Court Opinion

ID: 6513756
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:24:42.424097+00
Date Added: 2024-06-11T15:54:57.678954
License: Public Domain

SOMERVILLE, J.
1. The court, in sustaining the third, ground of the first demurrer, ruled that the complainants, under the facts stated in the bill, had a plain and adequate remedy at law by the action of ejectment. This view can be supported only on the theory, that when the complainants purchased the land in controversy, at the sheriff’s sale under the execution issued against J. B. Mackey on their judgment, they bought the legal title. We have many times held, that a purchaser of the legal title to land, sold under execution at a sheriff’s sale, has a plain and adequate remedy at law by ejectment, although the land had been fraudulently *588conveyed by the judgment debtor prior to such sale.—Smith v. Cockrell, 66 Ala. 64; Teague v. Martin, 87 Ala 500. In this case, however, assuming the allegations of the bill to be true, as we must do on demurrer, Mackey never acquired the legal title to the land, but an equity only. One Pullen formerly owned the land, and conveyed it to Mrs. Mackey, the wife of said J. B. Mackey, the judgment debtor, her husband being alleged to have paid most of the purchase-money out of his own effects. Mackey and wife afterwards conveyed to Mrs. Myra J. Daniel, one of the defendants in the bill. One of the questions which arose in Smith v. Cockrell, 66 Ala. 64, supra, was, whether precisely such an interest was subject to levy and sale under execution, as a “perfect equity” within the meaning of section 3207 of the Code of 1876, which is now section 2892 of the present Code of 1886. We held that it was not subject to sale, and, consequently, that the purchaser at such execution sale acquired no title of any kind, legal or equitable.
On the authority of that case, the complainants, under the facts stated in their bill, acquired no interest of any kind in the land, and certainly not the legal title. They had no remedy, therefore, at law, by ejectment, or otherwise. The third ground of the first demurrer was erroneously sustained.
2. The complainants are shown to have bid at the sheriff’s sale for the ,land the sum of two hundred and fifty dollars ($250.00), and they credited this sum on their judgment against Mackey, which was for something more than $1,250. The chancellor properly ruled, in sustaining the third and seventh grounds of the second demurrer, that this credit was pro tanto a satisfaction of the complainants’ judgment, which a court of equity would not vacate on the ground that the defendant in execution had no title, and the complainants acquired nothing by their purchase at the sheriff’s sale.' The question, whether a purchaser at sheriff’s sale will be relieved from the effect of his bid, on its being made to appear that the defendant in execution had no title whatever to the thing supposed to be sold, or whether his bid is an irrevocable satisfaction of the judgment to the extent of the sum bid at the sale, is one on which the authorities are about equally divided. — Freeman on Judgments (3d Ed.), § 478; 2 Freeman on Executions (2d Ed.), § 54.
The question was settled in this State as far back as the year 1854. In the case of McCartney v. King, 25 Ala. 681, it was held that the amount bid a creditor for *589certain slaves solcl at sheriff’s sale, to which the judgment debtor had no title, was properly credited upon the execution, and was a satisfaction of it, against which a court of chancery would give no relief by vacating the sale. The principle was thus stated by Judge Goldthwaite: “The true doctrine, we think, is this: The purchaser, where the sheriff is not indemnified, buys at his own risk, and if it should turn out that the defendant in execution has no title to the property, he is notwithstanding liable for the amount of his bid. This is on the ground of contract. The officer sells, and the purchaser buys, (not the thing itself, but) the real or supposed right which the defendant in execution has to it; and the purchase operates precisely the same as if he had bargained for and obtained a quit-claim.” It appeared in that case that the purchase was made with notice of the defect of title. That, in our opinion, can make no difference in the absence of fraud. The basis of the whole doctrine is the rule of caveat emptor, which is the established and well understood rule of sheriff’s sales. This rule puts every holder upon inquiry as to the defendant’s title. It proclaims to the purchaser that there is no warranty of title, and if he buys, he must do so at his own risk. It warns him to go and inquire before purchasing; so that, if he makes a poor bargain, by parting with his money without getting anything in return for it, he must enter no complaint — no more than if he had bargained for and obtained a mere quit-claim deed.—Smith v. Painter, 5 Serg. & R. 225. In the language of Chief-Justice Gibson, in Freeman v. Caldwell, 10 Watts (Pa.) 9: “The plaintiff’s case maybe a hard one, but it is not more so than would be the case of a stranger; and to say that every sheriff’s vendee, who is deprived of the property by title paramount, shall have his money again, would destroy all confidence in the stability of judicial sales.” And again, as observed in another case: “If this was not the law, an execution, which is the end of the law, would only be the commencement of a new controversy.” The doctrine of these cases has long been supposed to be the law of Alabama, and we adhere to them as sound. Jones v. Burr, 53 Amer. Dec. 699, and note on pp. 701-705; 2 Freeman on Executions (2d Ed.), § 54, and cases cited.
