Messrs. Webster Street and J. L. B. Alexander for appellants.[ Lewis v. Herrera 208 U.S. 309 (1908) ]
[208 U.S. 309, 311] Mr. William Herring for appellee.
Mr. Chief Justice fuller delivered the opinion of the court:
This was a suit by the receiver of the bank as a judgment creditor in the district court of the third judicial district of the territory of Arizona, in and for the county of Maricopa, to set aside two deeds executed by Lewis, the debtor, to his wife, and have the property therein described subjected to the payment of his judgment.
The case was tried upon an agreed statement of facts. The district court held the deeds to be void as against complainant. Defendants appealed to the supreme court of Arizona, which affirmed the judgment of the lower court. 85 Pac. 245. From that judgment this appeal was taken.
The facts were sufficiently stated by counsel for appellee as follows:
It was admitted that there was no fraud in fact, and no intent in the mind of Lewis to defraud his creditors in the transfers made. Paragraph 2698 of the Revised Statutes of Arizona, 1901, is as follows:
Paragraph 725 of the Revised Statutes of Arizona, 1901, reads thus:
As to the second deed, it was both signed and acknowledged after Lewis became indebted to the bank; as it was a gift, and as it did not appear that, at the date of signing, he was possessed of property in Arizona subject to execution sufficient to pay his debts, it followed that under paragraph 2698 of the Revised Statutes of Arizona the deed was void as to his prior creditor, the bank, and Herrera, the receiver.
The first deed, however, was signed by Lewis before he became so indebted. But if, as is contended, that deed did not become effective as a conveyance until it was acknowledged, namely, on January 9, 1904, on which day Lewis was already indebted to the bank, the deed was void as to it, a prior creditor. And that makes the only question in this case to be whether or not, under the statutes of Arizona, a deed signed, but not acknowledged, was valid as a conveyance of real property as to third parties.
The courts below held that a deed or conveyance of real property, to be valid under the law of Arizona, must be signed and acknowledged by the grantor, and that, until acknowledged, a deed or conveyance was ineffectual to convey title.
The construction of the statute by the local courts is of great, if not of controlling, weight. Sweeney v. Lomme, 22 Wall. 208, 22 L. ed. 727; Northern P. R. Co. v. Hambly, 154 U.S. 349 , 38 L. ed. 1009, 14 Sup. Ct. Rep. 983.
This principle was applied in Copper Queen Consol. Min. Co. v. Territorial Bd. of Equalization, 206 U.S. 474 , 51 L. ed. 1143, 27 Sup. Ct. Rep. 695, in which it was argued that a statute of Arizona in reference to the territorial board of equalization of that territory had been taken almost verbatim from one Colorado, and as that had been construed by the supreme court of that state contrary to the view taken by the supreme court of Arizona in the present case, it should be followed, and we declined to do so, although various other [208 U.S. 309, 315] considerations were stated to sustain the ruling. In this case the same point is urged as respects paragraph 725, as having been transferred from the statutes of Texas in that regard, and having been construed differently from the judgment of the supreme sourt of Arizona here. But paragraph 220 of the Revised Statutes of Arizona of 1887, which was in the exact language of the Texas statute, and as follows: '220. Every deed or conveyance of real estate must be signed or acknowledged by the grantor in the presence of at least two credible subscribing witnesses thereto; or must be duly acknowledged before some officer authorized to take acknowledgments, and properly certified to by him for registration,' was changed in the Arizona Revised Statutes of 1901, paragraph 725, so as to read: '725. Every deed or conveyance of real estate must be signed by the grantor, and must be duly acknowledged before some officer authorized to take acknowledgments, and properly certified to by him for registration.' Thus the legislative assembly of Arizona of 1901, so far from adopting the construction of the Texas statute, changed the language entirely and made it imperative that the deed should be signed and acknowledged before a proper officer. It made the acknowledgment by the grantor before a proper officer a prerequisite to the validity of the deed as much as the signing.
Paragraph 732 of the Revised Statutes of Arizona of 1901 is as follows:
But it is unnecessary to consider here whether the unacknowledged deed of Lewis to his wife might, under the provisions of this section, be claimed to be good as a contract, as that is not a question in this case. These deeds were finally and properly acknowledged, but the bank was then a prior [208 U.S. 309, 316] creditor, and as to a prior creditor the deeds, being gifts, were void, it not being made to appear that Lewis was then possessed of property in Arizona sufficient to pay his existing debts.