Neal v. Gregory ( 1882 )

Mr. Justice Westcott

delivered the opinion of the court.

As to the first ground upon which a reversal of the decree is sought, a failure of the court to order a reformation of the deed, it is very clear that there was no error. The accident or mistake alleged in the bill is directly denied by the answer supplemented by an averment that the deed was made to defraud creditors, and there is no proof at all of any mistake or accident. Proof of mistake in the manner of the execution of an instrument whenever admissible should be very clear.

Real, the plaintiff, before the deed from Atkins, Dunham & Co. to him, and before he had any knowledge of any conveyance, or any pretended conveyance, from Nixon to Atkins, Dunham & Co., purchased this land of Nixon for one hundred thousand oranges paid him, and Nixon agreed verbally to give him a deed therefor. The decree of the Chancellor here was without prejudice to any right of Real to file a bill setting up title by virtue of this purchase. If Nixon’s administrator is in such position that he can make no title the remedy of Real arising out of this transaction is an action at law for the value of the oranges, and if the title remained in Rixon, and upon his death the land became subject to the statute of descents and occupies the relation of the real estate of a decedent, then as against a parol vendee (Real) from the decedent in his lifetime, the vendee only paying the purchase-money, his judgment creditor in his lifetime would be preferred. Under such parol sale no title passed to Real, and the title being in Rixon the judgment became a lien upon the land. It is thus apparent that Real by virtue of the payment of the oranges acquired no title superior to the lien of the judgment creditors of Rixon, and that so much of the decree as is based upon that view is erroneous.

The statute of frauds prevents the acquisition of any interest in the land by Real under such purchase. Ro interest in the land was required. Ro decree for specific performance could have been had. Basford vs. Pearson, 9 Allen, 387 ; Kidder vs. Hunt, 1 Pick., 328 ; Seymour vs. Bennett, 14 Mass., 266 ; Brown’s Statute of Frauds, 4th Edition, page 136, §118; Tate vs. Jones, 16 Fla., 216 ; Purcell vs. Minor, 4 Wall., 513.

Say the Supreme Court of the United States in the case last cited : “ Payment of price in whole or in part will not of itself be sufficient for the interference of a court of equity the party having a sufficient remedy at law to recover back the money.” It is thus apparent that as to the orange transaction Real stood to Rixon as to the land in relation, having no greater equity than that of a general creditor to an amount equal to the value of the oranges he delivered.

So far as the acts of Real, the grantee of Atkins, Dunham & Co., are concerned we do not see that the evidence shows that he was aware of any fraud on the part of Nixon or Atkins, Dunham & Co. in the sale of the land by Nixon to Atkins, Dunham & Co. The facts seem to be that he was not aware of such sale until after he had purchased the land of Rixon and had paid the oranges agreed to be paid; that he was then informed that A., D. & Co., and not Nixon, had the title; that he, in company with Nixon, proceeded to Apalachicola and took a deed from A., D. & Co., Nixon being present and silent when the agreement of purchase was made. The price agreed to be paid for the land by Keal he subsequently paid after entering into possession, and there is no evidence that it was not the full value of the property.

The rule is that a bona fide purchaser for value without notice from a fraudulent grantee gets a good title. “As against the debtor the fraudulent deed is effectual, and the fraudulent grantee has a title and right to alienate. The only infirmity in his title is its liability to be impeached by creditors. As to all others it is perfect, and when it has passed into the hands of a bona fide purchaser for value without notice even this infirmity is cured and the title becomes sound and indefeasible.” Bump on Fraud. Con., 2d Ed., 482, and cases cited ; Jackson vs. Walsh, 14 Johnson, 415.

This brings us to the question whether A., X). &.Oo. had any title to convey.

What was the nature of the transaction between Kixon and A., D. & Co. as to the instrument executed by Kixon to them ? The answer denies positively that there was any consideration for the alleged deed. The proof shows none, but on the contrary it appears that subsequent to the execution of the paper Kixon remained in possession of the property for years, appropriating the rents and profits of the land and making absolute sales of the personal property, A., D. & Co. making no objection thereto. Ko explanation of these facts is attempted. Such a sale as this is void as against creditors. Such possession and such acts generate a legal presumption of fraud when not explained so as to bring them, within the operation of the exceptions to the general rule, that a conveyance accompanied by such acts render the deed void as to creditors. In this case these acts not only tended to deceive, but did in fact deceive Keal to such an extent as to cause him to purchase the property of Nixon, and to pay him the oranges agreed upon. Neal, to the extent of this purchase, is and was a creditor, and this antecedent retention of possession did in fact deceive him. “ The retention of the possession of land with the exercise of unequivocal acts of ownership over it is a badge of fraud, for it is not in the usual course of business, and indicates a secret trust for the debtor.” Again, under the circumstances of this case it devolved upon the plaintiff to prove the consideration. That this sale was a bona fide transfer for the consideration expressed in the instrument is alleged in the bill and denied in the answer. The proof shows retention by vendor of possession and acts of ownership. Under these circumstances the burden of proof was upon the plaintiff to show payment of the consideration. This he did not even attempt to do. Callan vs. Statham, 23 How., 477.

