Summary
In Health v. Cotton Mills, 115 N.C. 202, the certificate recited that the deed had been duly proven, and the attestation clause recited that the deed was duly signed, sealed and delivered.
Summary of this case from Brown v. HutchinsonOpinion
(September Term, 1894.)
Corporation Deed — Execution — Registration — Certificate of Probate — Omission of Seal from Record.
1. When a deed of a corporation is signed in the name of the corporation by its president, vice-president, secretary and treasurer, who constituted all the stockholders, directors and officers of the corporation, and the corporate seal is affixed to it, it is properly executed as a common-law deed.
2. A certificate by the clerk of the Superior Court that the officers of the corporation who signed the deed "acknowledged the due execution of the annexed instrument for the purpose therein set forth," was sufficient to warrant the registration of the deed.
3. Where an instrument which the law requires to be sealed is in all respects correctly recorded, except that the record does not show a copy of the seal or any device representing it, the record will nevertheless be valid and sufficient as notice, provided the record represents on its face in another way, as by recitals or otherwise, that the instrument was sealed and it was in fact duly sealed.
4. Debts contracted by a cotton mill company for cotton, flour and other like materials which do not attach to the freehold or permanently improve the property of the corporation, are not entitled to priority over a mortgage debt under the provisions of sec. 1255 of The Code.
ACTION in the nature of a creditor's bill, heard before Hoke, J., (203) at Spring Term, 1894, of ALAMANCE.
The following facts were agreed upon by the parties to be taken in connection with the undisputed facts contained in the pleadings, and all issues of law arising between the parties upon the facts were submitted to the court:
1. That the Big Falls Cotton Mills was duly incorporated, and on 16 August, 1888, the corporation executed to James E. Mitchell of Philadelphia, a mortgage deed, a copy of which is hereto attached, marked "A," signed by Big Falls Cotton Mills, James V. Pomeroy, president; Junius H. Harden, secretary and treasurer, and P. R. Harden, vice-president; and the corporate seal was properly attached at the time of the execution of the mortgage by Junius H. Harden, the secretary and treasurer, in the presence and by the direction of the president and all the stockholders and officers of the corporation.
2. That the said mortgage was authorized to be executed by resolutions adopted at a regular meeting of the stockholders and (204) directors of the corporation, all the stockholders and directors being present at the time.
3. That on 31 August, 1888, the said mortgage deed was acknowledged and probated and recorded in the office of the register of deeds of Alamance County in Book No. 10, pp. 87 to 91, inclusive, said registration being on the same day of the probate, to which book of registry reference is hereby made as a part of the facts of this case.
4. That at the time of the registration of said mortgage deed the register of deeds omitted to indicate the seal of the corporation upon his registry, through inadvertence or because of the fact that it was not the custom of himself or his predecessors in office to indicate or attempt to indicate or describe upon the record any corporate seal affixed to deeds registered in Alamance County.
5. That the mortgagee, James E. Mitchell, is a resident of the city of Philadelphia, Pennsylvania, and had no knowledge of the omission of the seal by the register of deeds until after the commencement of this action, and that upon learning of the omission he took steps to have the error or omission corrected, and the same was corrected, as appears in the decree in the special proceedings to correct the said error or omission, which decree is hereby referred to as a part of this case, and the register of deeds, in obedience to the said decree, has corrected the error or omission by indicating the seal on the record as appears from the Book No. 10 heretofore referred to.
6. That after the mortgage deed was executed and registered as aforesaid, it was sent by the corporation to the mortgagee, Mitchell, and the mortgage, when received by him, had upon it the common corporate seal of the corporation, and the certificates of probate and registration as now appears, and the said mortgagee thereupon sent to the corporation (205) the sum therein named, to wit, $25,000, as a loan.
7. That the debts due the plaintiffs, Heath, Springs Co., Pool Moring, Ed. H. Lee Co., and the Granite Manufacturing Company, by the Big Falls Cotton Mills, are just and true and are for the amounts found in the report of the referees filed in this cause, and the consideration of said claims or debts is cotton and flour sold and delivered to the corporation by said plaintiffs.
His Honor rendered the following judgment:
"This cause coming on to be heard, and it appearing to the court that at March Term, 1894, the receivers, B. D. Springs and J. A. Long, filed their report, setting forth all the claims found and ascertained to be due by the Big Falls Cotton Mills, and that they also filed at this term a supplemental report as to the claims of J. A. Mitchell Co., and Pool Moring, and no exception being taken to said reports, it is, on motion, ordered and adjudged by the court that the said reports be, in all (206) respects, confirmed. And this cause now coming on to be heard at this term of the court, upon the pleadings, reports of the receivers and the facts agreed, hereto attached and marked `Exhibit No. I,' and the same, upon agreement, being fully considered by the court, it is ordered and adjudged that the mortgage deed executed to James E. Mitchell Co., is a valid and subsisting mortgage as executed, probated and recorded, and is a prior lien upon the fund produced by the sales heretofore ordered and entitled to be paid in full out of the same in priority to all other creditors, and is hereby directed to be paid by the receivers out of the first moneys in their hands.
