Court Opinion

ID: 6987965
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:19:42.821288+00
Date Added: 2024-06-11T16:09:31.315932
License: Public Domain

Pillsbury, J. A careful examination of the evidence contained in this record causes us to believe that the appellant is entitled to the relief prayed in his cross-bill. He had received the trust deed from Ellwood securing the purchase money of the lots long before the appellee obtained his deed for lot 7 from Ellwood, anrl, therefore, the vital question in the case is, whether the appellee at that time had actual notice of the trust deed, or had knowledge of such facts and circumstances as would lead a reasonably prudent man to make inquiry for the purpose of ascertaining whether such trust deed or mortgage was in fact made. If he had knowledge of such facts that should have put him. upon inquiry, and such inquiry would have resulted in his ascertaining the truth; then he is held to a notice of the facts actually existing. In the spring of 1872, he bargained with Clark for lot 7, upon the same terms that Ellwood was to have the other lots; but as he could not obtain the money to build the house, he made an arrangement with Ellwood to buy the lot and build the house for him, and the appellant did include in Ellwood’s purchase, lot 7, for the appellee. Ho deed was then made to appellee by Ellwood, for the reason that he had not received any conveyance from Clark. Ellwood having built the house, appellee took possession of the premises under his verbal contract of purchase, knowing that the title was to come from appellant. We think the evidence sufficiently shows that appellee had knowledge that Ellwood had bought all the lots upon credit, and was not to receive a deed until the buildings were erected, when a deed was to be made, one fourth of the purchase money was then to he paid, and a mortgage given by Ellwood upon the lots to secure the deferred payments. The appellant in fact states very positively, that immediately after the sale of lot 7 to Ellwood for Pluihstead, he informed Plumstead that he had sold the lot to Ellwood on the same conditions that he had in the first instance offered it to him. In this statement the appellant is corroborated by Ellwood. The appellee in his testimony does not deny that appellant may have told him so, but say's he has no recollection of such conversation. In our opinion these facts known to appellee at the time he receivéd his deed from Ellwood, were sufficient to put him upon inquiry whether Ellwood had paid for the lots or given a mortgage upon them to secure the purchase price according to the terms of the sale, and if he had inquired of appellant, he would have learned that the trust deed was already executed and delivered, and the reason it was not recorded. Knowing these facts, and the avenues of knowledge being open to him by ordinary diligence, to ascertain the truth, if he did not avail himself thereof, and he suffers loss thereby, such loss must be attributed to his own negligence, and he can not be relieved in a court of equity But aside from these considerations, there is evidence in the record that he had actual notice of the trust deed. The appellant testifies that after receiving the trust deed in March, 1873, and while in Aurora he saw the appellee, and informed him that Ellwood had given him a trust deed upon the lots, but he was keeping it off the record so as to enable Ellwood to place a first mortgage upon the other lots, for money to pay the mechanic’s liens then existing thereon. Ellwood also testifies that at or before the time of giving' his trust deed to appellant, the appellee knew that he was endeavoring to raise the money to pay for the lots and improvements. The appellee, it is true, denies in general terms that he had notice of the terms of sale of the lot to Ellwood, or of the fact that the trust deed had been executed by Ellwood, but his whole testimony considered, shows that his recollection is at fault concerning many of the details of the transactions between the parties, and leads us to the conclusion that his testimony should not prevail over the clear and positive statements of the appellant, corroborated as they are in the main by Ellwood, and the well established facts and circumstances appearing in the ease. Again upon this question, considering the situation of the parties with reference to the sale from appellant to Ellwood, and from Ellwood to appellee, it is evident that the appellee can not be fairly said to occupy the position of a third party purchasing from Ellwood without notice of the rights of appellant in the premises. When he found himself unable to build the house without assistance, and consequently could not comply with his contract originally made with appellant, he made the arrangement with Ellwood to buy that lot for him, and appellant sold it to Ellwood, for the purpose of accommodating the appellee, and place it within his power through the aid derived from Ellwood, to erect the buildings required by the contract of sale before he could receive a deed for the premises. It was mutually understood that the purchase was made at his solicitation and for his benefit. The intention of all the parties was, that he was to take possession of the lot, and improve it before he obtained the title either from Ellwood or appellant. His possession, therefore, taken under the verbal contract with Ellwood, and that resting upon like contract with appellant, was not inconsistent with the title of appellant in the premises, but was iu harmony with it, in subordination thereto, and his continuing right to the possession depended upon the completion of the contract with appellant and the payment or securing of the purchase money. Under such circumstances, we think that in equity the appellee can not have any greater rights in the premises as against the appellant in asserting his claim to the payment of the purchase money, than he would have, had he dealt -with appellant directly instead of thimugh Ellwood. He knew that the lot was not paid for, and the arrangement contemplated a credit and that a mortgage was to be given to secure the purchase money, and in such case no reason is perceived why appellant should not be permitted to foreclose his mortgage for the amount of the purchase money of the lot unpaid, or if no mortgage had been given, why a vendor’s lien could not be enforced against the appellee. We are therefore of the opinion that the court erred in granting the relief asked by the original bill, and in dismissing the cross bill of appellant and the decree must be reversed and the cause remanded. As the sale of lot 7 was treated by the parties as a sale to and for the use of appellee, such lot should in no event be charged with any greater sum than is due for the purchase money of that lot alone. Decree reversed.