Case ID: va_74/html/0504-01.html
Source: Caselaw Access Project
Author: {"author": "ANDERSON, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Johnson’s Ex’or v. Nat. Exchange Bank, Richmond.
    September Term, 1880,
    Staunton.
    Absent Moncure, P.
    
    1. tenants in Common — Effect of Decree against One on Rights of Other. — J’s devisees and W are tenants in common of a hotel property, and J’s executor and W agree to sell the property at public auction; the deferred payments to be secured by separate bonds to each for his half of the purchase money, with a lien retained on the real property. The sale is made and W becomes the purchaser, but refuses to execute the contract. J’s executor sues W for specific execution of the contract, and there is a decree in 1868 in his favor for specific execution, a personal decree against W for the amount due, and for a sale of the whole property. Before the decree W sells and conveys his moiety of the property to M who pays the purchase money. Upon a bill by the judgment creditors of M to subject his moiety of the property to the payment of their debts — Held: W bought at the sale but J’s moiety of the property, and the lien of” J’s executor’s decree only extends to that moiety, though the whole property was sold under the decree.
    2. Decrees — Delay in Recording’ — Time of Taking’ Effect. — The decree of J’s executor was left with the clerk of the county court to be docketed on the 4th of February, 1870, but was not then put upon the docket. In July, 187$, the decree was found in the office and was then docketed, but was dated February the 4th. In May of the same year W conveyed a tract of land to T and C in trust to secure a debt to G, which was recorded. Held: The decree was not duly recorded until July, and the deed to T and C had preference of satisfaction out of the land.
    3. Principal and Agent — Notice to Agent— When Binding. — Though T, the trustee, had been the judge who made the decree against W, yet he stating in his answer, and also in his deposition, *that he had no recollection of the decree when the deed was made and recorded. Held: In order to affect the creditor by the previous notice or knowledge of his agent or trustee, of the existence of a prior unrecorded lien on the real estate which is conveyed for his security, it is necessary that the notice or knowledge should have been given or imparted to the agent in the same transaction, unless one transaction is closely followed by and connected with the other. In this case the evidence does not establish notice.
    This was a creditor’s suit in the circuit court of Rockbridge county in May, 1869, by The National Exchange Bank of Richmond against W. W. Major, J. G. Steele executor of George W. Johnson, deceased, G. A. White and others, to subject the real estate of said Mayor to the payment of his debts, and especially a judgment rendered against him in favor of the plaintiff for the sum of $703.76 with interest and costs, in the circuit court of the city of Richmond in November, 1868, and docketed in Rockbridge county court in March, 1869. The only questions involved in this case relate to the property called the Lexington hotel, in the town of Lexington, and a tract of land in the said county called the Hart’s bottom.
    
