Ross v. Houston

Mr. Justice Yerger delivered the opinion of the court. James C. Alderson, by his agent, George West, became the purchaser at a sale made by virtue of an execution against Nathaniel Anderson of a tract oí land. This land he after-wards sold to the defendant, Houston, by a quitclaim deed, Houston being informed of. the manner in which Alderson acquired his title. The defendants, who are sued upon a writing obligatory given for the purchase-money, resist payment upon the ground, that they were deceived and defrauded by Alderson in the sale of the land, while they admit that Alderson only sold by a quitclaim deed, and that they knew he had obtained title to the land by virtue of an execution sale of it, as the property of Nathaniel Anderson; and that they took upon themselves the risk of the validity and legality of the execution, and the sale under it, so far as the proceedings connected with the sale disclosed upon their face the facts of [596] the case; yet they say, that the sale under the execution to Alderson was fraudulent and void, which fact was known to Alderson, but concealed by him from them. It appears from the pleadings and proof, that when the sale under the execution against Anderson was made, he was not the owner of the land, but had previously sold and conveyed it by deed to A. F. Hopkins & Co. It also appears, that West, the agent by whom Alderson purchased the land, had notice when he made the purchase for Alderson, that Anderson did not own the land, and that he had no interest in it. But it does not appear, that Alderson knew these facts when he sold to Houston; or that West, the agent, by whom he purchased, ever communicated to him the knowledge he had received on the subject; or that notice had ever been given to him at any time, that Anderson did not own the land, and that it belonged to A. F. Hopkins & Co. On this state of facts, it is contended by Houston and Cannon, that although Alderson did not have notice in fact, the notice given to West, the agent, was notice in law to Alderson of the title of Hopkins & Co.; and though he did not actually know, when he sold to the defendant, that the land belonged to Hopkins & Co., yet, as the agent through whom he became the owner of the land, did know this fact, the law will charge him with knowledge of all the facts of which his agent had notice. It is certainly true as a principle of law, founded upon reason and sound policy, that wherever a party purchases property through the agency of another, notice, communicated to that agent during the progress of that negotiation, of the rights of third parties to the property, will be held, in any controversy with such third parties in relation to it, as equivalent to direct notice to the principal. 2 Sugd. on Vend. 215. So, too, notice given to an agent employed to purchase property of any defect in the title or quality of the property, will be equivalent to notice of those facts to the principal, in any controversy that may arise between him and the vendor in relation to the property. We think it may also be fairly deduced from the adjudged [597] cases, and from principle, that if a party employ an agent to sell property, and notice be given to that agent of such defects in the title or quality of the estate, which, if known to the principal, it would have been bis duty to disclose to the purchaser, it would be the duty of the agent also to disclose them to the purchaser; and in the event of his,failure to do so, that the purchaser might be relieved from the contract in the same manner and to the same extent, that he would have been relieved, if the principal had known the facts, and made the sale without disclosing them; and this too, although the principal, when his agent made the sale, was ignorant of the defects, the title, or quality of the estate. This is certainly as far as any adjudged case, or any sound legal principle, would warrant the court in extending this doctrine of implied notice. But the case before us does not fall within the operation of either of the foregoing rules. On the contrary, the attempt is now made to extend the doctrine still further, and we are asked to declare not only, that notice given to an agent to buy property shall affect the conscience of the principal in every matter-touching the purchase of the property, and’the title thereby acquired, so far as the rights of third parties exist in relation to the property, but also that knowledge of defects in the title or quality of the estate thus possessed by an agent employed to purchase, shall be considered in law as made known, though in fact they were not made known, to the principal, so as to affect his conscience in any future sale he might make of the property. We do not believe either the law or sound policy will warrant such an extension of the rule. So far as the rule has heretofore been established, that notice to the agent shall be treated as notice to the principal, we are willing to enforce it, as a rule of sound policy, although in individual cases it may sometimes operate harshly. But we are not willing to extend it further than it has heretofore been carried; and we are, therefore, of opinion, that if Alderson, at the time he sold to Houston, did not know in fact that be had acquired no title to the land by the purchase under the execution [598] sale against Anderson, because the land belonged to A. F. Hopkins & Co., and not to Anderson; the notice of those facts given to West, the agent, by whom he purchased the land, will not be treated as implied notice, so as to affect his conscience in the subsequent sale made by him of the property, and thereby entitle the purchaser to insist upon an avoidance of his contract. As the circuit judge laid down the law differently, we must reverse the judgment, and remand the cause.