Mix v. White

Mr. Chief Justice Walker delivered the opinion of the Court: There is no allegation in the cross-bill or answers to the original bill that a settlement had been made, or that the contract had been abandoned, by the parties. The want of such an averment in the pleadings is sufficient to exclude McCrea’s evidence as to a settlement from consideration in the case, as there is no. averment in the pleadings that there had been a settlement, even if his evidence was clear and explicit. But when it is examined, it is found that he only gives his impressions of what was said and done, with but few facts. He admits that he only heard a part of the conversation, and that he may have received his impressions of the conversation from White. Taken altogether, it is too loose and unsatisfactory to establish an agreement to waive or abandon the contract. To have that effect, evidence should be reasonably clear and definite, and, at least, satisfy the mind that such was the intention of the parties. But this evidence falls far short of such weight. At most, it but raises a doubt whether Mix designed to give up all claim to the lands, and receive one thousand dollars, in lieu of his interest in them. It is, however, insisted that the agreement of the 16th of September, 1854, although not in terms, is in law a transfer of all the rights of Mix in the lands, to White, and operates as a mortgage to secure the payment of one thousand dollars to him. Not being a mortgage in form, we must look beyond the agreement itself to determine whether it is different from what it purports to be. From the evidence, we see that the parties entered into an agreement to purchase government lands, and to sell them on spéculation, and divide the profits, after defraying the expenses. For the purpose of raising a capital, the bills referred to in the agreement of the 16th of September, were drawn, indorsed and negotiated, the money realized, the lands entered, with the money or warrants purchased for the purpose, in the name of Mix, who, it seems, gave more of his personal attention to the business than White. The money, thus borrowed, remained unpaid, and as may be supposed, White was desirous that the bills should be paid, as his firm were liable, and may have given the greater portion of the credit upon which the money was procured. Be this as it may, Mix held the legal title to the lands, one-half of which was his absolute property, and the other half in trust for White. They had an equal interest in the lands, and were equally liable for the payment of the money borrowed to make the purchase. It nowhere appears that White was indebted to Mix, or that White purchased Mix;s interest in the lands, so no reason is perceived why a mortgage should have been given to Mix. But from the agreement itself, it seems to have been the design of the parties to confer power on White, out of the proceeds of sales of the lands, to pay off the bills upon which the money had been obtained, provided White could sell the lands for such a price as would take up the bills, and pay Mix one thousand dollars profit within sixty days, but if that was not done, then the lands were to remain on joint account, to be disposed of according to future agreement between the parties. Owning the lands jointly, as they did, this agreement operated as a license or a power for White to sell Mix’s interest in the lands upon the terms and within the time specified, and if not thus sold, the power ceased, until it was renewed by a supplemental agreement. Had this indebtedness not existed, it would be perfectly apparent that White could not have sold Mix’s interest in the lands without his consent, notwithstanding he held the legal title. Had he in such a case attempted to do so, it is obvious that equity would have restrained him; or had a purchaser taken a conveyance with notice of his rights, he would not have acquired a title. Nor do we perceive that the fact that the bills were unpaid when the agreement was entered into, authorized White to sell without Mix’s consent. He no doubt held in equity Mix’s interest as a security against his liability to pay the bills. And it may be that either party might have applied to a court of equity to subject the lands to the payment of-the money with which they were purchased. Their rights were equal, and their liabilities reciprocal, when the agreement was entered into, and it seems to us they have made no change in such rights. We are therefore of the opinion that this agreement was neither in form nor by operation of law, a mortgage, or a sale by Mix to White. That after executing the agreement Mix.retained the same interest in the lands that he previously held. If, however, White made sales before the expiration of sixty days, or before the agreement was recorded, to Iona fide purchasers without notice, they took the title. But after it was recorded it became notice to the world, and persons purchasing after that time, took the title subject to Mix’s rights in the premises. And the same is true of White’s creditors. They could only acquire White’s half of the land. After the agreement was recorded, it was the duty of all persons dealing with the lands to inquire and inform themselves whether White had a different interest from that appearing by the agreement. Failing to do so, they acted at their own hazard. It then follows that Mix is entitled to one-half of the lands remaining unsold after the agreement was placed upon record. But if the bills were paid out of the proceeds of sales of the lands, then the lands thus sold should be deducted, as it is but equitable that Mix should contribute his full share to the payment of these debts. Or if White, out of his own means, paid the bills, then Mix should contribute his proportion towards their payment, and if he retains one-half of the lands he should pay. one-half of the debt, or in the same proportion. The decree of the court below must be reversed, and the cause remanded. Decree reversed.