Case Name: Carter v. Allan & als.
Court: Supreme Court of Virginia
Jurisdiction: Virginia
Decision Date: 1871-08
Citations: 21 Gratt. 241
Docket Number: 
Parties: *Carter v. Allan & als.
Judges: The other judges concurred in the opinion of Christian, J.
Reporter: Virginia Reports
Volume: 62
Pages: 804–807

Head Matter:
*Carter v. Allan & als.
August Term, 1871,
Staunton.
Sale of Lunatic's Land — Case at Bar. — C, committee of D, a lunatic, flies bill for sale of D’s lama. There is a decree for a sale, and S, the commissioner, sells and reports J the purchaser, and returns his bonds with C as his surety. The report is confirmed, and S reports that he has collected the purchase money and paid it to G, the committee, and returns the receipts of G with his report. This report is confirmed, and a commissioner is directed to convey the land to J, or as he shall direct; and the commissioner, by direction of J, conveys it to 0. Afterwards, G and his wife, who is a sister of D, conveys the land to G, in trust to secure a large debt to B. After the death of D and of C, J and S, the widow of G, one of the heirs of D, files her bill against the administrator of C, and the trustee G and B, to set aside the sale and conveyances to O and G, on the ground that C was in fact the purchaser, which was forbidden by the statute. She does not allege in her bill any error on the face of the proceedings, or after-discovered evidence; nor does she allege or prove notice of the fact she relies on, by G or B; and they demur and deny notice. Held :
i.Bill of Review — Grounds of. — The bill is fatally defective as a bill of review, for failing to show defect in the proceedings, or to allege- tBa-i she had discovered evidence since the decree,, that she could not by reasonable diligence have ascertained before.
2. Impeachment of Decrees —Fraud.—It. is; fatality defective as a bill to impeach the decree- for fraud, as against B for failing to charge; Trim; with notice of the fraud.
3. Purchaser for Value —Latent Equity. —A. purchaser for value without notice, actual-or constructive, having obtained a conveyance, will not be affected by a latent equity, whether- by-lien, or incumbrance, or trust, or fraud,, or any other claim.
The case is stated by Judge Christian, in his opinion.
Realce and Michie, for the appellant.
Robertson, for the appellees.
Biil of Review — Grounds of. — It seems well settled that the only proper grounds of a bill of review are errors of law apparent on the record, or newly-discovered evidence. See the principal case- cited as authority on this point in Amiss v. McGinnis; 12 W. Va. 393. See also, in support of this proposition, Hill v. Bowyer, 18 Gratt. 375; Triplett v. Wilson, 6 Call 47; Quarrier v. Carter, 4 H. & M. 243; Ellzey v. Lane, 3 H. & M. 593; Heermans v. Montague (Va.)20 S. E. Rep. 899; Diamond, etc., Co. v. Rarig & Co., 93; Va. 601, 25 S. E. Rep. 894; Hill v. Maury, 21 W. Va. 162; Middleton v. Selby, 19 W. Va. 167.
Same — After-Discovered Evidence — Nature ot — To-sustain a bill of review on the ground of after-discovered evidence three things must concur: first, the new matter must be relevant and material and such as If known might probably have produced, a different determination; second, the new matter must have first come to the knowledge of the party-after the time when it could have been used in the cause at the original hearing; third, the matter relied upon must not only be new, but it must be such as the party by the use of reasonable diligence could not have known before.
This rule, laid down in the principal case, was sustained in Douglass v. Stephenson, 75 Va. 755; Harman v. M’Mullin, 85 Va. 191, 7 S. E. Rep. 349; Tate v. Tate, 85 Va. 216, 7 S. E. Rep. 352; Nichols v. Nichols, 8 W. Va. 185; Dingess v. Marcum, 41 W. Va. 757, 24 S. E. Rep. 626. See also, in accord, Barnett v. Smith, 5 Call 98; Campbell v. Campbell, 22 Gratt. 650, and foot-note; Connolly v. Connolly, 32 Gratt. 660, and foot-note-, Reynolds v. Reynolds, 88 Va. 149, 13 S. E. Rep. 395.
