
    Hudson vs Warner & Vance.
    June, 1828.
    A bill of sale of personal property made upon a good consideration, as, to indemnify the grantees against suretyships entered into, and to be entered into, is available between the immediate parties to the instrument, altho’ not recorded.
    Where a mortgage was executed of the entire stock in trade in the mortgagor’s stove, and three years afterwards, the stock in the same store was sold by trustees for the benefit of his creditors, in the absence of evidence, that in the intermediate time, there was an entire sale of the original stock, or that the part sold was replaced, or that any new stock was purchased and mingled with the old, it will be intended, that the sales made by the trustees, were of the remnant of the stock of goods morí, gaged.
    The grantee of a second mortgage of personal property recorded in time, with notice of a prior mortgage which was not duly recorded, is bound by the equitable rights of the first mortgagee, unless upon inquiry into the nature of his claim, the first mortgagee had led him to believe, that his incumbrances were removed, in which case, equity would never interpose to invalidate his legal title.
    The act of 1729, ch. 8, had for its object the suppression of secret sales; by demanding that transfers should be recorded, it was intended that notice should be given, that no one might be injured, or deluded, by secret and unknown conveyances.
    fts object then being to protect creditors from prior secret conveyances-any such creditor who had notice of any such incumbrance, could not be considered as falling within the class for whose benefit that act was passed.
    The retention of possession of personal property, by a vendor, will not contaminate his transfer, where his deed showed, that the sale was not to have its completion immediately, but was prospective to a future event; till that future time, his possession is entirely consistent with his deed.
    The failure of a mortgagee of personal property, to take possession at the' time of the forfeiture, as stipulated in the mortgage, does not vitiate a deed, which in its inception was valid and effectual.
    Appeal from the Court of Chancery. The bill of the complainants, W. Warner and W. Vance, (now appellees,) stated, that on the 4th of February 1830, having lent to and endorsed for J. and T. Vance divers promissory notes to considerable amounts, which were negotiated for the use and benefit of the said and T. Vance, in consideration thereof, and for the purpose of securing the payment of the said notes, and of other notes which might thereafter be lent and endorsed by the complainants, or either of them, to the said J. and T. Vance, whenever payment thereof should be required by the complainants respectively, the said J. and T. Vance agreed to execute a certain deed of trust or mortgage. In pursuance of which agreement, the said J. and T. Vance on the said 4th of February, 1820, bargained, &c. unto the complainant's, all and singular the books, stationary, goods, wares, merchandises, effects and property, of orbelongingto the said J. and T. Vance, situated or being in the store nu nbered 178, then occupied by them, and standing on the north side of Baltimore street, &c. and every the debts and sums of money due and owing or payable to the said J. and T. Vance, and all books of accounts, bonds, bills, &e. Provided that if the said J. and T. Vance, their executors, 4’c. should, whenever thereto required by the Complainants, well and truly pay, &c. all the promissory notes that had at that time been lent to, or endorsed for them by the complainants, respectively, as all that might thereafter be so lent or endorsed, then the said instrument of writing to be Void. That it was also provided by the said instrument of Writing, that if default should be made by the said J, and T. Vance in payment of the said notes, then the said assignment was declared to be made in trust, that tne complainants should sell and dispose of at public auction, &c. all the said property; and the proceeds, when received, to be applied to the pa< ment of the said notes, and the balance, if any, to be paid to the said J. and T. Vance. That by the said instrument of writing the complainants were constituted attorneys to collect, recover and receive, all the debts and sums of money so transferred and assigned for the said trust, &e. They further charged that the complainants had then lent to, and endorsed notes for the said J. and T. Vance, and had since renewed the said notes, and lent and endorsed other notes for them to a very large a-, mount, &c. That the complainants finding their responsibility very groat, and the banks requiring large reductions to be made on the said notes as they became due, called on the said J and T. Vance, and required them, agreeably to the provisions of the said instrument of writing, to pay, take up.and retira, the said notes, which they refused to do, and have never done; but t^e complainants had been obliged to take up the said notes, and from their own funds. The bill also charged, that in the month of March 1822, the complainants called on the said J. and T. Vance for a delivery of the effects and property mentioned and contained in the said instrument of writing, they being advised, that a delivery of them was necessary. That the said J. and T. Vance did not object thereto, but on the contrary, put the complainants into possession thereof, and permitted them to take an inventory of the effects'on hand. That the complainants, confiding in the honesty and fidelity of the said J. and T. Vance, permitted them to remain in the said store, and as the agents of tlm complainants, to sell any articles they could, with the understanding that the proceeds should be paid to the complainants m part liquidation of the notes they had respectively taken up and retired for the said J. and T. Vance. The bill also stated, that T. Vance, one of the said firm of ./.and T, Vance, on the 18th of May 1822, executed an instrument of writing, purporting to be a bill of sale, and thereby', in the name of J. and T. V%nce, conveyed to B. and II Hudson the property before conveyed and delivered to the complainants, the said B. and 11. Hudson having fub knowledge ©£ the bill of sale so executed by the said J. and T. Vance to the complainants. That since then the said B. Hudson and T. Vance have departed this life. That J. Vance, the surviving partner of. J. and T. Vance, by consent of all parties interested therein, executed an instrument of writing to Jl. Neale, F. Lucas, and J. J. Donaldson, in trust for the creditors, of all the effects and property, debts, &c. belonging to the said firm, •with the.understanding that that conveyance should not prejudice the prior claimants. That the said trustees have sold the said effects and property, so conveyed to them in trust, and have the proceeds in their hands ready for distribution. Prayer, that the said J Vance, A. Neale, F. Lucas, J. J. Donaldson, and H. Hudson, may answer, #c. and that j2. Neale, F. Lucas, and J. J. Donaldson, may give an account of the. sales of the property, &c. That the nett proceeds of the said sales o,f the effects and property, as well as the said books of accounts, bonds, &c. due and'owing t.o the said J. and T. Vance prior to the said instrument of writing, be brought into court, and delivered to the complainants; and tor general relief, &c.
