Barney v. Currier

Chipman, Ch. J. delivered the opinion of the Court. It is true that by the 5th Section of the Act regulating conveyances of real estates, it is enacted, that no deed of bargain and sale,' mortgage or other conveyance in fee simple, of any lands, tenements or hereditaments, shall be good and effectual in law, to hold such lands, tenements or hereditaments, against any other person or persons but the grantor or grantors and their heirs only, unless the deed or deeds thereof,' be asknowledged and recorded, as is provided in the act; but we must take this in connexion with the 14th Section of the same Statute, which provides, “ That all fraudulent and deceitful conveyances of any lands, tenements or hereditaments, procured, made or suffered, with intent to avoid any right, debt or duty of any person or persons, shall as against such person or persons, whose right, debt or duty is so intended to be avoided, his, her, or their heirs or assigns, be utterly void, any false pretence or feigned consideration to the contrary notwithstanding. ' In the construction of this statute, these two sections must be taken together. For one person knowing of the right of another, wanting some thing only in form, to' its completion, for instance the deed not on record, to intercept that right by taking a conveyance, legal in its form, and procuring it to be first recorded, is a gross fraud, and clearly within the 14th Section of the Act above recited. In such case the deed is void, as well at law as in equity; and if brought before a Court of equity, it will generally afford sufficient relief, to declare such subsequent deed void: but if the fraud has extended, to destroy or intercept the evidence of the prior right, the Court will suffer the fraudulent deed to stand in the chain of title, and decree a conveyance to the person entitled in equity. This principle will extend to every person sought to be injured by the fraudulent act, according to his right; not only to him who claims an absolute right, but to all who claim a conditional, defeasable or equitable interest — as well to a mortgagor, in respect to his equitable interest, his right of redemption, as to the mortgagee, in respect [320] to his legal lien for the security of his debt. The principle is perfectly obvious, and the construction not only consistent with the general objects and design of the statute, but even necessary to their attainment. A contrary construction would, instead of a prevention, render the statute a protection of fraud. And, beside, it has been so long established, that it cannot be permitted now to be shaken. — It is no less firmly established that notice to the agent is notice to the principal, and shall affect him the same as personal notice. To apply this principle to the present case: Truman Currier was himself a principal, and being in the concern at Swantoa the only acting partner, he was to all intents the agent of his co-partners, the other defendants. He agreed, in behalf of the partnership, to take a conveyance of the premises to satisfy or secure a partnership debt; and he was informed of the Orator’s right — that Levi Hun gerford held the premises, merely as a security for a debt due to him from the Orator. As Hungerford then intended to sell, so Currier must have intended to purchase, subject to the Orator’s right of redemption, and gave a consideration accordingly. The amount of- the debt due from the Orator to Hungerford, was made the consideration of the deed which Currier received. The deed of conveyance was in form absolute and unconditional. This might or might not have been fraudulent in its inception, according to the use it was intended to make of it afterwards. By this knowledge, and by these acts of their acknowledged agent, the other defendants are bound equally in law, equity and good conscience. The Conveyance from Hungerford, was taken to all the defendants, members of the partnership. Truman Currier went farther — he received the redemption-money of the Orator, the full amount of the debt due the company, to secure the payment of which, the conveyance was made : He thereby bound the other defendants as well as himself to convey the premises to the Orator. He did, on his part, execute a deed of reconveyance, prepared for him and the other defendants to execute — he took it, and agreed to procure it to be executed by the other defendants. Here the fraud began to appear. Tie neglected to procure the deed to be executed by the other defendants, and took measures to defeat the Orator’s claim and preredemption, although he had received the full sum of the re321 ■demotion, and conveyed his share, one third part, to Moses Jewett, ■one of the other defendants. Luther More does not appear to be at all implicated in this foul transaction. He had, by consent, withdrawn from the partnership concern in Swanton, and it does not appear that he had any personal knowledge of this transaction; and although his name had been made use of in the conveyance from Iiungerford, (he being then a partner) he appears very honestly, on Jewett’s application, to have released his share as he supposed he was in equity and good conscience bound to do; but Jewett, the other defendant, is deeply implicated. He insists, in his answer, that he is a bona fide purchaser for a valuable consideration; but he concedes, that at the time he took the deed from Currier, he had heard a report that he (Currier) had received a sum of money from the Orator, and had agreed to convey the. premises to him. He also concedes, that on inquiiy, Currier acknowledged that the Orator held such receipt which he had given him, and that he had agreed to convey to the Orator one third part of the premises, and that the Orator refused to accept such conveyance, but that Currier denied that he had ever agreed to convey the whole of the premises to the Orator, or to procure a conveyance from the other partners. The manner of expression, and the degree of caution used, clearly show that Jewett had been correctly informed of the whole transaction, and yet lie claims to hold the premises against the Orator, contrary to equity and good conscience. As the evidence of title is now in Jewett, there must be a decree that he convey the premises to the Orator, and that lie and Currier pay costs; and that Luther More, the other defendant, be dismissed without costs.