Nelson, J.,
delivered the opinion of the court.
The original bill in this case was filed on the 4th of November, 1852. On the 28th of August, 1854, the complainant, by leave of the court, filed an amended bill against Miller & May-hew and Trowbridge; to this amended bill the defendants answered as they had done to the original bill, and on the 8th of September, i860, a second amended bill was filed. It will not be necessary to notice particularly the proceedings which were had under the original bill, as the questions for determination [158]*158in -this case arise out of *the case made by the two amended bills. The first amended bill raises several issues, all of fact. They arise upon the charges, first, that the two notes of $2,000 each, were either not loaned by Miller & Mayhew to Ford & Trowbridge as alleged, or if loaned, were never discounted or used by Ford & Trowbridge; that Miller & May-hew did not pay said notes, but if loaned, they were in fact returned to Miller & Mayhew; and that, if the notes were in. fact loaned and taken up, that Miller & Mayhew have been repaid by Ford & Trowbridge. The answers of Miller & May-hew negative these charges and declare upon oath, as the bill requires, that they did execute and deliver to Ford & Trow-bridge the two notes of $2,000 each, and receive in exchange four notes of Ford & Trowbridge for $1,000 each for them. That they did afterwards, at the request of Ford & Trow-bridge, discount the said notes for $2,000 each, at six per cent., and give Ford & Trowbridge the money for them, and so held them when they became due; and that they had never been taken up, or paid by Ford & Trowbridge. Trowbridge, the other defendant, answers to the same effect.
At this point the proceedings under the original and first amended bills seem to liave stopped. On the 8th of September, i860, as we have already remarked, a second amended bill was filed by complainant, in which it is charged that the deed to Alexander Fisher from Ford and wife, is absolutely null and void, for the reason that said deed is an absolute deed on its face, whereas it was designed to operate only as a mortgage, as shown by the written defeasances executed by Miller & Mayhew and Alexander Fisher at the time of the execution of the deed, which defeasances were not recorded with said deed. It is also charged, that at the time the deed from Ford to the complainant was made and delivered, he, the complainant, had no notice, actual or constructive, of the existence of the deed to Fisher or. of the defeasances executed by Miller & Mayhew and Fisher. It is further charged that if the deed to Fisher were otherwise valid, it is void as ^having been made without 'consideration, or upon a consideration that has failed. The answers of Miller & May-hew to this second amended bill deny the charges set forth therein, insist on the bona Hies of the transaction with Ford, [159]*159and aver that a full and valuable consideration was given by them for the said deed. They also insist that, at the time the deed from Ford to the complainant was executed and delivered, he, the complainant, had notice of the existence of the deed to Fisher and of the defeasances.
rFhe issues raised upon the first amended bill are issues of fact. The first inquiry is, were the two notes of $2,000 each, loaned by Miller & Mayhew to the firm of Ford & Trow-bridge? We think they were; the answers of Miller & May-hew, which are directly responsive to the charge in the bill, in connection with the testimony of the witness Hawkins, and the entire absence of rebutting proof on the other side, leave no doubt, we think, that the two notes for $2,000 each, were loaned by Miller & Mayhew to the firm of Ford & Trow-bridge; and we think it equally clear, looking to the same proof, that the said notes were used by Ford & Trowbridge by their having them discounted by Miller & Mayhew, and their obtaining the money for them. We find no evidence in the record that said notes ever were paid to Miller & Mayhew by Ford & Trowbridge. Tt is said, that these notes being accommodation notes and having been discounted by the drawers themselves, are void and Sauerwein v Brunner, 1 H. & G. 477, is referred to; that was a case which turned on the question of usury, and, we think, has no application to the case before us. In the absence of all authority to the contrary, we are unable to perceive why the drawer of an accommodation bill may not discount it, provided there is no usury or fraud in the transaction. It is manifest from the proof that Ford & Trowbridge obtained from Miller & Mayhew the cash for the two notes, less the legal discount, and whether Miller & May-hew could or not sustain an action against them directly upon their endorsement *on said notes, they were in equity and good conscience indebted to them, and bound to pay, or provide for the payment of the debt. This objection we think cannot be sustained. The next charge is that the deed from Ford and wife to Fisher is absolutely null and void. This charge is based upon the provision in the Code of Pub. Gen. Laws, Art. 64, sec. 1, which is in the following words: “Every deed conveying real estate or chattels, which by any other instrument or writing shall appear to have been intended only as [160]*160a security in the nature of a mortgage, though it be an absolute conveyance in terms, shall be considered as a mortgage; and the person for whose benefit such deed shall be made shall not have any benefit or advantage from the recording thereof, unless every instrument and writing operating as a defeasance of the same, or explanatory of its being designed to have the effect only of a mortgage or conditional deed, be also therewith recorded.” AVe cannot agree with the construction which the complainant gives to this law. That Miller & Mayhew would lose the benefit which the recording would have given them over subsequent bona ñde purchasers, by neglecting to record the defeasances, there can be no doubt; but the proposition that the law was designed to annul and make void such an instrument we think cannot be sustained for a moment. Granting, then, that the Fisher deed was not d,uly recorded by reason of the failure to record the defeasances as required by the law; yet, if the complainant, Owens, can be shown to have had actual or constructive notice of the existence of the Fisher deed at the time of the delivery and his acceptance of the deed from Ford and wife for the same property, it is clear, we think, that his deed must be postponed to the deed to Fisher, notwithstanding the defect in the recording. Before we advert to the' evidence on this subject, it is important to inquire at what time the deed to Owens took effect, to pass the title to him. It is not enough that a deed is in writing and signed and sealed by the grantor; before it can take effect to convey title to the grantee, it must *be delivered to and accepted by him. 4 Kent, 454. If, therefore, the deed to Owens from Ford and wife was a voluntary act of Ford, and Owens knew nothing of the execution or recording of the same at the time it was executed and recorded by Ford; and at the time he was first told by Ford of the execution and the recording of said deed, he was also notified or informed by Ford that there existed a former deed for the said property to Fisher, we think the notice thus given him was entirely sufficient, 'and that he accepted the deed subject to such incumbrance. The proof in the record, we think, sustains this state of the case.
