Maxwell v. Stuart

• Decision Date: 25 September 1897
• Citation: 42 S.W. 34
• Parties: MAXWELL v. STUART et al.
• Court: Tennessee Supreme Court

42 S.W. 34

MAXWELL v. STUART et al.

Supreme Court of Tennessee.

September 25, 1897.

Appeal from chancery court, Washington county; John P. Smith, Chancellor.

Bill by F. T. Maxwell against A. M. Stuart and others. Defendants appealed from a judgment of the court of chancery appeals reversing the decision of the chancellor, and holding defendants liable for damages, and fixing the basis on which damages should be computed. Reversed.

Deaderick & Epps and Newton, Hacker & Son, for appellants. Kirkpatrick, Williams & Bowman, for appellee.

WILKES, J.

This is a bill filed against the register of Washington county and the sureties on his official bond for failing to properly index a mortgage upon the real estate of William Harr in the index of the record book in his office. The facts as found and reported by the court of chancery appeals are that complainant, who is a resident of Connecticut, made a loan of $2,500 to William Harr. The loan was negotiated for Harr by one Brading, a resident of Johnson City, and one Jacobs, who lived at some point north. As a condition of the loan, complainant exacted mortgage security upon unincumbered real estate, and that an abstract of title showing these facts should be furnished to him. Brading and Harr solicited Mr. Faw, of Johnson City, a competent attorney, to prepare the abstract of title for them. Complainant did not know Faw in the matter, and had no contract with him, and nothing to do with his selection. Complainant accepted the abstract prepared by Faw for Harr when it was brought to him, and, upon the faith of it, took the mortgage, and loaned the money. Faw, Jacobs, and Brading were all to be directly or indirectly paid by Harr, and complainant was not obligated to pay anything, nor did he pay anything, to either of them. John E. Harr, the brother of William Harr, was selected as trustee, and complainant assented thereto, but had nothing to do with his selection. John E. Harr and wife, and William Harr and wife, some weeks before this mortgage was executed, had joined in a trust deed to Newton Hacker, to secure a debt to the Watauga Bank, each conveying separate property of his own, and William Harr conveying the real estate he afterward mortgaged to his brother John E., for the benefit of complainant. This deed of trust to Hacker was regularly registered when it was made, and before the mortgage for complainant's benefit, and was entered by the register in the note book: "Harr, Will, & als., to Hackner Newton, Trustee." In the volume in which it was registered it was indexed: "Jno. E. Harr & als. to Newton Hacker, Trustee." Both these books were in the register's office when Mr. Faw made his abstract, but he only examined the index of the latter, and from it made his abstract; and, as it did not show that William Harr had joined in the trust deed to Hacker, the incumbrance created thereby did not appear in the abstract of title. Complainant, soon after the first installment of interest was paid on his debt, learned of the defect in the title and the incumbrance on the land by the Hacker trust deed, and he thereupon sold and transferred his notes and mortgage to the Citizens' Bank for $1,975, receiving from the bank time certificates of deposit therefor. Some question afterwards being made as to the authority of the officers of the bank to buy the notes and mortgage, complainant repurchased them from the bank, and the complainant's notes and mortgage were returned to him, and he received from the bank, in addition, a note amounting to $575, as one of the terms of the repurchase. Complainant took judgment against William Harr on his debt, and execution as to him has been returned nulla bona. The property conveyed for complainant's benefit would have been amply sufficient to protect his debt but for the prior mortgage to Hacker. As it is, it has all been consumed by that mortgage. The court of chancery appeals find that the register was guilty of no willful negligence, but was under the impression that the indexing had been done according to law, and that all that the statute required had been done.

The registration and indexing in controversy in this case were done before the act of 1893 was passed, and hence it is not to be considered in determining the duties and liabilities of the register. The acts directly bearing upon the matter of indexing and the liability of the register therefor are Acts 1839, c. 26, § 1, which was brought into the Code of 1858 as subsection 11 of section 454, and is in these words: "To place any instrument he registers at the time of registration in the index of the book in which it is registered, under the initial letter as well the name of the bargainor as of the barbainee." See Code 1858, § 454, subsec. 11. Section 455 of the Code of 1858 provides as follows: "For failing to make such index the register shall forfeit one hundred dollars, one half to the use of the state, and the other half to the person who shall sue for the same." This was also a provision of the act of 1839. Section 456, Code 1858, provides that "upon failure to perform any of said duties the register may be indicted, and on conviction fined and imprisoned, and shall be civilly responsible to any person injured by the failure." This was from Acts 1841, c. 12, § 6. This act of 1841 (chapter 12) did not contain any provision as to indexing, but was wholly devoted to the duties of the register in keeping a proper note book, and making proper entries thereon; and it was provided that such entry upon the note book should be notice to the whole world from the day and hour when received and noted. It was with reference to this duty that the act of 1841 provided a...