Toomer v. Dickerson

Warner, C. J.

The only question presented, by the record in this case, for our consideration and judgment, is whether Dickerson, the security upon the bond of Tucker, the principal debtor, is discharged from the payment of the debt to the creditor, by reason of the failure of the latter to record his mortgage upon the negro slaves when removed into this State, as required by the laws thereof. The creditor, it- appears, took a mortgage upon ninety-one slaves to secure the payment of his debt, and also took personal security for the payment thereof. The mortgage upon the slaves was executed and recorded in the State of South Carolina; the bond upon which Dickerson became security was executed by him in this State. Shortly after the execution of the mortgage, the negroes mentioned therein were removed into this State by Tucker, the mortgagor, where he resided, at the time of the execution of the same, and at the time of the purchase of the negroes from Toomer, the plaintiff. By the statute law of this State, mortgages on personal property, executed without the limits thereof, when the property so mortgaged is brought within this State, are required to be recorded in the clerk’s office of the Superior Court of the county where the mortgagor resides, or if a nonresident, then in the county where the mortgaged property" is, within six months after suoh mortgaged property is brought into the State. Such mortgages, not recorded within the time specified, remain valid as against the mortgagor, but are postponed to all other liens, created or obtained, or purchases made from the mortgagor, prior to the actual record of the mortgage. Revised Code, secs. 1946, 1947.

Whatever may be the rule of law in other States or other countries, as to the discharge of securities from liability : yet, in this State, it is not now an open question upon the statement of facts, contained in this record. In Jones vs. Whitehead, 4 Georgia Rep., 401, this Court asserted, and recognized the rule to be, “ that whenever the creditor does an act, whereby injury, or loss, or liability to loss, or increased risk accrues to the surety, without his assent, he is entitled to be discharged. And the Courts uniformly refuse to require of the surety to show that he has in fact been damnified.” The same principle was asserted by this Court, in the case of Brown vs. Ex’rs of Riggins, 3 Kelly’s Rep., 412. The rule asserted in the two cases just cited, has been adopted by the Legislature, and incorporated into the Code of Laws of this State. By the 2126th section of the Revised Code, it is declared that “ any act of the creditor, either before or after judgment against the principal, which injures the surety, or increases his risk, or exposes him to greater liability, will discharge the security.” The public law of the State, required the creditor to record his mortgage in the county into which the property had been removed, within six months after its removal, which has not been done. Is this failure to record his mortgage, in obedience to the requirement of the law, such an act of omission on the part of the creditor, as inat'eased the risk of the security, or exposed him to greater liability ? The language of the Code is, “ any act of the creditor,” which may as well be an act of omission, as any other act, whereby the risk of the security is increased, or exposes him to greater liability. An act of omission on the part of the creditor, when the law requires him to act, may be quite as potent for mischief to the security, as an act of commission. The question to be answered is, did this act of omission on the part of the creditor, in not doing what the law required him to do, increase the risk of the security, or expose him to greater liability ? Whep we take into consideration the fact, that if the security had been compelled to pay this debt to the creditor, he would have been entitled to the benefit of the mortgage lien upon his principal’s property, in short, to have been subrogated to all the creditor’s rights and securities, held by him against the principal debtor, we shall then readily discover to what extent his risk has been increased, and to what extent he has been exposed to greater liability by the failure of the creditor to record his mortgage as required by law. By the creditor’s act of omission to record his mortgage, his lien upon the principal debtor’s property, (to which his security would have been entitled, to .reimburse himself in the event of the payment of the debt by him,) will be postponed to all other leins, created or obtained against that property, or purchases made from his principal debtor prior to the actual record of the mortgage.

But it was insisted in the argument of this case, that the security had suffered no injury from the failure of the creditor to record the mortgage. Upon that point, the X’ecord is silent. The security has shown, that by the act of the creditor, his risk has been increased, and that he has been exposed to greater liability, which is sufficient prima fade at least, to discharge him. The plaintiff has not attempted to show by any evidence in the record, that he was not in fact ixxjxxred in consequence of his increased risk and exposure to greater liability. We know nothing upon that point in the case, except what the record discloses. The record discloses the fact, that in consequence of the failux'e to record the mortgage, as required by law, the risk of the security was increased, and that he has been exposed to greater liability; at least such is necessarily the legal effect, from the facts proved in the record.

