Case ID: ohio-st_40/html/0418-01.html
Source: Caselaw Access Project
Author: {"author": "\n      DICKMA.N, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Wilson v. Hicks.
    1. Where a grantee obtains a deed of land by the fraud of his confederate, E., upon the grantor, H., and does not have the same recorded, and the land is afterward sold by the grantee for a valuable consideration to a bona fide purchaser, W., who has no knowledge of the fraud; and where instead of a deed from the grantee to W., the grantor H., without a reconveyance to him of the land, cancels the unrecorded deed made by him, and with knowledge of the fraud which had been practiced on him, makes a new deed to W., signed and sealed in the presence of but one witness and not acknowledged, and delivers the same to the confederate, E., to be by him delivered to W., who on the faith thereof parts with the consideration, he will be estopped from disputing the title or claim of W. to the land.
    2. Where a loss has happened which must fall on one of two innocent persons, it must be borne by him who is the occasion of the loss, even without any positive fault committed by him, but more especially if there has been any carelessness on his part which caused or contributed to the loss.
    3. The maxim, “he who is first in time is stronger in right,” does not prevail when the equity, junior in date, is superior in merit.
    Ebbob to the District Court of Lucas County.
    The original action was brought in the court of common pleas of Lucas county, by George W. Hicks, the defendant in error, against. Nathaniel Wilson, the plaintiff in error, George W. Imerson, Samuel Graeber, and John F. Eglin, to obtain relief against certain transactions wherein, he alleged, he had been defrauded out of the title to a certain house and lot on Michigan street in Toledo, Ohio, and out of certain notes and mortgage for about $1,776, by an exchange of the same for certain lands in Pike county, Ohio. A preliminary injunction was granted; an answer was filed by Wilson, claiming to own the house and lot as a bona fide purchaser thereof, and also an answer by Eglin, claiming the notes and mortgage.
    Upon the trial in the court of common pleas, judgment was rendered in favo^’ of Hicks, setting aside the deed under which Wilson claimed title, quieting Hicks’s title, and also setting aside Eglin’s claim to the notes and mortgage. This judgment reinvested Hicks with the title to the house and lot, and still stands as to all parties except Wilson, who alone appealed his branch of the case.
    In the district court there was a reference to a master, before whom testimony was taken and reduced to writing. The master reported the testimony with his findings to the district court. Exceptions to the report were filed by Hicks, and the cause was heard upon, the report, the testimony, and the exceptions; and the samé judgment which had been rendered in the common pleas in favor of the plaintiff against Wilson, was rendered in the district court. Wilson excepted, took bill of exceptions embodying the testimony, and filed his petition in error in this court.
    The lot on Michigan street, on the 29th of July, 1878, had thereon and still has a two-story brick dwelling-house and o'ther improvements; and the premises, with the improvements, were then of the value of about $5,500, with a mortgage thereon of $3,000 to Cook & Mitchell. The defendant in error, Hicks, was then the owner of certain notes amounting to the sum of $1,776, made by one Uriah Engleman, and secured on certain farm land in Wayne county, Michigan.
    On or about said 29th day of July, 1878, John F. Eglin, a real estate broker in Toledo, represented to Hicks, that he was the agent of said Samuel Graeber, and that Graeber owned in fee simple a certain tract of land in Pike county, Ohio, containing two hundred acres. Eglin, by means of. false and fraudulent representations made by him to Hicks, —upon which Hicks relied — in reference to the title, situation, quality and condition of said land in Pike county, and the buildings thereon, induced Hicks to trade and exchange for the same his said house and lot and the notes and mortgage made by Engleman. Eglin drew a deed of conveyance of the Michigan street house and lot from Iiicks and wife — not to Samuel Graeber — but to one George W. Imerson, which they executed on s&id 29th day of July, supposing that Graeber’s name was inserted as grantee. Said deed contained full covenants of warranty of title, but excepted therefrom the mortgage on the premises of $3,000, which the grantee in said deed assumed and agreed to pay. Hicks at the same time, as part of said transaction, duly assigned and transferred in blank, said notes and mortgage made by Engleman, and delivered the same to Eglin. Églin, on his part, delivered to Hicks a deed of the Pike county property made by said Graeber and wife, and dated July 29th, 1878, containing full covenants of warranty of title, but excepting therefrom the taxes for the year 1877 and a mortgage on the premises for $1,095, made by Graeber to one John A. Cobb — which mortgage and taxes the grantee assumed and agreed to pay. For reasons best known to himself, Eglin never placed on record the deed from Hicks to Imerson. On the 14th of September, 1878, Hicks rented of Imerson — or Eglin as his agent — the house and lot on Michigan street from October 1st, 1878, to April 1st, 1879.
