Hoult v. Donahue

Snyder, Judge, announced the opinion of the Court: The circuit court having declined to dissolve the injunction as to the fifteen and one half acres first purchased by the appellant, Samuel T. Sherwood, the controversy in this Court is narrowed to the remaining forty-eight and one half acres of the sixty-four acres of said appellant and the twenty-two and one half acres of the appellants, W. E. & A. E. IIoult. The Iloults acquired a complete equitable title to the said twenty-two and one-half acres before any equity in favor of any of the appellees attached to the land, and in that regard they are in a better situation than the appellant, Samuel T. Sherwood, who acquired both the equitable and legal title to his forty-eight and one half acres after the equities Of the appellees had attached. The legal title to the twenty-two and one half acres was conferred on the Hoults after the trust deeds were executed in favor of the appellees. If, however, the title of the appellant, Samuel T. Sherwood, to the said forty-eight and one half acres is paramount to tire claims of the appellees, Stuart and Maulsby, then it follows necessarily that the title of the Hoults to said twenty-two and one half acres must, also, be superior to said claims. I do not deem it necessary to refer to the fact that, at least, a part of the purchase-money for the said forty-eight and one half acres was paid to Commissioner Maxwell in discharge of the lien on the land for the original purchase, because in my opinion the case may be disposed of without such reference. [299] “ A purchaser shall not, under this chapter, or chapter 75, be affected by the record of a deed or contract made by a person under whom his title is not derived, nor by the record of deed or contract made by any person beiore the date of a deed or contract made to or with such person, which is duly admitted to record, and from which the title of such person is derived.” Section 10 chapter 74, Code, p. 475. This provision ot the code was first introduced in the revision of 1849, and in a note by the revisors it appears that the first part of the section was adopted to carry into effect the views of Chancellor Kent in Murray v. Ballou, 1 Johns. Ch. 574, that a purchaser is not required to take notice of a record by a person under whom his title is not derived. And the second part was framed to settle the doctrine of constructive notice affirmed by a divided court in Doswell v. Buchanan, 3 Leigh 365. In Doswell v. Buchanan, a person in possession of lands, to which he had an equitable title, made a deed of trust upon it which was recorded. Afterwards such person acquired the legal title, and then conveyed the land to a purchaser for valuable consideration, who had no knowledge of the trust deed. It was held, that the subsequent purchaser took the land unaffected by the trust deed. The case at bar, however, comes within the rule laid down in Murray v. Ballou, supra, and declared in the first part of the section of the statute, that “a purchaser shall not be affected by the record of a deed or contract made by a person under whom his title is not derived.” The word “ title ” here used, being without qualification necessarily means a complete or legal title. Thus the title of the appellant, Samuel T. Sherwood, to the said forty-eight and one half acres was derived from Commissioner Maxwell, while the trust deeds -were made by Daniel Sherwood. Consequently, said trust deeds having been made by a person under whom the title of said appellant to the forty-eight and one half acres is not derived, the record of said deeds, by the terms of the statute, cannot affect the title of said appellant to said land, and his title thereto must be defeated by the appellees, if at all, upon the general principles of equity unaffected by the recording of said deeds. [300] It is well settled that a purchaser for a valuable consideration, without notice of a prior equitable right, obtaining the legal estate or title at the time of his purchase, or before, he has notice of such prior equity, will be entitled to priority in equity, as well as at law, according to the maxim, “where equities are equal the law shall prevail.” Basset v. Nosworthy, 2 Lead. Cas. Eq. 1; Warner v. Winslow, 1 Sandf. Ch. 430. While on the one hand, notice of a prior equity, given at any time before the completion of the purchase, will invalidate all steps which may be taken to complete it (Murray v. Finster, 2 Johns. Chy. 155; Wormly v. Wormly, 8 Wheat. 421), yet on the other, when it is once completed, and the character of a bona fide purchaser acquired, notice will not be a bar to any future steps, necessary for protecting and securing what has been purchased. He who buys an equitable title in ignorance of its nature, and under the belief that he is getting a good legal title, may, therefore, protect himself, by getting in the legal title, even where the effect is wholly to exclude equities prior to his own. Baggarly v. Gaither, 2 Jones Eq. 80; Boone v. Chiles, 10 Pet. 177; Williamson v. Gordon, 5 Munf. 257; The Mutual Asso. So. v. Stone, 3 Leigh 218; Cox v. Romaine, 9 Gratt. 27; Bayley v. Greenleaf, 7 Wheat. 46; Camden v. Harris, 15 W. Va. 554. In the case before us the appellant, Samuel T. Sherwood, was not' only a complete purchaser by having paid the purchase money and been placed in possession of the land, but he had also acquired the legal title' before notice of the. equities or claims of the appellees. Therefore, under the least favorable-view of'the doctrine of equity relating to bona fide pur-ehasers; his title to the said forty-eight and one half acres of land must prevail over the equities of the appellees,-Stuart aud'Maulsby. And his title being paramount to that of the said appellees, and the appellants, W. E. and A. E. Iloult, having an equally valid'legal title to the twenty-two and one half acres and an equity anterior to that of the appellees, their title to said twenty-two and one.half acres is, of course, superior to and must also prevail over that of said appellees. I ani, therefore,'of opinion that the circuit court erred in dissolving”the plaintiffs’ injunction as to any part of the sixty-four acres of the appellant, Samuel T. Sherwood, or the [301] twenty-two and one halt acres of the-said A. - E. and ~W.. E. Hoült, and for this error the decree of said court, of July 27, 1881, must he reversed with cost to the appellants against the appellees, other than Michael Donahue, trustee. And this Court, proceeding to pronounce such decree as • said' circuit court should have entered, doth order and decree, that the injunction awarded to the plaintiffs on the 19th day of April, 1881, be made perpetual and that the defendants, other than Michael Donahue, trustee, pay to the plaintiffs their cost’s in the said circuit court expended. Judges Johnson and Green Concurred. Decree Reversed.