Dixon v. Doe ex dem. Lacoste , 9 Miss. 70 ( 1843 )

Mr. Chief Justice Sharkey

delivered the opinion of the court

The defendant in error brought ejectment against the plaintiff» in error for a lot of land in Natchez, and recovered judgment; to reverse which, the plaintiffs in error sued out their writ of error.

The facts contained in an agreed case are as follows, to wit; John Dixon was the original owner of the lot; on the 13th of September, 1386, he conveyed it to John P. Campbell, who-thereupon took possession but failed to have his deed recorded before the 25th of April, 1838, which was long after the proper-time for recording had elapsed.

On the 24th of October, 1836, Campbell conveyed to John Shirley, who took possession but did not have his deed recorded until the 4th of March, 1837, which was after the proper time for recording had elapsed.

In April, 1838, Shirley conveyed part of the lot to Edward Dixon, and the residue to Joseph Starkey, the plaintiffs in error, who took possession and had their deeds regularly recorded within three months.

John Dixon, the first owner, became indebted to Briggs, Lacoste & Co. by a bill of exchange dated the 31st January, 1837, payable on the 31 st of January, 1838. Suit was brought on this bill, and on the 17th of April, 1838, Briggs, Laeoste & ■Co. recovered a judgment. Execution was sued out, and levied on the lot; which, after having been regularly advertised, was sold as the property of John Dixon ; and Lacoste, the defendant in error, who was one of the judgment creditors, became the' purchaser and received a deed from the sheriff. Lacoste knew before the date of the judgment, that John Dixon had sold the lot. On this state of facts, the court below rendered judgment for the plaintiff in ejectment.

The ground on which the plaintiff seeks to overreach the deed from John Dixon, is, that it was not recorded as the statute requires, and is therefore void against creditors. The superiority of title must depend upon the construction of the registry act.

In applying the provisions of the statute to the foregoing facts, the first question to be determined is, are creditors affected by notice of an unregistered deed ? If it should appear that they are, then it will be necessary to determine what constitutes notice.

This case seems to have excited much interest amongst the members of the bar generally, and has been discussed with-great ability and research in all its bearings. After the passage of the registry acts in England, the court of chancery seized upon the circumstance of notice to a subsequent purchaser of a pre-existing unregistered deed as sufficient to create an equity between the prior and subsequent purchaser, by which the former should prevail against the latter notwithstanding the legal title which passed to the subsequent purchaser. By the 27 Hen. 8 c.M6, it was provided that a bargain and sale should not enure to pass the freehold unless it was recorded. As a conveyance of the legal estate, it was therefore inoperative even between the vendor and vendee. The 7 Ann. c. 20, provided that unregistered conveyances should be void except between the grantor and grantee. It contains no exception as against such as may have notice of the unregistered deed ; consequently, there could be nothing more than an equity in favor of the holder of an unregistered deed against a subsequent purchaser who had purchased with notice. The notice gave rise to the equity, as in that case the subsequent purchaser was supposed not to be within the reason of the law. Equity, therefore, en-grafted on that statute a provision by which the conveyance was valid in equity as against a purchaser with notice. The statute of this State declares in express terms, that unregistered conveyances shall be void as to purchasers without notice, from which it follows that they are valid as to subsequent purchasers with notice ; and as to them there can be no question of equity, as the conveyance is either void, or it is a' valid conveyance of the legal estate. Creditors are also mentioned in the statute, and unregistered conveyances are also declared void as to them. The main question is, whether they are affected with notice as subsequent purchasers are? If they stand on the same ground with subsequent purchasers, then, as to them, too, an unregistered deed with notice conveys the legal estate, and there can be no question as to equities. If, on the contrary, such conveyances are void as to creditors notwithstanding notice, then the question of a prior equity, founded on the notice, might arise between the creditor and vendee. Thus it will be seen that the main difference between our statute and the statute of Ann, is, that notice is equivalent at law to registration in the one case, and, in the other, it is equivalent in equity to registration. Having said thus much in reference to the grounds of equity cognizance, I shall proceed to the legal questions involved.

Are creditors, alike with subsequent purchasers, affected with notice of a prior unregistered deed ? To a correct understanding of the statute, it is necessary that the several provisions should be examined with some minuteness. It is an act concerning conveyances. The first section provides that no estate of inheritance, or freehold, or for a term of years, shall be conveyed unless the conveyance be in writing, sealed and delivered; “nor shall such conveyance be good against a purchaser for valuable consideration, not having notice thereof; or any creditor, unless the same writing be acknowledged by the party or parties who have executed it,” &c., or bexproved by a subscribing witness, the acknowledgment or proof to be made before a competent officer, who is required to endorse his certificate, and then the deed to be deposited with the clerk of the proper court for record. And the deed, when so acknowledged and recorded, may be given in evidence without further proof. This is the substance of the whole of the first section with a part of it extracted.

