Aultman v. Utsey

| S.C. | Nov 12, 1891

Lead Opinion

The opinion of the court was delivered by

Mr. Justice McIver.

On the first day of February, 1884, one F. M. Pope, being indebted at the time to plaintiffs and others to a large amount, executed a mortgage on a house and lot in the town of Ninety Six, to one Of. W. Connor, to secure the sum of ten thousand five hundred dollars, which Connor, in his testimony, says was intended to secure future advances, as well as the amount then really due. The amount really due on this mortgage ($5.045), Connor says was paid to him some time in the winter of 1884, though the mortgage was not cancelled, and still remains of record open and apparently unsatisfied. This payment was made by the sale to Connor of property other than that embraced in the mortgage. On the 7th of December, 1886, the house and lot above mentioned, which is the subject of this controversy, was conveyed by Pope to Connor by a deed, in which the consideration recited was the sum of $5,000, which deed seems to have been duly recorded, though the date of such record is not given.

Some time in 1887, probably towards the latter part of that year, L. M. Moore, the brother in-law of W. B. Utsey, who then resided in Ninety-Six, learning that Mrs. Utsey, the defendant herein, who then lived in Colleton County, desired to buy the house and lot in question, with a view to a return to Ninety-Six, where she had formerly resided; and being requested to see Pope, w'ho was then supposed to be the owner of the property, and ascertain at what price the property could be bought, undertook the negotiation for the purchase. Accordingly Moore wrote to Pope, who had then recently removed to Greenville, asking the price of the property. Pope replied by the next mail, saying that the property belonged to Connor, and referring Moore to him. Thereupon Moore opened negotiations with Connor, which resulted in an agreement to sell for the sum of $3,250. W. B. Utsey, the husband of the defendant, being informed of this1 result, and being advised to go up on the following Thursday, which seems to have been the 26th of October, 1887, did so and there met Pope instead of Connor, who produced the papers showing the chain of title, amongst which were the deed from Pope to Connor above mentioned, and a deed without warranty from Connor to the wife of Pope, bearing date that day, in which the consideration recited was the sum of five thousand dollars, together with a deed bearing the same date signed by Mrs. Pope to the defendant, in which the consideration recited was the price agreed upon, $3,250, and upon the delivery of these deeds to W. B. Utsey, he acting as the agent of his wife, settled with Pope by paying in cash $2,000 of the price and the balance in an accepted draft at sixty days. After the trade was thus consummated, Utsey delivered the papers to his attorney for an examination of the title, who pronounced it good.

In the meantime, however, to wit, on the 25th of February, 1887, the plaintiffs had recovered a judgment on their claim against said Pope, and under the execution issued to enforce that judgment, the said house and lot was levied on by the sheriff, and on the 2nd of September, 1889, the same were sold and bid off by the plaintiffs, who, having complied with the terms of the sale, received titles’from the sheriff. Very soon thereafter this action was commenced, in which plaintiffs, under the allegations that the deed from Pope to Connor was without consideration and made with intent to hinder, delay, and defraud the creditors of Pope, and that the mortgage, if anything was ever due thereon, had been paid and satisfied, and that the deed from Con-nor to Mrs. Pope was also without consideration and made with like intent, demand judgment that the said deeds be declared fraudulent and void, and that the same, together with the mortgage, be cancelled, and also for the possession of the premises. The defendant in her answer denies all the material allegations in the complaint, and sets up in an informal manner the defence that she is a purchaser for valuable consideration without notice.

The case was heard by his honor, Judge Izlar, upon the pleadings, the testimony taken by the master, and the argument of counsel, who, having found as matter of fact that the deeds from Pope to Connor and from Connor to Mrs. Pope were not only without consideration, but made with intent to hinder, delay, and defraud the creditors of Pope, adjudged them fraudulent and void; and having found that the mortgage had in fact been satisfied, directed that the same be so declared on the record by the clerk. He held that the only real question in the case was whether the defendant had such notice as would defeat her plea as purchaser for valuable consideration without notice ; and upon that he found that while she did not personally have such notice, yet she did have constructive notice through her agents sufficient to put them upon the inquiry, which, if followed up properly, would have led to the discovery of the defect in the title which she purchased, and he therefore overruled that plea, and rendered judgment that the deeds be delivered up cancelled and the mortgage be marked satisfied, and directed that the issue of title and right of possession be referred to a jury for trial.

