Opinion
11-30-1819
Bumgardner and Others v. Allen
Leigh for the Appellants, and Wickham for the Appellee.
[Syllabus Material] [Syllabus Material] [Syllabus Material]
Jane Allen exhibited her bill in the Superior Court of Chancery for the Staunton District, against Jacob Bumgardner and Claudius Buster, administrators of Isaac Hayes, and his heirs and representatives, and James Hayes and Jacobs Kinney executors of James Flack, and his heirs and representatives; setting forth, that the plaintiff sold James Flack three tracts of land, one of 80, one of 100, and one of 400 acres; that a certain Thomas Walker and Company had a claim on the 400 acre tract; of which Flack being apprised, the plaintiff agreed to abate 1001. of the price, and Flack agreed to take a special warranty: that the 1001. was either compensated by a conveyance of 50 acres more of land, or was to be deducted in case of eviction: that this agreement was written by Flack's Clerk, Claudius Buster, and remained in Flack's hands: --that the Deed was ordered to be drawn with special warranty; and, if it now appeared with general warranty, the plaintiff suspected an alteration: that Flack gave the plaintiff a mortgage on the land, to secure the purchase money; after which he sold the same to the defendant Bumgardner and Isaac Hayes; and they sold parts thereof to James Hayes; all of them being apprised of the claim of Walker and Company, and most probably of the agreement between the plaintiff and Flack respecting the special warranty of the 400 acre tract: --that Bumgardner and Isaac Hayes had never paid the purchase money to Flack, nor received deeds of him, nor had James Hayes paid them the purchase money of the land he bought; and all had refused, either to pay the plaintiff the purchase money due her, or give her back the land; insisting that her title to the 400 acre tract was defective, and that she was bound by the general warranty to make it good. She therefore prayed relief against the effect of the general warranty; a foreclosure of the mortgage; and general relief.
Jacob Bumgardner answered, as defendant in his own right. He denied notice of the contract for a special warranty, and of any fraudulent alteration of the deed in that respect. He and Isaac Hayes bought of Flack all the land sold him by the plaintiff, not doubting but Flack had a good title, and a general warranty from the plaintiff. At the time of that purchase, he had not heard of the claim of Walker and Company; though he had heard of a claim set up by one Wilkinson, noted for claiming lands he had no title to. He was told by Claudius Buster, that the plaintiff's title was good, and that, otherwise, she would not have warranted the land. The respondent had never seen the plaintiff's deed to Flack. The plaintiff's son came twice for installments of the purchase money due from Flack: --before he came the second time, this respondent had got notice of the claim of Walker and Company, and therefore refused to pay any more money. Young Allen, at first, doubted, but was afterwards satisfied, that his mother had given a general warranty. The plaintiff herself came afterwards, and, without suggesting fraud or mistake as to the warranty, being satisfied that Walker and Company had title to 330 acres of the land, appeared only anxious to have the amount of deduction fixed. The parties submitted it to arbitrators, who made an award, satisfactory to this defendant, but not to the plaintiff or to James Hayes; --he therefore was willing not to insist on that award. This defendant and Isaac Hayes sold to James Hayes so much of the land as was not claimed by Walker and Company, and retained only the part comprised in that claim. He admitted the mortgage, and that the land was bound by it, but claimed a deduction for so much as Walker and Company claimed.
James Hayes answered also in his own right; stating that he bought a part of the land, but had not then heard of Walker's claim; (though he had heard of that of Wilkinson; ) and had no notice of any contract between the plaintiff and Flack concerning a special warranty, or of any alteration in the deed she made. He confessed notice of the mortgage, but had never seen the contract or deed from the plaintiff to Flack. He had had a survey made, and found that Walker's claim would take off two hundred acres of the land he bought, and that by far the most valuable part. He therefore insisted on a deduction from the sum claimed by the plaintiff.
Claudius Buster administrator of Isaac Hayes, in his answer, said that he drew the agreement between the plaintiff and Flack; that a claim of John Wilkinson to a part of the land, was talked of at the time: --the plaintiff believed that Wilkinson had no right; but, choosing to avoid trouble, would only agree to give a special warranty; and it was so stated in the written agreement. This respondent knew not that the Deed was made with general warranty, 'till he was told by Flack, that the plaintiff had said that, as she herself had a general warranty, she would give him such an one; and that she did so. He had not the agreement; had never had the deed in his possession; and knew not what had become of the original.
