Case ID: miss_15/html/0651-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Clayton", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Albert G. Ellis vs. John R. Ward.
    The interest of a party holding only a bond for title to land, the whole of the purchase-money not being paid, is not subject to sale under an execution at law.
    Where a party holding a bond for title to land assigns it to another without any covenant on his part, and the same land is sold under an execution against the assignor of the bond in a controversy between the assignee of the bond and the purchaser at the sale under the execution, the assignor of the bond is an incompetent witness to prove that he assigned the bond without any consideration, and in fraud of his creditors.
    McG. purchased of the board of police of the county of Ponola, a lot in the town of Ponola, and took a bond for title when the last instalment on the lot was paid; McG. sold the lot to W. and assigned him the title-bond, without any covenants on his part, W. contracting to pay the last instalment due by McG. to the board of police; E. under a judgment recovered by him against McG. after the assignment of the title-bond to W. had the lot sold by the sheriff, and bought it himself, having full notice of the assignment of the bond to W.; E. then procured the board of police, by their president, to execute direct to him a deed to the lot, and he paid them the last instalment due by McG., and which W. had assumed the payment of, the board of police having notice also of the assignment of the bond to W.; E. obtained possession of the lot, and put improvements upon it; W. filed a bill to have the deed to E. from the president of the board of police set aside and can-celled, and for a specific performance of his contract with the board of police : Held, that W. was entitled to the relief sought, but that E. had a lien on the lot for the instalment paid by him to the board of police, and that he should be allowed for his improvements, to be applied to the extinction of the rent, so far as they will go.
    Error, from the district chancery court of Holly Springs ; Hon. Henry Dickinson, vice-chancellor.
    John R. Ward filed a bill in the district chancery court at' Holly Springs, against Albert G. Ellis, charging that on the-10th day of December, 1839, Joseph I. McGee purchased from. the board of police of Ponola county, part of lot No. 10, in Block No. 7, in the town of Ponola, at the price of two hundred and eighty dollars, ten per cent, of which amount was paid in cash, and McGee’s two notes for one hundred and twenty-six dollars each, payable at one and two years, were given for the balance, and the board of police executed to McGee a bond conditioned to make a title upon the payment of the purchase-money; that on the 2d day of October, 1840, McGee sold the lot, having made valuable improvements thereon, to complainant, and assigned to him the bond for title, in consideration of which complainant executed to McGee his note for five hundred dollars, payable four years after date, and agreed to pay the last instalment due by McGee to the board of police ; that possession was given to complainant, and he permitted one Dr. Williams, who was then occupying the house, with the consent of McGee, to continue in possession of the premises, free of rent, that he might protect them, until complainant could meet with an opportunity of renting them ; that when .Dr. Williams vacated the house the defendant managed by artifice and trick to seize and take forcible and fraudulent possession of the house and lot, and has controlled the same ever since, renting them out and receiving the rents; that the defendant pretends to claim title to the house and lot, under a sheriff’s deed, dated the 10th day of September, 1841; that the sheriff’s deed was obtained by the defendant in the following manner, to wit: After McGee had removed to the state of Tennessee, the defendant set up a fraudulent claim against him, and upon that had an attachment issued, and levied on the house and lot purchased by complainant, as the property of McGee; that he recovered a judgment against McGee, and caused the sheriff tó sell under the execution which issued thereon the house and lot, and bought them himself, for. fifteen dollars; that on the day of the sheriff’s sale, and before the sale took place, the defendant was publicly notified that McGee had no right, title, or interest, in the house and lot, that complainant had purchased them, and was then the holder of the title-bond ; that at the time of suing out the attachment the defendant was in truth indebted to McGee, and McGee could have established the fact, had actual notice of the attachment been given to him, and he would have appeared. The bill further charges, that the defendant then applied to the board of police to get their deed to the lot also, urging upon them his purchase at the sheriff’s sale, and the payment by him of the last instalment due by McGee, as reasons why they should make him a deed; and the board refused to make him a deed, upon the ground that they could not legally convey to any one but the original purchaser from them, or his lawful representative or assignee; and they continued so to refuse until, through the management and intrigue of the defendant, and his lawyer, employed expressly for the purpose, the board, on the 25th day of October, 1841, passed an order, authorizing the president of the board, in all cases, to make title, <fcc.; that the defendant and his counsel, having very great influence over the president of the board, prevailed on him to convey the house and lot to the defendant, on the 27th day of October, 1841, in direct fraud of the known rights of the complainant; that deed, on its face, recited the facts that it was made exclusively in consideration of the defendant’s having purchased the property at sheriff’s sale, and the payment by him of the last instalment due by McGee to the board. The bill charges that the note for the last instalment due by McGee had been transferred by the board long anterior to the purchase by defendant, at the sheriff’s sale, to George W. Ragan, in payment of a debt due him by the county of Ponola, and although the board had in that manner received full satisfaction for the note, it had not then been paid by the defendant, as noted in the deed ; that the board of police, at the time their president conveyed the house and lot to the defendant, had full notice of complainant’s purchase, and the assignment of the bond to him by McGee; that the suing out of the attachment, and having it levied on the house and lot, the purchase by the defendant, at the sheriff’s sale, and the execution of the deed by the president of the board of police, were all in fraud of the rights of complainant, who was a bona fide purchaser, for a valuable consideration, and all being done with notice of complainant’s claims, did not divest him of his right to demand of the board of police a conveyance of the lot according to their contract; that he had always been ready and willing, and was then ready and willing to pay the last in-stalment due by McGee to the board; and he had repeatedly demanded of them, a title to the lot, and tendered them their title-bond for that purpose; but they continued to refuse to do so upon the ground that their former president had conveyed the same to the defendant, notwithstanding some of them were well satisfied that conveyance ought not to have been made, and was in direct violation and fraud of the rights of complainant. And all of them would be perfectly willing to comply with their bond, and make a title to complainant; but they thought it would not be proper to do so until the deed to the defendant was set aside and cancelled. Ellis and the board of police were made defendants; and the prayer was, that the deed from the president of the board of police to Ellis should be set aside and cancelled, and the board compelled to perform specifically their contract, and to make to complainant, as the assignee of McGee, a title in fee simple to the lot, and for general relief.
    The several members of the board of police filed separate answers, all, except John Rayburn, stating that they had been elected since the sale to McGee, and the execution of the deed by the former president of the board to Ellis; and that they had no knowledge of those ^transactions, nor of any of the various allegations in the bill, save that the complainant had appeared before the board, and exhibited the title-bond made by the former board to McGee, and by McGee assigned to him, and demanded a title to the lot, in accordance with the conditions of the bond. And they refused to make the title as required, because the former president had conveyed the lot to their co-defendant Ellis, and they thought it would be improper in them to execute another conveyance until that to Ellis should be set aside or cancelled ; that the county had no claim or lien on the lot, and they were willing to comply with the conditions of the bond, if the deed to Ellis should be cancelled. The answer of Rayburn stated the same in substance as the answers of the other members of the board, and stated, in addition, that he was a member of the board when the sale was made to McGee, upon the terms and in the manner charged in the bill; that after the sale respondent took no further note of it, until sometime in October, 1841. When the attorney of Ellis showed him a deed already prepared for the board of police to execute to Ellis to the lot, he informed the attorney he would not sign the deed, as he did not believe the board ought to sign any deed until the bond they had given to McGee was returned; and that Ellis did not hold the bond, and could not return it; he told the attorney, however,, he could lay the deed before thé board, and perhaps a majority of them might sign it; that the deed was laid before the board, but for some reason, not then recollected, the board did not sign it; but they passed an order authorizing the president of the board, in all cases, to make titles, &c. and that some time afterwards he saw a deed from the president of the board to Ellis, for the lot.