3. The bill shows that the defendant, J. M. Daniel, acted as the agent of his wife, Mrs. Myra J. Daniel, in making the purchase of the land, in taking the deed of conveyance for it, and in paying the purchase-money over to the *590vendor. He thus acted for her in the whole transaction of purchase, as her authorized agent. This was in January, 1882, when the statutes of this State made the husband the trustee of the wife’s statutory separate estate, with power to control and manage the same, and charged him with the duty of reinvesting the proceeds of its sale in other property, which also became the separate estate of the wife. — Code, 1876, §§ 2706, 2709. As husband, therefore, Daniel was the agent of his wife for the purpose of making this investment, independently of his appointment by her to such agency. The bill does not allege positively that the purchase-money used was Mrs. Daniel’s statutory separate estate; but, taking its averments most strongly against the pleader, the inference is, that the money and notes invested by her alleged agent were hers, and, if hers, presumptively the property was her statutory separate estate.—Steed v. Knowles, 79 Ala. 446.
The alleged fraudulent deed from Pullen to Mrs. Mackey, and the one from Mackey and wife to Mrs. Daniel, are stated to have been executed on the same day — January 28th, 1882. The averment, then, that J. M. Daniel had knowledge of the fraudulent character of the deed taken from Pullen to Mrs. Mackey, by necessary implication charges that this knowledge was acquired during the time of his agency, and within the scope of his duty and power as trustee of his wife’s separate estate. There are cases which hold to the doctrine, that knowledge of a material fact acquired by an agent in a former transaction, comparatively recent in point of time, such as he is bound to communicate, if present in his mind and memory while engaged in a second transaction, shall operate as constructive notice to his principal in the second transaction. — 2 Pom. Eq. Jur., § 672. But there is a long line of decisions in this State which adopt the rule, that notice to an agent, to bind his principal, must have been acquired by the agent during his employment — i. e., while he is actually engaged in the prosecution of his duties as agent, and not at a time antecedent to the period of his agency. Wheeler v. McGuire, 86 Ala. 398; McCormick v. Joseph, 83 Ala. 401; Reid v. Bank of Mobile, 70 Ala. 199; Pepper v. George, 51 Ala. 190; Terrell v. Br. Bank, 12 Ala. 502; Mundin v. Pitts, 14 Ala. 84; Lucas v. Bank, 2 Stew. 321.
This principle is one based on expediency and sound policy. A different rule, as long ago suggested by Lord Hardwick, “would make purchasers’ and mortgagees’ titles depend alto^ *591gather on the memory of their counselors and agents, and oblige them to apply to persons of less eminence as counsel, as not being so likely to have notice of former transactions.” In other words, a contrary rule would render it hazardous for persons to employ efficient agents of broad knowledge and wide experience, and force selections to be confined to men of ignorance in affairs, and with narrow, or no experience. 2 Pom. Eq. Jur. §§ 670-671. Moreover, a designing agent would be armed with the power of bringing financial ruin on his innocent principal, by the intentional, or even fraudulent refusal, to communicate to him his previous acquired knowledge of a secret equity in property, or other latent defect of title, the concealment of which was dictated by the agent’s greed in earning his commission, or other equally selfish end.
In this case, the knowledge of the husband, as to the alleged fraud, must be constructively imputed to the wife as her knowledge.—White v. King, 53 Ala. 162; Dunklin v. Harvey, 56 Ala. 177; Wade on Notice, § 679.
Under these principles, the court erred in sustaining the second assignment of the second demurrer.
The decree of the chancellor is reversed, and the cause is remanded, that a decree may be rendered on the demurrers in conformity to the principles announced in this opinion.
Beversed and remanded.