author: Hitchcock, J. Avery, J.,

text:
    *Nicholas Thevenin v. Lessee of Marshall D. Slocum
    Under thé act of January 30, 1822, providing for the remission of penalties, and for the sale of land for taxes, the county auditor is a competent witness to prove that a list of judgments, as provided in the act, was delivered to him.
    Uuder the same act due notice of sale may be proven by the production of a newspaper containing an advertisement of the notice, accompanied by proof of publication for the requisite length of time.
    And under that act the hooks of the county auditor may he given in evidence to prove that the land was offered for sale, and not sold for want of bidders, although in the entries of said hooks there may be some irregularities.
    The forfeiture of land to the state for non-payment of taxes does not divest the former proprietor of title, so as to prevent him from maintaining an action of ejectment against one in possession not'claiming title under the state.
    This is a writ of error to the court of common pleas of Gallia county.
    The original action was ejectment, commenced by the defendant in error in the court of common pleas of Gallia county, for the recovery of section 19, township 5, range 15, in the Ohio Company’s purchase, and in the county of Gallia.
    Upon the trial of the case, the plaintiff having introduced evidence to prove his title, rested.
    The plaintiff in error then set up title to the premises in controversy by virtue of the forfeiture thereof to the state under the “ act providing for the remission of penalties, and for the sale of lands for taxes,” passed January 30, 1822 (commonly known as the judgment act), and of a subsequent sale and conveyance to his grantor, pursuant to the “ act to provide for the sale of lands forfeited to the state for the non-payment of taxes,” passed March 14, 1831. Having given in evidence a record of a judgment rendered by the court of common pleas of Gallia county in 1825, pursuant to the act first above mentioned, and of an order of sale made by said court pursuant to section 6 of the act aforesaid, he next ^offered the testimony which is contained in the following bill of exceptions :
    “ Be it remembered, that on the trial of this cause, Nathaniel Gates, being called by the defendant as a witness, testified that in the years 1824 and 1825 he was the auditor of the county of Gallia. That he received from the'clerk of the court of common pleas'for said county a certified copy of an order of sale of certain lands on which judgment had been entered in that court, under the act of J anuary 30, 1822, ‘ entitled an act providing for the remission of penalties and for the sale of lands for taxes.’ That said order of sale so delivered to him has been lost or mislaid, and can not now bo found; that he advertised said list of lands so ordered to be sold for thirty days prior to the 1st of June, a. d. 1825, in the ‘ Gallia Free Press,’ a paper then published weekly in the town •of Gallipolis, which advertisement contained a true copy of the list of said judgments and of the clerk’s certificate under his seal, four of which weekly papers containing said advertisement, dated April 14, 1825, April 21, 1825, April 28, 1825, and May 5,1825, he put on file among his papers in the county auditor’s •office, and are now here presented, which advertisement is in the •words and figures following:
    “ State of Ohio Gallia county, ss.

    “A list of those judgments entered in the name of the State of Ohio, at the April term of the court of common pleas, last past, in said county, for the amount of tax, interest and penalty for the years therein designated, against the person in whose names the several tracts hereinafter mentioned are charged, including the ■costs to be taxed on every several tract, to wit:

    “ Ordered, that Nathaniel Gates, the county auditor, proceeded to advertise and sell the lands in the foregoing cases, agreeably to the statute in such ease made and provided.
    “ State of Ohio, Gallia county, ss.

      “ I, Francis Le Clercq, clerk of the court of common pleas in and for said county, do certify that the foregoing is a correct list of the judgments entered, in the name of said state, against the persons therein named for delinquent' taxes, interest, penalties, and costs as aforesaid, and that the above order of sale is a true copy from the minutes of said court now remaining on file in my office.
    “In testimony whereof, I have hereunto set my name and affixed the seal of our said court at Gallipolis, this April 12, a. d. 1825, and in the year of this state the twenty-third.
    “ Francis Le Clercq, Clerk.”

    “ Auditor’s Office, April 12, 1825.

      “State of Ohio, Gallia county, ss.

    “I, Nathaniel Gates, auditor of Gallia county, do certify that the foregoing is a list of judgments obtained in the name of the State of Ohio, in the court of common pleas, held in said county of Gallia, at its April term, 1825, for taxes due on lands for the years, in the above exhibit mentioned, as certified by the clerk of said .'-¡‘court, under his hand and the seal of said court, agreeably to an advertisement published in the ‘Supporter’ and ‘Scioto Gazette,’ six weeks prior to a motion being made to said court for a judgment in the above cases. Notice is hereby given that on Wednesday, the 1st day of June next, at the court-house, in the town of Gallipolis, between the hours of ten and four o’clock, I shall proceed, pursuant to an ‘ act providing for the remission of penalties, and for the sale of land for taxes,’ passed January 30, 1822, to offer for sale each of the above tracts for the amount of said judgment and costs charged on each tract, to such person or persons as will pay the amount of said judgment and costs for the least number of acres to be laid off in the northwest corner of said tract, to which the same stand charged, provided that the amount of judgment and costs are not paid prior to that day.
    “ Nathaniel Gates, Auditor Gallia county.”

    Said Gates further stated, that prior to said sale he entered in a book in which he kept a minute or record of his proceedings as auditor, respecting the sale of lands for taxes, a true copy of said order of sale, which is in the same words with the advertisement of sale, which book was shown and presented. That in said copy of said order of sale in said book, there was a margin or blank space left in the right-hand side for remarks. That in pursuance of said advertisement and order of sale, he, as auditor of said county, on the 1st day of June, a. d. 1825, offered said lands for sale at the door of the court-house in said county, of which a record or entry was then made by him, in said book above mentioned, that he offered said lands from said order of sale, which is lost, as above stated, and made memorandums on it of those lands which were sold, and also of those lands for which there were no bidders; that as soon as the sales were over, he entered in said book in said margin, left, as above stated, for remarks, opposite to each tract, what was done at the sale; opposite to each tract sold, he wrote the word *“ sold,” and also the name of the purehaser; opposite to each tract which he offered for sale and for which there was no bidder, he wrote the words, “ no bidders.” That he finds the words, “no bidders,” entered in his handwriting opposite section No. 19, township No. 5, range No. 15. That from the facts above stated, he is enabled to state that said tract of land (section No. 19, township 5, range 15) was advertised' for sale as above stated; that it was offered for sale in pursuance to such advertisement, and that it remained unsold for want of bidders. Which said book of the auditor of said, county, containing an entry in the same words as in the preceding advertisement, the said numbers of the “ Gallia Free Press," and the above facts stated by said Nathaniel Gates, the said defendant offered as proof of the fact that an order of sale of said tract of land was delivered to the auditor of the county as stated in said Gates’ deposition, and as proof also of the fact that notice of the sale of said land was duly given; that it was offered at public auction, and that it was not sold for want of bidders ; which said book of the auditor, said newspaper advertisements, and said testimony of said Gates were, on motion of the plaintiff’s counsel, excluded and overruled as testimony, to which ruling of the court the defendant, by his counsel, excepted, and presented this bill of exceptions, which was signed and sealed in open court.
    This testimony being overruled, the defendant’s title failed, and judgment was rendered for the plaintiff. To reverse this judgment, this writ of error is prosecuted, and the errors assigned are :
    1. That the court of common pleas erred in ruling out the testimony of Nathaniel Gates, together with the book kept by him,, as auditor of Gallia county, and the newspapers containing the advertisements of sale, referred to in the bill of exceptions.
    2. That the said judgment was given in favor of said plaintiff *in ejectment, when by the laws of the land it ought to have been given in favor of the said Nicholas Thevenin.
    Yinton & Coombs, for plaintiff in error.
    Simeon Nash, for defendant.
   Hitchcock, J.

In order to determine the propriety of the decision of the court of common pleas, it is necessary to ascertain the object for which the testimony, which was excluded and overruled, was offered. This object, as appears by the bill of exceptions, was to prove that an order of sale had been issued by the court of common pleas, and delivered to the county auditor of the county of Gallia; as proof also of the fact that notice of the sale of said land had been duly given ; as proof that it was offered for sale at public auction, and not sold for want of bidders.

Previous to the act of February 20,1820, entitled “ an act levying ■a tax on land"—Chase’s Stat. 1101—a distinction had been made -between the lands of residents and non-residents. The lands of the former were listed and the taxes paid either in the townships •or county where the lands were situated or where the owners resided. For the convenience of non-residents the state was divided into collection districts, In each district a collector was appointed, .and lands were entered for taxation with, and the taxes paid tq, these district collectors. Lands were not taxed according to their .actual value, but were divided into first, second, and third rates, and a specified sum levied upon each rate, and the amount thus levied changed from time to time as the exigencies of the case might require. These laws all provided for the sale of the land, in default of payment of the taxes. In early times such sales were made by the sheriffs of the respective counties. Subsequent to the division of the state into collection districts, the sales were made by the district collectors. Certain preliminary steps were necessary before the sale, one of which was an advertisement. After sale, *if there was a controversy as to the validity of the title acquired by the purchaser, no one doubted that the face that all the preliminary steps had been taken, might be proven by parol. For some years previous to 1820, there had been no sales ior taxes, for although much land was liable to be sold under existing laws, yet the general assembly from time to time postponed sales by special enactment. This was done, however, without relinquishing or remitting taxes due or the penalties thereon.