    The answer of H. Hudson, survivor of B. Hudson, of the late firm of Hudson & Co. of Hartford, in the state of Connecticut, stated that J. and T. Vance, being justly indebted to the late- firm of .Hudson & Co. in the sum of $3888, for books and stationary theretofore sold and delivered to them by the said Hudson & Co, as well "as for money advanced for them., '&c. did, on the 18,th of May 1822, sell and deliver to this defendant all the books, goods and stock in trade, of the said L and T. 'Vance, then in the store No. 178, Market-street, Baltimore, and in the rooms and warehouses adjacent thereto; and also all the book's, stationary, and other property, in which the said J. and T. Vance had any interest, then in the possession of IV. Warner, or any other person or persons whatsoever. That when the defendant obtained the said bill of sale of the said property, the said T. Vance was alone in possession thereof, and that the sign of J. and T. Vance was suspended over the door .of the said store; and the said T. Vance made delivery thereof, as in the said bill of sale is stated, viz. “One set of Gill Bias, and one set of Sterne’s Works, in the name of the whole of the said property so transferred, and as a token of the manual delivery of the whole, to the said Hudson & Co. 
      at the date of this assignment.” And also of the key of the. said store, to C. Mitchell, as the agent and attorney of the defendant, on the day of the sale thereof, and the same was afterwards delivered to the said Vance, who received the same expressly as the agent and trustee for Hudson & Co. only. And the bill of sale was, on the same day, left with the clerk of Baltimore county court, to be recorded. That the bill of sale which is set up and pretended by the bill of complaint oi the complainants, was collusive, fraudulent and void, the same having been more than twenty days unrecorded, although the vendors were in possession of the goods and books thereby pretended to be sold; and further, that the said IV. Warner, nor the said W. Vance, had not then, as the defendant believed, paid any part of the money for which they now pretend to have become security for, nor were they bona fide creditors of the said J. and T. Vance at that time. The defendant, denies, that at the time he obtained the said security by thp said bill of sale, he had any notice of any previous legal or equitable lien or incumbrance upon the said property therein, mentioned, in favour of the complainants, or either of them, or of any other person or persons, except the landlord of the premises, for rent; nor had he any notice of any previous delivery or pretended delivery thereof, into the possession, or disposal of the complainants, or either of them, or of any other person on their account, excepting only the book of accounts of the firm of J. and T. Vance, and other evidences of outstanding debts due to the said firm, which are referred to in the defendant’s bill ot sale, as in the possession of W Wafner, which as the said T. Vance then represented to the defendant, amounted to the sum of $40,000 and upwards, and were moro than sufficient to pay all the debts of the said firm; but that the said books, and other evidences of debts, were then unjustly withheld from his possession and control by the said W. Warner. That the said Vance proposed to transfer to the defendant the same, together with his said stock and books, then in 3ns said store and warehouses, as additional security for his said debt. That the defendant previous to taking his said bill of sale, inquired of the said T. Vance, if there were any outstanding incumbrances on the said property, and was informed by him, that endorsements had heretofore been made by Warner for J. and T Vance, and a contract of indemnity given to him, accompanied with a bill of sale upon some part of their property, but what part he did not state, but said that Warner had never been called upon to pay'any of the notes of <7, and Ti Vmce, and that the security which had thus been given to him, and the said pretended bill of sale, were of no avail, and had not been recorded, but were null, fraudulent and void; and that the same could not, therefore, be rightfully enforced against the said J. and T Vance, or any of their creditors. That the same was founded upon no valuable consideration, and could not impair the security he then proposed to give to the defendant, even as to the books of accounts and securities then in the bands and possession of Warner, and much less, incumber, in any way, the books and stationary then in the said store No. 178, Market-street, and the rooms and warehouses adjacent thereto, which he then agreed to transfer to the defendant by the bill of sale as aforesaid, and', whereof the said Vance then appeared, and represented himself to be in the sole and exclusive possession, of, for and on account of the "firm of J. and T. Vance, arid not a trustee to or for any other person or persons. And the defendant verily believed the information so given to him by the said Vance-, but for greater certainty therein, previous to his taking the said bill of sale, and upon the day it bears date, caused search to be made m the clerk’s office of the county court of Baltimore, for the record of the said pretended bill of sale, in order to ascertain, if possible, what property it included, and whether the same was valid; and no such record being then found, and, as the defendant believed, not being then recorded, he concluded, as he lawfully and equitably might and ought to have done, that no valid bill of sale affecting the said property could be outstanding, either in favour of the said Warner or of any other person or persons, so as in' any way to impair the security the said Vance then proposed to give to the defendant upon the said' books, §>c. then in the said .store, and warehouses adjacent thereto, whereof the said Vance then appeared to have, and as the defendant then verily believed, had the entire and exclusive control and disposal j and under this impression and belief, ¡he defendant took and received the said security. The answer further stated, that the defendant had been informed that the fund sought by the complainants, as in the hands of the trustees, was raised entirely and exclusively from the sale of the sai ' books, &c. so as aforementioned transferred to the defendant by the said bill of sale. The defendant, in his said answer averred, that at the period aforesaid, and before lie obtained the said security from the said Vance. but on the same day, the said W. Warner knew that the defendant had a large claim against the said J. and T. Vance, and conversed with the defendant respecting the same; but gave no notice or intimation to the defendant that he had any lien or claim, or bill of