, then the possession of Coltraine was not under color of title, and therefore would be no bar. He says, indeed, that he claims under Horney’s deed to him, and that is good col- or. But that is only a false appearance, and not the real truth. He did not in fact enter the last time under the purchase and conveyance from Horney, but under his contract with Henly. There might be a difficulty on the. plaintiff in showing that at law; but here the answer discloses the truth, and, in the view of this Court, Coltraine’s possession was derived from Henly, upon an executory contract for a sale and conveyance in fee; and such a possession cannot be treated as adverse, unless it be continued long enough to raise the presumption of a conveyance. But in point of fact his possession was not for seven years before the bill was filed, but wanted two months of it. It is true, the contract was with Henly in August 1839 ; but Coltraine was let into possession, at that time, of the mill only, and Henly retained the exclusive possession of the houses and all the other parts of the land until November following: and the present suit was brought early in September 1846.

The answer further insists, that the plaintiff might have raised his debt from the personal property conveyed in the deed, and that he ought not, after suffering Henly to dispose of it, to come on the land to his prejudice. The equity of the defendant in this respect would be sound, if the plaintiff had it in his power now to obtain satisfaction out of the other effects, or if, after he knew of the defendant’s purchase, supposing it to be valid — he had released the other effects. But, prima facie, a mortgagee has a right to look to all the property, and a purchaser of a part must see, at his peril that the encumbrance is satisfied. He cannot repel the creditor by showing merely, that, if he had not been indulgent, he might at one time have raised his money without interfering with the part he purchased. Of course, if enough of the property remained in the creditor’s reach to pay him, he ought to resort to it; or, if there were several purchasers, they ought to be liable in the inverse order of their purchases. But this is not a case of either of those kinds, as it appears upon the answer, that of the horses, the few cattle and a little furniture, included in the deed, nothing is left, but all consumed or disposed of by Henly; and it is not even stated, whether that was done before or after Coltraine’s purchase.

The Court therefore declares, that the plaintiff Walker is entitled to have the money due him and his costs raised out of the land. We suppose this declaration is all that is requisite, as the defendant will hardly allow the land to be brought to a sale for so small a sup, unless it be as a mode of now completing his own title at law. But if it should be necessary to resort to a sale, then, in order to render it effectual by securing a good title to the purchaser, it must be decreed, that the defendant produce his deed to Henly, that it may be registered, or that he join in the sale and conveyance ; and to that end there must, in the mean while, be the usual reference to ascertain the plaintiff’s debts and the costs of the suit.

Per Curiam.

Decree accordingly.