Duval v. Bibb.
Thursday, May 18th, 1809.
[4 Am. Dec. 506.]
1. Hortgages — Mortgagee Purchasing Release of Equity of Redemption — Notice of Vendor’s Lien. — A bona fide mortgagee of a tract of land, without notice of any equitable lien in the original vendor, (of whom the mortgagor purchased,) is well authorized to purchase of the mortgagor a release of the equity of redemption, (even, after notice from the vendor.) in consideration of any just claim of his npon the mortgagor, originating before such notice; but,"after notice, the lien attaches, for so much as he may have actually paid, or agreed to pay, for such release, over and above the claims for which the mortgage was taken, and which originated before the notice.
2. Vendor and Vendee — Equitable Lien of Vendor. — A vendor, having conveyed a tract of land by an absolute deed of bargain and sale, in which, and by a receipt at the foot whereof, he acknowledged that the consideration expressed was fully paid, having, nevertheless, taken the vendee’s bonds for the amount thereof, and continued to live on the land, by virtue of a parol agreement, that he should retain possession until the contract on the part of the vendee should be fully complied with, retained an equitable lien on the land against a purchaser from the vendee having actual notice of such agreement.
3. Equity Practice — Deeds—Consideration.—In equity, either party to a deed may aver and prove against the other, or against a purchaser with notice, the true consideration on which the deed was founded, though a diffeient consideration be mentioned therein; but a bona fide purchaser, without notice of the existence of such consideration, is not to be affected thereby.
4. Same — Vendor and Vendee— Parties. — The vendee, or his legal representatives, ought to be parties to a suit in Chancery brought by the vendor against a subsequent purchaser, to recover a balance alleged to be due from the vendee.
*829The appellee preferred his bill in Chancery against William Duval and Pleasant Younghusband, and obtained an injunction to the judgment of this Court rendered in an action of ejectment between William Duval and himself, which case is reported in 3 Call, 362.
The bill suggested that, in October, 1788, the complainant agreed to sell to Francis Graves, deceased, then in high credit, the lands in question, for 2001. payable September, 1789, three negro girls, and one-half of two entries for lands in Kentucky, to which E. and T. Waltons had been entitled, and for the conveyance of which they *had given a bond which had been assigned to Graves without recourse; that, relying on the punctuality of Graves, he accepted his bonds for the money and negroes, and an assignment of the bond of the Waltons for the Kentucky lands ; that, being pressed by Graves to make a deed for the lands sold him, he refused to do so, but upon the express condition that he should retain the possession until paid the money and negroes, and until he should receive.a proper deed for the Kentucky lands, to which Graves assented, and thereupon he executed a deed to Graves, Dec. 13th, 1788, and has retained possession ever since, having received only a partial payment of money, and one negro, but no deed whatsoever for the Kentucky lands, which are absolutely lost; that some time after (but when he does not remember) he had a conversation with Duval, at Thomas Johnson’s house, in Louisa, concerning the purchase and agreement with Graves ; when he informed Duval of all the circumstances above stated, and that he should retain the possession of the land, until Graves should comply with the conditions before mentioned; that Duval, being asked by Johnson whether he had purchased the land from Graves, answered that he had not; that, notwithstanding this, Duval had brought an ejectment, and relied on a deed from Graves, dated in 1793, which was not executed until after the information given him as aforesaid, Graves being then sunk in credit, and, as the complainant believes, ruined in his affairs, and the deed obtained from him by Duval being as an indemnity against suretyships for him.
Duval’s answer stated that, previously to the conversation at Johnson’s, the respondent had a mortgage on the lands ; that he then told the complainant of it, and that he intended to purchase the land of Graves, for himself and Isaac Younghusband, to indemnify themselves as his securities ; upon which the complainant said, that Graves owed him money, but, if Duval would pay him, he could remove from the land the next fall; that the respondent was surprised, after knowing Bibb had lived on the land from *1789 until that time, that Graves should owe him any thing; that he told Graves what Bibb had said, whereupon he declared that he owed him nothing in his opinion, &c. Pleasant Young-husband (who was made a party as heir of Isaac Younghusband) never answered the bill.
