Pembroke v. Huston

| Mo. | Mar 17, 1904

VALLIANT, J.

This is a suit in’ equity to rescind a contract of sale or exchange of real estate.

There is no dispute about the material facts. In March, 1898, the plaintiff owned an equity in 440 acres of land in Nodaway county the legal title to which was held by Edward Hayes; the land was estimated to be worth $16,000. At that date the defendant owned certain city real estate in St. Joseph which was estimated to be worth $8,000. The plaintiff owed a debt to Hayes secured on the Nodaway county land which he estimated to be about $8,000. On the date above named the plaintiff and defendant made an agreément to exchange their properties, the plaintiff to give the Nod-away farm for the St. Joseph property, the defendant to pay Hayes the $8,000 incumbrance, thus equalizing the values. But it was understood between the parties that the amount due Hayes might, on a careful statement of the account, turn out to be more than $8,000, and it was agreed between them that if it should so result, the defendant was to pay the additional sum to Hayes, and the plaintiff was to give his notes to the defendant to reimburse him for such additional outlay, and secure-the notes by deed of trust on the St. Joseph property.

The contract was executed as agreed. When they came to settle with Hayes it was found that instead of $8,000, the plaintiff owed him $12,500. The defendant paid Hayes $12,500, Hayes at the request of plaintiff made a deed of the Nodaway farm to defendant, the defendant made a deed of the St. Joseph property to plaintiff, the plaintiff executed his notes amounting to $4,500 payable to defendant, and secured them by a deed of trust on the St. Joseph property. The defendant went into possession of the Nodaway farm and the plaintiff into the St. Joseph property, and they so continued until more than a year when, default being made in the payment of the first note given by plaintiff to defendant, the latter caused the deed of trust to be foreclosed and at the trustee’s sale the defendant purchased the St. Joseph property and took possession thereof. That was on May 10, 1899. Nothing else occurred between the'parties until August, 1901, when this suit was begun.

The plaintiff in his petition states and the evidence shows that he is a native of Ireland, and that during all the time covered by the transactions above mentioned he was a subject of the sovereign of the United Kingdom of Great Britain and Ireland. He also stated in his petition, and so testified at the trial, that he did not know when he had these business transactions with the defendant that by the law of this State enacted in 1895 it was unlawful for an alien to acquire real estate by purchase; that the defendant did not know that he was an alien; therefore, with plaintiff’s ignorance of the law and defendant’s ignorance of the fact, they made the contract under mutual mistake; that in April, 1899, the plaintiff learned what the law on this point was, and then he abandoned all effort to redeem the city property from the $4,500 deed of trust. The record shows that the plaintiff was a resident of Nodaway county at the time of these transactions and had resided there continuously since 1881; that he acquired his title to the Nodaway county land in question before the Act of 1895 relating to the ownership of real estate by an alien was passed.

The prayer of the petition is to rescind the contract by which the properties were exchanged, state an account, and adjust the rights of the parties, and restore to him the Nodaway county farm.

There was a finding and judgment for the defendant dismissing the plaintiff’s bill, and the plaintiff appeals.

The act of 1895 above referred to is now contained in sections 4764, 4765, and 4766, Revised Statutes 1899, which are as follows:

Section 4764. “It shall be unlawful for any person or persons not citizens of the United States, or who have not lawfully declared their intention to become such citizens, or for any corporation not created by or under the laws of the United States or of some State or territory of the United States, to hereafter acquire, hold or own real estate so hereafter acquired, or any interest therein, in this State, except such as may be acquired by inheritance or in good faith in the ordinary course of justice in the collection of debts: Provided, that the prohibition of this section shall not apply to cases in which the right to hold or dispose of lands in the United States is secured by existing treaties to the citizens or subjects of foreign countries; which, rights, so far as they may exist by force of any such treaty, shall continue to exist so long as such treaties are in force, and no longer. ’ ’

(Section 4765 relates to the acquiring of real estate by corporations whose stock is held by aliens.)

Section 4766. “All property acquired, held or owned in violation of the provisions of this chapter shall be forfeited to the State of Missouri, and it shall be the duty of the Attorney-General, or circuit or prosecuting attorney of the proper city or county, to enforce every such forfeiture by bill in equity or other proper process. And in any suit or proceeding that may be commenced to enforce the provisions of this chapter, it shall be the duty of the court to determine the very right of the matter, without regard to matters of form, joinder of parties, multifariousness, or other matters not affecting' the substantial rights, either of the State or of the parties concerned, in any such proceeding arising out of the matters in this chapter mentioned. ’ ’

Appellant interprets these statutes to mean that the acquiring or attempting to acquire by an alien title to real estate is an act denounced as wrong, a violation of law, and for that reason the act is absolutely void.