The second section concerns covenants and conveyances made in consideration of marriage, and provides that they shall not be good “ against a purchaser for valuable consideration not having notice thereof, or any creditor,” unless recorded.

The third section provides that all bargains, sales and other conveyances, whether made for passing an estate of freehold or for years, and all deeds of settlements upon marriage, either of realty or personality, and deeds of trust and mortgages, “ shall be void as to all creditors and subsequent purchasers for valuable consideration, without notice,” unless they are acknowledged or proved, and lodged with the clerk for record, “ according to the directions of this actbut as between the parties and their heirs, and subsequent purchasers with notice, such deeds are declared to be binding.

The fourth section directs when deeds for personal property shall be recorded, which by law are required to be placed upon record.

The fifth section provides that every conveyance, covenant, agreement or deed mentioned in the act, except deeds of trust and mortgages, shall be delivered to the clerk of the probate court for record within three months, and in that case they take effect from their date, but if not so delivered then they only take effect from the time when they are so delivered, deeds of trust and mortgages in all cases taking effect only from the time they are delivered for record.

The subsequent sections prohibit the recording of deeds without the proper certificates, and prescribe the forms, &c., and direct the clerk in his duties.

It will be perceived that by a literal and grammatical construction of the first section, creditors are exempt from the effect of notice of an unregistered conveyance. As to them, notice does not alter the case, the deed being void at all events. But subsequent purchasers are affected with notice. The second section also keeps up the idea that an unregistered deed is void-against creditors at all events. But the third section is clear and qxplicit, that unregistered deeds shall only be void against creditors and purchasers without notice, which is in effect to declare them valid as to all creditors and purchasers with notice. Now which of these sections is to control in the construction, or is either one to control to the exclusion of the others? They may appear contradictory and repugnant; in phraseology they are so, but not in sense and spirit. I cannot doubt but what the intention of the legislature is more fully and clearly expressed in the third section, in reference to the effect of notice, than it is in the first. Nor can I doubt but what creditors with notice are as much within the spirit and meaning of the whole act, as purchasers with notice. In the usual course of legislation, laws are divided into sections, each section performing a distinct office, or containing a distinct provision. They constitute separate parts of an entire thing. In construing the act the whole of it must be looked to, in order that apparent repugnancies and contradictions may be reconciled. The object is to get at the spirit and meaning—the design and scope of the law. That part of a law which is plain, may serve to explain that which is less certain. And we are often justified in adopting a construction which evidently embraces the meaning,, and will carry out the object of the law, although in doing so we may disregard both the letter and grammatical construction. We must look at the old law, the mischief and the remedy. Now let us endeavor to trace the operations of the legislative mind in the several sections of this act. The object of the first section seems to have been to prescribe the sort of instrument by which freeholds should pass. It consequently declares that no freehold shall pass, except by writing, sealed and delivered. In an act concerning conveyances, it is natural that the legislature should have given some thought as to what should constitute a conveyance. This was necessarily the first thing to be spoken, of in order to give a perfect understanding of that which was to follow; and it is manifest that the first section was designed to perform this office. This was its prominent object. It declares what a conveyance shall be, whilst the succeeding sections regulate the ceremonies necessary to its completion and its effect. It is true that in this section we find it said that such conveyance shall not be good against a purchaser for a valuable consideration not having notice thereof, or any creditor, unless the same be acknowledged, Sic. But it is plain that this provision was not intended as the prominent feature in that section ; it is also plain that as to this provision further legislation was intended because it is imperfect, and also because another entire section is devoted to that subject. The second section is devoted to marriage settlements, as its principle object, and yet it gives countenance to the idea that creditors are not affected by notice. Then comes the third section, which is exclusively devoted to a subject incidentally mentioned in the others, but in reference to which the preceding provisions were deemed imperfect. It clearly and beyond dispute, places creditors and purchasers on the same ground by declaring that every kind of conveyance shall be void as to them, of which they have no notice, unless it be recorded. Here we find an entire section devoted to the protection of purchasers and crediters. We must infer that the sense of the legislature is here more fully expressed than it is elsewhere, and if so, this section must serve to explain the others. The others must have been regarded as imperfect, else why should this have been inserted? and if there were even a repugnance, this section should prevail, beca’use it recapitulates all that preceded it, and indeed seems to have been designed to correct and explain whatever might have been left doubtful in the others. We do not thus adopt one section to the exclusion of the others, but it is construing one part by the lights which another furnishes. These remarks have been suggested by the singular structure of this statute, and as expressive in part of the course of reasoning which has led to the conclusion that creditors are affected by notice as well as purchasers.

