Case ID: va_20/html/0769-01.html
Source: Caselaw Access Project
Author: {"author": "JUDGE ROANE,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Taylor v. King.
    Decided April 7th, 1819.
    i. Deeds — Fraud—When and How It Can Be Taken Advantage of. — Th a court of common law, fraud may be given in evidence, to vacate a deed, on the plea of non est factum; if such fraud relate to the execution of the instrument,'as, if it be misread to the party, or his signature be obtained to an instrument which he did not intend to sign: but fraud committed in a settlement of accounts which preceded or in a statement of facts which induced, it’s execution, can not be pleaded or given in evidence; the only remedy, in such cases, being in Equity.
    2. Same — Want of Consideration — Effect.  — A defendant being party or privy to a deed, can not avoid it, in a court of common law, by parol evidence, on the ground of want of consideration; for he is estopped from averring such matter against a specialty;.
    3. Deed of Trust — Title of Trustee. — 1The trustee in a deed of trust takes a legal, though defeasible title; and a deed from him to a purchaser, conveys an absolute title, in a Court of common law; whether the conditions of the Trust Deed have .been complied with, or not: but the rule is different in Equity.
    4. Same - Sale by Trustee — Setting Aside. — A Court of Equity will not permit the original owner of land, or his alienee, to be injured by a breach of trust on the part of the trustee; and, therefore, will set aside a sale and conveyance by him, if the requisitions of the deed of trust have not been complied with.
    
      5, Same-Conveyance by Trustee — Estoppel of Original Owner. — A purchaser from a person who has previously conveyed the estate to a trustee by . deed duly recorded,-is estopped at law though not in Equi ly from impugning, on the ground of fraud, a deed regularly executed by the trustee, to a purchaser from him.
    