By the act of February, 1820, the system was changed so far as respects the mode of listing land and collecting taxes. By this act the office of county auditor was created,'and it was made the duty of that officer, among other things, to take a list of all lands in his proper county, to make out duplicates, etc. For the purpose of collection, a county collector was to be appointed. This collector settled his accounts with the county auditor and returned to him a list of those lands upon which the tax was not paid. It was made the duty of the county auditor to make return to the •state auditor, and if any land was delinquent for two successive years, it was to be sold for the taxes. Section 39 of the act provides “ that all sales, of land shall be made by the county auditor, .■at the court-house or place where courts are usually holden in his county, on giving notice by advertisement as aforesaid, which notice shall be given at least six months before the day fixed upon for such sale, and at such sale the person who will pay the tax, interest, and penalties charged and remaining unpaid upon any tract of land so advertised and offered for sale, for the least quantity thereof, shall be considered as the purchaser of such quantity; and the county auditor shall on such sale being made, make a fair entry descriptive thereof, in a book to be provided by him for that purpose, and shall also record in said book all the proceedings relative to ■the advertising, selling, and conveying said delinquent land, which record shall be good evidence in all courts holden ivithin the state."

Counsel for defendant in error suppose that the latter «clause of this section is decisive of this case, and that no other evidence except that which is derived from this book of the auditor can be admitted to prove anything relative to the “advertising, selling,” etc., of lands for taxes. This position would probably be correct with respect to any land sold under this act, or some of the subsequent acts which are to be found in our statute-books. And it would seem to me, that in the case under consideration, the book which was introduced from the auditor’s office, contains entries substantially such as are here required. But of this there may perhaps be some doubt. But it must be remembered that this act has no reference to lands which were delinquent and liable to sale previous to 1820, any further than this, they might be listed, but were not to be charged with the previous unpaid taxes and penalties. By section 61, it is provided “that the sale of all lands; which, by the laws now in force, would be exposed to sale for the non-payment of taxes, interest, and penalties due thereon, uponthefirst Monday of December,1820, shall be and thesameare hereby postponed until the first Monday of December, 1822.

Befhre the first Monday of December, 1822, another law was on-acted having special reference to those lands upon which the taxes had not been paid previous to 1820, and is applicable to such lands alone. It is a complete system in itself, and has no reference to« the act of 1820. It was passed on January 30,1822, and is entitled “ an act, providing for the remission of penalties, and for the ealeof land for taxes.”

Section 1 provides: “ That all taxes, interest, and penalties, which have accrued and become due upon lands, and remain unpaid,«prior to the year 1820, shall be collected in the manner hereinafter prescribed.”

Section 2 provides that the treasurer of the state, and the respective county treasurers, shall be authorized to receive, until December then next following, all arrearages of land taxes which had become due previous to the year *1820, with the interest thereon, and if the arrearages of taxes and interest should be paid by or before the time specified, all penalties which had accrued thereon were to be remitted.

By section 3 of the act, it was made the duty of the auditor of state, before the 1st of May then next, to transmit to the several-county auditors lists of the lands upon which arrearages of taxes, charged previous to 1820, were due, with a list of the delinquent lands for the year 1820, and transmit the same to the auditors of the respective counties. After correcting this list, it was made the duty of each county auditor to give notice, by publication, of this list. And it is further made the duty of the state auditor to-give notice, in the National Intelligencer, that all arrearages of taxes which may have been due previous to 1820, with the interest thereon, would be received until the 10th day of December next thereafter, exempt from all penalties which might have accrued prior to the year last aforesaid.

By the next section it is made the duty of the auditor of state, after having made all necessary corrections, to transmit to the several county auditors lists of all lands Upon which the taxes, interest, and penalties accruing prior to 1820 still remain due, adding to the same the taxes and penalties accruing upon the same land subsequent to the year aforesaid,

By the next section the county auditor is required forthwith,, after the receipt of the list last aforesaid, to cause a transcript, thereof to be advertised for six weeks successively in some newspaper having general circulation in such county where the lands lie, which advertisement shall set forth that at the next succeeding court of common pleas of said county a motion will be made for a judgment, in the name of the State of Ohio, for the amount, of said tax, interest, and penalties, against the person in whose name said taxes, interest, and penalties are charged.” It is then made the duty of the county auditor to appear before the court according to the advertisement, and move for a judgment, which judgment *the court is authorized to render. This judgment is made a-matter of record in the court.

In the case before the court such judgment had been rendered, and a record made by the clerk. So far there is no complaint.. Provision is next made that the clerk of the court shall make out. a list of these judgments, with an order of court for the sale of such lands to satisfy the judgment or judgments, and deliver the same to the county auditor, who is directed to sell said lands in the manner' specifically provided. Previous to sale advertisement, must be made in some newspaper for thirty days, and the lands are to, be sold to the person who will satisfy the judgment or judgments for the least number of acres. It is further required that the auditor, at the next term of the court of common pleas after the sale, make return of all sales by him made to the court, and if, upon examination, the court find that the proceedings-have been in accordance with law, deeds ai*e to be ordered to be made to the purchaser or purchasers.

The tenth, and last section section of the act, provides, “That where any tract or part of a tract of land charged for the payment of taxes, and exposed to sale as aforesaid, is not sold for want of bidders, it shall be the duty of the auditor offering the same for sale to return the same to the auditor of state, on or before the 15th day of December next after the time said land was offered for sale, and the auditor of state shall make a record thereof, and> the same shall be considered as forfeited to the State of Ohio, and be subject to be disposed of in such manner as any future legisla^ ture may direct.”

Perhaps it was not necessary to give so full an abstract of tha provisions of this act, but I have done it for the purpose of making it apparent that there was no necessary connection between it and the act of 1820. Both acts have, it is true, one common object—that is, to secure the collection of taxes on land, but not upon the same land. The act of 1820 introduced a new system of taxation, and is intended to operate upon current and subsequent taxation. It is entirely ^prospective, and has reference to all the lands in the state. The act of 1822, although a general law, has reference to such lands as were delinquent for the non-payment of taxes previous to 1820. The leading object of the law was to secure the payment of these back taxes, although it was provided that if the land's thus delinquent continued to be delinquent after 1820, the taxes accruing subsequent to that period should be included in the judgment, as well as those which accrued before. The mode of collection is entirely different. Under the law of 1820, if any tract of land was delinquent for the non-payment of taxes for two successive years, it was made the duty of the county auditor to sell the same. Under the ■law of 1822, there could be no sale without a previous judgment rendered by a court of record. By this law, it is true, as by the law of 1820, the land was to be sold by the county auditor; but in making such sale, he acted under an order of the court as much as does the sheriff of a county in making sale under execution. It was his duty in the evenfof a sale to make return to the court, and before any conveyance could be made the sale must be approved by the court and a deed ordered. If no sale was made, the return was to be made to the auditor of state, or rather the lands which were not sold were to be so returned.

To my mind it is apparent that there is no necessary connection between these two statutes, nor can there be any more propriety in resorting to the act of 1820 to give a construction to the act of 1822 than to any previous act on the subject, except so far as particular provisions of the act of 1820 are made part of the act of 1822 by special reference thereto. Nor did this latter act purport to be amendatory to the former. Under such circumstances it ■does not follow as a matter of course, that although it might be necessary to prove that lands were advertised for sale by the production of the records of the county auditor when those lands were sold under the law of 1820, therefore the same description •of evidence must be produced, where the land was sold under tho law of 1822.

Having made these general remarks upon these two laws, *1 now proceed to consider the question presented in the bill of exceptions. Nathaniel Gates was examined as a witness in open court. He held the office of county auditor at the time the lands in controversy were claimed to have been exposed to sale under the provisions of the act of 1822. His test imony was received subject to exceptions, but was finally excluded and overruled by the court. The bill of exceptions shows that in connection with the testimony of Gates, certain books kept by him as auditor of the county, and a newspaper containing the advertisement for sale, were also before the court, and were also rejected, as well as the testimony of Gates. This testimony was offered, as the bill of exceptions shows, “ as proof of the fact that an order of sale of said tract of land was delivered to the auditor of the county, as by Gates stated in his testimony." Was it legitimate testimony for this purpose? There was no controversy but that a judgment had been rendered and an order of sale made. But it was deemed necessary to prove that a list of judgments, as provided by section 6 of the act, had been delivered to the auditor. If necessary to make this proof, it could not be done by the production of the records of the court, because it had no connection with the action of the court. I find nothing in the law of 1822 which made it necessary that the fact of delivery should be recorded by the auditors of the county. It might then be proved, as any other matter in pais, by parol, and the man who received the list was as competent to prove its delivery as any other person. The best evidence which would have been introduced to prove the contents of the list, would have been the instrument itself. But the case shows that this had been lost and could not be produced. Therefore, it was competent to prove by the auditor that a copy entered by him in a book kept in the auditor’s office, and which was before the court, was a correct copy. It seems to us that the court of common pleas erred in ruling that the testimony stated in the bill of exceptions was not competent to prove the delivery of the list of judgments to the county auditor.

