Glenn v. Thistle

23 Miss. 42 | Miss. | 1851

Mr. Chief Justice ShaRkey

delivered the opinion of the court.

The plaintiff brought suit on a promissory note for $3333.33, dated Natchez, January 11, 1839, payable one year after date at the Planters’ Bank of Natchez, and signed by defendant’s testator as maker, indorsed by defendant and others. The defence set up is failure of consideration, arising from want of title in the vendor of the land for which the note was given. There was a verdict for the plaintiff, but a new trial was granted, to which plaintiff’ filed his bill of exceptions. On the next trial the jury found for defendant, and the plaintiff excepted, and it was stated in the last bill of exceptions that all the same points that were excepted to by the plaintiff on the first trial had also arisen on the second, and that the case was to be considered as presented by the first bill of exceptions.

A large tract of land, described as lying in Louisiana, was sold by E. C. Hyde to Israel Leonard, the maker of the note, and the transaction is described by the deposition of Hyde, who was examined as a witness for the defendant. He says the note sued on was, amongst others, given for a tract of land sold by him to Leonard for $45,000; that he received in part payment sundry notes of third persons, $10,000 in cash, and the balance was secured by three notes of Leonard, for equal amounts payable in one, two, and three years, the note sued on being one of them; that the title by which he acquired the land failed, and consequently his title to Leonard; that the land was sold at the public land sales, which occurred some time afterwards, as part of the public doniain. Hyde claimed the land by virtue of a deed from Broughton, and says Leonard was acquainted with the character of his title. At the time he conveyed to Leonard, he also gave him a bond to convey, at a future day, a like quantity of land lying back of that conveyed, and claimed as a back concession, for which he exhibited an order of location and entry from the commissioner of the general land-office. The witness ascertained that his title was defective in April or May, 1840, and immediately communicated the fact to Thistle. From this we infer that Leonard in the mean time had died. At the land sales T. L. Bailey obtained title to one hundred and sixty acres of the land conveyed in Hyde’s deed, by virtue of preemption right; and Thistle acquired title to the balance, as well as for the back concession included in the bond; part of which was obtained from individuals, and part from the United States, amounting in the whole to about two thousand eight hundred and fifty acres. Thistle acquired his title through the assistance and exertions of the witness, but without any contract in relation to it. Preemption claims which covered part of the land were bought by witness and Hurst, and paid for by them. The persons present at the land sales agreed that Thistle ■ should become the buyer, believing that Hyde would be thereby relieved from the consequences of the failure of his title to Leonard. He says he informed his friends that such would be the effect, and Thistle stated to him that he wanted no advantage. And those who had acquired title to part of the land, conveyed them to Thistle, the object being to enable the witness to comply with his sale to Leonard, and to furnish a consideration for the payments received. Thistle furnished ¡$4000 towards perfecting the title to the whole of the land, part of which was paid out by the witness in purchasing preemption rights, and part paid into the land-office for land purchased at the auction sales. The amount of land sold to Leonard was one thousand four hundred and seventy-seven acres, and the bond was for a like amount, making in all two thousand nine hundred and fifty-four acres. Soon after the failure of title was discovered, the witness returned to Thistle part of the notes received of Leonard, and at the land sales returned him all of the balance of them that were under his control, some of them having been disposed of very soon after they were received. They were returned to secure, as far as possible, the estate, of Leonard, on account of the failure of title. The witness exerted himself to procure and complete the transfer of titles to Thistle, but does not recollect that Thistle manifested uneasiness, or urged him to do so. Himself and friends were of the opinion, that by securing the land to Thistle, compensating for deficiency in quantity and payment of all money advanced, the whole affair would be settled; and but for this opinion Thistle could not have bought, as they would have prevented it. There were considerable improvements on the place, and also cattle, horses, farming utensils, &c. In all the transactions with Thistle, witness regarded him as acting in the capacity of executor, and was surprised to find, on attempting to settle with him, that he claimed to have acted for himself.