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Nelson, J.,
delivered the opinion of the court.
The original bill in this case was filed on the 4th of November, 1852. On the 28th of August, 1854, the complainant, by leave of the court, filed an amended bill against Miller & May-hew and Trowbridge; to this amended bill the defendants answered as they had done to the original bill, and on the 8th of September, i860, a second amended bill was filed. It will not be necessary to notice particularly the proceedings which were had under the original bill, as the questions for determination [158]*158in -this case arise out of *the case made by the two amended bills. The first amended bill raises several issues, all of fact. They arise upon the charges, first, that the two notes of $2,000 each, were either not loaned by Miller & Mayhew to Ford & Trowbridge as alleged, or if loaned, were never discounted or used by Ford & Trowbridge; that Miller & May-hew did not pay said notes, but if loaned, they were in fact returned to Miller & Mayhew; and that, if the notes were in. fact loaned and taken up, that Miller & Mayhew have been repaid by Ford & Trowbridge. The answers of Miller & May-hew negative these charges and declare upon oath, as the bill requires, that they did execute and deliver to Ford & Trow-bridge the two notes of $2,000 each, and receive in exchange four notes of Ford & Trowbridge for $1,000 each for them. That they did afterwards, at the request of Ford & Trow-bridge, discount the said notes for $2,000 each, at six per cent., and give Ford & Trowbridge the money for them, and so held them when they became due; and that they had never been taken up, or paid by Ford & Trowbridge. Trowbridge, the other defendant, answers to the same effect.
At this point the proceedings under the original and first amended bills seem to liave stopped. On the 8th of September, i860, as we have already remarked, a second amended bill was filed by complainant, in which it is charged that the deed to Alexander Fisher from Ford and wife, is absolutely null and void, for the reason that said deed is an absolute deed on its face, whereas it was designed to operate only as a mortgage, as shown by the written defeasances executed by Miller & Mayhew and Alexander Fisher at the time of the execution of the deed, which defeasances were not recorded with said deed. It is also charged, that at the time the deed from Ford to the complainant was made and delivered, he, the complainant, had no notice, actual or constructive, of the existence of the deed to Fisher or. of the defeasances executed by Miller & Mayhew and Fisher. It is further charged that if the deed to Fisher were otherwise valid, it is void as ^having been made without 'consideration, or upon a consideration that has failed. The answers of Miller & May-hew to this second amended bill deny the charges set forth therein, insist on the bona Hies of the transaction with Ford, [159]*159and aver that a full and valuable consideration was given by them for the said deed. They also insist that, at the time the deed from Ford to the complainant was executed and delivered, he, the complainant, had notice of the existence of the deed to Fisher and of the defeasances.