    In relation to the first named property there had been three suits pending, two of them since 1866. one of those by j -Rnson’s ex’or 71. White, and the other by White v. Johnson's ex’or. and the third since 1868, by C. F. O’Perrall v. Johnson’s ex’or; and they had been consolidated.
    The material facts as they appear in the record are: On the 16th of January, 1864, Jacob Thomas and wife conveyed the one undivided one half of the Lexington hotel property to G. W. Johnson and G. A. White jointly. On the same day A. J. Thomas and wife conveyed the undivided half of the same property to G. W. Johnson; and on the 18th of August, 1864, G. W. John-soil "conveyed to G. A. White one undivided one-fourth of the same.
    G. W. Johnson having departed this life, his executor J. G. Steele, on the 17th of Pebruary, 1866, entered into a written contract with G. A. White, by which they agreed “to sell the property in the town of Lexington owned jointly by the said White and the estate of George W. Johnson, dec’d, commonly known as the Lexington hotel, with the furniture and other property attached to said house,* * * at public auction without reserve, on the following terms, viz: 1st. $4,500 of the purchase money shall be required cash in hand or within sixty, days from the sale; out of the same Win. Pole is to be paid the sum of $1,300. which has been paid by him to the said White for said furniture and other personal property; one-half of the residue to be paid to the said G. A. White and the other half to the said J. G. Steele executor of G. W. Johnson, dec’d.'Sd. The residue of the purchase money to be paid in three equal annual instalments, bearing interest from the day of sale; separate bonds to be given for the deferred instal-ments in equal moieties to G. A. White and J. G. Steele ex’or of G. W. Johnson, dec’d, with undoubted personal security — or if the purchaser elect, secured bv lien on real estate; and in either case with the additional securitv of a lien retained on the real property. The prior liens on the real estate to be paid by J. G. Steele ex’or of G. W. Johnson, dec’d, out of his moiety of the first deferred instalment.”
    The sale was advertised, and the terms of the sale were set out in the advertisement as provided in the agreement; and at the sale, which was made on the 20th of March, 1866, While became the purchaser at the price of $32,000, which, after deducting the $1,300 to be paid to Pole, gave to the share of Johnson’s *estate $15,350. White refused to take the property, and in the same year Steele, as executor of Johnson, filed his bill in the circuit court of Rockbridge for a specific performance of the contract of sale; and at the April term, 1868, of said court, there was a decree for the specific execution of the contract of sale, and a decree against White for $10,766.66, the amount then due and unpaid on account of his purchase of said property, and commissioners were appointed to make sale of the property.
    In the mean time, viz., on the 19th of September, 1867. White entered into an agreement with Charles T. O’Perrall and William Major, by which he sold to them the Lexington hotel, with all the appurtenances thereto, with all his right, tille, and interest in and to said property, with the personal property in said hotel, in consideration of the sum of $32.000, to. be paid by the delivery to White of his bonds held by Major given for the purchase of the Hart’s bottom estate. And these bonds were delivered by Major to White.
    And it was agreed between the parties that the said O’Perrall and Major were to arrange with the executor of G. W. Johnson’s estate for the settlement of all claims held by said estate against the hotel property, amouneing to $16,000, with whatever interest might' ac-j crue thereon. And in pursuance of this agreement White and wife, by deed bearing date the 1st day of October, 1867, conveyed to O’Perrall and Major the property conveyed to him by the deeds hereinbefore referred to, and also any other or further right, title, and interest of any kind or nature whatever held j or claimed by him. But the deed specially provides that the said G. A. White only grants, conveys, and assigns to the parties of the second part his own individual interj est in said hotel property and its appurtenances; and that said parties of the second part are to purchase *from the executor or other legal representatives of the late G. W. Johnson, and at the proper cost of the saicl parties of the second part, such undivided interest as said executor, &c., may hold or claim in the said hotel , property and its appurtenances: it being the true intent and meaning of the parties of ' the first and second part that the latter are to take all the rights, title and interest of said G. A. White in said property with the like advantages and burdens as the same were held by said White; and with full right, if they see proper, to ratify the alleged sale of March 20th, 1866, of said hotel property, and to settle and pay off the claim of said G. W. Johnson’s estate, in and to the said hotel property as if said sale for $32,000 had been regular and valid and binding on all the parties interested therein.
    On the day of the agreement between Major and O’Ferrall and White, there was an agreement between O’Ferrall and Major, providing how O’Ferrall shall .pay Major for his half of the purchase money, and for conducting the hotel in partnership.