Several depositions went to prove the original agreement between Bibb and Graves to have been nearly as stated in the bill; but there were none at all to shew that Duval had any notice thereof, until the conversation between him and Bibb at Johnson’s house, which some of the witnesses supposed to have happened in 1795, but which, from the answer, it seems probable happened before the 28th of November, 1793, the date of Graves’s deed to him and Younghusband.
Among the exhibits were, 1. An absolute deed of bargain and sale, for the land in question, from Bibb and bis wife to Graves, and his heirs and assigns for ever, in consideration of 1,0001. in hand paid, the receipt whereof is acknowledged in the deed, and a separate receipt for the same, written and signed at the foot of the deed, with a covenant of warranty to Graves and his heirs, dated December 13th, 1788, and proved and admitted to record in the General Court on the 15th and 16th days of the same month. 2. A deed of bargain and sale from Graves to Duval, for the same lands, in fee-simple, with a proviso, “that whenever the said Francis Graves, his heirs or assigns, shall indemnify and keep harmless the said "William Duval, respecting certain premises, (noticed in the former part of the deed,) or shall make or cause to be made to the said William, his heirs or assigns, a good, sure, and indefeasible estate in fee-simple, of, in,, and to the premises, free from all incum-brances and necessary charges at law, then that mortgage shall be null and void, otherwise to be and remain in full force, power and virtue.” Dated February 11th, 1790, and proved and admitted to record in the General Court the 14th of June following,, 3. A deed of bargain and sale from *Graves and wife to Duval and Young-husband, (in consideration of 6001. to. them in hand paid, and for which there is also a separate receipt,) in fee-simple, with' a clause of warranty, bearing date November 28th, 1793, and recorded in the General Court, June 17th, 1794. 4. The bond of E. & T.. Waltons, for a conveyance of the Kentucky lands, assigned by Swann to Graves “without recourseand by Graves to Bibb, in general terms, October 13th, 1788, (which, it seems, was never complied with, nor put-in suit.) 5. Graves’s bond to Bibb for 2001. dated December 13th, 1788, payable September 1st, 1789 ; and, 6. Graves’s bond to the-same, (of the same date,) in the penalty of 2501. for the delivery of three negro girls, on or before the 1st day of April, 1789.
The Chancellor made a decree, (in substance,) giving the plaintiff his choice either to pay to the defendants so much of the consideration money as he had received of Graves, deducting therefrom his costs in this suit, (whereupon the defendants were to make him a deed for the land with a warranty against all their own acts in prejudice of the title,) or to receive from them the balance due of the said consideration money,, (without allowing any credit for Kentucky lands,) such balance being ascertained by an account to be taken by one of the Commissioners of the Court; and, if the defendant should fail to pay what should be found due upon such account, within six months after it should be approved and confirmed, that the land in dispute should be sold for ready money by Commissioners, who should pay to-*830the plaintiff what should appear to be so due, and to the defendants, the residue of the proceeds of the sale, after deducting' the expenses thereof; reserving to Pleasant Younghusband liberty of shewing cause within months against the said decree.
Prom this decree the defendant Duval appealed.
Warden, for the appellant.
The decree ought to be reversed. 1st. Because the deed from Bibb and wife to Graves, states a different consideration from that mentioned *in the bill to have been given for the land, and admits the whole thereof (as well in itself as by the receipt thereto annexed) to have been fully paid. Ars Cleri-calis, 391, and 2 Dyer, 169, a, Wilkes v. Beuson, shew that neither the bargainor, nor his heir, can aver that his deed was made on a different consideration from that expressed therein. He has not a right to set up any thing in opposition to his own deed, because otherwise purchasers would be entrapped. The deed, with the receipt in full, having been recorded, Duval, when he purchased of Graves, had no reason to expect that the consideration money, or any part thereof, had not been paid. The parol agreement that Bibb should remain in possession notwithstanding the deed, was of no effect. The statute executes a deed of bargain and sale, where to the bargainee’s use, and conveys the possession, The word “grant,” made the land pass by way of use, and there was no need of actual entry, Graves, therefore, was in possession by virtue of the deed ; and, as he never recon-veyed the land, Bibb could not be considered, legally, as in possession.