      In Ejectment in the Superior Court of Montgomery County, by John M. Taylor against Joseph King, the Jury found a special verdict; that Andrew Lewis was seised of the land in the declaration mentioned, with the appurtenances, in fee; that, before the 1st of February 1809, he had by proper deed conveyed the whole to his son Charles G. Lewis, who was thereof seised, and, while in actual seisin, being indebted to Reuben and Randolph Ross in the sum of $1,515 32 Cents, on the 3d day of 'February 1809, executed, jointly with his father, a Deed of Trust to Henry Ed-mundson, to secure the payment of the said sum of money to the said Reuben and Randolph Ross; which Deed, being duly recorded, was found in haec verba: — that, on the 4th of June 1811, the said Reuben and Randolph Ross, for a valuable consideration, fairly and bona fide transferred their interest, in the said deed of trust and the money secured thereby, to John M. Taylor the lessor of the plaintiff, by a writing under seal, found also in haec verba : — that, on the 14th day of December 1811, the sum of $1273 14% Cents, secured by the said Deed of Trust, being due on account of principal and interest, the said Trustee, having fixed on Montgomery Court House, as the place of sale, distant from *the premises about ten miles, and, at the request of the said Taylor, having duly advertised the time and place of sale according to the provisions of the Deed, proceeded to expose the Land and appurtenances according to the tenor and in the terms therein stipulated; and,, after due outcry at the place designated, the same was struck off to the said John M. Taylor, (who was the only bidder,) for the said sum of $1273 14% Cents: that, before this sale, and before the date of the advertisement, the suit mentioned in the said deed, depending in the Court of Appeals, between Andrew Lewis appellant and the heirs of William S. Madison, had been finally determined in favour of Andrew Lewis, so as to secure the title, as in the said Deed is mentioned, to Charles G. Lewis: that Henry Edmundson the trustee, by a deed of bargain and sale, (found also in hsec verba,) conveyed the premises to the lessor of the plaintiff: — that Charles G. Lewis, after he had made the said deed of trust, did regularly sell the land and premises for a valuable consideration, to wit, $15,000, to Joseph King the defendant, and put him in possession thereof: — that, on the day of sale of the premises under the deed of Trust, and before the land had' been knocked off by the auctioneer, a certain Garnett Peyton attended, and had made a positive and satisfactory arrangement to purchase the land in partnership with him the Trustee; and, in consequence of that arrangement, the said Peyton had come to the resolution to bid as far as $8000, if the land could not be got for less; that, afterwards, on the same day, and before the sale had taken place, the said John M. Taylor, understanding that arrangement and determination, then and there agreed with Peyton, that, if he bought the land, the said Peyton should have it at the price of $8000: that, in con-| sequence of this agreement, and the conduct of Taylor, Peyton did not bid at the sale: that, on the morning of the day of sale, one James Craig asked Taylor, if it would not be right for him to bid to the amount of the Deed of Trust; that Taylor then approved the said Craig’s intention of bidding, but, in the. evening, and before the land was struck off, came to him, and requested him not to bid; in ^consequence of which he did not bid; but, if Taylor had not made the request, he would have bid to the amount at which it was cried off to the said Taylor, and more rather than have lost the land: that Craig had not, at that time, by him, more than about $1100, but believed himself able to procure more money: that, in consequence of this conduct of the said Taylor, he was without a competitor in the market, and did obtain the land as the only bidder, at a very inferior and inadequate price; the land in the general estimation being worth from $8,000 to 10,000: that the said John M. Taylor, the creditor and lessor of the plaintiff, was guilty of a fraud at the sale of the land aforesaid, by which he obtained it, as purchaser, at less than one seventh part of it’s real value, to the injury of the said Joseph King. The verdict concluded in the usual form.
    The Superior Court, upon this special Verdict, entered judgment for the defendant; from which the lessor of the plaintiff appealed.
    Wickham for the appellant.
    By virtue of a deed of trust, the legal estate is in the Trustee, who therefore may bring Ejectment, even after the debtor has paid the money without taking a release; for the estate, without a release, does not revert. So a mortgagee may bring Ejectment, before forfeiture ; and the only remedy of the mortgagor is in equity. — At law, the person giving the dged, retains no estate, either in fee, or freehold, or for years.
    The Deed therefore from the Trustee to the purchaser passed the estate; being good between them. — The Trustee can not recover from the purchaser, or defend himself from a suit for the land, founded on his own act. — Admit it not binding as to the debtor;. — this can be in relation to his right only, which is merely equitable. — ■ Can a fraud committed by others, turn it into a legal right?
    Suppose the fraud had been between the Trustee and a purchaser, without the creditor; — would the deed be void absolutely, or only pro tanto? — Suppose the creditor a party to the fraud; what becomes of the estate? — Does it remain in the Trustee, notwithstanding his own deed? *Can the debtor bring Ejectment, where the land has been sold, and possession delivered, by the Trustee to the purchaser? why should he? for the purchaser with notice of the trust, and of it’s not being duly executed, is himself a trustee,  The proper remedy of King is by Bill in Equity to redeem or to set aside the sale; making the purchaser a party, who, then, must prove the sale regular, or the decree will be against him. — So, if A. sells to B., but makes no conveyance to him, and af-terwards conveys to C. ; (a purchaser with notice of B.’s right;) the conveyance Is good at law: — the fraud of A. & C. does not give B. a legal estate: — his only remedy is in Equity.
    It may be contended that a Court of common law has jurisdiction in cases of fraud. —I answer, that the Deed of Trust, which passed the legal estate, was not founded in fraud: but, if it were, the Court of law can not take cognizance of it, for the estop-pel operates. — The case of Chew ex’or. of Wormley v. Moffett, lately decided, (ante) turned on the circumstance that, by joining issue, the objection to the legality of the plea was waived ; — otherwise, the decision would have been different.
    The rule laid down in the Books, is, that all contracts of a nature generally repugnant to the policy, or contrary to the provisions, of the common law, are void. — But the rule relates to contracts whose general nature and object is illegal; such as bonds for compounding prosecutions for perjury ; for the wages of prostitution, &c.  A similar rule applies to contracts prohibited by Statute. For example, a conveyance of all the goods of a trader, is an act of bankruptcy and void: so also, bonds tainted with Usury, &c., are void.
    In like manner, a Bond may be avoided on the ground of fraud committed in it’s execution ; as, if an illiterate person be induced to sign it, by reading it to him in words different from those in which it is written ; for, in such case, the mind of the obligor does not assent to the act.
    The consequences of extending the rule farther, would be very inconvenient. Suppose the creditor, on a settlement, brings in a false charge of 51. 0. 0 in 10001., and *takes a bond, for too much, to that amount: — ii the debtor could plead the fraud at law, the bond would be avoided altogether; whereas the rule in Equity is, that the fraudulent instrument is void only so far as it ought to be so.
    Again, if a person defrauded, executed a Deed, would it be proper to permit him to avoid it in the hands of a purchaser without notice? If so, what becomes of titles?
    There is not a case like this, in which the conveyance has been decided to be void at common law: — but there are thousands in equity. Questions relating to purchasers without notice, breaches of trust, &c., form a main pillar of equitable jurisdiction, which would be thrown down, if the judgment now in question should stand.
    Call for the appellee.
    1. The deed from the trustee was void between the parties, for every fraudulent act is void in law; and a Court of law is competent to declare it so.  Neither is there any difference between a deed and simple contract; for what is base in it’s origin can not be made good by forms,  If you put the question upon the foundation of the mind’s not assenting; that reason is as much applicable to one species of fraud as another. If a man, intending to give a bond for twenty shillings, is imposed upon* and made to give one for twenty pounds, the bond is void, (says Mr. Wickham,) because his mind never assented: but the truth is, the ground of avoidance is the fraud committed by his adversary.
    A defendant is not estopped from pleading a collateral matter, which makes a deed void, or voidable: — 'not by the old law; as in the cases of the deed obtained by fraud from an illiterate raan, and where a man persuaded a woman to execute writings to another, as her trustee upon an intended marriage, which in truth contained no such thing, but only a warrant of attorney to confess a judgment, &c. : nor by the present law; for the party may shew that the deed was founded upon an illegal consideration ; or was obtained from a drunken man; or *from a lunatic ; or by a fraudulent misrepresentation of the plaintiff’s right to a patent for an useful invention. 
    
