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McClure v. McDearmon.

[DECEMBER

gram's two-third interest, in the lease, mill, etc. Alleges he was no party to Ingram's renting, and that he informed appellee that he would assume none of Ingram's responsibilities, but he was ready to run the mill upon any satisfactory agreement, made with himself, but in no other way. He admits that the mill cut lumber of much more than the value of the writings obligatory, within the time of such renting, but that he could not distinguish any part of that from other lumber. He fails to respond to the allegations of Ingram's insolvency, or his intention to sell the lumber.

Much more testimony was taken than seems to have been necessary-there being but little contradiction in the material allegations in the pleadings.

The substance of the testimony satisfactorily shows that the parties respectively owned the shares stated; that the contract between Ingram and McDearmon was made, as alleged, and that McClure; at and before his purchase, knew of the terms of that agreement; that he took possession of the mill and refused to pay the rents; that the mill cut a large amount of lumber, and that there was of the lumber cut, between the first of August, 1867, and first of August, 1868, on the yard, at the date of the injunction, much more than sufficient to pay off the rents claimed by the appellee.

The court found for appellee; decreed that the amount of the remaining writings obligatory be paid, and that he have a lien upon the lumber enjoined, and that, if payment be not made, that it be sold, etc.

Upon the hearing, the appellant objected to the reading of the trust deed, made by Ingram to McDearmon, because it was not sufficiently stamped-there being but a fifty cent internal revenue stamp on it. On motion of the appellee, the court allowed the clerk, in open court, to affix another similar stamp, and then held the deed sufficiently stamped, to which the appellant excepted.

He, also, objected to the reading of the deed, as evidence, because it was made in the name of Wilson W. McDearmon

TERM, 1870.]

McClure v.

McDearmon.

whose full and proper name was William Wilson McDearmon. The name in the writing obligatory was the same as in the deed.

McDearmon set out his full name in his bill, and alleged that these writings obligatory were made to him, and set them out in full, which sufficiently showed how and to whom they were executed; and this was in no way questioned by the appellant, in his answer; and such objections, at the hearing, were technical and frivolous.

There is but one question of doubt or importance in this cause, and that is, whether or not the stocks obtained and the lumber cut after the execution of the trust deed, could have been so conveyed by that deed as to be binding on the parties and their privies?

The appellant denies that he is bound by the contract with Ingram, or that the court below could properly decree a lien upon the lumber, cut by the mill, during the time of the renting.

The peculiar circumstances and inherent equities of each cause, may influence the chancellor to make the most liberal application of the established rules of equity to the facts appearing before him; the rigid rules of law should never defeat the ends of substantial justice, where the more liberal doctrines of equity jurisprudence reach the merits of the case.

We understand the rule of law to be, that a mortgagor cannot convey chattels not then in existence, and to which he has no present title. But in equity, incumbrances, not enforcible at law, are sometimes held valid.

Courts of law and courts of equity, upon imperfect titles, do not always take the same view of the conveyances. A mortgagor of land, at law, has a mere tenancy, and the mortgagee has the title and the right to take possession at any time, unless restrained by positive agreement to the contrary. But in equity the mortgagor is regarded as the real owner, the mortgage a mere security, a mere chattel interest, until after foreclosure.

McClure v. McDearmon.

[DECEMBER

A legal mortgage is the conveyance of the property intended, as a security for the performance of some prescribed act; but there are equitable mortgages, wherein the mortgagor does not actually convey the property, but does some act manifesting his intention to bind the same as a security; and courts of equity have frequently sustained claims of lien upon property that would not have been recogized by courts of law. Unreserved vendor's liens are not recognized by courts having no equitable jurisdiction; but before a chancellor it is unconscionable to hold lands under any conveyance without first paying the purchase price; and other just liens, not created as such, according to the rules governing purely law courts, are enforced in equity, where no intervening rights have accrued.

In the case of Smithurst v. Edmunds, et al., 1 McCarter, (N. J.,) 408, where, after acquired hotel furniture was embraced in a mortgage, the Supreme Court of New Jersey held that that which was purchased, subsequent to the execution of the mortgage, was embraced within its provisions that it was not a mortgage in law, for want of title in the mortgagor at the time of executing the mortgage, but it was an equitable mortgage. The Supreme Court of Illinois held that a chattel mortgage might cover after-acquired property if taken into possession before other liens attached. Gregg v. Sanford, 24 Ill., 17.