    On the 7th of February, 1868, Steele as executor of Johnson entered into an agreement with O’Ferrall, in which after reciting the sale to White, and the amount coming' to Johnson’s executor on that sale and “the time of payments, and that O’Ferrall a«d Major had purchased the Lexington hotel from White, O’Ferrall undertook to pay to Steele, executor of Johnson, the full amount due from said White on the purchase aforesaid in three annual payments each bearing interest from the 26th of March, 1868. And Steele bound himself to forbear to execute any decree which might be obtained at April term next or any succeeding term of the circuit court of Rockbridge, against said White for the specific execution of the said contract of sale of the Lexington hotel by the sale of the property under said decree so long as the said O’Ferrall made no default *in the payment of said instalments of purchase money. And on the same day there was another agreement between O’Fer-rall and Major, providing that if O’Ferrall shall fail to pay to Steele the instalments of purchase money and Steele shall enforce his decree for a sale of the property, O’Fer-rall’s interest in the property shall cease to the extent of the purchase money unpaid by him, and that the same shall invest in said Major subject to the lien of said decree. There were other provisions' in the agreement not necessary to be stated.
    Steele proceeding to have his decree of April 20th, Í868, enforced by a sale of Lexington hotel, O’Ferrall filed a bill to enjoin the sale, and the two cases of Johnson’s ex’or v. White & ais., and O’Ferrall v. Steele, ex’or, &c., coming on to be heard together on the 26th of September, 1858, the court decreed that O’Ferrall should be permitted to execute the bonds as provided in his agreement with Steele; but if he should fail to give the bonds, or should fail to pay them as they fell due, the injunction should stand dissolved as the act of that day, and the commissioner should proceed to sell said Lexington hotel property, under and in accordance with the decree of the 20th of April. 1868.
    O’Ferrall did not comply with the decree, and there was a sale of the Lexington hotel property, which was purchased by William W. Major. He failed to comply with the terms of sale; and on 17th of April, 1869, there was a decree for the sale of the same property; and there seems to have been two other sales of said Lexington hotel under decrees of the court, for a failure to comply with the terms of sale. The last of these sales was made in August, 1871.
    In January. 1874, the National Exchange bank filed an amended bill in the cause, in which the proceedings' in the several causes is set out. and ' it is stated that
    *Major having paid to White the whole of the purchase money for White’s half of the Lexington hotel property, Major was entitled to that half, free from any lien for' the amount due to Johnson’s executor under his decree against White, and that it was liable to satisfy the debts of Major. The bill further stated that the decree in the case of Johnson’s ex’or v. White having been docketed on the 4th of February, 1869, it was a lien upon the real estate of White. That White by deed dated the 20th of May. 1870, had conveyed the Hart’s bottom tract of land, which White had purchased from Major, to Hugh W. Sheffey and Edmund Coffin to secure a debt of White to Walter Gurnee for $15,000; and that deed being subsequent to the docketing of the decree of Johnson’s ex’or v. White, said decree was a prior lien upon said land, and said executor should be required to proceed first against said land for the relief of the Lexington hotel, or the creditors of Major should be subrogated to his rights; and Gurnee and the said trustees were made defendants with the other parties in the cause.
    Steele answered the bill, insisting that under the title held by Johnson and White, and the terms of sale of the property as agreed on by himself and White, and the various decrees and proceedings had in the causes, the lien of his decree extended to the whole property.
    Gurnee and his trustees answered, declaring that they had never heard of the decree in the case of Johnson’s ex’or v. White when the deed was made to secure Gurnee, or when it was put upon record on the 20th of May, 1870. _ That they had examined the docket of judgments and decrees in the county court of Rockbridge, wkh the help of the clerk of the court, with great care, and that there was no such decree upon the docket at that time. And the depositions of *said Sheffey and Coffin were taken, in which, they made the same statements. And Mr. Sheffey .stated that he had no recollection at the time of the. execution of said deed of ever having heard of said decree. And the only fact from which such notice or knowledge might be inferred is, that at the time of the decree of April 20th and September —, 1868, were made, Mr. Sheffey was the judge of the court and pronounced the decrees.
    As to the putting the decree upon the docket, it appeared that it had been delivered to the clerk on the 4thf of February, but was not put upon the docket, the clerk having been removed from his office a short time after-wards; and it was afterwards found in the clerk’s office, and at the instance of the counsel of the executor of Steele it was put upon the docket between the 4th of July and the 1st of August, 1870, though the entry was dated the 4th of February, the day it was brought to the office.
    On the 17th of July, 1874, the two cases of the National Exchange Bank of Richmond v. Major and others and Johnson’s ex’or v. White .and-others came on to be heard together, when, among other .things, the court held that the lien of the decree of Johnson’s ex’or v. White only extended to the moiety of the Lexington hotel, owned by Johnson’s estate, and that Major having paid all the purchase money to White for his moiety of said property, he was entitled to it, and it was liable to satisfy his creditors. And as to the Hart bottom land, the decree of Johnson’s ex’or v. White was not docketed according lo law until after the deed from White to secure Gurnee was recorded, and that neither Gurnee nor said trustees had notice of said decree. And thereupon Johnson’s executor applied to this court for an
    appeal; which was allowed.
    *John W. Daniel, for the appellant.
    J. R. Tucker and Wm. A. Anderson, for the appellees.
    
