Cox v. Wayt

Woods, Judge: Six errors in these proceedings have been assigned by the appellant. The first and second raise the question, whether the plaintiff’s deed of trust dated August 2, 1875, was to be held as a recorded deed; the third and fourth, wh e t r the — 814 — defendant James íl. Wayt as the assignee of certain debts secured by the deed to Peck, trustee, was entitled as to these debts, to preference over the debt of $4,600.00, secured' by the deed of trust to Cox; the fifth, whether the court erred-in sustaining the demurrer to the hill of review; and the sixth, whether the court erred to the prejudice of the appellant, in the’distribution of the proceeds of the sale of the 175 acres of land mentioned in the deeds of trust. It is contended by the appellants’ counsel that although the deed of trust executed by James Wayt to Cox, trustee, does not appear by any endorsement made thereon, or attached thereto, or recorded therewith, to have been acknowledged before the clerk of the county court of Ohio county, or before any other person authorized to take the acknowledgment thereof, or that the execution thereof had been proved before the said clerk, yet the fact that the same was admitted to record by him, and was copied into the deed-book, where deeds may properly be recorded, it must bo presumed that it was in fact acknowledged, or the execution thereof proved in the manner prescribed by’ law; and that the deed of Cox, so admitted to record must be held as a recorded deed. The appellant’s counsel has furnished an ingenious argument in support of this novel proposition, drawn principally ■ from a critical examination of the phraseology of' ch. 78 of the Code, as amended by ch. 67 of the Acts of 1875. The second section thereof authorizes the clerk of the county court of any county wherein any deed, &c., is to be, or may be recorded, to admit the same to record in his office, as to any person whose name is signed thereto'when it shall have’been acknowledged by him, or proved by two witnesses as to him, befoi’e such clerk of the county court. By the third, fourth and fifth sections of the Code so amended such deed may also be admitted to record upon a certificate of such acknowledgment before a justice, notai’y public, &c., written on or annexed to the same, and the deed of a married woman, upon the certificate of her privy examination and acknowledgment,’ or annexed to such deed, and the counsel concludes, that because the second section authorizes the clerk to take the acknowledgment of deeds, or to receive proof of the execution thereof, does not in terms — 815 — require him to make, out' a certificate of acknowledgment or proof before him, and endorse the same on, or annex, it to the deed or other writing; that no such thing is necessary to be done.by him. In other words, that while he is only authorized to admit the deed to record after it has been certified on the deed, by some one authorized tq do so, that the deed has been acknowledged, or when the same is so acknowledged, or the .execution thereof proved before him, by two witnesses, yet he is at perfect liberty to disregard this , requirement of law, and admit to record any deed or other writing produced to him, without acknowledgment or proof; and then point to his unlawful act, as conclusive evidence that the law has been complied with. Such a construction would operate as a complete abrogation of this requirement of the statute. While these provisions of the statute have substantially .been iu force in Virginia for more than a hundred years, the counsel has not been able .to present a single case wherein his views have been sustained, or where such a construction has ever been contended for. “The exercise of the probate jurisdiction in regard to deeds consists of two parts, one of which is the taking officially the proof or acknowledgment of the instrument; and the other is its recordation, or what is, the same thing in effect, the receiving it officially for that purpose, and the two together .when duly performed by the proper authorities constitutes'a complete act of registration.” Carper v. McDowell, 5 Grat. 233. These two parts, constituting the complete act of registration must both be performed, and the accidental fact that they may some times be performed by the same officer, will not authorize him to dispense with the performance of the first, and substitute the last, as conclusive evidence, that the writinghas been acknowledged, or the execution thereof proved before him. If the construction contended forbe sound, then every deed, however defective or imperfect the certificate of acknowledgment may be, whether the party making such certificate had authority to make it or not, would, as soon as admitted to record, of necessity become a recorded writing, for non constat, but that when the same was delivered to the clerk, it was acknowledged or proved before hi,m. — 816 — The registration of a deed is a matter of record, and this record is composed of the instrument itself, with the endorsements showing its proof or acknowledgment, and its admission to record; all of which are copied into the deed-book, and a transcript therefrom, or from the originals, is, as well as the originals, evidence for and against all persons. 