From this judgment defendant appeals upon the several grounds set out in the record, which raise substantially the single question whether there was error in holding that defendant had such notice as would defeat her plea of purchase for valuable consideration without notice. The plaintiffs also, in accordance with the proper practice, give notice that they propose to sustain the judgment below upon other grounds than those stated in the decree, which are likewise set out in the record. But as we are satisfied that the judgment must be sustained upon the grounds upon which it is based by the Circuit Judge, it will not be necessary for us to consider any of these additional grounds, some of which present important and very interesting questions upon which we would prefer to have the aid of the Circuit Judge’s views, as well as further argument of counsel, before undertaking to decide them, especially as it is not necessary to the decision of this case to do so now.

1 We will therefore confine our attention to the question raised by counsel for the appellant, which is.really more a question of fact than of law, and therefore, under the well settled rule, the conclusion reached by the court below should not be disturbed here, unless it is either without any evidence to sustain it, or is manifestly against the weight of the evidence. But it is urged by appellant that, inasmuch as the appeal here does not impute error in the finding of any particular fact, but that such error lies in drawing an unwarranted inference from undisputed facts, a question of law rather than of fact is presented. If it could be shown that the law lays down any particular rule or rules by which to determine what facts are or are not sufficient to put a person upon inquiry, then there would be much force in the position. But, so far as we are informed, no specific rules have been laid down by which to determine whether the facts in a given case are or are not sufficient to put a party upon inquiry.

Indeed, we do not see how it would be possible to formulate any specific rule of general applicability, as it is manifest that each case must depend largely upon its particular circumstances. The most that can be done is to lay down some general rules upon the subject; and that has been done by Mr. Justice McGowan in Black v. Childs (14 S. C., 312), probably as well as the nature of the subject permits, in the quotation from that case made by the Circuit Judge in his decree. For while it is undoubtedly true that “there must appear tobe, in the nature of the case, such a connection between the facts disclosed and the further facts to be discovered, that the former could justly be viewed as furnishing a clue to the latter,” yet in every instance it will always be a question what is the nature of the case, and whether the facts disclosed can be regarded as furnishing a clue to the fact in question. This view may be illustrated by a case depending upon circumstantial evidence. While it is true that there are certain well established general rules in regard to the consideration of that kind of testimony, yet after all, it remains a question of fact whether, in a given case, the particular facts proved warrant the one or the other conclusion. For example, in the trial of a criminal case where circumstantial evidence is relied upon to show the guilt of the accused, and where no error is imputed to the judge in laying down the general rules to be observed in considering that kind of testimony, it is always a question of fact, exclusively for the jury, whether the circumstances relied upon and established are sufficient to produce in the minds of the jury a conviction of the guilt of the accused.

So in this case, where it does not appear that the Circuit Judge has violated or disregarded any of the general rules in respect to the subject under consideration; but, on the contrary, has expressly recognized and followed them, and the only error assigned is in applying them to the facts of the case, it seems to us that a question of fact only is presented. This view seems to have been adopted in Richardson v. Chappell (6 S. C., at page 157), where it is said: “On the question of notice, the conclusions of the Circuit Judge appear to conform to the evidence. There was certainly evidence in the case from which a conclusion of fact could be drawn as to whether Simpkins had, at the time of purchasing, knowledge of the existence of plaintiff's claim. * * * The question of notice was properly before the Circuit Judge as a question of fact to be determined from the testimony before him. There is no overbearing weight of evidence against his conclusions, such as would justify this court in setting them aside.” And again : uWe are not required to say what force these circumstances should have on the mind of the Circuit Judge, for the duty of drawing such inferences rested primarily on him, and it is only where he acts in the face of and against the force of overbearing testimony that this court can properly disturb his conclusions.”

It seems to us, therefore, that the question of whether defendant had such notice as would defeat her plea of purchase for valuable consideration without notice, was a question of fact, and that the conclusion reached by the Circuit Judge must, under the rule, be sustained, unless it is either without any evidence to sustain it, oris manifestly against the weight of the-evidence, neither of which can be said in this case.