    The modern doctrine is that, even an equitable defence may be pleaded at law ; which abolishes the old doctrine of Estop-pels, or shews that they only apply in support of justice; so that, in every case, the instrument being admitted, the bad consideration may be shown.
    Actual fraud is a matter of fact, ané therefore proper to be ascertained by a Jury; so that, in such cases, the Court of Equity is generally obliged to direct an issue. Is it not monstrous, then, to drive the party into Equity, in order that he may be sent back to law to ascertain the fact? The distinction is this. Where the fraud depends on matter of fact, the case is cognizable at law, and the jurisdiction of both Courts is concurrent; but where it results from equitable inference only, the Court of Equity has exclusive jurisdiction.
    2. The deed is void also, as against the present defendant. If void between the parties, it can have no effect anywhere, or against anybody. So, a bond given by an infant, or founded on gaming &c., is void in the hands of an assignee. But if good between the parties, it can not affect this defendant; for estoppels do not bind a stranger; and therefore he may plead “ríen passa per le fait.” The plaintiff in Ejectment must recover upon the strength of his own title; and, here, his claim is founded on a fraudulent conveyance, which passes no estate; in like manner as a void bond creates no debt,  That the legal estate passed by the deed of trust cannot avail him; because the question is whether the legal estate passed by the deed to the lessor of the plaintiff; for, if not, he can not maintain Ejectment. The deed to him is void, not only as to equitable right, but altogether, and passes nothing. Tho’ the defendant can not deny the deed of trust, he still has a right to hold the laud against all but him who has the legal title; and the lessor of the plaintiff has not even equal equity; for, tho’ as creditor, he has a right to his money, he has none to the estate.
    *Mr. Wickham’s rule that only deeds contrary to Statutes, orto the general policy of the common law, are void, is too narrow. The cases prove that all fraudulent deeds are vbid. The inconvenience, that, at law, a bond would be avoided, altogether, for one fraudulent item, makes no difference; for, if so, it is a punishment for the perfidy of the party: but, perhaps,' the Jury might, under the Act, find the true sum due; and, at any rate, the'old debt, so far as just, would not be extinguished by defeating the bond. Neither is it important, that a purchaser without notice would not be safe; for such is the effect' in every case where the deed is void.
    Wickham in réply.' Not a single case referred to by Mr. Call is analogous in it’s circumstances to this. For example, Cock-shott v. Benuet, 2 Term Rep. 763,’ is not a case of a bond, but of a note; in Hayne v. Maltby, 3 Term Rep.' 441, the Deed was not contradicted, but avoided by collateral matters; and the case in 9 East' 417; was one of a bond with illegal consideration. There are multitudes of instances, in England and this Country,'of relief in equity in cases of this nature; but not one of relief at law. Does not this shew, that Mr. Call’s whole argument is founded on a misapplication of the authorities? His client has a mere equitable title. The Court of common law does not recognize his having any right at all. Any position that leads to an absurdity, or inconsistency with the uniform course of law proceed-' ings, must be wrong, however plausible it may appear. No doubt, the common law abhors fraud; but there are cases in which it can not give relief against it, tho’ a Court of Equity can.
    The question is, do the forms of the common law permit the fraud to be pleaded in snch a case as this? In Chitty on Pleading, 2 vol. 464, there is a form ofa plea of fraud to a bond; but it is not supported by any authority, and is not to be found in any other book of Entries. Is there not a substantial distinction between a case, where the party intended to sign a bond for one thing, and, by fraud, was made to sign one for a different thing, and a case in which the bond he signed was such as he ^intended, but his ground of defence is, that he was deceived in the settlement of accounts, and gave it for more than was due? In the former case, the Court of law will give relief on the plea of non est factum; in the latter, the only remedy is in equity. The plaintiff’s being indictable for the fraud, does not prevent his recovering at law upon the bond. — ■ Factum valet, fieri non debet, is the maxim.
    Can Mr. Call contend that the Chancellor’s sending an issue to be tried at law proves the case to be one in which the Court of law has original jurisdiction? If so, the jurisdiction of the Court of Equity would be destroyed in a great number of cases in which it’s existence has never been doubted.
    Estoppels operate upon privies, as well as parties. The lessor of the plaintiff claims under the trustee, to whom the Deed was originally made, and who has made him a Deed. He is therefore privy in interest.
    