5 Grat. supra; Code, ch. 130, sec. 5. Sec. 6 of ch. 73 of the Code, as amended by ch. 67 of Acts 1875, declares that “every writing SO' admitted to record shall, with all certificates of privy examination or acknowledgment, and all plats, schedules- and other papers thereto annexed or endorsed thereon be recorded by or under the direction of the clerk of the county court in a well bound book, to be carefully preserved.” As a deed when properly admitted to record, becomes in itself a record, which is evidence against any person of the due execution thereof, and stands as notice to all persons of the contents thereof, it- follows, that if in this case, as in all others, it appears on the face thereof, that the court or officer making the same, had no jurisdiction over the subject or authority.to make the same, it can as a record, have no force or effect whatever. Maxwell v. Light, 1 Call. 117; Taverner v. Barrett, 21 W. Va. 656. Therefore, the deed of trust to Cox, dated August 2, 1875, admitted to record by the-clerk of the county court of Ohio county, without any certificate of its acknowledgment or proof endorsed thereon, or annexed thereto, was improperly admitted to record, not having been acknowledged or proved, and recorded in the manner prescribed by law, and must be considered as an unrecorded deed. By sec. 5, of ch. 74 of the Code it is declared that every * * * * * . * deed of trust or mortgage conveying real estate or goods and chattels shall he void as to creditors, and purchasers for valuable consideration without notice,until and except from the time that it is duly admitted to record in the county wherein the property embraced in such * * * * * * * deed may be. The deed to Cox, not having been duly recorded, is therefore void as to subsequent purchasers without notice, of the 175 acres of land thereby conveyed to him in trust to secure the said debt of $4,600.00 ; but the same is nevertheless valid and binding as between — 817 — the grantor, and trustee and beneficiaries therein, and a against subsequent purchasers of the same land with notice of said trust-deed. It is well settled that a creditor obtaining a mortgage or deed of trust upon the property of his debtor, must claim the same as a purchaser, and can not claim it in the double character of creditor and purchaser. 2 Leigh 84. In asserting this principle Judge Lomax says : In regard to purchasers it would seem reasonáble also, that purchasers, within the act relating to registration of conveyances, should be understood to mean the same description, as purchasers within the act relating to fraudulent conveyances. And as under the latter, creditors acquiring in any way, a lien upon their debtor’s property by contract with him, are regarded as purchasers, they would be, in like manner regarded under the former. 2 Lomax Dig. 489; Tate v. Liggatt, &c., 2 Leigh 104; Evans v. Greenhow, 18 Gratt. 153; Bird v. Wilkinson, 4 Leigh 266; Beck’s administrator v. De Baptiste, Id. 349; Price v. McClannahan, 2 Gratt. 309. If such subsequent purchaser at the time he obtained his conveyance or deed of trust, had notice of the existence of the prior unrecorded deed he will be bound by such unrecorded deed in the same manner and to the same extent as if the same had been duly recorded. If a deed has been duly recorded in the proper county it is notice, to all subsequent purchasers of the property thereby conveyed. Applying these rules of law to the facts in the case under consideration it becomes easy of solution. The plaintiff Cox having failed to record his deed of trust, the same is void as to the trustee Peck and all the creditors secured thereby excepting Susan Edgington, George Edging-ton and Francis M. Wayt, who at the time it was executed, had notice of the prior unrecorded deed of Cox and they are therefore bound thereby, to the extent of his trust debt of $4,600.00. with interest thereon from August 2, 1875, still remains unpaid, but not to any greater extent. As by the terms of the deed of trust to Peck, Susan Edgington vras to be first paid in full, and then all the other creditors of James Wayt mentioned therein including George Edgington and E. M. Wayt, were to be paid ratably. All of these excepting only Susan Edgington, George Edgington and Francis M. — 818 — Wayt, having obtained, said deed of trust to Peck, without notice of the unrecorded deed ot trust to Cox, they stand in the postition of subsequent purchasers for a valuable consideration without notice, and they are entitled to have there debts satisfied out ot the trust subject, before any part thereof is applied to the satisfaction of the plaintiff’s trust-debt of $4,600.00. But Susan Edgington being first in order of priority in Peck’s deed of trust, she in legal effect, took the same subject to the amount due upon the said debt of $4,600.00 and therefore the payment of her trust-debt of $950.00, must be postponed, until there is realized from the trust subject, so much of said debt of $4,600.00 as may remain unpaid, and when that has been done, she is entitled to resume her position as first lienor in Peck’s deed of trust and to be paid in full before any other portion of the proceeds of the trust subject can be applied in discharge of the plaintiff’s debt; and the same is .true of the defendants, George Edgington and E. M. Wayt, except that before they can resume their places as second lienors on Peck’s deed there must be realized from the trust subject the further sum of $950.00 with its interest due to Susan Edgington. But as we have already shown5 the other creditors secured in Peck’s deed of trust, are as against the creditors