    The plaintiff in error, Natha'niel Wilson, a retired merchant of Chillieothe, was the owner of certain lands in Ross county, Ohio, which he had obtained by purchase, at a public sale, at the instance of the Chillieothe National Bank, of which he was a director and the president. A party owning certain lots in West Toledo, being desirous of exchanging some of them for this land, induced Wilson to visit that city to ascertain for himself their situation and value. While in Toledo, on or about September 10th, 1878, and at the hotel, he casually met Eglin. During a conversation in the hotel, he made known to Eglin the object of his visit to Toledo. Eglin at once proposed to him to trade for his Ross county lands, the Michigan street house and. lot, which had been conveyed to Imerson — informing Wilson that, he had the handling of that property, which he thought would suit him much better than the lots in West Toledo. The house and lot he represented as worth from six to seven thousand dollars, but was incumbered with a mortgage for $3,000, which, if assumed by Wilson, the residue of the purchase price could be paid in the Ross county lands. Through persuasion, Wilson visited the site of the property on Michigan street, in company with Eglin, viewing it only, from the street. He inquired of Eglin if it was rented, and, if so, at what rental. Eglin answered that it was then rented to its present occupant until the first of April thereafter, at $28 per month, but that it would bring $35 to $40 per month. Nothing was then concluded upon. On a subsequent occasion, before leaving the city, Wilson was again approached by Eglin on the subject of a trade. The terms of an exchange were then talked over, and a proposition was made by Wilson, but no conclusion arrived at. Wilson returned to Chillicothe with the promise on the part of Eglin, that his proposal should be submitted to the owner of the property, and the conclusions communicated by letter. Up to this time, neither the name of the owner nor occupier of the house and lot had been made known to Wilson, nor the name of the mortgagor, mortgagee or holder of the mortgage. Nor had Wilson any knowledge of the dealings of Eglin and Hicks; and had never seen or heard of Hicks, Graeber or Imerson. The negotiations of sale or exchange were carried on entirely by correspondence between Eglin and Wilson; and a sale was finally effected by the assumption and payment, by Wilson, of the $3,000 mortgage to Cook & Mitchell, and the conveyance of 206 acres of Ross county lands to George W. Imerson, by deed dated October 15th, 1878, in full consideration for the house and lot in question. When Wilson executed the deed of his land, and paid off the $3,000 mortgage, he had no knowledge of the claim of Hicks; had no knowledge of who was the owner of the property •until after the receipt of a letter from Eglin dated October 10th, 1878; and first learned that Hicks claimed to have an interest in the property in the latter part of December, 1878. The deed to Imerson not having been recorded, Wilson acquiesced in the suggestion made to him by his attorney, that it would be as well to obtain a new deed from Plicks; but required that the Imerson deed should be cancelled and delivered to him, and so arranged matters that ’he should not part with his own property, or pay any part of the consideration, until a deed from Hicks directly to himself, and the cancelled deed to Imerson, together with an abstract of title, were delivered to him. Under the impression that by cancelling the unrecorded deed to Imerson, Hicks thereby became reinvested with the legal title so as again to convey it to another, there was no reconveyance of the fee to Hicks. Eglin accordingly informed Hicks that Imerson desired the deed made to him to be cancelled, and a new deed for the house and lot to be made directly to Nathaniel Wilson; and that by so doing, they would save the expense of recording, and the trouble of bringing down to Imerson the abstract of title. Hicks and wife thereupon on the 10th day of October, 1878, executed a warranty deed of the premises to Nathaniel Wilson, and placed it in the hands of Eglin to be delivered to Wilson. At the time of executing this deed, Hicks had been informed, that the Pike county lands were not as represented to him by Eglin; and was daily expecting further information as to the fraud in that respect that had been practiced on him by Eglin.
    The special master commissioner in the case appointed by the district court, made the following report:
    