sale, upon the said goods, books, stationar}-, or stock in trade, in the said store and warehouses; but from the general tenor of his conversation with the defendant, the defendant; was led to the impression that the said J. and T. Vance had given no security whatever to the said Warner, for what, he pretended to claim against them. That if the pretended claim of the complainants, under the pretended bill of sale, as now set up, is established, the defendant will be defrauded out of his just and honest debt, which he trusted had been fairly and bona fide secured by the bill of sale to him. That he verily believes the complainants are not creditors of J. and T. Vance. to the amount set forth in their bill of complaint; and be prays that they may prove the true amount, thereof, and when and at what time,; nd on what account, any advances were made by them for the said J. and T Vance, '&c. and that the said bill of sale to the complainants may be declared null and void; and that the said miste-s may be decreed to pay to the defendant, the proceeds of the said goods, &<>.
    The answer of J. Vance, admitted the execution of the bill of sale to the complainants, and for the consideration therein expressed; and that a large amount of notes so lent to, and endorsed by, the complainants respectively, were not paid at maturity, by tin- firm of J. and T. Vance, and were either paid by the complainants, or renewed in their own names. That ho was notin Baltimore when the bill of sale, said to be executed by T. Vance, in the name of the firm, to B. Hudson and II Hudson, was made, and which, if executed, was without his concurrence or approbation. That at the request of the creditors, &c. he executed the bill of sale to Jl. Neale, &c.
    The answers of the other defendants do not seem to be necessary, as to the question decided m this case. Commissions issued, and much testimony was taken thereunder, and the cause was argued and submitted for decision.
    Bland, . Chancellor, (July term ’825.) The facts and circumstances in this case are sufficiently obvious as regards the question to be decided, and, therefore, need not be digested and stated.
    It is said that every case on the registry acts both in England and Ireland, which has been brought before a court of equity, has been determined on the ground that those acts da not affect the great fundamental principles of equity; but that every purchaser, claiming under a registered deed, is left open to any equity which a prior purchaser or incumbrancer may have. There seems to be nothing in any of our acts of assembly, requiring conveyances of real or of personal property to be recorded, which should induce a court of equity of this state to consider them, as in this respect, at all different in their effect and operation from the registry acts of England and Ireland. Indeed, it may be strongly inferred from the language of the legislature itself, in the act for enlarging the powers of the high court of chancery, that all those acts of assembly, whether they relate to. the recording of deeds for real or for persona] property, are to be construed as those of England and Ireland have been, in relation to any prior equity.
    It will, therefore, be assumed as a settled principle, that a person claiming property under a deed or conveyance, which has been duly executed and recorded, must take it subject to all other claims, of which he has had actual notice before the execution of his deed. Because after such notice, the accepting and recording of a conveyance, must be considered in equity as fraudiilent, since the party actually had that notice which It was intended by the act ofassembly he might have had by the recording of the conveyance of the prior claimant. But then to affect a record deed by notice of a deed unduly recorded, or •ne which has not been in any way recorded, the holder of the regularly recorded deed must have had actual notice, and it must be clearly proved. For no mere rumours, or even strong suspicion oí nolice, will gratify a court of chancery in breaking in upon the acts of assembly, which require deeds to be recorded. In this case, although the deed of the 4th of February 1820, was unduly recorded long after the time limited by the act of assembly, yet the chancellor is perfectly satisfied and convinced by the proofs in the cause, that Hudson 8¡- Co. had actual and express notice of its existence before the execution of the deed from J. and T. Vance to them; and, therefore, the claim of Hudson 8? Co. must be postponed, and give place to that of Warner and Vance. And Neale, Lucas and Donaldson, the trustees under the deed of the 20th of January 1828, will be directed to apply the proceeds of the debts and property which were so conveyed to them, in trust, after deducting all their necessary expenses, and a commission to be allowed them of seven per Centura on the whole amount they have and may disburse — First, to the payment of the rent for which the property was distrained and liable — next to the satisfaction of the claims of the plaintiffs under their deed of the 4th of February 1820, — then to the satisfaction of Henry Hudson’s claim, as surviving partner of the firm of Hudson and Co. under their deed of the 18th of May IS22, and the residue, if any, according to the terms of the deed of the 30th of January 1823. And for the purpose of having this adjustment made — Decreed, that the cause be referred to the auditor, with directions to state an account accordingly, from the proceedings and proofs, and such other proofs as the parties may produce in relation to any necessary expenses incurred in the execution of the trust under the deed of the 20th of January 1823.
    The auditor reported accordingly, stating the amount of the sales by the trustees to be $3030 05; and, after deducting the trustees’ commission, their expenses, paid for house rent, and the costs of suit, amounting to $1250 23, he stated that there was due to W. Vance $2299 16, and his proportion of the balance was $365 33, and to W. Warner $8939 67, and his proportion of the balance was $1420 49. This report was ratified and confirmed by the Chancellor on the 22d of October 1825, and the trustees were decreed to pay to the complainants, or bring into court to bo paid to them, the sums of money respectively allowed to them in the said report of the auditor. From this decree Hudson appealed to this court, and in his petition to the chancellor for the appeal, he prayed that on giving bond and security for the costs and interest on the money to be brought into court, that the amount to be brought in might be retained in court until the final decision of the cas© in the court of appeals. The chancellor granted the appeal; and ordered that all proceedings in the case, pending the appeal, be stayed on the defendant’s filing within the time limited by law, a bond to the complainants, with the usua¡ condition. in the penalty of $>6072 10, with a security or securities to be approved by the chancellor.
    The cause was argued before Buchanan, Ch J. and Earlb, Martin, Stephen, Archer, and Dorsey, .1.
    
