87 Tenn. 589 | Tenn. | 1889
On the 25th of June, 1887, Napoleon Hill sold and conveyed by deed with covenants of seizin, general warranty, and against incumbrances, to the Kansas City Land Company, a tract of land in Shelby County of sixty-six and thirty-seven one-hundreths acres, for the consideration of $149,332.50, of which the sum of $56,000 was paid in cash, and the balance secured by two notes for $46,666.25 each, bearing interest, and due at one and two years. A lien was retained in the deed, and the Land Company was placed in possession. .
On the 22d of June, 1888, a few days before the maturity of the first note, the Land Company filed the original bill in this cause against Hill, its vendor, Mrs. Elizabeth M. Hays (named in the bill as Lizzie "W". Hays), and her three sons, Samuel J., James W., and John M. Hays, suggesting that the title to forty-four of the sixty-six and thirty-seven one-hundreths acres conveyed to it by Hill was doubtful, and probably defective; that, if so, Hill had fraudulently represented that his title was good to the whole of the property conveyed, and that without the forty-four acres, which were claimed by the other defendants, the purchase was not desirable; and praying in the alternative, first, that its title under Hills conveyance be declared perfect and indefeasible, and the claims of the other defendants adjudged to be clouds thereon
The primary relief sought by this bill is the quieting and confirmation of the complainant’s title, and its effort throughout is, manifestly, to show that its title is good, notwithstanding the facts suggested as casting a doubt upon it.
The bill was dismissed as to James W. and John M. Hays, upon their demurrer, on grounds which need not be now considered. Samuel J. Hays filed a separate answer, which he prayed might be taken' also as a cross-bill, claiming an interest in the forty-four acres' under the will of his grandmother, Mai’y A. Walker. Ho defense seems to have been made by Mrs. Elizabeth M. Hays. ‘
Hill also answered and .denied all fraud, and that the title was doubtful or defective, and subsequently filed a cross-bill to enforce his lien for purchase money. The complainant Land Company, in its answer to this cross-bill, reversing the' theory maintained by it in its original bill, vigorously assaults the title of Hill, and sets out with great minuteness and detail the facts on which it strenuously insists the title is bad, and asks unconditionally to be relieved of its purchase. It traverses some of the ■ statements of its original bill, and, feeling doubtless the force of this incon
This feature of the case has been adverted to by counsel for defendants, and may be disposed •of at once.
Upon inspection of the two pleadings it is apparent that the repugnancy between them is more of theory than of ■ fact, and arises either upon statements made on information or upon statements of complainant’s conclusions, and hence does not work any estoppel against the truth.
The Chancellor, upon a hearing on the merits, held the title good, denied relief to the complainant Land Company and defendant Samuel J. Hays, and gave defendant Hill a decree on his cross-bill enforcing his lien for purchase money. Erom this decree, as well as the previous decree sustaining the demurrer of James W. and John M. Hays, the Land Company appeals, and alone assigns error.
The land in controversy originally belonged to Mrs. Mary A. Walker, and it is conceded that the title must be derived from her. This defendant Hill undertakes to do in two ways, and through two distinct and separate chains — the one beginning with a deed of trust made by Mrs. Walker in her life-time, and the other with her will. It was
The deed of trust was executed on the 11th day of July, 1872, by Mary A. Walker, defendant. Elizabeth M. Hays (therein named as Lizzie W.. ITays) and her husband, A. J. Hays, to C. B.. Wellford, as trustee, to secure eleven promissory notes of the same date, made by the makers of the deed, and payable to the Life Association of America, one for $5,000, due five years after date,, and ten for $250 each for interest, due respectively at the end of each semi-annual period from date, all of the notes being given to secure a loan of' $5,000 with ten per cent, interest, payable semiannually. It provided that upon default in the-payment of any of the notes at maturity, the-right of immediate foreclosure should accrue, and the whole debt, for the purpose of foreclosure, become due at once. A similar result was to-follow, by the terms of the deed, upon a failure to pay taxes promptly as they accrued. It was-properly acknowledged and registered, and no question is made against its validity. It is shown that the ' debt secured by it was the debt of Mrs.. Walker, incurred for improvements on the property now in controversy which then belonged to her.. No reason is shown for the joining of Mrs. Hays
On the 28th of July, 1871, after the death of Mrs. Walker, Wellford, the trustee, sold the property, in pursuance of the terms of the deed,, to Napoleon Hill and W. E. Taylor for $6,005, which they paid in cash, being about $100 in excess of the debt then due and ' expenses of sale; and on the 30th of the same month the trustee conveyed to them by deed with proper recitals. Taylor subsequently sold and conveyed his interest to Hill. These conveyances are all regular, and exhibit a good and indefeasible title on their face. This is not controverted.