      
      Deeds — Fraud-—When It Can Be Taken Advantage of. — in an action at law, on a specialty, it is not competent for the defendant to avoid it by pleading that it was obtained by fraudulent misrepresentations made by the plaintiff. Wyche v. Macklin, 2 Rand. 426; Hay v. Alexandria & W. R. Co., 11 Fed. Cas. 888, citing principal case. But he may introduce evidence tending to show that there was fraud in the execution of the instrument, as that it was misread to him. or his signature obtained to a different instrument from the one he intended to sign. Harrison v. Middleton, 11 Gratt. 549; American Button-Hole, etc., Co. v. Burlack, 35 W. Va. 660, 14 S. E. Rep. 323. both citing principal case.
      And in Fisher v. Burdett, 21 W. Va. 629, it is said: “Before the adoption of said Act of 1831, the courts of Virginia held, that the defendant could not vacate a bond at law because he was imposed upon in a settlement of accounts which preceded its execution, or because the bond was founded on a false or fraudulent statement of facts - Taylor v. King, 6 Munf. 358; or because the bond had been obtained by fraudulent misrepresentations made by the plaintiff — Wyche v. Macklin, 2 Rand. 426; or when the action was on a contract either by deed or by parol the defendant could not at law show, that the consideration had failed in part — Tomlinson v. Mason, 6 Rand. 169; Webster v. Couch. 6 Rand. 519; 1 Rob. Pr. (old) 227-8; Christian v. Miller, 3 Leigh 78.” Again, in Sterling Organ Co. v. House, 25 W. Va. 88, it is said, “it has been decided in a number of cases in the court of appeals of Virginia, that prior to the statute of 1881 before quoted no special plea could be filed by a defendant setting up as an abatement or satisfaction of the plaintiff’s demand, that he had violated the obligation on his part imposed on him by the contract, or that the consideration failed, or that fraud and deceit had been practiced by the plaintiff in making the contract sued upon, on which his suit was based; in other words that he could not set up the defence of recoupment by plea. (Taylor v. King, 6 Munf. 358; Wyche v. Macklin, 2 Rand. 426; Tomlinson v. Mason, 6 Rand. 169.)” See farther, monographic note on “Deeds” appended to Fiott v. Com., 12 Gratt. 564; monographic note on “Fraud” appended to Montgomery v. Rose, 1 Pat. & H. 5.
    