It was further insisted in the argument, that although the bond was executed in Georgia, it was intended to be, and was in fact, a South Carolina contract, and as such should be governed by the laws of the latter State in its enforcement in the Courts of this State. Conceding ex gratia, that it is a South Carolina contract, the plaintiff seeks to enforce it in the Courts of this State. Neither the validity nor the construetion of the contract is questioned. vThe only controversy between the parties is as to the remedy upon that contract in the Courts of this State. The question here is, can the creditor enforce his remedy against the security upon his South Carolina contract in the Courts of this State, in accordance with our laws regulating that remedy f We give to him the same rights and remedies in our Courts, for the enforcement of his contract, as we give to our own citizens; no more, no less. Mr. Justice Story states the rule correctly, when he says: “ Whenever a remedy is sought, it is to be administered according to the lex fori, and such a judgment is to bo given as the laws of the State, where the suit is brought, authorize and allow, and not such a judgment as the laws of other States authorize or require.” Story’s Conflict of Laws, 954, section 572. Dela Verga vs. Vienna 20, Eng. Com. Law Rep., 387. Whittemore vs. Adams, 2 Cowen’s Rep., 626. When a party comes into the Courts of this State to enforce his remedy upon his contract, that remedy will be enforced in accordance with the laws of this State regulating that remedy, and not according to the remedy provided for the enforcement of similar contracts in the State of South Carolina, although the contract may have been made in the latter State.

We have already shown what is the rule of law in this State, regulating the remedy against securities, and what acts of the creditor will discharge the security from liability on his contract as such security. But it is contended that the rule asserted by this Court, in regard to the liability of securities, in Jones vs. Whitehead, was not the judgment of the Court, but merely the obiter dictum of the Judge, who delivered the opinion in that case. Perhaps that is quite as convenient a way to dispose of that case, and the reasons contained in it, upon the present occasion as any other: but the majority of the Court do not take that view of it. We think the following legal proposition was necessarily involved in the judgment of the Court in that case: “ It is urged, however, by the distinguished counsel for the plaintiff in error, that the statute of 1831, contemplates some act to be done by the creditor. I reply, the law enjoins a duty to be performed. And the neglect, or refusal, of the creditor to sue, after notice, is equally culpable as though he had expressly released the .principal by giving time, accepting a composition, or parting with collaterals, without the privity of the defendant. It was the servant who knew_ Ms master’s will, and did it not, that was beaten with many stripes.” The question in that case was whether the omission of the creditor to sue one of the securities, after notice to do so, within the time required by the Act of 1881, operated as a discharge of his co-surety. It is insisted in this case that there must be some act done by the creditor in order to release the security; that the Code contemplates only the action of the creditor — not inaction. "We reply, that the Act of 1827, embodied in the Revised Code, requiring the mortgage, held by the creditor in this case, to be recorded in six months after the removal oí the mortgaged property into this State, enjoined a duty to be performed by the creditor holding that mortgage, so as to preserve its lien upon the mortgaged property, that the security might have the benefit of it, in the event he had the debt to pay: for it is not unreasonable to suppose that he may have been mainly induced to become the security for the payment of the debt in view of the fact that the mortgage had been executed by his principal to the plaintiff to secure its payment. If it was now an open question in this Court, which it is not, in the opinion of a majority of the Court, we should be extremely unwilling to establish the rule that a creditor holding a mortgage upon the property of his principal debtor to secure its payment, should be permitted to omit or neglect to perform his duty as required by law, whereby, in consequence of such omission or negligence of duty required by law, the risk of the security is increased or exposed to greater liability, and yet, that such creditor should be allowed, under such circumstances, to hold the security liable for the payment of the debt. For the creditor to remain passive when there is no law requiring him to act, is one thing, but to remain passive when the law enjoins upon Mm a duty to be performed in regard tg matters in which the security, for the payment of his debt, has an interest, is another and different thing. The creditor should not be allowed, simply because he has am/ple personal security for the payment of bis debt, to remain passive and negligent in the performance of his duties enjoined by law, so as to increase the risk of such security, or to expose him to greater liability. And such the majority of the Court believe to be the rule, established by the decisions of this Court, and adopted by the Legislature, in the Code, declaring what is the law of the State upon that subject. We do not consider that we have the right, if we had the inclination, to alter or change that rule of the law applicable to the liability of securities ; our duty is simply to administer the rule as we find it, and as we think the Court below has done in this case. Let the judgment of the Court below be affirmed.

Note. — Walker, J., concurring, wrote out no separate opinion.