Parker v. Foy

Simrall, J.: John Parker exhibited his bill in the chancery court, against Foy and Florer, in which he states that on the 2d of September, 1858, he sold aqd conveyed to Foy, a certain tract of land ; that on the same day, Foy made and delivered to him his five several promissory notes for $1,200, payable annually, from the first of January, 1859, respectively. All of the notes, except the last one, maturing the first January, 1864, have been paid. That on the — day of-, A. D., 1865, Foy sold and conveyed this land to Florer; that Florer had notice chat the note due first of January, 1864, was unpaid, and was for part of the purchase money due from his vendor to Parker. Pro oonfesso was taken against Foy. Florer answered, denying notice of the existence of the .note, or that any part of the purchase money was due from Foy to Parker, claiming protection as an innocent purchaser, for valuable consideration, without knowledge of the claim and equity of Parker. On final hearing, on the pleadings and evidence, a decree was rendered against Foy for the amount found due on his last installment of the purchase money, represented by his note to Parker, and the land was subjected for the sum of $600 in favor of Parker as against Florer. From this decree, Parker has appealed, and Florer also, has prosecuted a cross appeal, both of which have been submitted to us as one case. It is insisted in this court for Parker, that the decree against Florer is, under the law and facts, for two small an amount. And it is insisted for Florer, that there is no lien on the lands in favor of Parker, and that the bill ought, as to him, to have been dismissed, he being an innocent purchaser without notice. The proposition was pressed by the counsel for Florer in [265] the argument at the bar, that inasmuch as the deed from Parker to Foy, recited that the consideration had been paid, etc., that such recital operated as an estoppel upon Parker. And in support of this 1 Green. Ev., § 21, p. 23, was referred to. In a note appended to § 26, p. 33, there is a very full collection of American cases, “which treat this recital in the deed as only prima faeie evidence of payment. ” Such is the rule in the New England states, in New York, Pennsylvania, Maryland, Virginia, Tennessee, Kentucky, and South Carolina; North Carolina seems to be the only exception. In Louisiana it is regulated by positive law. The defense of innocent purchaser is only complete, by avering and showing that the consideration was valuable, that it was bona fide paid. It is not enough to show that it was secured to be paid. Moon v. Mahon, 1 Ch. Ca., 34; Day v. Arnold, Hard., 310; Hardington v. Nichols, 3 Atk., 304; Maloney v. Kenman, 2 D. & W., 31; 3 Atk., 814. If the purchaser had notice before execution of the deed, or payment of the purchase money he will be bound by it, Lady Rodman v. Vandearly, 1 Vernon, 179; Jones v. Thomas, 3 P. Williams, 243; Strong v. Lord Winsor, 3 Atkyns, 630. In order to the protection, the purchase must be complete before notice of the prior equity. To make it complete, there must be on the one side, an execution of the conveyance, and on the other, a payment of the whole of the purchase money, and the protection will be denied if the notice be given before the transaction is complete in either particular. Simmons v. Richardson, 2 Litt., 220; Nantz v. McPherson, 7 Munford, 599; Pillow v. Shannon, 3 Yerger, 308; Bush v. Bush, 3 Strob. Equity. 301; Barrett v. Nosworthy, 2 Lead. Cases in Equity, 90, et sequiter and cases cited. If the sub-vendee has notice of the lien in favor of the original vendor, before he receives a deed and acquires the legal title; then the lien attaches to the land, and it may be subjected to the payment of the original purchase money. Subject, however, to a superior equity in favor of the subvendee, to be reimbursed, the purchase money paid, which [266] will be treated as a lien paramount to the original vendor’s equity. If the notice is not received until after the deed has been executed, then the land is only bound in the hands of the sub-vendee for the amount of the purchase money due from the sub-vendee to his vendor at the time of receipt of the notice. All payments made before notice, were innocently made, and as to them, the sub-purchaser is entitled to protection. Payments made after notice, however, were paid in the party’s own wrong, with knowledge of the prior outstanding equity. A sub-vendee taking the legal title to land, charged with a vendor’s lien, and with notice, accepts the title Gum onere, and is in no better position than the origr inal purchaser, as against whom the lien was raised or implied. His condition is no better than if the lien were express, and registered in the proper office for recording such papers. 2d. As to the character of the notice, the principle seems to be pretty well established by authority, that whatever is enough to excite attention or put the party on inquiry, is notice of everything to which the inquiry might have led. Sufficient information to lead to a fact, shall be deemed sufficient to charge a party with knowledge of it. Kennedy v. Green, 3 My. & K. R., 719; Ploughby, 1 Gallison, 41; Hinde v. Vattier, 1 McLain, 128; Carr v. Hilton, 1 Curtis C. C. Rep., 393; Wailes v. Cooper, 24 Miss. Rep., 228. In this last case the court say, “that if the title deeds under which a purchaser derives title recite an incumbrance, he will be bound by that recital, and presumed to have had notice of it whether he read it or not.” The incumbrance referred to was a mortgage which was not recorded at the date of the purchase. The court say in reference to verbal notice, “ that a party may, perhaps, disregard a mere floating rumor, circulated by irresponsible persons.” From a careful examination of the testimony we are satisfied that Florer had direct and positive information that part of the purchase money to Parker was unpaid. Leachman, who was the attorney for Florer to examine the [267] title, deposes that a written memorandum of the sale was entered into between Parker and Foy, at which time from three hundred to five hundred dollars was paid by Foy; about two or three weeks afterward the deed was executed. Leachman, before the deed was executed, asked Foy if he had paid off the purchase money for the lands. Foy replied he still owed five or six hundred dollars, which he had arranged with Parker, or would pay out of the money coming from Fiorer; witness thinks Fiorer was present. Whitaker swears that Fiorer admitted that he had notice from Foy that there was a balance of $600 due Parker, and that this notice came to him before he paid for the land. The notice to Fiorer was sufficient to put him on inquiry. There could have been no difficulty in applying to the right person and being correctly informed of the amount of the vendor’s lien. He does not appear to have taken any pains to obtain correct and reliable knowledge. After this information he paid the residue of his purchase money to Foy. He failed even to see to it that the $600 which he was informed was due to Parker was retained or applied as a credit on Parker’s claim. He may have been misled and deceived by Foy, who said he would provide for what was due to Parker. But from the moment that he had such information as would put a man of ordinary prudence and care on investigation — information not derived from vague and loose “ rumor,” but from persons connected with the transaction — he is chargeable with knowledge of the truth to which he could have attained. That truth would have been that the last installment of $1,200 was still unpaid to Parker. In these circumstances the lien of the vendor attached to the land to the extent of the unpaid purchase money owing from him to Foy. But inasmuch as the record does not show the exact amount due at the time he had notice, and as the true balance may, with reasonable certainty, be ascertained, we reverse the decree and remand, with instructions to the court below to ascertain what amount was paid to Foy by Fiorer at the date of his purchase and before notice of the claim of [268] Parker, and to deduct that sum from the whole amount of the sum to be paid by Florer to Foy, and for such balance decree against Florer and the land, etc. Decree Reversed.