Case ID: ala_14/html/0084-01.html
Source: Caselaw Access Project
Author: {"author": "COLLIER, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MUNDINE v. PITTS’ ADM’R et al.
    1. A purchaser from one who has the legal title to, and is in possession of land, is not affected by a latent equity of which he has no notice, until he has paid for and received a deed for the land.
    3. Notice to an agent, or counsel, employed by another person, in another business, at another time, will not be constructive notice to his principal, or client, employing him afterwards.
    Error to the Chancery Court of Shelby. Before the Hon. W. W. Mason, Chancellor.
    The bill was filed by the plaintiff in error to rescind a contract entered into between him and Pitts for the exclusive right to use, sell and dispose of a certain patent invention called “ Pitts’ patent cotton cultivator.” The bill al-ledges fraud and circumvention, by which the complainant was induced to convey to Pitts for the right to use the said invention in certain States and Territories agreed on, nine hundred and twenty acres of land valued at $12 50 per acre, three lots in the town of Columbiana valued at $600, and executed his note for $2000. The bill also charges, that one Brasher has become possessed of the land, and was a confederate in the fraud.
    The answers of Pitts and the Brashers deny all fraud. Much testimony was taken, for which, as well as the facts put in issue, see the opinion of the court, which is so full as to render repetition unnecessary.
    The chancellor dismiissed the bill for want of equity— which is the matter now assigned as error.
    JoHN T. Moegan and L. E. Parsons, for the plaintiff in error.
    1. There can be no doubt that the deed was procured from Mundine by Pitts, by means of gross fraud and misrepresentation, and the sale of the land was void. Swift v. Fitzhugh, 9 Por. Rep. 40 ; Kennedy v. Kennedy’s heirs, 2 Ala. R. 571; Juzan v. Toulmin, 9 Ala. R. 662; see cases cited in Ballen-tine on Lim. 74, 370.
    2. The answers of the Brashers do not deny 'hknowledge of the fraudulent means by which the deed was procured from Mundine, but deny that they had any notice of a defect in the title, or claim of Mundine upon the land. Such a denial is a negative pregnant, and is an admission of notice of the fraud. The proof shows conclusively that T. S. Brasher had actual notice of the fraud; and this is also shown by his answer. The Brashers set up in their answers a compromise between Pitts and Mundine, and speak of all the facts as of their own knowledge. 2 Sugden on Tend. 348 ; Smith & Co. v. Zurcher, 9 Ala. 208.
    3- The Brashers being privies in estate, the answer of one is good against the other. In this case Samuel Brasher refers to the answer of T. S. Brasher, and adopts it as true. Osborne v. Bank U. S. 9 Wheat. 738; 5 Cond. R. 741.
    
      4. Brasher had sufficient information of the circumstances under which the trade between Pitts and Mundine was'made to put him upon inquiry, and the law deems him conusant of the fraud. Green v. Slaughter, 4 Johns. Ch. Rep. 38 ; 1 Johns. Ch. R. 267; Willis v. Beecher, 2 Binney, 460; Day v. Dunham, 15 Johns. 555.
    
