Collins v. Davis

• Decision Date: 10 March 1903
• Citation: 43 S.E. 579,132 N.C. 106
• Parties: COLLINS v. DAVIS et al.
• Court: North Carolina Supreme Court

43 S.E. 579

132 N.C. 106

COLLINS v. DAVIS et al.

Supreme Court of North Carolina

March 10, 1903

Appeal from Superior Court, Franklin County; Justice, Judge.

Suit by Mariah Collins against John C. Davis and others. From a judgment for plaintiff, defendant Davis appeals. Reversed.

Acts 1885, c. 147, provides that no deed shall be valid, as against purchasers for a valuable consideration, except from the registration thereof, and a saving clause protects the rights of persons in the actual possession of the land. Held that the phrase "purchasers for a valuable consideration," as used in such act, means for a fair and reasonable price according to the common mode of dealing.

F. S Spruill and W. H. Yarborough, Jr., for appellant.

Battle & Mordecai, for appellee.

CONNOR J.

This is an action brought by the plaintiff, administratrix cum testamento annexo of J. T. Collins, deceased, for the purpose of foreclosing a mortgage executed by defendant Davis to her intestate. For the purpose of adjusting the rights and equities of all parties in interest, B. H. Tyson is joined as a party plaintiff, and D. S. Leonard and D. T. Hollingsworth as parties defendant. The material facts, as gathered from the pleadings and findings of the jury upon issues submitted to them, are as follows:

D. S Leonard, being the owner of a share of a tract of land situated in Franklin county, for the purpose of securing the payment of a note of $217.50, executed to the plaintiff B. H. Tyson a mortgage on the same, bearing date March 1, 1881. The note was due and payable November 1, 1881. The mortgage was duly recorded. On January 1, 1888, the said Tyson, for value, transferred and assigned the note and mortgage to J. T. Collins. On March 3, 1891, there was due on said note the sum of $321.15, and on said day the said Leonard, Davis, and Collins entered into an agreement, whereby the said Davis assumed the payment of said note, and the said Leonard executed a deed to him for a portion of said land, containing 56 acres, Davis executing to Collins a note for $321.15, and a mortgage on said land to secure its payment. Said deed was never recorded. The said mortgage was duly recorded. Collins did not cancel the Tyson mortgage on the record, nor does it appear that he actually surrendered the note for $217.50. Davis entered into possession of said land after the execution of said deed, and has remained thereon until the date of the summons herein. On November 7, 1900, Leonard executed a deed to the defendant D. T. Hollingsworth for the said 56 acres of land, for and in consideration of $420, and said deed was duly recorded. J. T. Collins died during the month of February, 1899, leaving a last will but naming no executor, and the plaintiff Mariah Collins was duly appointed administratrix cum testamento annexo. The plaintiff alleged that after said agreement Davis made several payments on said note, the last being made on May 8, 1894. The defendant Davis admitted the payments. The defendants Leonard and Hollingsworth averred that they had not sufficient knowledge or information to enable them to form a belief as to the said alleged payments. The foregoing facts were found by the jury upon issues submitted to them, either by consent or under the instructions of the court.

There was no evidence that Hollingsworth had any other notice of the mortgages and deeds above set forth, except such as was afforded by the records. His honor held that Hollingsworth was a purchaser "for value, but with notice."

The sixth issue submitted to the jury was as follows: "Is the plaintiff's cause of action as to Hollingsworth barred by the statute of limitations? Answered, under the instruction of the court, 'No."' To this instruction the defendant Hollingsworth excepted. The defendant Hollingsworth, upon the verdict as found, moved for a judgment of nonsuit against the plaintiff. The motion was denied, and the defendant excepted. The court rendered judgment for the plaintiff, directing a sale of the land, etc., and Hollingsworth appealed.

The legal title to the land was conveyed to and continued in B. H. Tyson by virtue of the mortgage of February 15, 1881. The transfer of the note and mortgage to Collins did not divest him of the title. Williams v. Teachey, 85 N.C. 402; Dameron v. Eskridge, 104 N.C. 621, 10 S.E. 700. He held the legal title in trust to secure the payment of the note in the hands of Collins, with the equity of redemption in Leonard. The effect of the agreement between Davis, Leonard, and Collins, and the execution of the deed to Davis, was, as between the parties, to transfer or convey the equity of redemption to Davis, who assumed the payment of the Tyson note. It is admitted that the Tyson mortgage has not been canceled, and there is no evidence that the note was in fact surrendered to Leonard or Davis. Hollingsworth took his deed with such notice as the possession and the registration of the mortgage from Leonard to Tyson, and Davis to Collins, gave him of the condition of the title. His honor was of the opinion that he purchased with notice, and therefore took subject to the incumbrances and the equities of Davis. By the failure to record the deed from Leonard to Davis, it was, under the provisions of chapter 147, Laws 1885, invalid as against Hollingsworth, who purchased for value. The proviso to said act, saving the rights of persons in the actual possession of land, applies only to deeds executed prior to December 1, 1885. In Maddox v. Arp, 114 N.C. 585, 19 S.E. 665, Shepherd, C.J., says: "The present case not being within the proviso of the act, actual notice of a prior unregistered contract to convey cannot, in the absence of fraud, affect the rights of a subsequent purchaser for value whose deed is duly registered according to law." It will be observed that the act of 1885 is an exact copy of section 1245 of the Code, with the insertion of the words, "conveyance of land or contract to convey or lease," etc., placing deeds upon the same basis, in regard to registration, as mortgages and deeds of trust; hence, as said by this court in Allen v. Bolen, 114 N.C. 560, 18 S.E. 964, "thus applying to the registration of deeds the same rule applicable to the registration of mortgages." Since the passage of the act of 1829 (chapter 20), brought forward and incorporated in the Code (section 1254), Reade, J., in Robinson v. Willoughby, 70 N.C. 358, says: "The decisions have been uniform that deeds in trust and mortgages are of no validity whatever as against purchasers for value and creditors unless they are registered, and that they take effect only from and after registration, just as if they had been executed then and there. *** No notice, however full or formal, will supply the want of registration." In Hooker v. Nichols, 116 N.C. 157, 21 S.E. 207, Faircloth, C.J., quoting the language of chapter 147 of the Acts of 1885, says: "It will be noted that the effective words of this act are identical in substance with section 1254 of the Code, and we are driven to the conclusion that the Legislature, with full knowledge of the meaning and effect of said act of 1829, intended to apply the same rule to all conveyances of land, as declared in the late act of 1885, and we must give the same effect to it." So that the defendant Davis is, in respect to the rights of Hollingsworth, in the same position as if he had no deed.

We are thus brought to a consideration of the question, presented by the argument of the learned counsel for the plaintiff, that the defendant Hollingsworth took his deed with notice of the equities of Davis; that Davis' possession put him upon notice of such equities as he acquired by the agreement of March 3, 1891, and the execution of the deed by Leonard. If this be conceded, we do not perceive how it will avail Davis or his mortgagee, Collins. If Davis acquired no title to the land as against Hollingsworth because of his failure to record his deed, we do not see how he could have acquired any equity affecting Hollingsworth. Suppose that...