It is proved by the surveyor-general of Louisiana, that the lands described in the deed were vacant or public lands when-Hyde sold. Broughton, who had sold to Hyde, had a claim to lands, but they laid in another township,,ten miles off. It seems from documentary evidence, that’ Hyde and Hurst each obtained patents in 1843 for a quarter section of land, which were founded on preemption rights. These two quarter sections it is said fall within the land mentioned in Hyde’s deed to Leonard. But the defendant also introduced deeds from Hyde and Hurst to Thistle, in each of which the consideration money is expressed to be $500, and the deeds bear date after the public land sales.

The plaintiff introduced Frederick Stanton, who proved that being about to take an assignment of the note sued on, he called upon Thistle, who was indorser, about the 5th of February, 1839, for information in regard to it, and was informed that there was no offset; whereupon witness inquired if it would be necessary that he should see Leonard on the subject, and Thistle replied it would not, as he knew all about the transaction. The witness took the transfer and assigned the note to Prentiss, in payment of a claim due plaintiff. Stanton’s competency was objected to, he being an indorser, but he had been discharged as a bankrupt, and the plaintiff’s attorney, by permission of the court, wrote above his indorsement the words “ Without recourse,” and he was permitted to testify.

The deposition of Prentiss was taken, by which it appears Thistle, after the note was due and had been protested, went 'to him in company with Stanton, and in reply to an interrogatory propounded, stated that the note would be paid. Witness understood that Thistle was the executor, and on this assurance regarded the transfer as complete, but would not have considered himself b'ound to complete the arrangement with Stanton without such assurance. Prentiss’ deposition was also objected to because he was indorser, but it seems he indorsed only as the agent or attorney, and without any interest or liability.

This is the substance of the evidence, and on it both parties required sundry charges to the jury, and those refused on the part of the plaintiff, and those given for the defendant, are now relied on as sufficient, amongst other causes, to reverse the judgment.

On this state of the case it seems there are two general questions, the decision of which must dispose of the case. First, Was there such a failure of consideration as to constitute a defence? and second, Has there been a waiver of the de-fence ?

On the first point it is contended, that the failure of title must be total; that a partial failure cannot be set up at law. And then it is insisted, that as Hyde and his partner, Hurst, were entitled to a preemption right as to two quarter sections of the land, the failure was not total. And then again, it is said, when a vendee takes covenants of warranty, there must be an eviction;

This note was given for land in Louisiana, and the law of that State is relied on as controlling the contract. The law of Louisiana will of course control 'the title; it will decide whether the title has failed; but as the contract or payment was made here, and was to be performed here, the law of this State must decide on the effect of a failure of consideration. This question, however, does not seem to be very material, as the law in both States appears to stand very much on the same ground. In both a total failure and eviction seem to be necessary to full defence against the payment of the purchase-money. 3 Cond. Rep. Louis. 36; 3 Louis. Rep. 488; 8 Ib. 114; 7 Martin’s Rep. 223; Hoy v. Taliaferro, 8 S. & M. 727.