To these Answers, there was a general Replication; whereupon, Commissions were awarded, & c.
The heirs of Flack, in their Answer, disclaimed all knowledge on the subject. There was no regular proceeding against the heirs of Isaac Hayes.
From the exhibits, it appeared, that Mrs. Allen's deeds as Executrix of Robert Allen deceased, to Flack, contained a clause of general warranty: but the original agreement between them was not shewn. Copies were exhibited, of a survey made for John Wilkinson, of 800 acres, and of a Patent for the same land to Thomas Walker, dated June 12th 1772. The Deeds from Flack to Bumgardner and Hayes, were with warranty against all claims but Allen's mortgage.
The depositions proved, that Mrs. Allen and Flack both knew of Wilkinson's claim before her sale to him; that, by the original contract between them, she was to give only a special warranty for the 400 acre tract; and that Wilkinson's claim and Walker's were one and the same.
The Chancellor directed an account of the sum due the plaintiff on her mortgage; of the purchase-money due from Hayes and Bumgardner to Flack; and of the value of the lands included in Walker's claim. The Commissioner returned a survey, shewing that 206 acres in all were covered by that claim; estimated at 963 dollars; of which, 119 acres where held by Bumgardner, and 194 acres by James Hayes. He reported that that part of the purchase-money, due from Bumgardner and Isaac Hayes to Flack, which they agreed to pay the plaintiff, was still in their hands; --payment of the residue being acknowledged by Flack's executors; and that 9141., principal and interest, were due on the mortgage.
April 4th 1812. Chancellor Brown decreed, that the plaintiff should be relieved from the effect of the general warranty; and that the same should be regarded as only special; and that, unless the defendants paid her the balance due on the mortgage before the 1st of October ensuing, the land should be sold by Commissioners to satisfy the debt.
The Commissioners reported, that they had sold the land accordingly, and Bumgardner purchased it for $ 2840; charges of sale $ 67 30; nett proceeds $ 2772 70; which sum was paid to the plaintiff's agent, as of date of sale, November 30th 1812.
The Chancellor confirmed the sale; and directed the Commissioners to convey the land to Bumgardner: and, it appearing from the said report, that the proceeds of sale were insufficient to discharge the plaintiff's claim, the Chancellor, being satisfied that, by the agreement between Flack, Bumgardner and Isaac Hayes, of Dec. 26th 1800, the latter were bound to pay the plaintiff at least 7001., which, if punctually paid, would have extinguished the whole of her claim, therefore decreed, that the defendants Bumgardner and Buster, (the latter out of the assets of his intestate,) pay unto the plaintiff the balance due, after deducting therefrom the sum of $ 2772 70, the nett proceeds of the sale aforesaid, to be considered as a payment on the 30th day of November 1812.
From this decree, Bumgardner and Buster appealed.
Decree reversed with costs, and the cause remanded.
The cause was argued before a Special Court of Appeals, by Leigh for the Appellants, and Wickham for the Appellee.
On the part of the appellants, it was contended that, whatever equity the plaintiff might have had, as against her vendee Flack, to be regarded as only a special warrantor, and to be relieved from the effect of her general warranty, she was entitled to no such relief against the defendants, who purchased without notice of that equity: that, consequently, the defendants were entitled to a deduction for the land covered by Walker's better title, for which the plaintiff did not, and could not, convey a good title: and that, after the plaintiff, over and above the instalments of the purchase money she had already received, had also received the proceeds of the sale of every foot of the land, it was highly unjust to make innocent purchasers, ignorant of Flack's secret contract with her, and misled by her own deed to him, personally responsible to fulfil Flack's contract to the uttermost farthing. Flack alone was so responsible, in the event of inadequacy in the mortgage: --his representatives were before the Court, and should have been decreed against.
Sugden 476; 2 Fonb. Bk. 2, c. 6, § 2.
On the other side, it was said that this was not a case of a mere equitable title set up against purchasers without notice; for Mrs. Allen, being a mortgagee, was a holder of the legal title. Her equity, too, was preferable to their's. It is perfectly clear that the Deed's being with general warranty proceeded from a mistake in the scrivener who drew it. Flack himself, long afterwards, acknowledged that he did not know it, but supposed the Deed to have been with special warranty: he therefore could not have misled Bumgardner and Hayes by telling them that it was with general warranty. It is incontrovertible that they did not buy on the faith of the general warranty from Mrs. Allen to Flack, but relied on Flack's warranty to themselves. Bumgardner says he never examined the Deed; Hayes, that he never saw it. The Recital in the Deed was, that she sold the land not as her own, but as a trustee, under a power given by the Will of her husband. A general warranty was therefore not to be expected. They knew too that she was about to leave the State.
