Saunders v. Gould, 124 Pa. 237

Saunders v. Gould

124 Pa. 237 | Pa. | 1889

Opinion,

Mb. Justice Cl abk:

It is conceded that in January, 1873, the title to the premises in dispute, being No. 928 South Fifth street, and No. 635 Lombard street, in the city of Philadelphia, was in Charles W. Hepburn; that in the month of February, 1873, the former, and in April following, the latter, was sold at sheriff’s sale as the property of Hepburn, and both were struck down to Henry F. Hepburn who says he purchased them in the interest of Charles W. Hepburn, for whom he was acting as an attorney. As to the legal effect of these sales, the learned judge of the court below instructed the jury, as follows: “Now these sheriff’s sales, if they were made in good faith to a third party, would throw all these incumbrances out, and give a perfect good title to the purchaser. They were, however, bought at this sale by Mr. Charles W. Hepburn, the very man upon whose *249land tlioy were incumbrances. lie permitted the sale, and bought them in when they were knocked down by the sheriff; in a case of that kind they do not discharge the incumbrances on the land, but the title he acquires is for the benefit of his creditors,” etc. This portion of the charge we think results from a misconception of the case presented by the facts which are uncontradicted or admitted. It will be conceded of course that if Charles W. Hepburn himself had purchased at these sales, or Henry F. Hepburn, his attorney, had purchased for him, in his name and using his money for payment of the purchase money, the title would have been unaffected, and the liens undisturbed thereby. But that is not this case, as we understand it. The charge in this respect was much more favorable to the plaintiff in error than he deserved.

There is no charge of fraud or unfairness in the sale ; it was regularly conducted, and was open to all. Whilst Henry F. Hepburn purchased the property, in the interest of his client, the evidence is wholly to the effect that he purchased in his own name and upon his own responsibility, for the purpose of securing the title to himself, free from all liens, so that he might sell one property at a time at a fair value, to prevent sacrifice. He was called as a witness by the plaintiff in error, and testified “ there was nothing dishonest about it so far as Charles W. Hepburn was concerned.” The interest of Charles W. Hepburn was tó be promoted by a re-sale or pledge of the property by Henry F. Hepburn, who, apart from the strict line of his professional duty, voluntarily assumed the responsibility and undertook to aid his client in this way. He says the reason he made the purchase in his own name, was to secure the money which he was obliged to advance in order to get the titles from the sheriff, and that he subsequently turned them over to Gould for the purpose of raising the money to pay the sheriff; to get the money by placing the property in the hands of bona fide purchasers. That this was a perfectly legitimate transaction cannot be questioned. That he was acting in the interest of Charles W. Hepburn he admits, but the sale was open to all, and was not under his control. He stood on the same plane with the creditors, who had a perfect right to and probably did compete with him in the biddings. Under these circumstances, he had a right to bid and buy, and *250a right to be secure in his purchase, and to be protected in the purchase-money which he obligated himself to pay. There was at the time, it is true, a confidential relation existing between himself and Chas. W. Hepburn, his client. If he had taken advantage of that relation to obtain the title, and subsequently abused the confidence reposed in him by his client, the law might perhaps have affected him with a constructive trust ex maleficio, but he did not abuse it,, and no trust of that character arose.

But instead of taking the deed in his own name, Henry F. Hepburn, in furtherance of the original design, entered into an arrangement of some bind with Gould, by the terms of which, upon jsayment to him of from $3,600 to $4,000, Gould’s name was substituted in the sheriff’s return, and, the purchase-money having been paid to the sheriff out of the money received from Gould, the sheriff’s deeds to Gould were executed, acknowledged, and delivered. Under such circumstances, we think the judgments and all liens subsequent to those effecting the sale, were discharged. Henry F. Hepburn was a good-faith bidder, at a regular sheriff’s sale, and creditors, and others in interest, had full opportunity to protect their interests, if they chose to do so. There was no obligation on the part of Henry F. Hepburn to buy the property, or to incur the responsibility which he assumed, but if he or any other person chose to do so, it was in no sense an unlawful act on his or their part.