      
      Judge Moncure was too unwell to attend at this term of the court at Staunton, and therefore it will not be necessary to note his absence, in each case.
    
    
      
      See 2 Min. Inst. (4th Ed.) 957, 972, 977, 980; 1 Min. Inst. (4th Ed.) 232.
    
   ANDERSON, J.,

delivered the opinion of the court.

This is an appeal by Joseph G. Steele, executor of George W. Johnson, deceased, from a decree of the circuit court of Rock-bridge county, pronounced at its July term, 1874, in a cause in which The National Exchange Bank of Richmond was complainants, and Joseph Steele, executor as aforesaid, and others were defendants, which came on and was heard together with the consolidated causes of George W. Johnson’s executor against G. A. White, and White v. Johnson’s ex’or, and Charles T. O’Ferrall v. Johnson’s ex’or.

The questions raised upon this appeal, by the assignment of errors, in the petition, and by appellants’ counsel in argument, are: First. Did Johnson’s executor have a lien upon the whole of the Lexington hotel property, for the purchase money due him?

George W. Johnson in his lifetime, and G. A. White were the owners of the property-each being owner of an undivided moiety. Whether they were joint tenants or tenants in common, or joint tenants of a part, and tenants in common of the residue, by the death of Johnson his part vested in his dev-isees, and the property was held in common by them, and G. A. White, each entitled to an undivided moiety. They had neither unity in interest, time or title, but only in possession. As tenants in common they held by several seizins. They had several titles but unity of possession. One joint tenant may alien to a stranger, and his alienee, and the other joint tenant, will be tenants in common. Joseph G. Steele, as executor, was authorized by Johnson’s will to sell, with the consent of his *wife, and G. A. White. Johnson could give him no authority to sell other than his own interest. He could not authorize him to sell White’s interest, which was an undivided moiety. He could only authorize him to sell his own. White and Steele, executor of Johnson, agreed to sell the whole together, on the following terms: Four thousand five hundred^ dollars to be paid in cash in hand, or within sixty days from the day of sale; out of which William Pole was to be paid $1,300, due him for furniture and other personal property; the residue of cash payment to be paid in equal moieties to White and Johnson’s executor; the residue of the purchase money to be paid in three equal annual instalments, to bear interest from the day of sale; separate bonds to be given for the deferred instalments in equal moieties to G. A. White and J. G Steele, executor of G. W. Johnson, deceased, with undoubted personal security, or if the purchaser elect, secured by lien on real estate, and in either case with the additional security of a lien retained on real property sold.

