Wait v. Smith

Mr. Justice Scholfield delivered the opinion of the Court: The evidence satisfactorily shows that there was a mistake, as alleged in the bill, in the description of the land in the deed from Steele to the Mississippi and Atlantic Railroad Company, and in the bond and deed from that company to Sanford J. Smith. William S. Wait was chargeable with knowledge that Smith intended to buy, and the Mississippi and Atlantic Railroad Company intended to convey to him, the land which it bought from Steele, and which Steele intended and attempted to convey to it. The deed from the railroad company was, in part, written by Wait, and he seems to have been an active agent of the company in the transaction with Smith. When Smith purchased he appears to have been a stranger to the railroad company. He was not then bound to know its by-laws and could not be affected by them. Occupying the relation he then did to the company, the bond is to be regarded as properly executed and obligatory upon the company. Smith v. Smith et al. 62 Ill. 493. Aside from the question of the sufficiency of the proof of the consideration,before Smith became a member of the railroad company he was entitled to a deed for the land he had contracted for. It is impossible to see how the fact of his becoming a member of that company could lessen or affect his legal or equitable rights already vested in regard to the land. Granted that he is thenceforth chargeable with notice of the by-laws, etc., of the company. The effect of that is prospective, not retrospective. It may, with propriety, be insisted that what remained thereafter to be done to complete his title to the land should be done in conformity with the by-laws of the company; but what had been previously done was not affected by them, at the time, because he was a stranger to the company. There was no necessity, so far as Wait was concerned, that the bond should be recorded, for the proof is ample that he had actual notice of it. If, then, we shall concede there were irregularities in the execution of the deed which rendered it invalid at law, it is manifest those irregularities can avail nothing here. We are now dealing with the equities, not the technical legal rights of the parties; and, very clearly, no irregular action, or refusal to act, by a board of directors or other officers of a corporation, can defeat the equitable rights of persons having lawful contracts with the corporation. It is enough for the present if it appear, as we think (waiving the question of the proof of the consideration) it does, that Smith was equitably entitled to have a deed. Wait, having notice of Smith’s rights, in subsequently acquiring title to the land omitted by mistake from Smith’s deed, took as a trustee for Smith. Thus far we concur in the view taken of the case by the court below. But Smith, to have been entitled to relief, must have shown that he was a.purchaser in good faith for a valuable consideration, and not a mere volunteer—and appellees, as his heirs, occupy a position no more favored. This issue was distinctly presented by the answers, and there is no evidence, other than that found in the recitals of the bond and deed, tending to prove any consideration for the undertaking to convey. The rule is, the proof must show an actual payment of the consideration,—and this must be outside and independent of the recitals in the deed or instrument under which the party claims. Brown et al. v. Welch, 18 Ill. 343; Keys impl’d v. Test, 33 id. 316; Roseman et al. v. Miller, 84 id. 297. But again: At the time the Cooks purchased, the land in controversy was in the quiet and peaceable possession of the heirs of Wait, and they had enjoyed such possession for several years previously. There is proof that Wesley Cook, one of the co-purchasers and grantees of Wait’s heirs, had been notified, before the purchase of the land, that the land belonged to appellees, and that the • title of Wait’s heirs was worthless. But there is no proof that either .Harrison Cook or William Cook had such notice, or that Wesley Cook was acting as their agent or attorney, by virtue of a partnership or otherwise, when he received notice, or when the purchase was made. On the contrary the proof repels such an inference. The only witnesses proving notice are Messrs. Metcalf and Gillespie. The former does not claim to have made any communication in regard to the title to either Harrison or William Cook, and the latter expressly denies that he ever made such communication. The only evidence looking in the direction of an agency by Wesley Cook is the declaration of Mr. Metcalf that he thinks that in the purchase Wesley Cook did the business, because he never saw or talked to either William or Harrison Cook about it previous to the sale or afterwards, only to the effect that they had no personal notice of appellees’ title. But it does not appear that this witness had anything to do with the sale of the land, or that he was in a position to know by