108 So. 274 | Miss. | 1926
It is further alleged that the bank, the defendant, was fully advised as to these facts, and in conjunction with Mrs. Chambers procured the suit to be filed in 1920, setting up the fact that there was a mistake in the deed and that the land should be disposed of; and that the title thereto should be acquired by the said Mrs. Chambers, formerly Mrs. Dendy, alone, so that a deed of trust thereon given by her to the defendant bank would be valid as against complainants; but later, for reasons unknown to the complainants, said bill was dismissed without *68 any relief being granted. It is further alleged that the bank, with intent to clear and defraud complainants out of their rights in said land, procured the said land to be advertised and sold under a deed of trust given by Mrs. Chambers to the said bank; that said deed of trust from Mrs. Chambers to the bank was void and without any effect to convey the complainants' interest; that all of these transactions were by collusion between the bank and Mrs. Chambers, and Mrs. Chambers was overreached by the bank, and said transactions were a fraud in law, and the said bank was fully aware of the mistake in the deed from Wells to Mrs. Dendy, now Mrs. Chambers, and that the bank had full knowledge of the children's interest. There was a prayer for the cancellation of the deed of trust and the trustee's deed to the bank as clouds on the title of complainants.
Separate answers were filed by Mrs. Chambers, formerly Mrs. Dendy, and the bank. Mrs. Chambers admitted practically all the allegations of the bill. The bank answered denying any agreement between Mrs. Dendy and Wells; that Wells would buy at the commissioner's sale for the benefit of the complainants and their mother jointly; denied that the consideration in the commissioner's sale was for one thousand five hundred fifteen dollars and ninety-five cents; denied that there was a mistake in the deed, or that it knew anything about said alleged facts; denied that it was fully advised of the facts and references to the sale of 1910, or that it was a party to the proceedings in 1920, or that the sale was filed in conjunction with Mrs. Dendy, now Mrs. Chambers; denied any knowledge on its part that the children had any interest in the land; denied that there was any intent to cheat and defraud the children; denied the invalidity of the deed of trust from Mrs. Chambers to the bank and the trustee's deed foreclosing such deed of trust; and denied any collusion with Mrs. Chambers, or that Mrs. Chambers was overreached in these transactions, or that said transactions were for the purpose *69 of cheating and defrauding complainants, or that they constituted a fraud in law.
The defendant made his answer a crossbill in which it alleged that the loans were made by the bank to Mrs. Chambers on the representation by her that she was the absolute owner in fee simple of the land involved in the suit; that upon these representations loans were made to her and renewed from time to time leading up to the last loan secured by the deed of trust which was foreclosed and bought in by the bank at said trustee's sale. It is further alleged that at the time the loans were made the bank never had any intimation of an outstanding claim of the children to the land described in the bill. It is further alleged that the land was foreclosed under a deed of trust from Mrs. Chambers to the bank and of a trustee's deed to the bank, giving it a good title to the land. It is alleged that the sale by Windham, commissioner, in 1910, was a valid sale and conveyed a good title to Wells in so far as the property was accurately described; and that the conveyance from Wells to Mrs. Dendy, the defendant, now Mrs. Chambers, was a valid conveyance in so far as the property was accurately described, and that all the deeds of trust were valid and binding conveyances in trust. It is further alleged that at the time of Mr. Dendy's death, he owed debts secured by mortgage on the said land which were paid off by Mrs. Dendy to the extent of one thousand nine hundred six dollars; that the sum was paid out of her private funds, and in the partition proceedings in 1910 a lien was established in her favor against the said lands; that the sale by the commissioner was not a fictitious or simulated sale, but that Mrs. Dendy received good title to the property and immediately thereafter took out letters of guardianship for the minor children and made bond for their part of the proceeds of the sale, executing a bond to account for it; and that, therefore, the children received full compensation for the land, all of which was done by the chancery court as being fully advised of *70 the facts; and that the cross-bill prayed for cancellation of the claim of the complainants as a cloud on the title of the bank and for general relief.