2. No notice that any part of the purchase-money was due, is proved to have been given to Duval, or to Isaac, or Pleasant Young-husband, until the year 1795, which was after the date and recording of the last deed from Graves.
3. There was no necessity of such an account as the decree directed ; but, if it was to be taken, credit should have been allowed to Graves for. the value of the Kentucky lands, for which the appellee had accepted the bond of Edward and Thomas Waltons. It is true the assignment of that bond by Graves was not “without recourse but the deposition of John Poindexter, who drew the writings, proves that he so understood the intention of the parties. Besides, if Graves were ultimately responsible for those lands, Bibb ought to have used due diligence in endeavouring to recover of the Waltons, before he could look to Graves ; yet he has never brought suit on that bond, though so many years have elapsed since its date. But, at *any rate, Duval, the bona fide purchaser of the Eouisa land, ought, in no event, to be liable for the default of the Waltons, or of Graves.
4. The legal representatives of Graves ought to have been made parties ; a balance being alleged to be due from him, and an account directed to be taken, which could not be rendered by Duval. Graves’s representatives are interested on his warranty to Duval, and, at law, would have been called in as vpuchees. It is a rule in equity, that all persons interested should be made parties. Mitf. 39, Ibib. 144.
Randolph, for the appellee.
There can be no doubt, after the case of Eppes, &c. v. Randolph, that a different consideration from that mentioned in the deed, may be averred and proved. Mr. Warden is mistaken in saying that Duval had no notice. It appears from his own answer, that he had notice before the last deed from Graves to him; and this notice binds him to the same extent, and in the same manner, as Graves was bound. Sug. B. Vendors, 484. The previous mortgage was of no consequence, for that was for indemnity only, and there is no proof that the indemnity was required. The evidence clearly proves, that Bibb was to retain possession of the land, until the contract on the part of Graves should be fully complied with, and that he actually did retain it, which in itself was sufficient. It is said that Walton’s land was taken by Bibb at all risks ; but the nature of the transaction precludes the idea. The bond was assigned by Swann to Graves “without recourse;” but from Graves to Bibb in general terms. It cannot be believed, then, that Bibb meant to take the land without the warranty of Graves. Bet it be considered, too, that Bibb was selling himself out of house and home ; and it would have been insanity in him to part with his own land, without any security for a good title to that which he took in its stead. The testimony of John Poindexter is only as to his “apprehensions,” *in which he might have been mistaken ; and even he admits that Graves was to see that the Waltons made a deed. He never did see to it, and the land is actually lost, as appears from the deposition of Edward Walton himself, who swears that other persons now hold it by prior titles.
As to the want of proper parties, the case of Brace v. Harrington furnishes the general reasoning on the subject. Collins v. Griffithis strongly in our favour, shewing, that where there are two joint and several obligors in a bond, and one dies, the executor of the deceased may be sued in equity, without making the surviving obligor a party ; and that in such case it is incumbent on the defendant to compel the other obligor to contiibute towards payment of the debt. So here, if any contribution is to be demanded of Graves’s representatives, Duval must sue them for that purpose. But he has taken on himself the defence, and has not suggested thd propriety of calling on them for contribution.
Wyatt’s Prac. Reg. 302, 314, and 3 P. Wms. 97, note [A], also, by analogy, support the doctrine I contend for. In note [I], to 3 P. Wms. 311, it is said to be a general rule, that no one need be made a party against whom the plaintiff can have no decree. Neither was it necessary to make Graves’s representatives parties, in order to get evidence from them, because it might have been obtained in the ordinary way, by taking their depositions.
Thursday, June 1. The Judges pronounced their opinions.