      Taney, (Attorncv General,) and Mitchell, for the Appellant,
    contended, 1. That, the complainants’ security was void for want of record or registry, under the act of assembly, within 20 days.
    2. That no possession was ever delivered to the complainants at the time of their mortgage, or at any time thereafter; but that the property remained in possession and control and disposal of J and T. Vance, until Hudson received it from them,.and that as against him, a bona fide purchaser, without notice, the deed to the complainants was fraudulent, and void.
    3. That Hudson had no such notice as to inflict him with fraud in taking a bill of sale of the property; but on the jontrary, that concealment was practised by the complainants to mislead him, and that he was misled in fact, although he used due diligence to obtain knowledge.
    4. That the security to the complainants was without consideration, and ought not to havp been sustained by the chancellor against Hudson-, or, at all events, not to the amount allowed by the chancellor.
    5. That there was a fraudulent resulting trust to J. and T. Vance in their deed to the complainants, and the deed was void, whether registered or not, on the principles of the common law.
    
      6. That Lucas, one of the defendants, was not a competent witness for the complainants, and not made so by any proceed* ing before the commissioner who took his testimony.
    7. That the chancellor’s order requiring security for the fund, and denying the prayer of Hudson to have the money brought into court, was illegal; and that the distribution of a fund, after an appeal had been taken, was irregular and unwarranted by law — the fund being in the hands of the trustees, who were before the court; and that this court may direct the money to be brought in by the trustees now, they having notice of the appeal. They cited, in their arguments on the several points, the Act of Ass. 1729, ch. 8. Dorsey v Smithson, 6 Harr & Johns 63. Stat. 13 Eliz. ch. 5. Fitzhugh v Anderson, 2 Hen. & Munf. 308, 303. Sturtevant v Ballard, 9 Johns. Rep. 337. Esp. Evid. 238. Hamilton v Russell, 1 Cranch, 316. Weller v Wayland, 17 Johns. Rep. 102. Brinkerhoff v Marvin, 5 Johns. Ch. Rep. 327. Shirras v Caig, 7 Cranch, 34. Livingston v M'Inlay, 16 Johns. Rep. 165. Wordall v Smith, 1 Campb. 332, 333. Boyd v Dunlap, 1 Johns. Ch. Rep. 484. 3 Bac. Ab. 313. 19 Ves. 434, 437.
    
