Case ID: ohio_14/html/0286-01.html
Source: Caselaw Access Project
Author: {"author": "Birchard, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Heman Oviatt v. John Brown, Daniel C. Gaylord, Amos Chamberlain, Tertius Wadsworth, Joseph Wells and others.
    The purchaser at sheriffs sale, without notice of a dormant equity prior to tho return of the execution satisfied, takes title as a bona fide purchaser without notice, although the sheriff’s deed bears date subsequent to actual notice; given after the sale.
    When the confirmation of the sale by the court, after notice of the dormant equity, leaves the party having such equity in the same condition that he would have been in had the sale been set aside, chancery will not sot aside the sheriff’s deed, to let in the equity. . ,
    This is a bill in chancery, reserved in the county of Summit.
    The bill charges that John Brown, one of the defendants, on July 11, 1836, applied to Frederick Brown, Joshua Stow, Henry Wetmore, Ogdon Wetmoro, William *Wetmore, and the complainant, Heman Oviatt, to become security for him to tho Western Reserve Bank, on a note for about $6,000; that they complied with his request, and became security accordingly, on a note bearing date that day.
    The note being unpaid was sued, and judgment recovered at the May term of the court of common pleas of Portage county, 1837, for $6,178.25 damages, and $12.55 costs. To discharge this judgment, Brown and his securities, on August 2,1837, gave to the bank their joint and several judgment bond for the sum of $6,000, to be paid' in sixty days.
    Oliver O. Brown being the equitable owner of 140 acres of land in the north parts of lots 99 and 100, in the township of Hudson, by contract with William Westland, guardian of Diantha and Parmolia Westland, children and heirs of Grovo Westland, and with Diantha Westland, widow of said Grovo, on January 10, 1836, gave a penal bond to John Brown, conditioned to convoy to. him said land on or before January 1, 1839, which bond John Brown indorsed to complainant and others, his indorsers, on July 5, 1837, and delivered the same to the complainant as collateral security, to indemnify them against liability for having indorsed said note.
    On October 23, 1838, William and Diantha Western, at the request of Oliver Brown, by deed of that date, conveyed said premises to John Brown, who caused the deed to be recorded; and it is charged that all this was done without the knowledge or consent of the complainant.
    On January 2, 1836, John Brown held two notes against Seth Thompson, one payable January 7, 1839, and the other January, 1840, which he sold to Frederick Brown without indorsing them; and Frederick, in May or June following, sold and delivered the same to Daniel G. Gaylord, one of the defendants, who afterward applied to John Brown to get them indorsed, to make them negotiable. John, without any consideration, indorsed them to make them negotiable, and for no Mother purpose whatever. The notes being unpaid, however, Gaylord took the necessary steps'to charge John as indoi’ser, commenced suit upon one note, and recovered final judgment in the Supreme Court of Portage county, at the August term, 1839, for $1,304.10.
    On June 17, 1839, John Brown mortgaged the Westland farm to the defendants, Wadsworth and Wells, of Connecticut, without the knowledge of the complainant, to secure to them the payment of money previously borrowed of them; but the bill charges explicitly that they have ample security for said debt without resorting to the Westland farm.
    At the September term of the court of common pleas, 1839, the Western Beserve Bank caused judgment to be entered against John Brown and his security, in Portage county, upon their judgment bond, for the sum of $5,675.66, and on the 11th of October, of the same year, caused execution to be issued thereon, to the sheriff of Medina county, where the complainant then lived, and which complainant was compelled to pay.
    On October 12, 1840, Gaylord caused the Westland form to be sold on execution, upon his judgment against John Brown; and Chamberlain, one of the defendants, became the purchaser by the procurement of Gaylord, having bid for the farm $1,681. In payment, Chamberlain delivered to the sheriff Gaylord’s receipt for the sum of $1,369.59 in full of his damages, and paid the balance of the purchase money in cash, which balance, after payment of costs, was, on motion of Wadsworth and Wells, applied on their mortgage, and that all this was done without the knowledge of the complainant.
    It is charged that, before and at the time of sale, Gaylord and Chamberlain well knew that complainant and his securities had a lien upon the premises to secure them against their liability, and for that reason Chamberlain refused to purchase until Gaylord gave to him a bond or contract to secure, or indemnify him against said lien.
    The prayer of the bill is, that the sale to Chamberlain may be decreed to be fraudulent and void, etc.
    *To this bill Gaylord and Chamberlain have alone answered.
    Gaylord, in his answer, donies having any knowledge of the transaction between the Western Reserve Bank and John Brown and his securities, but presumes they are correctly set forth. Admits that Oliver O. Brotvn had some equitable interest in the Westland farm, and that on January 10, 1836, or about that time, gave the penal bond to John Brown as charged; but docs not believe, and therefore denies that on June 5, 1837, the said John Brown transferred said bond to "the complainant and his eosecurities for the purposes in the bill specified, or for any other purpose; admits that he has been informed that there is now an indorsement upon said bond purporting to transfer the same to the complainant, but denies that he received any such information until long after the recovery and satisfaction of his judgment; believes, and therefore charges, that said indorsement was actually made long after it bears date, and long after he received his judgment, and that it was done with a view to defraud him, and prevent him from collecting said judgment, and that the said bond was not delivered to complainant; denies that he had any knowledge even of the existence of said bond until long after the recovery and satisfaction of his judgment; admits that the premises were conveyed to John Brown by William and Diantha Westland, as stated in the bill, but whether it was done by the consent of the complainant, or at the request of Oliver Brown; does not know.