Hut it is insisted, on behalf of the opponents of Hill, that the sale and conveyance by Wellford, the trustee, were procured by the fraud and collusion of Hill and Taylor, and one Chas. Hewett, with a view to cutting off the devisees of Mrs. Mary A. Walker, and that such conveyance is therefore ineffectual as against such devisees, and is liable to be impeached by them and declared void at any time.
This contention is specially important on account not only of the magnitude of the interests involved, but also of the provisions of the will of Mary A. Walker, by which the property in controversy was given to her daughter, Elizabeth M. Hays, for life,
It is possible, therefore, that the persons who will ultimately take the remainder under this will, and who are.' to be affected by the alleged fraud against the remaindermen, are not now in existence. If, then, the title is subject to the alleged infirmity, it is of the greatest importance to complainant that the fact be ascertained at once, and timely relief afforded, as otherwise, upon the future total .or partial failure of the title by reason of such infirmity, in the possible contingency stated, its remedy upon the covenants of the deed under which it holds might be wholly inadequate.
The present children of Mrs. Hays, with herself, have all conveyed the property in controversy to Hill, since the commencement of this suit, warranting against all persons claiming under or through them; or, to speak more accurately, they have executed and acknowledged such a conveyance, and offer to deliver it upon the payment to■ them by
The alleged fraud and collusion in procuring the trust sale and conveyance, it is obvious, were not wrongs against the complainant Laud Company, nor any one under whom it claims. But it is insisted that Hill, having participated in such fraud, and with knowledge of the existence and terms of the will, concealed these facts from complainant in his sale to it, and falsely represented that his title was good.
The complainant having accepted a deed from
The question of fraud out of the way, the complainant is not entitled to a rescission so long as it remains in the undisturbed possession of the property conveyed. If the title is bad, either totally or partially, the covenant of seizin was broken as soon as made, and. a right of action accrued upon that covenant immediately. If there was a failure of title to the whole of the property conveyed, the measure of damages upon the covenant of seizin would be the price paid, and a recovery would operate practically as a rescission, for a purchaser cannot be permitted to recover back the consideration and also retain the property conveyed.
Hpon the pleadings here, however, the case is for rescission, if for any relief at all, and the vital question therefore is, have the charges of fraud been sustained?
From what has been said it is obvious that the alleged fraud on the part of Hill relates to two
The contention of Hill, on the contrary, is that he had no knowledge or information of the existence or contents of the will until long after his sale to complainant; that he had no agency whatever in procuring the sale by Wellford, and that he made no false statement or representation in his sale to the complainant; and he so testifies, positively and unequivocally, in his deposition.
It appears that on the 6th day of March, 1877, after the death of the testatrix, Mary A. Walker, Mrs. Elizabeth M. Hays (who was her only surviving child and heir at law), and her husband, A. J. Hays, and son, Samuel J. Hays, conveyed the forty-four acres in controversy to one Charles Llewett, of St. Louis, Missouri, with covenants of seizin, general warranty, and against all incum-brances except the deed of trust to Wellford, which was recited as an. existing incumbrance on the land,
It is argued by counsel for complainant that this transaction was a payment and discharge of the note as a debt against the land under the deed of trust, and that it thereafter became only a personal debt of Hewett to Sterling & Webster; and hence,, there not being sufficient time for advertising between the maturing of the next notes, July 11, and the date of the sale, that the sale was premature and void.
The proof is clearly to the contrary. The transaction amounted to a purchase of the debt by Sterling &■ Webster, under an express agreement that they should have the benefit of the deed of" trust for its security. They took up and held the-note itself, and took no note from nor made any charge against Hewett. - It was a subsisting part-of the trust debt at the date of the sale, past due since January previous.