Same — Affidavit.—The bill must not only set forth the discovery of new matter which was discovered after the decree, but it must be accompanied by an affidavit that the new matter could not be produced or used by the party claiming the benefit of it, in the original cause. And the affidavit must also state the nature of the new matter, in order that the court may exercise its judgment upon its relevancy and materiality. Carter v. Allan, 21 Gratt. 245; Norfolk, etc., Co. v. Foster, 78 Va. 420; Armstead v. Bailey, 83 Va. 245, 2 S. E. Rep. 238; Corey v. Moore, 86 Va. 731, 11 S. E. Rep. 114; Dingess v. Marcum, 41 W. Va. 763, 24 S. E. Rep. 626; Kern v. Wyatt, 89 Va. 885, 17 S. E. Rep. 549; Whitten v. Saunders, 75 Va. 563; Trevelyan v. Lofft, 83 Va. 141, 1 S. E. Rep. 901.
See generally, monographic note on “Bills of Review” appended to Campbell v. Campbell, 22 Gratt. 649.
Purchaser for Value — Latent Equities. — As authority for the proposition that a purchaser for value without notice will not be affected with latent equities, see the principal case cited in National Bank v. Harman, 75 Va. 609; Rorer, etc., Co. v. Trout, 83 Va. 415, 2 S. E. Rep. 713; State Bank v. Blanchard, 90 Va. 27, 17 S. E. Rep. 742; Moorman v. Arthur, 90 Va. 485, 18 S. E. Rep. 869; Throckmorton v. Throckmorton, 91 Va. 47, 22 S. E. Rep. 162; Snyder v. Grrandstaff. 96 Va. 473, 31 S. E. Rep. 647: Ellison v. Torpin, 44 W. Va. 429, 30 S. E. Rep. 188; Turk v. Skiles, 45 W. Va. 87, 30 S. E. Rep. 236. See also, in accord, Tompkins v. Powell, 6 Leigh 576. See the principal case dis - tinguished in Davis v. Tebbs, 81 Va. 604.

Opinion:
*CHRISTIAN, J.
This is an appeal from a decree of the Circuit court of Albemarle county. The record discloses the following facts: James C. Carter was the committee of Elizabeth Davis, a lunatic. In May 1851 he filed his bill in the Circuit court of Albemarle, in which he set forth that the said lunatic was entitled to certain real estate, the rents and profits of which were inconsiderable; that the land, if it continued to be rented, would greatly depreciate in value, and that it was manifestly to the interest of the said lunatic, that the land should be sold and the proceeds invested in an interest bearing fund. The heirs of the said lunatic were made defendants to this bill, who answered it; the infants by a guardian ad litem; and such regular and proper proceedings were had in the cause, that at the October term, 1851, of said court, a decree was entered directing a commissioner to sell the said real estate at public auction upon certain terms therein named. This decree was executed by the commissioner (as to the land now in controversy,) on the 8th day of November 1852, and one James 1$. Chapman became the purchaser. He paid in cash such sum as was required by the decree of the court, and executed his bonds with James C. Carter, the committee, as security, payable at such times as said decree prescribed. These bonds, as they became due, were collected by the commissioner, and paid over to Carter, the committee, and the receipts are filed by the commissioner, and signed by Carter, showing upon the face of the receipts, that the bonds of Chapman had been paid in full to the commissioner, and by him paid over to the committee, James C. Carter; and this fact is reported to the court, in a written report signed by the commissioner, who files said receipts with his report.
To this report there was no exception; and the court, at its May term, 1858, "fully approved and ratified" said report, and directed that a commissioner appointed for that purpose, should "convey by deed, with special «warranty, to the said James E. Chapman, or to whom, or in such wajr as he may direct, at his costs and charges, all the estate, whether in law or in equity, held by the lunatic, Elizabeth Davis, in and to the tract of land in the proceedings herein mentioned, containing 325 acres," &c.