We'think Nixon in this case acted in good faith and paid value, but the difficulty here is that A., I). & Co. had no title to convey to him, and he got none through their act. The paper purporting to convey the land was not under seal and was not effective to pass the title. It was void under our statute. Hart vs. Bostwick, 14 Fla., 162 ; Sicards Lessee vs. Davis, 6 Pet., 136 ; Clark et al. vs. Graham, 6 Wheat., 577.

It insisted, however, that even if the paper from A., D. & Co. was not effective to vest any estate or title in them, still that Nixon being present and silent at the time of the execution of the deed from A., D. & Co. to Neal was es-topped from denying that the title was in them, that the title was thus good as against him, and that such estoppel would operate against his then creditors subsequently obtaining judgments, and now seeking a sale of the land to satisfy their debts.

The estoppel here insisted upon is an equitable estoppel as contradistinguished from an estoppel by record or deed, and as the existence or non-existence of such an estoppel is determined by a very slight variation in the facts in any given case we think it proper to repeat the general facts established so far as they have a bearing upon the subject in order to an intelligent determination of the question. The bill alleges that Nixon was the agent of A., D. & Co. This is denied by the answer, and the proof, so far as it has reference to this fact, is that Neal dealt with Nixon not as the agent of any one. Neal purchased the property of Nixon, paying him 100,000 oranges. Neal in giving the history of the transaction states in one place that he was told by Capt. Whitesides that Nixon did not own the place, and that it belonged to A., D. & Co. In another place he states that he received a letter a few days before he wfent to Apalachicola with Nixon in the year 1868, and that this letter was the first intimation he had of any claim upon the land by A., D. & Co.; that when he reached Apalachicola Beale, one of the firm of A., D. & Co., told him the same thing; that he returned home and sent his son William to Apalachicola, and about two days thereafter he received a letter from John Atkins stating that the firm owned the land; that he spoke of this letter to Ivey Gregory ; that he exhibited the letter to Nixon, and requested him to go to Apalachicola to see the firm of Atkins, Dunham & Co.; that they went, and that he (Nixon) and A., D. & Co. made the contract of purchase referred to ; that to this contract of purchase Nixon made no objection at the time or since. From the case as stated by Neal himself it thus appears that in all his dealings with Nixon wherever Nixon’s voluntary acts appear it is upon the basis of title in Nixon, and not in A., D. & Co. Neal bought the land of Nixon and paid for it. His information as to title in A., D. & Co. he derived from others. His going to Apalachicola, the time at which he seems to have concluded the title was in A., D. & Co., was upon the representation of Whitesides and Atkins, that the title was in A., D. & Co. It is not proved that Nixon made any such representation. Nixon when he went to Apalachicola did not go of his own accord, but was “ requested ” to go by Neal. Under these facts can it be said that Nixon, by his silence, occasioned the belief that A., D. & Co. had the title, or that this silence was the inducement to take a title from A., D. & Co. ? Nor is there any imputation of concealment upon the part of Nixon. What purported here to be a deed from Nixon to A., D. & Co. was of record in Liberty county, and a few moments’ examination would have shown Neal that there was no deed, and that the title was still in Nixon. Is an estoppel to operate to cure the result of such extraordinary laches and negligence ? Every circumstance existed here to cause Neal to look to the title.' Nixon had dealt with him on the basis of ownership, and when Neal had paid him the purchase money another party writes that he and not Nixon was the owner of the property. Is it not a most extraordinary degree of neglect upon the part of Neal under these circumstances not to examine records easily accessible ?