*This testimony was offered as proof further of the fact that notice of the sale of the land had been duly given. The transcript from the books of the county auditor shows a list of the judgments, in which is included one against the person in whose-name the land in controversy is taxed, with a statement of the auditor that the same had been “ advertised in the 1 Gallia Free Press,’ April 12, 1823, and continued six weeks,” and then follows a copy of the advertisement.

I have not been able to discover in what respect this entry upon the auditor’s book, is not sufficient proof that notice of the sale of -the land had been duly given. But if the fact was not sufficiently • proven by this record, or even if there had been no such record, •could the legality of the notice be proven by the production of the newspaper in which it was contained, accompanied by proof that it been continued the requisite length of time?

It must be borne in mind that if sales wore made, return must be made to the court of common pleas for confirmation. One ■question with the court, and perhaps the most important one, would be whether the sale had been duly advertised. Can there be any doubt that the production of a newspaper containing the advertisement, accompanied by proof as before stated, would be the very -evidence which would be required by the court? I apprehend ■not. It is the evidence required preliminary to the confirmation of a sheriff’s sale, and would be equally proper preliminary to the confirmation of a sale made by a county auditor. Indeed, the .sufficiency and competency of such proof for such a purpose, does not seem to be controverted by counsel. But it is insisted, that inasmuch as the land offered for sale and not sold, is to be returned to the auditor of state, to lay a foundation for a forfeiture, the proof of publication of notice of sale, so far as these lands were ■ concerned, must be matter of record in the books of the county auditor. I can see no reason for the distinction. Certainly the act of 1822 does not require any record to be made relative to “ the advertising” of land for sale. This matter rested *ontiroly in parol previous to the act of 1820, and although such record is required by that act relative to sales under it, the act itself has no reference to lands delinquent for non-payment of taxes prior to its passage.

There is certainly no reason that greater strictness should be required, in order to justify a return of the lands not sold, to the auditor, than is required where there is an actual sale. Indeed, the injury to the previous owner is much greater where the land is sold, than where it is so returned. True, the law provides i-that the land so returned shall be forfeited to the state. Much land «has been so forfeited. But the legislature have never treated this forfeiture as vesting tbe title in the state for any other purpose ■than as security for taxes due and owing. And whenever any of this forfeited land has been sold, it has been done under laws providing that if sold for more than the taxes due, the surplus should be placed to the credit of the former proprietor. In an action by such proprietor for the recovery of such forfeited land, we do not suppose that a defendant could defeat the plaintiff’s action by showing merely that the land had been forfeited. He must show, in addition, that it has been sold as such forfeited land. Proving an outstanding title in the state by forfeiture, would not be sufficient.

The evidence overruled and rejected by the court, was offered to prove further that the land was offered for sale at auction, and •that it was not sold for want of bidders.

The transcript from the auditor’s boobs contains a statement that on the day appointed for the sale, the county auditor pro-ceeded to offer the land for sale, pui’suant to the notice, offering each tract separately, and that certain specified tracts were sold to certain individuals. The same transcript shows that other parcels of the land were not sold for want of bidders. There may be some informality in these entries, but in our apprehension, the testimony was competent, and the court of common pleas erred in excluding •and overruling it.

The question presented, is not whether the the evidence excluded 5|<was sufficient to sustain the defense relied upon by the defendant, but whether it was competent for the purposes for which it was offered. This evidence of itself would not have been •sufficient to prove that the land was forfeited, much less to prove its sale as forfeited land. Before the land could be considered as forfeited, further steps must be taken. But the evidence was competent as conducing to prove facts preliminary to a forfeiture. In ■excluding and overruling it, the court of common pleas erred. The judgment of that court is therefore reversed, and the cause remanded for further proceedings.

Avery, J.,

to one of the points decided, dissented, holding that there should have been record ovidence of the advertisement, and that parol evidence that notice of sale was given, was inadmissible.


source: Caselaw Access Project

author: Read, J. Birchard, C. J.,

license: Public Domain

text:
    Franklin Holliday and others v. The Franklin Bank of Columbus and others.
    Where there is a judgment not levied within the year, a junior judgment levied within the year, and thus acquiring a preference as against the senior judgment, and an intervening mortgage executed and recorded prior to the rendition of the second judgment, the senior judgment shall be first paid, next the mortgage, and the junior judgment shall be postponed to both.
    A mortgage has no effect, either in law or equity, previous to its delivery to the recorder of the county for record.
    Where a mortgage is delivered for record on the first day of a court, previous to the hour at which it actually convenes, it will prevail against the lien of a judgment rendered at the same term.
    This is a bill in chancery, reserved in the county of Knox.
    The object of the bill is to determine the priority of liens between a mortgagee of John Buckingham and sundry judgment creditors.
    Samuel Ross recovered a judgment against Buckingham *at the June term of the court of common pleas of Knox county, in the year 1838, and levied upon land, January 1, 1840. At the October term, 1839, several more judgments were taken and all levied within the year. On October 9,1839, Columbus Delano took a mortgage from Buckingham on the land covered with these levies, and delivered it to the recorder for record at eight o’clock the same day, being the first day of the court at which the last-mentioned judgments were taken, and before the court convened.
    Henry B. Curtis, for the defendant Ross,
    contended that by the authority of Brazee et al. v. Lancaster Bank, 14 Ohio, 318, Ross, being the senior judgment creditor, had the prior lien, provided the mortgage of Delano had precedence over the junior judgments. He claimed that the mortgage of Delano having been delivered for record before the court opened, on the first day of the term, had priority over the judgments of that term; that the term commenced on the opening of the court, and that though, in general, fractions of a day were not regarded, yet to subserve justice they would be, and that a court would never permit a fiction of law to work injustice. He cited 1 Saund. 250, note e; 2 Co. 30; 13 Vin. Ab. 209 ; Hob. 311; 2 Roll. 502; 2 Burr. 962 ; Hob. 222 ; Co. Lit. 265 ; 2 Brown, 18; 8 Dowl. P. C. 287 ; 3 Har. Dig. 632; 4 Co. 71; 3 Dana’s Ab. 486; 10 Wend. 422.
    R. C. Hurd, on behalf of the junior judgment creditors,
    insisted that it was the intention of the legislature in making judgment liens relate back to the first day of the term, to include the whole of that day. He contended, first, that they had used apt words to express that intention, and second, that the inconvenience and disputes to which a contrary construction would lead, show it to be at variance with the intention of the legislature. He claimed that no case could be found where the division of a day had been admitted in regard to judicial proceedings and judicial days. He cited *the following authorities: 3 Thom. Co. Lit. 285, note g; 15 Ves. 257 ; 1 Term, 116.
    C. C.- Converse, for Delano,
    submitted the case without argument.
   Read, J.

"Upon the above state of facts arise the following three questions:

1. Where there is a senior judgment, and no levy within the year, a junior judgment and levy within the year, which gives it precedence over the senior judgment, and an intervening mortgage which has precedence over the junior judgment, which lien shall prevail—that of the senior judgment, that of the mortgage, or the junior judgment ?

2. Prom what time does a mortgage take effect—from the date of its delivery to the mortgagee, or from the time it is delivered to the recorder to be entered upon record ?

3. If from the time of its delivery to the recorder for record, which has the precedence—a mortgage delivei-ed for record on the first day of the term, but before the court has actually opened, or a judgment recovered at the same term ?

The case now under consideration has had a singular fate. It was one of the first cases to arise, and it involves all three of the above important questions, and yet all three of these questions, one after the other, have been decided in three several cases in court in bank, before this has come on for disposition.

