ERROR to the Circuit Court of the United States, for the district of Rhode Island.
The defendant in error, Cyrus Butler, in 1838, instituted an action of replevin against Barrington Anthony, the marshal of the United States, for the district of Rhode Island, to recover from him certain machinery, and articles used in the manufacture of goods, which had been the property of the Union Steam Mill Company, and which were claimed by the plaintiff, under a mortgage alleged to have been executed to him by the Union Steam Mill Company, on the 20th of November, 1837, to secure to him the payment of sixteen thousand four hundred and fifty-nine dollars, loaned to the company, by Cyrus Butler.
The defendant in the Circuit Court, the marshal of the district of Rhode Island, ordered the taking of the goods under an execution issued out of the Circuit Court of the United States for that district, on a judgment against Daniel Greene, William P. Salisbury, and Rufus W. Dickinson; which execution had been so levied upon the goods as of said Greene, Salisbury, and Dickinson, for the purpose of satisfying the debt and costs.
The cause was tried before a jury, in November, 1838, and a verdict, and judgment were rendered for the plaintiff. The defendant prosecuted this writ of error.
The matters of law arising in the case were presented on a bill of exceptions, taken by the counsel for the defendant on the trial.
The bill of exceptions stated that the plaintiff in support of his title to the articles named in the replevin, produced a certain deed dated 20th November, 1837, executed by one Daniel Greene, as agent for the Union Steam Mill Company, the said company being a corporation, conveying the property of the company, the articles mentioned in the replevin included, to the plaintiff on mortgage; and proved the execution of the deed, and produced the act of the legislature of Rhode Island, incorporating the company, and produced the record of the corporate proceedings of the company, having duly proved the said proceedings. The execution of the deed of 20th November, 1837, was in the following form. 'Union Steam Mill Company, Daniel Greene, [L. S.]' The plaintiff also produced and read in evidence, a deed dated 18th May, 1837, from William P. Salisbury to Daniel Greene, by which all the property of said Salisbury, in the Union Steam Mill Company, was conveyed to Daniel Greene. The plaintiff also proved that Daniel Greene was, and had been agent, from the time of the formation of the company; and that the deed to the plaintiff was executed by him, by, and with the consent and authority of the company.
The plaintiff insisted that the deed of Daniel Greene was the corporate deed of the Union Steam Mill Company, and conveyed to him the articles mentioned in the replevin; and he further insisted, that if it was not their corporate deed, it was sufficient to convey a valid title to the property to him, inasmuch as the said deed was made and executed by, and with the consent of those, who at the time were members of the company; and that Daniel Greene, as the general agent of the company, was authorized to convey the articles named in the plaintiff's writ.
The defendant objected to the deed as inoperative, the Union Steam Mill Company having had no corporate existence at the time it was executed; and the Court decided that the corporate existence was not so proved as to allow the deed to be given in evidence, as the deed of the corporation; but if inoperative, as the corporate deed, it was sufficient and competent to convey the articles in the replevin to the plaintiff. To this opinion the defendant excepted.
The defendant also objected to the deed, as it did not appear to have been recorded according to the law of Rhode Island regulating the recording of mortgages on personal property, prior to the defendant's levy on the goods.
On the back of the deed was the endorsement of the town clerk of the place where the property was situated, stating that the deed had been 'lodged in the town clerk's office, to record, November 20, 1837, at 5 o'clock, P. M., and recorded same day in the record of mortgages in East Greenwich, book No. 4, pages 49, 50 and 51.' The town clerk is the proper recording officer, by the laws of Rhode Island
The defendant's counsel objected to the sufficiency of the certificate as evidence that the deed was duly recorded, and produced evidence that there was a book kept by the town clerk, in which mortgages of personal property only, were recorded; and other mortgages, which included real estate, were recorded in other books kept in the office; and after recording the deed in the book of mortgages of real estate on the 20th November, 1837, the deed was taken by him to the office of the town clerk, on the 14th November, 1838, and was recorded in the book kept for mortgages on personal property. The Court decided that the certificate was sufficient evidence that the said deed was duly recorded. The defendant excepted.
The case was submitted to the Court on printed agreements, by Messrs. Pearce and Turner, and Mr. Atwell, for the plaintiff in error; and by Mr. Ames, Mr. Tillinghast, and Mr. Green, for the defendant.
For the plaintiff in error it was argued.–The counsel for the plaintiff in error say the deed in question is either the deed of the party executing it, or it is no deed. Two of the necessary incidents to a deed, says Lord Coke, (2 Thomas' Coke Lit. 272,) are a person able to contract, and by a sufficient name. In the deed offered in evidence by the defendant in error, in the Circuit Court, the grantor is a corporator, described as such, and using the name and style of the corporation.
Individuality is an attribute of corporations as well as of natural persons. Dartmouth College vs. Woodward, 4 Wheat. 636. 1 Kyd on Corp. 15. 4 Serg. and Rawle, 356. The distinction between those bodies and natural persons, is distinctly marked. 1. Corporations are limited in their powers by the terms of their creation. Beatey vs. The Lessee of Knowles, 4 Peters, 152. 2. By the personal irresponsibility of their members. The United States Bank vs. The Planter's Bank, 9 Wheat. 907. 2 Serg. and Rawle, 311. 9 Mass. Rep. 355. 15 Mass. Pep. 505. 16 Mass. Rep. 9.
