Fowler v. Merrill/Opinion of the Court

Mr. Justice WOODBURY delivered the opinion of the court.

This was an appeal from a decree of the Circuit Court of the United States for the District of Arkansas.

The decree was in favor of Merrill, on a bill in chancery to foreclose a mortgage of certain negroes, described therein and executed to him, November 25, 1837 to secure him for indorsing two notes made in April and June, 1837, the first payable in one year and the other in two years, for $12,578.42 in the aggregate. These notes run to F. L. Dawson or order, and were by him indorsed to the plaintiff, Merrill, and by him to the Planters' Bank for Dawson, who obtained the money thereon for himself. This mortgage was recorded December 29, 1837.

[p393] The notes not being taken up by Dawson, Merrill was compelled to pay their amount and interest, on the 4th of March, 1842.

The bill then proceeded to aver, that the defendants below, viz. James L. Dawson, James Smith, William Dawson, and others, had since got possession of these negroes, some of one portion of them and some of another. And that, although they were bought with full notice of Merrill's prior rights to them under the above mortgage, yet the respondents all refuse to deliver them to him, or pay their value and hire towards the discharge of the mortgage. Whereupon he prayed that each of them be required to deliver up the negroes in his possession, and account for their hire or to pay their value.

The court below decided, that $18,934 be paid to Merrill by the respondents, excepting Mrs. Bayler, and, on failure to do it, that the redemption of them be barred, and other proceedings had, so as eventually to restore the slaves or their value to the mortgagee.

Several objections to this decree and other rulings below were made, which will be considered in the order in which they were presented.

Some of the depositions which were offered to prove important facts had been taken before "a judge of the Probate Court" in Mississippi, when the act of Congress allows it in such cases before "a judge of a county court." 1 Stat. at Large, 88, 89.

But we think, for such a purpose, a judge of probate is usually very competent, and is a county judge within the description of the law.

In Mississippi, where these depositions were taken, a Probate Court is organized for each county, and is a court of record, having a seal. Hutch. Dig. 719, 721. Under these circumstances, were the competency of a probate judge more doubtful, the objection is waived by the depositions having been taken over again in substance before the Mayor of Natchez.

The other objections to the depositions are in part overruled by the cases of Bell v. Morrison et al., 1 Peters, 356, and Patapsco Ins. Co. v. Southgate et al., 5 Peters, 617.

On the rest of them not so settled, we are satisfied with the views expressed below, without going into further details.

The next exception for our consideration is, that the time of the execution of the mortgage is not shown, and hence that it may have been after the rights of the respondents commenced.

But it must be presumed to have been executed at its date [p394] till the contrary is shown; and its date was long before. Besides this, it was acknowledged probably the same day, being certified as done the 24th of November, 1837. And though this was done out of the State, yet, if not good for some purposes, it tends to establish the true time of executing the mortgage. It must also have been executed before recorded, and. that was December 29th of the same year, and long before the sale in October, 1841, under which the respondents claim.

The objection, that the handwriting of the record is Dawson's, does not impair this fact, or the legality of the record as a record, it having doubtless been allowed by the register and being in the appropriate place in the book of records.

It is next insisted, that, as the negroes were left in the possession of Dawson after the mortgage, and were seized and sold to the respondents in October, 1841, to pay a debt due from Dawson to the Commercial Bank of Vicksburg, and as the respondents were innocent purchasers, and without notice of the mortgage, the latter was consequently void. This is the substance of several of the answers. Now, whether a sale or mortgage, without changing the possession of the property, is in most cases only primâ facie evidence of fraud, or is per se fraud, whether in England or in some of the States, or in Arkansas where this mortgage and the sale took place, may not be fully settled in some of them, though it is clear enough in others. (See cases cited in 2 Kent's Com. 406–412.) So whether a sound distinction may not exist at times between a mortgage and a sale, need not be examined, though it is more customary in all mortgages for the mortgager honestly to retain the possession, than to pass it to the mortgagee. U. States v. Hoe, 3 Cranch, 88; Haven v. Low, 2 N. Hamp. 15. See 1 Smith's Leading Cases, 48, note; Brooks v. Marbury, 11 Wheat. 82, 83; Bank of Georgia v. Higginbottom, 9 Pet. 60; Hawkins v. Ingolls, 4 Blackf. 35. And in conditional sales, especially on a condition precedent bonâ fide, the vendor, it is usually considered, ought not to part with the possession till the condition is fulfilled. See in 9 Johns. 337, 340; 2 Wend. 599. See most of the cases collected in 2 Kent's Com. 406.

But it is unnecessary to decide any of these points here, as, in order to prevent any injury or fraud by the possession not being changed, a record of the mortgage is in most of the States required, and was made here withi four or five weeks of the date of the mortgage, whereas the seizure and sale of the negroes,to the respondents did not take place till nearly four years after.

Yet it is urged in answer to this, that if the statute of Arkan- [p395] sas, making a mortgage, acknowledged and recorded, good, without any change of possession of the articles, did not take effect till March 11th, 1839, over a year after this record.

Such a registry, however, still tended to give publicity and notice of the mortgage, and to prevent as well as repel fraud, and it would, under the statute of frauds in Arkansas, make the sale valid if bonâ fide and for a good consideration, unless against subsequent purchasers without notice. Rev. Statutes, ch. 65, § 7, p. 415.