The first-named proposition is known to the profession as the triangular question; it was decided in the case of Brazee v. Bank of Lancaster, 14 Ohio, 318, that in such ease the senior judgment had precedence both over the junior iudgment and tho-mortgage, and tho mortgage to the junior judgment. Or, in other words, that each lion should prevail according to its age. If it be attempted to settle the question upon the principle of superiority, it runs in a circle and. produces no result. If the junior judgment takes it from the senior judgment, then the mortgage would take it *from the junior judgment, and the senior judgment from tho mortgage, and thus perpetually without a conclusion. If it be attempted to reason it out by interposing intervening liens, it results in a triangle of equal equities, without any circumstance to determine in favor of either. If it be said that the intervening mortgage should protect the senior judgment because it was superior to the junior judgment and inferior to the senior, so it might, with equal reason, bo said that the senior judgment should check the mortgage in favor of the junior judgment, or that the junior judgment should protect the mortgage from tho senior judgment. The court, therefore, felt the necessity of establishing a rule, and that which was considered least objectionable was adopted, to wit, that each should have precedence according to age. This, too, has some show of reason in the fact that the lien of the senior judgment extended to the whole estate mortgaged, and the mortgagee took subject to such lien, and would hold only as to the balance of the estate after satisfying the senior judgment, and the lien of the junior judgment attached only to the balance left, if any, after satisfying the mortgage out of the balance left by the senior judgment. Or, in other words, the junior judgment only attached to the equity of redemption in that portion of the interest covered by the mortgage, after satisfying the lien of the senior judgment.

The second proposition was decided in Stansel v. Roberts, 13 Ohio, 148, and also in Mayham v. Parker et al., 14 Ohio, 431, where it is decided that a mortgage under tho statute, shall take effect from the time it is delivered to the recorder to be entered of record ; that the recording or delivering for record, is a part of the execution ; and hence, before that act is done, that the instrument is not a mortgage, and therefore that notice that certain written instruments exist which may become mortgages by delivery for record, will not prevent another party from taking a like instrument .and making it a mortgage by delivering it for record ; and -when it once becomes a mortgage by such delivery, if it bo *prior in time, it will take precedence ander the statute.

The fact of notice, that there are other mortgages unexecuted for lack of delivery for record, will not destroy its validity or priority. Before execution by delivery for record, they are, at best, mere agreements for a mortgage; and as- the right to take a mortgage is equal among all, he who first succeeds, will prevail. But it may be argued that if such unexecuted mortgages could be considered as agreements for a mortgage, they would at least confer an equity; and that a person who should, with notice of this equity, acquire a legal mortgage, ought to be treated as a trustee, and to hold for the benefit of the equity. This would be the result, if we reasoned upon the ordering doctrine governing equities; but this conclusion is disturbed by the statute, which stops in and declares in such case that mortgages shall take effect and have precedence from the time of delivery for record. The court has declared, therefore, in obedience to the statute, that they shall have no effect, either in law or equity, before such delivery. Mortgages are bare securities to protect either equitable or legal rights. They are neither the legal right nor the equity, but; an incident which attaches to some substantial right or equity. The right or interest to which a mortgage may attach is absolute; a mortgage is secondary and dependent. Destroy the debt or right to which the mortgage attached, and it dies; and without some right to which it can attach, it could never exist. It is, in its nature, an incident. I do not say that the incident may not sometimes constitute the entire value of the substance; but it does not follow, therefore, that the same principles should govern both. In fact, we know that they do not. But it was the tendency of the courts to regard them as governed by the same principles that induced the legislature to interfere. The old doctrine was, that a mortgagee was to be treated as a purchaser, and it is so now in reference to a secret equity; and hence, if he acquired an equity only, a subsequent and legal mortgagee, with notice, was to be treated as a purchaser with notice of an existing equity. The *whole matter is this: how shall persons

having absolute rights and equities for money, secure its payment by fixing a lien upon the property of the debtor? All have an equal right to payment and to security. The court has said, therefore, that he who first takes a security which is legal, shall have its benefit. But it is said that, upon principles of equity, he who first makes the effort to get a mortgage security shall havo his debt first satisfied; and that if any body else knows that this effort to take security has been made, though it bo ineffectual, and actually does take security for his own debt, that the attempt shall prevail over the completion of the act, or at least permit the attempt to be subsequently completed, and then give it priority. But as the property of the debtor should be subject to payment of all his debts, and all his creditors have an equal right to be paid, we see no hardship in holding that he who would secure his own debt over others, should bo hold to acquire such precedence by a compliance with every requisite necessary to give him such right. Nor do we see why a court of equity should help out a lack of such compliance to withdraw the property from other creditors who have an equal right to payment. But it is said that a prior debt attempted to be secured upon property, should have a-prior equity over a debt subsequently contracted, and secured, with notice, upon the same property. A case of fraud might exist, which would give relief in equity, as where the design in contracting the debt and. getting a mortgage, and having it delivered first, was to cheat the first mortgagee. But where debts are contracted in good faith, and mortgage security is honestly taken, first in time is first in right. But it is said that this construction of the statute makes men’s rights depend oftentimes upon swiftness of foot. The answer to this is, that the- legislature have the right to fix the nature and extent of mortgage liens, and to declare what shall bo requisite to con-' stitute a mortgage. But it is an old maxim, that the law aids the vigilant, that superior diligence is to be favored, and that in many cases, first in time, first in right, whether this depends *upon swiftness of foot, or wakefulness of eye. The plain truth is, it was found necessary for the good of all, to havo some fixed rule. That this may be more swiftly complied with by some than with others, is no argument against it. Thus, while we are perfectly satisfied that we have construed the statute according to its letter and spirit, we regard the rule thus established as having reason and convenience to support it. It puts at rest all the vexed questions as to procedure, and enables all persons certainly to know whether the property of persons to whom they extend credit is incumbered or not, without being involvod in the vexed questions of prior equities and notice.

As to the third question, it was decided at this term, in the case of Foilott v. Hall et al. It was held, in that case, that a mortgage delivered for record on the first day of the term at which a judgment was rendered, but before the court was actually convened and opened, had precedence over the lien of such judgment.

We have reported this ease merely to assert and reaffirm the decisions already made upon these vexed questions, with the hope that they may be regarded as permanently settled.

Birchard, C. J.,

to the point last decided, giving a mortgage delivered for recoi’d on the first day of the term of a court, but before the opening of court, a preference over a judgment rendered at that term, dissented.


author: Birchard, C. J.

text:
    *Hardesty Walker and Rorert Fulton v. The Board of Public Works.
    The legislature can not, by declaring a river navigable which is not so in fact, deprive the riparian proprietors of their rights to the use of the water for hydraulic and other purposes, without rendering them compensation.
    The provisions of the legislative resolutions of March 12, 1845, providing for the assessment of damages to the riparian proprietors upon navigable streams, extends to all streams which have been by the legislature declared navigable.
    He who owns the land on both banks of a navigable river, owns the entire river, subject only to the casement of navigation ; and he who owns the land upon one bank only, owns to the middle of the main channel, subject to the same easement.
    This is a mandamus directed to the board of public works.
    The writ was issued pursuant to resolutions of the general assembly, adopted March 12, 1845. The resolutions, with their preamble, are as follows :
    “Whereas, doubts have been entertained whether riparian proprietors on the navigable rivers of the state, are, in good faith, entitled to remuneration from the state on account of deterioration of the value of their investments in hydraulic purposes on such rivers; to settle such doubts, and as a rule to guide the board of public works, and their appraisers in such cases, be it
    “1. Resolved, by the General Assembly of the State of Ohio, That owners of land on the banks of any rivers of the class described in the above preamble, who have erected dams across such rivers, and upon which dams for hydraulic purposes have been authorized by law, who have sustained damage to capital by them employed on such lands for hydraulic purposes, by reason of the abstraction of water from such river, by authority of law, in the construction or repair of any such public works of this state, or by backwater, *by the same authority, caused by the construction or repair of any such public works, are entitled to compensation from the state for such damage so far as such capital, by them so invested, is made of less value thereby.
    “ 2. Resolved, further, If any riparian proprietor, on such river, shall claim damages from the state, for loss of any supposed interest in, or to the use of, the water of such river, by abstraction of the water therefrom by authority of law as aforesaid, he may apply w the Supreme Court, when in session in any county, for a writ of mandamus, directed to the board of public works, which may be served on them, or any member of said board, and shall be returnable to the next term of the Supremo Court in bank, commanding them (if the said board,, by themselves or counsel, shall not show good cause to the contrary) to assess any damages which .such riparian proprietor may have sustained for loss of any supposed interest in, or to the use of, the water of such river, over and above his loss on the capital by him invested, on his lands on such river, for hydraulic purposes.
    “3. Resolved, further, If the court in bank shall determine in favor of such proprietor, then said court shall order said board to proceed and assess such damages, under the provisions of the act ‘providing for the internal improvement of the State of Ohio, by navigable canals,’ passed February 4, 1825.
    “4. Resolved, further, That the said court shall entertain but ono such application, and the governor shall be authorized to employ counsel to defend the rights of the state in such suit.”
    On July 11, 1846, the relato rs filed their relation for a mandamus, under the second of said resolutions; sotting forth, in substance, that they are seized in fee simple of the land on their bank of the Great Miami river, about one mile below the town of Sidney, in Shelby county; and were so seized of the same, at the time of the abstraction of the water of said river by the State of Ohio, as thereinafter stated; that there is upon said premises a water ^privilege, and that a dam was erected thereon by those under whom relators claim, about the year 1812; that said dam has been ever since continued, abutting upon said promises ; and that the same does not interrupt or impede the navigation of the Great Miami r’iver. And relators further state, that in the year 1843, the water of said Great Miami river was, by authority of law, by the State of Ohio, abstracted from said river above the premises of relators, and taken out of said river through the Sidney feeder of the Miami canal, for the purpose of supplying the Miami canal south of Dayton with water, to the groat injury of relators, etc.
    To this relation, the board of public works have answered, admitting the ownership of the land, as set forth by the relators, and the abstraction of the water of the river by authority of law, but denying the right of the relators to damages, for the alleged reason, “that the said river, as well at the point where the water is so abstracted, as also at the place where the said Walker & Fulton claim to own the banks thereof as such proprietors, is a navigable highway, and the waters thereof have been used by said Walker & Fulton for hydraulic purposes, by means of a dam not authorized by law, and which is, and has been, from its erection, an unlawful obstruction to the navigation of the river, and a pubic nuisance.”
    To this answer, the relators have filed their plea, averring that said dam was erected more than thirty years since,- in good faith, and has been so continued ; that said river is not, and never has boon, actxially navigable, or subject to any easement of navigation, at the point where said dam is erected; that said dam has never been an unlawful obstruction to the navigation of said river, and is not, and never has been, a public nuisance; and that, therefore, the waters of said river are not, at the point where said dam is • built, navigable waters, within the true intent and meaning of the ordinance of 1787.
    The plea further insists on the custom, for more than twenty years,' t'o build dams on tho Great Miami river both above *and below the dam of relators, without reference to the easement of navigation, and on the acquiescence of the public in the exorcise of this right; and that, in good faith, the relators have by prescription such right.
    The plea also insists that the State of Ohio has fully recognized the rights of relators by the acquiescence of the Miami Navigation Board, a corporation created by the general assembly, for regulating the navigation of said river and its tributaries, and also by the state herself having built two dams below said relators’ dam, without slope or lock, for navigation ; and that, in good faith, the state is thus estopped from denying the rights of relators in the premises.
    To this plea there is a demurer.
    Swan & Andrews, for the relators.
    Henry Stanbery, attorney-general, contra.
   Birchard, C. J.