    
      
       Same — Want of Consideration — Effect.—It was not competent at common law as against sealed contracts to prove a failure in the consideration of the contract, or fraud in its procurement, o< breach of warranty of the title or soundness of personal property, but the defendant was driven, as when he proposed to recover agaiust plaintiff any excess of damages, to his independent action M law to recover the damages he had sustained Columbia Accident Association v. Rockey, 93 Va. 685, 25 S. E. Rep. 1009. citing principal case. Sealed instruments import consideration and its want cann )t be shown at law. Williamson y. Cline, 40 W. Va. 205, 20 S. E. Rep. 921. To the same effect, the principal case is cited in Underwood v. McVeigh, 23 Gratt. 426, 427.
    
    
      
      Deed of Trust — Title of Trustee. — The trustee in a deed of trust takes a legal, though defeasible title, and a deed from him to a purchc -er conveys an absolute estate in a court of law, '•’’hether the conditions of the trust deed have been cc nplied with or not, though a different rule preval s in a court of equity. Sulphur Mines Co. v. Thompson, 93 Va. 316, 25 S. E. Rep. 232, citing principal case, and Harris v. Harris, 6 Munf. 367. To the san e effect, the principal case was cited in Harris v. Harris, 6 Munf. 367; Pownall v. Taylor, 10 Leigh 183; Fulton v. Johnson, 24 W. Va. 114; Norman v. Hill, 2 Pat. & H. 681; Pollard v. Baylor, 6 Munf. 435. See monographic note on “Deeds of Trust” appended to Cadwallader v. Mason, Wythe 188.
    
    
      
       Same — Sale by Trustee — Setting Asicie.— After a sale has been made by a. trustee under a deed of trust, the court of equity will interpose with more reluctance than when it is applied to in the first instance, and before the sale is actually made. Morriss v. Virginia State Ins. Co., 90 Va. 375, 18 S. E. Rep. 843, citing principal case, and Harris v. Harris, 6 Munf. 368. See principal case also cited in Spencer v. Lee, 19 W. Va. 195. See further, monographic note on “Deeds of Trust” appended to Cadwallader v. Mason, Wythe 188.
    
    
      
       Fonbl. Book 2, ch. 6, § 2, note (i.)
    
    
      
       Collins v. Blantern, 2 Wils. 341.
    
    
      
       Walker v. Perkins, 3 Burr. 1568.
    
    
      
       Worseley v. DeMattos, 1 Burr. 467.
    
    
      
       3 Bac. 295.
    
    
      
       Fermor’s case, 5 Co. 78: Bright v. Eynon, 1 Burr. 395-6: 6 Viner 475; C. pl. 3: Cockshott v. Bennett, 2 Term Rep. 765: 3 Bac. 297.
    
    
      
       Mitchell and Reynolds, 10 Mod. 130: Collins v. Blantern, 2 Wils. 348.
    
    
      
       11 Co. 27. b.; Shep. Touch. 70.
    
    
      
       Sid. 481: 3 Bac. 295 note (a).
    
    
      
       2 Wils. 349.
    
    
      
       Bull. N. P. 172, 7th Edit. citing Coles v. Robin, per Holt, Salk. M. S. S.; Yates v. Boen, Str. 1104; Peake on Ev’ce, 265; Sugd. on Powers, 323-4.
    
