Myers v. Buchanan

Tabbelu, J. : Simon Myers, complainant, in 1868, filed his bill of complaint in the chancery court of Chickasaw county, against Thomas J. Buchanan, to recover the value of the lumber, materials, machinery, etc., constituting a saw and grist-mill, located upon the land of defendant, together with a share of the profits of said mill, in the-possession of the defendant, — 412 — and to Rave conveyed to Mm the interest of one Brownlee, in the mill and in certain lands whereon the said mill is located, under a contract between Brownlee and Buchanan. From the arguments of the several counsel, the case turned below, and is supposed to depend here, upon the question, whether the defendant, Buchanan, had notice of the prior lien of the complainant, Myers, upon lands whereon the mill was located, and from whence it was removed to the land of Buchanan, the defendant herein. The bill represents that, on the 16th day of April,. 1861, one A. M. Brownlee being indebted to the complainant in the sum of $2,000 76, executed a deed tó J. A. Orr, in trust, to secure the payment thereof, by which he conveyed to said Orr the lands described therein and in the -bill; that upon said land, at the time of said conveyance and for several years thereafter, was a steam, corn, wheat and saw-mill, the machinery, appurtenances, fixtures and house constituting a part of the freehold conveyed in said deed, worth about $3,1500 ; that, during the summer of 1865, said Brown lee entered into a verbal contract with T. J. Buchanan, the defendant herein, by which they were to become joint and equal partners ; Brownlee was to erect a steam-mill on the lands of Buchanan, who was to convey to Brownlee one-half interest in the lands ; without the knowledge or consent of complainant, Brownlee removed from the land first described the lumber, machinery and fixtures, constituting the mill thereon, to the lands of Buchanan, whereon, with said lumber, etc., he proceeded to erect a mill in pursuance of the agreement mentioned above; that the lumber, machinery and fixtures so removed were worth $1,178 78; the bill charges defendant with knowledge that Brownlee was removing these materials from the land first described, and with legal, if not actual, notice of the trust deed; it also charges the laborers engaged in the erection of the partnership mill with knowledge of the same facts; that on the 31st day of May, 1866, the original debt due complainant remaining unpaid, Brownlee executed another trust deed to B. F. — 413 — Owen, trastee, of the same lands described in the first trust deed, and also all the right, title and interest, legal and equitable, which said* Brownlee had to certain lands described, and to the mill-house, machinery and fixtures erected thereon, being the lands and mill in which a partnership had been formed between Brownlee and Buchanan, as a further security for the payment of ,said debt; that sales, have been made under both deeds, the complainant becoming the purchaser in each ; and claims to be vested with all the rights of Brownlee ; that Brownlee recognizes the rights of complainant, as herein asserted, but defendant has taken possession of said’ property, claiming ownership to the exclusion of complainant; that Buchanan claims this property through a sale thereof by the sheriff, under an execution, upon a judgment in favor of certain mechanics who had assisted in erecting the mill upon the land of defendant herein, and who had obtained the said judgment to enforce their mechanics’ lien, but to which complainant was not a party; that complainant attended the said sale, and gave notice to said Buchanan and others, by public proclamation, of his paramount lien; the bill prays that an account be taken of the value of the materials removed from the land of Brownlee, of the value of the materials, money, work and labor performed by Brownlee in the erection of the mill on the land of defendant, and of the profits realized by him from said mill since he assumed its control; with prayer for payment, and for other and further relief, etc. The answer denies actual or constructive notice, or knowledge of the trust deed; denies that the mill was a part of the freehold upon the land of Brownlee; denies the value claimed in the bill, and denies the damage to the freehold by the removal, as alleged in the bill; denies that Brownlee-erected a mill according to contract; avers the advancement of money by defendant to Brownlee in aid of the erection of the mill; sets forth the judgments obtained by the mechanics, October 2,1866, on which the mill was sold December 3, 1866, the defendant becoming the purchaser; admits. — 414 — defendant’s knowledge of the removal of the mill and materials from the land of Brownlee, but denies notice of the trust deed; denies the removal without the knowledge of complainant. Upon the exhibits and proofs with the pleadings, the case was heard and the bill dismissed, i on the ground, as stated in the final decree, “ that the allegations in said bill are not sustained by the proof.” Several witnesses were examined at considerable length touching the value of the property removed, the cost of the re-erection, the terms of the agreement between Brownlee and Buchanan, the character of the Trull erected, the date of the work and the time when the new mill went