On the trial, Mrs. Chambers, formerly Mrs. Dendy, the mother of the complainants, testified that she filed a suit for partition in the sale of the said property between herself and children, but that in order to protect the lands from being sold for less than their value, she arranged with Mr. Wells, a relative of hers and also of her deceased husband, to buy in the lands for herself and children unless some one else bid the real value of the said lands, and as there was no one to bid the real value of the lands, the same was struck off to Wells by the commissioner, who was her father and who was appointed by the chancery court to make the sale. She testified that no money was paid by Wells to the commissioner nor any paid by her to Wells except for the expenses attending the sale. She further testified that the money advanced to pay off the incumbrances and the debt of her deceased husband, Mr. Dendy, was repaid her out of the sale of a place in Chickasaw county sold under the said sale; and that she was not due anything on account of the said advances as against loans involved in the present suit. She testified that she took out letters of guardianship on the advice of her attorney, but no account was ever filed therein, as she never received any money on account of said sale for the benefit of the children, the complainants in this suit.
She further testified that she gave the deed of trust to the bank; that she disclosed the fact to the officer of the bank making the loan that the children had an interest in the land; and that the bank, through this said officer, was fully advised as to her title and that of the children involved in this suit. She further testified that the suit in 1920 was filed at the suggestion of the officer of the bank with whom she was doing business for the purpose of divesting the title out of the children into herself so as to protect the bank. It further brought *71 out in the evidence that in ordering the sale in 1920, the chancellor informed the parties that the property must bring not less than four thousand dollars. This property was bid in by Mrs. Chambers at that suit, but the attorney attending to that suit was unable to prove her claim for one thousand nine hundred six dollars which was advanced to pay off previous incumbrances against the property, and he finally reached the conclusion that on account of the minors' interest being involved and business questions in some of the proceedings, he would not prosecute the suit and caused the bill to be dismissed without prejudice. Nothing further was done with reference to that suit. It appeared further in the evidence that the bank in making the first loans to Mrs. Chambers did not require security, she being in business and obtaining small sums from time to time for the use of her business, but as her business increased and the demand for loans grew larger, the bank first took security on the land without having an abstract, but in 1917 the loans had grown to such an extent it caused an abstract to be made, which was introduced in evidence. This abstract showed an abstract of the proceedings in 1910, which showed on its face that the complainants were minors at the time of that suit and sale therein. The records of the chancery court of Calhoun county were destroyed by fire in 1922, and the original papers and also the minutes of the court in reference to the suit of 1910 were destroyed with all other records of the county, except a few abstract books purchased by the county from certain attorneys who had made the abstract in 1917.
The officer of the bank testified in denial of the allegations of the bill and of Mrs. Chambers' testimony that he had no knowledge of the children's interest in the said land, that he did not have an abstract made during the first year of the loan and that he did not know that there was no money paid by Wells, the purchaser, at the sale in 1910; that he did not know of anything in reference to the agreements between Mrs. Chambers, then *72 Mrs. Dendy, Mr. Wells, and Mr. Windham, the commissioner, in reference thereto; that he was told by Mrs. Chambers that she was the owner in fee simple of the said lands; that he acted in good faith in taking the deed of trust, and that the first he knew of the complainants' interest in said land was in 1920, when Mr. Chambers took up with him the adjustment of the deed of trust, Mrs. Chambers was then absent from home on account of illness, and Mr. Chambers complained of the bank's having transactions with Mrs. Chambers without his consent. He testified that he told Mr. Chambers that he did not think it necessary to secure his approval, as the property belonged to his wife, and for the first time, through Mr. Chambers, learned of the children's interest therein and that he (Mr. Chambers) intended to see that they were protected; that he was on his wife's guardian bond and had induced a friend to go on with him as security for the guardianship, and that he did not intend that his friend should lose on account of so doing; and that he thought the bank was in the wrong in making the loan without his knowledge or consent.
The chancellor held that the complainants were entitled to no relief and dismissed their bill, but held that the defendant bank, who was cross-appellant, was entitled to the relief prayed for in the cross-bill and canceled the claims of the complainants to the land involved, from which decree this appeal is prosecuted.
The testimony of Mrs. Chambers, the mother of the complainants, as to the agreement between her and Mr. Wells, the purchaser, and that no money was actually paid or received on account of said transaction, is not disputed by any evidence. The question, therefore, must be decided as though these facts existed and as though the bank had no knowledge thereof at the time of taking its security. Can the decree of the court below be upheld upon the theory that the bank was an innocent purchaser for value without notice? The appellant relies upon Smith v. Strickland
(Miss.),
In the case of Smith v. Strickland (Miss.),
Among other defenses, the appellees pleaded section 646, Code of 1906, Hemingway's Code, section 408, as a bar to two of the heirs of the decision; more than one year having elapsed after they were twenty-one years of age before their answer was filed in court. After setting out the statute, the court said:
"This section, above set out, cannot operate to bar in this case, because it had no reference to the right of an infant upon attaining majority or during infancy to defend his title to lands, where a voidable decree has been entered against him, and where a want of good faith has been shown on the part of those who assume to act for him while he was under disability.