    
      
       Hayne v. Maltby, 3 Term Rep. 441.
    
    
      
       Pole v. Harrobin, East 417, note; 3 Bac. 321, note a; 7 Wentw. 432; Bates v. Graves, 2 Vesey jr., 295.
    
    
      
       5 Bac. 429; Co. Litt. 352; 10 Viner 422, 446.
    
    
      
       13 Viner 89: Gilb. Law Evidence 145, 160.
    
    
      
       3 Co. 78; 2 Vessey jr. 295.
    
    
      
       See 2 Wils. 351.
    
   The Court’s ooinion was delivered by

JUDGE ROANE,

as follows:

This is an action of Ejectment brought by the appellant against the appellee. At the trial, upon the general issue, the appellant relied upon a deed of February 7th 1812, made to him by H. Edmundson, the trustee in a Deed of Trust of February 3d, 1809, executed by Andrew and Charles Lewis to him, to secure the payment of a debt due to Reuben and Randolph Ross, which debt was duly assigned by them to the appellant. Both these deeds are in the common form, and are in themselves unexceptionable. The defendant claims under a Deed from Charles Lewis, for the consideration of $15,000, made after the trust deed aforesaid, and before the sale to the plaintiff, and was put in possession of the premises. That' deed is, therefore; subject to' the incum-brance contained in the deed of trust, and must yield to any title legally deduced under it. Both the deeds being unexceptionable as aforesaid on their face, and that of February 7th 1812, being only produced on the trial, it could not be assailed but by evidence.

*The Jury found a special verdict, detailing certain acts committed by the appellant at the time of the sale, which are fraudulent, as to the defendant; and they also find them to be fraudulent. These facts tended to prevent ° competition at the sale, by means of which, it is also found, the appellant got the land for about one seventh part of its value. There is no doubt but that, in a Court of Equity, these facts would vacate the sale, and the defendant be deemed - to hold the land subject to the trust. Nor is there any doubt, but that, in a Court of law, a fraud may be given in evidence to vacate a deed, if that fraud relates to the execution of the instrument; as, if it be misread to the party, or his signature be obtained to an instrument which he did not intend to sign. It would be too much, however, to vacate a bond at law, because a party was imposed on, in a settlement of accounts which preceded it’s execution, or a bond or deed which was founded on a false or fraudulent statement of facts. Such circumstances go to shew a want of consideration; and a defendant can not avoid a solemn deed on that ground, by parol, in a Court of law. In that Court, and on such an instrument, the principle that fraud and covin vacates every contract, is to be taken in subordination to another principle, namely, that the party is estopped from averring a matter of the kind against a specialty, If this position needs support, it may be found, among other cases, in that of Mease v. Mease, Cowp. 47, and Dorr v. Munsel, 13 Johnson’s N. York rep. 430. In the last case it is expressly decided, that the fraud to be proved upon a plea of non est factum, must be such as relates to the execution of the instrument.

With respect to the Deed in this case, it is not at this day to be questioned that the Deed of a Trustee conveys a legal title. The Trustee himself takes a legal, though defeasible title; and that title becomes absolute in his vendee, by the Deed, in a Court of law.

We are also of opinion that, in a Court of law, the Vendee need not shew that the conditions of the Trust deed have been complied with. There have been some ^opinions and dicta in this Court seeming to countenance a contrary idea; but this is our opinion upon due consideration. While, however, the vendee gets a legal title by the mere execution of his deed, the original owner of the land, or his alienee, is not to be injured by a breach of trust on the part of the trustee. A purchaser from him, the requisitions of the Deed not being complied with, does not, in equity, get a complete title. He does not get it, because, until then, the trustee is not authorised to convey it.

On these grounds, we find ourselves compelled to reverse the judgment, and enter one for the appellant. 
      
       Note. See Pollard v. Baylor’s devisees, 4 H. & M. 239. Ibid. 136 — 7; and Ross v. Norvell, 3 Munf. 182