43 S.C. 39 | S.C. | 1895
The opinion of the court was delivered by
The Fort Motte Lumber and Shingle Company purchased from James A. Peterkin, the ‘'timber leaf” upon a certain tract of land in Richland County, together with certain machinery, boilers &c., then on said land, and to secure the payment of the purchase money thereof, on the 8th of August, 1892, executed a mortgage to said Peter-kin upon all its stock of timber, lumber, and shingles, as well
Upon the execution of this contract, the property mentioned in the complaint was delivered to the said lumber and shingle company, and by it placed upon its mill sites. On the 20th of December, 1892, the defendant, upon breach of the condition of its mortgage, seized the said property, and took it into its possession, where it remained until it was destroyed by fire some time in August, 1893. In the meantime, to wit: on the 27th of June, 1893, the plaintiff demanded from the defendant possession of said property, which demand being refused, this action was commenced to recover damages for the conversion of said property. It is conceded that no part of the purchase money of the property in dispute was ever paid by the lumber and shingle company to the plaintiff; that the contract above referred to, for the purchase of said property, was never recorded until the 7th of February, 1893; and that the defendant never had any notice, either actual or constructive, of such contract until that date. All the material facts being con
Bnt while it is not disputed, and could not well be under the cases of Moore v. Byrum, 10 S. C., 452, Parker v. Jacobs, 14 S. C., 112, and Hirshkind v. Israel, 18 S. C., 157, that by a mortgage covering after acquired personal property, the mortgagee may obtain a lien upon such property after it is acquired by the mortgagor, it is earnestly contended by counsel for respondent that a mortgagee of after acquired property takes only a lien on the interest of the mortgagor, and if such property, when it is acquired, is subject to mortgages or other liens, the original mortgage does not displace such liens though they may be junior to it in point of time; and he cites in his argument several decisions of the Supreme Court of the United States to sustain his contention. But, as we understand it, the cases draw a distinction between a case where the mortgagor still retains possession of the acquired property, and a case where such property has passed into the possession of the original mortgagee, by a seizure under his mortgage. In the former, the mortgagee has only an equity to subject such property to the lien of his mortgage, which may be met and overcome by some superior equity, but in the latter the mortgagee acquired the legal title. It is observable that the cases cited from the Supreme Court of the United States were cases on the equity
It seems to us that the true rule is stated, and the proper distinction drawn, in the following quotation from Parker v. Jacobs, supra: “There can be no doubt that the rule at law is that it is necessary to the validity of the mortgage that the mortgagor should have a present property, either actual or potential, in the thing mortgaged (1 Jones Mort., § 140), but in equity the rule is different. As is said by Judge Story in Mitchell v. Winslow, 2 Story, 630, ‘it seems to be the clear result of all the authorities that wherever the parties, by their contract, intended to create a positive lien or charge, either upon real or personal property, whether then owned by the assignor or not, or, if personal property, whether it is then in esse or not, it attaches, in equity, as a lien or charge upon the particular property, as soon as the assignor or contractor acquires a title thereto, against the latter and all persons asserting a claim thereto under him, either voluntarily or with notice, or in bankruptcy.’ This doctrine is fully established by the case of Holroyd v. Marshall, 10 H. L. Cas., 191, and is recognized in McCaffery v. Woodin, 65 N. Y., 459. We take it, therefore, that a mortgage on personal property,' in which the mortgagor has no present interest, either actual or potential, is ineffectual to transfer the legal title to such property when subsequently acquired by the mortgagor, unless, when acquired, possession thereof is given to the mortgagee, or taken by him under the mortgage (Moody v. Wright, 13 Metc., 32, Williams v. Briggs, 11 R. I., 476, and many cases there cited), but that, in equity, such a mortgage is effectual to charge the property as soon as it is acquired by the mortgagor, and before possession is obtained by the mortgagee, with an equitable lien which will prevail against
Applying this doctrine to the case under consideration, it is clear that the defendant, by its mortgage, executed and duly recorded in August, 1892, acquired, at least, an equitable lien upon the property in question so soou as it was acquired by the mortgagor under the contract of 23d of September, 1892; but when the property was seized by the defendant, under its mortgage, on the 20th of December, 1892, and taken into its possession, the defendant thereby acquired the legal title, before any notice, either actual or constructive, of plaintiff’s mortgage, and was, therefore, entitled to retain the possession thereof.
The judgment of this court is, that the judgment of the Circuit Court be reversed, and that the complaint be dismissed.