Source: https://supreme.justia.com/cases/federal/us/160/379/
Timestamp: 2019-04-25 13:48:18+00:00

Document:
When one party to an action has in his exclusive possession a knowledge of facts which would tend, if disclosed, to throw light upon the transactions which form the subject of controversy, his failure to offer them in evidence may afford presumptions against him.
Where land is used for the purpose of a home and is jointly occupied by husband and wife, neither of whom has title by record, a person proposing to purchase is bound to make some inquiry as to their title.
The possession of real estate in the District of Columbia under apparent claim of ownership is notice to purchasers of the interest the person in possession has in the fee, whether legal or equitable in its nature, and of all facts which the proposed purchaser might have learned by due inquiry. This principle applies with peculiar cogency to a case like the present, where the slightest inquiry would have revealed the facts, and where the purchaser deliberately turned his back upon every source of information, and a purchase made under such circumstances does not clothe the vendee with the rights of a bona fide purchaser without notice.
This was a bill in equity filed by Maria E. Tallmadge against the appellants to set aside and remove, as a cloud upon her title, a deed made by the appellants Richard H. Miller, Elizabeth Houchens, and Ella A. Goudy, claiming to be heirs at law of one John L. Miller, deceased, dated August 30, 1888, and purporting to convey to the appellant Kirby the property therein described. The bill further prayed for the cancellation of a trust deed executed by the appellant Kirby and his wife to the defendants Willoughby and Williamson, and for an injunction against all the defendants except Kirby restraining them from negotiating certain notes given by Kirby for the purchase of said lots, etc.
each. Instead of taking the title to the property in herself, she furnished the money to John L. Miller, a friend of the family, who paid the five thousand dollars cash with the money thus furnished, and at her request took the title in his own name, and executed notes for the deferred payments, which he secured by a deed of trust upon the property. Subsequently, and in June, 1883, Miller also purchased with the funds of Mrs. Tallmadge the adjoining lot, No. 76, taking title in his own name and executing a deed of trust for the deferred payments, amounting to $1,266.
Mrs. Tallmadge took immediate possession of the premises, and has occupied them as her own from that day to the time the bill was filed, paying taxes, improvements, and interest on encumbrances, reducing the principal $2,266, and holding open and notorious possession under her claim of title.
On June 16, 1888, defendants Miller, Houchens, and Goudy, collateral heirs of John L. Miller, who had made a contract with the defendants Willoughby and Williamson to give them one-quarter of whatever they could get for them out of the estate of Miller, filed a bill in the Supreme Court of the District against the widow and executor of Miller, the holders of the notes given by him, and the trustees in one of the deeds of trust, praying for a partition or sale of the property, the admeasurement of the widow's dower, and for a charge upon the personal estate of Miller for the unpaid purchase money of the property.
had any interest in the property. In August, 1888, the pendency of this suit coming to the knowledge of Mrs. Tallmadge, she sent the original deed from Miller to her, then unrecorded, by Mr. Tallmadge, to Willoughby and Williamson, solicitors for Miller's heirs, who examined and made minutes from it.
The controversy in this case arises from the fact that the deed from John L. Miller to Mrs. Tallmadge, which was given December 27, 1883, was not put upon record until October 4, 1888. In the meantime, and in February, 1888, Miller, in whose name the property had been taken for the benefit of Mrs. Tallmadge, died, and on August 30, 1888, Houchens, Goudy, and Richard Henry Miller, collateral heirs of John L. Miller, executed a deed of the property, subject to the dower rights of Miller's widow, to defendant Kirby, for an expressed consideration of $12,000, of which $3,000 are said to have been paid down in cash, and $9,000 in notes payable to Willoughby and Williamson. Kirby now claims to be an innocent purchaser of the property, without notice of the prior deed from John L. Miller to Mrs. Tallmadge.
"is to be weighed according to the proof which it was in the power of one side to have produced and in the power of the other side to have contradicted."
"The conduct of the party in omitting to produce that evidence in elucidation of the subject matter in dispute, which is within his power and which rests peculiarly within his own knowledge, frequently affords occasion for presumptions against him, since it raises strong suspicion that such evidence, if adduced, would operate to his prejudice."
"open and notorious occupation and adverse holding by the first purchaser when the second deed is taken is, in itself, sufficient to warrant a jury or court in finding that the purchaser had evidence before him of a character to put him on inquiry as to what title the possession was held under, and that he (the subsequent purchaser) was bound by that title, aside from all other evidence of such possession and holding."
The principle had been steadily adhered to in subsequent decisions. Lea v. Polk County Copper Co., 21 How. 493, 498; Hughes v. United States, 4 Wall. 232, 71 U. S. 236; Noyes v. Hall, 97 U. S. 34; McLean v. Clapp, 141 U. S. 429, 141 U. S. 436; Simmons Creek Coal Co. v. Doran, 142 U. S. 417.
"Where possession is relied upon as giving constructive notice, it must be open and unambiguous, and not liable to be misunderstood or misconstrued.
It must be sufficiently distinct and unequivocal so as to put the purchaser on his guard."