"Our construction of this section of the Code is that it was intended as a saving to a minor of his rights to have any decree rendered against him, subject to review within one year after attaining the age of twenty-one years, and to permit the minor to challenge under the decree any question affecting his interest which would be regarded as good cause. As, for instance, errors of fact as well as errors of law. The history of this statute is that it was enacted in order to prevent the necessity for inserting in decrees a saving clause granting to minors *75 the right to have the decree reviewed within a given period after he was twenty-one years of age. The statute was intended as a shield to the minor and not a sword to prevent his attacking a fraud perpetrated upon him, legal though it may be, independent of the statute."
The court then cited and quoted from Mayo v. Clancy,
"The statute itself and this construction of it show that it was intended as a rehearing statute, fixing a time after a minor reached majority when he could point out an error against him.
"So that we reach the conclusion that in a case like this, where the next friend purchased the land of the minor whom he assumed and essayed to represent in court as his next friend, he does not act in good faith, and neither section 3122, Code of 1906 (Hemingway's Code, section 2486), nor section 646, Code of 1906 (Hemingway's Code, section 408), have any application, and they cannot be successfully interposed to defeat the rights asserted as against the voidable sale and decree."
In Memphis Stone Gravel Co. v. Archer, 82 So. 315,
"It is the duty of a next friend to protect and enforce the rights of his ward throughout the lawsuit, and in the case at bar it was the duty of J.L. Archer, in the proceeding in which the appellee's interest in the land was sold to protect the rights of the appellee, not only in the proceedings leading up to the sale, but also to prevent, if possible, the confirmation of the sale, when made, if *76
any of the complainant's rights were violated to her prejudice in the making thereof. Ponder v. Martin,
In Brandau v. Greer, supra, it was held that a wife of a guardian cannot lawfully acquire title to the property of his ward where the law forbids him to acquire it; that it is the duty of the guardian to protect his ward's estate in every way that he can; but that he cannot make profit on it outside of what is lawfully allowed for administering the trust. See, also, authorities in the case notes to the annotated case reports of this case.
In Gibson v. Currier, 35 So. 315,
"There is nothing in the plea of the statute of limitations. The purchase money was not paid. Mrs. Matthews paid no purchase money, did not even credit her bid (two hundred sixty-four dollars) on the decree, and did not take possession of the land. L.H. Matthews' testimony shows this. She conveyed to J.E. Jones the day of the purchase, taking his notes. He never paid anything. J.B. Jones on the same day conveyed, for five thousand, five hundred dollars, to Mrs. N.E. Ford, taking her notes. A decree was rendered January 7, 1888, for three thousand, ninety-seven dollars, amount of balance of vendor's lien, against J.B. Jones, but no effort was ever made to enforce it, because of the reversal of the original decree by the supreme court. The law is imperative in requiring actual payment. No subterfuge or sham payment will do."
In the case of Shannon v. Summers, 38 So. 345,
"By its terms, Code 1880, section 2693, does not apply in any case unless the sale is in good faith. The burden is on the purchaser to show that the sale was made in good faith.Jeffries v. Dowdle,
"We therefore hold the sale void because made in violation of a provision of the Constitution, and it was not protected by the two years' limitation, because not made in good faith. Subsequent vendees cannot shelter themselves behind the two years' limitation where the original purchaser could not. It is only the good faith of the parties to the chancery sale that is to be considered in determining as to whether the bar of the two years' statute can be invoked. The good faith of subsequent vendees has nothing whatever to do with the application of the statute.Jeffiries v. Dowdle,
We think the statute giving minors one year after coming of age to contest the proceeding gives them the right to prove the facts that will avoid the decree. This provision being by statute, of course, charges the bank *79 in this case with notice of their right. The abstract of title in proof showed that the parties were minors, and, consequently, showed the bank that they had one year within which to challenge the validity of the proceedings after coming of age. We therefore hold that the bank was not a purchaser for value without notice; and the proof being undisputed that the purchase money was not paid, and that there was an agreement between Mr. Wells and Mrs. Dendy that he was to buy for account of all parties, the chancellor erred in dismissing the complainants' bill and in sustaining the cross-bill as to the appellants.
The judgment of the court below will therefore be reversed, and the cause remanded.
Reversed and remanded.
