Tartt v. Clayton

Mr. Justice Dickey delivered the opinion of the Court: After a very careful consideration of this record we think that as against James T. Tartt, one of the complainants, the decree was clearly right. The evidence produced does not lead us to the belief that Philip H. Clayton, or Mrs. Lucy A. Clayton, has been guilty of any fraud or bad faith in the matter of the sale under the power in the annuity mortgage. Nor do we think the validity of the sale is affected by the fact that Mrs. Clayton, instead of paying to Philip H. Clayton the amount of her bid in cash, paid the same, under an arrangement made with him before the sale, by giving him credit to the amount of that bid, upon an existing indebtedness by him to her for a larger amount. There is no proof whatever tending to show that the paper in which the notice was published was an obscure paper, save the supposed declarations of Mrs. Clayton, mentioned by the witness Adams. She denies making the statement, and swears she does not know anything about the supposed obscurity of the paper. If the status of the paper were not what it ought to be, the fact, from its very nature, could have been proven affirmatively by any number of witnesses, and yet no proof of that kind is offered. That charge is not sustained. Nor is there any proof offered to sustain the allegation that the notice, in itself, was defective in any particular. The notice was not produced by complainants, and no reason is shown for the failure to produce it. The burden of showing that the same was defective was upon complainants. The recitals in the deed sought to be set aside show, prima facie, that the notice was good. The fact that it recites particularly certain essentials, and omits certain others, does not repel the conclusion that the notice was good. The recitals do not profess to set out all that the notice contained. It is merely said in this regard, that the notice embraced the essentials specified. It is not to be inferred that these constituted the whole of the notice. The mere filing of a bill by Philip H. Clayton, asking that his deed to Jennie C. Tartt, and the annuity mortgage, and the mortgage to Charles T. Clayton, be set aside, upon the allegation that the mortgage was, in the manner in which it was drawn, not adequate security for the payment of his annuity, did not strip him of the right to change his mind and proceed to enforce the mortgage, especially after all the defendants thereto who had been brought into court had answered the bill, insisting that he had ample power to collect his annuity by virtue of the mortgage. As well might it be said that these answers estopped them from questioning his right to sell under his mortgage, for by their answers they asserted that as his present and existing right. True, the pendency of such a suit may have thrown them off their guard, and thus imposed upon the mortgagee the duty of notifying them, in some way, that he proposed to exercise his rights under the mortgage. This he did do, by a specific demand upon Thomas Tartt and upon James Tartt for the payment of the two installments which had matured and become payable, respectively, on September 1, 1880, and on September 1, 1881, and he proceeded to advertise in less than a week after these demands. Thomas Tartt and James Tartt therefore have no ground to complain of being lulled into security by the pending suit. The only serious question in this regard has relation to the other complainants, composing the firm of John A. Prickett & Sons. The assignment of the interest of Charles T. Clayton to James Tartt carrying with it the right of redemption from the annuity mortgage, was made before the suit of Philip H. Clayton was instituted, and accordingly Thomas Tartt and wife, and James Tartt, were made defendants. In April, 1881, James Tartt having disclosed in his answer the fact that he had assigned his interest to the banking • corporation, complainant took leave to, and did amend, his bill, making that corporation a party; but no process was served upon that corporation, nor does it appear it had any knowledge or notice of the pendency of the suit in question. And although it appears in proof that on the 27th day of September, 1881, a deed of the master conveying this land to them was placed on record, which deed purported to have been made under sale of the same upon proceedings under the second mortgage, and in which it is recited that the certificate of purchase was assigned by the banking corporation to John A. Prickett & Sons, still it does not appear that Philip H. Clayton or his wife had any actual knowledge that the Pricketts had any interest in the matter whatever. In fact, it is not so alleged in the bill. This is not a- question as to the legal effect of a deed in passing an interest in land. The only interest that deed passed to the grantees was the title of this land, subject to this annuity mortgage, and the recording of the deed vested that interest in the grantees as against any subsequent purchaser of that interest from James Tartt or from the corporation. It did not affect the right of Philip H. Clayton to enforce his annuity mortgage. The question here is one of personal good faith. If Philip H. Clayton, at and before the sale, was ignorant of the interests of the Pricketts, and Mrs. Clayton, at the time of the sale, was ignorant of the same interests, no bad faith can be attributed to them upon the ground that no actual notice was given to them, nor can they complain no actual notice was given to them. True, they stand in the shoes of the Farmers’ Exchange and Loan Company, and it is said no actual notice was given to it. It is not alleged in the bill that this corporation had any knowledge of the pending suit, nor is it alleged that this corporation did not in fact know of the sale sought to be set aside,-before the same occurred. The testimony of John A. Prickett does tend to show that the corporation had no actual notice of the proposed sale until after it occurred, but it also tends strongly to show that the corporation was not misled or lulled into security by the suit of Philip H. Clayton. Prickett testifies that he was the president of that corporation, and that he did not know, until after the sale to Mrs. Clayton, that there was any default in the payment of any of the installments to be paid as annuity to Philip H. Clayton. Had he known of the bill of Philip H. Clayton seeking to set this mortgage aside, he would necessarily have known the ground alleged,— the non-payment of the annuity of 1880, and the peculiar provision of the annuity mortgage, which it was said rendered it inadequate security. It is therefore clear that the Farmers’ Exchange and Loan Company was not lulled into security by the suit of Philip H. Clayton, and therefore was not prejudiced thereby. As to the firm of John A. Prickett & Sons, who acquired their rights from the corporation in April, 1881, Philip H. Clayton, as trustee under the mortgage, owed them no duty he did not perform. He did not have any actual knowledge of their interests in this regard. The bill does not allege such notice, and no proof tends to show it. It is said the filing for record of their deed on September 27, 1881, was notice to him and to Lucy A. Clayton, the purchaser. This is true as to constructive notice. It is equally true that all the complainants (embracing the Pricketts) had constructive notice of the sale, and should have attended to protect their interests. After a careful consideration of this entire record, we find no error in the decree of the court below. The decree is therefore affirmed. Decree affirmed.