The record further shows, that the commissioner conveyed this land under the direction of Chapman, the purchaser, to James C. Carter, the committee. On the 14th day of July 1860, Carter conveyed this land, together with other real éstate, to a trustee to secure a debt of about $15,000, to Nelson Barksdale; and in that deed the appellant, who was then his wife, united. In November 1866, a bill was filed by Mrs. Carter, after the death of James C. Carter, (the commissioner, Southall, and the purchaser, Chapman, being also dead,) in which she claims that as the heir at law of Elizabeth Davis, the lunatic, she is entitled to the land sold by Commissioner Southall, upon the ground that said sale was null and void, because the said James C. Carter was in fact the purchaser, and not James E. Chapman; that though the report of the commissioner states, that the purchase money was paid by Chapman to him, and by him to the committee Carter, in point of fact no money was paid, but receipts were simply passed between the commissioner and Carter, to conceal the fact that he was the real purchaser. That being positively prohibited by special provision of the statute law, from becoming the purchaser of the land of his lunatic, either directly or indirectly, the deed made and delivered to Carter under the decree of the Court is null and void, and that the said Carter acquired no title whatever to said land; but that the legal and equitable title remained in Elizabeth Davis during her life, and at her death descended to her heirs at law.
After setting forth in detail, the proceedings in the suit referred to above, she prays that these proceedings «may be reviewed, and that the decree confirming the pretended sale to Chapman may be set aside, and that the deed to James C. Carter from the commissioner of the court, may be declared null and void. To this bill the administrators of Nelson Barksdale, the administrators of J. C. Carter, the other heirs of Elizabeth Davis, and the trustee in the deed of trust securing the debt due to Nelson Barksdale, are all made parties.
The defendants all answer this bill except the heirs of Elizabeth Davis; and the administrators of Barksdale both answer and demur to the bill. At the October term, 1867, certain proceedings were had which it is unnecessary to notice here, but which resulted in a motion to dismiss her bill without prejudice; which motion was granted by the court.
In February 1868 the same bill in todidem verbis was filed at rules. A demurrer to this bill was also filed at rules by Barksdale's administrators and Garrett, trustee; and at the May term, 1868, the cause came on to be heard upon the bill taken for confessed as to all the defendants except Barksdale's administrators, Ira Garrett, trustee, and upon their demurrer to said bill, and the court treating the bill as a bill of review, sustained the demurrer and dismissed the bill, upon the ground that the bill was filed without leave of the court. Thereupon,the plain-tiff asked leave of the court to file the said bill; which the court refused, and dismissed the bill; the court being- of opinion, that the plaintiff was not entitled to the relief sought as against the administrators of Nelson Barksdale. It is from this decree that an appeal was allowed to this court.
The bill filed by the appellant in this case, (one of which was filed by leave of the court, and afterwards dismissed on her motion without prejudice, and the other filed at rules,) are treated as bills of review, by the court below. But neither was a bill of review, either in form or substance. Neither alleged err.or of *law apparent on the record, or newly discovered evidence, which are alone proper grounds of a bill of review. Story's Eq. Pl. § 404; Hill & als. v. Bowyer & als., 18 Graft. 364.
It is not alleged nor pretended in either bill, that there was any error of law apparent on the face of the proceedings; but on the contrary, the proceedings are, as stated ,in the bills, regular and in perfect accordance with the requirements of the law. Nor was there alleged the discovery of new matter such as would give the bill which was dismissed by the court below the necessary characteristics of a bill of review. Such a bill must not only set forth the discovery of new matter which was discovered after the decree, but it must be accompanied by an affidavit that the new matter could not be produced or used by the party claiming the benefit of it, in the original cause. And the affidavit must also state the nature of the new matter, in order that the court may exercise its judgment upon its relevancy and materiality. Story's Eq. Pl. 412; Cooper's Eq. Pl. 91.
