Case ID: miss_18/html/0268-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Chief Justice ShaRKey", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Thomas W. Brown vs. John Doe, ex dem. Neal Bartee.
    Where the plaintiff, in an action of ejectment, claims title under a deed of trust, executed by a third party, in his favor, and the defendant claims title under a sheriff’s deed of the interest of such third party, it is not necessary for the plaintiff to introduce proof to establish the consideration on which the deed of trust was executed ; it will be prima facie valid ; if the defendant seelts to impeach it he must do so by proof.
    In February, 1839, T. executed a deed of trust to W. as trustee, to secure the payment of a sum of money to B. In April, 1839, a judgment was obtained against T., and, under execution on this judgment, R., in 1842, bought the property conveyed by the deed of trust. In May, 1839, T. executed a deed in fee simple to B. of the same property. In 1842 W., the trustee, sold the property under the deed of trust, and it was bought by B., who sued R. in ejectment for the property ; held, that the absolute conveyance by T. to B., in May, 1839, did not vest in B. the legal title, and thus merge the deed of trust; that T. had but an equity to convey to B., and by his deed he only conveyed that equity. The perfect, legal title was in W., the trustee, and never passed out of him until the sale under the deed of trust, by which B., having before the perfect equitable, became also the owner of the perfect legal title ; and therefore no title passed to R. by the sheriff’s deed.
    Where the grantee, in a deed of trust, subsequently conveys the property granted, directly to the cestui que trust, the deed of trust is not thereby extinguished, merged or rescinded; parties holding mere equities can only dispose of equities, they cannot affect the legal title.
    The execution, by the grantor in a deed of trust, of an absolute deed, by which he conveys the property formerly conveyed in trust, absolutely to the cestui que trust, is not a payment of the deed of trust; the absolute deed only operated, to extinguish, the grantor’s interest; the legal title still remained in the trustee.
    "Where a sale takes place under a deed of trust, the purchaser acquires that title which the grantor in the deed of trust had at the time it was executed ; and if judgments have been obtained against the grantor, since the execution of the deed of trust, they bind only the grantor’s equity, which the judgment creditor might whilst it existed have appropriated, by the use of proper means.
    In error from the circuit court of Lowndes county; Hon. Francis M. Rogers, judge.
    Bartee instituted his action of ejectment, for the recovery of lots 3 and 4, in square 9, in the town of Columbus. The declaration w;as served on E. C. Eggleston, as tenant in possession. Subsequently, Thomas W. Brown was admitted to defend as landlord.
    At the October term, A. D. 1846, the cause was tried before a jury, and a verdict rendered in favor of the plaintiff. At the trial the plaintiff read in evidence to the jury, 1st. A deed from Samuel M. Turner to Paschal B. Wade, as trustee, executed on the 21st day of February, A. D. 1839, to secure Bartee in the sum of fifteen hundred dollars. 2d. A deed from Wade, as trustee, to Bartee, executed on the 21st of March, 1842; both conveying the property in controversy. Bartee then introduced J. B. Wade, who testified that he was the trustee in the deed, that he advertised and sold the property according to the provisions of the trust deed; that he paid rent to the Trustees of the Franklin Academy, in the year 1839, and was of opinion, in the year 1840, that Eggleston was in possession at the commencement of the suit, and that Turner was present at the time of the sale under the trust deed, and made no objection thereto.
    The defendant’s counsel moved to exclude the deed of trust from the jury, because there was no proof of the validity of its consideration. The motion was overruled.
    The defendant then read to the jury a deed executed on the 11th day of May, 1839, by Samuel M. Turner to Neal Bartee, purporting to convey the property in controversy in fee simple. It was proved by the records, that on the 9th of April, 1839, in the county of Lowndes, a judgment was rendered in favor of James Owen against one William Collins and Samuel M. Turner, for the sum of $62 1.25 damages. That execution issued thereon on the 19th of February, 1842, and was levied on the property in controversy, which was sold to Thomas W. Brown, for the sum of twenty-one dollars, on the 4th of April, 1842. The sheriff’s deed to Brown was also read.
    The defendant proved by George M. Mullen, that he was Treasurer of the Trustees of the Franklin Academy, in the years 1840, 1841, and 1842; that Neal Bartee paid the leases for lots 3 and 4, during those years; that Bartee’s name was substituted on the treasurer’s book as the owner of these lots, in place of Samuel M. Turner. That it was not the custom of the treasurer to substitute the name of another for that of the owner paying leases, without his orders.
    Levi Donnell testified that he rented the premises in dispute, in the year 1840, from Neal Bartee, as Bartee’s property; that Bartee had a well dug on the premises in that year; that he paid the rent for the premises in dispute to Neal Bartee, and took a receipt forffhe same.
    Thomas E. Bell testified, that in the year 1841 he rented th'e premises in dispute, from Bartee, and gave his obligation payable to Bartee for the same ; that he paid a part of the same; that Bartee had his horse attached for the balance; that in a conversation with Bartee, the latter told him the property once belonged to Turner, and that Bartee offered to sell it to him.
    Edward C. Eggleston' testified that in the year 1842, Bartee told him that he had seen deeds for the property in dispute, a trust deed, and an absolute deed.
    There was other testimony, not, however, material to the issue.
    The defendant asked the court to instruct the jury,
    1. That unless the jury believe, from the evidence, that the defendant was in possession of the premises at the beginning of the suit, they must find for the defendant; also when a legal and equitable title are united the equitable title is merged in the legal. This was given by the court.
    