    
      Winchester, for the Appellees,
    insisted, 1. That the bill of sale from J. and T. Vance to the complainants, of the 4th of February 1820, being bona fide, and for a valuable consideration, was as between the parties tq it, binding and effectual, although not recorded in time.
    2. That Hudson having had actual notice of the deed of the 4th of February 1820, before he obtained his bill of sale from T. Vance of the 18th of May 1822, was equally bound with J. and T. Vance.
    
    
      3. That independently of the bill of sale to the complainants, they had acquired title to the property in question by aij actual and bona fide delivery thereof in the month of March 1822, two months before Hudson, or his agent, had applied for or obtained a bill of sale.
    4. That the bill of sale from T. Vance to Hudson was obtained by fraud — was not executed according to the act of assembly;, and that Hudson, or his agent, never had either an at iual or legal possession of the property.
    
      
      First Point. It is not necessary to produce authority to sustain this position. The deed itself purports consideration, besides the proof in the cause.- That there was a debt actually due appears, 1st. by the answer of J. Vance; 2d. by the testimony in the record. Here then is a conveyance bona fide and for a va'uable consideration, and which no one will dispute, is binding on J. and T. Vance, if they were defendants. There is no tainted spot in this transaction on the part of the com-, plainants. They were not only bona fide, but suffering creditors.
    
