Summary
In Hall v. Harris, 40 N.C. 303, the Court, in discussing the matter of the delivery of the deed, said: "The law does not depend upon the accidental use of mere words `trusted to the slippery memory of witnesses.' It depends upon the act that a paper signed and sealed is put out of the possession of the maker."
Summary of this case from Perkins v. ThompsonOpinion
(December Term, 1848.)
When a paper is signed, sealed, and handed to a third person, to be delivered to another, upon a condition which is afterwards complied with the paper becomes a deed by the act of parting with the possession, and takes effect presently, without reference to the precise words used, unless it clearly appear to be the intention that it should not then become a deed, and this intention would be defeated by treating it as a deed from that time.
CAUSE removed from the Court of Equity of MONTGOMERY, at Spring Term, 1848.
Strange for plaintiff.
No counsel for defendants.
The facts in this case are fully stated in a case between the same parties, Hall v. Harris, 38 N.C. 289, and so much of them as is necessary to the understanding of the decision now made is set forth in the opinion of the Court here delivered.
When this case, was before this Court at June Term, 1844, it was decided that an execution does not bind equitable interests and rights of redemption from its teste, as in ordinary cases, but from the time of "execution sued"; and it was declared that the plaintiff would be entitled to a decree, provided the deed under which he claimed took effect before the execution under which the defendant Harris (304) claimed was issued. Hall v. Harris, 38 N.C. 289.
We are satisfied that the view then taken of the case was correct. The rights of the parties depend upon that single question.
The execution issued on 7 March, 1840. The plaintiff alleges that the deed took effect on 2 March, 1840. The facts are that on 2 March the plaintiff and the defendant Morgan made an agreement, by which the plaintiff was to give Morgan $725 for the land, to be paid a part in cash and the balance in notes and specific articles, as soon as the plaintiff was able, which he expected would be in a few days, and Morgan was to make a deed to the plaintiff and hand it to Col. Hardy Morgan, to be by him handed to the plaintiff when he paid the price. Accordingly, on that day the plaintiff paid to Morgan a wagon and some leather, which was taken at the price of $57.50, and Morgan signed and sealed the deed and handed it to Colonel Morgan to be handed to the plaintiff when he paid the balance of the price. The deed was witnessed by Colonel Morgan and one Sanders, and is dated on 2 March. Afterwards, on 10 March, the plaintiff paid to Morgan the balance of the $725, with the exception of $152, for which Morgan accepted his note, and the deed was then handed to the plaintiff by Colonel Morgan.
The question upon these facts is, whether the deed takes effect from 2 or from 10 March? We are of opinion that it takes effect from the 2d, at which time, according to the agreement, it was signed, sealed, and delivered to Colonel Morgan, to be delivered to the plaintiff when he should pay the price. The effect of the agreement was to give the plaintiff the equitable estate in the land, and to give Morgan a right (305) to the price. The purpose for which the deed was delivered to a third person, instead of being delivered directly to the plaintiff, was merely to secure the payment of the price. When that was paid, the plaintiff had a right to the deed. The purpose for which it was put into the hands of a third person being accomplished, the plaintiff then held it in the same manner as he would have held it if it had been delivered to him in the first instance. This was the intention, and we can see no good reason why the parties should not be allowed to effect their end in this way.
It is true, the plaintiff was not absolutely bound to pay the balance of the price. Perhaps he had it in his power to avail himself of the statute of frauds, and it would seem from the testimony that at one time he contemplated doing so, on account of some doubt as to the title; but he complied with the condition and paid the price. His rights cannot be affected by the fact that he might have avoided it. If the vendor had died after the delivery to the third person and before the payment, the vendee upon making the payment would have been entitled to the deed; and it must have taken effect from the first delivery; otherwise, it could not take effect at all. The intention was that it should be the deed of the vendee from the time it was delivered to the third person, provided the condition was complied with. If this intention is bona fide and not a contrivance to interfere with the right of creditors, of which there is no allegation in this case, it must be allowed to take effect.
A distinction is taken in the old books between a case when a paper, being signed and sealed, is handed to a third person with these words, "Take this paper and hand it to A. B. as my deed, upon condition," etc., and a case where these words are used. "Take this deed and hand it to A. B. upon condition," etc. In the latter case it takes effect presently, while in the former it is held, in most cases, not to take effect until the second delivery. Shepherd's Touchstone, 58, 59.
(306) The distinction upon which this "diversity" is made would seem too nice for practical purposes — to be a mere play upon words. The intention of the parties, whether one set of words be used or the other, is to make it a deed presently, but to lodge it in the hand of a third person as the security for the performance of some act. If it was not to be a deed presently, provided the condition be afterwards performed, the maker would hold it himself, and the agency of the third person would be useless. Indeed, the idea that the third person is a mere agent to deliver the paper as a deed, if particular words be used — "escrow," for instance — even by the old cases, has many exceptions, and the deed is allowed, in such cases, to take effect. As if the maker dies, as in the case above put; or becomes non compos mentis; or, being a feme sole, marries; or if the vendor should create any encumbrance, as by making a lease; in all such cases, when the paper was handed to the third person to be delivered as a deed upon condition, etc., it is allowed to take effect from the first delivery, in order to effectuate the intention of the parties. In other words, when it can make no difference, the deed takes effect from the second delivery; but if it does make a difference, then the deed takes effect from the first delivery. This entirely settles the question. The last exception cited above, as to the relation of the deed in cases of "escrow" to avoid a lease, takes in the case under consideration, for it is the same whether the encumbrance to be avoided proceeds from the act of the party or from the effect of an execution, as the object is to make the deed effectual and to carry out the intention. S. v. Pool, 27 N.C. 105.
But, in truth, the distinction cannot be acted upon — it is merely verbal, and whether one set of words would be used, or the other, would be the result of mere accident. The law does not depend upon the accidental use of mere words "trusted to the slippery memory of (307) witnesses." It depends upon the act, that a paper, signed and sealed, is put out of the possession of the maker. It must be confessed (and with reverence I say it) that many of the dicta to be found in the old books in reference to deeds are too "subtle and cunning" for practical use, and have either been passed over in silence or wholly explained away.
We are satisfied from principle and from a consideration of the authorities, that when a paper is signed and sealed and handed to a third person to be handed to another upon a condition which is afterwards complied with, the paper becomes a deed by the act of parting with the possession, and takes effect presently, without reference to the precise words used, unless it clearly appears to be the intention that it should not then become a deed, and this intention would be defeated by treating it as a deed from that time, as if, no fraud being suggested, the paper is handed to the third person before the parties have concluded the bargain and fixed upon the terms, which cannot well be supposed ever to be the case, for, in ordinary transactions, the preparation of deeds of conveyance, which is attended with trouble and expense, usually comes after the agreement to sell.
There must be a decree for the plaintiff, with costs against the defendant Harris.
PER CURIAM. Decree accordingly. Cited: Dis. op. of Pearson in Gaskill v. King, 34 N.C. 222; Roe v. Lovick, 43 N.C. 91; Phillips v. Houston, 50 N.C. 303; Robbins v. Rascoe, 120 N.C. 82; Perkins v. Thompson, 123 N.C. 179; Craddock v. Barnes, 142 N.C. 96; Buchanan v. Clark, 164 N.C. 63, 65; Huddleston v. Hardy, ib., 215; Lynch v. Johnson, 171 N.C. 613.
(308)