To the extent that acts in pais are held to estop the real owner of land to assert a title, or to in effect transfer the title, to that extent is the statute of frauds modified and rendered inoperative, as that statute requires a writing to create an interest in real estate of the character sought to be established by estoppel in this case. While some of the cases adhere to the strict rule and will not permit such operation of an estoppel, still the general rule is “that every one who encourages, or even stands by and sanctions, the acquisition of land by another will not only be estopped from invalidating the interest thus acquired by the subsequent assertion of any title which he held with full knowledge at the time, but will be compelled to make a conveyance to the purchaser.” This is a statement of the general rule, but its exceptions and what constitutes encouraging and standing by and sanctioning is to be ascertained from the particular circumstances covering ‘the subject matter of each ease. In 2 Smith Leading Cases, 661, it is stated that no estoppel can spring from silence or acquiescence unless there are some special circumstances which make it a duty to speak, and the maxim of the law that illustrates the doctrine is “ that he who is silent when conscience requires him to speak shall be debarred from speaking when conscience requires him to be silent.” Among the requirements to give effective operation to an equitable estoppel of this character is acquaintance with his title upon the part of the party sought to be estopped, and that for the reason that it would be the grossest injustice to construe ignorance or misapprehension of the true nature or existence of a right into a forfeiture of the power to enforce it. Tilgham vs. West, 8 Iredell, 83 ; Royston vs. Howell, 15 Ala., 309.

Again, it should also be shown that the conduct of the party sought to be estopped did in fact affect the action of the purchaser ; that it was to some extent the motive and inducement for his action. Brewer vs. Brewer, 19 Ala., 431; Morton vs. Hodgdon, 32 Maine, 327; The Cambridge Institution vs. Littlefield, 6 Cush., 216 ; Watkins vs. Peck, 13 N. H., 360 ; Otis vs. Sill, 8 Barb., 102; Darlington’s Appropriation, 1 Harris, 430. Tt is -also true that when the actual state of the title can be readily ascertained by reference to the record, and the purchaser neglects to avail himself of the information which a simple examination of the record affords, silence unaccompanied by fraud will not operate as a peremptory estoppel. Bigelow vs. Topliff, 25 Vermont, 273; Carter vs. Champion, 8 Conn., 554; Gray vs. Bartlett, 20 Pick., 186.

In this case not only did Neal have this means of information readily at hand, but the circumstances were of such character as to specially induce him to examine the records of the county. He had purchased from Nixon, who claimed title, and before the promised deed was executed he was informed by Whitesides and Atkins that Nixon did not have the title, and that A., D. & Co. did. He did not examine the record, nor did he even ask A., D. & Co. to show their title. His failure to ascertain the true state of the paper title was his own fault, and he cannot resort to an estoppel based upon silence to save him from the result of his own extraordinary negligence and laches.

Again. We do not think a bona fide purchaser for value without notice from a fraudulent grantee (admitting for the sake of the argument the deed here from N. to A., D. & Co. to be good) can, through the operation of an estoppel resulting from the silence of a fraudulent grantor, acquire as against the creditor the title of the fraudulent grantor. The rule protecting the bona fide purchaser from the fraudulent grantee against the assault of the creditor is based upon the fact that the deed though fraudulent as to the creditor is good between the parties. The estate is thus traced. It is in this way the title gets in the fraudulent grantee. The deed is not absolutely void, and it becomes effective when-the fraudulent grantee transfers to the bona fide purchaser for value without notice. The effect here of the operation of the estoppel would be to protect such purchaser by the mere act of the fraudulent grantor without the existence of any intervening estate, and would thus in effect render the fraudulent deed of the grantor operative to pass a title good against creditors without the intervention of any other estate, which cannot be. Again, even if the deed here from NT. to A., D. & Co. was bona fide and regular and for value it is not good against creditors under our statute, unless it is a deed recorded. The effect of an estoppel here we thus see would be to suspend the operation of two statutes controlling the subject, even if the instrument was a deed, the execution of which was in all respects formal, and this under the circumstances before stated.

Such portion of the evidence in this case as the statute (Chap. 1983, Laws,) prohibits as being in reference to a transaction or communication by Nixon with the witness, a party and interested person, is not considered in reaching our conclusions. They are based upon the admissions of the bill and the other legal evidence.' The statute operates to exclude such testimony. Tunno and Jessup & Co. vs. Robert, 16 Fla., 750 ; Sanderson’s Administrators vs. Sanderson, 17 Fla., 864; Price et ux. vs. Hicks, 14 Fla., 586.

So much of the decree in this case as dismisses the bill without prejudice to the plaintiff’s filing “ a new bill setting up title under purchase directly from NTixon is reversed.” In all other respects it is affirmed, and the case will be remanded with directions to enter a decree dismissing the bill generally at the cost of the appellant upon notice to the plaintiff in the bill or his attorneys.