To reach that conclusion appellant adheres to the letter of the statute: “It shall be unlawful for any person or persons not citizens, ’ ’ etc., to acquire real estate. That form of expression is often used in statutes forbidding an act and classing it as criminal, and when so used it means what appellant thinks this statute means, but it is not always used in that sense. To get at the true meaning of language employed in a statute we must look at the whole purpose of the act, the law as it was before the enactment and the change in the law intended to be made.

The common law on this subject is thus expressed by the author in 1 Jones on Real Prop, in Con., sec. 163: “At common law, aliens could not acquire and hold land by a secure title. The crown or the State could claim land held by them or for their benefit. Coke says: ‘If an alien, Christian or infidel, purchase houses, lands, tenements, or hereditaments to him and his heirs, albeit he can have no heirs, yet he is of capacity to take a fee simple, but not to hold. For upon office found the king shall have it by his prerogative of whomsoever the land is holden. And so it is, if the alien doth purchase land and die, the law doth cast the freehold and inheritance upon the king. If an alien purchase any estate or freehold in houses, lands, tenements, or hereditaments, the king upon office found shall have them.’ ”

The- same learned author further says:

“166. The common law made a distinction between the disability of an alien to take by purchase and his disability to take by inheritance; for while an alien could acquire a defeasible title to land by devise or deed, he could take no title whatever by mere operation of law, as by descent, by right of curtesy, or by right of dower. The title which an alien acquired by purchase or devise he could hold until office found, and he could, until such proceedings were taken, convey the land and confer title upon a purchaser. If the alien dies without having made a conveyance, the land vests immediately by escheat in the State without any inquest of office.

“167. Statutes restricting or denying the right of aliens to hold real property can be enforced only by a direct proceeding by the Attorney-General to enforce a forfeiture. An alien’s right to hold land can not be questioned by an individual in any collateral action. It is a matter between the State or supreme authority and the alien. . Until office found, or an official ascertainment of alienage and a judgment of forfeiture, an alien may hold real estate against every one and even against the State or government. If he becomes a citizen, or otherwise becomes qualified to hold land, before a forfeiture is declared in favor of the State or government, his title becomes perfect even as against the State or government. ’ ’

In Fairfax v. Hunter, 7 Crunch 603, l. c. 619, the Supreme Court of the United States, per Mr. Justice Story, said: “ It is clear by the common law, that an alien can take lands by purchase, though not by descent, or in other words he can not take by act of the law, but he may by the act of the party. This principle has been settled in the year books, and has been uniformly recognized as sound law from that time. [11 Hen. 4, 26; 14 Hen. 4, 20; Co. Litt., 2b.] Nor is there any distinction whether the purchase be by grant or by devise. In either ease, the estate vests in the alien (Pow. Dev. 316, etc.; Park Rep. 144; Co. Litt., 2b), not for his own benefit, but for the benefit of the State; or in the language of the ancient law, the alien has the capacity to take, but not to hold lands, and they may be seized into the hands of the sovereign. [11 H. 4, 26; 14 H. 4, 20.] But until the lands are so seized, the alien has complete dominion over the same. . . . And may convey the same to a purchaser.”

Before Texas became a State in the Union its constitution forbade the holding of real estate by an alien. One Baldwin who was a citizen of New York, and therefore as to Texas was an alien, bought certain lots in Galveston and received certificates of his purchase, but being aware of his personal disability to hold the real estate he caused the deed to be made to one Holman for him. There was an execution levied on the land as the property of Holman, the land was sold by the sheriff and bought by one Osterman who, when he purchased, knew the character of Holman’s title. In a suit between Osterman and Baldwin for the land the Supreme Court of the United States, per Mr. Justice Davis, said: “Until office found Baldwin was competent to hold land against third persons. No one has any right to complain in a collateral proceeding, if the 'sovereign does not enforce Ms prerogative. . . . Even if the defendants could have made this objection, while the Republic of Texas existed, they can not make it now, because, when Texas was admitted into the Union, the alienage of Baldwin was determined. His present status is that of a person naturalized, and that naturalization has a retroactive effect, so as to be deemed a waiver of all liability to forfeiture, and a confirmation of his former title.” [Osterman v. Baldwin, 73 U.S. 116" court="SCOTUS" date_filed="1867-12-16" href="https://app.midpage.ai/document/osterman-v-baldwin-87894?utm_source=webapp" opinion_id="87894">73 U. S. 116.]

