Kingman v. Graham

TayloR, J. Upon the trial the defendants did not rely upon showing that the deed from Marshall Kingman to the plaintiff was fraudulent and void as to the defendants or any other person; and, although they excepted to the finding of fact by the learned circuit judge, “ that the deed from Marshall Kingman to the plaintiff was duly executed and delivered, and was made in good faith, and upon a sufficient and valuable consideration, and without any fraudulent intent to hinder, delay, cheat or defraud the defendants or either of them, or any other person or persons,” the finding seems to be — 240 — sustained, by the evidence; and the learned counsel for the appellants did not insist, upon the argument, that this court ought to reverse that finding as against the clear preponderance of the evidence. As we understand the argument of the counsel for the appellants, the only point made against the findings in the case is, that the eleventh and twelfth findings of fact are not supported by the evidence, and should be reversed by this court. These findings are as follows: “Eleventh.,That the allegations of the answer — viz.: 1 that down to about the first day of May, 1874, the said plaintiff himself gave out, and caused it to be understood and believed, and aided and assisted the said Marshall Kingman to give out to these defendants and to others, and to cause it to be by them understood and believed, that the said Marshall Kingman, and not the said plaintiff, was the owner of said lands and premises; that in consequence of the said representations, statements and conduct of said Marshall Kingman and said plaintiff, after said deed to him, and of their reliance upon and belief in said statements, representations and conduct, and of their belief that he was the owner of said premises, these defendants gave credit to said Marshall Kingman and suffered him to become indebted to them in a very lai’ge sum; that but for such representations and conduct of said plaintiff, as well as said Marshall Kingman, and their said belief therein and reliance thereupon, these defendants would not have given said credit, or any part thereof, to said Marshall Kingman, or suffered him to become so indebted to them,- — ■ are not substantiated by the proofs; that said credit, and the whole thereof, was given to said Marshall Kingman upon his own representations, or upon the belief of said Thomas J. Graham, and Jacob Bremer that he was able to pay or would pay them, and not on account of the conduct or representations of the plaintiff. Twelfth. That this plaintiff, neither by representations nor conduct, nor by reason of silence when it was his duty to speak, is estopped from claim — 241 — ing title to, and right to the possession of, the undivided two-thirds of said premises, as against these defendants or either of them.” It is urged upon this court that the evidence is such as should estop the plaintiff from asserting his title as against these appellants. The foundation of this estoppel is based upon two, and but two, items of evidence. The first evidence is that which tends to prove a conversation between Marshall Kingman and Graham, at which the plaintiff was present, in June, 18T3, in which, it is claimed, Marshall Kingman, complaining of the high price charged for stave bolts by the people about Museoda, said “ that unless he could get cheaper stave bolts at Museoda, he would remove his mill to the eastern part of the-state.” It is sufficient to say, in regard to this statement, that the plaintiff denies that he was present when any such conversation took place, and Marshall King-man testifies that what he said was, “ that unless bolts could be obtained at such prices as would admit the running of the mill at a profit, the property might have to be removed to some place where lumber was cheaper.” The learned circuit judge has probably found in favor of the plaintiff as to what was in fact said at this conversation. But, even if the conversation had been just what is claimed by the appellants, we are' unable to see how the fact that the plaintiff did not interrupt' the conversation and declare himself the part owner of the mill could estop him from relying upon his title in this action-against these defendants. It does not appear that any negotiations were going on at that time between Marshall King^ man and the defendants, or either of them, by which Marshall Kingman was seeking credit from the defendants. And1 unless they were having some such negotiation, and such fact was understood 'by the plaintiff, he was under no obligation to assert his tide as against the claim of his father to the prop-perty. In order to make it the duty of the owner to break silence and assert Ms title when another makes claim to it, he242 must know, or have good reason to believe, that some third person is about to act upon the claim made by such other in a way that he would not be likely to act if he knew the real state of the title. In such case, if the third person acts upon such claim of title so that he will be prejudiced if the party having the title be permitted to assert it, an estoppel may be claimed against the real owner. Certainly no evidence short of this can sustain an estoppel as to title in any case. The only other evidence upon which an estoppel is based, is what took place at Dubuque at the time Graham, one of the appellants, made a partnership agreement with Marshall King-man. The witnesses do not agree as to what was the exact nature of the conversation at the time the contract was made. The witness Scofield, who was the business man of Marshall Kingman at Muscoda, was present when the partnership contract was made. He testifies that some time before the contract was made, Graham and Marshall Kingman had a talk at Muscoda about going into partnership. Graham afterwards came into the oflice at Muscoda, and said to witness he was going to Dubuque to see what he could do about going into partnership with the old man. Marshall Kingman wrote to the witness to come down to Dubuque with Graham. He