In the first place, the new matter must be relevant and material, and such as if known, might probably have produced a different determination. In the next place, the' new matter must have first come to the knowledge of the party after the time when it could have been used in the cause at the original hearing. Another qualification of the rule, quite as important and instructive, is, that the matter relied upon must not only be new, but it must be such as the party by ' the use of reasonable diligence could not have known. Livingston v. Hubbs, 3 John. Ch. R. 124; Pendleton v. Fay, 3 Paige R. 204.
In the bill under consideration, none of these necessary requisites, which under the rules of equity pleading, always govern bills of review, are to be found. And though the bill was treated and acted upon as- a bill of review in the court below, both by the counsel and the court, it was not such a bill either in form or substance. *But it must be regarded as it was treated here, by the learned counsel for the appellant, as an original bill impeaching the decree, as one that was obtained by fraud, that is, fraud in law if not in fact.
If the bill could be treated only as a bill of review, and was filed only as such, it is manifest, from what has already been said as to the nature and requisites of such a bill, that there was no error in the Circuit court refusing the leave to file it. But the bill was filed at rules; and a demurrer was filed at rules. This demurrer was sustained; and afterwards the same bill was presented, and leave asked to file - it as a bill of review; and the leave refused.
Treating it now (as it must be, from its nature,) as an original bill, impeaching the decree sought to be set aside, the question recurs, was there error in the decree of the court sustaining the demurrer? The material allegation in the bill of the appellant, by which she seeks to impeach the decree, is the fact that James C. Carter (her late husband), and the committee of Elizabeth Davis, the lunatic (who was her sister), was in fact the purchaser of the land at the sale made by tlie commissioner of the court; that the pretended purchase by Chapman was a mere sham; that, in point of fact, no money passed, and that Commissioner Southall simply passed receipts with Carter, and that he (Carter) was in fact the purchaser; and that, inasmuch as he was positively prohibited by special provision of the statute law from becoming the purchaser of the land of his lunatic, either directly or indirectly, therefore the conveyance by the commissioner to him was null and void, and no title passed; but that the legal and equitable title to said land remained in Elizabeth Davis, and at her death descended to her heirs at law.
She admits that she united in the deed which her husband executed to Garrett, trustee, to secure the debt to Barksdale. But she does not pretend to allege, in any *form, in a bill of unusual length, that either Garrett or Barksdale had any notice of the fact upon which she relies to impeach the decree, to wit: that Carter, and not Chapman, was the real purchaser; and that under the statute the sale was therefore void. No notice to them, actual or constructive, is charged in the bill. Nor is there anything in the proceedings or decree which she seeks to impeach, which could possibly bring home to them knowledge of the alleged legal fraud. The decree was based upon regular and proper proceedings. The report of a commissioner (that commissioner being a lawyer of high personal and professional character) informs the court. that Chapman had become the purchaser, and he returns Chapman's bonds for the purchase money. He afterwards collects the bonds, and files with his second report the receipts of Carter, the committee, for the balance in full of the purchase money collected from Chapman. So that there was nothing even to put him on the enquiry as to the title of Carter.