      2. That when a deed of bargain and sale is admitted to record on the acknowledgment of the bargainor in court, and the bar-gainee enters on the premises after the purchase, and claims under the deed, that the deed is good in law as a deed delivered. This was also given.
    3. That a cestui que trust, for whose account a trust deed has been executed, may take an absolute bona fide conveyance of the trust estate, and the latter becomes merged in the former, unless the contrary is at the time declared not to be the intention of the parties. This was refused.
    4. That if the jury believe from the’ evidence, that the trust deed to Wade as trustee, was paid or extinguished by the execution of the absolute deed from Turner to Bartee, that they must find for the defendant. This was also refused.
    The plaintiff asked the following, which rvere given.
    1. That if the jury believe from the evidence, that, after the exclusion of the deed in trust, Turner conveyed the rvhole equitable estate to Bartee, yet that would not so extinguish the original lien as to let in judgments junior to the deed in trust, unless it be shown that the deed in trust was satisfied.
    2. That even if Bartee accepted the absolute deed, such acceptance was not an extinguishment of the deed in trust, unless it was the intention of Bartee that the deed in trust should be extinguished by it. And even if Bartee accepted the absolute deed in payment of the debt secured by the deed in trust, yet his title would have relation back to the time the deed in trust was executed, and would exclude the lien of the judgment entered up, after the deed in trust was executed, and, if the jury believe, that Brown’s judgment was entered up after the deed in trust was executed, they must find for the plaintiff.
    Brown sued out this writ of error.
    
      Boykin and Crusoe, for plaintiff in error,
    contended,
    1. That it was incumbent on Bartee to prove by other evidence than the mere recital of the deed of trust, that the consideration was bona fide and for value. Doe ex dein. M’Ginty v. Meeres, 10 Ala. R. (New Series) 139; McCain v. Wood, 4 Ala. R. 258; Branch Bank v. Kinsey, 5 lb. 9; Graham v. Lock-hart, 8 lb. 23.
    2. That the court should have given the instructions refused; that the equitable and legal title uniting, the former was merged in the latter. Slandifer v. Chisholm, 1 Stew. & Port. 458; 6 Johns. Ch. R. 417; 2 Pirtle, 98; 6 Cow. 316; 1 J. J. Marsh. 258, 259; 1 Wash. R. 184; Munf. Index, 325.
    3. The court erred in giving the charges asked by plaintiff. Clayborn v. Hill, 1 Wash. Va. R. 184; James v. Johnson, 6 Johns. Ch. R. 417.
    