    The answer of Ellis admitted that the board of police sold the lot to McGee in the manner and upon the terms charged in the bill, and also that he had notice of the assignment of the title bond by McGee to the complainant before his purchase at the sheriff’s sale, but charges that the assignment was made when McGee was on the eve of leaving the state to avoid the payment of his debts; that McGee and Ward were near neighbors, intimate friends, and family connections, and the assignment was only colorable, made without any consideration whatever, and for no other purpose than to defraud respondent and other creditors of McGee; that after McGee absconded he sued out an attachment for a just debt which McGee owed him, and had it levied on the house and lot; that the attachment was defeuded by counsel for McGee, and he recovered judgment upon a full and fair trial; and under that he had the house and lot sold and bought them himself; he admitted that Dr. Williams was in the occupancy of the house at the time of the sale, but denies that he occupied it as the tenant of Ward; he was placed in possession by McGee, and knew no other landlord until the purchase by respondent; he denied that he obtained possession by intrigue or trick, or retained it by force or fraud ; he admitted he was in the possession and received the rents, and insisted on his legal right to do so ; he admitted that he applied to the board of police for a deed, and that he employed counsel to aid him in procuringa deed from them, and that the president of the board did make him a deed to the property on the day stated in the bill, but he positively denied that it was procured by fraud, collusion, or by undue influence over the president, or by any other improper or unfair means; that he was advised he was entitled to a deed from the board of police, and he wished it for the purpose of fortifying and strengthening his own title; that in order to procure the deed from them he made an arrangement with James C. Armstrong, who was then the holder of the note given by McGee for the last instalment of the purchase-money for the lot, by which the note was considered as settled and paid ; that it remained in the possession of Armstrong after that time, through carelessness only; Armstrong was his neighbor, and he thought he could take up the note at any time; that although it remained with Armstrong, both parties looked upon it as in fact paid ; that as soon as it was known he had settled that note the deed was made to him by the president of the board of police, without any hesitation. Respondent repeats that Ward never paid any consideration for the assignment of the title bond; that when respondent sued out an attachment against -McGee, he had Ward summoned as garnishee, and Ward answered, denying that he owed McGee anything; he admitted the execution of the note for five hundred dollars, and pretended to hold offsets against it sufficient to cover the whole note. Respondent stated that since his purchase he has made permanent and valuable improvements on the property, for which he ought in any contingency to be allowed a fair price. He denied all the charges of fraud, collusion, &c. contained in the bill. The complainant proved by the deposition of W. H. Williams, that about the 2d day of October, 1840, deponent was in possession of the house in controversy, and he occupied it for some time thereafter; that he occupied the house by the permission of Joseph J. McGee; that he never heard Ward say anything about his having purchased the property of McGee until the day of the sheriff’s sale; on that day, before the sale took place, he heard him say the property was his, and that he purchased it from McGee; from rumor he knew, prior to that time, that Ward had purchased it.
    On cross-examination, he stated that he took possession of the house in October, 1840, and left it early in 1841 ; that previous to the sheriff’s sale he never heard Ward say anything about the property ; after that time he thought perhaps he had heard Ward say he owned it. James C. Armstrong’s deposition, read by complainant, proved that the note for one hundred and twenty-six dollars, given by J. J. McGee to the board of police of Ponola county, and due on the 10th day of December, 1841, was not paid at the time or before the execution of the deed by the president of the board of police to Albert G. Ellis; being cross-examined, he said he objected to the president’s making a deed to Ellis on the ground that the note was unpaid, and deponent was surety on it; that he was then the clerk of the police court, and the note was in his hands as clerk; that Ellis, in company with his attorney, went to him and promised to pay the note, and he then said he was satisfied; that Ellis did not say he would pay the note in any particular way; the note had been transferred to Ragan, to be returned if he could not collect it, and he returned it accordingly before the 27th day of October, 1841; that Ward had never offered to pay the note, though he always said he would pay it. The complainant proved, by J. T. M. Burbridge, that McGee sold the house and lot to Ward, and in consideration thereof, Ward gave McGee his note for five hundred dollars, and agreed in addition to take up a note executed by McGee to the board of police, but the amount or date of the note he did not recollect; that at the time of the sale McGee told Ward he could take possession of the house; that he considered the rent of the house and lot from September, 1841 till the 30th day of December, 1843, worth six dollars per month. On being cross-examined, he stated that the contract between McGee and Ward was made between eight and ten o’clock at night, and no one besides the parties was present except himself; after the sale by the sheriff, a brick chimney was built to the house by Ellis’s order, as he understood; that while the chimney was being built, Ward went to the house, and objected to any improvements being made there by the order of Ellis ; that he supposed the house would rent for four dollars per month without the brick chimney. By John H. Keith complainant proved that in April, 1843, deponent called on James C. Armstrong for two notes he held in favor of Ponola county, and he received not only the two notes asked for, but also a note on Joseph J. McGee for one hundred and twenty-six dollars, due on the 10th day of December, 1841; that he called on Ward for the payment of McGee’s note, and Ward said he would pay it if the board of police would make him a title to the house and lot in controversy; that he then went to Ellis and told him he had the note, and Ellis appeared .to be very much surprised, and said he thought it was paid, and went over to Armstrong’s office to see him about it; he afterwards returned and requested deponent to hold on to the note until the 5th day of May and he would pay it, and he did ■pay the same to deponent, as treasurer of Ponola county. The defendant took the deposition of Joseph J. McGee, who testified that when he transferred the title bond to Ward it was agreed that the sale should be void; he received from Ward a note for five hundred dollars, which he still held but he was willing to give up whenever called on by Wardfor.it; that tíre sale to Ward was not bona Jide, but was made for the purpose of preventing a sacrifice of his property; that he was not indebted to Ward at the time of the transfer of the bond and has not been since, and that Ward held no offsets against the note for five hundred dollars. The complainant’s counsel excepted to the deposition of McGee upon the ground that the vendor would not be heard to impeach the title he conveyed to another, but the record does not show whether the exception was sustained or not.
    At the January term, 1845, the vice-chancellor rendered a final decree, ordering the deeds from the sheriff and from the president of the board of police to be delivered up to be can-celled, and the board of police to execute to Ward a deed upon the payment by him of the amount of the note due by McGee on the 10th day of December, 1841, with interest; and that Ellis pay to Ward one hundred and sixty dollars for the rent of the property, that being the amount reported to be due by the commissioners to whom the case was referred to state an account. Whereupon Ellis appealed to this court.
    
