Court Opinion

ID: 7984139
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:23:46.878714+00
Date Added: 2024-06-11T16:35:06.795015
License: Public Domain

Peytost, C. J.:
On the 17th of March, 1866, William Stein conveyed a certain tract of land, situate in Bankin county, containing about 1,800 acres, to Joseph Bell and Thomas Green, in trust to secure the performance of an obligation to deliver to Martha S. Withers 833 pounds of cotton at. Jackson, on the 1st day of November, 1866, or, in case of failure, the payment of the value thereof at the market price. This deed of trust was properly acknowledged and recorded on the 27th day of February, 1867.
On the 10th of April, 1867, the said trustees, Bell and Green, sold said land at public auction, under said deed of *496trust, to Martha S. Withers for the sum of $230. and executed to her a deed for the same. The said Martha S. Withers, in conj unction with her husband, on the 21st day of December, 1868, sold and conveyed the said land to Absalom Little and Aaron Price for the sum of $425, by deed of that date, which was duly acknowledged and filed for record on the 5th of January, 1869, and recorded on the 25th day of that month.
On the 12th day of February, 1869, Alfred Martin and William H. Batte filed their bill, in the chancery court of said county of Nankin, against Little and Price, Withers and wife and Bell and Green, to set aside the conveyance from Withers and wife to said Little and Price as fraudulent and void as to the creditors of the said William Stein. The bill alleges that complainants were' creditors of said Stein at the time of his execution of the deed of trust to Bell and Green; and that thé said Alfred Martin, on the 8th of March, 1867, obtained a judgment on his claim, in the circuit court of said county, against said Stein for the sum of $414 61; and that the said W. H. Batte obtained a judgment on his claim against said Stein, in the same court, on the 5th day of February, 1868, for the sum of $144 96 ; and charges that the conveyance to the defendants, Little and Price, was made to hinder, delay and defraud the complainants in the collection of their judgments against the said William Stein; and prays that the conveyance to these defendants may be declared fraudulent and void as to the complainants, and that the said land may be decreed to be sold for the payment of their judgments.
The defendants in their answers to the bill positively deny that the conveyance was made to defraud the creditors of the said Stein, and insist that the transaction was fair and honest, and that said conveyance was made in good faith and for a valuable consideration. The complainants then filed an amended and supplemental bill, alleging therein that said Little and Price had sold or contracted to sell part of said land to two persons therein named, who are made *497parties to these proceedings and required to discover what sums of money they gave or are to give for the lands purchased by them, and to account for the same to the complainants. Upon a final hearing of the cause, the court declared that the defendants, Little and Price, hold the lands conveyed to them by Withers and wife, subject to the judgments of complainants, Martin and Batte, and decreed that said Little and Price pay to complainants, within ten days, the sums found due the complainants, and, in default thereof, that the said lands be sold by the sheriff fox the payment of the same. Prom this decree the defendants, Price and Little, bring the case to this court and assign for error, that the court below erred in rendering a final decree for complainants, contrary to the evidence and the principles of equity applicable to the case. The equity of the bill is fully denied by direct and positive answers, and, unless there be evidence sufficient to overcome the answers, the decree cannot be sustained. We will advert to the testimony adduced on the trial of the cause.
E. Bloom testified that he had knowledge of the land and was of opinion that some of it was not worth the taxes on it, and that he would not fence it for it, and that he would not pay the taxes for it, that Aaron Price was the brother-in-law of William Stein, who died insolvent, leaving a large family of children in a destitute condition. Witness expressed to Price sympathy for the children and hoped that he would aid them, and that Price said he would do what was right and would give them each eighty acres of land, including the dwelling.
John B. Lewis testified that the land was worth about $1,500, and William Stein rented the land from Withers, and continued as such tenant in possession of the samé until his death.
H. S. Cole stated in his testimony that Price said to him, when he came to witness’ office to have the deed from Withers and wife to him and Little recorded, that he would assist or benefit Stein’s children.
*498This is all the evidence having any hearing upon the case. And if Price has failed, of which we have no knowledge, to carry out his benevolent intentions toward the children of 'William Stein, it does not prove that the conveyance of the land by "Withers and wife to Price and Little was fraudulent and void as to the creditors of Stein.
The testimony wholly fails to support the allegations of the bill, and to make out a case of fraud on the part of the plaintiffs in error in their purchase from Withers and wife against the defendants in error as creditors of Stein.