      District Court, I/uccis County, Ohio.
    
    George W. Hicks, ) against > Nathaniel Wilson, et al. )
    The undersigned, Special Master Commissioner appointed in this ease, respectfully reports, that the plaintiff and the defendant Nathaniel Wilson, appeared before him with their respective counsel, and severally produced the evidence set forth in the schedule hereto attached, and the undersigned, having duly considered the saíne, and heard the arguments of counsel, finds that the defendant John T. Eglin, substantially in the manner and by the means set forth in the petition, and fraudulently as therein charged, procured from the plaintiff the deed of conveyance to George W. Imerson of the house and lot described in the petition; that he also in the manner set forth in the petition, procured from the plaintiff the deed to Nathaniel Wilson, therein mentioned, and that the last mentioned deed was signed, sealed and delivered in the presence of but one witness, and was not acknowledged.
    
      He further finds, that the defendant, Nathaniel Wilson contracted with said John F. Eglin, for the purchase of said house and lot, substantially as set forth in the answer of said Wilson, and received from said Eglin the last mentioned deed in pursuance of said contract; that in making said contract, and delivering said deed, said Eglin pretended, and said Wilson believed him, to be acting as the agent of the owner of the fee of said house and lot; but that in fact, said Eglin was not acting as such agent, but was acting for himself, and in his own interest; that said Wilson entered into said contract, and received said deed in good faith, and paid a valuable consideration therefor, by conveying the parcel of land mentioned in his said answer, and assuming and paying the mortgage upon said house and lot mentioned in the pleadings.
    He further finds, that said plaintiff, at the time of making and delivering said deed to said Wilson, had received information sufficient to put him upon inquiry, and was then prosecuting such inquiry, as to the value of the consideration received by him, for said conveyance to George W. Imerson, and the truth of the representations made to him by said Eglin, to induce him to execute said deed, and that he had unreasonably delayed making such inquiries, relying upon the undertaking of said Eglin to trade off for him the parcel of land which he had received as the consideration for said conveyance.
    The undersigned therefore concluded, as a matter of law, that said defendant Wilson acquired by virtue of said contract, and said deed to him, a valid equitable title to said house and lot, and that said plaintiff is in equity estopped from disputing such title or the right of said Wilson to the. possession and enjoyment of said property.
    Respectfully submitted.
    W. A. CoTjLINS,
    
      Special Master Commissioner.
    
    To this report, the plaintiff George W. Hicks filed ten exceptions, all of which the district court overruled, except the 9th and 10th, which were sustained.
    
