251 F. 164 | S.D. Ga. | 1918
The questions here must be determined in view of the facts following:
In 1877, J. C. Rawlins, for many years the clerk of the superior court of Dodge county, bought a town lot, one-fourth of an acre, in Eastman. On this lot has been the home of Rawlins for 41 years. There he has lived, and reared nine children of his first wife and nine of his second. With so many to meet his enemies at the gate, it is perhaps not surprising that his possession has been peaceful and undisturbed. It has been also continuous and exclusive. Unlike most of the patriarchs, Mr. Rawlins has been less successful in the amassment of worldly goods than in the multiplication of offspring.
A singularly unfortunate venture was the Rawlins Mercantile Com
It was not long, however, before the Rawlins Mercantile Company was again in the throes of bankruptcy, and this time by its own voluntary petition. With this last proceeding Rawlins filed his .schedule, and therein declared anew the house and lot in Eastman to be his property. This now appeared to be under the lien of a mortgage, which was given to secure some $3,800 due a local bank, the Citizens’ Bank of Eastman, which is a party here. This mortgage covered other •land besides the home place. The trustee, believing that there was an equity in the realty pledged, over and above the amount of the debt it secured, and being in possession by virtue of the possession of the bankrupt, obtained from the referee an order for its sale. Now, for the first time, it appeared that there was- an outstanding claim of title to the home of the bankrupt. This was brought to the attention of the referee by the intervention of Nicholson, who is the son-in-law and neighbor of Rawlins. The referee sustained the claim, and the trustee brought his petition for review. The question then is: -Shall the claim of Nicholson prevail, or shall the creditors, secured and unsecured, be accorded the right to have this property sold and appropriated toward the payment of the several claims?
Early in this period Rawlins determined to enlarge his boundary. He purchased 1% acres adjoining him. He made other purchases contiguous to his home place, until he had acquired a considerable body of land in the suburbs of Eastman. He, however, continued to live on the home lot. Besides, Rawlins built a new house on this lot. He testified that it is worth $2,000 now. On the former -trial, when the issue was insolvency, he thought it was worth $4,000. He had built
The right of the trustee depends,upon the fact that Rawlins had tille and that he was not shown to have conveyed it; but, even had there been such conveyance, the facts show that he held it adversely and in his own right for more than 20 years, that this was done without any sort of protest or claim by the intervener for all of that period, and that the latter, having permitted .Rawlins to use the property as his own, pay taxes on it, pledge it, improve it, and claim it in judicial proceedings and otherwise, wilhout any protest from him, cannot now be heard to contravene the lien of (he trustee in behalf of the creditors, for some of whose debts, with the knowledge of the intervener, this property was distinctly pledged, and for all impliedly pledged, in that the credit accorded him may have been in view of such apparent ownership.
“There is some evidence as to the search for it among the effects of Rozar. The bond for title is not produced.”
The referee adds:
“There is, therefore, a break in Nicholson’s chain of title, which must be fatal to his case, unless the fact that such conveyance existed is shown by the evidence.”
Indeed, counsel for the trustee objected to this evidence, and the oral testimony of Rawlins, as incompetent to show title. No witness, other than Rawlins, makes reference,, however remote, to the deed from him to Rozar. Of this deed, Rawlins testified:
“I dbn’t know whether it was a security deed or a warranty deed. I don’t know anything about it, except there must have been a deed, because I remember that I did borrow about $500 from Rozar.”
The referee found that the deed was made. Even if we omit consideration of the long possession and the many acts of ownership of Rawlins, with Nicholson’s knowledge, this proof is scarcely sufficient to show the legal title in Nicholson. Title to land in Georgia is conveyed by deed. The search for the supposititious deed from Rawlins to Rozar was most perfunctory. It was wholly insufficient, under the 'rule, to admit secondary proof of its execution, and the proof, when admitted, was insufficient. Rawlins testified that there must be a deed, because he borrowed $500 from Rozar. This seems a non sequitur. Many loans are made without such security. Nor is the bond for title, the alleged transfer of which to Nicholson is the basis of his claim, produced in evidence. The proof of the search for this was also insufficient to admit oral evidence of its existence. The conclusion of tire court, however, has been reached in view of considerations believed to be more important. These are that, whatever his title, Nicholson never, in the slightest manner, disturbed the possession which Rawlins held under his deed from Sapp. This was made in 1877. That possession was open, notorious, uninterrupted, adverse to all the world, and exercised by Rawlins under the claim that the title was rightfully his own. This, under the law of Georgia, would seem to leave the legal title in him.
“Possession, to be the foundation of a xDrescription, must be in the right of the x>ossessor and not of another, must not have originated in fraud, must be public, continuous, exclusive, uninterrupted and peaceable, and be accompanied by a claim of right. Permissive possession cannot be the foundation of a prescription until an adverse claim and actual notice to the other party.”
• Thai, possession, remaining with the grantor and never surrendered, is held under the grantee, and is not adverse to his title, and neither proscription nor the statute of limitations is available as a defense to an action of ejectment founded on the deed.”
Here, however, there Is no deed from Rawlins to Nicholson. It is true that Rawlins drew the deed from the administrators of Rozar to Nicholson, and was a witness to it. This may be susceptible of the inference that he recognized Nicholson’s title. Since, at the time, he was heavily embarrassed, and since Nicholson, his son-in-law, as he himself testifies, never said a word to him for more than 26 years about the property, or his continued possession, so far as the rights of the creditors are involved, it may be susceptible of an inference less favorable.
“When a person is shown to be notoriously in possession of land by occupancy, cultivation, and the like, his possession is presumed, to be adverse until the contrary is shown.” Hammond & Hinson v. Crosby, 68 Ga. 767.
“The relation of grantor may be denied, by retaining actual possession and exercising acts of control and dominion over the property, consistent only with a claim of exclusive ownership and of adverse right, and hostile to the title of the grantee.” Knight v. Knight, 178 Ill. 558, 53 N. E. 308; Harn v. Smith, 79 Tex. 310, 15 S. W. 240, 242, 23 Am. St. Rep. 340; Murray v. Hoyle, 92 Ala. 559, 9 South. 368.
“Of two innocent parties, he whose confidence enables the wrongdoer to act must bear the burden of the resulting loss.”
This is an ancient doctrine. It is announced by Lord Holt in Hern v. Nichols, 1 Salkeld, 289:
“For, seeing somebody must be a loser by this deceit, it is more reason that he that employs and puts trust and confidence in the deceiver should be a loser than a stranger.”
See, also, Butler v. United States, 21 Wall. 275, 22 L. Ed. 614; Pompton v. Cooper Union, 101 U. S. 204, 25 L. Ed. 803; People’s Bank v. National Bank, 101 U. S. 183, 25 L. Ed. 907. There the general principle is announced:
“Where one of two innocent parties must suffer by the wrongful act of a third, he who gave the power to do the wrong must bear the burden of thf consequences.”
The rule is stated with much pertinence by Lord Romilly, Master of the Rolls, in Briggs v. Jones, Law Rep. 10 Eq. 92, 98:
“A person who puts it in the power of another to deceive and raise money must take the consequences. He cannot afterwai'ds rely on a particular or a different equity.”
This is a doctrine of equity, but a bankruptcy court is a court of equity. Whatever may have been Nicholson’s motives, his acquiescence for so many years in Rawlins’ claim of ownership will result in loss either to the creditors or to himself. It is the opinion of the court that, under the circumstances, he should bear the loss.
For these reasons, it is concluded that the findings of the referee should be reversed; and it will be so ordered.