into operation. The point upon which this case is supposed to depend, as suggested, is contained in an agreement in writing, signed by the respective counsel, and made a part of the record, of which the following is the material portion, viz.: “ That, in the month of April, 1863, the records of the probate court of said county and state were in part burnt, mutilated and torn, that, during the whole of the year 1865, record book L of said office, together with all the record books of said probate court’s office, was lying in one confused mass, without a back, index or margin, in the probate clerk’s office ; ” which, for the purposes of the trial, it was agreed, might be read in evidence in behalf of the defendant. Neither complainant nor defendant were examined as witnesses. Brown-lee was a witness in the case, but no question was put to him, and he gave no testimony with reference to actual knowledge on the part of the defendant or of actual notice to him of the deed of trust. The only evidence in the record on this point is found in the statements of N. C. Wright, one of the mechanics, who testified as follows on this subject : “I had no knowledge of any lien on the house until the day of sale under my judgment, when S. Myers came and forbid the sale; said he had a deed of trust on the property. I ordered the officer to sell, which he did; ” and this is all the testimony in the record before us upon this — 415 — point. Whether Brownlee made any inquiries at the clerk’s office in regard to liens upon the property in litigation, the record' is wholly silent. The law favors diligence in this respect. Excepting the general language of the agreement as to the condition of the records, the testimony before us fa.il p to explain the actual condition of record book L in which was recorded the deed of trust upon which complainant’s claim depends. It appears that said deed was recorded April 25,1861. The agreement of counsel describes the records as “in part” burnt, mutilated and torn; that “during the whole of the year 1865, record book L,” “together with all the record books of said office, was lying in one confused mass, without a back, index or margin.” “Record bookL” and other “record books” are mentioned as “lying in one confused mass,” but whether the leaves were separated and scattered is not clear, as the “books” are spoken of as in a “confused mass.” We assume, as unquestioned, that these trust deeds were once duly recorded and indexed. Of a knowledge of this condition of the records on the part of Buchanan, the papers afford no information, nor does it appear that he sought to know whether there was a lien upon the property of Brownlee or not. The defendant and all the mechanics were fully informed of the fact that the mill upon Brown-lee’s place was being torn down to furnish materials for the erection of the mill upon the land of defendant. The facts, then, of this case, chronologically stated, are these : A trust deed from Brownlee to Orr of lands of the former, wherein was the mill subsequently torn down and removed to the land of defendant; said trust deed dated and duly recorded in 1861; partial destruction of the records of Chickasaw county in 1863 ; in 1865, while the record books were lying in a confused mass, without back, index or margin, in a corner of the clerk’s office, Brownlee and Buchanan entered into an arrangement by which the former was to erect a mill upon the land of the latter, in which, and in the land, they were to be joint owners and partners in the erection of — 416 — this mill; Brownlee, with, the knowledge.of Buchanan and the mechanics, tore down and removed the mill upon the lands embraced in the trust deed of 1861; the work of removal began in the fall of 1865; the re-building on the lands of defendant was commenced in February, 1866. N. C. Wright, one of the mechanics employed in the erection of the mill, on defendant’s land, and who obtained a judgment under the mechanics’ lien-law, whereon the mill was sold to defendant herein, testified, with reference to his services, as follows : “I commenced work in February, 1866 ; there was no contract between myself and Brownlee, but I charged by the day for my work, $4 00 ; I obtained a judgment in the county court under the mechanics’ lien, and had the house sold.” This judgment was obtained in October, and the sale occurred in December, 1866. In May, 1866, Brownlee executed a second trust deed to Owens, trustee, embracing, specifically, the lands in the first trust deed, the lumber, machinery, and fixtures, and the mill, as well upon the land of Brownlee as upon the land of Buchanan, together with all the interest of Brownlee in the mill and lands whereon it stands, under the agreement between himself and Buchanan to secure the debt to Myers, which deed was duly recorded in May, 1866. At the sale, complainant appeared and forbid the sale, saying he held a deed of trust on the property, after which the sale took place by special order of the mechanics; it was agreed by counsel on the hearing that Henderson Orr, one of the mechanics in the proceedings against Brownlee to subject the mill to the lien of the mechanics, had no actual notice of the existence or record of either of the deeds of trust. N. 0. Wright testified that there was one other mechanic employed at the same time under