      Second Point. The principle is that a purchaser, under a recorded bill of sale, must take it subject to all other claims of which he had actual notice before the execution of his deed; because it would be otherwise a fraud. If this bill of sale had been recorded, who would doubt but that it would take preference of Hudson; and a fortiori, if he has notice actually given to him. The whole policy and object of the recording statutes in England and our law was, to give notice. Recording was not a substitute for actual notice, but auxiliary to it. 1 Madd Ch. 327, 328. Anderson v Maltby, 2 Ves. jr. 254, 255. 2 Eden, 228. Frost v Beekman, 1 Johns. Ch. Rep. 302. What kind of notice is necessary to puf a.purchaser up-, on inquiry, &c? Sugd. 498. Smith v Low, 1 Atk. 490. Ward v Turner, 2 Ves. 437, 440. Underwood v Lord Courtown, 2 Sch. & Lef. 66. 3 Bac. Ab. 313. The proof on the question of notice is abundant, as will be seen in the record.
    
      Third Point. The possession by the complainants, independently of the deed, gave them a good title; and of this possession, there is the most conclusive proof Hudson had notice., ,The law is clear, if there was a bona fide and actual delivery, the title would pass as against all the world; and most certainly as to any one having notice. The possession of the complainants was bona fide, and not collusive, as proved by the evidence.
    
      Fourth Point. He who takes a bill of sale, does so subject to notice of all previous claims. In the bill of sale to Hudson, T. Vance is the only grantor. It was signed by him, in the name of J. and T. Vance, but not sealed; and it was acknowledged by T. Vance only. The act was done without the knowledge and against the wish, consent, or authority of his partner. It was a fraud upon his co-partner. One partner cannot transfer the property of the partnership in this manner. He could not alone, without authority from his co-partner, make a valid bill of sale. It was not executed in conformity to the act of 1729, eh. 8. It was clearly a fraud attempted upon the complainants. There was nothing like a delivery and possession legally made and delivered, as is fully proved by the evidence. The property had been previously seized under a distress for rent, and was at that time in the custody of the law, so that it could not be transferred.
   Archer, J.

delivered the opinion of the Court. The ehan gellor has in this case decreed, that the funds in the hands of the general creditors of John and Thomas Vance, shall be appropriated in the first place to the discharge of the claim of William Warner and William Vance. Hudson, surviving partner of Hudson and Co, claims priority in the distribution of these funds in virtue of his bill of sale from Thomas Vance, of the firm of John and Thomas Vance, dated the 22d of May 1822; and as his claim has been postponed, he has prayed an appeal to this court.

The appellant relies on his legal title, which he contends overreaches any lien which Warner and Vance could have on the property.

The bill of sale made in 1820 to Warner and Vance was made upon a good consideration. It was made to indemnify them against suretyships entered into, and to bo entered into by them for J and T. Vance, and it cannot be questioned, but that it was perfectly available as between the immediate parties to the instrument, although it was not recorded. It might be void against creditors who were injured by it; yet, nevertheless, binding on them. The principle was settled by this court in the case of Dorsey v Smithson, 6 Harr. & Johns. 63.

If it be binding on J. and T. Vance, the next subject of Inquiry will be its effect upon the transfer made to Hudson, and whether it will overreach the claim of Hudson? And this will depend on the solution of several questions — whether the mortgage of J. and T Vance to (Varner and Vance covered'the property claimed by HudsO)i? If it did, whether Hudson had notice of the lien of Warner & Vance? And lastly, the.effects of such notice, if any such existed, upon the claim of Hudson.