But apart from a comparison of the several sections, if we look to- the reason and object of the whole law, we find that creditors are equally within its purview, and have been so considered in the interpretations of these statutes in England and the United States. These interpretations show the reason of the law, from which it is evident that notice is equivalent to registration as to all persons. This becomes perfectly apparent when we look at the common law, the evil which was likely to result from the statute of uses, and the remedy which the registry acts had in view. ■

We know that by the common law, livery of seisin was necessary to pass a freehold estate. The object was to give public notoriety to the transaction, and thus to prevent imposition. The effect of a bargain and sale without livery, which was a sort of real contract, was to raise a use, the bargainor being a trustee for the bargainee. It was not a perfect legal conveyance of the freehold, because livery of seisin was wanting. The effect of the statute of uses was to execute the use, by transferring possession to the usee. Consequently under the operation of that statute, a bargain and sale became a means of conveying the freehold without livery of seisin. The notoriety of the transaction was wanting. Perfect legal conveyances might be made secretly. Subsequent purchasers were liable to be deceived, and so were persons taking mortgages on the estate. This evil consequence was perceived by the same parliament that enacted the statute of uses, and to guard against it by supplying the means of information, the registry act of Hen. 8, was passed, which provided that a conveyance by bargain and sale, should not pass the freehold unless made by indenture, and enrolled within six months. Thus we plainly perceive the reason of the law. It was to furnish a substitute for livery of seisin, which had been in effect, dispensed with, by the substitute of uses. Registration furnished the means of information by proper diligence, and amounts to constructive notice, or notoriety, without which the conveyance was inoperative even between the parties. The statute of 7 Ann, c. 20, went a step farther, by declaring the unregistered conveyance void as to subsequent purchasers and mortgagees, but valid as between the parties and their heirs. There is no exception in this act as to such as may have notice. The conveyance was void as against subsequent purchasers and mortgagees, either with or without notice. It is not so with our act; it is declared void only in favor of subsequent purchasers without notice. And now suppose that creditors are not affected by notice, or, in other words, that an unregistered conveyance is absolutely void as to them, either with or without notice of its existence, then they will stand on precisely the same ground with subsequent purchasers and mortgagees under the statute of Ann. If mortgagees with notice, were not within the meaning and intention of the English act, it must be equally apparent that “ creditors,” with notice of the prior conveyance, are not within the meaning and intention of our act. The construction which the English statutes have received, will, at least, furnish a very persuasive reason for adopting a similar one in this case. The leading decision in the English courts, is the case of Leneve v. Leneve, 3 Atkyns, 646, in which Lord Hard-wick reviewed all the previons decisions on the same subject, and settled the construction of 7 Ann, c. 20, and 27 Hen. 8, c. 16. The contest was between two marriage settlements, one having been made upwards of twenty years before the other, but the oldest had not been registered. The attorney who drafted the latter, had notice of the existence of the former. It was held that this was notice to his principal, and that notice takes the ease' out of the statute, because then it is not within the mischief intended to be remedied. His Lordship declared that the acts were intended to screen innocent persons against prior secret conveyances and fraudulent incumbrances, and if a subsequent purchaser has notice of the existence of the prior conveyance, then it is not secret or fraudulent. That although the legal title, under such circumstances, passes t’o the subsequent purchaser, yet it shall not prevail against the superior equity of the first vendor, founded on the notice. That a subsequent purchaser is as much affected by notice, as though there had been livery of seisin. All subsequent decisions have conformed to this construction of the registry acts of England, and it is now regarded as the settled law.

The statute of Massachusetts is in substance the same as the English statutes, differing in no essential particular from our own, the only difference being that the Massachusetts act, like the statute of Ann, is silent as to the effect of notice, whilst ours is not. The supreme court of that State, by a uniform train of decisions, has adopted the same construction, holding that an unregistered deed is not void as against subsequent purchasers with notice, because they are not within the mischief intended to be prevented, notice being equivalent to registration. 2 Mass. Rep. 506. 4 Mass. Rep. 541. Ib. 637. 14 Mass. Rep. 296. The case of Prescott v. Heard, 10 Mass. Rep. 60, was the case of a creditor, and is, therefore, a direct authority in the present case, even on the supposition fhat our statute did not intend to affect creditors with notice. The cases of Brown v. Maine Bank, 11 Mass. Rep. 153, and Priest v. Rice, 1 Pick. 164, are also directly in point, both involving the rights of creditors.