The same doctrine has been reuttered by that court, and declared by other courts in numerous decisions which will be found by reference to the brief of the learned counsel for respondent.

We see, therefore, that by the common law the pliantiff in the case at bar would have acquired the title to the St. Joseph property and would have held it against the claim of every one except the State of Missouri, and could at any time before office found have perfected his title even as against the State, by becoming naturalized.

That being the condition of the plaintiff’s right, if it were to be judged under the common law, what was it under our statute?

The right of an alien to acquire and hold real estate has been the subject of legislation in this State, from time to time, from an early date, the earlier statutes conferring qualified rights in that respect upon him.

In 1872 our General Assembly enacted that: “Aliens shall be capable of acquiring, by purchase, devise or descent, real estate in this State, and of holding, devising or alienating the same, and shall incur the like duties and liabilities in relation thereto as if they were-citizens of the United States and residents of this' State.” That statute passed into the revision of 1879 as section 325 and into that of 1889 as section 342, and was the law when the plaintiff acquired title to the Nod-away county land, and was the law until 1895, when the act which is now sections 4764-5-6, above- quoted, was enacted and which was the law when the transactions in question occurred.

The act of 1872 repealed those features of the common law which imposed disabilities on an alien in respect of his capacity to acquire and hold real estate. While that statute was in force an alien had as much capacity to acquire and hold real estate as a citizen had. But after an experience of more than twenty years under the operation of that statute our General Assembly concluded to change the policy of the State in that particular.

As the act of 1872 had repealed the common law on that point, it was at least doubtful, under section 4177, Revised Statutes 1899', if a mere repeal of that act would restore the common law, even if the Legislature had intended to restore it in its original form and effect; it was, therefore, doubtless deemed necessary in order to accomplish its purpose that the Legislature should by affirmative act withdraw from the alien the right that had been conferred -on him by the act of 1872. When the Legislature in the act of 1895 said it shall be unlawful for an alien to acquire land by purchase, it did not mean that an alien in taking a deed to land was to be regarded as a lawbreaker or one guilty of an offense, but it only meant that the right that had been conferred on him by the act of 1872 was withdrawn, and that the disabilities that the common law had formerly imposed were now to be imposed by statute, except as in the statute itself otherwise provided. Some of the words of the statute give plausibility to the contention that title can not pass to the alien at all, the words being that it shall be unlawful for the alien “to hereafter acquire,” etc., but when those words are taken with the immediate context that idea disappears. The language is that it shall be unlawful for the alien “to hereafter acquire, hold or own real estate so hereafter acquired.” The sense is awkardly expressed; there could be “no real estate so hereafter acquired” if we give literal meaning to that part of the sentence which says that it shall be unlawful “to hereafter acquire” such property. This meaning is further shown by the language in the beginning of section 4766: “All property acquired, held or owned in violation of the provisions of this chapter shall be forfeited to the State of Missouri,” etc.

That is an express recognition that real estate might be acquired by an alien after the passage of the act, but that whenever the State called for it the alien should surrender it. That is just what the common law was on that subject.

The act of 1895 was intended to reinstate the ' common law on the subject of the acquiring by purchase of real estate by an alien; under that statute an alien can take by purchase a defeasible title and hold it subject to the same conditions that the common law imposed.

The parties to the contract of March 3, 1898, violated no law when they entered into it,' and the plaintiff, though an alien who had never declared his intention of becoming a citizen, took such a title to the St. Joseph property as constituted a sufficient consideration to support the contract. That title he held for more than a year, during which period the State made no demand on him, He could during that time have perfected his title by becoming a citizen. If he preferred to abandon his property rather than come under the terms of the law by which he could hold it, we can not consider it otherwise than a voluntary abandonment. He may have made the contract under the belief that he could acquire and hold the St. Joseph property without becoming a citizen, but the court can not relieve him from his contract because of his mistake in that respect. When he discovered, as he says he did, in April, 1899, that he was under the disability of the act of 1895, he was probably also under a misconception as to his rights under that statute, he certainly was so if he then thought, as he now contends, that no title passed to him by the defendant’s deed; but because of that mistake he is not entitled to rescind his contract.

Respondent presents further points which he thinks are sufficient to close the door of a court of equity against the appellant, one of which is that appellant rested from April, 1899, when he says he discovered the statute of 1895, until the summer of 1901, when he began this suit, without giving respondent any intimation that he was dissatisfied, allowing respondent in the meantime to make valuable improvements on the farm. We do not deem it necessary, however, to go into those other questions. The plaintiff twas not entitled to a rescission of the contract on any theory presented by him.

The judgment is affirmed.

All concur.