      Exception number nine was to the finding of the master, that the plaintiff Hicks had unreasonably delayed making inquiries as to the value of Pike county lands.
    Exception number ten is as follows:
    “Plaintiff excepts to the finding that the plaintiff is estopped from disputing the equitable title or claim of Wilson to the property, as his right of possession, for the reason that such finding is not sustained by the evidence, and is contrary to law.”
    The finding of the district court is as follows:
    “ The court having heard the report, the said testimony and said exceptions, and the arguments of counsel, and being now fully advised in the premises, does sustain the last two of said exceptions, numbered nine and ten respectively, and does overrule all the remaining exceptions to said report. The court further finds, that at the time of the coimnencement of this action, the legal title to the premises in-the petition described (describing it) was in said George W. Imerson, and that the defendant Wilson has none against, and does not hold the legal title to any part of said premises. The court further finds, that the plaintiff has in said premises an equity equal to and more than that of the defendant, and that he is not estopped from asserting and maintaining his said equity, as against any and all equity of said defendant.Wilson; and the court finds' the equity of the case to be with the plaintiff, and that he is entitled to have his title to and possession of said realty above described quieted, as against all the rights of the said defendant Wilson, except his right to enforce and foreclose said mortgage for $3,000, made by the plaintiff to Cook & Mitchell, which has been paid off by said defendant Wilson. Wherefore it is considered, ordered, and adjudged by the court,” etc.
    
      W. 3. Safford, and Scribner, Hurd, Scribner, for plaintiff in error.
    
      Pratt Wilson, for defendant in error.
   DICKMA.N, J.

The record discloses, that the Master Commisssioner in his report to the district court, among other things, found as a fact, that George W. Hicks, the plaintiff below, unreasonably delayed making inquiries as to the value of the Pike county land, and found as a conclusion of law, that the plaintiff was in equity estopped from disputing the title or the right of Wilson to the possession and enjoyment of the Michigan street property. The court sustained the plaintiffs exceptions, numbers nine and ten, to these two findings, but overruled all other exceptions to the master’s report, and in effect, approved all other parts of the same. The court in its decree, found as a fact — which was not disputed on the trial — that the legal title to the premises in controversy was, at the date of the commencement of the action, in George W. Imerson, and not in Wilson; that the equity of the plaintiff in the premises was equal to, and more than, that of Wilson; and that the plaintiff was not estopped from asserting and maintaining his equity as against Wilson.

There being but little dispute as to facts, the main question is, Did the district court err in its conclusions of law in finding the equity of Hicks superior in merit to that of Wilson, and in permitting Hicks to dispute the right and title of Wilson to the possession and enjoyment of the property. We are of opinion that the district court erred; and that' judgment should have been rendered in favor of Wilson, in accordance with the findings of the master’s report.

We are satisfied that Hicks, the defendant in error, through the fraudulent representations made to him by Eglin, as to the Pike county land — the number of acres under cultivation and in timber, the title to the land and its value, and the character of the building thereon — was induced to exchange for the land, his house and lot on Michigan street, and the notes and mortgage executed by Engleman. Eglin. and Imerson were doubtless confederates in fraud; and, in order that Imerson might be a convenient and accessible instrument, Hicks was deluded into making his deed to Imerson, supposing at the time that the grantee named in his deed was Graeber, with whom he was exchanging property. But no knowledge of these fraudulent transactions was ever brought home to Wilson, the plaintiff in error, until after the execution of the deed by Hicks to himself, and his conveyance to Imerson of his land in Ross county. Indeed, it was never claimed by Hicks that Wilson was in any manner connected with the transactions in reference to the Pike county land deeded to him by Graeber.

We regard Wilson a purchaser in good faith, for a valuable consideration, of the house and lot on Michigan street — having in all respects complied with the terms of his contract with Eglin, by conveying to Imerson the two hundred acres of land in Ross county, and assuming the mortgage debt of three thousand dollars on the house and lot. It is contended that Eglin was Wilson’s agent, and that the fraud of the agent is to be imputed to the principal. But we believe, as found by the master commissioner, and approved by the district court, that Eglin in his negotiations for the conveyance of the Ross county land to Imerson, was acting for himself and not as the agent of Wilson.

