Hoppin v. Doty

Paiite, J. The evidence in this case is not materially different, upon the question whether either Munn or Doty was a bona fide purchaser, without notice of the plaintiff’s mortgage, from what it was in the former action between the same parties, reported in the 22d Wis. p. 621. We there held that it clearly appeared that each had notice, and that the plaintiff had the right to redeem from the former mortgage sale under which their title accrued. We think this is equally clear now. It is true, that in the present case it appears, that Munn had been induced to attempt to make an apparent qualification of his former testimony. But, if there is any qualification at all, it is apparent only, and not real. All that it amounts to is, that his former answers, to the effect that he had heard, at the time of his purchase, that the La Crosse Itailroad Company had transferred large numbers of the railroad mortgages, and among them Lennart s, were not intended to mean that he had any actual knowl [590] edge of the fact, or definite information of the actual transfer of this particular mortgage, but were founded merely on general current rumors. Notwithstanding all that he says upon this subject, it is still entirely apparent that he fully understood, at the time of his purchase, that this mortgage was outstanding somewhere, and was not owned by the La Crosse Company. And it is also equally apparent, from the mode in which he was applied to by Condon to take the title, from the trifling amount which he paid as compared with the value of the land; from his allowing Lennan to repiain in possession during all the time he held the title, without calling for any account of the rents and profits; from his paying no attention to the taxes, and from his finally disposing of it to Doty at Lennart s suggestion for $100, which, with what he had already received from Condon, repaid him for his advance, — that he never intended to acquire the title to the land for his own benefit, beyond a security for what he advanced'; and also, that, although he may have been able to swear truly that he had no actual knowledge of any ulterior objects on the part of Lennan, or Condon acting for him, still he did have that knowledge which every intelligent man gains by inference from obvious facts presented to him, that they had some object, to accomplish which they wished him to take the title as he did, without asking any questions and remaining purposely as ignorant as possible, and that in all probability that object was in some way to cut off this very mortgage, which he knew to be outstanding. He consented to act in that capacity, designing only to get his money back. And when he was about removing from Portage City, Mr. Doty was selected to act as his successor. Mr. Munn sought out Lénnan and told him he wanted the money, and was going to sell the land, “but preferred making the sale to some party that was friendly with him.’’’’ This phrase is pregnant with meaning. It would fully [591] reveal tire real nature of the transaction, if it had not been sufficiently obvious without it. Mr. Munn also says : “I conveyed the land to Baron J3. Doty at his own request, and because Mr. Lennan had previously told me that he had no objection to my making a sale to Mr. Doty.” ' It is true, Mr. Doty swears that he had no conversation with Lennan before purchasing of Munn. But he does not swear that he had no conversation with any one acting in behalf of Lennan. And it is extremely probable that it was deemed advisable that the negotiations, such as they were, with Doty should be carried on, as they were originally with Munn, through the intervention of a third person. Either this must have been the case, or else the relations between Lennan and Doty, or Munn and Doty, were such that it was felt with entire confidence that the title might be conveyed to him for a nominal consideration, and that he could be relied on, without asking any questions, to fill Munir’s place. It is little less than preposterous to suppose that he believed himself to be acquiring for his own benefit the title to a farm worth from $2,000 to $3,000 for $100. He knew that Munn’s title had been acquired several years before, and that Lennan, the original owner, had remained in possession all the time. An offer under such circumstances by Munn to sell him such a farm 'for $100, although it might not in itself have apprised him of the exact nature of the objects which the parties were trying to accomplish, would yet be sufficient to inform him so distinctly that there was some ulterior object in view, somebody’s rights or interests attempted to be sacrificed,. as to put Mm upon the strictest inquiry. It is not necessary, in order to charge a purchaser with bad faith, that he should have definite knowledge or notice of the exact character and condition of the right which he attempts to defeat. If the circumstances are such [592] as to inform Mm. loudly that some wrong is sought to be perpetrated, lie cannot blindly shut Ms eyes, and then come into court in the character of a bona fide purchaser. In De Witt v. Perkins, 22 Wis. 473, we held that one who purchased a note for $300, shortly before its maturity, against a solvent maker, for the sum of $5.00, was not a bona fide purchaser. That circumstance alone was sufficient to put him on inquiry* and charge bfm with bad faith if he neglected to make it. The decision is entirely applicable to the purchase by Doty in this case, if nothing were considered but the mere amount of the consideration which he paid. But in addition to that we have the fact that he knew of the existence of this railroad mortgage; that he must have known that, at the time the first mortgage was foreclosed, it no longer remained in the hands of the La Crosse Company, because Munn swears that at the time he purchased, this company was generally understood to be insolvent, and that, in raising these mortgages, it was openly represented by the company that they were wanted to use as a basis of credit upon which to raise money, and that rumors that this and others had been transferred were then current. It was utterly improbable, therefore, that at the time of the first foreclosure sale this mortgage remained in the hands of that company, so that, although Doty might safely swear that he had no knowledge or definite information of the transfer of this particular mortgage, he must have had perfect knowledge that in all probability, this, as well as all others of the same class, had been transferred. So that the facts not only imperatively put him on inquiry, but also directed his attention very distinctly to the precise subject-matter of that inquiry. And, indeed, without making any further inquiry at all, he had sufficient general knowledge to enable any man of ordinary intelligence to draw a reasonably certain inference that the object of the transaction, in which he [593] was sought to be used, was in some way to defeat this mortgage, which he had every reason to believe, was outstanding somewhere. His subsequent conduct has been in entire harmony with the conclusions indicated sufficiently by the original facts. It is true, he went through the formality of executing a lease to Lennan; but the entire rent, since that, has been paid by improvements made by Lennan on the property for his own convenience. And Doty himself swears that he had no knowledge as to the $600 or $700 worth of improvements and repairs made by Lennan, except from Lennan’s account, according to which they settled. If, upon such facts as these, either Munn or Doty could come into court and uphold their title as against this mortgage, which they both knew to exist, and had every reason to believe was outstanding, as bona fide purchasers, it would seem useless ever to attempt to make out a case of bad faith. The plaintiff has a right to redeem, and to have an account stated upon the principles applicable to such a case. And we do not feel called upon to anticipate at this time all the questions that may arise in respect to such account, as the court below has not yet passed upon them. The judgment must be reversed, and the cause remanded for further proceedings in accordance with this opinion. By the Qourt. — So ordered. Dixon, C. J., did not take part in the decision of the above cause,.