Bryant was indebted to Pearson, who recovered two judgments against him on 30 December, 1811, before a magistrate, for the sum of $67. *Page 433 Bryant stayed the executions, giving the plaintiff security for the debts, and to indemnify him executed an absolute bill of sale to him for the negro sued for, on the day after the judgments were recovered.

At the same time the plaintiff executed to Bryant an instrument under seal, whereby he acknowledged the purpose for which the bill of sale was made, and promised to surrender it, under a penalty of £ 400, provided Bryant paid the judgments on or before 1 January, 1814. Both the above instruments were drawn by a person who was keeping store for the defendant.

Bryant, at this time, was indebted to the defendant, who in the following February warranted him, and, having recovered judgment, had the execution levied upon the negro, then in Bryant's possession, having so continued from the date of the bill of sale. The negro was sold and the defendant became the purchaser, to whom the constable made a bill of sale, and who then took the negro into possession, and had him when the suit was brought. The bill of sale to the plaintiff, as well as that to the defendant, was duly proved and registered; but the bond from the plaintiff to Bryant was proved and registered on (601) the day the trial took place in the Superior Court. The defendant knew of the conveyance to the plaintiff, and of the bond, before he sued out his execution. The bill of sale purports to convey an absolute property in the slave, while, by a separate deed made at the same time, the title of the plaintiff is liable to be defeated upon Bryant's paying the amount of the judgments. To separate the defeasance from the deed is always a suspicious circumstance. Cockrell v. Purchase, Forrest, 61. Both deeds were registered within the time required by law, yet the latter, not being registered until the moment of trial, is strong indicative of a wish in the parties to cover half the transaction with the veil of secrecy. This is one of the badges of fraud in Twyne's case, Moore, 638. The plaintiff may be considered in the light of a creditor of Bryant's, who, by being permitted to retain the possession contrary to both deeds, was thus enabled by the plaintiff to gain a delusive credit, and thereby impose on third persons. (603)

From these special circumstances in the case my opinion is that the plaintiff is not entitled to recover; for, had the transaction been fairly designed, it would have been perfectly easy to have accomplished every justifiable object, and to have provided, at the same time, for Bryant's enjoyment of the property. *Page 434

I must acknowledge that my mind hesitates in adopting the rule in the extent it is laid down at the bar, and as it is supported by respectable authorities, both British and American, that where possession does not accompany and follow the deed it is fraudulent in law. Nor can I reconcile with that rule Kidd v. Rawlinson, 2 Bos. and Pul., 59, where the title was in one person and the possession in another, yet it was left to the jury to decide whether, under all the circumstances, the transaction was fraudulent. Lord Elden, in giving his opinion in that case, cites Buller's Nisi Prius, 258, and adopts the doctrine, "The donor's continuing in possession was not, in all cases, a mark of fraud; as where a donor lends his donee money to buy goods and at the same time takes a bill of sale of them for securing the money." There were certainly many strong circumstances in the case tending to show that the transaction was fair, and that third persons could not be imposed upon by it; but if such circumstances can be inquired into, it proves that the terms in which the rule is laid down in the cases cited are too unqualified.

I do not think it necessary to decide the question raised in this cause, whether the possession of a chattel remaining in the mortgagor *Page 435 after the execution of the mortgage constitutes, per se in point of law, a fraud, as I am of opinion that we are not to look upon this transaction as a mortgage. Between the parties to it, I suppose it would be such; but as to third persons, it clearly is not. The deed is absoluteupon the face. In that shape it is spread on record; the public see it so, and know, and can know nothing to the contrary, because the bond or defeasance, as it is called, is not an instrument which the law directs or authorizes to be registered. It is concealed until the party is compelled to produce it, by a seizure of the goods by a creditor. It then comes to light, and contradicts what the deed has before said. Surely, such a contrivance for entrapping innocent people cannot be supported under the notion that it forms a mortgage. In these two papers different languages are spoken. Both cannot be right: one of them must be false; and take which you will, it equally is a fraud. This defeasance, to my mind, instead of making the vendor's possession consistent with his deed, and thereby fair, evinces his guilt, by making it more difficult to detect the fraud. It is a cover to a foul transaction, and not the evidence of a fair one. Even if the parties clearly intended a mortgage, they have so framed it that to the world it tells a falsehood, and the truth only to themselves. It is too late to disclose the truth after the (605) injury arising from the secrecy has been sustained.

But it is said that the defendant had notice of these deeds. That makes no difference. The law makes the deed void; and what is void may be taken advantage of by all of Bryant's creditors.

Taking the deed to be absolute, upon the authorities cited by my brother DANIEL, and Hamilton v. Russell, 1 Cranch, it is fraudulent in law, and ought so to have been pronounced by the court.

Wherefore, there must be a nonsuit.

The rest of the Court concurred.

NOTE. — Upon the first point, see Hodges v. Blount, 2 N.C. 414, and the cases there referred to in the note, and in the cases referred to in the note to Ingles v. Donaldson, 3 N.C. 57, which show that the possession not accompanying the title is only evidence of fraud, and fraudper se.

Upon the second point, see Gregory v. Perkins, 15 N.C. 50; Halcombe v.Ray, 23 N.C. 340; Newsome v. Roles, ibid., 179.

Overruled: Trotter v. Howard, 8 N.C. 323, 324. *Page 436

The bill of sale made by Bryant to Gaither, and the bond bearing even date with it, which was executed by Gaither to Bryant, conditioned to reconvey the negro on Bryant's saving him harmless by paying the judgments which Pearson had obtained against Bryant, was, as between the parties to it, a mortgage, and as to them it was quite immaterial whether the bond had been registered or not. Erskine v. Townsend, 2 Mass. T. R., 469.

But, as the bill of sale was absolute on its face, and recorded in this situation, without the defeasance, it is to be considered by all the rest of the world as absolute. Were that not the case it would, in (604) numberless instances, place creditors and purchasers in great perplexity and difficulty. It is more consonant to justice that he who would take a bill of sale in the way the plaintiff did in this case should sustain the loss, than a bona fide purchaser under an execution, or from the vendor himself, who has been permitted to retain the possession.

To all the world but the parties this bill of sale must be considered absolute; and, as the property did not follow and accompany the deed, the transaction is per se fraudulent. 2 Term, 1; Cranch, 309; 4 Binney, 258; 9 Johns., 339. As the act was fraudulent, and void to all persons who were not parties to it, the circumstance of the defendant having notice of both the bill of sale and bond to reconvey can make no difference.