In the case of Walker v. Vaughan, the Supreme Court of Connecticut say: "a mortgage upon property not yet acquired will be good between parties and others,

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upon the chattels being acquired by the mortgagor, no intervening rights having accrued." 33 Conn., 583; and see 29 Conn., 282. It has been said, where a mortgage was to operate as a continuing security, it will be so applied to property afterwards acquired. Carr v. Alott, Hurl & Nor., 964; C. B., (N. S.) 471; Langdon v. Horton, 23 Eng. Com., (or 1 Hair.) 549.

Where a cutler mortgaged his stock and tools, etc., and all stock and tools to be purchased, and all goods manufactured, and to be manufactured, and all machinery to be added, it was held a valid mortgage. Mitchell v. Winslow, 2 Story, 630.

TERM, 1870.]

McClure v.

McDearmon.

In the case of Johnson v. Curtis, the Supreme Court of New York decided that a mortgage on logs, and lumber to be cut out of them, was not fraudulent-the transaction being attacked for fraud. 42 Barb., 585.

Judge STORY, in his Equity Jurisprudence, Vol. 2, Sec. 1040, lays down the rule equally as broad as in most of the cases above referred to.

But the now leading case of Pencock et al. v. Col., 23 How., 117, by the Supreme Court of the United States, fully establishes the doctrine that liens may be created upon chattels not in being, to take effect upon the acquisition of such property by the mortgagor, where such property comes to him in the ordinary course of his business, or is otherwise sufficiently identified, and that such liens will be enforced in equity.

In the case under consideration, it is clear that the appellee owned a one-third interest in the mill, machinery, etc., and Ingram the other two-thirds, and by just and fair means, satisfactory to both, it was found that the one-third of the rent of the mill, etc., for the time stated, was worth $600. Ingram preferred to pay that sum and have the entire mill, etc., for that time, rather than to continue the co-partnership, and McDearmon preferred to accept that sum, if the payments were secured, and to that end the deed exhibited was executed, conveying to him the stocks and lumber on hand, and the further material that might result from carrying on that business. For this consideration he turned over his property and gave the entire mill, etc., into the possession and control of Ingram for the year. Ingram then owned absolutely two-thirds, and for one year he owned the other third, with an incumbrance upon or claim against it of $600.

It certainly would have been unjust and inequitable for Ingram to have used this mill and machinery, and had the entire profits thereof, without paying a share to the appellee; and appellant, being cognizant of all the facts, purchased no better title than Ingram had; and for him to have received the entire

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The State . Nichols.

[DECEMBER

profits of the mill and machinery, and to pay nothing, would be no less unjust to the appellee.

And the appellant being well aware that the appellee relied upon the products of the mill for his fair share of the profits, and not upon any other credit given Ingram, and that the parties, by deed, had endeavored to create a lien upon such effects to secure such sum, and having the sole use of the mill. and all profits arising therefrom, for so long a time, we deem it unjust that he should refuse to pay the sum which he knew had been fairly settled upon as appellee's share of rents and profits, and it seems to us that this is one of those continuing securities, an equitable lien, that may well be enforced in a court of equity.

The decree of the court below is in all things affirmed with

costs.

THE STATE 2. NICHOLS,

PARDON AND AMNESTY-The pardoning power is not naturally or necessarily an executive function, and where the Constitution is silent, vests no more in one branch of the government than the other.

The power to pardon, after conviction, vested in the Governor, by the Constitution of 1864, is not prohibitory of the exercise of that power, by the Legislature, before conviction, nor is it inhibited by the powers delegated to the federal government.

Where there is no express or implied limitation in the exercise of the pardoning power, granted to the executive, it operates as an inhibition against the legislative branch interfering with it.

Plea of tender and acceptance of pardon, before indictment found, is good and is not an interference with the administration of justice by the courts.

After tender and acceptance of pardon, no subsequent action of the executive or Legislature can revoke it.

The Act of March 1, 1887, entitled, "An act of pardon and amnesty," is not

in conflict with the present Constitution.

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