
    
      Elizabeth S. Garrett v. The Bank of Hamburg, S. C.
    
    Where, by authority of the will of a testator leaving several children, his executor gives, by way of advancement, certain negroes to the husband of his daughter on her marriage, and after having possession of them for some fourteen years, the husband, having no other property, mortgages them for valuable consideration, (although the will further required the property advanced to be valued and receipts to be given for it, so as to ensure equality among the children at the final division,) the executor cannot defeat the sale of these negroes in satisfaction of the mortgage, by claiming a specific delivery of them under a receipt given by the husband for them as a loan, at the time of their delivery to him by the executor, of which receipt the mortgagee had no notice.
    Where one obtains credit on the faith of his ownership of the property in his possession, and on this confidence only, the claim of the creditor cannot be defeated by a latent right of which he had no notice.
    This case was heard by Dunkxn, Chancellor, at Edgefield, June, 1846, and will be fully understood from his decree.
    Dtjnkin, Ch. On the 24th January, 1840, Britton Mims executed to the Baixk of Hamburg a mortgage of a negro woman, Yiney, and her eight children, of which negroes Mims was then in possession, and had been, with little or no interruption, for about fourteen years. On the 14th December, ’42, the Bank caused the negroes to be seized and advertised for sale, to satisfy the mortgage thereof.
    On the 31st December, 1842, this bill was filed by the complainant, claiming a specific delivery of the negroes, and an account of their hire. >
    
    The negroes originally belonged to Stephen Garrett, deceased. By his will, executed in December, 1823, he devised and bequeathed his whole estate, real and personal, to his widow, the complainant, during her natural life, “to be kept together by her for her use and support, and the support, raising and educating of his younger' children.” By the next clause it is provided, that the complainant should “have the sole power and authority to advance his six yotuxg children, as they respectively marry or come of age, in the following manner, by allotting off and giving to them, each, one or two negroes, and such other articles of property as she might, spare from the plantation, to be taken by 'them at a valuation to be made by and under the hands of any two ox-three respectable persons in the neighborhood, to be named by her, the children giving, respectively, receipts for the same, so that equal justice may be done to the whole of them upon a final division of my property, after her death.” By a subsequent clause, it is provided as follows, viz: “After the death of my beloved wife, I give, devise and bequeath all the above property, either not sold to pay my debts, or advanced to my said six younger children, together with all my other property, to them, their heirs and assigns forever, to be equally divided between them, share and share alike, still having in view the principle of equal justice referred to in the third clause of this my will.” Of this will the complainant was appointed sole executrix, during her life, and after her death, his sons were appointed executors.
    Britton Mims married Mary Ann, one of the testator’s six younger children, on the 15th December, 1825 ; and on the 20th March following, the complainant delivered to Mims the woman Yiney, with her infant children, Moses, and Jack.
    Britton Mims testified, that about the time of receiving the negroes, he gave to the complainant a receipt, which was exhibited at the hearing, and in the following words, viz:
    
