Chapman v. Sims

Campbell, J., delivered the opinion of the court. The children of John H. Sims, deceased, who claim to be the real owners of certain land, which their father owned at his death, exhibited their bill in chancery, to vacate certain deeds as clouds on their title, alleging that Thomas Sims, executor of their father’s will, had by falsehood and fraud obtained an order of the Probate Court to sell the land, and that said order was void; but that said executor, proceeding under it, sold the land, and himself became the purchaser of it, at an inadequate price, through the intervention of another person, who bid off the land and received a deed from the executor, and the next day conveyed it to the executor, who, after holding” it awhile, conveyed it to his wife and children, reserving to himself the power to dispose of it as trustee for his wife and children; and that, subsequently, said Thomas Sims, as trustee for his wife and children, sold and conveyed to W. D. Ander — 164 — son part of said land, and that Anderson now holds that part, and the remainder is held by the wife and children of Thomas Sims. A demurrer to the bill was sustained, so far as to dismiss all of said bill except the charge of fraud in obtaining title by Thomas Sims to said land. The remainder of the bill was answered, and all charges of fraud were denied, and Anderson claimed to have purchased in good faith, for a full price paid at the date of his deed, and without any notice of the claim of the complainants. Upon final hearing, on pleadings and evidence, it was decreed that Anderson should be protected in his title to the land he purchased, and that, as to all others, the decree of sale, and all other proceedings and deeds, by which the title to the remaining portion of said land was in the wife and children of Thomas Sims, should be cancelled and annulled. Sarah M. Chapman and the co-complainants appealed from so much of the decree as secured Anderson in his title, and Thomas Sims and others appealed from the other part of the decree. We will not disturb the finding of the Chancellor against the title acquired by Thomas Sims, under his sale as executor, but the form of the decree is not correct with reference to the decree in favor of Anderson. It should not vacate and annul the order of sale and deeds, but should declare the wife and children of Thomas Sims trustees of the legal title for the complainants in the bill, and direct a conveyance. It was proper also to have discharged Thomas Sims, as executor, from the charge of the purchase-money of the land in his report to the court, and accounts as executor. In the circumstances of this case, the answer of Anderson is sufficient to uphold the decree in his favor. The bill discloses a perfect legal title, according to the decree of the Chancellor on demurrer, which is not complained of, in Anderson as grantee of Thomas Sims. That is sufficient to protect him, unless he had notice of the fraudulent conduct of Thomas Sims, as executor. Anderson affirms his purchase, and payment for the land in good faith, without notice of any claim of the complainants. The bill sets forth the deed to Anderson, and shows a perfect legal title in him. The only issue, then, was as to notice to Anderson of the claim of the complainants. There was no evidence of such notice, as matter of fact. But — 165 — it is zealously urged that the muniments of title, through which Anderson derived title, consisting of the record of the probate proceeding for sale, and the deed from Sims, executor, to McPherson, the bidder, and McPherson’s deed to Sims, are sufficient to charge Anderson with notice, and place him exactly in the shoes of Sims, the executor. As already stated, the record of the Probate Court is all right, as decided in this case by the Chancellor, whose decree in this respect is not complained of. The deed from McPherson to Sims is a mere quitclaim deed, and it is said that, as there is such a deed in the chain of Anderson’s title, he cannot be held to occupy the position of a bona fide purchaser. The cases cited in support of this legal proposition are Smith v. Winston, 2 How. (Miss.) 601; Kerr v. Freeman, 33 Miss. 292; Learned v. Corley, 43 Miss. 687; Oliver v. Piatt, 3 How. (U. S.) 333, 410; May v. Le Claire, 11 Wall. 217, 232 ; Woodfolk v. Blount, 3 Hayw. 147. In Smith v. Winston the point under consideration was, whether failure of consideration could be set up by a vendee under deed, without covenants of warranty, as a defence to the recovery of the purchase-money he had promised. It would seem that to suggest the question was to indicate the proper answer to it; but the learned judge, delivering the opinion, discussed the question at length, and, among many other things, said, “ In a quitclaim deed, the party does nothing more than to acquit the grantee from any title or right of action which he may have ; and the fact of taking nothing more than a quitclaim would, in general, imply a knowledge of doubtful title.” Again, he remarked, “ The law seems to be well settled, that a purchaser without covenants takes all the risk of title.” The remark last quoted was pertinent, and all that was necessary to dispose of the point. It is indisputable that a purchaser without covenants takes all the risk of title, so far as any right to call on his vendor to indemnify him for a failure of title is involved. We are not able to perceive the appropriateness of the above-quoted statement, that “ the fact of taking nothing more than a quitclaim would, in general, imply a knowledge of doubtful title.” Knowledge or want of it could in no way affect the question being discussed. It was not