Court Opinion

ID: 7134788
Source: CourtListenerOpinion
Date Created: 2022-07-24 15:22:46.008929+00
Date Added: 2024-06-11T16:14:35.388154
License: Public Domain

Response by
Judge Hobson,
overruling petition for new hearing.
The rule as to when a person who voluntarily executes a deed which is procured by fraud can avoid it against other persons than the party who perpetrated the fraud is thus accurately stated in Pomeroy’s Equity Jurisprudence: “The destructive 'effect of fraud upon any contract, conveyance, or other transaction is so essential and far-reaching that no person, however free from any participation in the fraud, can avail himself of what has been obtained by the fraud of another, unless he is not only innocent, but has given some valuable consideration.” Section 899. “The remedy which equity gives to the defrauded person *489is most extensive. It reaches all those who were actual ly concerned in the fraud, all who directly and knowingly participated in its fruits and all those who derived title from them voluntarily or with notice. A court of equity will wrest property fraudulently acquired, not only from the perpetrator of the .fraud, but, to use Lord Oottenham’s language, from his children and his children’s children, or, as elsewhere said, ‘from any persons amongst whom he may have parceled out the fruits of his fraud.’ There is one limitation. If the property which was acquired by thi fraud has come by transfer into the hands of a bona fidt purchaser for a valuable consideration, and without notice, even though his immediate grantor or assignor was the fraudulent party himself, the hands of the court are stayed, ■and the remedy of the defrauded party 'with respect to the property itself is gone. His only relief must be person al against those who committed the fraud.” Section 918. It will thus be seen that only bona fide purchasers without notice are within the protection of the rule. If Sweet h'ad conveyed the land to Parker, and Parker had conveyed it to Thomas for a valuable consideration, which was paid by him, without notice of the fraud of Parker, the rule would apply, and Thomas would be protected. But that is not the case. Sweet was in possession of the land. He had made no deed to any one. He was to hold possession of the land until he got the land in Missouri. Thomas had notice of this. He knew that the Missouri land was the consideration that Sweet was to get for his farm, and that he had not gotten it and was to hold his farm until he did get it. He parted with nothing when the deed was made by him to Sweet, or upon the faith of that deed, so far as the record shows. When the conveyaince was made, he was charged with notice that it was only *490in execution of the contract between Parker and Sweet. The making of the deed did not fully execute the contract. It was only a step in the full performance of it. The contract would not be performed by Sweet until he surrendered possession of the farm, and this he was not to do urn til he got the land in Missouri. As, Thomas had notice of all this, and parted with nothing on the face of the deed, he took it subject to the equities of Sweet growing out of his contract with Parker, when the Missouri land turned out to be a myth. There is no middle 'ground. Thomas was not a bona fide purchaser of the land without notice. He therefore stands in no better light than Parker, unless protected by estoppel; and, as is clearly shown in the1 opinion, the facts established are insufficient to make out an estoppel. The deed was as truly the product of the fraud of Parker as the original contract. The arm of equity is not so short that it can not uncover fraud, no matter in what,form the victim may be induced to put the transaction; for, the grosser the fraud, the greater effort will be made to invent means to sanctify it, and the dupe is only as putty in the hands of the schemer who would rob him.
Petition overruled.