went down, and, in the presence of the plaintiff and witness, Graham and Marshall Kingman talked over the matter and came to an agreement, and the plaintiff reduced the agreement to writing for and it was signed by them. Scofield further testifies that “ the mill and appurtenances were valued $6,000, and Graham was to offset his use of the mill with stave bolts. Mr. M. Kingman said machinery will depreciate ten per cent, in running, and Graham hesitated at that, and said $600 would make a good rent for the mill, and they referred to me. I said I did not want my machinery run at less depreciation than ten per cent., and then Mr. Kingman said to Graham, How will you rent? Will you go and rent of John Waller his mother’s one-third, and then rent one-half of one-third of — 243 — me, to make you an equal partner, or shall I keep right on with that lease, and you rent half the property of me? And Graham said he would rent of him, as he had no deal with Waller. The plaintiff was present during this conversation.” The evidence of Graham and that of the Kingmans, father and son, differs in some respects as to what was said at the time this contract was made, so that the testimony of the witness Scofield, being a disinterested witness, is perhaps fully as favorable to • the defendants as all the testimony considered together could possibly be. This testimony, therefore, with the contract itself, is really all there is upon which the claimed estoppel can be founded. The contract of partnership is as follows: “ Memorandum of agreement, made this 28th day of November, 1873, by and between M. Kingman, of Dubuque, Iowa, and Thos. J. Graham, of Muscoda, Wis., witnesseth that said parties this day enter into a partnership, to commence January 1,1874, to continue one year’, for the manufacturing of cooperage stock at Muscoda, on the following basis: Land, buildings, machinery, tools, horse, wagon, harness, and all buildings on the said land, valued at $6,000. Said' Graham is to put in stave bolts and hoop poles to the value of $6,000, at last contract prices, viz.: Peeled oak bolts, at $5 per cord; unpeeled oak bolts at $4.25 per cord; basswood heading bolts, unpeeled, at $2.50 per cord; basswood heading bolts, peeled, at $2.75 per cord; sound white elm bolts, unpeeled, at $3.50 per cord; soft maple and hackberry, unpeeled, at $3.50 per cord; flat oak bolts, unpeeled, at $4.75 per cord. “ Said Graham is to pay said Kingman for his share of rent $300 per annum, payable one-half on July 1, 1874, and balance at the close of the year. “ Said Kingman and Graham to run equal partners for the year 1874, each contributing equally, share for share, of the necessary capital required to carry on the business as above stated at Muscoda, Wis., under the name and style of Muscoda — 244 — Steam-Mill Company, each sharing equally in profit or loss; each partner’s services to be valued equal, and neither of said partners shall draw out of the firm, for personal expenses, more than $100 per month, unless by mutual consent; and said Graham is to pay one-half of all repairs of buildings and machinery, not to exceed $400; all over that sum to be paid by said Kingman, who is to use due diligence to beep the machinery in good running order, and said Kingman is to have all in good running order on or before January 1st next. “ It is understood that if either partner contributes more than the other he shall receive interest at ten per cent, per an-num from the other partner. “ The contract heretofore existing between Graham & Bre-mer and said Kingman is hereby rendered null and void. A clerk or foreman, as superintendent, shall be continuously employed by consent of both partners. “ MaRShall Kingman, “ T. J. Graham.” In addition to this the defendants testify that they believed M. Kingman owned the two-tliirds of the mill property in fee, and Graham swears he would not have entered into the partnership if he had known M. Kingman did not own two-thirds of the mill, and the appellants also testify that they would not have credited M. Kingman had they known he did not own the two-thirds of the mill. The learned circuit judge has found, from all the evidence in the case, that the allegations of the answer — viz., that down to about the first day of May, 1874, the said plaintiff himself gave out and caused it to be understood and believed, and aided and assisted the said Marshall Kingman to give out to the defendants and to others, and to cause it to be by them understood and believed, that the said Marshall Kingman, and not the said plaintiff, was the owner of said lands and premises; that in consequence of the said representations, statements and conduct of said Marshall Kingman and said — 245 — plaintiff after said deed to him, and of their reliance upon and belief in said statements, representations and conduct, and of their belief that he was the owner of said premises, these defendants gave credit to the said Marshall Kingman, and suffered him to become indebted to them in a very large sum; that but for such representations and conduct of said plaintiff, as well as said Marshall Kingman, and their said belief therein and reliance thereupon, defendants would not have given said credit, or any part thereof, to said Marshall Kingman, or suffered him to become so indebted to them — are not substantiated by the proofs; that said credit and the whole thereof was given to said Marshall Kingman upon his own representations, or upon the belief of said Thomas J. Graham and JacoTo Bremer that he (M. Kingman) was able to pay or would pay them, and not on account of the conduct or representations of this plaintiff. This finding of fact disposes of the whole of the defendants’ defense, if it is supported by the evidence; and from a careful reading of the evidence, as it is preserved in the record, we are not prepared to say that it is not sustained; certainly it - is not so clearly against the preponderance of the evidence as would justify us in setting it aside, under the rule established by this court in such cases. But, independent