2 But in deference to the earnest and able efforts of counsel to relieve this unfortunate lady from a misfortune which has befallen her through no fault on her part, as it is entirely clear that there is not a shadow of reason for believing that she was guilty of any fraud herself, or connived at the fraud of others, or even had any personal knowledge that there had been any fraud committed, we are disposed to consider more fully the question than is usually done in cases where an appeal turns upon a question of fact; although it seems to us that the reasoning of the Circuit Judge in his decree, which we trust will be incorporated in the report of the case, is quite sufficient to vindicate the correctness of his conclusions.

While, as we have said, it is clear that the defendant had no personal knowledge of any fraud, or of any circumstances calculated to excite inquiry, yet, under the well settled doctrine that notice to the agent is notice to the principal, if her agents had notice, she must be affected thereby. The real question, therefore, is whether the agents of the defendants, one or both of them, had notice of such facts and circumstances as were calculated to excite inquiry, which, if followed up with due diligence, would have led to the discovery of the fraud,; or, in other words, were the facts and circumstances, of which they unquestionably had notice, of such a character as would furnish a clue which, if followed up with due diligence, would have led to the discovery of the fraud.

In the first place, both of these agents certainly had conUructioe notice of the mortgage, which was spread upon the record, apparently unsatisfied, and one of them, Moore, who had conducted the negotiations up to the day when Utsey appeared for the purpose of consummating the trade, says he had actual knowledge of the mortgage, and when he learned that Pope had conveyed the property in question to Connor, he assumed, without any inquiry whatever, that such conveyance had been made in satisfaction of the mortgage', which turns out not to have been the fact. Again, when Moore learned that the property had been conveyed to Connor some time before, he at the same time knew that Pope had retained possession as long as he remained in Ninety-Six, up to a very short time before the sale to defendant, and, this of itself was a circumstance well calculated to excite inquiry, especially in view of the fact that Moore still regarded Pope as the owner, as shown by bis attempt to buy from him, as well as by his own direct testimony to that effect. Indeed, the remark made by Moore to Pope after the sale had been consummated — that he ought to pay him one hundred dollars for making the sale — would seem to indicate that Moore still regarded Pope as the real owner, even after he had learned of the conveyance to Connor, and Pope’s reply to that remark was not calculated to remove that impression, for he did not say that the property was not his, but said “the trouble of it was he didn’t get the money,” but did not say who got it. Moore also knew that Pope was embarrassed at the time, to some extent at least, and knew of the pendency of the action by plaintiffs against Pope, in which the judgment was recovered, under which the property was subsequently sold.

Then when Utsey appeared as the agent of defendant to consummate the trade which Moore had negotiated with Connor, he certainly had constructive notice of the mortgage. Common prudence required that he should examine the records of the county where the property which he proposed to purchase was located, and if he had done so, he would have discovered, not only that there was a mortgage upon it to secure the payment of a large sum of money, which was apparently open and unsatisfied, but that judgments to a large amount against the former owner, P.ope, had been entered very soon, one of them only a few days, after Pope had conveyed the property to Connor ; yet it does not appear that he made any such examination, and made no inquiry either as to the mortgage or anything else. Add to this the fact that though Utsey had been informed only a day or two before that the agreement for the sale had been made with one person (Connor), he is met by another (Pope), and proceeds to consummate the trade with him. without any explanation whatever being given or asked for, as to why this sudden change in the vendor was made.

But more than this. When Pope presents the papers showing the chain of title, Utsey sees that one of them is a deed, dated that very day, from Connor to Mrs. Pope, the wife of F. M. Pope, a person whom he knew, or ought to have known from the records, was heavily embarrassed,-in which the consideration recited was $5,000. which deed contained no warrrntv whatever, and yet he takes a deed from Mrs. Pope, in which the consideration stated, and actually paid, was $1,750 less than the amount which her deed from Connor showed that she had on the same day paid for the very same property, without making any inquiry whatever, or receiving any explanation of these very singular circum-, stances. Here was not only a very sudden change in the vendor, but here was a married woman, whose husband had been the owner of the property within less than a year before, and who was then very much embarrassed, selling that property which she held under a quit claim deed, from a person who then held a mortgage apparently unsatisfied, for a sum' very much less than what the papers showed she had that very day given for it. Surely these circumstances were well calculated to excite inquiry, and yet none was made.