In the meantime, the precise date not appearing, Hewett entered upon negotiations with W. E. Taylor and defendant Hill for the sale of the property to them, Taylor conducting the -negotiations on the. part of himself and Hill. The terms of sale were agreed on, and a deed was prepared on July 2, 1877. But before closing the purchase Hill and Taylor procured an abstract of the title and submitted it to counsel for examination. The title was rejected on account of the existence, unsatisfied, of the deed of trust to Wellford, and thereupon the negotiations for the sale were suspended, or abandoned.
There is no fact or circumstance shown which indicates that either Hill or Taylor, at that time, or at the date of the trustee’s sale, on the 28th of July, knew that Mrs. Walker had left a will. On the contrary, it appears that they knew, or had been informed, that Mrs. Hays was the only child and heir at law of Mrs. Walker, and they supposed that the title had descended to her as heir, subject to the deed of trust; and it was upon this assumption that the investigation of the title proceeded. Taylor likewise testifies positively that he had no knowledge or information of a will
A deed, however, is produced from Hewett to Hill and Taylor, dated July 2, 1877, for this same property, containing covenants of seizin, warranty, and against incumbrances, and reciting a consideration of eight dollars paid; and it is shown by proof that they paid to Hewett or his agent, after the trustee’s sale, the sum of one thousand dollars on account of the land; and it is argued that these facts show that the sale by the trustee on July 28th was made in pursuance of a previous collusive and fraudulent understanding and agreement between Hewett and Hill and Taylor, notwithstanding the testimony above cited to the contrary.
Although the deed bears date July 2d, which was before the sale, it is clearly shown that it was not delivered nor acknowledged until the first day of August thereafter, and the one thousand dollars paid Hewett, or his agent, was paid on the delivery of this deed. It was doubtless the same deed that was drawn and dated at the time the parties first' agreed on the terms of sale, before the title was investigated, and was afterward delivered without changing its date. It obviously did not take effect until it was delivered, which was after the sale and conveyance by the trustee. But even with- this explanation it is impossible to reconcile these facts with the non-agency and indifference of
Hill does not give any reason for taking Ilewett’s deed and paying the one thousand dollars, the transaction having been conducted by Taylor. Taylor, in his deposition, when asked why Iiewett was paid this money, says, “ I expect, to carry out the original trade.”
Iiewett, in answer to the question why his deed to Hill and Taylor was not delivered until the 1st day of August, says: “ Mr. Hill, to the best of my recollection, refused to take a deed until after the sale of the land in dispute under Mrs. Mary A. Walker’s trust deed. On the 1st day of August, when the deed was delivered, I got a check through W. I. Berlin for a thousand dollars from Hill and Taylor, paid through Hill, Fontaine & Co., of Memphis, Tenn., the amount due as purchase money.”
The true state of facts on this question, established by the proof and circumstances, must betaken to be, that upon discovering the unsatisfied trust deed, Hill and Taylor refused to complete their purchase from Iiewett until the trust deed should be foreclosed, and the same was thereupon suspended, but with the understanding that if Hill and Taylor should become the purchasers of the property at the foreclosure sale, they would then complete their pui’chase from Iiewett, accept his
Now, upon this state of facts, what is the effect of the transaction on the title of the devisees of' Mrs. Walker? Does it constitute such a fraud upon their rights as, if they were here now complaining, would entitle them to relief against the purchasers at the trust sale? Undoubtedly, if the sale was brought about by Hill and Taylor for the purpose of defrauding the devisees of Mrs. Walker out of their estate in remainder, it could not be allowed to prevail against them, and probably the same result would follow if its purpose were otherwise fraudulent or unlawful. But the real question is, was it fraudulent or unlawful as against 'any one? The purchasers having no knowledge of the will of Mrs. Walker, it is not possible that they could have purposed any prejudice of her devisees.
Being desirous of acquiring the land, and unwilling to assume the incumbrance on it, or to buy subject to it and take the risk of other liabilities that might come against it — was there any thing unlawful or improper in Hill and Taylor
But it is further insisted for the Land Company that Hill and Taylor were affected with notice of the existence and terms of Mrs. Walker’s will, because, first, the will had been probated and placed upon the public records of the county, and the law therefore presumed their knowledge of it; and, secondly, in Ilewett’s deed from Mrs. Ilays and her husband and son, it is recited that ITewett, as a part of the consideration thereof, had conveyed to them a tract of land in Mississippi County, Arkansas, and in this latter conveyance it is recited that Mrs. Walker had made a will giving the propei’ty in controversy to Mrs. Ilays and her children; and it is insisted that Ilill and Taylor having accepted a deed from ITewett, they are fixed with notice of the contents of all deeds and instruments recited or referred to in his title papers.