the case of one claiming as a bona fide purchaser. That — 166 — case is not an authority in support of the proposition for which it has been invoked. The case of Kerr v. Freeman is that of a complainant, claiming land under a quitclaim deed, seeking the cancellation of certain deeds operating as clouds on his title. The judge delivering the opinion, speaking of the complainant’s quitclaim deed, said, “ His deed merely shows a doubtful title,” but it was not said that, because the complainant held under a quitclaim, he could not maintain his bill. On the contrary, the question, “ whether the decree is sustained by the evidence in the cause,” was minutely discussed, and the conclusion announced that it was insufficient to warrant the decree. If it be true, as a legal proposition, that a title evidenced only by a quitclaim deed is not sufficient to support a claim to have clouds removed from it, the announcement of that proposition was enough to dispose of the case, and render an examination of the evidence unnecessary. This ease is not an authority for the proposition that a vendee by quitclaim cannot be regarded as a bona fide purchaser. Learned v. Corley contains this expression, “A quitclaim deed implies a doubtful title.” But that was not pronounced sufficient, of itself, to deprive the grantee of his claim to be a bona fide purchaser. It seems rather to have been treated as a significant circumstance in the history of the case, fit to be considered, with other circumstances, all of which combined were held to deprive the holder of his claim as a purchaser in good faith. In Oliver v. Piatt this language is found: “Another significant circumstance is, that this very agreement contained a stipulation that Oliver should give a quitclaim deed only for the tracts; and the subsequent deeds given by Oliver to him, accordingly, were drawn up without any covenants of warranty, except against persons claiming under Oliver, or his heirs and assigns. In legal effect, therefore, they did convey no more than Oliver’s right, title, and interest in the property; and, under such circumstances, it is difficult to conceive how he can claim protection as a bona fide purchaser,” &c. It is observable that the quitclaim deed, in pursuance of a previous stipulation for such a one, was declared to be a “ significant circumstance,” in connection with others in themselves sufficient to deprive the grantee of his claim to be treated as a bona fide purchaser. The — 167 — quitclaim deed is not pronounced to be per se enough to rob its holder of the character of a bona fide purchaser. In May v. Le Claire this language is used: “ The evidence satisfies us that Cook had full notice of the frauds of Powers, and of the infirmities of Dessaint’s title. Whether this were so or not, having acquired his title by a quitclaim deed, he cannot be regarded as a bona fide purchaser without notice. In such cases the conveyance passes the title as the grantor held it, and the grantee takes only what the grantor could lawfully convey.” And Oliver v. Piatt, 3 How. (U. S.) 333, is referred to in support of the proposition. No other authority is cited. After declaring “ that Cook had full notice of the frauds of Powers, and of the infirmities of Dessaint’s title,” it was surely unnecessary to say more, and the remark about the quitclaim deed is as perfect a specimen of an obiter dictum, as the books afford. We have above shown that the single case cited in support of this dictum, merely treated the quitclaim in that case as a “ significant circumstance,” and did not announce that it alone was in itself a bar to the claim to be a bona fide purchaser. In Woodfolk v. Blount, the court, hesitatingly and doubtfully, suggested that, perhaps, “ the vendee in all eases, when he receives but a special warranty or quitclaim conveyance, takes the estate subject to all the disadvantages that it was liable to in the hands of the vendor, and the law will presume notice of all incumbrances, either legal or equitable. The circumstance of a vendor refusing to make a full and ordinary assurance is sufficient to excite suspicion and put the party upon inquiry.” Not a single authority is referred to, except eases on the subject of “indorsement of a bill without recourse after it is due,” which hold that the indorsee takes subject to all equities. The language immediately afterwards used in the opinion is : “The principles in relation to conveyances of real property with special warranty, perhaps, will be found equally applicable. However, it is not necessary to give a positive opinion on this subject.” It is just to assume that the judge delivering that opinion would have cited some text-book or adjudication, if he could have found one to sustain the view he expressed. His citation of cases of indorsements of bills after maturity shows his anxiety on the subject, and suggests his inability to find any authority in point. — 168 — We conclude that there is no authority for the proposition that a quitclaim deed in the chain of title deprives him who claims under it of the character of a bona fide purchaser. There are ■dicta and suggestions and inferences to that effect. But we deny and repudiate the proposition as unsound and insupportable on authority, principle, or policy. We concede' that, under some circumstances, a quitclaim deed may be a “ significant circumstance ” in the consideration of a combination of circumstances of which it may be a part, but this is the greatest force it can possibly have in any ease. Rawle, in his valuable work on “ Covenants for Title,’’quoting the remark of Story, J., in Oliver v. Piatt, ubi supra, referring to the deed with special