This agreement seems to have been entered into in contemplation of a sale to a third party. But G. A. White being the highest bidder, at the sum of thirty-two thousand dollars, became the purchaser. What was sold? In fact only the undivided moiety of Johnson’s estate; and that was subject to the prior liens on the hotel, which were to be paid by J. G. Steele, executor, out of his moiety of the first deferred instalment, as stipulated in the agreement. It was in effect a sale to While of only Johnson’s moiety. If the sale had been carried out, he would have paid Steele a moiety of the purchase money after deducting $1.300, to be paid to Pole, and to have required that so much of it should be applied to the payment of the prior liens upon the Lexington hotel, as was necessary to satisfy *and discharge them, and would have received a c< n-veyance from the executor Steele of Johnson’s moiety of the property, which would have invested him in severalty with title to the whole property, without any further grant or conveyance. He could not sell and convey his own property to himself. As tenant in common he was already seized of the title, and held the possession promiscuously with Johnson’s devisees, and when he acquired the title of his co-tenants to their individual moiety, he was seized of the whole in severalty. A sale and conveyance to him of his moiety was unnecessary to invest him with the title and possession, and Johnson’s executor was invested with no power or authority to sell it or convey it to him. He had only authority under the will of Johnson to sell and convey the Johnson moiety, and he and White had mutually agreed to unite in the sale of their respective moieties. If they had sold to a third party Johnson’s executor and While would have been bound upon his compliance with the terms of the sale, to convey to him their respective interests; that is each of them to convey an undivided moiety in the whole. Johnson’s executor could only have conveyed his interest, and White could onlv have conveyed his interest. Neither could have conveyed the interest of the other, because they were invested with no title to it. They agreed to unite in the sale — that is each one to sell his interest, whereby the purchaser would be invested with the whole. It seems they did not find a third party to purchase, who was willing to give as much for the property as White bid. No objection seems to have been made by the executor to White’s bidding, and he became the purchaser from the executor, of Johnsori’s moiety — which was all he had a right to sell — and the executor insisted upon his taking it under his purchase. And being the owner himself of the *other moietv. White became the purchaser of Johnson’s moiety only, and that was what was sold, and a lien upon that, was the additional security, which, by the terms of the agreement, Johnson’s executor was entitled to retain.

If personal security had been given, separate bonds for the deferred instalments were to be given in equal moieties, and even if a third party had become the purchaser, the security would have been to each one, for the proportion of purchase money due him, for his moiety of the property. And as White was the purchaser in reality and effect, only of Johnson’s moiety, he could only have been -required to give security, in the bond to be executed to Johnson’s executor, for the purchase money due him for his undivided moiety. He could not be required to execute bonds to himself with personal security, for his undivided moiety; or if he elected to give security on real estate, it could only be given to secure what was due from him for Johnson’s moiety,, which he had purchased. He could not be required to give it to himself for purchase' money for his moiety of the property, which he did not owe. And consistently with the idea of separate interests, which pervades the whole instrument, each one could retain-a lien on only what he sold, and what he only could convey, and especially is it so, when White, one of the tenants in common, became the1 purchaser, which could only be of Johnson’s moiety, on which only his executor could retain a lien, being the only real property actually sold. For these and other reasons, which might be given, the court is of opinion that Johnson’s executor has not a lien upon the whole of the Lexington hotel property, for the purchase money due him from G. A. White; but only upon the undivided moiety belonging to Johnson’s estate. The first question is therefore answered in the negative.

*The second question, If he did have such lien, was it binding as against Major, the purchaser from White? needs no answer, as he had no lien as against White, on his moiety which he sold and conveyed to Major. At the date of White’s sale and conveyance to .Major, Johnson’s executor had no personal decree against White. He did not obtain his personal decree until the 20th of April, 1868. White was not then the owner of a moiety of the Lexington hotel property. He had before that, to-wit, on the 1st of October, 1867, conveyed it to O’Ferrall and Major, and had received payment in full from Major, and the deed of conveyance was of record. At the date of the personal decree he had no interest in the hotel to which the executor’s lien thereof could attach.

With regard to the third question, “If such lien bound Major, did it bind his judgment creditors?” we need only remark, that as it did not bind Major,1 it could not bind his judgment creditors.

The fourth question raised by appellant’s counsel upon the assignment of errors is, Did the judgment of Johnson’s executor against White bind his Hart’s bottom place as against Sheffey and Coffin, trustees, and Gurnee, beneficiary in the deed of April 20, 1870, from White?