    Donies that Frederick Brown sold him two notes against Seth Thompson, as stated in the bill, but admits that he sold two such notes to the defendant and Jonas Leach under the following circumstances : Leach and defendant owned, jointly, certain real estate in the township of Franklin, which the said Frederick was desirous of purchasing, and offered, in part payment, the two notes. Defendant and Loach refused to take them, because they were not indorsed. At a subsequent period Frederick again produced the two notes, one of them indorsed by himself, and the other by John Brown, whereupon ^defendant and Leach agreed to receive them, and did receive them, in part payment for the aforesaid real estate. By a division between Leach and himself, the defendant received the note indorsed by John Brown, and when the same arrived at maturity, took the proper steps to charge him as indorser, and commenced suit and recovered judgment in the court of common pleas of Portage county, from which Brown appealed, and judgment was rendered in the Supreme Court, as stated in the bill.
    Admits the execution of the mortgage to Wadsworth and Wells ; but whether it was made with the consent, or without the knowledge of the complainant, defendant does not know, nor does he know whether the said Wadsworth and Wells have ample security for their debt, exclusive of the Westland farm; but of these things he requires proof.
    Admits that he caused an execution to be issued on his judgment, and had the same levied upon the premises, which were sold at sheriff’s sale, and purchased by the defendant Chamberlain, but denies that he solicited or procured Chamberlain to make the purchase. Upon the application of Chamberlain, he did agree to take his notes upon time for a part of the purchase money; but he denies that he gave Chamberlain a bond, contract, or promise to indemnify him against any claim of the complainant, or of any other person. This, defendant then believed, and still believes that his judgment constitutes the oldest and most preferable lien upon said bond.
    Says it was not long after the sale of said land upon execution, that he heard that the complainant had, or pretended to have, any claim upon said land. That it was for a long time generally known that Brown was in failing circumstances; that there were judgments and mortgages against him, and that he had assigned his property. These lacts must have been known to Oviatt, from his local situation, from his intimacy with Brown, and from his known caution about his own pecuniary concerns; but he set up no claim, repeatedly declared that he had no indemnity for going security, and in fact if he had any security, he fraudulently concealed the same *until he knew the land was sold, and satisfaction entered upon defondant’s judgment.
    Says, that on June 5, 1837, John Brown was possessed, in Portage county, of sufficient unincumbered real estate to have indemnified complainant. Denies all fraud, etc.
    Chamberlain, in his answer, corroborates Gaylord, and says, that seeing the land advertised for sale, and being desirous to purchase, he examined as to the title, and took the advice of counsel. That he ascertained, as he supposed, that Gaylord’s judgment was the oldest lien upon the land. That not having sufficient money to make payment in full, he applied to Gaylord and made an arrangement with him, by which Gaylord agreed, in the event of his purchase, to give him a receipt to apply on the judgment, and give him time to make payment in part. That he attended on the day of sale, and bid for the land $1,681, and it was struck off to him. He paid to the sheriff Gaylord’s receipt for the amount of damages, and the balance in money. This was done at the return term of the execution ; but the sheriff neglected to get an order for a deed until the next term of the court, which was in April, 1841; that at the time of the sale, and at the time of the payment to the sheriff, he had no knowledge of the existence of said bond to John Brown, or of the indorsement thereon, nor had he ever had any notice of the same, nor did he know, nor had he ever heard that the complainant had, or intended to have, any claim to said land, of any kind, nature, or description whatever; but a long time thereafter, and but a few days before he received his deed, he did hear that the complainant had, or pretended to have, some claim to the land; whereupon, on or about April 15,1841, he went to the complainant to make inquiry; and, for the first time, was informed of, and ascertained the existence of the bond and indorsement; but this was long after he had purchased and paid for the land. He denies that Gaylord requested him to make the purchase ; that he has any interest therein, or that he has undertaken in any manner to indemnify this defendant. He says that soon after the purchase, *he took possession of the land, and has been in peaceable possession ever since, except for a short period, when disturbed in that possession by John Brown. He claims to be a bona fide purchaser, for a valuable consideration, without notico, etc. Denies all fraud, etc.
    The testimony taken was very voluminous, and the questions of fact involved in the case were argued at great length by the respective counsel, but would not interest the general reader, nor are they important to a correct understanding of the points de-
    