This proceeding was authorized by the legislature in order to obtain the opinion of this court as to the duty of the state, in reference to certain riparian proprietors using hydraulic privileges on certain streams of fresh water, navigable under the provisions of the ordinance of 1787, and which have been declared navigable by sundry statutes.

This is evident from the preamble to the resolutions: “ Whereas, doubts have been entertained whether riparian proprietors on the navigable rivers of the state are in good faith entitled to remuneration from the state on account of deterioration of the value of their investments in hydraulic purposes on such rivers, to settle such doubts,” etc.

In disposing of this subject, it is well in the first instance to consider what are the respective rights of the public and riparian owners in the streams within our borders, which are in fact navigable. The question is not new in this state. It has been repeatedly before this court, and the rule is this: Ho who owns the land on both banks of such river owns the entire river, subject only to the easement of navigation, and *he who owns the land upon one bank only, owns to the middle of the main channel, subject to the same easement. The right of the public is merely the right to use the water within the channel for the purposes of navigation. The proprietor of the lands upon its banks may use the waters, of the river in any way not inconsistent with the public easement, or of private rights, and neither the state nor any individual has the right to divert the water to his injury. The right of the adjacent proprietor to the water of the stream is a usufruetory right, appurtenant to the freehold, not an absolute property. Hence the state, in its exercise of the right of eminent domain, can subject the waters of such stream to other public uses the same as any other pi’ivate property, by making a just compensation for the injury, and not otherwise. Gavitt v. Chambers, 3 Ohio, 495; Commissioners Land Fund v. Kempshall, 26 Wend. 404; Rules of the Chancellor of Now York in 17 Wend. 571.

There is another matter to be considered before we come to the questions arising upon the pleadings, viz: the effect of a statute declaring an unnavigable stream to be navigable. It is worthy of remark, that in all the statutes of this description, enacted hitherto in Ohio, no provision is made for compensating the owners of the land, through which such small streams flow, for any injury which may accrue in consequence of thus converting their private property into public highways. There is no provision made for the purchase of the easement thus dedicated to the public use, or attempted to be created for the public use. Yet prior to the passage of these acts, the owners of the lands on both banks of such streams owned the streams and the right to use the water flowing in them, in any manner consistent with the rights of persons above and below them, without let or hindrance. They might erect dams or other obstructions to direct the water from the bed of the stream to. any point of their premises, returning it to its natural channel after using it at their pleasure or convenience. A right of this desrription is a right of property within the protection of the constitution, *and that can not be impaired by a legislative enactment which provides no compensation to the proprietor for the injury. It follows from these principles, that a mill-dam belonging to these relators was erected by authority of law. It was such a structure as the owner of the soil might erect without the aid of. any statute, and in opposition to the prohibition of the statute declaring that portion of the. Great Miami navigable. The common law sanctions it, and conferred the power to build the mill and use the water, while no binding statute forbade the act. The plea avers that the stream at the point of erection was never subject to the easement of navigation. The demurrer admits the facts well pleaded, and as we shall hereafter see admits this fact. The relators have, therefore, in the words of the preamble, “in good faith,” and in law, a clear right to demand of the state full compensation for all the injury to them occasioned by the diversion of the waters of the Great Miami from its natural channel.

It remains for us to consider only whether they have made a case within the resolution of March 12, 1845. 43 Local L. 456. The first resolution gives to the owners of land on the banks of any navigable river, who have erected dams across such river, and upon which dams for hydraulic purposes have been authorized, etc., the right to institute this proceeding. The Great Miami is declared, by sundry acts of the legislature, to be a navigable river. The legislature, by those acts, has shown what were its views of this stream, and from that we may infer what its meaning was, when speaking of navigable rivers in these resolutions.

We ought to understand the same words “navigable rivers,” when employed in different acts by the same body, to mean the same thing. In these resolutions, “ navigable rivers” should be considered for the purpose of interpretation and construction, as defined by the statutes declaring this stream navigable. Those statutes show what these words mean as used here, and we want no better exposition of what our own legislature means, when speaking of a “ navigable river’.” *It is a stream, great or small, which they have thus christened. By an exercise of the legislative power, the state says the Great Miami is navigable at, above, and below the mill-dam of the relators; and although we deny to the legislature the power to change the private rights of the riparian proprietor by so doing, yet for all other purposes consistent with the provisions of the constitution, the statutes should be sustained—more especially, to enable us to carry into effect subsequent legislative action, according to the true meaning and intention of the general assembly. But we are not required to hold that the mill-dam of the relators must have been built pursuant to these special statutes, and with a slope for the passage of boats, even if the Great Miami was in fact navigable at that point, and subject to a public easement. The resolution does not restrict the intended relief to those owners of dams, where dams were built pursuant to the provisions of either the special statutes or the rules of the common law. It is given to those owners, who have erected dams across “navigable rivers,” and upon which ^rivers'] dams for hydraulic purposes have been authorized by law. The relative which, relates to rivers, not to the word dam. This is the grammatical construction of the sentence, and this reading of the resolution is precisely what it should be, if the object of the state was to render to the riparian owners exact justice, of which object there can be no doubt. Eor if an owner had constructed and continued a dam for hydraulic purposes, without providing for the passage of boats as required by the statutes, that would furnish no good reason why the state authorities should divert from the channel of the river, and deprive him of the right which he had to use its waters, without compensating him. It might subject him to the penalties provided by the statute. It might afford a reason for abating his dam as a nuisance, but nothing more. If a nuisance, the fact would tend to lessen the damages which he might claim, and would not be a reason for denying them altogether.

How then stands the issues, when tided by the foregoing *rules, and the well-known rules of pleading? The demurrer to the plea reaches the first defect in the pleading. If the answer sets forth a valid defense, and the plea is bad, then the demurrer is well taken ; but if the answer is insufficient the demurrer is not well taken, because a bad plea is sufficient, if the answer is defective. The gist of the answer of tho board of public works is, “that the waters of the Great Miami have been used by Walker & Fxdton for hydraulic purposes, by means of a dam not authorized by law, and which is and has been from its erection an unlawfxil obstruction to the navigation of said river, and a public nuisance." In other words, your dam was a nuisance, ergo, you had no righ t to the waters of the river. This is not sufficient to bar the relators’ claim, and we need not further consider the plea.

Demurrer overruled ; mandamus peremptory ordered.


author: ■Read, J.

text:
    Collins and McElroy v. George Myers and others.
    A mortgage of personal property, where the mortgagor retains possession of the property mortgaged, with the power of sale, is void as against subsequent purchasers and execution creditors.
    This is a bill of review, reserved in the county of Fairfield.