In making the transfer of the house and lot to Wilson, instead of a deed to him directly from Imerson, the unrecorded deed from Hicks to Imerson was cancelled, without a re-conveyan ce of the premises to Hicks, and a deed was executed by Hicks directly to Wilson and placed by him in the' hands of Eglin, to be by him in turn delivered to Wilson. By the cancellation of the deed without re-conveyance, Hicks was not reinvested with the legal title, but the cancellation and new deed taken together would make a good title to Wilson by operation of law. It is said however, and it is conceded, that at the commencement of the action neither Hicks nor Wilson had the legal title to the property. Their rights were equitable only, and it is urged in behalf of the defendant in error, that where the equities are equal, the maxim must govern, that the equity “ older in time is stronger in right.” In our view of the evidence, the equities between the parties are not equal, but that of Wilson though junior in time is superior in merit. In such a case, the elder equity cannot prevail, but must yield to the junior. Hume v. Dixon, 37 Ohio St., 66.

The testimony shows, that at the time Hicks executed the deed to Wilson, he had received information that the Pike county land was not as it had been represented to him by Eglin. This he had learned from two sources, and he was then in correspondence to obtain further information on the subject. In daily expectation of receiving explicit information — information which would reveal to him in its true form the fraud which Eglin had practiced upon him— he executed the deed to Wilson, and handed it to Eglin himself for him to deliver it to Wilson. When requested to cancel the deed which he had given to Imerson and execute another directly to Wilson, he discovered, that instead of a deed to Graeber, the name of Imerson had been deceptively ■ inserted as grantee; but the suspicious circumstance did not prevent his investing Eglin with power to pass the property over to Wilson. It is true, that the deed to Wilson was signed and sealed in the presence of, but one witness, and was not acknowledged; but, it is not to be presumed that the design of Hicks, himself, was to perpetrate a fraud, by palming upon a bona, fide purchaser, as a good and sufficient deed, that which amounted only to a contract for a deed. His intention doubtless was to divest himself of all title to the property. Certain it is, that he placed in the hands of Eglin, who he knew had deceived him, a deed signed and sealed by himself, and thereby enabled him to devise for presentation to Wilson, a deed on its face signed, sealed, witnessed and acknowledged according to law. Wilson, upon the faith of the deed, parted with the consideration, and, conveyed to Imerson the Ross county land, and paid off the mortgage debt of three thousand dollars on the Michigan street house and lot. On the face of the deed to Imerson, Hicks held him out as the apparent owner of the property which he had conveyed to him; and placed it in the power of the confederates Eglin and Imerson to initiate the trade for the Ross county land, which was afterwards consummated by the act of Hicks himself, in executing the new deed to Wilson. Under the circumstances, .we are of opinion, that Hicks should be estopped from disputing the title of Wilson to the premises conveyed to him.

If Imerson had recorded the deed made to him in the first instance by Hicks, and conveyed the premises directly to Wilson, it would not be claimed that the title of Wilson could be successfully attacked. In delivering the opinion of the court in White v. Graves, 107 Mass., 324, 328, Gray, J., said: — “It was long ago decided by this court, upon great consideration, that a person who voluntarily executed a deed, although induced to do so by fraud, could avoid it only as against the party who exercised the unlawful influence, or against one who took title under the deed with participation in or notice of the fraud, and not against one who took a title apparently good from those having capacity to convey.” And manifestly, a different rule would not prevail, where the party who exercised the unlawful influence surrenders his unrecorded deed to the grantor, who cancels the same, and voluntarily executes a new deed of the same premises, to an innocent purchaser for valuable consideration from the first grantee.

It is said, that in the transactions with Eglin, Imerson and Wilson, Hicks was in all respects an innocent party. There is no evidence that Wilson was not an equally innocent party; and his equity we deem superior in merit to that of Hicks. But it is a rule long established, that where a loss has happened which must fall on one of two innocent persons, it must be borne by him who is the occasion of the loss, even without any positive fault committed by him, but more'especially if there has been any carelessness on his part which caused or contributed to the loss. Somes v. Brewer, 2 Pick., 184, 202.

In accordance with the aforegoing considerations, we are of opinion that the judgment of the district court should be reversed, and judgment rendered for Wilson in conformity with the report of the master commissioner.

Judgment accordingly.