McRae v. Newman

MANNING, J. Appellee, Newman, a citizen of Virginia, was in 1866, owner of a plantation in Barbour county, Ala [533] bama, called the “Fitzhugh Place”; and in September of that year, an agreement was made between him and Eeuben F. Kolb, (who then occupied the premises under a lease from Newman,) for a sale of the property to Kolb for $10,000; of which Kolb was to pay $4,000, in cash, and for the balance, give his two notes of $3,000 each, secured by a mortgage of the premises, and payable with interest from 1st of January, 1867, at one and two years after date. Upon making the first payment, and the notes and mortgage, he was to receive a conveyance of the title from Newman. And, with a view to the execution of this contract, Newman, in November, 1866, had his deed of the plantation to Kolb, signed, sealed and acknowledged, in Virginia, and sent out to Messrs. Shorter & Brother, attorneys at Eufaula, to be delivered when Kolb should perform his part of the agreement. But before this was done, the appellant, McRae, bargained with Kolb to buy the same property from him at $11,000; of which he was to pay $8,000 in cash, and for the rest, give his note at one year, and receive a conveyance from Kolb and wife. McRae paid $5000 on the first of January, 1867, and $2,000 more on the 4th. He also delivered his note to Kolb for $3,340, the balance of the price and one year’s interest; but when this was delivered, or what was its date, is not shown by any witness. And McRae received from Kolb possession of the premises, the deed of Newman to him, signed and acknowledged in November, 1866, and Kolb and wife’s deed to him, McRae, dated December 28th, 1866, and acknowledged January 4th, 1867; but when these instruments were respectively delivered is a matter in dispute. The other $1,000 of the cash payment of McRae to Kolb, was made “in corn and fodder and, perhaps, some money”; but when or by whom delivered, does not appear. Two years after these transactions, and long after McRae had paid his $11,000, in full, to Kolb, he learned from Newman that the latter had a mortgage on this same Fitzhugh Place, executed by Kolb as a security for his two notes of $3,000 each, for the credit part of the price he was to pay Newman for it; and that a large part of this debt was still due. And it is to enforce payment of this balance, by a sale under the mortgage, that Newman filed the bill in this cause. It is insisted for McRae that the deed of Kolb to him is older than Kolb’s mortgage to Newman and takes precedence of it; and if not, that Newman is estopped from setting up his mortgage against defendant, McRae, because the latter bought the land ^without any suspicion of such an incum-brance, with the knowledge of Eli S. Shorter, the agent of [534] Newman, and without any intimation from him of its existence, although if it existed, the mortgage was then in his possession. First, in regard to the priorities, as mentioned above, Newman’s deed to Kolb bears date and was acknowledged in November, 1866; and the deed from Kolb and wife to Mc-Rae bears date December 28th, 1866, and was acknowledged January 4th, 1867. The mortgage from Kolb to Newman bears date January 1st, 1867, and was attested by subscribing witnesses, but was never acknowledged at all before a magistrate. It was recorded March 7th, 1867. Such instruments, though, do not become operative always from their dates, nor at all, until delivered — that is, until the grantors part with their control over them with the intent that they shall go into effect. When was Newman’s deed to Kolb delivered? It is proved by entries on the books of Shorter & Brother and their testimony, and by the date of the draft, in which a large part of the first payment was made, that this deed was not delivered before the 7th of January, 1867. And Eli S. Shorter and Kolb testify that Newman’s deed to him was delivered on that day. Confirmation of this is afforded by an entry of that date, upon the books of Shorter & Brother of a charge against Newman, for revenue stamps to be affixed to that deed. The evidence in opposition is very unsatisfactory. McRae, on this subject, does not testify of his own knowledge; for, he says Newman’s deed was delivered to Ms agent, Kendall, before Kendall made the .first payment for him, to Kolb; and that both it and Kolb’s deed to him (Mc-Rae) were delivered to Kendall at that time. But McRae was not then in Eufaula where the transaction took place, and could not have personal knowledge of them. What testimony, then, have we on this subject ? Kendall, in his