We can have no hesitancy in deciding that there was a total failure of title in the present case. The witness, Hyde, who was the vendor, so states, and indeed this fact is only controverted in argument on the ground that to a small portion of the land Hyde and Hurst had a preemption right. It seems to be true that each of them obtained patents for a quarter section. But admitting that they had such right, does that alter the case. By the act of 29th of May, 1830, a preemption right was allowed to actual settlers, but the act expressly prohibited the assignment or transfer of such right, and declared all such made prior to the issuance of a patent, absolutely void. 4 U. S. Stat. at Large, 420. The act of June, 1834, revived the act of 1830, but it did not make the right assignable or transferrable. 4 U. S. Stat. at Large, 678. The act of 1830 was again revived by the act of 22 June, 1838; but this last act made it necessary, before a patent should issue, that the party should swear before a competent officer, that he entered upon the land which he claimed in his own right and for his own benefit, and that he had not, directly or indirectly, made any contract or agreement to transfer the title, or by which the title should inure to the benefit of any other person at any future time; and it further declared, that such agreements should be void. 5 lb. 251. Now it is said, that Hurst obtained or held his preemption under the act of 1834, and Hyde under the act of 1838. The deed from Hyde to Leonard was executed the 11th of February, 1839, and it is manifest that Hyde did not intend to convey any land to which he had but a preemption right. On the contrary, he conveyed land, or professed to do so, which had been conveyed to him by Brough-ton, who derived title through Edward Broughton. And how can a sale be sustained as valid in the face of the prohibitions in the preemption laws, which not only prohibit transfers before patent, but declare them void ? Not only, then, was there no transferable right in Hyde and Hurst under the preemption laws, and of course nothing was tranferred by the deed; but as soon as their title became complete by the issuance of patents, they conveyed to Thistle, in his individual capacity. But it is said, these titles inured to the benefit of Leonard’s heirs, and they were made to carry out, as far as possible, the original contract with Leonard. Hyde does not say there was any contract between himself and Thistle on this subject, nor does he say that he informed Thistle as to the motive and object which caused him to be active in aiding Thistle to become the purchaser. His mere opinions or private intentions can have but little influence in establishing a title in the heirs of Leonard. But in view of this object of Hyde’s, under the circumstances of this case, it is said Thistle could not acquire a title for himself, and must be regarded as holding for the estate of Leonard. It is certainly true that an executor or other trustee must act in relation to the trust property, for the benefit of the cestui que trust., and cannot avail himself of his position, or of information which he acquires by it, to acquire adverse interests in the property. But this principle results from the fact that it is his duty to act in good faith for the benefit of the estate, and necessarily pre-supposes a power in him so to act. Now if Leonard had acquired a mere defective title, under a valid and binding contract, the executor could not have built up a better one on it for himself. But Leonard had no title, and was not •therefore bound by the contract. The title was in the United States, and Thistle could only acquire it by a new contract, and the will does not confer power for that purpose. He was ■bound to take the estate," and to deal with* it as he found it. But in addition to this view, there is strong ground to suppose that the contract was rescinded. As soon as the defect of title was discovered, and it was as Hyde supposed, a defect as to the whole, he returned part of the notes, and afterwards returned all that were subject to his control. He did not profess to return the notes only in proportion to the failure, or to retain any part in consequence of the possibility of perfecting title as to part, but he went as far as he could towards a total abandonment, without manifesting any intention to regard the sale as good to any extent. And if he had had all the notes, we cannot doubt but they would have all been returned. Sims v. Boaz, 11 S. & M. 318. He says he discovered he had been mistaken, and returned the notes to save the estate. This looks like a total abandonment of the contract. True, he says at the land sales, he aided Thistle to procure titles, and acted under the impression that by securing titles to Thistle, by compensating for any deficiency, and by re-payment of the money advanced, the matter would be finally settled. But there was no contract to that effect; it was but his impression. It was evidently the result of an after-thought, by which it was supposed the contract might, to some extent, ■be saved. We cannot say, under these circumstances, that Thistle was precluded from acting for himself. Hyde certainly could not have forced Leonard, if living, to abide by this contract, and cannot force it upon his heirs. It seems, then, that as to Leonard, there was a total failure of consideration, before notice of transfer. Indeed, it does not appear that Leonard, in his lifetime, ever had notice of the transfer. It should here be remarked that the witness Hyde says, there were on the place, when sold, cattle, horses, and farming utensils, but it does not appear whether these were sold or not. They are not mentioned by the witness as a part of the consideration of the notes, nor are they specified in the deed.