      D. C. Gletm, for appellant.
    In this case there was a mere transfer of a title bond, and no covenant of warranty. Vendor of an estate, who has sold without covenant of warranty, is competent to prove title of vendee. 1 Str. 445. The peculiar attitude of a grantor is material only so far as it may affect his credibility. They can both prove and disprove fraud. A party to a transaction to which fraud is imputed, can testify either to the mala or bona tides of the same, the rule of interest being satisfied. 4 J. J. Marshall, 586, 587; Peeke’s Ev. 146 ; 6 Johns. R. 136. In trover, A. v. B., 0. allowed to prove property in himself. 4. Barn. & Aid.
    In 9 Pickering’s Mass. R. 141 ; action of replevin, plaintiff claimed under bill of sale from Abott; defendant claimed'under a sale by virtue of an attachment. Upon the trial defendant introduced the vendor, and proved the sale fraudulent, and made with an intent to defraud creditors, (as McGee has done in this case,) but did not show whether the note was paid or not. The supreme court of Massachusetts decided him to be a competent witness.
    McGee merely assigned this bond; he has given no special or general covenant of warranty, and from the above decisions he is clearly competent to testify as to this fraudulent affair, whatever may be said as to his credibility. He has no interest, or if any, equally balanced, and his position being that of a witness, he might prove any deed which he had attested to be a forgery. Burrow. 1255; 2 Dallas, 214; 2 Washing. 63.
    