The mortgage covered the stock of books and stationary ill the store of J. and T. Vance at its date, and the fund, now for the disposition of the court, arose from the sale of the books and stationary in the store in February 1823, a period of three years after the date of the mortgage. The ability of the instrument to cover the proceeds of the sales of the stock mortgaged,- which might remain m the hands of J. and T. Vance, or such additional stock as, with the proceeds of the sale, or by other means, might have been purchased by J. and T. Vance, and put in their store, to replace such sales as may have been maue bythem between the date of the. moitgage and the date of the sale by the trustees of the general creditors, need not be examined or determined in this case. There is no evidence to show that there was an entire sale of the old slock, and that it was replaced by new, between the date of the mortgage and the sale by the trustees; or that any books or stationary were-purchased in the intermediate time, and mingled with the old stock. There is evidence of sales, but no testimony to show that- the original stock was exhausted or' partially replaced; and in the absence of such testimony, we cannot but intend, that the sales, which took place under the superintendence of the trustees, were of the remnant of the stock of goods mortgaged. It. is certain that goods were received from Hudsonhy John and Thomas Vance, and were credited in their books; but whether they were brought to their store, and mingled in the general mass of their capital, is not in evidence.

The next subject for consideration will be, whether Hudson had notice of the pre-existing lien of Warner and Vqnce. Hudson must be supposed to be conusant of the facts stated in his own bill of sale, and the transfers therein made. Looking at this, we find a conveyance of all the books and stationary, and other property in the possession of Warner, in which J and T. Vance had an interest. Hudson, in his answer, endcavours to limit the generality of those expressions, and intimates, that they had reference solely to the books of accounts and evidences of debt, of which Warner had taken possession. But if this were the object, and he had no reason to fear that Warner had taken possession of the books, stationary and other property, it would be difficult to divine a reason for the insertion of these general words in the instrument. When we examine the testimony in the cause, and look at the efforts of Warner 1o take and maintain possession of the store, these general words in the conveyance, strongly incline us to believe that Hudson could not have been unaware of the claim of Warner, and of the facts which actually occurred as springing out of that claim. But independent of the bill of sale, the answer distinctly admits the notice, before the execution of his bill of sale, that Warner and T’ance had received a conveyance. It is true he was, at the same time, apprized that nothing was due upon the conveyance; but from whom? from his creditor, who was then pressed to give him a security for his debt. Ought he to have confided iu such an interested representation from one whom, common sagacity might have admonished, would, very naturally, be inclined to rid himself of the pressing solicitations of importunate creditors, by the mos1 favourable representations, of the unincumbered and unshackled condition of his estate? He was not, in truth, so easily imposed upon. Ai least he was not willing to confide entirely in Vance’s statement; for we find, that notwithstanding he had been informed by Vance that his bill of sale to Warner was never placed upon the records, he examines into this fact for himself, and when he ascertained satisfactorily that nothing was on record legally binding the property, he resolves to take the title, and hazard the experiment, whether his title could not be made to override any unrecorded transfer to Warner and Vance. That such information, thus imparted to him, sufficiently affected him with notice, cannot be doubted, particularly when that information was accompanied with no equivocal indications, that the first conveyance was meant to reach the identical properly, of which he took the transfer. If Hudson could have supported by testimony what he has set up in avoidance of this notice, his claim would have been presented in a very different view before this court. Could he have established the tact that he had madethe inquiry of Warner, into the nature of his claim and lien, and had been led by Warner to believe that his incumbrances were removed, equity would never interpose to invalidate his claim. But these facts were necessary to have been established, as they constituted the only effective part of his defence, and it is scarcely necessary to say, that his answer can furnish no evidence of these facts.

There is one part of this transaction which cannot escape the remark of the most superficial observer. And in adverting to it, we, by no means, intend to cast any eensure on Mr. Hudson, as he was in the pursuit of a just claim, and of the means of securing it. The ceremonies attending the execution of this bill of sale were peculiar. To give it validity they were wholly useless. Why was adopted the symbolical delivery of the goqds by the delivery of the key' of the warehouse? One would have thought this was sufficient, yet to this-was superadded, for greater security, the delivery of a book in the name of all the books, stationary and goods. If the transmission of the legal title was the. object, these proceedings were useless, as his bill of sale effected that object. On the other hand, if the goods were to be transferred by delivery, then the bill of sale was unnecessary to be recorded, and all the stipulations upon which the delivery was to. take place could have been effected by a'writing, neither demanding record, nor acknowledgment. These ceremonies, and' this formula, lead irresistibly to the conclusion, in connexion with the bill of sale, answer and evidence, that Hudson had such a notice as would affect his conscience, and that there existed some pre-existing equity, which this machinery was to destroy, and which when prostrate, would.permit his legal possession to rest in security.