Johnson’s executor obtained a personal decree against White on the 20th of April, 1868, just two years prior to the date of the deed of trust referred to in the question. But that decree had not been duly docketed according to law, and could not bind creditors and subsequent purchasers without notice. In Vest v. Michie, 31 Gratt. 151, we held that whilst the fact of notice may be inferred from circumstances, as well as proved by direct evidence, the proof must be such as to affect the conscience of the purchaser, and must be so strong and clear as to fix upon him the *imputation of mala fides; and this is well supported by authorities which are cited. We also cite approvingly, 2 Minor’s Inst. 887, 2 Ed., where the author says: “The effect of the notice which will charge a subsequent purchaser for valuable consideration and exclude him from the protection of the registry law, is to attach to the subsequent purchaser the guilt of fraud. It is, therefore, never to be presumed, but must be proved, and proved clearly. A mere suspicion of notice, even though it be a strong suspicion, will not suffice.”

In this case it is not pretended that Gurnee, the creditor secured by the deed of trust, had notice or knowledge of the prior judgment or decree against White, the grantor in the deed of trust, in favor of Johnson’s executor. But it is contended that one of the trustees had notice or knowledge of said decree, because he was the judge who pronounced the decree and had written an opinion, which was filed with the papers in Jhat _ cause, which showed that he was familiar with the whole case. It may be conceded that notice to the trustee was in effect notice to the creditor secured by the deed of trust. But, as was held by this court in'Morrison v. Bauseman & Co. and ais., Moncure. P. delivering the opinion of the court, 32 Gratt. 225, 229, “if a trustee in a deed of trust to secure a debt had notice or knowledge of the existence of a judgment against the grantor in the deed of trust at a time anterior to the execution of the deed of trust, but have no remembrance of such existence at the time of such execution, the trust creditor will not be at all affected by such anterior notice or knowledge on the part of such trustee.” In that case it appeared that the trustee, Newman, about a year before the execution of the deed of trust to him and Trout, had notice or knowledge of the existence of said judgment. He was then writing in the clerk’s office of the court *which rendered the judgment, and as deputy or assistant of the clerk, made a copy of it, and signed the clerk’s name to it for the creditor. There was no evidence that he remembered the fact at the time the deed of trust was executed, except what might be presumed from the fact of his having made a copy of it. Upon his examination as a witness, he could not say that he had any recollection about it one way or the other at the time the deed of trust was executed. In that case it was held that the proof of notice was insufficient.

In this case Judge Sheffey, who was made a party, in his answer, says, respondent had no notice whatsoever of any judgment or decree in said transaction; neither did he think of any such judgment or decree, or that the same was in existence at the time he was so engaged as counsel for G. A. White, and when said deed was executed and recorded. His deposition was also taken in the cause, and is to the same effect. Tn the cause above cited, Judge Moncure deduced from the authorities “that if an agent, before the commencement of his agency, receive notice of an unrecorded lien on real estate, of which his principal afterwards becomes purchaser, such notice of the agent will not be imputable to the principal, unless there be very strong evidence, that at the time of the purchase. the agent remembered the fact that he had received such notice.”

Tn order to affect the creditor by the previous notice or knowledge of his agent or trustee, of the existence of a prior unrecorded lien on the real estate which is conveyed for his security, it is necessary that the notice or knowledge should have been given or imparted to the agent in the same transaction, unless one transaction is closely followed by and connected with the other. 2 Lead. Cases,

Part I., p. 134, and the authorities *c.ited. This principle seems to be supported by reason as well as authority. It is not reasonable to hold that a man will recall facts which came to his knowledge in the discharge of his duties as a clerk, or a judge of a court, or a solicitor or counsellor, when years afterward he may be called on to act in a different transaction, and in a different capacity as agent or trustee for another, so as to affect that other, for whom he has become an agent or trustee with notice of such fact. The court is of opinion that there is not sufficient proof of notice to Gurnee, or his trustees, of the existence of the judgment lien of Johnson’s executor to give effect over the ¡ deed of trust upon the Hart’s bottom place.

The fourth and last question, “should Johnson’s executor be compelled to exhaust the lien against Hart’s bottom before proceeding against the hotel?” need not be considered inasmuch as after satisfying the preferred lieu of the deed of trust, there will be nothing left upon which it can act.

This disposes of all the points of error made by appellant’s counsel in his ingenious and able argument, and upon the whole the court is of opinion to affirm the decree of the circuit court.

Decree affirmed.