Waters v. . Crabtree

MerrimoN, C. J. after stating the facts: It is very true, as contended by the counsel of the appellant, that a deed conveying the title to land absolute upon its face may be and is treated in equity as a mortgage of the land to secure a particular debt, but this can be only when the parties to it certainly so intended and agreed by mere words, or some writing, to be evidence of such intention and purpose. Such purpose and agreement must appear by strong ¿nd satisfactory proof. Otherwise, the deed — a very solemn instrument — must be accepted, as expressing the settled intention of the parties to it. It is made, ordinarily, as, and intended to be, the strongest evidence of that purpose, and will be so accepted and treated until, in a Court of Equity, it shall certainly appear that some condition or modification in connection with and part of it has been omitted from it. Skinner v. Cox, 4 Dev., 59; Mason v. Hearne, Busb. Eq., 88; Robinson v. Willoughby, 65 N. C., 520; Coot on Mort., 24, 25; 1 Jones on Mort., 241, et s(q. But such a deed, duly proven and registered as required by .the statutes of this State on the subject of registration, will not prevail as such a mortgage against subsequent bona fide purchasers of the land for value, without notice of such mortgage so contemplated by it and the parties to it, because such subsequent purchasers had no notice of it. As to them, it would be secret, fraudulent and void. Hence, a Court of Equity would not enforce it. Gregory v. Perkins, 4 Dev , 50. The agreement whereby such a deed, apparently absolute, is to be subject to a condition or modification, or such a mortgage, must exist at the time the deed is executed. When such instruments are perfected, they, by virtue of their very nature, imply and possess certainty — fixedness as to their provisions and stability of purpose — that can be changed *400 only by an instrument of like character and equal dignity. Neither Courts of law nor Courts of Equity can make or modify valid contracts; they can only determine what they are and give them effect. Courts of Equity can only give effect to and ádminister rights created by and growing out of them that Courts of law cannot, by reason of their peculiar organization and rigorous methods of procedure. Nor has a Court of Equity authority to change the settled nature of an instrument and make it different from and serve a purpose different from that contemplated by the parties when they made it. 1 Jones on Mort., §§ 244-246.' As we have said, a deed apparently absolute may, by agreement of the parties to it, made at the time of its execution and as part of its basis, be made subject to a condition— made a mortgage — and such agreement may be by mere words, or be reduced to writing, or a separate deed of defeasance may be executed. Such writings may afterwards be executed, but only in pursuance of the agreement made at the time the deed was executed, and, in that case, they will relate back to that time. The writing, whether deed or not, becomes evidence of the nature and purpose of the deed absolute upon its face. In the present case, the plaintiff appropriately alleges in his complaint, and with sufficient particularity, that the paper-writing called a “ defeasance,” executed on the 25th of May, 1861, was executed in pursuance-of the agreement made at the time the deed, apparently absolute, was executed to Geo. A. Latham, on the 9th of September, 1859, and as part of the ground of it. If this were so, then the latter deed would be taken and treated in connection with the deed of defeasance and as part of it, and the whole as a mortgage of the land to secure the balance of the mortgage debt — that for which the note mentioned was taken. But no evidence was produced on the trial to prove such agreement made at the time the deed of the 9th of September, *401 1859, was executed, or at all, nor that the debt for which the note was taken was balance of the mortgage debt. The paper-writing of the 25th of May, 1861, makes not the slightest reference to such agreement, nor does it specify or recite at- all that the note therein mentioned is the balance of a mortgage debt. Indeed, the plaintiffs failed to produce evidence on the trial to prove a material allegation of the complaint. The paper-writing of the 25th of May, 186.1, cannot, of itself, be treated as a mortgage then made. In that view, the debt specified therein was due from the plaintiff to George A. Latham, and the land belonged to him. The debtor cannot give the creditor a mortgage of the latter’s own land to secure the former's debt due to him. That would be absurd and nugatory. Treating the land in controversy as the property of Geo. A. Latham at the time the instrument just mentioned was executed, and the latter as an independent agreement, it is, in effect, a covenant on his part to convey the title to the land to the plaintiff when and as soon as he should pay the note therein specified. The plaintiff, however, did not allege such a cause of action. It might, perhaps, be contended that the facts stated in the complaint developed sufficiently such a cause of action, and, therefore, the Court should have given the plaintiff such judgment as he was entitled to have. If this be granted, we nevertheless are of opinion that, accepting the evidence as produced on the trial as true, the plaintiff was not entitled to any judgment, because such cause of action as appears, as to the defendants, is fraudulent, and cannot be enforced against them. The covenant last mentioned was proven and registered February 19th, 1862. The registry was afterwards, in 1864, destroyed by fire, and thus the registration of this covenant ceased to give notice, certainly in fact, of it to the public as contemplated by law. The Legislature, intending to remedy *402 such and like mistakes and misfortunes, afterwards provided by statute (Acts 1866, ch. 41, §§3, 14; The Code, ch. 8, §§56, 68), that “all original papers once admitted’ to record or registry, whereof the registry or record is destroyed, may, on motion, be again recorded or registered, on such proof as the Court shall require. * * * Tlie records and registries allowed by the Court, in pursuance of this chapter, shall have the same force and effect as original records and registries.” This statutory provision, at least, admonished all persons having such original papers to prove and register them anew in the way prescribed, and good faith required that they should do so. It, moreover, gave the public reason to expect that it would be faithfully observed by persons interested. Nevertheless, the plaintiff did not register anew thp covenant in question until the 7th of May, 1886, the day this action began, and then it w^as registered, so far as appears, without submitting it to any tribunal authorized to take proof of and direct it to be registered, as allowed by the statute. The plaintiff was thus negligent of his duty to himself, remiss and misleading as to the public, and, particularly, for the present purpose, as to the defendants. The evidence went to prove that the defendants, and those under whom they claim, after George A. Latham paid full value for the land, that their mesne conveyances were proven and registered; that they had possession of the land from May, 1870, putting valuable improvements thereon at intervals, and exercised acts of ownership over the same. The registration of the mesne conveyances was notice to the plaintiff of them and their character and purpose. He ought to ha,ve taken notice of such possession of the land so claimed by him, and the presumption is he did. Although he failed to re-register the covenant, as stated above, and notwithstanding the striking facts and circumstances recited, he failed, so far as appears, for more than fifteen years to lay claim to *403 the land, or to give any noticé to the defendants, or those under whom they claimed, of his claim as purchaser. He paid the note mentioned in 1877, and after that — for more than eight years — he failed to give such notice. If the registration of 1862 of the covenant in question could, under the circumstances of this case, be treated as constructive notice for any purpose, the plaintiff’s gross negligence, his long and misleading* silence and failure to give actual notice of his claim, when in fairness and good faith he should have done so, makes it, as against the defendants, unconscionable and fraudulent, and the Court will not enforce it against them. In any view of the case, as it appears, we think the plaintiff was not entitled to refcover. Affirmed.