      
      D. Shelton, for appellee.
    It is insisted by Ellis, that the sale from McGee to Ward was fraudulent and void.
    There are two sufficient answers to this.
    1st. There is no proof of such fraud.
    2d. If proved, it would not be available to Ellis.
    1. As to the proof of fraud. It is proven that McGee still holds Ward’s note for five hundred dollars; that Ward has, from the time of his purchase, avowed and acknowledged his responsibility for the note still due the board of police.. It is further proved (by Ellis,) that he garnisheed Ward as the debtor of McGee, and Ward, upon oath, answered that he did owe McGee the five hundred dollars, but had sets-off thereto to the full amount thereof. These things all tend to show the genuineness of the purchase, but the testimony of McGee himself, is taken by Ellis, and excepted to as incompetent; he deposes that he now holds Ward’s note, which he is ready to redeliver to Ward; that there was an agreement between them that the sale should be void; that Ward has no sets-off against him.
    McGee is incompetent to prove his own assignment fraudulent, because Ellis, having no pretence of claim to the property, since McGee had no interest subject to sale under execution. See Goodwin v. Anderson, 5 S. & M. 730 ; and Moody v. Farr, 6 S. & M. 100. If therefore the assignment to Ward bo avoided, the title is in McGee. A grantor, who has executed a deed, is not a competent witness to prove it fraudulent, when by avoiding it the title would enure to his own benefit. 2 Johns. Rep. 478.
    2. If proved it would not be available to Ellis.
    In ejectment it is true, that a defendant can set up an outstanding title in avoidance of a recovery, but not so in equity; there it is a mere comparison of title. Ellis has no interest whatever. Ward may have interest, and the only conflict on that question is between him and McGee, and Ellis cannot set up McGee’s title, and introduce McGee to prove it genuine, for in such case he would retain a wrongful possession in the title of another, and sustain that title by the testimony of the holder thereof.
    