      The bill is brought to reverse a decree of the Supreme Court of Fairfield county, rendered at the November term, 1846. The bill in the original case was filed by the present complainants; was answered by McCracken, one of the defendants; demurred to by the others, and, on hearing, dismissed.
    The allegations in the original bill were that prior to January 1, 1842, the complainants and the defendant, Geo. Myers, wero partners in merchandising at Lancaster, in the name of Myers, Collins & Co. That at that time said ^partnership was dissolved by consent. That Myers, who continued business on his own account, took the stock in trade, the debts due the firm and other personal effects, and assumed the payment of the firm debts'. That on February 22, 1842, the defendant, Geo. Myers, to indemnify said complainants against said firm debts, executed to them a mortgage on certain personal property.
    The mortgage, after reciting the facts above stated, states and enumerates the persons and amounts for which said firm are liable. The footing is §34,490.32.
    It then transfers to complainants a great variety of personal effects, and among others, the following:
    “ The entire stock of dry goods, lately belonging to Myers, Collins & Co., but now belonging to me, in my store at Lancaster, estimated at §14,500, together with all such additions as I may make thereto hereafter.”
    The mortgaged property foots at its estimated value at §22,772.
    The mortgage states that the property shall remain in the possession of Goo. Myers, until complainants, or either of them, are compelled to pay any of the above debts, or until they or either of them shall become fearful that they will have the same or some part thereof to pay, when it shall bo lawful for them, or either of them, to take possession of said property, and sell the same at public or private sale for cash, and pay said debts out of the proceeds, and the overplus after paying expenses to return to said Myers. The mortgage is duly signed and acknowledged before a justice of the peace.
    The bill further states that a few months after the date of the mortgage, said Myers sold of the mortgaged property a stock of groceries, for the avowed purpose of paying paid debts, but whether the purchase money was so applied, complainants have no knowledge.

      That about December 1, 1842, Myers purchased in New York an addition to his said stock of dry goods, amounting to $6,000; $3,000 of which was paid in *hand by said Myers; that the $3,000 thus paid were the proceeds, in part, of the stock of dry-goods above mentioned; and said goods consisted of every variety of goods adapted to the season, necessary to replenish and renew that part of the old stock still remaining unsold and in the store of said Myers; the old stock then being reduced so as not to invoice to exceed $5,000. That about January 1, 1843, and before said new goods had arrived at said Myers’ store in Lancaster, the place to which they were shipped and directed for the purpose aforesaid, said Myers, being in failing circumstances, made an assignment of all his property to Samuel F. Mc-Cracken and James D. Caldwell, who are made defendants for the benefit of his creditors generally, including therein the new and old goods aforesaid.
    That shortly afterward said new goods arrived at Lancaster, and the sheriff of Fairfield county, who held executions against said Myers, in favor of King & Hunter, as assignees of the Lancaster (Ohio) Bank, and in iavor of Alfred Fahnestock, for the use of Wm. Slade, who are also made defendants, levied the same upon the above-described merchandise (among other property), new and old.
    That said Myers’ assignees claimed said merchandise by virtue of their assignment, and the judgment creditors claimed the same by virtue of their levies.
    That to prevent a sacrifice, it was arranged among the defendants that said merchandise should be retailed by agents, and the proceeds distributed according to their several rights. That the property was thus disposed of, and the proceeds, about $10,000, are now in the hands of Myers’ assignees, undistributed.
    That complainants have paid of said debts $263.39; that a large amount of them remain unpaid, the most of which are reduced to judgments and levied upon the real estate of the complainant, Collins.
    The prayer of the bill was that the defendants answer on oath; that an account be taken of the unpaid debts of Myers, Collins & Co., and of the proceeds of said merchandise, and *that the same be decreed to be paid over by said Myers’ assignees to discharge the above-mentioned debts of Myers, Collins & Co., and to reimburse complainants, and for general relief.
    All the defendants except McCracken demurred to the bill.
    McCracken answered, that the firm of Myers, Collins & Co. existed and was dissolved at the time alleged. He admitted the execution of the mortgage, and the purchase of the new stock of goods of about $6,000, as charged. He alleged that said now goods were never added to the stock once owned by Myers, Collins & Co., but that said goods were assigned to him and James D. Caldwell, prior to their arrival in Lancaster, the place of their destination. That said assignees, when said goods arrived in Lancaster, took possession of the same and paid the cbai’ges thereon. That Samuel Ewing, then sheriff of said county, having several executions against said Myers, levied the same on said goods and took them into his custody. That the stock of goods in the store, which were in like manner assigned, were in like manner levied upon. That all said goods were placed in the hands of an agent, to be retailed by consent of said sheriff and said assignees.
    That said assignees brought a suit at law against said sheriff, alleging that he had unlawfully levied upon said property. That trials of said cause were had in the common pleas and Supreme Court, and it was adjudged therein (in both courts) that the levy upon the old stock should be sustained, and that the title to the new goods passed to the assignees by the assignment. That the agents employed to sell mingled the goods, new and old, and the proceeds of the same, so that accuracy can not be attained in the division. Respondent had no knowledge of the mortgage to complainants up to the time of the assignment, and that the rights of the assignees were not impaired thereby.
    That said goods were first in the hands of John Latta, now deceased, and afterwai’d in the hands of F. A. Foster. *That said agents had not accounted with or paid to him any part of the proceeds of said sales, but respondent was advised that the funds were at interest until distribution should be ordered.
    To this answer there was a general replication.
    P. Van Trump and John T. Brazee, for complainants,
    maintained that retaining possession by the grantor or mortgagor of personal property, was only prima facie evidence of fraud and might be explained or rebutted on the part of the vendee or mortgagee; that when so explained and proved to he a fair and honest transaction,’the conveyance would be sustained, and this was especially so with regard to mortgages, and cited the following cases: Edwards v. Harben, 2 Term, 587 ; Martindale v. Booth, 3 Barn. & Ald. 505; Bull. N. P. 258; Kidd v. Rawlinson, 2 Bos. 6 Pul. 59; Lady Arundel v. Philips, 10 Ves. 145; Brooks v. Powers, 15 Mass. 244; Fletcher v. Willard, 14 Pick. 464; Briggs v. Parkerman, 2 Met. 258; Putnam v. Dutch, 8 Mass. 286; Joy v. Sears, 9 Pick. 4; Haskel v. Greeley, 3 Greenl. 464; Reed v. Jewett, 5 Greenl. 46; Cutter v. Copland, 6 Shep. 127; Ulner v. Hills, 8 Greenl. 326; Ragan v. Kennedy, 1 Overt. 91; Cullen v. Thompson, 3 Yerg. 475 ; Young v. Pate, 4 Yerg. 164; Marcey v. Killough, 7 Yerg. 440; Hobbs v. Bibb, 2 Stewart, 54; Miller v. Thompson, 3 Porter, 196 ; Pauling v. Sturgis, 3 Stew. 96 ; Shepherd v. Twigg, 7 Missouri, 151; Ross v. Cartsinger, Ib. 245; King v. Bailey, 8 Miss. 332; Rogers v. Dare, Wright, 136 ; Burbridge v. Seeley, Ib. 359; 9 Ohio, 153; Jones v. Huggeford, 3 Met. 515; Abbott v. Goodwin, 20 Maine, 408; Blood v. Palmer, 2 Fairf. 414; Jones v. Robinson, 10 Met. 481; Meeker v. Wilson, 1 Gall. 414; Penttiplace v. Sayles, 4 Mason, 312 ; De Wolf v. Harris, 4 Mason, 545 ; Wheeler v. Sumner, 4 Mason, 183 ; Brooks v. Marbury, 4 Wheat. 79; Hamilton v. Russell, 1 Cranch, 309; United States v. Hooc, 3 Ib. 73; Conrad v. Atlantic Ins. Co., 1 Peters, *388; Fitzbugh v. Anderson, 2 Hen. & Munf. 289 ; Alexander v. Denealc, 2 Munf. 341; Robertson v. Ewell, 3 Munf. 7; Sydnor v. Gee, Leigh, 535 ; Burchard v. Wright, 11 Leigh, 463; Hundly v. Webb, 3 J. J. Marsh. 643; Head v. Hobbs, 1 J. J. Marsh. 280 ; Baylor v. Smithers, 1 Lit. 105; Davenport v. Thornton, 1 Scam. 295; Kitchell v. Bratton, 1 Scam. 361; Jordon v. Turner, 3 Blackf. 309; Watson v. Williams, 4 Blackf. 26; Coburn v. Pickering, 4 Blackf. 425; Case v. Winship, 3 N. H. 415; Parker v. Patten, 4 N. H. 176; Trask v. Bowers, 4 N. H. 309; Haver v. Low, 2 N. H. 13; Ash v. Savage, 5 N. H. 545; Smith v. Henry, 1 Hill, 16; Dupee v. Harrington, Harper, 319; Maples v. Maples, Rice’s Eq. 301; Reeves v. Harris, 1 Bailey, 563.
    T. Ewing, H. H. Hunter, and W. Slade cited the following cases:
    1 Term, 596; 1 Cranch, 317; 3 Cow. 189; 3 Blackf. 309; Wright, 190; 1 Smith’s Leading Cases, and authorities thero cited.
   ■Read, J.