In this case, one James Townsend bought and took possession of a public house in Salt Lake City, and lived in it with his lawful wife and a plural or polygamous wife, the latter, who was the appellant, taking an active part in conducting the business of the hotel. He subsequently ceased to maintain relations with the appellant as his polygamous wife, but, being desirous of having the benefit of her services, both concealed this fact. He made a secret agreement with her that if she would thus remain, she should have a half interest in the property. He afterwards acquired his legal title to the property without a disclosure of the secret agreement. His interest therein having subsequently passed into the hands of innocent third parties for value, without notice of appellant's claim under the secret agreement, it was held that the joint occupation of the premises by herself and Townsend, under the circumstances, was not a constructive notice of her claim, and that she had no rights in the premises, as against a bona fide purchaser without notice. There were evidently two substantial reasons why appellant's possession was not notice of her rights: first, James Townsend took the legal title to himself in 1873, and held it until 1878, when the purchase was made, and second, his agreement with the appellant was not one with his lawful, but his polygamous, wife, and was also a secret one. The case is obviously not one of a joint occupation by a husband and his lawful wife, neither of them having any title thereto.
"Where a title under which the occupant holds has been put upon record, and his possession is consistent with what thus appears of record, it shall not be a constructive notice of any additional or different title or interest to a purchaser who has relied upon the record, but has had no actual notice beyond what is thereby disclosed."
"It cannot, we think, be doubted that possession of real property by a husband and wife together will impart notice of the wife's equities, as against all persons other than those claiming under the husband, their possession being regarded as joint by reason of the family relation."
In this case, the occupation was by a husband and wife, and it was held that such possession was notice of a title in the wife to a life estate in the property, as against the holder of a mortgage given by a son, who was a member of the family as a boarder, lodging a part of the time in his mother's house and a part of the time elsewhere, the legal title being in the son.
In the case of Lindley v. Martindale, 78 Ia. 379, the title to the lands was in a son of the plaintiff, who resided on a portion of them, while plaintiff and her husband resided on another portion. The lands had for a long time been cared for either by the husband or the son, and it was held that one who, upon being told that the title was in the son, took a mortgage from him to secure a loan which was used for the most part to pay off prior encumbrances placed on the land by the son, was not charged with the alleged equities of plaintiff by reason of her claimed possession of the land, the court holding that her possession was not such as the law requires to impart notice. The case is not entirely reconcilable with the last.
the sums advanced by them respectively. He however took a conveyance of the entire estate to himself, and they both moved upon the place, he managing the land, and she attending to the household duties. The deed was recorded, and he borrowed money, mortgaged the land to secure the loan, and appeared to the world as the owner for a period of over ten years, during which time the sister took no steps to have her equitable rights enforced or asserted. It was held that her possession under such circumstances was not such as would charge a subsequent purchaser from her brother with notice of her equitable rights. Here too the record title was strictly consistent with the possession.
"to give notice or to make inquiry a duty must be open, notorious, and unequivocal. There must be such an occupation of the premises as a man of ordinary prudence, treating for the acquisition of some interest therein, would observe and, observing, would perceive to be inconsistent with the right of him with whom he was treating, and so be led to inquiry."
So, in Atwood v. Bearss, 47 Mich. 72, the title to property, upon the record, appeared to be in the wife. Her husband's previous occupation had been under her ownership and in right of the marital relation, and nothing had transpired to suggest that she had made the property over to him. She had, however, given him a deed, which was not put upon record. It was held that his continuance in possession was no notice of this deed, since it was obviously consistent with the previous title in herself.
that where the land is occupied by two persons, as for instance by husband and wife, and there is a recorded title in one of them, such joint occupation is not notice of an unrecorded title in the other. In such case, the purchaser, finding title in one, would be thrown off his guard with respect to the title of the other. The rule is universal that if the possession be consistent with the record title, it is no notice of an unrecorded title. But where the land is used for the purpose of a home, and is jointly occupied by husband and wife, neither of whom has title by record, we think that in view of the frequency with which homestead property is taken in the name of the wife, the proposed purchaser is bound to make some inquiry as to their title.
The case of Phelan v. Brady, 119 N.Y. 587, is an instance of this. In this case, a suit was brought to foreclose a mortgage upon certain premises given by one Murphy, who held an apparently perfect record title to the property. It appeared, however, that before the execution of the mortgage, Murphy had conveyed the premises to one Margaret Brady, who was in possession, and, with her husband, occupied two rooms in the building on the premises. She also kept a liquor store in a part thereof. The other rooms she leased to various tenants; claiming to be the owner, and collecting the rents. Her deed was not recorded until after the giving of the mortgage. It was held that her actual possession under her deed, although unrecorded and its existence unknown to plaintiff, was sufficient notice to him of her rights to defeat any claim under the mortgage. This case goes much further than is necessary to justify the court in holding that Mrs. Tallmadge's possession was notice in the case under consideration, as the actual occupation of the wife was only of two rooms in a tenement house containing forty-three apartments.
his back upon every source of information, does not even enter the house, makes no examination as to whether the property was in litigation, and buys it of collateral heirs of Miller, subject to his widow's dower if he had had the title, to an unpaid mortgage, and to the chances of the property being required for the payment of Miller's debts. It is clear that a purchase made under such circumstances does not clothe the vendee with the rights of a bona fide purchaser without notice.

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