    5. Notice to McClanahan, who was the attorney of the Brashers, was sufficient. Westervelt v. Hoff, 2 Sandf. Ch. R. 98; Hayden v. Agent Auburn Prison, Id. 195.
    F. Bugbee, contra.
    1. Defendant may embrace all the matter of his plea and demurrer, either general or special, in his answer, and shall have the benefit thereof. Clay’s Dig. 351, § 36.
    2. Misrepresentation in matter of opinion and fact, equally open to the inquiries of both parties, and in regard to which neither could be presumed to trust the other, unless it be a mere contrivance of fraud, in cases of peculiar relationship; or where the other has justly reposed upoh it and been misled, furnishes no ground for the interference of equity. Ju-zan v. Toulmin, 9 Ala. R. 684.
    3. Misrepresentation must be material of something in which the party places a known confidence — not in matter of opinion, open to both parties for inquiry, and where neither is presumed to trust the other. 1 Story’s Eq. § 197 to 201; 6 How. Miss. R. 311; Atwood v. Small, 6 Clark & Finell,. 329, 447, 478, 502; Davis v. Meeker, 5 Johns. Rep. 354; 1 Dev. & Bat. Eq. R. 315.
    4. No matter how positive the representations of a seller may be, it will be regarded as an expression of his belief, or opinion, unless it was intended and received as a stipulation, that the property was of the quality represented. Barnet v. Stanton & Pollard, 2 Ala. R. 184.
    5. Chancery will not aid a purchaser to rescind a contract even in a case of fraud, where there has been a want of common and ordinary diligence. Steele v. Kinkle & Lehr, 3 Ala. R. 352; 9 Term. 368.
    6. Yague and indefinite statements do not avail. False representations as to value and quaility of land — specific performance decreed. 1 Sim. 13; 3 Mer. 704.
    
      7. To enable one of the parties to a contract to defend himself for a violation by the other, he must act promptly. He cannot take the beneñt on his part, and then refuse as to the benefit conferred on the other party. Casey v. Holmes et al, 10 Ala. Rep. 776.
    8. If a party, with knowledge of incumbrance, proceeds to execute in part, he will be required to execute in full. Barnett v. Gaines & Townsend, 8 Ala. R. 374; Simmons v. Komegay, 7 Ala. R. 71.
    9. Difference in unfairness, which will induce a court to set aside contract, or to decree a specific performance. 5 Peters, 276; 10 Tes. 292 ; 2 Cox’s Cases in Ch. 77; 3 Cow. 445, 530; 11 Peters, 248.
    10. Fraudulent contract may be affirmed by innocent party. Fenimore v. U. S. 3 Dali. 357; 12 Pickering, 307.— Right to disaffirmance limited to time interest is in the original parties, per Elsworth, C. J., 3 Dali. 357 ; 1 Peters, 164; 12 Pick. 307.
    11. Rescission must be in whole, not in part. Kimball v. Cunningham, 4 Mass. 502; 23 Pick. 283; Chit, on Con. 276; 3 Wend. R. 236.
    12. If party has derived any benefit, cannot recover back. Taylor v. Hare, 4 B. & P. 260; Burnett v. Stanton & Pollard, 2 Ala. R. 189, 190.
    13. Confirmation. 1 Story’s Eq. 345; 2 Stew. 479; 2. Yes. 125; 7 Smede & Mar. 544; Burnett v. Stanton & Pollard, 2 Ala. 189; Cole v. Gibbons, 3 P. Wms. 290; Parker v. Palmer, 4 Barn. & Aid. 387.
    14. Purchaser bona, fide. 2 Story’s Eq. 1502-3.
    15. Equity will not interpose where party has acted upon a mistake of law. 1 Story’s Eq. 139.
   COLLIER, C. J.

Waiving the consideration of the general equity of the bill, we proceed to notice other questions which are presented, and are decisive of the cause. In respect to the allegations that T. H. Brasher co-operated with Pitts in making a sale to the complainant of the right to usé or dispose ef the “ patent cotton cultivatorand that he agreed to become a parkier of the complainant in the purchase, it is enough to say that they are denied in toto, and that the denial of the answers is not disproved.

Conceding that the complainant, as against Pitts and his representatives, was entitled to a rescission of the contract, and the question arises, can he recover the lots and the land of the Brashers and others, who purchased of Pitts ?