The whole question in this case depends upon the validity of the mortgage to Collins and McElroy.

The retention of possession on the part of the mortgagor is only a badge of fraud, which may bo removed by showing the transaction was honest. We regard it to be perfectly well-settled law, that on a sale or mortgage of personal property a continuance of possession by vendor or mortgagor, is only prima facia evidence of fraud, which may bo explained away or rebutted by showing that such possession was honest and fair.

But a continuance of possession, with a power of disposition and sale, either express or implied, is'quite a different thing. Such is the character of the mortgage under consideration. Myers, Collins, and McElroy had been partners in merchandising. On dissolution Myers assumed the debts of the firm, and to secure Collins and McElroy from responsibility, executed to them a mortgage of the entire stock in trade and such additions as might be made thereto, to retain possession of the stock for the ordinary purpose of barter *and sale, until the retiring partners should be compelled to pay some of the debts thus indemnified, or should become fearful that they would have to pay any or all of the debts of the late firm, when they might take possession and dispose of the stock thus mortgaged in the manner provided, and apply the proceeds to the discharge of the firm debts.

The object of a mortgage is to obtain a security beyond a simple reliance upon the honesty and ability of the debtor to pay, and to guard against the risk of all the property of the debtor being swept off by other creditors by fastening a specific lien upon that covered by the mortgage.

But a mortgage with possession and power of disposition in the mortgagor, is nothing at last but a reliance upon the honesty of the mortgagor, and in fact is no security, as it is within the power of the mortgagor, at any moment, to defeat the mortgage lien by an entire disposition of the whole property covered by the mortgage. Such a mortgage, then, is no security, so far as the debtor is concerned, and is of no benefit except as a ward to keep off other creditors. True, it may furnish a more specific remedy for the collection of the debt, but is not a specific and certain security at its inception. To hold such a mortgage valid, would enable a debtor to do business upon a capital within the limits of the mortgage debt at the will of the mortgagor, protected from all claims of other creditors; and in the present instance upon a capital of indefinite amount, as the mortgage is to extend to all additions to be made to the stock in trade. To hold that such a mortgage was valid, would furnish a complete shelter under which a man could carry on trade for his own benefit, completely protected against the payment of his debts, and placed wholly beyond the reach of creditors. That the mortgagee should thus permit the mortgagor to transact business for his own benefit, and not proceed to collect the mortgage debt, would not be evidence of fraud which would authorize the mortgage to be defeated, upon the ground that it hindered or delayed creditors, because the mortgage may have been honestly executed, and simple generosity or *good nature, or carelessness, in delaying the collection of a debt, could not be regarded as a fraud which would defeat an honest security.

The very nature of a mortgage is to fasten a lien upon specific property; and the court have gone far enough when they have permitted an honest possession in the mortgagor, because that opens up a door by which an honest vendee may be defrauded, by purchase without notice,.which shows that there was much reason in the rule established in the old case of Twyne. Butin this case there is no specific lien, but a floating mortgage, which attaches, swells, and contracts, as the stock in trade changes, increases and diminishes, or may wholly expire by entire sale and disposition, at the will of the mortgagor. Such a mortgage is no certain security upon specific property; it all depends upon the honesty and good faith of the debtor; and as he might dispose of it to a creditor at will, to satisfy a debt, we see no reason why a creditor might not seize it against his will, for the same object. In such ease the whole right to dispose of the property to pay a debt, depends upon the will of the debtor, not affected by the rights of the mortgagor; and what reason is there in permitting the will of the debtor to determine whether property shall legally go to pay a debt or not? If it be the will of the debtor to appropriate the mortgaged property to pay tho debt, it is binding as against the mortgagee ; but if it be not the will of the debtor, and the property is seized upon execution, the rights of the mortgagor fastens upon the property, and takes it away from the execution creditor. Then the property is not held by the mortgage, but the will of the debtor; because, if the debtor sees proper to dispose of it, he has the power under the mortgage. He may dispose of the property, defeat the mortgage, and put the money in his own pocket; but if he refuses to pay a debt, and you seize the property in execution against his will, the mortgage steps in and restores it to the debtor. The whole matter, then, appears to rest upon the option of the debtor to appropriate the mortgaged property to the payment *of his debts or not, and not upon the mortgage. No reasoning will change this result, if a mortgagor retains possession and the full power of disposition over the mortgaged property.

A mortgage upon a specific article, with possession and power of disposition left in the mortgagor, is, in truth, no mortgage at all; it is no certain lien. The power to hold possession and dispose of the property, is inconsistent with the very nature of a mortgage. It indeed would not, perhaps, be going too far to say that such an instrument was a nullity. It is next thing to a sale of a horse, with possession and power of disposition retained to the vendor. Except in the case of a mortgage, it would be contended that a time might happen when the mortgagee could assert possession ; but before condition broken and possession taken, it would be hard to discover any difference. But at all events we have not the slightest hesitation in saying that a mortgage which secnre3 possession and the full power of disposition in the mortgagor until condition broken, will not hinder creditors from seizing property thus mortgaged on execution, and applying the proceeds to the payment of debts. Nor will it prevent the mortgagee from assigning to pay debts, for he has the power of disposition by the instrument itself. As to all the world exeej)t as to the parties themselves, such a mortgage will be held void, as against the policy of the law.

But many respectable authorities have been cited, to show that ■a mortgage of a stock of goods, with power to sell, is valid. ¥o are-not disposed to adopt either their reasoning or conclusions. It is said by Judge Story, in support of a fact of this sort, that although the articles mortgaged may be sold that others may be substituted in their place, and this may be done by consent of parties. This is no answer, for it may be that others will not be substituted, and if we look to experience, in all cases, where a trader has felt himself bound to mortgage his whole stock, it is not the usual result.

The whole error in these cases appears to be in regarding *the word stock as a fixed thing, which must always remain, the same as a horse which preserves its identity, although in the process of time every particle composing him may be thrown off and renewed. And that the power of disposition in the mortgagor of stock in trade, is only the power to sell the old and replace it with new, and thus keep up the identity of the thing mortgaged, and then claim that such a mortgage is only the common case of a mortgage of a specific thing, with possession in the mortgagor until condition broken. The error is in treating a word as a thing, and mortgaging a word instead of a substance, and permitting the substance to be sold, while the mortgage attaches and remains fixed to the word. Except in the case of sale and resupply, or wear and resupply, with identity preserved under the noun stock, there is no confusion in the books. Because it is not held anywhere that a mortgage of a specific thing, as a horse, with possession and power of disposition in the mortgagor, is valid against creditors. But the word stock has been treated as permanent and fixed, and the power of disposition as attaching to the goods which made up the stock, and that the stock must necessarily be resupplied as fast as consumed.

Wo need not, under this view, consider whether the mortgage could attach to future additions to be made to the stock, or subsequent acquisitions, as no additions in this case were ever made, and if made, they would not have been protected by the mortgage—the mortgage itself being void as against creditor or purchaser.

Hence the court, in holding that this mortgage would not prevail against execution creditors, or against Caldwell & Mc-Cracken, assignees for the benefit of creditors, held rightly.

Demurrer sustained; bill dismissed.


author: Avert, J.

text:
    *Christopher Nisewanger v. Cadwallader Wallace and Another.
    A party claiming an equity in land before the emanation of his patent from , the United States, in order to gain a priority over another who claims an equity in the same land, must establish by proof that his entry was by virtue of a valid warrant, and trace his connection with the samo warrant.
    This is a bill in chancery reserved in the county of Madison.
    The bill is filed to settle the title to a part of a 640-acre tract of land in Madison county, covered by two patents, one issued to the complainant, the other to Joseph Harness, under whom the defendants claim.
   Avert, J.

The complainant claims title to 640 acres of land in the Virginia military district in Ohio, between the rivers Scioto and Little Miami. He relies upon an entry No. 6,780, made on the 21st of May, or, as stated in his -bill, on June 22, 1810, upon a survey made April 26, 1826, examined and recorded September 29, 1817, and a patent from the United States, dated November 20, 1838.

The defendants claim under entry No. 5,531, of 533 acres, made July 21, 1807, in the name of Joseph Harness, surveyed August 19, 1814, in two surveys, one of 157 acres, the other of 280 acres, and patented to Joseph Harness, September 17, 1814, and under a purchase and deed for both surveys, from the heirs of said Harness.

The patents of these contending parties, as to a part of the land embraced in the description of each, cover the same premises, and of course there must be a loss produced by this interference in the boundaries of the tracts. The present *bill is brought to cast the loss of that interference upon the defendants.

