Sewell v. Nelson

©pintón op tiie court by JUDGE O’REAR Affirming. Anna. Patrick owned an undivided fifteenth of six tracts of land in Breathitt county, formerly belonging- to her grandfather, Thomas Sewell^ One of these tracts of land was called the ‘‘Town Tract,” and contained about 2,400 acres. Within this tract is the land in dispute in this suit. On January 20, 1885, Anna Patrick and her husband conveyed her interest in this tract and in other lands to Martin Vivion by deed duly executed and placed of record. The sale to Vivion was through an agent, T. G-. Stuart. Pro-. vious to making the deed to Vivion, Patrick and wife had delivered to one Gt. Bi W. Sewell what appears as a deed in form, dated February 19, 1884. The proof shows that in fact this transaction Avas to secure a loan of $300 that day — 175 — made by (L B. \Y. Sewell (o Mrs. Patrick. By deed dated January 25, 18S5, the day before Mrs. Patrick and her husband executed- the conveyance' to Vivion, and while the begot iations between Vivion and Patrick and their agent,. Stuart, were' shown to have been in progress, GL'B. W. Se-well conveyed this land to his brother, the appellant, Thomas L. Sewell, for the recited consideration of $50,000 of the capital stock of the Eastman and Short Consolidated Mining Company of the State of Colorado, whose jilace of business was described as being at Richmond, Ky. There was proof to the effect that before the execution of this last-named deed, and while the negotiations betiveen Stuart and Vivion were being carried on, appellant, Thomas L. Sewell, for the purpose' of inducing Vivion to buy the land, represented, in substance, that the title in Mrs. Patrick was perfect; that the land was well worth the price being paid for it, $5 per acre; that she was his sister, and generally encouraged the investment by Vivion. It was further shown by the proof that the mining stock was worthless at the tinu» of the taking of the depositions in the case. Though afforded an opportunity to do so, appellant failed to show then that it was of any value at any time. In fact, taking the testimony of appellant, and his brother concerning the transaction out of which grew' the deed of January 2oth between them, we are unable to arrive at a different conclusion from that of the chancellor below, that this deed was without valuable consideration. This contest is between Mrs. Patrick’s remote vendee through the sale to Vivion and appellant, Thomas L. Sewell. Numerous questions are presented in argument, but we feel it necessary only to decide two, which, in our opinion, are conclusive of the rights of the parties in this case. The first is: It being conceded that the transaction between — 176 — Mrs. Patrick to (5. B. W. Sewell was a loaning of money and the securing of it by a mortgage which was on its face apparently a deed, and which was subsequently paid off by-Mrs. Patrick, whether (5. R. IV.’s venden1 without consideration — that is,'without such full and fair consideration as brings him within the description' of a bona fide purchaser for value — will be allowed to successfully claim against Mrs. Patrick’s vendee for value, and without knowledge of the deed to her mortgagee’s vendee. The burden was upon appellant to show that he was a purchaser for value. Ii was shown that Vivion was a purchaser for value; that lie had not actual knowledge1 or 2iotice of the transactions between Mrs. Patrick and (1. B. W. Sewell, or the one between Of. B. W. Sewell and appellant. He had thereby made1 a prim a facie case1 of title, and upon that was entitled to recover, unless appellant could establish either that Vivio2i liad actual notice at the ti2ne of his purchase of appellant's claim, or that appellant was in that attitude that gave Vivion constructive notice of the state of the record. 11 is 2ipon the latter phase1 alone that appellant pretends to liave made a case1. The statute1 in force at the time of the 'execution of these deads permitted a purchaser to have his deed recorded within GO days after its execution, io have the sa2ne effect as if recorded on the day of its execution. Section 14, c. 24, General Statutes. However, that statute must be 2‘ea.d in connection with seel ion 2 of chaptei' 44 of the General Statutes, which is: “Every gift, conveyance, assignment, ti’ansfer or charge made by a debt- or, of or upon any of his estate without valuable consideration therefor, shall be void as to all liis then existing liabilities, but shall not, on that account alone, be void as to creditors whose debts or demands are thei-eafter contracted, nor as to purchasers with notice of the voluntary alie2i — 177 — tion or charge; and though it'bo adjudged to be.void as to a prior creditor, it shall not therefore be deemed to be void as to suc-h subsequent creditors*or purchasers.” “Between (‘states equal in quality it may be assumed as a principle that those having the priority will be preferred. But when the junior equity combines with it the legal title, is free from fraud, and founded on a valuable consideration, the prior equity must yield.” Taylor v. McDonald’s Heirs, 2 Bibb, 422. In the early case of Gilpin v. Davis, 2 Bibb, 418, 5 Am. Dec., 622, which was a contest between two persons claiming under deeds from the same vendor, the first one of which was shown to have been fraudulent, the junior was allowed to prevail. Raid the court: “If he [the holder of the junior conveyance] ivas a lona fulo purchaser for valuable consideration, he was qualified, under the statute, to avoid the prior conveyances from Morgan by showing that they were1 made with an intent to deceive him.” Rection 2 of article1 1 of chapter 44 of the General Statutes, above quoted, was the same as section 1907 of our present statutes. In the case of Winter v. Mannen, 81 Ky., 