Flynt v. Hubbard

Chalmers, J., delivered the opinion of the court. This is a bill filed by Mrs. Nancy Hubbard against the heirs of her deceased son, Green Hubbard, and against his mortgagee, for the purpose of asserting in her own favor a resulting trust in a tract of land of which her son died seized, and which during his life he had mortgaged to one Flynt. The mother had entrusted to the son the money with which to complete the purchase of a half interest in a tract of land, known in the pleadings as the Tyler tract, the title to which was to be taken in her name. In violation of the trust, and without the knowledge of the mother, the title was taken by the son in his own name. Afterwards, with her consent, he exchanged the half interest in the Tyler tract for the tract in controversy, known as the Thomas place, but,, in making the exchange, received only a title-bond to the latter place, though the consideration for the exchange was paid in full.. The title-bond was taken, as the deed to the former place had been, in the son’s name, and thereafter it was held and occupied by him as his own, nor was it known outside the family that the mother had any claim upon it. Several years after he had taken possession, he borrowed from Flynt five hundred dollars, and to secure it executed a mortgage upon the land. Flynt had no notice of the mother’s claim, and supposed that the son had a deed. The son did receive a deed some years afterwards, about a month before his death, and it was not until after that event that this suit was brought and the mother’s claim for the first time disclosed. It is insisted for her, that, inasmuch as, at the date of Flynt’s mortgage, Green Hubbard held only a title-bond to the land embraced in it, Flynt acquired a lien only on an equity, and that his equity must therefore be held subordinate to the prior equity of the complainant. • It is well settled that the purchaser of an equity is bound by all prior equities, though he has paid value and acquired [474] bis title in the utmost good faith; but it is equally well settled, at least by the great weight of authority, that under such circumstances he can defeat the prior equities by a subsequent acquisition of the legal title. 2 Eq. Lead. Cas. (4th Am. ed.), part 1, 47, and authorities cited. In this case Green Hubbard, who, at the date of the mortgage to Flynt, by reason of his complete payment of the purchase-money, was entitled, as against his vendor, to a conveyance of the legal title, obtained a deed before his death, and before the complainant had given any notice of her claim. This acquisition of the legal title inured, of course, to the benefit of his mortgagee, and converted that which had been a conveyance of an equity into a conveyance of the legal title, and thereby defeated the prior secret equity of the complainant, so far as the rights of the mortgagee are concerned. Mrs. Hubbard, therefore, is entitled to a decree, establishing a resulting trust against the heirs of her son, but not against his mortgagee. Decree reversed and decree here.