rFhe issues raised upon the first amended bill are issues of fact. The first inquiry is, were the two notes of $2,000 each, loaned by Miller & Mayhew to the firm of Ford & Trow-bridge? We think they were; the answers of Miller & May-hew, which are directly responsive to the charge in the bill, in connection with the testimony of the witness Hawkins, and the entire absence of rebutting proof on the other side, leave no doubt, we think, that the two notes for $2,000 each, were loaned by Miller & Mayhew to the firm of Ford & Trow-bridge; and we think it equally clear, looking to the same proof, that the said notes were used by Ford & Trowbridge by their having them discounted by Miller & Mayhew, and their obtaining the money for them. We find no evidence in the record that said notes ever were paid to Miller & Mayhew by Ford & Trowbridge. Tt is said, that these notes being accommodation notes and having been discounted by the drawers themselves, are void and Sauerwein v Brunner, 1 H. & G. 477, is referred to; that was a case which turned on the question of usury, and, we think, has no application to the case before us. In the absence of all authority to the contrary, we are unable to perceive why the drawer of an accommodation bill may not discount it, provided there is no usury or fraud in the transaction. It is manifest from the proof that Ford & Trowbridge obtained from Miller & Mayhew the cash for the two notes, less the legal discount, and whether Miller & May-hew could or not sustain an action against them directly upon their endorsement *on said notes, they were in equity and good conscience indebted to them, and bound to pay, or provide for the payment of the debt. This objection we think cannot be sustained. The next charge is that the deed from Ford and wife to Fisher is absolutely null and void. This charge is based upon the provision in the Code of Pub. Gen. Laws, Art. 64, sec. 1, which is in the following words: “Every deed conveying real estate or chattels, which by any other instrument or writing shall appear to have been intended only as [160]*160a security in the nature of a mortgage, though it be an absolute conveyance in terms, shall be considered as a mortgage; and the person for whose benefit such deed shall be made shall not have any benefit or advantage from the recording thereof, unless every instrument and writing operating as a defeasance of the same, or explanatory of its being designed to have the effect only of a mortgage or conditional deed, be also therewith recorded.” AVe cannot agree with the construction which the complainant gives to this law. That Miller & Mayhew would lose the benefit which the recording would have given them over subsequent bona ñde purchasers, by neglecting to record the defeasances, there can be no doubt; but the proposition that the law was designed to annul and make void such an instrument we think cannot be sustained for a moment. Granting, then, that the Fisher deed was not d,uly recorded by reason of the failure to record the defeasances as required by the law; yet, if the complainant, Owens, can be shown to have had actual or constructive notice of the existence of the Fisher deed at the time of the delivery and his acceptance of the deed from Ford and wife for the same property, it is clear, we think, that his deed must be postponed to the deed to Fisher, notwithstanding the defect in the recording. Before we advert to the' evidence on this subject, it is important to inquire at what time the deed to Owens took effect, to pass the title to him. It is not enough that a deed is in writing and signed and sealed by the grantor; before it can take effect to convey title to the grantee, it must *be delivered to and accepted by him. 4 Kent, 454. If, therefore, the deed to Owens from Ford and wife was a voluntary act of Ford, and Owens knew nothing of the execution or recording of the same at the time it was executed and recorded by Ford; and at the time he was first told by Ford of the execution and the recording of said deed, he was also notified or informed by Ford that there existed a former deed for the said property to Fisher, we think the notice thus given him was entirely sufficient, 'and that he accepted the deed subject to such incumbrance. The proof in the record, we think, sustains this state of the case. Ford, a witness on the part of the complainant, upon his examination being asked: “at the time of the execution and recording of the deed from you to Owens, [161]*161had you or not, informed Mr. Owens of the execution of the former deed by you to Alexander Fisher?” replies, “I cannot answer that question positively for this reason: 1 think the deed was executed and recorded before I notified Mr. Owens of the execution of the deed to him, but as soon as I notified him that the deed was executed, I must have notified him of every thing in connection with the matter, by which I mean that Alexander Fislier had a prior mortgage on the property, but that provision had been made for its redemption.”
Being asked, “ did you or not, before executing the deed, promise to' give Mr. Owens security for his debt?” replies, “ I have no recollection of having done so.” We think from this proof that, at the time the deed was delivered to and accepted by Owens, he had sufficient notice of Fisher’s deed, and that he accepted the deed from Ford, subject to the former incumbrance. We think therefore that Owens was not a bona fide purchaser without notice, and that his deed must be postponed to the Fisher deed.
In regard to the assets or chases in action assigned to Ford by his partner, Trowbridge, the assignment upon its face shows it was made for a special and particular purpose, to wit: to be appropriated to the payment of $4,000 against his *house, deeded to Alexander Fisher, to secure him, Ford, against the loss of his private property, which he had mortgaged to secure a debt of the firm; this was the sole and only purpose; it conferred no right upon Ford to use these assets in any other manner; it was a trust for one particular purpose, creating no interest in them in Ford, outside of that single purpose. He had, therefore, no right to assign them to the complainant. But supposing his right to make such assignment, the assignment to Owens continues the trust in him by its terms. Owens held, as Ford had held those assets, subject to the equitable lien of Miller & Mayhew to have them appropriated to the payment of their claim. In another view, we think there can exist no doubt of the right of Miller & Mayhew to have those assets applied to the payment of their debt. Ford had mortgaged his private property to secure a debt of the firm of Ford & Trowbridge, and that firm, to secure him from the loss of his private property, and to redeem the same, assigned those assets to him, that he might, in case the firm did not pay, [162]*162himself pay the debt and redeem his private or individual property. Thus Ford stood in the attitude of a surety for the firm of Ford & Trowbridge, with those assets assigned to him as a pledge or security to indemnify him from individual loss. It is a well settled principle of equity, that if a principal has given any security, or other pledge to his surety, the creditor is entitled to the benefit of such security or pledge, in the hands of the surety, to be applied in payment of his debt. 1 Story’s Eq. sec. 638; Wright v. Morley, 11 Ves. 22. We think this is precisely the condition of the parties to this transaction, and that Miller & Mayhew are entitled to have the funds derived from the sale of the house of Ford, and the proceeds of the assets or choses in action applied to the payment of their debt, and that the decree of the court below must be affirmed.
Decree affirmed.