3 indeed, some of the cases go so far as to hold that one who purchases from another holding under a quit claim deed cannot, by reason of that fact, claim to be a purchases!' without notice. See 2 Pom. Eq. Jur., section 753, where the cases, both pro and con, are cited in a note. Among the cases cited in support of the proposition are two from the Supreme Court of the United States-Oliver v. Piatt, 3 How., 333" court="SCOTUS" date_filed="1845-02-26" href="https://app.midpage.ai/document/oliver-v-piatt-86321?utm_source=webapp" opinion_id="86321">3 How., 333, and May v. LeClaire, 11 Wall., 217" court="SCOTUS" date_filed="1871-02-13" href="https://app.midpage.ai/document/may-v-le-claire-88320?utm_source=webapp" opinion_id="88320">11 Wall., 217. The reason given is that such a purchaser buys no more than what his grantor can lawfully convey ; to which we think might be added that the fact that the grantor is unwilling to warrant the title, tends at least to show that there is some defect in the title, known to or apprehended by him, and therefore the purchaser is put upon inquiry. While we are not prepared at present to go to the full extent to which the doctrine has been carried by some of the cases, yet we are satisfied that the fact that the immediate grantor of the purchaser holds under a quit claim deed is a circumstance well calculated to excite inquiry, which, if not pursued properly, will affect the purchaser with notice of every fact which such inquiry, pursued with due diligence, would disclose; and certainly when, as in this case, there are other circumstances of a very suspicious nature, connected with the fact that the immediate grantor of the purchaser held under a quit-claim deed, the conclusion reached by the Circuit Judge may well be sustained.

4 It is urged, however, that if inquiry had been made, the defect in the title would not have been disclosed, as Connor would not have been likely to confess the fraud in which he had participated. For, to use the language of appellant’s counsel : “Connor was anxious at that time to get out of the matter, as he had been a party in the fraud a good while before that time. We think it would be too much to ask any one to believe that he would have revealed the whole matter just at a time when he was about to get out of the difficulty.” To say nothing of the fact that this would apply in every case of fraud, it is impossible for any one to say what Connor would have done if inquiry had been made of him before the sale, and the court is not at liberty to speculate about it. We do see, however, that the purchaser had notice, through her agents, of such facts and circumstances as demanded further inquiry, and that none was made. If inquiry had been made, and no information impugning the title had been obtained, that would have relieved the purchaser ; but having failed to make inquiry as the circumstances demanded, she cannot claim relief upon the ground of a mere speculation that the persons who could have furnished the desired information would have been unwilling to do so. That could only be tested by a trial, and none was made.

But we are unable to see what difficulty, legally speaking, Con-nor was in and wanted to get out of, though morally considered, his conduct may well be viewed as reprehensible, and we do not see how his quit-claim deed to Mrs. Pope, for the purpose of enabling her to sell the property as her own, could relieve him from his moral delinquency. His debt secured by the mortgage had been extinguished by the conveyance of other property, and the fact that he held the property in question under a fraudulent deed, for which he had paid nothing, could not involve him in any legal difficulty, as all he would have to do would be to surrender property which had cost him nothing to its rightful owner. But more than this. The testimony shows that the first time Connor was called upon, he stated fully, and no doubt truthfully, all the circumstances.

5 It seems to us that the fact that Utsey submitted the papers to an attorney for an examination of the title, who pronounced it good, after the sale had been made, titles executed, and the money paid, cannot affect this question. It was too late then to make the inquiry which should have been made before.

It seems to us, therefore, that there is much in the testimony to sustain the conclusion reached by the Circuit Judge, and certainly it cannot be said that it is either without any evidence to sustain it, or is against the manifest weight of the evidence.

The judgment of this court is, that the judgment of the Circuit Court be affirmed.

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Concurrence Opinion

Mr. Justice McGowan.

I concur in the result. There was a complete chain of paper title ; deeds purporting to be for valuable consideration from Pope to Connor, and back again from Connor to Mrs. Pope. It is, however, perfectly clear that they were without consideration, fraudulent, and void. It is true that of this fraud Mrs. Utsey was entirely innocent. She had no connection whatever with it, or indeed knowledge of it. But, after some hesitation, I cannot resist the conclusion that there was, on the part of those who negotiated the purchase for Mrs. Utsey and paid her money, such a want of ordinary and proper care and inquiry as to prevent her from having the benefit of the plea of purchaser for valuable consideration without notice.