The appellee, who won in the court below, has filed an elaborate suggestion of error, in which it contends that we erred and have established a new and dangerous doctrine, which has the effect of destroying the principle of a bona-fide purchaser in partition proceedings where minors are involved. It contends, also, that our opinion was contrary to certain decisions of this court, and undertakes to distinguish the cases cited in the former opinion from the case at bar.
We have given this suggestion of error full and deliberate consideration, and we could rightfully dispose of it on the authorities cited in the former opinion without comment; but, in view of the earnestness with which the suggestion of error has been argued therein, we will respond to it by referring to some of the authorities which we did not quote from in the former opinion.
In McLemore v. Chicago, St. Louis New Orleans RailroadCo.,
"And this decree is to be binding on the defendants unless, on being served with subpoena, they shall, within six months after they shall attain the age of twenty-one, show unto this court good cause to the contrary."
It was held that this practice, established under this rule, was that, if the infant defendant was dissatisfied with the defense made for him and wished to make a new defense, he must, in general, wait until he is twenty-one years of age; but, upon special circumstances shown, he might obtain leave to make a new defense during his infancy, and if he made such defense of such leave he would be bound accordingly, with no subsequent right to again attack the decree. But, if such infant wishes to impeach the decree on the ground of fraud, collusion, or error, he may proceed by original bill, without waiting to attain his majority. At page 521, of this case, the court said:
"Decrees against infants, as to which the statute makes the saving mentioned, are subject to the contingency specified by the statute. They are liable to assailment by the infant at any time within three years after he attains the age of twenty-one years. The party interested in concluding the infant defendant at an earlier day may, within six months after he attains the age of twenty-one years, summon him to appear and show cause against the decree, or serve him with a copy of it. If this is not done, the infant defendant has three years after his majority in which to show cause against the decree. *81
"Until the decree is binding on the infant, it may be assailed by him, and cause shown against it. The complainant, and all who hold the real estate under him, hold subject to the contingent character of the decree, and liable to have good cause to the contrary shown by the infant defendant, according to the saving in his favor by the statute. Although the decree is final in form, and the sale or conveyance may be made as it directs, it is subject to the right reserved by law to the infant to show cause to the contrary.
"It is clear, therefore, that an absolute title cannot be acquired under a decree for the sale or conveyance of the real estate of an infant, in those cases in which a saving is made in his favor until such decree shall be binding on the infant, as shown above. The decree may be executed, and a sale or conveyance be made as directed; but the right of the infant to show to the court good cause to the contrary of the decree is secured by the statute, and all are bound to take notice of it and the character it impresses on the decrees to which it applies. . . .
"The statute cited was intended as a substitute for the rule in chancery courts to insert in decrees affecting the inheritance of infant defendants a saving in the following words, viz.: `And this decree is to be binding on the defendants unless, on being served with subpoena, they shall, within six months after they shall attain the age of twenty-one, show unto this court good cause to the contrary.'
"Under such decree the practice was to serve the late infant with a subpoena to show cause, and if he failed to appear or to show cause against the decree it was made absolute. If he appeared, he might defend and show the decree to be wrong.
"When the infant defendant might come into court to impeach a decree against him, and how he might proceed, and exactly what his right and remedy were, seem not to have been very well settled in England at a comparatively recent date. The precedents on this subject are *82 very few, and the learning afforded by reports and textbooks is meager, fragmentary, and by no means satisfactory."
After reviewing certain authorities, the court, at page 524 of the opinion said:
"But it was the settled doctrine of the chancery courts, that, if the infant sought to impeach a decree on the ground of fraud, collusion, or error, he was not required to wait until he attained his majority, and might proceed by `original bill, in which it will be enough for him to say the decree was obtained by fraud and collusion, or that no day was given him to show cause against it.' Richmond v. Tayleur, 1 P. Wms. 737; 1 Dan. Ch. Pr. (5th Ed.) 164, and authorities cited in note; Sledge v.Boone,
"Such were the rights of infant defendants in chancery, which review is presented as bearing on the question as to what is their position under the statute we are considering, for we have said that the statute is a substitute for the chancery rule.