Both propositions are untenable upon the facts of this case. Hill and Taylor claiming, as they do,
The second proposition, is answerable in the same way; it is at most constructive notice only. And again, while the general rule is that a party is held to have constructive notice not only of all that appears, in the deeds constituting his chain of title, but also of all that appears in all other deeds and instruments recited or referred to in them as being connected with, or as limiting or affecting the title or property conveyed; yet, there are exceptions to the rule, and it' does not, in principle, apply to collateral and immaterial conveyances or
There is nothing in the deed of the Hayses to Hewett, for the land in controversy, to indicate that the- deed therein referred to -as having been made by him to them for the Arkansas plantation, has any bearing whatever upon the title conveyed to him. It is merely mentioned as a part of the consideration.
It is further insisted for complainant that the effect of the foreclosure sale, and purchase by Hill and Taylor, under the facts and circumstances, and especially in view of the previous understanding with Hewett and their subsequent acceptance of a deed from him, was the same as if Hewett had himself paid off the incumbrance, or had himself purchased at the sale, and then conveyed to them, and that the title acquired by Hill and Taylor must be restricted to that which Hewett acquired by his deed from the Hayses.
This contention is based upon the assumption that the conveyance from the Hayses to Hewett was only of the life estate of Mrs. Hays and the supposed interest or expectancy of Samuel J. Hays under the will of Mrs. "Walker; and it is argued that the effect of the conveyance was to make Hewett tenant for life of the whole land, and tenant in common with James W. and John M. Hays of the remainder.
Again, the conveyance of the Hayses could not have operated as argued, so far, at least, as to create the relationship of tenancy in common, for the reason that Samuel J. Hays was not seized as
Again, neither the deed of the Hayses to Hewett, nor Hewett’s deed to Hill and Taylor, as has been seen, are necessary to the latter’s title. They do not have to rely on them at all. Their title under the trust sale and conveyance was perfected before Hewett’s deed was made to them, and by no principle can the latter deed operate ex post facto to cut down their previously acquired good title to the limits of the imperfect title held by Hewett.
And lastly, upon the whole facts and circumstances, it is clear that the purchase of Hill and Taylor at the trust sale was made for themselves, and not under or for the benefit of Hewett. They were under no legal obligation to buy the land, either at the sale or from Hewett. They had the right to buy for themselves as fully as did others who attended the sale and bid. The sale was in all respects open and fair. Having bid the highest price offered, paid it, and taken the trustee’s deed, the fact that they chose to pay Hewett an additional sum, and accept a deed from him, in pursuance of a previous verbal agreement with him to do so in case they became the purchasers at a figure that would justify them in so doing, cannot be held to vitiate their purchase, and destroy their deed from the trustee as a muniment of title, proceeding from the maker of the deed of trust.
There being, then, no defect in Hill’s title at the time of his sale to the complainant Land Company,
In this opinion, after a reference to the deed made to Hill and Taylor by the trustee, the learned counsel adds, “But outside of the title derived from the sale under said trust deed, on March 6, 1877,, Elizabeth M. Hays, whom I understand to be the only child and heir at law of Mary Ann Walker, who died in 1878, together with her husband, A. J. Hays, sold and conveyed the forty-four acres to Chas. Hewett, subject to the foregoing trust deed. * * • * This deed conveyed a good title to the forty-four acres to Chas. Hewett, subject to the incumbrance of the deed of trust to Wellford, and subject to whatever debts Mary Ann
The abstract of title contained no reference to the will of Mrs. Walker, and it is very clear that Hill had no knowledge of such a will until after his sale and conveyance to complainant, so that, even if the will were material to the title, Hill 'was guilty of no misrepresentation in regard to it.
The result is, we hold that the Ohancellor’s view of the case is correct, and it is, therefore, unnecessary to consider the other question suggested at the outset.
Affirm the decree with costs.
Sitting for Judge Folkes, who was incompetent.