Sowell v. Rankin

• Citation: 82 So. 317,120 Miss. 458
• Decision Date: 26 May 1919
• Docket Number: 20708
• Court: United States State Supreme Court of Mississippi
• Parties: SOWELL v. RANKIN ET AL

82 So. 317

120 Miss. 458

SOWELL v. RANKIN ET AL

No. 20708

Supreme Court of Mississippi

May 26, 1919

Division A

APPEAL from the chancery court of Simpson county. HON. G. G. LYELL Special Chancellor.

Suit for injunction by C. R. Rankin and another against T. J. Sowell and another as sheriff to enjoin them from selling certain property. From an order of the chancellor sustaining the injunction and making it perpetual defendant, T. J. Sowell, appeals.

On December 15, 1915, one J. W. Rankin, being then indebted to appellant, T. J. Sowell, conveyed his property, consisting of lands, to his father, C. R. Rankin. The deed was sent by mail by J. W. Rankin to the chancery clerk of Simpson county where the land was situated, for recording. But the deed having no revenue stamp upon it, was not filed by the clerk, or recorded at that time. The clerk, however, wrote to Rankin, calling his attention to the fact that he could not file or record the deed unless there was a revenue stamp affixed on it. Rankin wrote back to the clerk to attach a stamp, but it seems that no revenue stamp was attached, and the deed was not filed for record or recorded until March 28, 1916.

In the meantime, appellant, T. J. Sowell, had obtained judgment against J. W. Rankin, the grantor of the deed, in the circuit court of Simpson county, having no actual notice or anything to put him upon inquiry of the deed of J. W. Rankin to his father, C. R. Rankin. Shortly after T. J. Sowell had obtained his judgment, he caused execution to be issued upon the same, placed it in the hands of the sheriff, and it was by him levied upon the lands which had previously been deeded by J. W. Rankin to C. R. Rankin. Thereupon, J. W. Rankin and C. R. Rankin got out an injunction against T. J. Sowell, appellant, and the sheriff, enjoining them from selling the property. The case was tried before the chancery court of Simpson county, and resulted in the chancellor sustaining the injunction and making it perpetual, and from this decree T. J. Sowell appeals.

Affirmed.

Powell & Mayes, for appellant.

There are several questions which were thrashed out in the lower court, but we regard them as unimportant in the decision of this case.

The sole issue which we shall present is this: Does the fact that J. W. Rankin gave a deed to his father, C. R. Rankin, before our judgment was rendered, convey the title so as to prevent appellant from levying his execution, where the deed was never filed or recorded because no internal revenue stamp was placed thereon until after our judgment was rendered?

In the first place, we say that under the Internal Revenue Act of Congress, passed in 1914, the property being valued at one thousand dollars, it was necessary to have the deed stamped, and that it was a violation of the law to register the deed without the proper stamp. We quote from 4 Federal Statutes Annotated, section 11, page 290: "Issuing instruments mentioned in schedule A without stamping--penalty: That any person or persons who shall register, issue, sell or transfer, or who shall cause to be registered, issued, sold or transferred any instrument, document, paper of any kind or description whatsoever, mentioned in Schedule A. of this act, without the same being duly stamped or having thereupon an adhesive stamp for denoting the tax chargeable thereon, and cancelled in the manner required by law, with intent to evade the provisions of this Act, shall be deemed guilty of a misdemeanor."

The statute further provides: "That where it shall appear to said collector upon oath or otherwise, to his satisfaction, that any such instrument has not by reason of accident, mistake, inadvertence, or urgent necessity, and without any willful design to defraud the United States of the stamps, or to evade or delay the payment thereof, then and in such case, if such instrument, or, if the original be lost, a copy thereof, duly certified by the officer having charge of any records in which such original is required to be recorded, or otherwise duly proven to the satisfaction of the collector, shall, within twelve calendar months after the making or issuing thereof, be brought to the said collector of internal revenue, to be stamped, and the stamp tax chargeable thereupon shall be paid, it shall be lawful for the said collector to remit the penalty aforesaid and to cause such instrument to be duly stamped."