"Independent of the statute, it was the doctrine that the infant, desiring to impeach the decree for fraud, collusion, or error, might proceed by bill of review, or supplemental bill, in nature of a bill of review, or by original bill; and in case of a decree nisi causa against an infant, on his coming of age and applying to the court for leave to put in a new answer, it was granted on his ex parte application, in the case of Fountain v. Caine, 1 P. Wms. 504. See, also, Napier v. Effingham, 2 P. Wms. 401. In I Daniell's Chancery Practice, p. 174, it is said that the present practice is believed to be different, and that the motion or petition will be for leave to make a new defense; but the text gives no information as to whether notice of such motion or petition is required to be given to anybody." *83
It will be seen from the second syllabus of this case that, although the decree is final in form and may be executed by a sale or conveyance, yet the right of the complainant and the purchaser of the real estate, or any claimant or holder under the latter, was subject to the contingent character of the decree which is liable to have good cause shown against it by the infant within the time allowed by statute, and no absolute title under such decree can be acquired until the decree has become binding on the infant by his failure to avail of the statutory saving in his favor. See, also, Fletcher's Equity Pleading and Practice, p. 729 et seq., section 710; Griffith, Ch. Prac., p. 751, section 647.
It is said in the suggestion of error that we erred in holding that the testimony of Mrs. Chambers, formerly Mrs. Dendy, was uncontradicted, and the recitals of the decree of the court confirming the sale in 1910, it is said, is sufficient to make a conflict, upholding the right of the bank as purchaser without notice. It is also said that Mrs. Chambers, formery Mrs. Dendy, had discharged certain incumbrances against the estate of her husband, and that this was allowed her and constituted a part payment of the money. Mrs. Chambers testified that this incumbrance money which she paid to protect their estate was allowed out of the sale of the other property embraced in the proceeding. The statute would be a vain and useless thing, if the recitals of the decree confirming the sale, although procured by fraud, could not be reviewed.
It is true that the presumption of the regularity of the decree would be presumed in the absence of attack, but when the facts are produced in evidence the case is to be controlled by the facts so produced. Both Mr. Wells and the commissioner who made the sale were available to the defendant to show that the testimony of Mrs. Chambers was not true; but neither was produced, although each would have necessarily had knowledge of the transaction. So there was no dispute as to the facts. The *84 saving under the decree under the former practice reserved the right of the minor to attack the decree for good cause, and the statute in the present case writes into every decree of this kind a saving as full and effectual as the court could do. As every person must know the law, he is charged with notice of the saving to the same extent as if it were actually written in the decree.
It is difficult to see upon what theory a person could be held to be a purchaser for value and in good faith with this knowledge. He is certainly bound by everything that inquiry would have disclosed to him, and, as there is no showing that he made any inquiry, there is nothing to show that the facts would not have been disclosed to him. The statute shows that the infant defendant may, after attaining his majority, attack the decree for good cause. Just exactly what "good cause" meant is not necessary to be decided here, because the testimony shows fraud between the commissioner and purchaser and the next friend of the minor. Certainly fraud is good cause. It would appear that anything would be good cause to set the decree aside within the period allowed by statute after the minor reaches majority that would be good cause for the court to set it aside during the term on application of one of the parties, or such fact, if showing were made and disallowed in the court, as would cause the reversal of the cause here. There, of course, can be a multitude of things that could be shown in different cases, but we will not lay down any hard and fast rule or definition with reference thereto.
The suggestion of error undertakes to distinguish certain cases cited from the case at bar, referring to the cases of Jeffries
v. Dowdle,
It is true that all of these cases construed a different section of the Code, and these last-mentioned cases, cited in the former opinion, were referred to as showing principles analogous to the ones that were adopted in construing the present statute. It is, of course, well settled that the last announcement of the court, when in conflict with prior decisions, overrules them to the extent of the conflict, and the principles announced inGibson v. Currier and Shannon v. Summers were controlling in the present statute. They seem to be bound and in conformity with the purpose of the statute.
It was not intended that the statute of limitation of two years, provided for in section 3122, Code of 1906 (section 2486, Hemingway's Code), should begin to operate unless the purchase money was paid and the sale was made in good faith. So it appears to us that we would not be warranted in departing from the announcement of these latter cases. It is not necessary for us to hold that they, in effect, overrule all of the decisions of the former cases, or to state just how far the decisions are consistent, and how far antagonistic. It would be safer to reserve decision on these questions until they are squarely presented for decision. We have no doubt that the attorneys of the state will be able to interpret for themselves the decisions of this court as applied to such facts which they are called upon to deal with. We *86 do not feel warranted in undertaking the reconciliation of the cases, or in the distinguishing of them.
We are satisfied that we have reached the correct conclusion in this case, and that it is supported by the authorities heretofore referred to. The suggestion of error will therefore be overruled.
Suggestion of error overruled.