124 (4 R., 949), the court had occasion to consider this statute. In that case the owner had made a voluntary conveyance to his children, some of whom reconveyed to him. After his death his- heirs at law sold and conveyed the land to Pepper for full, consideration in money. Those of the original heirs who had not reconveyed to the father brought this action against the last vendees. The court held: “The very language of the statute implies the converse of its expressed meaning, that a purchase made with actual notice of the voluntary .alienation is void, which, of course, is subject to the condition that the voluntary alienation is not in addition actually fraudulent, for then a purchaser for value with actual notice would be protected.” The court held — 178 — that, although the voluntary conveyance had been duly recorded, it did not constitute constructive notice to a subsequent purchasin' for value. In Ward v. thomas, 81 Ky., 452 (5 R., 195), the court held that the recording of a voluntary conveyance was not constructive notice» as against subsequent purchasers or creditors. These cases were followed in Brown v. Connell, 85 Ky., 404 (9 R., 27) 3 S. W., 794. The court said, considering the second section of chapter 44 of General Statutes: “Tinder the first section of the statute supra, the rule is that, if the conveyance is actually fraudulent, the subsequent purchaser for value is not affected by either constructive or actual notice of the conveyance. Fnder the second section the rule is that a voluntary conveyance is .prima facie fraudulent as to a subsequent purchaser, and unless he has actual notice of the conveyance his title is perfect, and he is not affected by the fact that the voluntary conveyance is of record. Actual, and not constructive, notice must be brought home to him.” Jones’ Adm’r v. Jenkins, 83 Ky., 391 (7 R., 408). In Enders v, Williams, 1 Metc., 352, construing h statute not so favorable to purchasers as the statute now under consideration, it was held: “A voluntary conveyance should, however, be deemed presumptively fraudulent against a subsequent purchaser for a valuable consideration without actual notice. It should not, in our opinion, be deemed absolutely void, but the question of fraud should be left open'for investigation. The'subsequent sale, however, raises a strong presumption of fraud in the gift, and imposes the burden of proving that it was made i)ona fide on the person who claims under the voluntary conveyance.” “Constructive notice, arising from the recording of the conveyance, is not sufficient to affect the conscience of the purchaser. Actual knowledge is necessary for this, purpose.” — 179 — We do not find it necessary to pass upon the question of actual fraud charged by appellee against appellant and his vendee, G. B. W. Sewell. It seems to us to be clearly set-tied as the law of this State that where the senior conveyance', even though recorded, was voluntary, or not based upon that adequate consideration that makes its'vendee a purchaser for value, within the contemplation of law, the subsequent purchaser for actual and sufficient value is not required to take constructive notice of the' first conveyance, but, as against it, his equity and legal title will prevail. It is claimed by appellant that the deed from Patrick to Yivion did not embrace the land in controversy. The description in that deed, so far a^ it affects the land in controversy, is this: “One tract lying on the waters o'f the Kentucky river, in said county, above and below the town of Jackson, known as the “Town Tract’ of the Sewell estate, and containing 2,400 acres.” It was shown that town tract, as mentioned in this deed, embraced all of the land of Sewell in that immediate locality, and which was described in the commissioner’s report to partition the estate of Sewell as being one tract adjoining the town of Jackson, and containing about 2,500 acres. This tract was divided into two tracts, one of which was subsequently designated as the “Town Tract,” containing 1,018 acres, and the other containing 1,482 acres. We are satisfic'd from the evidence and exhibits in this case that the deed to Vivion was intended to and did embrace the land in contest. The other legal question presented by this appeal is whether appellant is protected by the statutes of limitation. Appellee w7as in possession at the time of the bringing of this suit, and had been for five or six years before. Appellant had never been in possession of the land. Appellee brought the suit to quiet his title against appellant’s claim, — 180 — appellee asserting title for himself. Appellant set up his claim under the deed from O. B. W.> Rewell. Appellee, replying, sought to avoid the* effect of this deed by showing that it was fraudulent and voluntary. Appellant pleaded that this deed had.been made in 1884, and that, as more (han 10 years had elapsed from that time before- tin* tiling of (lie suit, (he s(atu(es of limitation against relief, when based upon fraud or mistake, ojierated to perfect liis title. The argument is a novel one. It is that one out of possession, claiming a right to possession" under a fraudulent and void conveyance it may be, can have such conveyance ripened by time into a perfect one; that ft: may sustain an action of ejectment against, one* originally having the better title and in possession. The position is fallacious. The statutes of limita!ion do not apply fas respects property) to any one* not in possession. The jdea is a defense toward maintaining tlu* status quo. A mere claim, for whatever "time, unaccompanied by actual possession, can give no right under the statute. Tlx* judgment of the circuit court was to the1 effect that apjiellee, under tlx* Vivion deed, took the better title, and that judgment is affirmed.