      ..eided. The conclusions to which the court arrived upon the points material, are stated in the opinion delivered by Birchard, J.
    Vi. S. C. Otis, and P. B. Wilcox, for complainant,
    cited in support of the legal positions upon which they rested the case, the following authorities: Lewin on Trusts and Trustees, 610, 205, 358 ; The Attorney-General v. Lady Downing, Wilson, 21, 22; Anderson v. Van Allen, 12 Johns. 343; Rutledge v. Smith, 1 McC. Ch. 132; Tallmadge v Tallmadge et al., decided in bank, December Term, 1841, but not reported; 2 Sugd. on Vend. 313; 4 Kent’s Com. 180; Story’s Eq. Pl. 816; Gallison v. McCoslin, 1 Black. 91; Doswell v. Buchanan, 3 Leigh, 365 ; Nanzt v. McPherson, 7 Munf. 599; Hunter v. Simrell, 5 Litt. 62; Pillow’s Heirs v. Shannon’s Heirs, 3 Yerg. 508; Simmons v. Richardson, 2 Litt. 276; Murray et al. v. Ballow et al., 1 Johns. Ch. 566 ; 10 Pet. 211; 2 Sugd. on Vend. 352 ; Story’s Eq. Pl. 618 ; 2 Coke (Thomas and Frazier’s edition), 78, 79, 419; 15 Johns. 309; 3 Cow. 75; 15 Wend. 588; Wright, 520; 3 Ohio, 527; 5 Ohio, 55; 8 Ohio, 107; 9 Ohio, 184; 10 Ohio, 404; 11 Ohio, 235; 1 Ohio, 275; 2 Ohio, 503; O’Neal v. Cothran, 4 Des. 553.
    H. Whedon and Hitchcock & Wilder, for tho defendants,
    *Gaylord and Chamberlain, relied upon tho following authorities: Manley v. Hunt, 11 Ohio, 257; Mager v. Beatty, 8 Ohio, 396 ; Bank of Muskingum v. Carpenter, 7 Ohio, 21; Chase’s Stat. 454; Remington v. Doud, 10 Ohio, 415; Boyd’s Lessee v. Longworth, 11 Ohio, 235; Scribner v. Lockwood, 9 Ohio, 184; Parker v. Miller, 9 Ohio, 108; Jackson v. Dickerson, 15 Johns.
   Birchard, J.