      Evans and Topp, for defendant in error.
    1. The doctrine of merger does not apply to a case of this kind; it applies only when the legal and the equitable estates meet in the same person, and that even in those cases there is no merger, if there be any beneficial purpose to be served by keeping the legal and equitable titles separate and distinct. Starr v. Ellis, 6 Johns. Ch. R. 396. “It is very clear, that a person becoming entitled to an estate, subject to a charge for his own benefit, may, if he choose, at once take the estate and keep up the charge.” Ib. “ The question is upon the intention, actual or presumed, of the person in whom the interests are united.” Ib. See, also, Gardner v. Astor, 3 Johns. Ch. R. 54.
    2. No merger could take place here, as the legal estate was in Wade, the trustee, and not in Bartee, until he purchased from Wade in 1842.
    3. By the deed made by Turner on the 11th May, 1839, if anything passed to Bartee, it was only such an equitable interest as remained in Turner, after executing the deed in trust to Wade. This equitable interest would be merged in the legal estate, which commenced with the execution of the deed in trust, and, consequently, effectually excluded the lien of the judgment under which Brown bought.
    4. If the deed of trust had been assailed for fraud, or for want of consideration by proof, which made a prima facie case against it, then it would have been incumbent on Bartee, by proof of the consideration to sustain its integrity. The deed in trust, itself, was all the proof which Bartee wanted of the consideration, as its fairness was not questioned by the proof of the defendant below.
    Were it necessary to prove the consideration expressed in a deed in trust, before the deed is assailed by proof, it would be impossible to deraign a title through a deed in trust after the lapse of years.
   Mr. Chief Justice ShaRKey

delivered the opinion of the court.

This was ah action of ejectment, for two lots in the town of Columbus, in which the lessor of the plaintiff obtained a verdict. Exceptions were taken, during the trial, to the rulings of the court, on which the case is brought up by writ of error.

The first ground taken in this court, arises on an exception taken to the decision of the court, in refusing to rule out a deed of trust, made by Turner to Wade, for the benefit of Bartee. The history of the case is simply this; on the 21st of February, 1839, Turner made a deed of trust to Wade, by which he conveyed the lots in question to secure a debt of $1500 due to Bartee. On the 9th of April, 1839, a judgment was rendered against Turner. The defendant derived title under this judgment, by virtue of a sale made by the sheriff in 1842. In May, 1839, Turner, the grantor in the deed of trust, made an absolute conveyance by bargain and sale of the trust property to Bartee, and, in 1842, the property was sold by the trustee; Bartee became the purchaser, and took a deed. It is thus seen that the deed of trust was the first incumbrance, and the judgment the next.

The application was made to rule out the deed of trust, because the plaintiff did not introduce proof to establish the consideration on which the deed was given, and it is contended that such proof is necessary in a controversy between the claimant under a deed of trust, and a purchaser at sheriff’s sale. In support of this position, we are referred to several cases decided by the supreme court of Alabama. These cases have been examined, and are found to sustain this doctrine. We are always inclined to pay great deference to the decisions of sister states, but in this instance we are constrained to differ with the supreme court of Alabama. The first time the question came before that court, was in the case of McCain v. Wood, 4 Ala. R. 258, when the question does not seem to have been much considered, except that under the particular circumstances of the case, such proof was held to be necessary, because, said the court, the deed was executed after the indebtedness, and even after the judgment. The court seems, afterwards, to have built upon that case, until the question became settled, without ever having examined the solidity of the foundation on which the superstructure was reared. It results from these cases, that a deed of trust is prima facie fraudulent; or, in other words, that the party introducing such a deed must prove that it was not fraudulent. On general principles, a deed is prima facie valid, and its recitals true, and it requires no evidence to support it, until it is attacked for fraud. In Hundley v. Buckner, 6 S. & M. 70, this court said : “Another objection is, that there is no evidence of the bona fides of the debt secured by the deed of trust, nor any evidence of its existence, except the recital in the deed of trust, and the production of the note for which it was given. This was sufficient prima facie proof, and none other was requisite unless this had been impeached.” That is the point made in this case, and we adhere to the rule as then stated. Fraud is never presumed, and never to be negatived until it is charged or made to appear. The judgment did not exist when this deed was made, although it is probable the debt did. But a debtor has a right to sell and convey his property — he may prefer creditors. This is the general rule. The exception to it is, that he cannot convey to defraud creditors. He who wishes to bring a deed within the exception, must make his proof. The presumption of law is always against bad faith. These Alabama cases reverse the rule, and establish this new doctrine, that it is fraud in law for a man to convey property who owes a debt. The rule which would require the purchaser to prove the fairness of the transaction amounts to this.

