McCullough v. Dashiell

| Va. | Feb 21, 1884

Lewis, P.,

delivered the opinion of the court. After stating the facts, he proceeded:

The appellant insists that the court below erred in holding him estopped by the release deed of April 17th, 1871, from enforcing the lien of the deed of trust on the Norfolk city property, and in perpetuating the injunction restraining the sale of that property to enforce that lien. And these are the only questions raised which need be considered.

In the first place, it is to be observed that Dashiell and wife were not parties to the release deed in question, and that its object was to relieve the Norfolk county property of the lien of the deed of trust in the hands of the Norfolk Land Association, which was in fact the purchaser. This, then, being its object, and such the intention of the parties, there can be no doubt that as to any question affecting the lien released on that particular property, the recital in the release deed that the notes.secured therein had been fully paid would be conclusive as between. the parties to that ■deed. But the rule does not apply in favor of strangers who have not acted upon or been misled by the recital. A recital is a narration of such deeds, agreements, or facts as are necessary to explain the grantor’s title and the motives and reasons upon which the deed is founded and entered into. The operation of deeds is a question of intention, and will not be carried further than the parties .appear from the tenor of the whole instrument to have agreed; and the doctrine of estoppel is no exception to this general principle. Accordingly, the introduction of a statement into a sealed instrument will not render it conclusive, unless there is sufficient reason for believing that such was the design, or some injustice would result from allowing it to be contradicted.

And so it has been held that formal statements and admissions, which were perhaps looked upon as unimportant when made, and by which no one was ever deceived or induced to alter his position, are not conclusive. And so as estoppels are founded on intention, they will be limited by it, and will not extend to objects that the parties cannot reasonably be supposed to have had in view. A recital may consequently be an estoppel for some purposes and not for others. Indeed, as has been said, nothing is more obvious than the injustice that would ensue if the formal receipts introduced into conveyances for the convenience of the grantee, and with a view to facilitate the transfer of the title to subsequent purchasers, were treated as conclusive in opposition to the truth of the case and the understanding of the parties. The estoppel of a deed will be limited to suits based upon it or growing out of the transaction in which it was executed, and will not extend to a collateral action, where the cause is different, although the subject matter may be the same. These propositions are abundantly sustained by the authorities cited by the appellant’s counsel and by other's that might be referred to. See on this subject generally, 2 Smith’s L. O. p. 671, &c.; 7 Eob. Pr. 247.

The object and intention of the parties in the execution of the deed releasing the Norfolk county land from the lien of the trust deed of April 28,1869, is manifest. It was simply, so far as the latter deed was concerned, to give to the purchaser of the land a clear and unencumbered title, and nothing more. The release deed was made in 1871, and it was not until the amended bill was filed in this case, nearly, nine years thereafter, that any claim was set up by any one that the effect of that deed was a discharge of the deed of trust lien on the Norfolk city property. No reference to that property whatever is made in the deed, and the object of the deed is shown by the recital therein of the sale of the land to the Norfolk Land Association. It is not pretended that Dashiell and wife, or either of them, have been induced to alter their position, or have in any way been misled or prejudiced by the recital in the deed that the notes referred to had been paid, and hence, upon the principles indicated, the appellant is not estopped by that recital quoad the city property, from showing that in fact they have not been paid.

Coming, then, to the merits of the case, the question is» Were those notes in whole or in part unpaid when the advertised sale of the Norfolk city property was enjoined by the court below? There can be no question as to the title of Dashiell to the notes for the deferred payments on the county land sold to the Land Association. His wife having united with him in the conveyance of the land, and the notes being payable to him individually, they became his absolute property and subject to his disposal as he saw fit. These notes he delivered to the appellant, who credited him with their proceeds. The appellees insist that the notes were intended as a loan, and their proceeds being more than sufficient to pay the balance due on the deed of trust notes, it was the duty of the appellant to have applied so much of the proceeds as were sufficient to pay off the deed of trust notes before applying them to any other purpose.

The court below, without objection by any party, excluded the depositions of the appellant and the appellee> Charles Dashiell, on the ground that as the latter was an incompetent witness (his wife being a party to the suit) the appellant was also incompetent to testify. This being so, the case must be viewed as it is presented by the pleadings and the depositions which were admitted as evidence. And so viewing it, there can be but little doubt that the contention of the appellant is well founded. Indeed, the case in the court below seems to have turned mainly on the effect of the release deed of April 17,1871. The answers emphatically deny the material allegations of the bills, and set forth at length the transactions between the parties; and such of their averments as are not responsive to the allegations of the bills, are substantially sustained by the proofs in the cause.

There is no doubt that the original notes, each for the sum of $700, and secured by the deeds of trust, were from time to time renewed, and that the only payment on account of them was the $500 paid in June, 1869, out of the proceeds of the sale of the Norfolk county land. The three notes for the deferred payments on account of that sale do not appear to have been delivered to the appellant as a loan, or for the purpose of enabling him to use them as collateral in raising money on his own notes. It is true, that by his receipts for them he bound himself to return two of them if the parties should wish to cancel them before maturity, and to return or account for the third on demand. But the notes were afterwards discounted by him, and the proceeds applied to the credit of the appellee, Dashiell, on open account indebtedness. Of these facts, Dashiell, it is alleged in the answers, was informed, and assented to what had been done. And in this particular the averments of the answers are fully supported by the testimony of the witness, Anderson. It is unnecessary, therefore, to enter into any discussion as to how the proceeds of the land notes ought to have been applied in the absence of any direction on the part of the appellee, Dashiell. It is sufficient to say, that their application by the appellant afterwards was assented to by him, and that it is now too late for him to obj ect thereto.

For these reasons the court below erred in perpetuating the injunction, and directing a release deed to be executed. The injunction ought to have been dissolved, and in these particulars the decree must be reversed, and in other respects affirmed.

The decree was as follows:

This day came again the parties, by their counsel, and the court, having maturely considered the transcript of the record of the decree aforesaid, and the arguments of counsel, is of opinion, for reasons stated in writing and filed with the record, that the said decree of March 14th, 1881, is erroneous in the following particulars, namely: first, in holding the defendant, McCullough (the appellant here), estopped by the release deed of April 17th, 1871, from denying the payment óf the two notes payable to him, and secured by the deed of trust of March 23d, 1869; secondly, in holding that under the facts proved, it was the duty of the defendant (McCullough), if he had any right to use the proceeds of the notes mentioned in Exhibit “ C,” to have applied to the extinguishment of the notes designated as “ deed of trust notes,” if any such notes then existed, so much of the said proceeds as was necessary to extinguish the same, so as to have relieved the other -property of the female plaintiff from any liability therefor; thirdly, in overruling the second and third exceptions of the defendant (McCullough) to the master’s report; fourthly, in perpetuating the injunction awarded on the 10th day of February, 1872; and fifthly, in decreeing that the defendants, Lamb, trustee, and A. A. McCullough make a deed of release of the property on Bute street, and that the defendant, McCullough, pay to the plaintiffs their costs expended in the prosecution of their suit. It is therefore considered that the said decree in the particulars aforesaid be reversed and annulled, and in other respects affirmed, and that the appellees pay to the appellant his costs by him expended in the prosecution of his appeal aforesaid here. And it is further considered that the injunction awarded on the 10th day of February, 1872, be dissolved, and that the said appellees, the plaintiffs in the court below, pay to the appellant, one of the defendants in the court below, his costs by him expended in defending the suit in the said corporation court.

' And this cause is remanded for such further proceedings as may be necessary and proper to be had therein; which is ordered to be certified to the said corporation court of the city of Norfolk.

Decree reversed in part.