Their agreement with Flack to pay to her the purchase money, bound them to make good the balance unsatisfied by the sale under the mortgaged. There was a privity between them and her; for they agreed to stand in Flack's shoes; to pay her the money for him; and they paid part in conformity with that agreement.
The only defect in the Decree is, it's failing to give the plaintiff relief, (in default of Bumgardner and Hayes,) against Flack's representatives.
OPINION
Judge Roane delivered the Court's opinion as follows.
The Court is of opinion that, notwith-standing the general warranty contained in the deed of Oct. 5th, 1798, from the appellee to James Flack, it is fully established by the testimony, that that stipulation was contrary to the real agreement between the parties. By that agreement, the 400 acre tract conveyed thereby was only to be conveyed under a special warranty. Notwithstanding, therefore, the claim of Walker, mentioned in the proceedings, to a part of the said land, the said Flack and his representatives were bound to pay the full consideration therefor, mentioned in the said Deed. The opinion of the Court further is, that, towards effecting this payment, the lands mortgaged by the said Flack to the appellee, were liable, into whose soever hands they might come; and, in case of a deficiency, that the balance was to be made good out of the proper estate of the said Flack. This is the extent of the appellee's claim in this particular; and she has nothing to do with the subsequent contract between Flack and the appellants, except in so far as they may have bound themselves absolutely to pay a sum to her on account of Flack; in which case, to avoid circuity, the Decree would be rendered against them, pro tanto, in the first instance.
The Court can not view the contract between Flack and Bumgardner and Hayes, which is thus brought collaterally before them, as importing any such absolute agreement on the part of the latter. We can not see that there is any essential difference, in principle, between agreeing to pay the vendor himself, and contracting to pay his creditor; and, if Mrs. Allen were out of the question, it would be the common case of a general warranty of a tract of land, as to which there is a real outstanding title. Nor can we see that the appellee's case should be differed, and her rights extended, by virtue of the alienation of Flack, beyond what they would have been if no such alienation had been made. In that case, her remedy would be limited to the proceeds of the mortgaged estate, and to the balance to be recovered from him or his estate as aforesaid, in exclusion of others. However, therefore, the case may be, as between the representatives of Flack and the appellants, and in relation to this claim by Walker, the appellants have done nothing in this transaction to subject themselves to the claim of the appellee: --they only agreed that a part of the money stipulated to be paid to Flack, should be paid to her, his creditor; but that agreement was subject to the same limitations and exceptions, as if it had been contracted to be paid to himself; it excludes the reported value of the land claimed by Walker.
This view of the subject excludes the enquiry whether the appellants had notice, or not, of Walker's claim, when they purchased from Flack. We are inclined to think they had not; but this is immaterial as to the appellee. The ground of holding a purchaser bound, who has notice of an out-standing title in another, is that he acts with a corrupt conscience in purchasing what in equity he knows belongs to another. In relation to Walker, (who has also the legal title,) this principle would be infringed, on this hypothesis; but it is otherwise as to the appellee. She has no land which is thus brought in question; and the appellants are only liable to her, if, and so far as, they are brought in, collaterally, by the agreement between them and Flack. Flack's executors have not answered as to the state of his assets. It may be that his estate is entirely competent to pay the balance due to the appellee, after the sum of $ 963, (the reported value of the land claimed by Walker,) and the other payments, are deducted. The decree is therefore erroneous, not only in subjecting the appellants to pay the said sum of $ 963, but also in omitting to decree against Flack's representatives, (including eventually his heirs,) the balance which is due to the appellee as aforesaid.
The Court is further of opinion, that the appellee has the less reason to complain of this construction of the appellant's contract with Flack, because the general warranty contained in her deed as aforesaid, might have tended to mislead them as to the reality of Walker's claim, and which might, therefore, have produced even a more unqualified stipulation in this particular, than is found to exist.
On these grounds, the Decree is to be reversed with costs, so far as it conflicts with the principles now declared, and affirmed as to the residue; and the cause is remanded, to have that decree reformed, and the cause finally proceeded in pursuant to the principles of this Decree.