As the title has failed, we come next to inquire whether the defence is made complete by eviction. The deed contains but a general covenant of warranty, and it has often been decided that there is not a total failure of consideration without eviction, or something equivalent. Hoy v. Taliaferro, 8 S. & M. 727; Heath v. Newman, 11 Ib. 201; Dennis v. Heath, Ib. 206; Duvall v. Craig, 2 Wheat. 45, and notes. But this is a rule which may be subject to exceptions; or at all events, a sufficient eviction may be accomplished by various means. Delivery of seisin by the sheriff to the creditor in satisfaction of .the execution, is an eviction of the tenant, and constitutes a breach of the covenant of warranty. Gore v. Brazier, 3 Mass. R. 523; Wyman v. Brigden, 4 Ib. 150. And if one, having a paramount title, enter and hold adversely, it is equivalent to eviction. Curtis v. Deering, 3 Fairf. 499. And entry and legal possession taken under a mortgage, to which the estate was subject when conveyed to the tenant, constitute an eviction. Tufts v. Adams, 8 Pick. 547. The foregoing seem to have been regarded as cases of legal eviction without actual ouster. But this case stands upon even more favorable ground for the defence. The land belonged to the United States, which does not resort to a suit to evict the possessor; he may be turned off in a summary way. It was not necessary that the government should resort to a suit to establish title. Any one in possession of public land is either a trespasser, or holds by permission of some act of Congress. And a sale of the land by the government carries with it a constructive possession ; and such sale constitutes, therefore, a legal eviction, or certainly what is equivalent to it. But further; if any one had possession, it must have been Thistle as executor, his wife being a joint legatee of all real estate; and if he has entered under a paramount title, this is equivalent to an eviction, as an actual ouster was impossible under the circumstances; and such title we have said it was competent for him to acquire. But, what is perhaps no less conclusive, nothing was said as to the possession. It does not appear from the record, whether Leonard ever had possession. The point seems to have been overlooked.

In the next place, has there been any waiver of the defence ? If Leonard had been living, and had made the statement to Prentiss which was made by his executor Thistle, the matter would have been placed beyond dispute. Or if he had been consulted, and had replied to Stanton before the assignment was taken, as did Thistle as indorser, it would have been equally plain. But as it is, the question arises, Can an executor waive the defence of his testator ? The authorities cited in support of the affirmative of this proposition have been examined, but none of them seem to come up to the point. The principle is this, When a contract of the testator cannot be enforced in a court of law, can the executor waive the defence by his promises, and thus make the estate liable ? If he may withdraw one defence, he may any one of. every character. We had occasion to examine this question, or at least a very similar one in Henderson v. Ilsley, 11 S. & M. 9, in which we held that an executor could not, by his promises, revive a debt barred by the statute of limitations, and the reasoning in that case which we still adhere to, will apply in this. Indeed, this is a much stronger case against the power of the executor. There the intestate in his lifetime had been bound; indeed, the bar was not complete until some time after his death. But in this case, Leonard never was bound; there was no binding contract, inasmuch as no consideration passed. And if the promise of the executor is to have the effect to destroy the defence, it is a new obligation. It is on principles of equity that the maker of a note is held bound to an assignee, who has been induced to take a transfer on the assurance that it would be paid. It would be a fraud upon the assignee to exonerate the maker under such circumstances. And this equity rests upon the acts of the party himself; it cannot be imposed upon his estate, by his executor. It is the duty of the executor to discharge existing obligations, but it is not his duty or his privilege to create new ones, unless he be authorized to do so by law or by the will.' The law places the executor in the shoes of the testator in regard to existing obligations, but it does not clothe him with the discretion which the deceased was at liberty to exercise. It is quite probable that, on a similar principle of equity, an executor might by such a promise render himself personally liable, but that is not the question. We do not think he can render the estate liable by such promises.

We have thus stated what we take to be the law of the case on the two general questions presented by the record, and on examining the charges given at the instance of the defendant, we find them to accord with our own view. The court refused to give two charges asked by the plaintiff, to wit: “ When the consideration of a note is the sale of land for which the vendor gives a deed with warranty, there is no failure of consideration unless the purchaser has been evicted by a paramount title, and this eviction must be proved by the record of the suit.” We have shown that such a charge would have been too broad. There might, in such case, be a partial failure of consideration. And we have seen that eviction may occur without a suit. Even the record of the suit would not prove actual eviction, but only a right to evict.

And again, the court refused to charge that “ A mere outstanding title in another who does not sue for the recovery of the land, is not a breach of the covenant of warranty, and the existence of such title does not constitute a failure of consideration.” As a general proposition this is very nearly correct, except that it assumes that there must be a suit. A suit is the usual mode of settling a right it is true, and therefore generally necessary. But we have said when the title is in the United States a suit is not necessary; and in this instance there could not have been a suit. Besides, the authorities show that a legal eviction may occur in certain cases without a suit.

It hence follows that the court correctly refused to grant a ’ new trial, and in the granting of the first new trial we can see no error, inasmuch as the verdict was contrary to law and evidence ; therefore, let the judgment be affirmed.