There is no sufficient proof here of actual fraud, or mala fides, or want of a full and valuable consideration. And hence the objection is reduced to the mere question of the want of notice in the respondents. In relation to that fact, beside what has already been stated, evidence was offered to show, that the existence of the mortgage was known and talked of in the neighborhood, and proclaimed publicly at the sale.

Indeed, some of the evidence goes so far as to state, that, after the notice of the mortgage at the sale, the sheriff proceeded to sell only the equity of redemption, or to sell the negroes subject to any encumbrances. His own deed says expressly, "hereby conveying all of the right, title, estate, interest, claim, and demand of the said James L. Dawson, of, in, and to the same, not making myself hereby responsible for the title of said slaves, but only conveying, as such sheriff, the title of said James L. Dawson in and to the same."

The proof likewise brings this actual notice home to each of the respondents, before the purchase, independent of the public record of the mortgage and the public declaration forbidding the sale at the time, on the ground that the moftgage existed and was in full force.

According to some cases, this conduct of theirs under such circumstances would seem more fraudulent than any by Merrill. Le Neve v. Le Neve, 3 Atk. 646; 1 Stor. Eq. 395; 8 Wheat. 449. Beside this, the answer should have averred the want of notice, not only before the sale, but before the payment of the purchase-money. Till the actual payment the buyer is not injured, and it is voluntary to go on or not when informed that the title is in another. Wormley v. Wormley, 8 Wheat. 449; Hardingham v. Nicholls, 3 Atk. 304; Jewett v. Palmer et al., 7 Johns. Ch. 68. See Le Neve v. Le Neve, 3 Atk. 651.

There is another view of this transaction, which, if necessary to revert to, would probably sustain this present mortgage. The Arkansas law to make a mortgage valid if recorded, passed February 20th, 1838 (Rev. Stat. p. 580). This mortgage was on record then, and since and had been from December, 1837, thus covering both the time when the law took effect [p396] and when the respondents purchased. It was also acknowledged then, and though not before a magistrate in Arkansas, yet before one in Mississippi; and in most States, the acknowledgment may be before a magistrate out of the State as well as in, if he is authorized to take acknowledgments of such instruments.

Nothing appears in the record here against his power to do this. Some complaint is next made of the delay by Merrill to enforce his mortgage against Dawson.

But it will be seen on examining the evidence, that he was not compelled to pay Dawson's notes to the bank till March 4th, 1842, and that these negroes were sold to the respondents and removed some months before, viz. October 11th, 1841, so that no delay whatever occurred on his part to mislead the respondents.

It was next objected, that two or three children, born since the mortgage, should not be accounted for, and one woman, who is supposed to have died after the sale and before this bill in chancery.

But it seems to accord with principle, that the increase or offspring should belong to the owner of the mother (2 Bl. Com. 404; Backhouse's Admr. v. Jetts's Admr., 1 Brock. C. C. 511); and the evidence is so uncertain whether the death of Eliza occurred after this bill or before, that the doubt must operate against the respondents, whose duty it was to prove satisfactorily that it happened before, in order to be exonerated.

It is argued further against the decree, that the respondents were made to account below for a boy, not proved clearly to have been born of one of the mortgaged women. But there seem circumstances in the case from which it might be inferred that he was so born. He was brought up among them, he was under the care chiefly of one, and no other person is shown to have been his parent.

We do not see enough, therefore, to justify us in differing from the judge below on this point.

The rules adopted in the Circuit Court for fixing the value to be paid for the negroes are also objected to, but seem to us proper. 1 Brock. C. C. 500.

The mortgaged property is given up or taken possessibn of by the mortgagee usually at the time of the decree; and if not surrendered then, its value at that time, instead of the specific property mortgaged, must be and was regarded as the rule of damages.

The injury is in not giving it up when called for then, or in not then paying the mortgage, and not in receiving it some years before, and not paying its value at that time.

[p397] This is not trover or trespass for the taking ofit originally, but a bill in chancery to foreclose the redemption of it by a decree, and hence its value at the time of the decree is the test of what the mortgagee loses, if the property is not then surrendered.

There is another exception to the estimate made of the value of the hire of the slaves. Their hire or use was charged only from the institution of this bill in chancery. This surely does not go back too far. 1 Brock. C. C. 515.

And some analogies would carry it back further, and in a case like this charge it from the period of their going into the possession of the respondents. But they object to the hire allowed; because, it is said, that clothing, medicine, &c., during this time should have been deducted. 1 Dana, 286; 3 J. J. Marshall, 109.

We entertain no doubt, however, that in fact the hire here was estimated as the net rather than gross hire, and all proper deduction made. It is only a hundred dollars in one case, and seventy in others, which manifestly might not equal their gross earnings, while nothing is charged for the children. Testimony, too, was put in as to the proper amount for hire, and the judge as well as witnesses belonging to the country, and being acquainted with its usages, doubtless made all suitable deductions.

There is no evidence whatever to the contrary.

And on the whole case, we think the judgment below should be affirmed.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the District of Arkansas, and was argued by counsel. On consideration whereof, it is now here ordered, adjudged, and decreed by this court, that the decree of the said Circuit Court in this cause be, and the same is hereby, affirmed, with costs.