Mcdowell v. Lockhart
| Decision Date | 31 October 1885 |
| Citation | 93 N.C. 191 |
| Court | North Carolina Supreme Court |
| Parties | BREM & MCDOWELL v. J. A. LOCKHART, Assignee. |
OPINION TEXT STARTS HERE
This was a CIVIL ACTION pending in the Superior Court of ANSON County, and heard by Avery, Judge, at Chambers, on Spring Circuit, 1885, upon a case agreed.
There was judgment for the defendant, from which the plaintiffs appealed.
Messrs. Little & Parsons, for the plaintiffs .
Mr. John D. Shaw, for the defendant .
On February 27, 1884, in pursuance of an application in writing made by G. J. Redfearn to the Barn Safe Company, the latter sold and delivered to him a Number 6 Iron Safe, at the price of one hundred and ten dollars, in which is contained the following stipulation:
“It is agreed that the title of said safe shall not pass until notes are paid, or safe paid for in cash, but shall remain your (the vendor's) property until that time.” The purchase money has not been paid, nor has the contract been proved and admitted to registration.
On December 16, 1884, Redfearn becoming insolvent, made an assignment of his stock of goods, including the safe, which is specially mentioned, and other property, to the defendant James A. Lockhart, in trust to secure debts, large in amount, and in the order therein mentioned--the debt for the safe among them, and in a remote class--under which the trustee took possession.
On or about the first day of October of the same year, prior to said assignment, the plaintiffs, for value, became the owners of the claim due the company, with notice of all the rights, title and equity appertaining thereto under the said contract; the trustee had no notice at the time of the conveyance to him of the said contract, or of its provisions and conditions.
These facts are agreed to, and submitted as a controversy without action, as authorized by §567 of The Code, for the determination by the Judge of the question, in whom rests the legal title in the safe, and for whom judgment shall be rendered.
The Judge, being of opinion against the plaintiffs, gave judgment accordingly, and therefrom they appealed.
Previous to the act of 1883, conditional sales of personal property with a retention of title until the purchase money was paid, were upheld as valid without registration, notwithstanding they partook very much of the nature of those securities which are required to be registered. Clayton v. Hester, 80 N. C., 275; Vasser v. Buxton, 86 N. C., 335, are the later cases on the subject. But to avoid the similar mischiefs arising from the unknown separation of title from possession which such contracts were apt to produce in deceiving creditors and purchasers, in that year the General Assembly enacted that “all the conditional sales of personal property, in which the title is retained by the bargainor, shall be reduced to writing and registered in the same manner, for the same fees, and with the same legal effect, as is provided for chattel mortgages.” The Code, ch. 27, §1275.
The statute applicable to chattel mortgages or deeds conveying personal property in trust to secure debts, to facilitate the making of which a form is given, thus extended to conditional sales or contracts in which the title remains in the vendor as a security for the purchase money, declares them to be “good to all intents and purposes when the same shall be duly registered according to law.” §1274.
These instruments are thus brought under the operation of the previous general law, which refuses any validity to deeds of trust or mortgages of real or personal estate as against creditors and purchasers for a valuable consideration from the bargainor and mortgagor until they are registered. § 1254. The effect produced by this legislation upon conditional sales of personal goods is to render inoperative so much of the contract as undertakes to reserve property in the vendor as a security for the purchase money, unless and until the contract is registered, and, so far as creditors and purchasers for value are concerned, the transfer must be absolute and unconditional.
Now while there is some diversity of opinion on the question whether an assignment to secure existing debts is a conveyance to a purchaser “for money or other good consideration” within the meaning of the statute of 27...
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