warranty, that it wus a “ significant circumstance ” in affecting a purchaser with notice of a paramount title, says, “But there would appear to be equal reason for the opposite argument, that a deed with general warranty was as significant a circumstance, that unless there had been something wrong about the title, the purchaser would not have demanded a general covenant, and that he intended to run the risk of the defect, and rely on the covenant for his protection. In the absence of local usage, it would seem that no presumption of notice can properly arise, either from the absence or presence of unlimited covenants.” Rawle on Covenants for Title (4th ed.), 35. This learned author in a note refers to Woodfolk v. Blount, ubi supra, in the same connection. No other case is referred to. There is no reference to the subject of a distinction between quitclaim deeds or deeds with special covenants, and those with general covenants of warranty, as a protection to bona fide purchasers, or as a significant circumstance to put one on inquiry, in the full and learned discussion of bona fide purchasers by the English and American editors of Leading Cases in Equity, in connection with the case of Basset v. Nosworthy, 2 Lead. Cas. in Eq. (3d Am. ed.) 101, except to remark, “ But there is some difficulty in assenting to a dictum in Oliver v. Piatt, 3 How. 333, that taking a deed with a covenant of special warranty is sufficient to show a doubt of the warrantor’s title,” &c. The case of Le Neve v. Le Neve, 2 Lead. Cas. in Eq. 127 et seq., presents an exhaustive discussion of the subject of notice, as considered by the — 169 — English and American adjudications, and nowhere among them is a distinction between a quitclaim and a warranty deed adverted to as affecting a holder with notice or putting him on inquiry. Nor is there any reason for such a distinction. A covenant of warranty does not convey title. It cannot enlarge a title conveyed by the deed in which it is inserted. It is no more than a covenant to indemnify against failure of title by eviction, actual or constructive. A quitclaim deed is as effectual to convey title as one with general warranty. Under our statute it has the same effect to “ estop the grantor and his heirs from asserting a subsequently acquired adverse title to the lands conveyed ” as a deed with covenants of general warranty has. Code, § 2300, copied from the Code of 1867. If the vendor has a good title, a covenant of warranty is useless to the vendee, but if the vendee doubts it or does not know of it, he quite naturally exacts a covenant of warranty for his indemnity, and there is force in the suggestion of Eawle, quoted above, that requiring a covenant of warranty, if any presumption arises from it, is rather calculated to suggest either a doubt of the title or carelessness and indifference about it, and a looking to the covenant of warranty for indemnity against possible failure of title. In Cresson v. Miller, 2 Watts, 272, it was argued by counsel that, because the deed under which a party claimed contained a general warranty, the purchaser could not claim to be a bona fide purchaser without notice. The judge responded that he had looked into the cases, and failed to “ find a trace of such a distinction; it has also escaped the research of the learned counsel; and it seems to me that it is as unsupported by reason and policy as by authority.” So we say, and we fully approve and adopt the language of Rawle, quoted above, “ In the absence of local usage, it would seem that no presumption of notice can properly arise, either from the absence or presence of unlimited covenants.” Such a doctrine, as that a quitclaim conveyance in the chain of title affects the party who claims under it with notice of infirmities in the title, would be as impolitic as it is unsupported by reason or authority. A very large number of titles depend on conveyances without any covenants of warranty. To say nothing of patents and grants by the United — 170 — States and the State, and deeds by sheriffs, tax-collectors, commissioners under decrees, trustees, executors, administrators and guardians, there are many conveyances between private individuals which do not contain covenants of warranty. Conveyances by parents to children, and by husbands to wives, we suppose, rarely contain covenants of warranty. In the several cases in which it has been said that a quitclaim deed is evidence of a doubtful title, the controversy was with the grantee in such deed. We have shown it to be erroneous even then. But in the case at bar the deed to Anderson contains a covenant of general warranty, and the quitclaim was to his vendor. If it were true that his vendor was deprived of the character of a bona fide purchaser, because he held by quitclaim, according to the dieta we have been combating, the bona fides of Anderson, as indicated by his taking a deed with covenant of general warranty, should protect him against the mala fides of his vendor. The decree in favor of Anderson is correct. The decree will be reversed, and a decree entered here, dismissing the bill as to Anderson, and declaring the wife and children of Thomas Sims trustees of the title of that land not conveyed to Anderson, and directing a conveyance to be made by them to the complainants, who are children of John H. Sims, deceased, and appointing a commissioner to execute such conveyance, and discharging Thomas Sims, executor, from the charge of the purchase-money of the land in his accounts as executor. The costs of both appeals will be taxed on Sarah M. Chapman and her co-complainants, and Anderson’s costs, in both courts, will be taxed against them.