      il Received of Mrs. Elizabeth S. Garrett, as a loan to her daughter Mary Ann Mims, one negro woman named Yiney, being of yellow complexion, about twenty-six years old, also her two children, Jack and Moses, which I promise and oblige myself to return to the said Elizabeth S. Garrett, her heirs or assigns, together with her increase, at any time, when I may be required by the said Elizahe'th S. Garrett, her heirs, executors and administrators. Given under my hand and seal, this 20th day of March, 1826.
    (Signed,) B. Mims. [L. S.]”
    The paper, had no witness to its execution, and was never recorded. Mims said that he drew or copied it from a draft made by 'Wm. Garrett, complainant’s son; that the complainant brought the paper, and said that her son, who was an executor, thought it necessary. Mims also said, that when he took the negroes, it was the understanding that they were to be brought back to the estate. He also testified, that when he executed the mortgage, he had no property of any consequence, but what was mentioned in the mortgage. Mims further said, that about the time of executing the receipt to the complainant, she borrowed from him the sum of five hundred dollars, and that he was to have the use of the negroes, for the use of the money; and that the complainant had never paid the money — -that previous to filing the bill, she had demanded the property, and that he had consented, so far as he was concerned, that she should take it.
    As to the time of giving the receipt to the complainant, and. the time of the loan oí five hundred dollars,1 there is a painful uncertainty, which, is rather enhanced by the absence of any attesting Avitness to what purports to be a sealed instrument. It is true, that it is unnecessary that such paper should be under seal. If it had been necessary I should hold, on the authorities of Alston vs. Thomson, Cheves, 271, and the cases there cited, that a deed requires a witness. But if, in this case, the parties deemed it desirable to give to the paper the formality of a sealed instrument, it would seem a consistent caution to have secured an attesting witness, who could not only prove the delivery, but the time of the delivery, and, perhaps, the loan of the money, said to have been made about the same time, but the evidence of Avhich seems to have been left to depend on the frail recollection of the parties themselves. It is not to be questioned, however, that the witness, William Garrett, corroborates the testimony of B. Mims, in most of the important particulars, although differing as to the amount of the sum loaned.
    The Court would be gladly relieved, if possible, from questioning, in any manner, the accuracy of the recollection of these witnesses,' testifying to transactions Avhich took place twenty years ago.
    From the Avhole tenor of the testator’s Avill, it is quite manifest that he intended Avhat he said, Avhen he authorized his executors to give to each of his younger children one or two negroes, and other property, by way of advancement, as they respectively married or became of age. The property advanced was to be valued and receipts given, so as to ensure equality on the final distribution, at the death of his AvidoAV. The Court cannot but believe, that the complainant acted in the exercise of this authority, and was understood by the parties to be so acting, when, after the marriage of her daughter, she delivered to her husband the negroes mentioned. Doubtless it was understood that they must be accounted for in the final division, in the manner provided by the will. Mims says it “ was understood at the time he took the negroes, that they were to be brought back to the estate.” And in one vierv, this is not only true, hut in accordance with the Avill, and yet quite consistent with his absolute ownership. The will directs that a receipt shall be given by the parties advanced. The object, too, is stated. Accordingly a receipt is taken from Mims, Avhich the complainant’s son, who was an executor, thought necessary. In the receipt the advancement is termed a loan; and supposing the parties intended to fulfil precisely the injunctions of the testator, it is not unlikely that the receipt would assume this form.
    On the contrary if, as Avas suggested, the transaction was a mere loan of the negroes, or rather a hiring of the negroes, in consideration of a loan of five hundred dollars, and that the hire was to stand against the interest, it is quite clear that the parties adopted not only a very inappropriate mode of expressing their agreement, but one from which no such understanding could be inferred.
    There is no evidence whatever, however, that at the time when the negroes were delivered into the possession of Mims, he received them on hire, or agreed to pay hire. It was either a loan, according to the literal terms of the receipt, or an advancement, as authorized by the will of Stephen Garrett.
    Supposing the transaction to have been strictly a loan, the principle recognized in Archer vs. McFall, Rice, 73, as having been “ settled by a series of decisions,” is entirely conclusive. That was the case of a general creditor merely. The court say “the possession of the debtor was such as held him out to the world to be the true owner of the property. If he acquired a credit upon the faith and confidence that Sarah and her children belonged to him, a creditor who trusted under these circumstances, has a right to subject the property to the payment of his debt. It is wholly immaterial whether Archer (the original owner) intended to defraud or not.”— And again, “to deprive a creditor of his position as a subsequent creditor, some evidence must be given to satisfy the jury that he knew, or, by the exercise of ordinary diligence, might have known, that Lawhorn’s possession was a mere loan.”
    The defendants were not merely creditors of Mims: they were purchasers for valuable consideration, and, certainly, without notice. It is true, the will of Stephen Garrett was on record, and, supposing them to have exercised diligence, they were aware of its provisions. This knowledge would only have assured them of Mims’s right to dispose of the' property, and the act of Mims himself, in undertaking to dispose of the negroes absolutely, could leave no suspicion on their minds, of any defect in the title. His conduct was either a gross fraud on the defendants, or his testimony now, as to the fiduciary character of his possession, is entitled to very little consideration.
    It is not to be disguised that both the witnesses, Mims and Garrett, testify under a strong bias, and it would be hazardous in the extreme to permit the right of property to be disturbed by vague recollections of what was said, or understood, in the family, twenty years past.
    It is ordered and decreed that the bill be dismissed.
    The plaintiff maintained the following propositions before the Court of Equity Appeals, and moved that the decree of his Honor Chancellor Dunkin be reversed and modified accordingly.
    1. That the negro slaves, Yiney and her children, were, on the 20th day of March, 1826, lent, and were shortly thereafter let to hire, by the plaintiff to Britton Mims, and so continued until their seizure by the defendant under his supposed mortgage, and that the conclusion of the Chancellor that they were given absolutely to the said Mims, is unauthorized by the evidence.
    2. That in the absence of all fraudulent intention on the part of the owner of chattels lent or let to hire, there is no rule or principle of the law which subjects such chattels to liability for the debts of such bailee, beyond his special property in the same, even though he may have acquired credit upon the faith that he was the owner of such chattels.
    3. That the defendant’s supposed mortgage, (if operative to any extent,) secured only such of the individual debts of Mims, in the form of promissory notes or bills of exchange, as arise out of the purchases of cotton, contemplated by him, at its date, and cannot therefore include the note of $3,124.09, executed by Mims, more than eighteen months after his dealing in cotton had ceased, and in liquidation of a demand for which he was bound merely as surety.
    4. That if the supposed mortgage be construed to include the note of $3,124.09, it is, to all intents and purposes, a prospective guaranty of payment to the Bank of all its debts that might hereafter arise against the said Mims, without any limitation of the form or grade of those debts, or of the periods within which they should occur, or of the dates at which they should fall due, or of their consideration, or of their amounts, save only, that they should not, at any one time, exceed $10,000; and it is respectfully submitted, that such an instrument is of a character unknown among legal securities, is against the policy of the law, and as a mortgage is absolutely void, and confers no lien upon the demands of the Bank claimed to be thereby secured.
    5. That the legal title to the said slaves being in the plaintiff, and no valid transfer of them to the defendant having been made, even by Britton Mims, the plea of purchase for valuable consideration cannot be sustained.
    Failing in these objections to the Circuit decree, the plaintiff will move that the case be remanded for a new hearing, upon the ground:
    That the Chancellor erred in excluding the evidence offered by the plaintiff, to show that the note of $3,124.09 was procured by fraud, or at all events, was without legal consideration, and was given by Mims, under the mistake that he was already bound for the sum therein specified.
    Carroll, for the motion.
   Dunkin, Ch.

