Miles v. King
| Citation | 5 S.C. 146 |
| Parties | MILES v. KING. |
| Decision Date | 31 May 1872 |
| Court | United States State Supreme Court of South Carolina |
OPINION TEXT STARTS HERE
That an execution creditor has notice of an unrecorded mortgage does not affect a purchaser at Sheriff's sale under the execution of the mortgaged land, such purchaser being without notice.
Where a mortgage given in 1855 was duly recorded, as the law then of force directed, but-the record having been destroyed-was not again recorded, as the Acts of 1866 required, it is void as against a subsequent purchaser for valuable consideration without notice.
The Act of 1866, directing all instruments of writing which by law were required to be recorded, the records of which had been destroyed, to be again recorded within a time fixed by the Act, or else to be null and void as against subsequent purchasers for valuable consideration without notice, and creditors without notice, does not impair the obligation of contracts, and is a constitutional and valid law.
BEFORE FARMER, J., AT COLLETON, MAY, 1872.
This was an action by C. R. Miles and L. D. DeSaussure, against Samuel J. King, C. P. W. King and Caleb Sauls, to foreclose a mortgage of land.
The case was this: In the year 1854, Samuel J. King and C. P. W. King gave to Edward J. Parker their bond for $5,000, and on the 26th May, 1855, to secure the payment of the debt, they executed to Parker their mortgage of a tract of land in Colleton. The mortgage was duly recorded in June, 1855, and a few months afterwards Parker assigned both instruments to the plaintiffs. The record of the mortgage was destroyed in 1865, and it was not again recorded as directed by the Acts of 1866, which provided that “all instruments of writing of which a record or registry is required by law, and of which the record or registry is destroyed or lost, but the original preserved,” shall be recorded by the 1st day of December, 1867, “otherwise they shall not prevail as liens against subsequent purchasers for valuable consideration without notice, nor creditors without notice,” (13 Stat., 384, 411.) The original had been preserved.
When the mortgage was given the two Kings were seized of the tract of land, as tenants in common, each being entitled to one undivided moiety. On the 4th August, 1866, the undivided share of Samuel J. King was sold by the Sheriff under execution, in favor of Hull & Co., against Samuel J. King, and purchased by Caleb Sauls, who paid his bid and received a conveyance from the Sheriff. The debt, to satisfy which the sale was made, was contracted in 1860 and 1861. Sauls was a purchaser without notice. He alone answered the complaint, and he put his defense upon the ground that he was a purchaser of Samuel J. King's moiety, for valuable consideration, and without notice. His Honor sustained the defense, and made a decree for the sale of C. P. King's moiety.
The plaintiffs appealed, on the following grounds:
First. Because the plaintiffs' mortgage given for the purchase money, having been duly recorded in accordance with the provisions of the Act of 1843, became the paramount lien upon the mortgaged premises; and Hull & Co., who became creditors of the mortgagor, Samuel J. King, in 1861, while the said record was in existence, were subsequent creditors, with notice of the mortgage; and under the judgment recovered by them against the mortgagor could levy only upon his interest, subject to the mortgage, viz: the equity of redemption or right to redeem the mortgage.
Second. Because the defendant, Sauls, who purchased at the sale under Hull & Co.'s execution, obtained no greater rights, as against the lien of plaintiffs' mortgage, than those of the plaintiffs in execution, who were subsequent creditors, with notice of the mortgage.
Third. Because the due registration of plaintiffs' mortgage was notice to all the world; and the defendant, Sauls, as well as Hull & Co., were affected with notice, and could never become “purchasers or creditors without notice;” and Sauls having purchased only the interest of the mortgagor levied upon under the judgment obtained by creditors with notice, is not “a purchaser for valuable consideration without notice,” within the purview of the Acts of 1866.
Fourth. Because the Acts of 1866, according to their true construction, do not destroy the paramount lien of plaintiffs' mortgage, secured by due compliance with the requirements of the Act of 1843.
Fifth. Because, if such is the effect of the Acts of 1866, then their “provisions are so unreasonable as to amount to a denial of a right, and call for the interposition of the Court.”
Sixth. Because the mortgagees, by compliance with the requirements of the Acts of the Legislature in relation to the recording of mortgages existing at the time of registration, acquired certain vested rights in the mortgaged premises, which could not be divested by any subsequent exercise of mere legislative will. And if the operation of the Acts of 1866 is to destroy, defeat or postpone rights so vested, then they “impair the obligation of a contract,” and are unconstitutional, null and void.