T. EL Brasher denies that he advised the complainant to make a deed to Pitts with any intention of becoming the purchaser of the land in fraud of the complainant’s rights, and the testimony shows, that he informed the latter, that if he conveyed the title, then he (Brasher) proposed to purchase of Pitts; he also expressed the opinion, that the bond was as binding as a deed; that there could be no fraud, as the government had issued a patent for the. invention, and Pitts was authorized to sell. It cannot be assumed, in opposition to the denial of fraud in the answer, that this opinion was not honestly entertained ; nor can it be inferred that the complainant confided in, or was influenced by it. Besides, the declaration by Brasher, that he expected to purchase of Pitts, if the complainant made a conveyance, tends to show an absence of mala fides, and that Brasher considered a deed necessary to authorize Pitts to perfect titles to him; and the subsequent execution of the deed, with a knowledge of such intention, if it does not warrant the implication of the complainant’s assent to Brasher’s purchase, at least indicates, that in conveying to Pitts, he acted with a previous knowledge of the intention of the latter to sell.

Both the Brashers affirm by their answers, that their purchase was made in good faith — that they paid Pitts $6,000, and received a deed from him and wife, duly acknowledged, &c., before they had notice that the complainant claimed the land, or insisted upon the right to rescind the contract. In fact, they believed the deed to Pitts was executed upon a compromise and settlement of the matters of controversy growing out of the sale of his patent to the complainant. In respect to the bona fides of the transaction between Pitts and the Brashers, the consideration paid by the latter, and the execution and delivery of the deed to them, their answers are fully sustained by Pitts. There is nothing in the record to implicate its fairness, and the testimony is full and explicit to make out the consideration of the deed, its execution and delivery.

It is well settled, that where a person is invested with a regular legal title to land, evidenced by a deed duly executed from one who was authorized to sell and convey it, and is himself in possession, a purchaser from such person, who has no notice, either actual or constructive, of an adversary claim at the time he pays the purchase money, and obtains a conveyance, will hold the land against all the world; except in the case of a prior claim, which is afterwards registered within the time prescribed by law; or perhaps where the adverse claimant was an infant, feme covert, or under legal disability. Fenno et al. v. Sayre & Converse, 3 Ala. Rep. 458, 475, and cases there cited ; Billington, Lessee, v. Welsh, 5 Binn. Rep. 129; Dexter v. Harris, 2 Mason’s Rep. 531; Jackson v. Henry, 10 Johns. Rep. 185; Swartz v. Moore, 5 Sergt. & R. Rep. 257; Stahl v. Spohn, 8 Id. 317. Conceding that it is shown by the testimony, that in the modified contract between the complainant and Pitts, it was stipulated the deed by the former to the latter should become void if the patent cotton cultivator” should prove to be a useless invention, and still the complainant is not in a predicament to be exempt from the operation of the rule we have stated. If therefore the Brashers had no notice of the equity of the complainant against Pitts, when they paid for and received a deed for the land which they purchased of the latter, they cannot be affected by it.

We have examined the volume of testimony in the record, and it certainly does not show that the Brashers were purchasers with notice. The deposition of McClanahan, which is mainly relied on for that purpose, proves that he wrote the deed from the complainant to Pitts, and that it was understood at that time, it should not prejudice the complainant’s right to rescind or make defence against his contract for the purchase: but the witness explicitly declares, that he does not know whether this understanding was communicated to either of the Brashers. Fagan’s testimony is substantially the same as the preceding.

It is however insisted, that as McClanahan wrote the deed from the complainant to Pitts, and was then informed of the reservation of the contingent right to rescind, the law will intend that the Brasher’s possessed the same information, because'McClanahan, a few days afterwards, wrote the deed from Pitts to them. As a general rule, it may be admitted, that if an agent or attorney acquire knowledge, or receive notice of a fact, while engaged in the discharge of his duties as such, it will be presumed that it was communicated to his principal or client, or the principal or client are at least chargeable in the same manner as if personal notice was communicated to them. But beyond this, the rule does not extend or it would operate injustice. Lord Hardwicke said, “ It is stated, that notice to an agent, or counsel, who was employed in the thing by another person, or in another business, and at another time, is no notice to his client, who employs him afterwards: and it would be very mischievous if it was so, for the man of the most practice and greatest eminence would then be the most daugerous to employ.” Worsley v. The Earl of Scarborough, 3 Atk. Rep. 392; Warrick v. Warrick, Id. 294; Le Neve v. Le Neve, Id. 650; Lowther v. Carlton, 2 Id. 242. To the same effect see Lucas v. The Bank of Darien, 2 Stew. Rep. 321; Terrell v. The Branch Bank at Mobile, 12 Ala. Rep. 502, and cases there cited. These citations are conclusive to show, that the Brashers cannot be charged with a constructive notice of the circumstances under which the deed from the complainantjto Pitts was executed, merely because McClanahan, who had such knowledge, afterwards wrote the deed from Pitts to them. This being so, it results from what has been said, that their title must prevail against the complainant.