whom the negotiations were conducted, or that those actively participating in the purchase should have communicated with him in regard to it. From aught that appears, his opportunity for knowing who were the active participants in effecting the sale may have been quite limited. William Cook testifies: “ Myself, Harrison and Wesley, made the bargain for the land. We wrote to Mr. Wait at Pocahontas. * * * John Vanhooser, a young man living Avith me, went to Pocahontas to see Wait about purchasing the land. He represented us. We sent him there. We sent out by him a bid on the land of $5500. William S. Wait, Jr., accepted it for the heirs. He subsequently came down to Troy with the deed executed and we met him there and paid him the money; each man took his own money and paid it to him, and the deed AAras made to us jointly. I mean by fwe’ and ‘ us,’ Wesley, Harrison, and myself. I would say that we commenced negotiating for the land some two months before we bought it—we three did the bargaining for the land.” And he denies all knowledge of any communication made to Wesley in regard to the title before the purchase. Harrison Cook testifies that he knew of no knowledge that Wesley had in regard to the title, previous to the purchase; that at the time of the purchase, he, himself, had no knowledge or intimation that the title was not perfect in the Wait heirs; that they were in possession and claimed to own it, at the time. It is said in Freeman on Co-tenancy, § 171: “If notice to one part owner ever operates as notice to another, it is rarely by reason of "their relation as co-tenants. Unless one has been made the agent of the other, by virtue of partnership relations or of some other means, neither can ordinarily be charged and held accountable for the knowledge of the others. If an incumbrance or conveyance be in existence affecting the title to land, and a purchase be made by several jointly, or as tenants in common, those who have notice of the incumbrance or conveyance will hold their title in subordination to it, while those who did not have such notice will obtain their title free from the claim to which their co-tenants are subjected. The rule that notice to a co-tenant is not, by mere-force of the relation of co-tenancy, notice to any of his companions unless in cases of notices to quit, seems to prevail without any qualifications or exceptions.” In Snyder v. Sponable, 1 Hill (N. Y.) 567, there was a conveyance to a husband and wife jointly, and a prior unrecorded mortgage upon the land. It was held notice to the husband of the existence of this mortgage did not affect the wife. Bronson, J., who delivered the opinion of the court, said: “ On a conveyance to two or more persons, whatever may be the nature of their estate, I am not prepared to admit that notice to one would be sufficient to overcome the registry laws as to all of the purchasers.” And again, speaking of the objection urged against the deed, he says: “The reason upon which the objection rests goes only to the party who had the notice, and such estate as he would otherwise have taken under the conveyance may well fail without involving the other and innocent vendee in the same consequence. This would, I think, be so- on a conveyance to several persons either as joint tenants, except in the case of a trust estate, or as tenants in common, and I see no reason why the same rule should not apply on a conveyance to husband and wife.” The same doctrine, in effect, was announced by this court in Burt et al. v. Batavia Paper Mfg. Co. 86 Ill. 66, in which we held that knowledge by one of several corporators of the existence of an incumbrance on the property purchased by the corporation, whatever effect it may have on his interest, will not charge his associates with notice, where he does not act as their agent in forming the company. Very clearly then, under the evidence before us, William • and Harrison Cook are not chargeable with the notice given to Wesley. We do not, so far as William and Harrison Cook are concerned, regard it as of consequence how, in the first instance, Wait obtained possession of the land. They had no such actual or constructive notice as charges them with knowledge of any irregularities in that regard. They found the heirs of Wait in the peaceable possession of the property, and, in the absence of knowledge to the contrary, were authorized in assuming that their possession was lawful. But it is argued the record of Smith’s deed was sufficient to put the Cooks on inquiry. We do not so understand it. That record was notice of Smith’s title to all the land therein aptly or intelligibly described—but no farther. Rodgers v. Kavanaugh et al. 24 Ill. 583. We perceive nothing in the deed, on the other facts proved, that should have put the Cooks upon notice that the deed of Steele to Wait and Wait’s possession of the land were in bad faith and in violation of any of the rights of appellees. The decree is reversed and the cause remanded. Decree reversed.