Tracy, for appellants.
Henderson & Behre, contra.
The following is the opinion of
Assuming that the mortgage was recorded in conformity with the Act of 1843, the points involved in the grounds of appeal draw in question the validity of the Acts of 1866, (13 Stat. 384, 411,) so far as they are held by the Circuit decree to affect it.
Sauls presents himself in the position of a subsequent purchaser for valuable consideration without notice, and it is an error on the part of the appellants to contend that the mortgage having been on record when Hull, in 1861, became the creditor of the mortgagor, S. J. King, the notice thus binding him must be held to extend to the respondent, the purchaser. There is no connection between them. The equities existing between Hull, the creditor, and King, the debtor, in no way, either in an actual shape, or by implication, attach to the purchaser at Sheriff's sale, who takes his title, not mediately, but immediately, as is said in McKnight vs. Gordon, 9 Rich. Eq., 233. That case disposes of the argument that the purchaser at a Sheriff's sale was bound by the notice, which the creditor, under whose judgment the land was sold, had of the pre-existing mortgage, when the debt due him was contracted.
The main ground on which a reversal of the Circuit decree is claimed by the appellants is, that their mortgage having been recorded in conformity to the requirements of the Acts in force at the time of its execution, they acquired certain vested rights in the mortgaged premises, which could not be divested by any subsequent exercise of mere legislative will; and if the operation of the Acts of 1866 is to defeat, destroy or postpone rights so vested, then they amount to a denial of right, impair the obligation of a contract, and are unconstitutional, null and void.
The lien of a mortgage becomes operative through its own force. It is perfect and complete without the aid of confirmation by legislative authority. In McKnight vs. Gordon, (already referred to,) p. 231, it is said: “Recording is not an element in the due execution of a mortgage, and, therefore, is not essential to its validity.” To prevent the mischief that would result to the public, if instruments, by the force of which property is transferred, particularly where no change of possession is required, the Legislature declared that although their effect may remain unchanged as to the parties, they should not prevail against subsequent creditors or purchasers for valuable consideration without notice, unless recorded in certain offices within a limited period. The mortgage acted by its own power from its execution, and we fail to see how the fact of recording it, in compliance with the provision then required by law, was so incorporated with it as to constitute a part of the contract, which the respective parties, as shown by the instrument, had entered into. The Legislature did not declare in the Act of 1843 that the notice which it therein fixed should forever remain unchanged, or by any implication bind itself, no matter what might be the necessity that intervened, not to provide by further interposition, for the prevention of the mischief which the Act of 1843 was designed to frustrate, should it prove ineffectual for the end in view.
But the General Assembly has power to divest vested rights, and to enact statutes retrospective in their action, provided they do not impair the obligation of a contract.-Satterlie vs. Matthewson, 2 Pet., 380;Watson vs. Mercer, 8 Pet., 110;Charles River Bridge vs. Warren Bridge, 11 Pet., 420;Florentine vs. Bartow, 2 Wal., 410.
In what respect, however, are the statutes of 1866 retrospective? While that of 1843 was effectual for the intended purpose, the conditions on which it should operate as notice remain unchanged. When it failed to meet the exigency for which it was adopted, all that the Legislature proposed by the Act of 1866 was to establish a mode by which, for the future, constructive notice of mortgages and other instruments, of which a registry had before been required, should be provided. This it did by directing that they should be re-recorded. It did not affect the past. When the Act of 1843 failed to accomplish its intended purpose through the destruction of the record books which contained the evidence of the notice, all that the Legislature proposed was to carry out the purpose of its enactment.
The notice which it required was to protect the public. Where would have been the protection, after the destruction of the registry books, to a proposed purchaser from the mortgagor? The original, if preserved, would remain in the hands of the mortgagee, without anything to put such purchaser to enquiry, and the whole community in the Counties where the books of the Register of Mesne Conveyance had been destroyed would have been in a state of inextricable confusion as to the title to their lands, without...
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...safeguards are thrown around such rights by the provisions of sections 14 and 23 of article I. of the constitution. In the case of Miles v. King (5 S.C. 146), it held that the act of 1866, which required all instruments in writing of which a record is required by law, and of which the recor......
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