The interest of corporators in the capital stock of a corporation is different from that of ordinary co-partners. Wood et. al. vs. Dummer et al. 3 Mass. Rep. 38.
The deed was made as the conveyance of the corporation, and was so received by the grantee. If there was no such corporation in existence, the persons voting and acting as corporators had no legal powers, and there was no one competent to act as a grantor in the deed.
The deed is made, and intended as made, not by persons acting in their natural capacities, and as distinct individuals, under the general laws of the land; but by persons acting under the artificial characters of corporators, with the limited and restricted rights and powers conferred upon them by their charter of incorporation. If then the party by whom the deed is supposed, from its language and evident intent, to have been made and executed, had no legal existence–was not in esse; by what rule of law is it that the deed can be held to enure to the grantee as a deed of another person, possessing a distinct individuality, and different legal attributes?
The maxim 'quando quod ago, non valet ut ago, valeat quantum valere potest,' under which Courts give to deeds a legal effect, different from the technical effect of the words of the instrument itself, does not apply to this case; because that rule is only applied to the character of the estate intended to be granted, in order to effectuate the intention of the parties, and not to the character of the parties themselves. 4 Cruise Dig. 298-303, and cases there cited.
The deed cannot be the deed of the copartnership, and thus enure to the benefit of the grantee; because it is under seal, and is executed by one partner only in the name of the whole, and without a special authority for the purpose under the seal of the corporation. Harris vs. Jackson, 7 Term. Rep. 207. 4 Term Rep. 313. Their subsequent assent to it was as corporators, and not as copartners. At the trial, it did not appear that the deed had been recorded prior to the levy on the property, according to the act of the general assembly of Rhode Island, passed February 1, 1834.
This statute is remedial in its character, and was intended by the legislature to remedy the mischief occasioned by the rule of law as expounded by the Courts, that possession by the vendor of personal property, (if such possession was consistent with the deed,) was not evidence of fraud. The construction of such a statute should be liberal, to prevent the mischief; or, as said by Lord Coke, the judges shall put such a construction on a statute as may redress the mischief, guard against subtle inventions and evasions for the continuance of the mischief, pro privato commodo, and give life and strength to the remedy, pro bono publico, according to the true intent and meaning of the law. Heyden's case, 3 Rep. 7. Pierce vs. Hoppin, 1 Strange, 253. The full result contemplated by this statute cannot be reached, without the record is made in the manner pointed out in the act. The manner of record is, therefore, an essential part of the law. See State Laws, 835.
The certificate of the town clerk was not in itself sufficient evidence that the mortgage in question had been recorded, in conformity with the provisions of law; because the expression 'book of mortgages,' used in said certificate, was ambiguous in its character, and might refer to mortgages of real estate, as well as to personal property. This ambiguity being explained by evidence, it is apparent that the actual record was not made in conformity with the form prescribed by the statute, to wit, in a book to be kept by the town clerk, for the especial purpose of recording therein mortgages of personal property. This form is imperative. 2 Inst. 388. 1 East, 64. It is of the essence of the statute, and therefore imperative. 1 Burr. 447. And it is not directory only, for it makes void the mortgage, when not recorded. Rex vs. Bunningham, 8 Barn. and Cres. 29.
Although it is the duty of the clerk to record the mortgage, yet the party claiming under it is affected by the misfeasance or nonfeasance of that officer in the performance of his duty. Johnson vs. Stagg, 2 Johns. R. 510. Beekman vs. Frost, 18 do. 544. Frost vs. Beekman, same case, 1 Johns. C. R. 288. The New York statute is in its terms like the Rhode Island statute. 18 Johns. R. 553.
The subsequent record of the mortgage in the proper book, under date of the 14th Nov. 1838, was made after the levy by the marshal, and was consequently void as to that levy.
That record cannot relate back to the time when the deed was lodged to be recorded, (Nov. 20, A. D. 1837,) for the statutes of Rhode Island make a manifest distinction between mortgages of real and personal property; making the first valid as to subsequent purchasers when recorded or lodged to be recorded, and the second valid when recorded only. Laws of Rhode Island, 202 and 835. And it is the further policy of the state of Rhode Island, that no deed, when once left to be recorded, shall be taken from the office of the clerk until the same shall have been by him duly recorded. Laws of R. I. 878.
For the defendant in error, it was contended, by Messrs. Ames, Tillinghast, and Green, that the deed of Daniel Greene, of 20th November, 1837, executed by Greene as the agent, and in behalf of the company, was fully competent to convey the articles in contest between the parties to this suit. The Circuit Court decided that as the legal existence of the corporation was not shown, it was not proved to be the deed of the corporation; but as the property conveyed was that of the individuals represented by Mr. Greene, and the deed was made with the individual approbation of the owners, it was sufficient. This decision was correct. The individuals composing the corporation were in partnership, transacting business as partners, when the charter was granted. By the charter, the property vested in the corporation; and each of the corporators are made individually liable for the corporate debts. Mr. Greene was the agent before and after the charter was granted.
If the Union Steam Mill Company were not a corporation, they were a copartnership. If the property in question did not belong to them as a corporation, it belonged to them as a copartnership. This copartnership acted by an agent, and always had so acted. The deed in ...