As it appears conclusively to our minds that Hudson had notice, we are led t-o the examination of the effect of such no-, tice upon his title. The act of assembly oí 1729, c/¿. 8, had for its object the suppression of secret sales. By demanding that transfers should be recorded, it was intended-, that notice should be given, that no one might be injured or deluded by secret and unknown conveyances.

Its object then, being to protect creditors from prior secret conveyances, any such creditor, who had notice of such an incumbrance, could not be considered as falling in the class of those for whose benefit the act was passed. For when he had notice, how could he be considered as injured by the conveyance? We cannot give the act the narrow construction, which seems to be contended for, that no notice was sufficient to gratify the law, but such as was derived from the registry of the deed; for such a construction would invalidate transfers, which, it is obvious, from the general tenor of the act, it was not the purpose of its framers to disturb, or interfere with. Any other kind of notice of the transfer, which demonstrates the existence of a lien, or the transfer of a right, brought home to the party who seeks to avoid such lien or transfer, will be sufficient

But although the bill of sale to Warner and Vance was made upon a good consideration, Hudson’s bill of sale cannot be overreached by the previous bill ol sale, unless it appear that an incumbrance, as against him, was created by it, which was not condemned as fraudulent by the peculiar circumstances which attended it.

The consideration of the unrecorded mortgage to Warner and Vance was two-fold — to guard thorn against injury from farmer seeurityship, and for anticipated loans and endorsements of notes. But, it is said, the recital which explains the object and purposes of the deed, is not conformable to the facts. If this be so,.it would certainly subject the instrument to a very rigorous scrutiny, and a misrepresentation in this respect would subject it to strong suspicion. But it would not follow, that every variance in the statement of the real facts of the case, would defeat and destroy the instrument, where it appeared that the transaction was fair on'the whole, and indemnity was the real objects of the parties. Nor would the court be disposed to hear with a very favourable ear, the objections of one who had received no injury from the transaction.

But in truth, there is no suggestion of falsehood, as we apprehend, in the recitals of the bill of sale. The responsibility of Warner and Vance had .been undertaken for John and Thomas Vance, as was anticipated in the mortgage; and although there is no direct evidence that prior to the mortgage notes had been loaned, yet they may have been so loaned; and constituting now no part of their claim, we fairly presume from the course of business, that the earliest notes found in the record were, many of them at least, renewals of former ones loaned or endorsed by Warner and Vance.

In the retention of possession by John and Thomas Vance there will be found nothing to contaminate the transfer, for the possession was consistent with the deed; and although this Would not necessarily render it valid, yet by the agreement of the parties it was not to have its completion immediately, but Was prospective to a future event; that is, the default on the part of the mortgagors to pay the amount of the promissory notes whenever their payment should be demanded by Warner and Vance. And in such a special case it has been adjudged (Bucknal v Roisten, Prec. in Ch. 287,) that possession by the vendor till that future time, is entirely consistent with the deed. And if the deed is good at its commencement, it has been determined that it shall continue so, notwithstanding possession is retained at the time of the forfeiture. Lady Lambert’s case, Shep. Touch. 65. Stone v Grubham, 2 Bulst. 25. Roberts on Fraud. Conveyances, 561, (note f.)

Their failure then, to take possession of the property at the time of the forfeiture as stipulated in the mortgage, does not vitiate a.deed which in its inception was valid and effectual.

It appears then, from our view of this case, that the mortgage from J. and T. Vance to Warner and Vance was binding between the parties thereto; that it was valid at common law, notwithstanding the retention of possession, its completion looking to a prospective event; that being valid in its commencement, it was. not condemned by a failure on default to take possession of the property; that Hudson having notice of this conveyance, is bound by the prior lien which it created, and that he is not to be considered in the light of an injured creditor, having had such notice, and, therefore, notentifled within the meaning of the act of 1729, ch. 8, to set up his title against the prior deed, and by so doing to treat it as a nullity.

EECREE AFFIRMED.-  