Kelley v. Bank of the State of South Carolina
Kelley v. Bank of the State of South Carolina
Opinion of the Court
The object of the Act of 1816 seems sufficiently clear ; in what manner it can be carried into effect has presented questions of more difficulty. Mechanics and handi-crafts-men were employed by the proprietors of land, to erect, or improve buildings, and having expended their labor, skill, and materials, in the performance of their contract, discovered, too late, that they had only contributed a fund to pay the other creditors of the proprietor, while they were themselves remediless. The purpose of the Act was to give a lien to the mechanic, on the building which he had erected, or improved; on the other hand, the law does not favor secret liens, and the contract, therefore, was declared to create no lien, until it had been recorded. This building contract has been sometimes called a mortgage, but inaccurately. The mortgage is itself a lien, and derives no efficacy, as such, from being recorded, as was held in Ashe vs. Livingston, where an unrecorded mortgage was preferred to an execution. A building contract has none of the characteristics of a mortgage. It may not be intended by either of the parties to create a lien. It may never become a lien. It may become a lien without the knowledge of the party, on whose property it is a charge. The lien is created by recording, and becomes such from the date of the record. The Charleston Hotel Company contracted with Jacob Small, to complete the hotel, for one hundred and ten thousand dollars. He was to furnish every thing. In pursuance of his arrangement, he made contracts with various individuals, and, among the others, with the complainant, to do the plastering, <fcc. The contract bears date,
(Signed) ALEX. BLACK, L. S.
President Charleston Hotel Company.
Witness. (Signed,) George W. Logan.”
It was sufficiently proved that the complainant would not have entered into the contract without this guaranty on the part of the company. The contract was not recorded until 25th February, 1838. The work of the complainant was completed, and amounted, in value, as he alleges, to about $20,000, of which he had received about {$11,000, leaving due to him, a balance, exceeding $8,000. In the great conflagration of the 27th April, 1838, the building was consumed, and had been insured, and the company received the amount. A new hotel was af-terwards erected, on the foundation of the former edifice, which foundation, with cisterns, (fee., still remained. In order to proceed with the work, they negotiated a loan with the defendant, the Bank of the State, under what is termed the Fire Loan Act, executing a mortgage, (fee., on 21st January, 1839, to secure their bond, in the penal sum of $150,000. In May, 1839, a sum in promi-sory notes, was also borrowed from the other defendants, T. Street and others, and a mortgage executed to secure them. For the view taken by the Court, it may be only necessary to consider the rights of complainant, under the Act of 1816. It has been suggested, that by virtue of that act, a lien may be created, when the party may never have intended to encumber his property. By executing the contract, (which is no lien,) he places it in the power of the mechanic to acquire a specific lien, by recording the contract, where the contract is between the mechanic find the proprietor of the premises his may be only equitable, and it is enough for the Court that such is the law. It has been stated, that Mr. Small made an original contract with the company for the entire work. That contract, recorded, would have created a lien. Had Mr. Small been the proprietor of the premises, his contract with the complainant, being recorded, would have become a lieu. But the Court can find no authority for extending this lien beyond a con
The original contract of the complainant was with Small. To this contract alone, the law of 1816 gives the efficacy of a lien, after it has been recorded. The undertaking of tlie company is collateral. They would become •liable, in the event of Small’s default. It does not appear to the Court, that this undertaking gives to the complainant any advantage beyond that of a general creditor. It presents no case which would entitle him to the extraordinary aid of this Court and the bill must be dismissed.
From this decree, the complainant appealed; but the motion was refused ; the whole Court concurring.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.