And further that: "In all cases where the party has not affixed the stamp required by law upon any such instrument issued, registered, sold or transferred at a time when and at a place where no collection district was established, it shall be lawful for him or them or any party having an interest therein, to affix the proper stamp thereto, or if the original be lost, to a copy thereof. But no right acquired in good faith before the stamping of such instrument, or copy thereof, as herein provided, if such record be required by law, shall in any manner be affected by such stamping, as aforesaid."

By section 12 of this Act, found on page 291 of 4th Federal Statutes Annotated, we find: "Recording unstamped instruments prohibited--Tax on foreign bonds, etc.--That hereafter no instrument, paper, or document required by law to be stamped, which has been signed or issued without being duly stamped, or with a deficient, nor any copy thereof, shall be recorded until a legal stamp, or stamps, denoting the amount of tax, shall have been affixed thereto as prescribed by law."

Under Section 13 of this Act, on page 293 we find: "Effect of recording instrument: That it shall not be lawful to record or register any instrument, paper or document required by law to be stamped unless a stamp or stamps of the proper amount shall have been affixed and cancelled in the manner prescribed by law."

It is true that this court, in the case of Mangold v. Barlow, 61 Miss. 593, which is cited with approval in the case of the Bank of Lexington v. Cooper, 115 Miss. 794, says: "The mortgagee is regarded as having discharged his entire duty when he has delivered his mortgage, properly executed and acknowledged, to the recording officer, and as being in the same attitude as if the deed were at that moment correctly spread upon the record book so that no error in transcription can deprive the deed of its operation as a record instrument, and subsequent purchasers are charged with constructive notice, notwithstanding the officer does not properly record the instrument."

In this case, we contend that the instrument was not properly executed until it was properly stamped as required by law, and consequently could not be recorded legally and not being able to be so recorded, was not notice to any creditor.

We contend that under this law the clerk would have violated the law if he had filed the deed or recorded it. We contend further that it is against public policy for any man to acquire any right where he has to support those rights by the perpetration of any illegal act. In this case, the clerk did not file the deed for record nor record it, because to do so would have made him criminally liable as well as as the grantor in the deed. Our rights had interevend before the deed was properly executed by being stamped and before it could be legally filed or recorded.

It is true that appellee in his answer charged that we had actual notice of the existence of the deed, but the court will find, upon an examination of the record that this is emphatically denied by appellant, and there is no testimony to establish the fact. In truth, this position seems to have been abandoned on the trial of the case in the court below.

For these reasons, we respectfully insist that the decree of the chancellor in the court below should be reversed and judgment here be awarded to the appellant.

R. C. Russell, for appellee.

The only question this record presents to the court for adjudication is whether or not the deed from J. W. Rankin to his father, C. R. Rankin, to the property involved in this controversy, not having the required revenue stamps affixed thereto, constituted notice when appellant obtained his judgment against J. W. Rankin.

It is contended by the counsel for appellant that this deed of conveyance, though lodged with the proper officer for record, was not notice, and was not a valid instrument because the required revenue stamp was not affixed thereto, and in this connection they cite in their brief various sections of the internal revenue act of Congress, none of which hold that the deed in question was inoperative, or did not constitute notice or that it cannot be lodged with the proper recording officer for record without the required revenue stamp, but provides only that it cannot be recorded or that if it is recorded, the recording officer would be violating his official duty under this act of Congress.

It is appellee's contention that all they had to do, under the law of Mississippi, was to acknowledge and lodge the deed in question with the proper recording officer for record, and we have been unable to find an intimation anywhere, in this internal revenue act of Congress, that changes this rule. In fact it is our view that Congress could not change this rule.

The concluding clause in section 2784, Miss. Code 1906 reads as follows: "And be lodged with the clerk of the chancery court of the county in which the lands are situated, to be there recorded."

So under this section of our code, the deed did not have to be marked filed by the clerk to constitute notice. The moment it was lodged in the chancery clerks office for record, it became notice to all subsequent purchasers, and creditors etc. It is to be observed by the reading of this section that the filing of the deed is not required to constitute notice. ...