What has been said upon the law of the case applies with ■all force to the other purchasers of the 'town lots, and the eighty acres of land not embraced by the conveyance to the Brashers. If the bill is so framed as to entitle the complainant to relief against Baker, Havis and Roper, the proof is defective in making out such a case. Havis states in his answer that he purchased one of the lots of Baker which he paid for, and at the request of Baker received a deed for two of them of Pitts, without any notice of the complainant’s claim to them, or suspicion of the validity of Pitts’ title. Neither Baker or Roper are made defendants, and the fact that the former was the purchaser of the lots, is only shown by Havis’ answer; and Roper himself testifies, that he purchased the eighty acres tract of land at a sale by the sheriff as Pitts’ property — but when, does not appear. Havis’ answer is not contradicted by the testimony, and as for Baker and Roper, no decree could be rendered in the cause which would affect their interests or impair their rights, whatever the proof might be; because they are not made parties to the suit. It results as an obvious sequence, that the complainant is not entitled to relief against Havis. The only remaining inquiry is, what are his rights upon the case made by the bill and proof against Pitts.

We need not consider what were the rights of the parties under the original contract, or whether Pitts practised such a fraud upon the complainant as entitled the latter to insist upon its rescission. However this may be, it is alledged in the bill that more than one year after Pitts made to the complainant a sale of his patent right for several states, &c. the latter proposed to rescind the contract, to which Pitts did not assent: whereupon it was agreed between them, that the complainant should give Pitts his note for $150, and make a deed to him for the lands embraced by the first contract, and not previously conveyed. In consideration of which, Pitts delivered up to the complainant the note which he held on the latter for $2,900 — it was at the same time agreed, andas a part of the compromise, that the complainant should not be put to the trouble and expense of a lawsuit to rescind the contract, but if the “ patent cotton cultivator” failed to answer the purpose intended by it, then Pitts would re-convey all the lands and town lots which the complainant had conveyed to him, and the contract should be annulled. These are the allegations of the bill. The only proof upon the point is found in the depositions of McClannahan and Fagan. Both these witnesses concur in stating that it was agreed between the parties the complainant did not deprive himself of the right to rescind the original contract by executing a deed for the land, and modifying it in respect to the amount of money he had undertaken to pay; that if the notes taken upon sales made by the complainant of the right to rnanu-facture or use the “ patent cotton cultivator,” should be adjudged by the courts not to be recoverable, then, the contract should be rescinded.

The proof is full and direct that the invention of Pitts was not a valuable improvement in agriculture — -in fact, that it failed to answer the expectations both of the complainant and the patentee. But the terms on which the modified contract provided for a rescission of the original was, that the notes received upon the sales of the plough, should be judicially determined not to be recoverable. Now, conceding that the allegation is adapted to the testimony, and still the proof is at fault in not showing that the courts had decided against the complainant’s right to recover upon sales made by him. Such evidence is indispensable to entitle him to rescind according to the terms which the parties themselves have stipulated; and in its absence, the complainant is not entitled to the redress which he seeks against Pitts.

This view is decisive of the cause, and shows our concurrence in the conclusion of the chancellor, if not in the reasoning employed by him, and relieves us from the necessity of considering the equity of the bill, except so far as this may have been done incidentally. The decree of the court of chancery is consequently affirmed.