him, but that such other mechanic did not profess to be a skillful mill-wright; judgments were obtained by Wright and Henderson Orr, the above-named mechanics ; the value of the lumber and materials of the mill torn down was variously estimated ; defendant herein and all the mechanics were fully aware of the demolition of the mill — 417 — on Brownlee’s land to become, in whole or in part, the mill on the land of Buchanan. It is charged in the bill, and not denied in the answer, that at and prior to the sale under the judgments in favor of the mechanics, public notice was given by Myers, complainant, of his lien and trust deed and the sale forbidden. On the part of the complainant it is insisted that the trust deed to Myers in 1861, having been recorded according to the requirements of the Code, it was, then and thereafter, notice to all the world : and the rights of complainant becoming thus fixed, could not be divested by the subsequent destruction or mutilation of the records ; while counsel for the respondent contends that, in consequence of 'the condition of the records in 1865, and of his neglect to re-record his deed under an act of the legislature, approved December 8, 1863, the complainant lost his lien, and the respondent, through the mechanics, acquired the superior right. We are referred by counsel for respondent to the case of Speer v. Evans, 47 Penn. St. 141, as conclusive of this case against the complainant. That was a case of a mortgage copied into the proper record book, but never indexed. Subsequently, a judgment at law was obtained against the mortgagor, and the contest was between the mortgagee and the judgment creditor. Prior to actual sale under the judgment, personal notice of the mortgage lien was given to the judgment creditor. The court held the mortgage not duly recorded, and therefore not constructive notice, but sustained the lien of the mortgage upon the actual personal notice of its existence. As we understand the case referred to, it does not sustain the respondent. It is not a case of the destruction of records, but of a record which had not been made in accordance with the requirement of the statute. The prior mortgage lien, however, was sustained upon actual personal notice of its existence prior to a sale under a junior judgment lien; and is, therefore, an authority for the complainant. While there are points of resemblance between that case and the one at bar, we may observe — 418 — that, in the former, the record of the mortgage was never indexed ; in the latter it was indexed; in the former diligent search was made in the registry office for liens; in the latter no diligence or inquiry is pretended ; in the former diligence was unavailable; in the latter the result was not tested by inquiry, and we are left to conjecture as to the fruits of an inquiry and search upon the agreed condition of the records; in both actual notice of the recorded mortgage was given after the judgment and before the sale. Notice at the sale herein is admitted by the pleadings, proved by the witness Wright and is undisputed, which establishes the complainant’s right of recovery, assuming the case to turn upon this point. We have, however, no hesitation in affirming the general proposition propounded by the complainant, and hold the deed of trust in favor of Myers, in 1861, constructive notice to all the world, notwithstanding the disordered condition of the records in 1865. It would be monstrous to declare a lien, acquired by a duly recorded mortgage, lost by a subsequent partial or total destruction of the records. Such a rule would subject every lien in the state to the hazards of accidental fire, the caprice of incendiaries, and the casualties of war. The law is with the complainant in the case at bar on both the main propositions presented by the record: 1st. Thei’e was constructive notice by the recorded mortgage; 2d. There was, also, actual notice thereof prior to the sale under the subsequent judgment lien. Reference is made by counsel to the act of the legislature, approved December 8, 1863, whereby the re-recording of deeds in certain cases was authorized. The language of the act appears to contemplate the destruction, loss or mutilation of the record of the particular deed sought to be recorded anew, and not to the records generally. In this case there is no evidence of any injury to the trust deed in question. Whether the legislature intended to pronounce records destroyed, lost or mutilated ineffectual and inopera — 419 — tive by the above act, as insisted upon, it is impossible and unnecessary to determine. The act itself imposes no penalty or condition. It is permissive, and to be availed of by the party, the record of whose deed “has been lost, mutilated or destroyed; and such records anew,” says the statute, “ shall be as good and effectual in law or in equity as the original record might or could have been.” We presume no such extraordinary effect as contended for was contemplated by this act, but that it was passed, in the discharge of a public duty, for other purposes than the unjust one of destroying the liens of those neglecting to avail themselves of this legislative enactment. Authorities supposed to sustain the respondent may be briefly noticed. Otley v. Haviland et al., 36 Miss. 19, was under the law of 1840, and decided