delivered the opinion of the court.

The appeal has been argued with great zeal, chiefly, as is said, from the doubts expressed by the decree as to the facts testified to by the witnesses. It is very difficult to add any thing on this point to what is said in the decree. Mrs. Garrett and her son may very well have been under the impression that, in fulfilling the will of Stephen Garrett by advancing his children, the executrix only loaned the property. As they were to account for the value in the final distribution, it might naturally assume this character in her contemplation. As to Britton Mims, if he swore to the truth at the hearing, it is difficult to resist the inference that, in January, 1841), he obtained money from the Bank on false pretences, by mortgaging to them property which, he well knew at the time, did not belong to him.

But notwithstanding the uncertainty in which the mind of the court was left, as to some of the facts deposed by the witnesses, it was assumed, and it is the basis of the defence, that, in March, 1826, the negroes were loaned by the complainant to Britton Mims, and that he held them as a loan. It is, nevertheless, conceded by the candor of both the solicitors for the appellant, that, unless Archer vs. McFall be overruled, such loan cannot be supported against the rights of the defendants, and that the decree must stand.

Archer vs. McFall was decided by the unanimous judgment of a full court, after two trials, and on great consideration. The legal propositions are announced with singular clearness and precision. Yet cases may well be conceived as falling within the language of that judgment, to which the court would hesitate to apply its principles. But the circumstances of this case create no such reluctance. Mims was in possession of the negroes, as apparent owner, for at least twelve years anterior to his transactions with the defendants. They had been the property of Stephen Garrett, whose daughter he had married. The will of the testator, which was on record, authorized his executrix to give his children negroes and other property on their marriage. Mims, having no other property, in January, 1840, mortgaged this property to the defendants as a substitute for an endorser, and obtained a loan for four or five thousand dollars, at or about the time. Other transactions followed, and, in December, 1842; Mims being then indebted to the Bank, between three and four thousand dollars, the negroes were taken under the mortgage, and the claim of the complainant was interposed. The question is not, as was said in Archer vs. McFall, whether the complainant intended any fraud in leaving the negroes in possession of Mims, for of this there is no suspicion, but whether she did not thereby enable him to commit a fraud on others, whose rights are entitled to the protection of the court, in preference to her’s, on acknowledged legal principles. It cannot be doubted that the Bank trusted Mims on the faith of his ownership of this property, and on this confidence only; and their claim cannot he defeated by a latent right of which they had no notice, and the existence of which they had no reason to suspect.

It is ordered and decreed that the appeal be dismissed.

Johnson, Ch. concurred.

Harper, Ch. absent from indisposition.

Appeal dismissed.  