Exceptions were also taken to the refusal of the court to give certain charges asked for the defendant, and to the giving of those asked for the plaintiff.

The first charge refused was, that a cestui que trust may take an absolute bona fide conveyance of the trust estate, and the latter (the trust estate, we suppose, was intended,) becomes merged in the former, unless the contrary is declared at the time to be the intention of the parties. This construction was asked, no doubt, in view of the subsequent absolute conveyance made by Turner to Bartee, which was younger than the judgment. If this conveyance could be regarded as the only title Bartee had, the property was of course liable to the judgment. This charge could not have been given without a total disregard of the distinction between a legal and equitable title. After the deed of trust was executed, what interest had Turner in the lots? certainly nothing but an equity. Then how could he make an absolute conveyance of the legal estate, when he had no such estate to convey ? His conveyance, at most, only passed such right as he had. He could not convey that which he had not. It does not follow, that a party by adopting a form of conveyance appropriate to pass the legal estate, thereby conveys such estate. Whatever form he may adopt, he can only transfer such interest as he possesses. If he has but an equity, that is all that he can convey. The legal title to these lots was in Wade the trustee, and it could not be divested without his concurrence, or the judgment of a competent tribunal. Bartee held the entire equity by the purchase or conveyance, and, after that, Wade held the legal title as trustee for Bartee alone. He was previously trustee for both parties. The doctrine of merger then can have no application.

But it is contended that the conveyance by Turner to Bartee was a rescission of the conveyance in trust, as it was made by the only parties interested. It is certainly true, that Bartee was thereby invested with the entire equity; but we do not perceive, in view of well-defined distinctions, how two persons, each holding but an equity, could rescind a contract which passed the legal estate to a third person, without the concurrence of that third person. A party who holds the legal title cannot be divested of it, except by his own act, or in virtue of the decree or judgment of a court of competent jurisdiction. The case of Standifer v. Chisholm, 1 Stew. & Port., is cited in support of this position. That was a controversy about personal property. If there should be a distinction between real and personal property, that case may rest upon it. If there is not, then we know not how to reconcile it with what we conceive to be well-established principles. It must be incontrovertibly true, that parties who hold nothing more than equities, can dispose of nothing more. If we could regard the beneficial interest as the legal title, our conclusion might be different.

The second charge asked and refused was, that if the jury should believe from the evidence, that the trust deed to Wade as trustee, was paid or extinguished by the execution of the absolute deed from Turner to Bartee, they must find for the defendant.

Payment is usually a question of fact, but extinguishment is a question of law. Here both were questions of law. We have already endeavored to show, that the right conveyed by the deed of trust was not extinguished by the absolute deed. The debt might have been paid, but the deed of trust was not susceptible of payment. It was but a security for the payment of the debt. The absolute conveyance could only operate to extinguish Turner’s interest. The legal title was still in Wade. The court was asked by this charge to submit to the jury the effect of the absolute conveyance,' which would have been improper. The jury could not determine whether the deed of trust was paid or extinguished by the absolute deed. It was for the court to determine as to the legal effect of the conveyance.

When Wade sold under the deed of trust and Bartee became the purchaser, he was for the first time invested with the legal title, which had its origin in the deed of trust, and he held it precisely as Turner did when the deed of trust was made ; and if the doctrine of merger can have any application, it is by sinking Bartee’s equity into his legal title; which, however, would not so operate as to act in intermediate judgments. It could not do so in this instance, as the legal title passed out of Turner previous to the judgment, and never returned to him. If the judgment could have been binding on anything, it was his equity which the judgment creditor might, whilst it existed, have appropriated by the use of proper means.

These remarks cover substantially the charges which were given at the instance of the plaintiff, and they do not require further notice.

Judgment affirmed.