"It is further considered and adjudged that the debts of the Granite Manufacturing Company, Heath, Springs Co., Pool Moring and Ed. H. Lee Co., arising from cotton and flour sold and delivered to the Big Falls Cotton Mills, and more fully described in `Exhibit No. I,' are not, by reason of said claims being for the articles mentioned in said `Exhibit No. I,' a prior lien to the mortgage of James E. Mitchell Co., hereinbefore mentioned, nor as against the claims of the other creditors in this action.
"It is further ordered by the court, all parties consenting thereto, that the receivers proceed to pay out, at once, pro rata among all the creditors of the Big Falls Cotton Mills, as per reports of receivers and referees, the money now on hand or due, saving and preserving, however, enough of said money in their hands to meet and discharge whatever balance may be found to be due to Ed. H. Lee Co. and James E. Mitchell Co. on their debts upon which they claim priority, in case the priority claimed by them shall hereafter be established.
"This order is in no way to prejudice the claims of Ed. H. Lee Co. and James E. Mitchell Co., for which they claim priority, nor is it to extend to those creditors, to wit, the operatives of Big Falls Cotton Mills, whose claims have, by another order made in this cause at this term of the court, been ordered to be paid in full. This cause (207) is retained for further orders and directions."
The creditors above mentioned appealed.
Haywood Haywood for plaintiffs.
L. M. Scott and W. P. Bynum, Jr., for defendants.
BURWELL, J., did not sit on the hearing of this case.
The question presented in the exception of the appellants is whether the mortgage deed to J. E. Mitchell Co. has been properly executed, probated and registered so as to give the note secured therein priority over the claims of the excepting creditors. The deed is signed in the name of the corporation by its president, vice-president, secretary and treasurer, who constitute all the stockholders, directors and officers of the corporation, and the corporate seal is affixed to it, as appears by the profert of the original deed on the trial, as well as from the fact agreed. We are of the opinion that it is properly executed as a common-law deed. Bason v. Mining Co., 90 N.C. 417. We are also of the opinion that the certificate of the clerk was sufficient to warrant the registration of the same. Quinnerly v. Quinnerly, 114 N.C. 145.
It is earnestly insisted, however, that the omission of the register to copy the seal on his book destroys the efficacy of the registration as constructive notice of the said mortgage. Very respectable authorities, which accord with our conception of the true principle, sustain the position that if the attestation clause recites that the deed (208) was signed and sealed, it will be presumed that the original deed was sealed. "Where an instrument, which the law requires to be sealed, is in all respects correctly recorded, except that the record does not show a copy of the seal, or any device representing it, the record will nevertheless be valid and sufficient as notice, provided the record represents on its face, in any other way, as by recitals or otherwise, that the instrument was sealed, and it was in fact duly sealed." Beardsley v. Day, 55 N.W. 46 (Minn.). To the same effect, 1 Jones Mort., 493.
This view is fully supported by the case of Aycock v. Railroad, 89 N.C. 323. A similar objection was made to the introduction of certain grants, but as it appeared from the attestation clause that the seal was affixed, the objection was overruled. The Court said: "It thus affirmatively appears that the grants were issued under the great seal, and this is shown in the registration. As the purpose of requiring registration is to give notice of the terms of the deed, and this is fully accomplished in the registry, we can see no reason why some scroll or attempted imitation of the form of the seal should be required in addition to the words spoken in the grant. The registry furnishes all the information that could be derived from an examination of the original, as both utter one and the same language."
His Honor was also correct in his ruling that the debts of the plaintiffs and others arising from cotton and flour sold and delivered to the defendant are not entitled to priority over the said mortgage. Paper Co. v. Chronicle, ante, 143.
Upon a careful inspection of the whole record, we are unable to find any reason to disturb the judgment of the court below.
Affirmed.
Cited: Strain v. Fitzgerald, 128 N.C. 397, 400; s. c., 130 N.C. 601; Smith v. Lumber Co., 144 N.C. 49; Johnson v. Lumber Co., 147 N.C. 251; Edwards v. Supply Co., 150 N.C. 176; Withrell v. Murphy, 154 N.C. 90; Brown v. Hutchinson, 155 N.C. 210; Weston v. Lumber Co., 162 N.C. 206; Hopkins v. Lumber Co., ib., 534; Power Corporation v. Power Co., 168 N.C. 221, 222; Buchanan v. Hedden, 169 N.C. 224.
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