second deposition, testifies that according to Ms best recollection, (which may be very confused and uncertain, after a lapse of six years,) he had Newman’s deed to Kolb, and Kolb’s deed to McRae, before he paid any money to McRae. And he and Locke satisfactorily prove, by reference to book-entries, that his first payment of $5,000 was made to Kolb for McRae, January 1st, 1867, upon the order of McRae, and the second, of $2,000, on the 4th. But Kendall says nothing of having given back to Kolb his deed to McRae for acknowledgment, as McRae says he did. It is also pretty certain that he was mistaken in supposing he then had, as:, agent for McRae, Newman’s deed to Kolb. For it is quite clear that this was not delivered to Kolb before the 7th of January. And since it was upon McRae’s order that Kendall paid for [535] him tbe $5,000 to Kolb, it was not necessary that Kendall should have the deed before making the payment. In his first deposition, he does not say he did have it. There appears indeed to have been great inattention on McRae’s part in regard to the titles to the land, for he employed no attorney to guard his interests and advise him, and never even made any inquiries on the subject, of Shorter, through whom, as he knew, the conveyance from Newman was to cpme. We notice, also, that he did not have Kolb’s deed to himself recorded until the 13th of June, 1867; and that of Newman to Kolb was not recorded until February 18th, 1869. When, now, was the mortgage from Kolb to Newman, for a part of the purchase-money, delivered? It is dated January 1st, 1867, and attested by the two Shorters, and was left in their hands. But the written agreement between Kolb and Newman about the purchase, shows that the mortgage to Newman and the deed of Newman to Kolb, the mortgagor, were to be simultaneously delivered. Until this was done and the cash payment made, the papers remained in escroto, in Shorter & Brother’s hands. The mortgage became operative only when the conveyance of the land, for the price of which it provided, was delivered. Until that time the mortgagor neither owned the land he mortgaged, nor owed the debt secured thereby; wherefore, it did not matter whether he had previously executed a deed of the land to Mcltae or not. This could not have precedence of the mortgage ; because, the mortgagor never was able to convey the land, free from that incumbrance. The title remained in Newman until his deed was delivered, and by the mortgage, eo instanti, returned to him, so as to preclude the interposition of any title or right in any other person. It has often been held that such a transaction is one and entire, and that even a right of dower in the wife of the purchaser could not, in such a case, come in between the conveyance and the mortgage; for which reason.her signature to the mortgage, or relinquishment of dower in the land mortgaged, is in such a case, wholly unnecessary. — Boynton v. Sawyer, 35 Ala. 500, and cases there cited. No priority, therefore, arises in favor of McRae, because the deed to him bears an earlier date than that of the mortgage to Newman. In regard to the supposed estoppel of Newman, whereby he should be precluded from insisting on his security in opposition to McRae, a bona fide purchaser from Kolb, the argument in support of it rests wholly on the circumstance, that the deed from Kolb to McRae is in the handwriting of Shorter, one of the attorneys of Newman. McRae says that [536] knowing his handwriting, and that he was the agent of Newman to deliver the deed of the latter to Kolb, his confidence in Shorter, (who was the uncle of Kolb), led him to believe that Kolb had a good," unincumbered title. This is a very narrow basis on which to found so important a • conclusion, as that Newman should, therefore, be barred of any right under the mortgage to him. Apart from Shorter’s explanation of the circumstances under which he wrote the deed, and of the fact that it is not affirmatively shown that he was informed when or in what way McRae was to pay for the land, McRae does not himself say that he ever approached Shorter, or sent to make any inquiry of him, on the subject, or- employed any one else to investigate the condition of the title — although he knew when and where he could obtain such information. We cannot charge the consequences of this carelessness on Newman, and deprive him of his vigilantly preserved rights, on the ground that his attorney did not seek out McRae to give him information which he did not himself take pains to apply for. Let the decree of the Chancellor be affirmed.