The judgments upon which the sales were effected were open and unsatisfied; the record disclosed a valid judgment and a regular execution; if the proceeds of the Sixteenth street property had been previously applied in payment of the Simpson judgment, the record did not show it. Assuming that Henry F. Hepburn knew or had the means of knowing, that the money had been so applied, there is no evidence that Gould had any knowledge of that fact, and the state of the record was not such, we think, as to put him upon inquiry. Whilst a purchaser at a sheriff’s sale with knowledge that the judgment upon which the sale is effected has been paid, may acquire no title, it has been held to be otherwise with respect to a bona fide purchaser from him without notice: Hoffman v. Strohecker, 7 W. 86; Gibbs v. Neely, 7 W. 305. If, there*251fore, tbe transaction between Henry F. Hepburn and Samuel Gould was an absolute sale, upon tlie consideration stated, as Gould says it was, and as tlie deed declares, lie took a good title, and would have a clear right to recover in this case.

But it is alleged, oil tlie part of the plaintiff in error, that the deed to Gould was only a security for the money advanced by him, and that upon repayment of the money by Chas. W. Hepburn, to whose benefit the transaction was turned over, the land was to be conveyed to him; that the defeasance being by parol was not recorded, and that in equity the deed was nothing more than an unrecorded mortgage. The deed was made in Gould’s name in consideration of the money he paid to Hepburn; the money was therefore Hepburn’s money, and from this he paid his bid to the sheriff; if the facts are as alleged, therefore, the deed, although absolute in form, was in effect merely a mortgage: Boyd v. Taylor, 37 Leg. Lit. 424. An absolute deed and a separate defeasance, if the latter is not recorded, amount only to an unrecorded paortgage, as against subsequent lien creditors: Corpman v. Baccastow, 84 Pa. 363; and, whilst an unrecorded mortgage is good against the mortgagor: Levinz v. Will, 1 Dall. 430; Mellon’s App., 32 Pa. 121; and against his heirs: M’Laughlin v. Ihmsen, 85 Pa. 364; Tryon v. Munson, 77 Pa. 250, it will be postponed to a subsequent judgment, unless the creditor had notice of the mortgage before his debt was contracted: Lahr’s Appeal, 90 Pa. 507. Upon this ground it is contended that the rights of Gould as a mortgagee must be postponed to the Betts judgment.

But it will be observed that by the original sheriff’s sales, owing to the order of the Simpson and the Brown judgments, which were the instruments of the respective sales, all the liens, excepting the Brown mortgage as to No. 928 South Fifth street, including the lien of the Betts judgment and mortgage, as we have already said, were discharged as against the premises in suit, and no other lien was afterward entered until in 1879, when the Betts judgment was revived. In the meantime, however, in the month of May, 1874, Charles W. Hepburn, having exhausted his efforts to pay the money, voluntarily executed and delivered to Gould a quit-claim deed, thereby surrendering the equity of redemption existing under *252the parol defeasance, and abandoned his right to regain his estate in' the premises mentioned, intending, as upon a foreclosure, to vest the entire title, legal and equitable, in Samuel Gould.

We can see no good reason why the quit-claim deed was not effectual to accomplish this purpose of the parties. The liens had been discharged as stated; no new liens had been entered, and, as the good faith of the transaction is not impeached, it is plain that on and after the 26th day of May, 1874, Samuel Gould was the absolute owner in possession of these respective premises. An absolute deed, subject to an unrecorded defeasance,on the execution of a release of the equity of redemption before any other right has attached, vests an absolute estate in the grantee: Caverow v. Insurance Co., 52 Pa. 287.

If we are right in this, the question raised by the first and the eleventh assignments of error becomes unimportant, for it is no difference whether Gould claims upon an absolute sale in the first instance, or upon the title set forth in his bill in equity In either case he is entitled to recover; and as his recovery is upon the exhibition of his written and recorded title, the admission of the evidence complained of in the second, third, fourth and fifth assignments^ even if the objections taken thereto were well-founded, did Saunders no harm.

The remaining assignments, in - so far at least as they have any relevancy or bearing upon the real questions involved in the case, are fully considered and disposed of in this opinion.

The whole case turns upon the question whether the liens were discharged by the sheriff’s sales made in February and April, 1873, and as to this vre think there can be no doubt. Whilst we are unwilling tó adopt the reasoning of the learned judge of the court below, we are of opinion that the result reached at the trial was right. The charge throughout was much more favorable to the plaintiff in error than ho had any right to expect. The case is somewhat complicated in its facts, but after a careful examination of the whole matter we are of opinion the judgment should be affirmed.

Judgment affirmed.