93 N.C. 191 | N.C. | 1885
On 27 February, 1884, in pursuance of an application in writing made by G. J. Redfearn to the Barn Safe Company, the latter sold and delivered to him a number six iron safe at the price of one hundred and ten dollars, in which is contained the following stipulation:
"It is agreed that the title of said safe shall not pass until notes are paid or safe paid for in cash, but shall remain your (the vendor's) (192) property until that time." The purchase money has not been paid, nor has the contract been proved and admitted to registration.
On 16 December, 1884, Redfearn, becoming insolvent, made an assignment of his stock of goods, including the safe, which is specially mentioned, and other property, to the defendant, James A. Lockhart, in trust to secure debts, large in amount, and in the order therein mentioned — the debt for the safe among them and in a remote class — under which the trustee took possession.
On or about 1 October of the same year, prior to said assignment, the plaintiffs, for value, became the owners of the claim due the company, with notice of all the rights, title and equity appertaining thereto under the said contract; the trustee had no notice at the time of the conveyance to him of the said contract, or of its provisions and conditions.
These facts are agreed to and submitted as a controversy without action, as authorized by sec. 567 of The Code, for the determination by the judge of the question in whom rests the legal title in the safe and for whom judgment shall be rendered.
The judge, being of opinion against the plaintiffs, gave judgment accordingly, and therefrom they appealed.
Previous to the Act of 1883 conditional sales of personal property with a retention of title until the purchase money was paid, were upheld as valid without registration, notwithstanding they partook very much of the nature of those securities which are required to be registered. Clayton v.Hester,
The statute applicable to chattel mortgages or deeds conveying (193) personal property in trust to secure debts, to facilitate the making of which a form is given, thus extended to conditional sales or contracts in which the title remains in the vendor as a security for the purchase money, declares them to be "good to all intents and purpose when the sameshall be duly registered according to law." Sec. 1274.
These instruments are thus brought under the operation of the previous general law, which refuses any validity to deeds of trust or mortgages of real or personal estate as against creditors and purchasers for a valuable consideration from the bargainor and mortgagor until they are registered. Sec. 1254. The effect produced by this legislation upon conditional sales of personal goods is to render inoperative so much of the contract as undertakes to reserve property in the vendor as a security for the purchase money, unless and until the contract is registered, and, so far as creditors and purchasers for value are concerned, the transfer must be absolute and unconditional.
Now while there is some diversity of opinion on the question whether an assignment to secure existing debts is a conveyance to a purchaser "for money or other good consideration" within the meaning of the statute of 27 Elizabeth; or "for the full value thereof" and without notice, as modified by the Act of 1840'-41, as it is admitted such purchaser is, to whom an assignment may have been made to secure an indebtedness created at the same time, the distinction is expressly denied by this Court after an able and exhaustive argument from Mr. Rodman, since a member of this Court, to the contrary in Potts v. Blackwell,
Again: "A deed in trust executed bona fide for the security of actual creditors, whether for debts old or new, must then, in our (194) opinion, be regarded as a conveyance for value under the statute, 27 Elizabeth."
In Moore v. Ragland,
Yet in an intermediate case, McKay v. Gilliam,
Evidently, in this inadvertent recognition of a distinction between the two classes of deeds in trust in which in Potts v. Blackwell, supra, the Court declares "as now exploded" the attention of the Chief Justice seems not to have been called to the ruling in that case, and, what is more singular, to have overlooked what he himself said when the same case was before the Court at the previous term, on an original hearing.
He then thus answers the inquiry: "Is a deed of trust or a mortgage made to secure an existing debt a conveyance for valuable consideration?"
"It is a settled principle, acted upon every day, that the trustee or mortgagee is a purchaser for a valuable consideration within the(195) provisions of the 13th and 27th of Elizabeth; but it would seem that they take subject to any equity that attached to the property in the hands of the debtor, and cannot discharge themselves from it on the ground of being purchasers without notice," etc.
The ruling of the Court in the case of Potts v. Blackwell, supra, must be deemed to have conclusively settled the law in this State upon the before mooted point, and a different interpretation cannot be allowed to be put upon the words, "purchased for a valuable consideration," and in the act that requires registration.
While unregistered deeds in trust and mortgages are inoperative against creditors and purchasers for value until registered, and from the time of registration, like other deeds that are required to be registered, they are, when registered, effectual as between the parties from the delivery.Leggett v. Bullock,
No error. Affirmed.
ASHE, J., did not sit. *183
Cited: Empire Drill Co. v. Allison,