only that a mechanic might have a lien upon a building for labor and materials furnished in the erection thereof, to the exclusion of a prior lien on the land. But that is not the case at bar. There, the building was erected upon the land of the mortgagor, subsequent to an incumbrance by deed of trust. Harper et al. v. Tapley et ux., 35 Miss. 506, was an action of ejectment. The title of the plaintiff was by parchase under a judgment. The defense was based upon an unrecorded deed. The possession of the defendants was held to be constructive notice. Of the registry acts, the court said their object was “to enable a person about to purchase lands to ascertain whether they have been conveyed. In order to do this, the place where he must reasonably be led to make the inquiry, is the probate clerk’s office of the county where the land lies. That is the place intended by law for recording the deed of conveyance; and if, upon examination, he finds no conveyance there, he is justified in acting on the belief that none has been made.” The main doctrine of this case seems to be that a purchaser at execution sale stands in a position, at least as favorable as that of the judgment creditor, and hence notice to such purchaser, of an unregistered deed before the rendition of the judgment, will not avoid his — 420 — purchase, if it be not also shown that the judgment creditor had notice of it before his lien attached. The case cited is .unlike the one at bar, in this, that, in the latter, there was a prior, registered lien, personal notice of which was also given before sale under the judgments, and further, that Buchanan made no examination or inquiry at the record office. In Henderson v. Downing et al., 24 Miss. 106, the contest was between claimants under an unrecorded deed of trust and title under a judgment, without notice to the creditor until after the enrollment of his judgment. The question in Dixon & Starkey v. Lacoste, 1 Smedes & Marsh. 70, was as to the effect of notice of a prior, unrecorded deed as against a judgment creditor, and constructive notice, or notice by possession, was held sufficient. We do not think these cases aid the defendant in error. Treating this case upon the basis upon which it appears to have been tried in the court below, and as it is presented in the argument of counsel here, the court erred if it held the deed of trust from Brownlee to Orr, trustee in 1861, inoperative because of the condition of the records of 1865. The record impresses us with the equities of the complainant’s case. It is as though the mill upon lands whereon was a valid lien, was put upon wheels, and moved bodily off and located upon the lands of the defendant. He knew whence it came, as did all the mechanics and laborers. For the materials of which the mill was composed upon the lands of Brownlee, Buchanan has paid nothing. He is enriched at another’s expense. He has acquired a part of what was the freehold of another without cost, except what he jjaid the mechanics. This would seem to be unjust, and it would appear to be right that he should pay to the true owner the value of the materials by which he has been thus benefited. The facts, however, were not, in all their aspects, fully developed. For instance, the mechanic testified that he did not erect the mill by contract, but worked by the day. If this be so, the mechanics were not entitled to the benefits of the Code on that subject. — 421 — A gain, the particulars of the sale by virtue of the deeds of trust are not given. The date of forfeiture of the first deed of trust does not appear; and, qucere, whether the proceedings were in chancery, whether Buchanan was made a party thereto, whether, if in chancery, such proceedings, specially embraced, by suitable averments, the mill and its component parts, and particularly, whether upon the sale, if without reference to the removal of the mill, the said Myers bid for the land contained in the deed of trust, the full amount of Brownlee’s indebtedness to him. In this latter event, he would, perhaps, be without remedy. Under a different state of facts, a very serious question would arise, as if Buchanan were a bonaftda purchaser for a valuable consideration of chattels, formerly a part of the realty, removed therefrom and restored to personalty by the mortgagor in possession, but such is not this case„ Buchanan is not a purchaser, and has not paid any thing for the property. He is in possession with full notice. Thus a case apparently beset with difficulties is easily solved. We have examined the law on the subject of fixtures and their removal, as between mortgagor and mortgagee and third parties, and, without a discusssion thereof, append some of the authorities referred to. Amos & Heard on Fixtures; Dart on Vendors and Purchasers; Hill on the Law of Fixtures; Hilliard on Real Estate; Powell on Mortgages; Smith on Real and Personal Property; Williams on Real Property; Williams on Personal Property; 2 Kent, 342, 347, title Fixtures. As to the claim of complainant to the interest of Brown-lee under the contract of the latter with Buchanan, we have deemed it unnecessary to discuss, upon this record, leaving its further litigation to the discretion of the parties, without prejudice. / The decree dismissing the bill is reversed, and the cause remanded for further proceedings.