Arthur v. Screven

• Citation: 17 S.E. 640,39 S.C. 77
• Parties: ARTHUR, Clerk, v. SCREVEN et al.
• Decision Date: 10 April 1893
• Court: United States State Supreme Court of South Carolina

17 S.E. 640

39 S.C. 77

ARTHUR, Clerk, v. SCREVEN et al.

Supreme Court of South Carolina

April 10, 1893

Appeal from common pleas circuit court of Richland county; W. H Wallace, Judge.

Action by E. R. Arthur, as clerk of the court of common pleas administrator of William N. Marsh, deceased, against E. W Screven and others, to foreclose an instrument alleged to have the effect of a mortgage on land. Judgment for defendants. Plaintiff appeals. Affirmed.

Lyles & Muller, for appellant.

Andrew Crawford, Bachman & Youmans, Barron & Ray, and John G Capers, for respondents.

McIVER C.J.

This was an action for the foreclosure of an instrument in writing, claimed to have the effect of a mortgage on certain real estate in the city of Columbia. The facts of the case seem to be undisputed, and are therefore not set out in the case, but must be gathered from the decree of his honor Judge Wallace, which is excepted to solely on the ground of errors of law. From what is there stated we learn that on the 1st of January, 1873, one Ezra W. Wheeler executed his promissory note, whereby he promised to pay to the plaintiff's intestate, W. N. Marsh, 12 months after the date thereof, the sum of $2,000, with interest at the rate of 10 per cent. per annum, payable annually, and that on the 23d of April, 1873, pursuant to an agreement in writing to that effect, signed and delivered an instrument in writing in the form of a mortgage, but omitted to fix his seal thereto. This instrument was proved and recorded in the office of the register of mesne conveyances for the county of Richland on the day of its date. It appeared in evidence that said Wheeler left the state some time in the year 1876, and never returned, and that he died some three years before the trial,--some time in the year 1889. It seems that in January, 1880, F. W. McMaster bought the real estate purporting to be covered by the alleged mortgage from Louis Le Conte, paying the purchase money at the time; but, as Le Conte seems to have held under a tax title only, the circuit judge lays no stress upon that purchase. But on the 30th of January, 1882, the said real estate was sold by the United States marshal as the property of Wheeler, under execution against him, and McMaster again became the purchaser, paid the purchase money, and received title from the marshal; and after holding possession until the 15th of March, 1888, he on that day sold and conveyed, with general warranty, the said property to the defendant E. W. Screven, who then paid the purchase money, took possession, and has ever since retained the same. This action was commenced on the 27th of February, 1892, against said Screven,--the other defendants being made parties as holders of liens subsequent in date to the instrument in writing set up by the plaintiff as a mortgage; and the only judgment demanded in the complaint is for a sale of the premises, and the application of the proceeds to the payment of plaintiff's claim, together with the costs of the action, but no personal judgment for any deficiency is demanded against any one. The defendants set up two defenses: (1) Plea of purchaser for valuable consideration without notice; (2) the statute of limitations. Both of these defenses having been sustained by the circuit judge, he rendered judgment dismissing the complaint; and from his judgment plaintiff appeals upon the several grounds set out in the record, which make, substantially, but two general questions: (1) Whether there was error in sustaining the plea of purchaser for valuable consideration without notice; (2) whether there was error in sustaining the plea of the statute of limitations.

Inasmuch as there is no dispute as to any of the other requisites to sustain a plea of purchase for valuable consideration, and inasmuch as it is conceded that neither Screven nor McMaster had any actual notice, at the time of their respective purchases, of the paper set up by the plaintiff as a mortgage, the question first stated is narrowed down to the inquiry whether the fact that such paper was spread upon the records of the proper office before either of those gentlemen bought will operate as constructive notice. And as we regard the rule to be well settled by the cases of Villard v. Robert, 1 Strob. Eq. 393, and Harper v. Barsh, 10 Rich. Eq. 149, recognized in a number of subsequent cases, that the record of a paper not required to be recorded will not operate as constructive notice to a subsequent purchaser, the inquiry is still further narrowed down to the question whether the paper in question was one which is required to be recorded, or, rather, whether the record of such a paper will operate as constructive notice. It is earnestly contended that the paper here in question is an "instrument in writing in the nature of a mortgage," and as such entitled, when recorded, to operate as constructive notice, under the provisions of section 1 of the act of 1843, incorporated in the Revised Statutes of 1872, (page 422,) which was the law in force at the time the transaction under consideration took place, and afterwards incorporated as section 1776 in the General Statutes of 1882. That section in the Revised Statutes of 1872 (and there has been no substantial change since) reads as follows: "No mortgage, or other instrument in writing in the nature of a mortgage, of real estate, shall be valid, so as to affect the rights of subsequent creditors or purchasers for valuable consideration, without notice, unless the same shall be recorded," etc. It must be admitted that if the paper under consideration can be regarded as an instrument in writing in the nature of a mortgage, and if it was duly recorded, the language of the statute implies very strongly, if not necessarily, that such record would operate as constructive notice. Two questions here arise, both of which must be determined in the affirmative before this branch of the appeal can be sustained: (1) Is this paper an instrument of writing in the nature of a mortgage? (2) Has it been properly admitted to record?

Upon the first of these questions we have been very much impressed by the argument of the counsel for appellant, and we confess we have felt very great difficulty in deciding it; so much so that we would feel some hesitation in resting our conclusion upon the answer to this question. It seems to us, however that there is a difference between a paper which would be given the effect of a mortgage by the court of equity, as between the parties to it, and a paper which is in the nature of a mortgage. For example, a mere agreement to give a mortgage might, under certain circumstances, be given the effect of a mortgage, as between the parties; and yet such a paper could scarcely be regarded as an instrument in writing in the nature of a mortgage, for it would be a mere contract, perhaps evidenced simply by a letter, and all the essential requisites to the creation of a mortgage would be wanting. The argument seems to ignore the distinction between the essential requisites to the creation of a mortgage, and the effect which may be given to it after it has been created, either by statutory provisions or by judicial construction. One of the essential requisites to the making of a will is that it shall be executed in the presence of three subscribing witnesses, and notwithstanding the various changes which have been made in the effect which shall be given to various provisions which it may contain, it is quite certain that no paper not so executed can ever...