The object of this bill is to reach an equity in certain land sold on an execution in favor of Gaylord, and purchased by Chamberlain, who has the legal title. Much testimony has been taken, numerous points of law raised, and great pains taken in preparing the very elaborate arguments upon several questions of fact, and of conflicting evidence as well as of law.

So far as we deem it important to a correct understanding of our views of the merits, these matters of fact and mooted points will be noticed in this opinion. And, for the sake of brevity, those only will be noticed which we consider important, as being those upon which the merits of the controversy depend.

The land in dispute was conveyed by deed to John Brown, on October 23, 1838.

Gaylord’s judgment was a lien upon all of Brown’s land, from May 27, 1839, the first day of the term of the court of commoD pleas, at which it was rendered.

On June 17, 1839, Brown mortgaged all his lands, including this now in controversy, to the respondents, Wells and Wads-worth, to secure a large sum of money.

August 29, 1839, two days before the rendition of judgment in favor of Gaylord against Brown, in the Supreme Court, Brown assigned all his property, real and personal, to De Peysten, in order to prevent a levy by Gaylord.

On September 17, 1837, the Western Reserve Bank obtained the judgment set forth in the bill against Brown and his sureties, which was paid on execution, by complainant.

^October 12, 1840, the land in dispute was sold on the execution in favor of Gaylord, and bid in by Chamberlain at $1,681, and the execution was returned satisfied at the November term, 1840, of the Portage common pleas.

After the return of the writ, and between that time and the execution of the sheriff’s deed, Chamberlain had notice that the complainant claimed to hold an interest in the land by virtue of the title bond set forth in the bill. Whether he had such notice before the confirmation of the sale, or at what precise time, is a question of some doubt/

It is equally doubtful whether this title bond had not been surrendered by the complainant at the time Brown received his deed for the land. Indeed, it is difficult to reconcile the statements and conduct of Oviatt, as disclosed by the evidence, with the supposi- ■ tion that he held this bond from the date of the receipt attached to De Peysten’s deposition. But, admitting that he so held it, and „ admitting that Chamberlain had notice between the return of the writ and the subsequent term of the court at which the sale was confirmed, and a de.ed ordered by the court, in our view the complainant is not entitled to the decree which he seeks.

The rights and the acts of Gaylord and Chamberlain, and the situation of Oviatt’s equi ty, must all be taken into consideration, when coming to a conclusion as to the merits of their claim in chancery.

Oviatt’s rights to this equity could not have availed him anything in opposition to the mortgage to Wadsworth and Wells, who were bona fide purchasers without notice. That mortgage covered two other tracts of land ample to satisfy the judgment of Gaylord, which was a lien prior to the mortgage; and, had the sale been set aside at the time it was confirmed, the consequence must have been a levy of an alias writ by Gaylord upon the other land covered by the mortgage, and the operation would have produced a sale of this land upon the.decree, instead of the execution. Had that course been adopted, complainant would have been left precisely where he is now, ^without any benefit from his secret bond. The proceeds of all the lands, without any such bills of costs as this useless operation would have, caused, are found insufficient to satisfy the mortgage and the judgment.

What was done, has produced the precise result that ought to have been produced. It is what a court of equity would have done, if all the parties were before it asking a distribution of the proceeds of the lands bound by the judgment of Gaylord, and embraced in the mortgage. The claim would have been marshaled so as to satisfy Gaylord’s judgment first, and then the mortgage to the extent of the value of the remaining lands.

Another view of the case is equally decisive. The title of Chamb.erlain was acquired at a sheriff’s sale, which, by statute, vests in him the title from the day of the sale. The deed executed at a subsequent date, has relation back to that date, and is as effectual as if then made.

It is not pretended that the purchaser, at that time (or if pretended, it is a mere pretense), had any notice of complainant’s equity. He made, then, his purchase in good faith, without notice, satisfied the judgment without notice, and has title by operation of law anterior to the notice. So that if the equity of Oviatt were ever so fully established, it would fail, because that of Chamberlain is equal to his, and is coupled with the legal title, untainted by fraud. There is an essential diffei’ence between a sheriff’s sale and a private sale, in this:

The purchaser at the former purchases at his peril; and the purchase money goes to the creditor — not to the owner of the land; and, if the title fail, he loses the consideration. He has no recourse. The purchaser at private sale may arrest the proceeding at any stage if cause exists, and look to his vendor for redress If liis title fails, he may sue and recover back the consideratioi paid.

Bill dismissed,

Judge Hitchcock was formerly counsel, and therefore took no part in deciding the cause.