of this finding upon the questions of fact, we are of the opinion that, giving the evidence the most favorable construction in favor of the defendants, yet as a question of law no estoppel 'has been proved against the plaintiff. It must be remembered that the defendants undertake to estop the plaintiff setting up a title to real estate by matter im pais, which title appeared of record in the office of the register of deeds of the proper county at the time the matters im, pais which are set up as an estoppel occurred, and had been so upon record for two years previous thereto. In Brant v. Virginia Coal & Iron Co., 93 U. S., 326, the supreme court of the United States use the following language: — 246 — “ It is difficult to see where the doctrine of equitable estoppel comes in here. For the application of that doctrine there must generally be some intended deception in the conduct or declarations of the party to be estopped, or such gross negligence on his part as to amount to constructive fraud, by which another has been misled to his injury. £ In all this class of cases,’ says Story, ‘ the doctrine proceeds upon the ground of constructive fraud or of «gross negligence, which in effect implies fraud; and therefore, where the circumstances of the case repel any such inference, although there may be some degree of negligence, yet courts of equity will not grant relief. It has been accordingly laid down by a very learned judge, that the cases on this subject go to this result only: that there must be positive fraud or concealment, or negligence so gross as to amount to constructive fraud. . . . And it would seem that to the enforcement of an estoppel of this character with respect to the title of property such as will prevent a party from asserting his legal rights, and the effect of which will be to transfer the enjoyment of the property to another, the intention to deceive and mislead, or negligence so gross as to be culpable, should be clearly established.’ ” This court has adopted the foregoing rule as to estoppel in pais, substantially, in Norton v. Kearney, 10 Wis., 443, 453; Vilas v. Mason, 25 Wis., 310, 323; and McLean v. Dow, 42 Wis., 610. Under this ímlewe do not find any fevidencein the record which brings the plaintiff within it. He took all proper precautions to give notice of his title to all the world by putting his title upon record in the proper office. His record title would appear at the same place where his father’s title appears. He did not live within several hundred miles of the property, and had no personal supervision over the same. His father went into the actual possession thereof immediately after plaintiff purchased of him, as his tenant, and remained in possession as such until long after the transactions which are set up as estopping the plaintiff. Having placed his title — 247 — upon record where it could be seen by all men interested in knowing who owned the property, he could not be prejudiced by any claim of title made by his tenant, and of which he liad no knowledge. See Ford v. Smith, 27 Wis., 261, 267. The evidence of what took place at the time the contract of partnership was made between the father and Graham, is the only evidence which can possibly be construed as in any way tending to prove that the plaintiff knew that his father was making any claim to the ownership of the property. This evidence does not show that the plaintiff was in any way connected with the preliminary negotiations between his father and Graham in relation to this partnership, or that he in any way encouraged the parties in entering into it, either before or at the time the contract was made. The evidence as to what took place at the time the contract was made, except what appears from the contract itself, is too indefinite, uncertain and contradictory to base an estoppel as to the title of real estate, under any of the rules laid down by the courts upon this subject. As to the contract itself, there is nothing in it which amounts to a claim on the part of Marshall Kingman that he was the owner in fee of the two-thirds of the mill premises; and there was.no reason, therefore, for calling upon the plaintiff to assert his ownership and deny that his father owned the same. There is another rule which governs as to estoppel m pais as to the title to real estate, which is conclusive against the defendants in this action. This rule is also stated in the case of Brant v. Virginia Coal & Iron Co., supra, as follows; “It is also essential for its application with inspect to the title of real property, that the party claiming to have been influenced by the conduct or declarations of another to his injury, was himself not only destitute of knowledge of the true state of the title, but also of any convenient or available means óf acquiring such knowledge. When the condition of the title is known to both parties, or both have the same means of ascertaining the truth, there can be no estoppel.” — 248 — Tlie cases in the supreme court of Pennsylvania which are cited by the supreme court of the United States as sustaining this rule, hold that when the plaintiff’s title appears of record in the proper office, mere silence on his part, when another makes claim of title to the same with a view to have a third person act upon such claim of title, will not estop the plaintiff from asserting his title against the person acting upon such claim of title to his prejudice. In Knouff v. Thompson, 16 Pa. St., 357, 364, the court say: “The party who has placed his written title on record, has given the notice which every person is hound to know and respect. The law does not require him to go further. But, if he speaks or acts, it must be consistent with his recorded title. The law distinguishes between silence and encouragement. Whilst silence may be innocent and lawful, to encourage and mislead another into expenditure on a bad or doubtful title would be a positive fraud that should bar and estop the party — the author of that encouragement and deception — from disturbing the title of the person