The New York registry act differs in one particular. Unregistered deeds are void only as to subsequent purchasers, nothing being said as to the effect of notice. As to all others it may be inferred that they are valid. But as to purchasers the same construction has been given, notice being regarded as equivalent to registration. That a purchaser with notice is not within the intention and reason of the law. 13 J. Rep. 471. 4 Wendell, 585. 6 Wendell, 213. 8 Wendell, 620. 11 Wendell, 442. 1 Paige, 127. 3 Paige, 421. And a similar construction prevails in New Jersey. 1 Green’s Rep. 43.

In Virginia the decisions seem to have'fluctuated on a statute like ours. The case of Gibson v. Randolph, 2 Munford, 310, is based upon the preceding construction, but the case of Guerrant v. Anderson, 4 Randolph, 208, adopts a different one, a distinction being taken between creditors and purchasers. The decision is, to say the least, rather unsatisfactory. The subject of the contest was not land, but personal .property, and it was claimed not by an absolute deed, but by a mortgage, which, I believe in Virginia as here, takes effect only from the date of record; before that, it binds nothing, and yet it is evident the court construed the act as though the mortgage had been a deed. The court is evidently wrong in saying that a court of equity never affected creditors with notice, and the error in this, shows a want of due consideration, and leaves the authority doubtful in all points. A different doctrine is recognized and sanctioned in Beverly v. Brooks, 2 Leigh’s Rep. 425, and other decisions favor a similar construction.

This is also the rule in South Carolina, where the registry act is like that of Massachusetts, which, as already stated, does not materially differ from ours. 1 McCord, 265. 2 Ib. 152, 274. 1 Bailey, 315.

In Kentucky this has been the construction, and the question has lately received a very full adjudication in a case reported in 4 Dana, where the reasons and object of the act are reviewed at some length, and this interpretation given.

It must be useless to multiply authorities. Every State in the Union has a similar statute, and in every one a similar construction has been given. Chancellor Kent says, “it is a settled rule that if a subsequent purchaser or mortgagee, whose deed is registered, had notice at the time of making his contract, of the prior unregistered deed, he shall not avail himself of the priority of his registry to defeat it.” 4 Kent, 169-70, 456-7. This covers the whole ground, for a mortgagee is but a creditor. He is not regarded as a purchaser, and hence the statute of Ann declared that unregistered conveyances should be void as to all subsequent bona fide purchasers and mortgagees. We cannot perceive any, even the most remote reason, for placing a general creditor in a more favored condition than a mortgage creditor. Justice would dictate the reverse. The general creditor contracts on a mere personal responsibility, whilst the mortgagee contracts on a specific lien, and may have nothing beyond it. It would be much fairer to give one the fruit of his specific lien, than to avoid all conveyances in favor of one who had no lien. The reasoning of the authorities shows that it was the policy and object of the law to protect those who might be injured by secret conveyances. It was not to prevent bona fide conveyances, which might be prejudicial in its consequences. Creditors may be injured by secret conveyances, but a knowledge of the conveyance enables them to guard against the mischief, and they are therefore not within the mischief intended to be guarded against when they have notice. Being equally as free from danger as subsequent purchasers are with notice, I conclude that the legislature intended to place them both on the same ground.- This conclusion I think would be justified even on a fair construction of the first section, and certainly it is on the third, and the foregoing decisions certainly furnish conclusive reasons for adopting the third section as conveying the whole meaning of the legislature. We cannot overlook the important fact, that in the legislation on this subject we have but followed in the track of Great Britain-—that the statute of Ann declared unregistered deeds void in favor of creditors under the name of mortgagees—that the courts there and elsewhere held that such creditors with notice were not entitled to this protection, and that there was no design to change the rule. So far as creditors are concerned, the reason of the law would seem to indicate a design to protect such as had given credit on the supposed ownership of property. Carried to this extent it would be reasonable, but the statute uses the words “all creditors,” without qualification or limitation. It is difficult to reconcile this general mode of expression with the evident object in view, and hence it has been insisted that a “ creditor” must be one who has a judgment or lien. It is certainly true that an unregistered deed is not void as to general creditors. There must be a judgment or lien before it can be regarded as void. A general creditor has no lien on any particular thing; then at what point of time did the statute mean the credit should exist? If it is to be extended to debts previously contracted, this leads to absurdity; for the debt may have been contracted long before the property conveyed was owned by the debtor, and how could a secret conveyance affect him more than a public one ? If it is to be extended to debts subsequently contracted through the whole life of the vendor, this also leads to absurd consequences. The only perceivable reason for the enactment, confines it to those, who have been induced to deal and give credit on the apparent ownership. In this light it would correspond with the statute of Ann, which protects mortgagees, the reason of which is apparent. I do not deem it necessary, however, to determine who are creditors within the meaning of the statute; taking the term even in its most general sense, I am satisfied that the meaning of the statute is, that unregistered deeds shall not be avoided in favor of creditors with notice.