secured by the deed of trust to Cox, to be paid in full, before the latter are entitled to receive anything, and as Susan Edgington cannot be postponed to any greater amount than what may remain unpaid upon said debt of $4,600.00, it necessarily follows that the several creditors secured in Peck’s deed of trust, other than Susan and George Edgington and E. M. Wayt, are entitled to receive satisfaction out of the $4,600.00 and its interest, and that only the residue thereof can be applied as a credit upon the plaintiffs judgment. The proceeds of the trust-subject must then be applied to the satisfaction of $950.00 due to Susan Edgington, and then ratably to the satisfaction of the debts of George Edgington and E. M. Wayt respectively. After these payments are made the amounts due to McClure’s administrator and to Vanmeter upon their judgments should be paid ratably, and the residue of such‘proceeds should be applied, first, to discharge any balance remaining unpaid upon the plaintiff’s judgment, and — 819 — secondly, upon the judgment of Robert B. Wayt. The circuit court having by its decrees of June 2, 1883, and of December 10, 1883, ascertained the several liens on said land and fixed their priorities, and directed distribution of the proceeds of the sale thereof in accordance with the views herein expressed, we are of opinion that there is no error in said decrees for the causes assigned by the appellant. But inasmuch as the report of the commissioner ascertained and reported as due to the defendant James II. Wayt, a debt of 179.57, with interest from August 5, 1879, which was one of the debts secured by the deed of trust to Peck, and the plaintiff excepted to said report for that cause, and the court by its decree of June 2, 1883, overruled said exception, and declared the same a lien on said land, having priority over that of the plaintiff and decreed the same to be paid to him, and in its decree of December 10, omitted the same in the distribution of the proceeds of the sale of said land, we are of opinion that said last decree ought tobe, and the same is now so amended that the said special commissioners shall, in making the distribution of said proceeds include said claim of $79.67 in the class therein fourthly to be paid, and shall pay to James II. Wayt the sum of $79.67 with interest thereon from August 5, 1879, until paid, and the same shall be held to be included among the payments by said decree directed fourthly to be made, before any part of such proceeds shall be paid to the plaintiff; and because the debt of $257.30 therein decreed to be paid to John Gardner, is also included in said class “ fourthly ” to be paid, and his name is omitted in the designation of the persons included in said class “ fourthly ” to be paid, when it is apparent from the context, that it was intended to be, and ought to have been inserted therein. And, that all uncertainty in this respect may be avoided, the said decree is further amended by inserting in the sixth paragraph thereof alter the name of “ Van-meter,” the name of John Gardner. The third error assigned by the appellant was in over-ruling his exceptions to the report of the commissioner. They were based upon two grounds: Hirst, that certain specified debts, all of which were included in Peck’s deed of trust, had been improperly allowed priority over the — 820 — plaintiffs trust debt; and second, that all of these debts, save one, were improperly reported in favor of the defendant James H. Wayt, as the assignee of such creditors, as he and they, at the time of the execution of the deed to Peck, had notice of the plaintiff’s unrecorded trust-deed. What we have already said in regard to the priorities of these two deeds of trust has effectually disposed of appellant’s first ground of exception. The second is simply a question of fact. On this the commissioner has already passed, and found the facts against the pretensions of the appellant, and his finding has been approved by the court, and unless it clearly appears from the evidence returned with, and made part of the report, that the finding of the commissioner is unsupported by the evidence, the Appellate Court will affirm the action of the circuit court in over-ruling exceptions thereto for that cause. But in this case the evidence on which the commissioner acted is returned with and made part of his report, whereby it appears that while dames H. Wayt, at the time of the execution of the deed to Peck, had notice of the unrecorded deed of the plaintiff, he did not own any of said debts, and that said several creditors to whom they then belonged had no notice of said unrecorded deed, and that they severally transferred their said demands, secured by said deed of trust to Peck to said James H. Wayt for a valuable consideration, and we are of opinion that he was entitled to the security afforded by said deed of trust to the same extent as- his assignors held the same, and therefore the circuit court did not err in over-ruling the plaintiff’s said bill of exceptions. The decree of the circuit court of Ohio county rendered on the 2nd day of June, 1883, as well as its decree rendered on the 10th day of December, 1883, as herein amended, must be affirmed with $30.00 damages and costs to the appellees, against the appellant as executor of Jane Brown, and as executor of Ann Brown, deceased, to be paid out of the assets of his said testatrices in his hands to be administered. Aeitrmed.