McCaskill v. Lathrop & Co.

Bleckley, Justice. 1. Parker, as trustee for the complainants, purchased the premises from Powers, in the year 1856, paid a part of the purchase money, gave his notes, as trustee, for the balance, and took from Powers a bond for titles. The notes were afterwards paid out of the trust fund. The complainants as a family, including McCaskill, the husband and father, went into possession, and so remained. The bond for titles was turned over by the trustee to McCaskill, and in February, 1864, he surrendered it to Powers, the latter then conveying to McCaskill the premises by absolute deed in fee simple. This deed was duly recorded in the month following its execution. It indicated no trust whatever. After this McCaskill held himself out as owner of the property, the possession being still in the family of which he was the [100] head. In the early part of the year 1870, J. W. Lathrop & Co., believing him the owner, and having no notice to the contrary, advanced him a considerable sum, at a rate of interest which was usurious. In December of that year they agreed to make him a further advance of fifteen hundred dollars at a like rate, on condition that he would secure them for both loans by a conveyance of the premises and certain personalty. lie made them an absolute deed, and they gave him a bond for titles, conditioned to convey back to him on payment of the stipulated amount. The deed was recorded May 30, 1871. In the course of subsequent dealings, not only the fifteen hundred dollars were advanced, but considerably more, so that at the close of 1873 his whole debt amounted to $4,900.00, being $900.00 in excess of the estimated value of the property. In January, 1874, all usury laws having been repealed in the preceding year, a full settlement was had; the result of which was that McCaskill surrendered to Lathrop & Co. their bond for titles, they extinguished their entire debt against him, the deed of 1871 was left to stand, and he rented the premises from them for the year 1874. During all this time Lathrop & Co. were ignorant of any trust, or of any equity in the complainants, or of any defect in McCaskill’s title. lie rented from them again for the year 1875, and it was while this second year of his tenancy was running, that the present bill was filed, and that notice of the trust, and of the equitable rights of complainants came to Lathrop & Co. In like manner, it seems that until this year, the complainants remained in ignorance that Powers had conveyed to McCaskill or that McCaskill had conveyed to Lathrop & Co. It is obvious that all active possessory acts over the property were exercised by McCaskill from the time of the . purchase from Powers in 1856, to the time of his renting from Lathrop & Co. in 1874. There was no possession in the complainants as distinct from that which he, as head of the family, personified before the world. Of course, when he acquired the formal legal title by the deed from Powers, [101] in 1864, he became affected with a trust in favor of his wife and children, but the trust was a secret one as to Lathrop & Co. when they extended to him credit upon the faith of his apparent ownership, and when they extinguished their whole indebtedness against him as a full and final settlement in actual purchase of the land and other property. The deed which he had made to them was void as title because infected with usury, but at the time of the settlement there was no law against receiving usury even on a past debt. The settlement was a perfectly lawful one, and even if it did not operate to put life in the usurious deed by way of ratification or confirmation thereof, it rooted a perfect equity which, together with the contract of renting which took place at the same time, on the part of McCaskill, divested the latter of his legal title to the land and clothed Lathrop & Co. with the same. It is manifest that from that time forth, McCaskill was estopped to assert any title whatever against Lathrop & Co., he having been paid his purchase money in full, and having become their tenant, and commenced to hold accordingly. This holding went on through the year 1874, and by a second contract of renting, was extended into the year 1875, and was pending when the bill was filed. To break up so powerful an equity, and drive Lathrop & Co. from the position of owners, the complainants would have, at least, to tender them the money which they advanced to McCaskill, and lawful interest on the same; and this the bill does not do. Equity is the forum of the complainants’ own choice, and yet they do not propose to repair the consequences of what their “original trustee, by his negligence in delivering the Powers bond to McCaskill, and by not attending to the use made of it, put it in the power of McCaskill to do, and of what Mc-Oaskill did actually do, in obtaining the money of innocent parties who trusted to his apparent title, duly recorded. It is plain enough that Powers ought not to have conveyed to McCaskill, that Parker, the 'trustee, ought to have seen to it that the bond of Powers was not surrendered without a [102] proper conveyance, and that McCaskill ought never to have dealt with the property as owner; and it is far more equitable to remit the complainants for redress to any or all of these three, than to allow them to strip Lathrop & Co. without making or tendering adequate compensation. On a comparison of equities, that of Lathrop & Co. is the superior; and, under the circumstances, their title is so far complete that equity ought to decree it to be absolute, the answer being also a cross-bill with a sufficient prayer to cover this relief. 2. The parol evidence objected to was clearly admissible. Warren, the witness, was one of the firm of Lathrop & Co., and the member who represented the firm in the transaction. It does not appear that the agreement to surrender the bond, cancel the debt, and leave the deed to stand as evidence of title, was in writing, and no law that we are aware of requires such an agreement to be in writing. It was a parol understanding actually executed, and of which McCaskill took the benefit. Surely it was relevant to ascertain the purpose and intention with which the parties produced such an important change in their relations. Was the debt canceled as a full payment for the land, etc., or was there some other object? And did the surrender of the bond have a like purpose or some other? What was the intention was material for the jury to decide, for the intention qualified the act and gave it significance. We have disposed of the case without indorsing all the . views of the court below as the motion for a new trial represents them. It may be that we might differ with that court in some of its reasoning, but we entirely agree with it in the conclusion. Judgment affirmed.