Barksdale, therefore, stood on the high and impregnable position of a purchaser for valuable consideration, without notice, who had paid the purchase money, and secured the legal title. Admitting, then, all the allegations of the bill to be true, it is necessary to allege and prove notice of the alleged fraud, before the land in the hands of a bona fide purchaser for value can be made liable to the claim of the ap-pellatit. In this case the bill fails to allege notice, either actual or constructive, and for that reason, if no other, the demurrer ought to have been sustained, and the bill dismissed. The doctrine that courts of equity will not grant relief against bona fide purchasers, without notice, has always been adhered to as an indispensable muniment of title. It is founded upon a general principle of public policy to protect and quiet lawful possessions, and strengthen such titles. It is wholly immaterial of what nature the equity is, whether it is founded on a lien, or incumbrance, or x'trust, or a fraud, or any other claim; for a bona fide purchase of an estate for a valuable consideration, without notice, purges away the equity from the estate, in the hands of all persons who may derive title under it, with the exception of the original party, whose conscience stands bound by the violation of his trust and meditated fraud. 1 Story's Eq. Jur. 410; 9 Versey K. 24; 1 John. Ch. R. 219. Courts of equity act upon the conscience, and as it is impossible to attach any demand upon the conscience of a man who has purchased for a valuable consideration, without notice of any claim or demand against the estate, such a purchaser is entitled to the peculiar favor and protection of a court of equity. 2 Sugden on Vendors, 295. To so great an extent has equity favored purchasers bona fide without notice, that where the equitable title of the purchaser (who had got in the legal estate), depended upon a forged will, he was held entitled to the protection of the court. In Jones v. Powles, 3 Mylne & Keene, 581, 10 Eng. Ch. R. 310, cited in 2 Eq. E. C. 37, Sir John Leach, M. R., said: "Upon full consideration of all the authorities, and the principle upon which the rule is grounded, I am of opinion that the protection of the legal estate is to be extended, not merely to cases in which the title of a purchaser for a valuable consideration, without notice, is impeachable by reason of a secret act done, but also to cases in which it is impeached by reason of the falsehood of a fact of title asserted by the vendor, or those under whom he claims, where such asserted title is clothed with possession, and the falsehood of the fact asserted could not have been detected by reasonable diligence."
In Boyce's ex'x v. Waller, 2 B. Mun. R. 91, it was held that a bona fide purchaser under a fraudulent conveyance, without notice of the invalidity of the deed, will be protected against defrauded creditors. See also Griffith v. Griffith, 7 Paige Ch. R. 315; and Galatian, &c. v. Erwin, Hopk. R. 48. In the last named case, *where a guardian had purchased the estate of his ward, under a decree of sale fraudulently obtained (a case exactly in point), a purchase from the guardian, without notice of the defect, was held valid.
Authorities might be multiplied to any extent. It is sufficient to say that it has been the uniform course of decision in this State, as well as in the other States of the Union, to hold that the bona fide purchaser of a legal title is not affected by any, latent equity founded on a trust, fraud or incum-brance, or otherwise, of which he had not notice, actual or constructive. Moore v. Hunter, 1 Gilman's R. 317; Love v. Braxton, 5 Call 537; Basset v. Nosworthy, 2 Eq. Lead. Cas. 1, 22, and note, and cases therein cited. It is equally well settled, that the party seeking the aid of a court of equity for relief against a bona fide purchaser, must allege and prove notice. 2 Lead. Cas. in Eq. 55; Carr v. Callagan, 3 Littel R. 365.
Whatever hardships may sometimes result from these well settled doctrines of equity, founded upon a wise public policy to insure the security of titles, the claim of the appellant in this case does not appeal to the favorable consideration of a court of equity. She is seeking to set aside a deed made under a decree which she in effect alleges was fraudulently obtained by her husband; and yet admits that she united in that very deed with her husband, to an innocent purchaser who paid down $15,000. And after the death of her husband, after the death of Chapman, the purchaser at the judicial sale, after the death of Southall, the commissioner, who sold the land to Chapman, after the death of all these, the only parties to the original transaction, she asserts her claim as heir at law against the land in the hands of a bona fide purchaser to whom she had united in conveying it, without the slightest allegation that he had ever had any notice of any defect in his title, actual or constructive. Equity will not lend its aid to enforce such a demand, but will ^always afford its protection to the innocent bona fide purchaser.
I am of opinion that the Circuit court did not err in sustaining the demurrer and dismissing the bill, and that its decree should be affirmed.
The other judges concurred in the opinion of Christian, J.
Decree affirmed.