It is insisted by counsel for the defendants in error, that the fact that Price was a brother-in-law of Stein, and that he had promised to give the children of Stein some of the land, together with the inadequacy of the price paid for it, goes to establish fraud in this transaction as against the creditors of Stein. It would certainly be very unreasonable to construe the fact of Price’s relationship to Stein, and the expression of his benevolent intentions toward his nephews and nieces, as evidence of fraud in a transaction perfectly fair and honest in itself.
It is admitted in the bill of complaint that Martha S. Withers was a bona fide purchaser of the land, under a deed of trust which stands unimpeached, and this admission completely destroys the equity of the bill. The purchasers from her, however fraudulent may have been their motives, are protected in their purchase by the bona fides of Mrs. Withers. Por it is well settled that a purchaser, with notice from a purchaser without notice, will be protected in his title on account of the bona fides of his vendor, and this is so, not from the merits of the second purchaser, but of the first ;• for, if an innocent purchaser were prevented from disposing of the subject of his purchase, the necessary result would be a stagnation of property.
Even if William Stein made the deed of trust for the purpose of defrauding his creditors, of which, however, there is no evidence in this case, this would not affect the title of Mrs. Withers, unless she had notice of such inten*499tion of Stein, and colluded with Mm for that purpose. And although Price and Little may have had notice of the fraudulent intent of Stein in making the deed of trust, they will be protected in their purchase from Mrs. Withers by her purchase under the deed of trust, bona fide and for valuable consideration, without notice of any fraudulent intent on the part of Stein.
The doctrine in regard to the effect of notice is strictly applicable to every purchaser, whose title comes into his hands affected with notice. But it in no manner affects any such title, derived from another person, in whose hands it stood free from any such taint. Thus, a purchaser with notice may protect himself by purchasing the title of another bona fide purchaser, for a valuable consideration without notice; for, otherwise, such bona fide purchaser would not enjoy the full benefit of his own unexceptionable title. Indeed, he would be deprived of the marketable value of such a title, since it would be necessary to have public notoriety given to the existence of a prior incumbrance, and no buyer could be found, or none except at a depreciation equal to the value of the incumbrance. For a similar reason, if a person who has notice sells to another who has no notice, and is a bona fide purchaser for valuable consideration, the latter may protect his title, although it was affected with the equity arising from notice, in the hands of the person from whom he derived it; for, otherwise, no man would be safe in any purchase, but would be liable to have his own title defeated by secret equities, of which he could have no possible means of making a discovery. In short, a purchaser without notice from one with notice will be protected in his title in equity on account of his own bona fides, and a purchaser with notice from one without notice will be protected in his title on account of the bona fides of his vendor. This doctrine, in both of its branches, has been settled for nearly a century and a half in England, and has been adopted and adhered to in this country as an indispensable muniment of title. And it is wholly immaterial of what *500nature the equity is, whether it is a lien, or an incumbrance, or a trust, or any other claim; for a bona fide purchase of an estate, for a valuable consideration, 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. But, if the estate become re-vested in him, the original equity will re-attach to it in his hands. Lewin on Trusts and Trustees, 725, 726; 1 Story’s Eq. Jur. 401, §§ 409, 410.
Mere inadequacy of price is no ground to set aside a conveyance. Still, however, there may be such ah unconscion-ableness or inadequacy in a bargain, as to demonstrate some gross imposition or some undue influence; and in such cases courts of equity ought to interfere upon satisfactory grounds. But then such unconscionableness or such inadequacy should be made out, as would shock the conscience, and amount, in itself, to conclusive and decisive evidence of fraud. Where no fiduciary relation exists between the parties, dealing for the'sale and purchase of an estate, mere inadequacy of consideration is not sufficient to impeach the contract, so as to induce a court of equity to set it aside. The value of a thing is what it will produce, and it admits of no precise standard. It must be in its nature fluctuating, and depends upon a variety of circumstances. One man, in the disposal of his property, may sell it for less than an another would. If courts of equity were to unravel all these transactions, they would throw every thing into confusion and set afloat the contracts of mankind.
In the case under consideration, the property perhaps sold for less than its real value, yet the inadequacy of price was not so gross as of itself to prove fraud or imposition upon Martha S. Withers, the vendor of the property, and even if it were, the defendants in error could not possibly, in any way, be affected by it, and therefore would have no right to complain. In no aspect of this case can the decree of the court below be maintained.
*501For the reasons above stated the decree is reversed. And this court proceeding to render such a decree as the court below ought to have rendered, doth order, adjudge and decree that the bill of complaint of the defendants in error be and the same is hereby dismissed at their costs in both courts.