The legal rights of the parties are settled upon established principles, and without any difficulty, the older patent, except when void, which we do not find to be the case here, always succeeding at law. The defendants then have the legal right to the land in dispute, for they exhibit a title by patent, dated in 1814, whilst that of the complainant was not issued till 1838.

But a patent from the government, though it is admitted to pass an unquestioned legal title, is yet, upon a principle in our system also well established, made to yield to a prior equitable title, and therefore it became necessary in the ease, to examino and discuss the equitable as well as the legal rights of both the parties. This service has been thoroughly performed by the counsel on both sides in reference to the title of each, and as do-rived through entries and surveys, withdrawals, relocations, patents, etc.

The complainant, to establish his equitable title to the tract in dispute, relies upon the entry 6,780, made as aforesaid in 1810, in virtuo, as he alleges, of military warrants numbered 1,899, 332, 1,824, of 200 acres each, and forty acres, part of No. 750, which, as it appears, was for 200 acres also. This equity of the complainant, if it can be sustained, having been in existence at a period earlier than the date of the defendant’s patent, must prevail - over every right of theirs derived merely from their patent. It becomes important, therefore, to inquire whether this entry and' survey conferred any equitable rights upon the complainant, as against the defendants, who afterward appropriated the same land by their grant from the government. The burden of proving this equity rests, of course, upon the complainant who sets it up, and who must make this proof before his adversary is called upon to take any steps toward his defense.

What, then, are the facts connected with this entry? David Ross & Co., being the owners, in 1784, of the military warrants, on which this entry No. 6,780, in Ohio, is claimed *to have been made, then entered in Yirginia, by virtuo of these identical warrants, a tract of 1,000 acres of land. This tract being entry No. 70 in what is now Kentucky, was surveyed and recorded in 1785, and a patent for the same was granted to Ross & Co., by the commonwealth of Yirginia, in 1786.

The military warrants above referred to, issued according to the law of Yirginia, from the land office in that state. It empowers the officer or soldier for whose benefit it is given, his heirs or assigns, to select for himself the'number of acres specified therein, from certain lands of Yirginia, set apart for that purpose, and to have the same surveyed and laid off to him. After the location is made, and the boundaries ascertained by a survey, the owner of the warrant returns it to the state authorities, and receives in the place of it, a patent or grant from the government. This grant is equivalent to a deed in foe simple for the tract described, passing all the title from the government to the grantee.

It is contended, for the defendants, that the warrant thus passing into grant has performed its office ; that having been given up for a patent, which in law appropriates the land therein described, it can never afterward be withdrawn, nor be used to appropriate any other tract of land, and this objection to bringing the warrant a second time into use is not easily obviated, whether we regard the object and nature of the warrant or judicial authority bearing upon, the subject. Hoofnagle and others v. Buchanan, 7 Wheat. 214. It does not appear that any legislative acts of Virginia or any decisions of the courts have received military warrants after they had by the emanation of a patent become of no value, except in the character of evidence.

This patent for the land in entry No. 70, it appears, then, is given by Virginia for a tract of land, then lying within that state and claimed to be the property of the state, and a part at least of the tract so entered and surveyed is held under the patent thus issued; how much does not appear by *any survey of the premises. But whether these warrants, after passing into grant, have no longer any efficacy to authorize and support an entry in Ohio, or whether the act of Congress of May 13, 1800, authorizing, in case of interference in Ohio, a withdrawal of the warrant, may be supposed likewiso to justify and sustain an entry in Ohio under a warrant withdrawn or treated as withdrawn by reason of interference in Kentucky, arc questions which we do not here decide, because it becomes unnecessary from the view which, as will be hereafter stated, wo have taken of the evidence in the case. Under these warrants, a right in the land no doubt exists before the issuing of a patent, and one which courts will respect. This right or equitable interest commences with the entry. But it must be a lawful and valid entry. Certainly no unlawful or unauthorized entry can give an equitable title. To be a valid entry binding upon the government, and efficacious to hold the land against others disposed to locate it, it must be made by virtue of a Virginia military warrant still subsisting. It is settled, indeed, in practice and by judicial decisions, that possession of the warrant gives authority to make the location. 4 Pet. 239. It will bo considered as done with the real owner’s consent, and will operate for his benefit. It is to be done, however, in the name stated in the warrant, or as it is assignable, in the name of the person to whom it appears to be actually assigned. But this must bo an unsatisfied warrant; it is this that gives the right to the land, the state is not called upon to furnish more than what is justly required to satisfy the warrants.

Does the evidence in support of this equitable title prove the existence of such unsatisfied warrants at the time of the entry in Ohio? The power of the warrants under consideration was once believed to be exhausted, and so treated by all the parties having an interest in them, when, as before stated, they were succeeded by a patent for the land on which they had been located. Had the tract No. 70, in Kentucky, contained the complement of unappropriated land, these warrants would still have remained satisfied and incapable ;tof supporting an entry. The survey of this No. 70 remains as it was originally, no other survey of any part nor a survey of the whole ever having been admitted to record. There appears, indeed, upon the margin of the record entry a memorandum of “ 640 acres withdrawn,” and the principal surveyor certifies that it was withdrawn by reason of its having been lost by interference with Henderson’s grant. But in the opinion of the court this is not, nor is there, as they think by any other proof in the case, sufficient evidence either of the exact quantity or of any quantity lost. This certificate of the surveyor is not recognized as establishing the loss. There is, therefore, no proof of an equitable title commencing with the entry. Nor can it be conceded that this question of the equitable right belongs to the department at Washington, and is settled when the patent issues. After the proper officers hero have acted upon proof satisfactory to themselves, and upon such proof have issued a patent, the legal title passes out of the government to the grantee, and so far effect is given to their decision. But they are not a court provided with the necessary and best means of ascertaining- and determining facts. Others, claiming equitable rights in the land, can not be present nor represented there; and it would be contrary to very sound rules if their interests were to be concluded by any such ex- parte examination. With regard to the very tract in controversy, the authorities at Washington have made contradictory decisions; first conveying it by patent to the defendant’s grantor, and afteward to the complainant, and it is not perceived in what manner by any power of theirs, the difficulty arising from this interference could have been prevented. The issuing of the patent then, and the recitals it contains, are not claimed in the actual state of this case to be controlling evidence of complainant’s equitable title at the date of his entry. The existence of such an equity is a fact to bo established by proof before the court, and this fact, to be of any avail, must have existed before the date of the defendants’ patent.

*By what mode of proceeding was the complainant’s patent obtained? Vc have certified copies, supplied by the defendant, of the exhibits and proofs presented there. The warrants were not produced; but in their place a copy of the Virginia patent was sent. This patent is not by any law a warrant for entering land. A copy of entry No. 70, and of the survey under it, was jmoduced. Neither the entry nor survey states, with reference to the authority on which they wore founded, anything more definite than that each was made upon several military warrants. In this manner a tract of 1,000 acres of land was taken up. The surveyor, however, found evidence satisfactory to himself among the files of his office, and he has certified that these warrants wore used for the purpose of securing tract No. 70. There were produced likewise, from the register of the Virginia land office, copies of these four warrants of 200 acres each, accompanied by a certificate that they were not located, surveyed, or patented in the name of the persons to whom they were originally given. These copies could not have been accepted in the place of the warrants, under either the law of Virginia or the law of the United States, concerning lost warrants, for they were not lost or destroyed in any sense contemplated by those laws. Nor do the papers from the Virginia land office certify that the warrants, or a part thereof, remain unsatisfied, so that copies, instead of the originals, might be received under the act of Congress of June 9, 1794, which provides for certified copies under the 'seal of the office where the warrants are legally kept. There was further produced before the authorities at Washington a certified copy, from the principal surveyor, of entry No. 6,780 in Ohio, and the survey under it: and of the marginal entry of withdrawal upon the record, as before stated, of entry No. 70, with his (the surveyor’s) certificate, as to the warrants, entries, interference, etc., as above, and his certificate, that the warrants were never before satisfied; that said patent, on which said survey (the survey in Ohio) was founded, was in his (the surveyor’s) possession, unsatisfled, etc. *AI1 this proof, though it may authorize the issuing of a patent, which will carry the title to the rest of the tract specified in it, does not, in the judgment of the court, establish the title of the complainant to that part which is covered by the patent of the defendants. An equitable title, therefore, to the premises, is not shown by the complainants.

E. Dane, Gilbert & Baldwin, for complainant.

T. Ewing, for defendant.

There being, as the court believe, no proof that the patent of the defendants is void either in whole or as to the part now in dispute, there is no necessity of inquiring into their entry of 1807, or the amended entry of 1811. The defendants’ equity will, at all events, commence with their patent, and their title so accruing, being earlier than the title either equitable or legal established by the complainant, must prevail in the case.

The injunction will therefore be dissolved and the bill dismissed;