*831JUDGE! TUCKER,
after stating the case, said, the first question which I shall consider is, whether a purchaser, for a valuable consideration of lands, for which the seller has an absolute conveyance in fee-simple duly proved and recorded, and the consideration for such a conveyance also acknowledged to have been fully received, can be affected by any latent equity which the first seller may have *against the second, or by any condition touching the original sale, from the first seller to the second, which is not expressed in the deed itself ?
This question seems to be fully answered by the President of this Court in the case of Wilcox v. Calloway, where, in delivering the opinion of the Court, he says, '‘The rule caveat emptor applies only to purchasers of defective legal titles. A purchaser of the legal title is not to be affected by any latent equity, whether founded on trust, fraud, or otherwise, of which he has not actual notice, or which does not appear in some deed necessary in the deduction of the title, so as to amount to constructive notice.”
Duval then could not be affected by any latent equity, or secret condition, between Bibb and Graves, which is not expressed in the deed itself. The mortgage of the 11th of February, 1790, therefore stands unim-peached, both at law and in equity, since he had neither actual notice of Bibb’s private agreement, nor is there any thing in Bibb’s deed to Graves, that could have led him to further inquiry. On the contrary, the information to be collected from it was conclusive, in favour of a purchaser ; otherwise, the laws which direct the recording of all deeds of lands must prove a snare, instead of a security to purchasers.
The deed of February 11th, 1790, is to all intents and purposes an absolute conveyance in fee-simple, at law. The proviso is in the nature of a condition subsequent. The object of the deed is the perpetual security and indemnity of Duval, against a recovery which might be had against him by Currie or his heirs. Equity cannot deprive him of that security ; and, so long as he may by possibility be exposed to the danger of a recovery, his estate at law remains absolute. Any future conveyance from Graves to him could only operate by way of a release of his equity of redemption ; for Graves had nothing else left in himself. If, upon the faith of such a release, he advanced money to Graves, or became security for him in any of his pecuniary transactions, his legal right would attach *thereto an equitable priority against any other equitable claim, especially if his engag'ements, as security for Graves, were actually prior to actual notice of such latent claims. If a third mortgagee can, by purchasing the first mortgage, attach a priority to his own over the second, by thus acquiring the prior legal title, and the union of his own mortgage with it, will not the same reason apply more forcibly in Duval’s favour ? He therefore had a right to a perfect indemnity, not only from the events intended to be provided against in the mortgage of February 11, 1790, but from all other damages which he may have incurred, or still be exposed to, from his suretyships for Graves ; nor could a Court of Equity deprive him of either. Why, then, might he not commute a contract for future indemnity, into one for present indemnity, by taking a release of Graves’s equity of redemption of the lands, the legal title of which was already vested in himself?
According to the decision of this Court in Eppes v. Randolph, Duval, as a purchaser for a valuable consideration, is at liberty to aver and prove the real consideration paid or agreed on, between himself and Younghus-band on the one part, and Graves on the other, for the lands, as conveyed by the deed of November 28, 1793. He states that they had become bound as securities for Graves to William Alexander & Co. The amount of that suretyship, and the time when it was undertaken by them, are therefore, it may be presumed, susceptible of proof. Nor must the security intended by the mortgage in February, 1790, be lost sight of, if it can be proved that it entered into the view of the parties, when contracting for the absolute sale of the lands : Duval’s equity must, therefore, prevail over Bibb’s, as far as these matters extend. But, for any actual payments made by Duval to Graves, posterior to the information which the former received from Bibb at the house of Johnson, (if any such were made,) I think Bibb is fairly entitled to recover the amount thereof, with interest, towards the satisfaction of his claim against ^Graves for any part of the purchase-money of the land which may still remain due to him from Graves, but nothing more.