In the next place, it becomes necessary to inquire what will constitute notice, or the evidence of it. Notice that the owner has disposed of his property, is susceptible of proof like any other fact, by showing that the person to be affected, had actual knowledge of it by information or otherwise, or by circumstances from which hé must have inferred such sale. Possession by the vendee, is evidence to creditors and purchasers of the conveyance; or, at least, is so strong a circumstance, that it is now uniformly regarded as sufficient evidence of notice. This rule results necessarily from the nature of the act, it being a substitute for livery of seisin. 10 Mass. Rep. 60. 6 Wendell, 213. 11 Wendell, 242. 3 Paige, 421. 10 Vermont Rep. 452. If we look at the reason for considering possession as notice, it would seem to limit the term “ creditor ” to such as had trusted on the faith of the ownership of the property; and that by crediting when their debtor was not in possession, they could not have calculated on. that as a means of remuneration. It appears by the agreed case, that Campbell took possession when he purchased of Dixon, which was long before the debt was contracted. Shirley took possession when he purchased, and so did the plaintiffs in error when they purchased of him. Briggs, Lacoste & Co., the creditors, then had notice before they contracted with Dixon, that he had conveyed the lot in question. This placed them in the attitude of creditors with notice, against whom the statute has made an unregistered deed valid. But, besides this, it appears that the judgment creditor had actual notice of the conveyance before he recovered judgment. This would seem to be sufficient. As general creditor, he could not avoid the deed. It was valid until he could convert his debt into a lien; but before he can do that, he has notice of the conveyance. Under such circumstances, eould the judgment become a lien? It is difficult to say that it could, unless we also assume that the debt itself was a lien. This is another difficulty growing out of the word “ creditors.” Tn looking back at the history of this enactment, it is probable that it was intended to protect mortgagees and creditors who had reduced their debts to judgment before conveyance—-for judgments, at the date of the enactment, were not liens—or it may have been sirbstituted for the word mortgagees in the English statute, without any very definite intention as to who would be embraced under it. But be this as . it may, there caá be no reason whatever for placing creditors on more favorable ground than subsequent purchasers. They are undoubtedly within the meaning and spirit of the law, and, consequently, within the exception. If the law was silent as to notice, as some of the statutes are, a court of chancery would regard the notice to a creditor as constituting such an equity as would entitle the holder of an unregistered deed to protection. It is difficult to suppose that this State alone intended to depart from a rule which had been adopted by all others, by giving protection to creditors in preference to bona fide purchasers. A mortgagee is a creditor, and if an unregistered deed be void a§ to all creditors, it must be void as to him. Suppose, then, the case . of a subsequent purchaser with notice, and a subsequent mortgagee with notice; can it be that the law intended that the purchaser should take nothing by his deed, and yet that the mortgagee might enforce his mortgage ? And if it be a fraud to purchase with a knowledge of a prior unregistered deed, is it any less a fraud to take a mortgage? 'Will the law in the one case say you purchased with a knowledge of the prior deed, you must lose your purchase money, for you intended a fraud on -the rights of the prior purchaser? And will it at the same time say to the mortgagee, although you lent your money with a . knowledge of the prior conveyance, and although by foreclosing the mortgage the original purchaser must lose his land, yet you ■ must be protected and he must abide the consequences ? Surely the law never was designed to work such injustice. The . result to the first purchaser in the case supposed, is precisely . the same as to the fraud. If it was a fraud to take the abso- , lute deed, it must be a fraud to take the mortgage. But sup- • pose it should be said that a mortgagee is something more than a creditor; that he occupies the attitude of a purchaser. If he is ; to be considered in this light, then notice destroys the validity of his deed, but it does not destroy the debt which it was taken to secure. He may proceed by other means, and enforce his debt against property which another had purchased. That would make him a creditor as to his debt, but a purchaser as to his mortgage. The effect would be that he could not have his mortgage foreclosed; but he might sue at law, and levy his execution on the same property.

For the foregoing reasons, I am of the opinion that the court below should have rendered judgment for the defendants on the agreed case, and that the judgment ought to be reversed; and that this court should render the judgment which the court below should have given.