      Miller and Smith, on the same side,
    cited, Freeman’s Ch. R. 401; 1 Wend. 502; 2 N. Y. Digest, 993; 1 Johns. Ch. R. 52; 17 Johns. R. 351 ; 8 Johns. R. 333; 1 Story’s Eq. 2d Ed. 499, note 3; lb. sect. 439, 440, 442 and 695; 2 lb. sect. 783, 784, 788, 796, p. 6, 7, 10 and 13.
   Mr. Justice Clayton

delivered the opinion of the court.

One of the points in this cause is settled by Goodwin v. Anderson, 5 S. & M. 730. The principal point now in controversy, grows out of a question, as to the competency of a witness. One McGee sold a house and lot in Ponola, to Ward, and assigned him a title bond which he held for it, without any covenant on his part. Ellis purchased the lot, under an execution in his own favor, at sheriff’s sale. In a contest between him and Ward, the deposition of McGee was taken, by Ellis, to prove that the sale made by him to Ward was without consideration, and in fraud of his creditors.

It is urged,' in argument, that McGee is competent as a witness, because he has made no warranty of title, and is not legally liable upon the assignment. This view is, to our minds, conclusive that he is not competent. It is his interest to pay the debt to Ellis, with the lot, and if he be not responsible to Ward, that interest is not countervailed by any opposing interest. There is no equipoise. This conclusion is fully sustained by several adjudged cases. Pratt v. Stevens, 16 Pick. 326; Rea v. Smith, 19 Wend. 293; Waller v. Mills, 3 Dev. 517. We do not understand the cases cited by the counsel for the plaintiff in error, to lay down a different rule; if they do, they constitute a departure from principle.

This was the view adopted by the court below. But we think the decree in other respects is erroneous. Ellis made the last payment for the lot, which, by his contract with McGee, Ward was to have paid; for this amount he ought to have a lien upon the lot. The improvements which Ellis placed upon the lot ought also to be allowed as a credit to him, to be applied to the extinction of the rent, so far as they go.

The decree will be reversed, and the cause remanded, with directions for the taking of a new account, upon the principles herein indicated. The decree, however, upon the main point, is not disturbed, the complainant being entitled to relief.

Decree reversed.