I am, therefore, of opinion, that the Chancellor’s decree be reversed, and the cause remanded for an account to be taken of any actual payments which may have been made by Duval to Graves, subsequent to the notice received at Johnson’s house, &c. That an account of the balance due from Graves to Bibb, upon his bonds of the 13th of December, 1788, for 2001. and for the three negroes, if any, upon a full settlement of all accounts between those parties, (except as to the Kentucky lands, for which Bibb appears to have taken an assignment of the Waltons’ bonds, without any agreement on the part of Graves to be responsible, in case the lands were lost,) ought to be taken; and for that purpose the personal representatives of Graves ought to be made parties to the suit; that Duval be considered liable for any actual balance due from him to Graves, as also for any actual payments made by him to Graves since the time of Duval’s receiving notice of Bibb’s equity, as before mentioned ; and that the cause be sent back with directions accordingly.
JUDGES ROANE and FLEMING
agreed that the decree be reversed ; and the following was entered as the unanimous opinion of the Court: “The Court having maturely considered, &c. is of opinion that the said decree is erroneous in this; that the appellant, William Duval, having obtained from Francis Graves, before he had notice of any equitable claim which the appellee, Robert BTeming Bibb, might have on the lands sold by him to the said Graves, a conveyance in fee-simple, by way of mortgage, as a security against certain contingent damages to which the said appellant might be exposed from a *832claim of James Currie to the houses and lots, before that time sold and conveyed by the said Graves to the said appellant, and having-, as he hath alleged in his answer, like*wise become bound, together with a certain Isaac Younghusband as a security to William Alexander & Co. for a considerable sum of money, before notice as before mentioned, was well authorized to purchase the release of the equity of redemption of the said mortgage, notwithstanding such notice afterwards received; and to avail himself of the consideration in his favour arising out of the preceding circumstances, being responsible only for so much of the purchase-money as he may either have actually paid to the said Graves, or have agreed to pay to him, over and above the before-mentioned considerations of indemnity ; therefore, it is decreed and ordered, that the said decree be reversed and annulled, and that the appellee pay to the appellant his costs by him expended in the prosecution of his appeal aforesaid here. And this Court proceeding to make such decree as the said Superior Court of Chancery ought to have rendered, it is further decreed and ordered, that an account be taken before one of the Master Commissioners of the said Court, of all sums of money, if any, actually paid to the said Graves by the said appellant, since the notice proved to have been given him at the house of Thomas Johnson, in the county of Bouisa, or which may be still due from him to the said Graves, or to his representatives,' as a further con"sideration for the purchase of the release of the equity of redemption, beyond the indemnities before mentioned, and also an account of the purchase-money due from the said Graves to the appellee, exclusive of the Kentucky lands, for which this Court is of opinion the said Duval was not responsible ; and, for the purpose of taking such last-mentioned account, the representatives of the said Graves are to be made parties to this suit, and that the account so to be taken be reported to the said Superior Court of Chancery ; and if, upon such report, there shall appear any money due from the said Graves to the appellee, on account of1 the purchase aforesaid, the appellant, Duval, ought to be, and *is hereby made responsible for so much thereof as it may appear that he hath paid, or agreed to pay to the said Graves, since the notice before mentioned, with interest on the same, and no more ; and, on payment thereof by the appellant to the said appellee, Robert 3?. Bibbj that he, by a good and sufficient deed, at the costs and charges of the said appellant, release unto him all his right and title both in law and eqijity to the said land and premises, and deliver quiet and peaceable possession thereof to the said appellant; and if the said appellant shall fail to pay to the said appellee whatever sum of money may appear to be due on such report of the Commissioner, with interest as aforesaid, within a certain time to be limited by the said Superior Court of Chancery, that then the said Douisa land, or so much thereof as will be sufficient, be sold by Commissioners to be appointed by the said Court for that purpose, at public auction, for ready money, after the time and place of sale shall have been noticed for four weeks successively in two of the Richmond newspapers ; and, out of the money arising' from the sale, the said Commissioners pay to the said appellee, or to his assigns,, whatever sum of money shall, by the report of the Commissioner of the said Court,, appear to be due, with interest as aforesaid,, and the residue of the product of the sale, if any, after deducting the consequent expenses thereof, pay to the said appellant, and report their proceedings in execution of the same to the said Superior Court of' Chancery, in order to a final decree.”
Cause remanded to the Court of Chancery for further proceedings, according to the principles of this decree.