whom he misled, by any claim of title in himself.” See, also, Crest v. Jack, 3 Watts, 240; Hepburn v. McDowell, 17 S. & R., 383. A learned writer, speaking upon this subject, says: “If there is a positive misrepresentation, it in general suffices if it be made either with the intention that another should act upon it, or with knowledge that he is about to act, or under such circumstances that a reasonable man would know that it would be acted upon. No one, however, is under any obligation to exercise care or diligence to prevent another’s being defrauded in a transaction to which he is not a party. In this class of cases a person is estopped because he has not spoken when he ought to have spoken. The duty to speak rests upon the knowledge that another is about to act in ignorance of the truth. Thus, where the title has been duly recorded, it may •fairly be presumed that subsequent purchasers have used the means pointed out by law, and acquired all the knowledge which it is important for them to have, or that they will do — 249 — so. "When, however, the owner is directly apprised of the ignorance of the buyer, and of his purpose to act in such ignorance, he cannot claim the benefit of this principle, because good faith then requires him to speak.” This last rule was held in Markham v. O'Connor, 52 Ga., 183, and is, perhaps, a qualification of the rule stated in cases cited from the supreme court of the United States and of Pennsylvania, and is more strictly in accord with the decisions of this court also above cited. Adopting this last statement of the rule as the true one, we do not see how the plaintiff was called upon to assert his title at the time the contract of partnership was entered into by Marshall Kingman and Graham. If, instead of negotiating for the purpose of a partnership, Graham had negotiated with Marshall Kingman for the purchase of the title in fee, and the plaintiff had sat by and heard Kingman declare he was the owner, and permitted Graham to take a deed from him purporting to convey the title in fee, and to pay for the same, as though Kingman was in fact the owner thereof, he might have been estopped from afterwards asserting his title, although his deed was on record. Under such circumstances, he would probably be within the rule last above stated. The fact that the purchase was made and the price paid as though the one claiming title was the actual owner, might be sufficient notice to the real owner that the purchaser did not know the real state of the title, and was purchasing in ignorance thereof, depending upon the declaration of the party of whom he was making the purchase, and would require the real owner to assert his title. Silence under such circumstances would probably be a fraud upon the purchaser, and estop the party having the real title from asserting it as against him. But Graham was not negotiating with Marshall Kingman for a purchase of the land, nor was he negotiating a contract which made it absolutely essential that Kingman should have title. The partnership was but for one year, and the use of the mill property for the year was all that was absolutely necessary for the purposes of — 250 — such partnership. The right to that use Kingman lia.d, and put into the firm; and, as the evidence shows, the firm had the uninterrupted use of the mill according to the agreement. But it is said that Graham would not have entered into the partnership if he had known that Kingman did not own the mill by an absolute title. Admitting this to be so (which, upon the proofs, we think is quite doubtful), there is no evidence in the case which shows that the plaintiff’ knew of this alleged fact. Graham himself does yot testify that he made any inquiries as to the ownership of the property in the presence or hearing of the plaintiff, but only says Marshall King-man stated to him in presence of pla ntiff that he owned the two-thirds of the mill. Admitting that this statement was made as Graham says it was, it was simply volunteered by Kingman ■ — was not made-in answei to any inquiry made by Graham; and Graham, not having d aclared either by speech or act that he would not make thp partnership agreement unless Kingman had the title in fpe, the plaintiff was not bound to assert his title. He had the right to presume that Graham, who had lived in the vicinity of the property for several years, and who had come sweral hundred miles to make a negotiation for a partnership with Kingman in which the use of the mill for a year was neeessai’y to the business of such partnership, had sufficiently informed himself as to the title of the same for the purposes of his contract, or else that it was a matter of indifference to hi n whether Kingman had title or not, so long as the firm got the use of the same for the year. Under these circumstances the plaintiff was not called upon to assert his title, within the rule above stated. We have very grave doubts whether the affirmative answer of the defendants sets up any defensa ment. It justifies withholding the pa from the plaintiff on the ground that they hold such possession by virtue of a certificate of sale upon an execution against Marshall Kingman, upon which the time for redemption had 3 to the action of eject-assession of the premises — 251 — not expired. If the action had been by Marshall Kingman, it is clear the answer would not have been a defense; and we are strongly inclined to the opinion that, if the answer would not he a defense had Marshall Kingman been the plaintiff", it cannot be a defense against his grantee. To have made the defense good as against the grantee, we think that, in addition to showing the deed to the grantee void as to the defendants, either by way of estoppel or otherwise, there should have been a further allegation that they held the possession with the consent or license of Marshall Kingman. But we prefer to put our decision upon the merits of the estoppel set up by the defendants, and do not therefore pass upon this last point. By the Court.— The judgment of the circuit court is affirmed.