Wells v. Pierce

Bell, J. The facts stated in the bill are to be taken as admittted, according to the allegations, upon a demurrer. Mitf. Eq. PI. 14; Welf. Eq. PI. 261; Story Eqf PL 292. The substance of the bill is, that the defendant attached the lands now in suit, then owned by P. P. Wood, subject to mortgages, and the stock in trade of Wood & Quimby, to secure a debt of Chapman & Pierce, of which firm the defendant is surviving partner. He, with others, acting as a committee of the Boston creditors of Wood & Q,uimby, investigated the affairs of Wood & Q,uimby, and agreed with them that they should give up their rights to the property attached, and the committee should sell it as they should think proper, and divide the procéeds ratably among the Boston creditors; and Wood, and Wood & Q,uimby should make the proper conveyances to the purchasers. This arrangement was acceded to by Wood & Quimby, and the committee agreed to sell the whole property to one Fur-bush, at a price agreed on between the committee and him. — 509 — Wood & Q,uimby made to Furbush such conveyances as the committee requested, and under their direction; and Furbush. paid to the committee the price agreed on, and the attachments were discharged. The title of Furbush to a part of this land has since passed, by several intermediate conveyances, to the complainant, who is now in possession. Some years after these transactions, Pierce recovered a judgment against Wood & Q,uimby, for a debt alleged to be due before the sale to Furbush, and has levied his execution upon the land purchased by the complainant at second hand from Furbush, as the property of Wood; and is now pressing a suit at law for the recovery of this property. The conveyances, under which the complainant claims to hold this property, are all set up as founded on good consideration, and executed in good faith, and at this stage of the proceedings they are to be so regarded. Many facts, real or supposed, are alluded to in the argument, which do not appear on the face of the bill, and which cannot be inferred from anything there stated; such as that the complainant was counsel in a former suit, and was notified that there was fraud in the settlement, upon which the conveyance was made to Furbush; that the complainant’s purchase was made pending the defendants’ attachment, &c. These matters cannot be assumed by the court to be facts in this case. They were neither alleged, admitted, nor proved. If they should hereafter appear to be facts, they may be very Important to the decision of this case, but as they are not stated in the bill, they can be brought into the case only by the defendants’ answer. It would be entirely unsafe for the court to assume that the facts appearing in another case decided by them, are facts existing in the case now before them, unless that appears to be the case by the allegations or admissions of the parties. Upon the facts admitted by the demurrer, the first question is, whether the complainant has any equitable ground upon which he is entitled to ask the interposition of a court — 510 — of equity. It is a principle of equity, that if a man, who has a right to a particular property, is present at the sale of that property by another, and he does not forbid the sale, or give notice of his claim, he will not be permitted to set up his title or claim against the purchaser; provided he was aware of what was doing, had knowledge of his rights, or such information as ought to have put him on inquiry, and the purchaser had no knowledge or reason to suspect his claim. Fonb. Eq.B. 1 ch. 3, § 4; Story Eq. Jur. § 384 and seq.; Mad. Ch. Pr. 264. There is no principle better established, says Chancellor Kent, in Wendell v. Van Ransellaer, 1 Johns, ch. 354, in this court, nor one founded on more solid considerations of equity and public utility than that which declares, that if one man knowingly, though he does it passively, by looking on, suffers another to purchase and expend money on land, under an erroneous opinion of title, without making known his claim, he shall not afterwards be permitted to exercise his legal right against such person. It would be an act of fraud and injustice, and his conscience is bound by the equitable estoppel. Qui tacet, consentiré videtur. Qui potest et debet vetare jubet. This principle is recognized in this State, in Watkins v. Peck, 13 N. H. Rep. 360, and in Marshall v. Pierce, 12 N. H. Rep. 127, and other cases there cited. Upon the facts stated in the bill, we see no ground on which the complainant can be deprived of the protection of this rule. The defendant had then the same claim under which he has since made his levy; he had an actual attachment upon this property, which he withdrew; he had occasion to investigate, and had actually investigated, the affairs of Wood and Plumer, of which the state of this property was a material part. There is nothing to lead to the belief that he did not then know, or at least have good ground to suspect, all that he has since known about it. But the ca.se of the defendant, upon the facts admitted — 511 — by the demurrer, falls within another principle of equity, which we think clear. If the owner or claimant of property actively persuades or encourages another person, who is ignorant of his right, to purchase the property, or any right or interest in it, he will not be permitted to claim the property, or any right in it, against the purchaser; though he was not aware of his rights. It will be reckoned his fault, that he did not inquire what his rights were. Hobbs v. Norton, 1 Vt. Rep. 136; S. C. 2 Chan. Ca. 128; Hunsdon v. Cheney, 2 Vt. Rep. 150; Teasdale v. Teasdale, Sel. Ch. Ca. 59; S. C. 13 Vin. Ab. 539, pl. 4; and 1 Fonb. Eq. 151 n.; M’Eloy v. Truby, 4 W. & S. 323; Skining v. Neufoille, 2 Dess. 194; Aills v. Graham, 6 Litt. 440; Lassell v. Barnard, 1 Blackf. 150; Storrs v. Barker, 6 Johns. Ch. 166; Dennison v. Ely, 1 Barb. S. C. 610; 1 Story Eq. Jur. 377. This principle is recognized here, in Marshall v. Pierce, 12 N. H. Rep. 133, though expressed with a doubt in the marginal note. Here it is distinctly alleged that the bargain for the sale of the property of Wood & Q,uimby was made, not by Wood & Q.uimby, but by the committee, Pierce, Howe and Ammidown, in pursuance of the agreement that they should sell it; the price was fixed by them, and was received by them. The conveyance made by Wood to Furbush, was at t|ieir request, and agreeably to their direction. After such a participation in the sale of this property, it must be deemed a fraud in the defendant, without any excuse or justification, for none appears in the bill, to set up a claim to this property, of earlier date than Furbush’s purchase. And it is one of the cases where the party should be estopped to claim his legal rights. It was gross negligence in him to take the active part he did in making this sale, without inquiring what his rights were. And gross negligence is regarded in equity as closely allied to fraud. II. But it is objected, that the complainant has an effectual and complete remedy at law, for the injustice of which — 512 — he complains in his bill. This court has a broad jurisdiction, as a court of equity, in all cases of trust, fraud, accidents or mistakes. Rev. Stat. ch. 171, § 6. The limits of their jurisdiction in these cases are coextensive with those of the court of chancery, and other courts of equity in England. Equity, as a great branch of the law of their native country, was brought over by the colonists, and has always existed as a part of the common law, in its broadest sense, in New Hampshire. While our territory was under the colonial government of Massachusetts, there is reason to believe that the general court exercised original chancery jurisdiction. Wash. Jud. His. of Mass. 34; An. Charters of Mass. 94. Under the first royal governor of this province, Robert Mason was appointed Chancellor of the province, and among the early records are to be found bills in equity, which were heard and decided before him. 1 Belk. His. 198 and 200. In 1692, by “ an act for establishing courts of judicature,” it was "provided, that “ there shall be a court of chancery within this province, which said court shall have power to hear and determine all matters of equity, and shall be esteemed and accounted the high court of chancery of this province, that the governor and council be the said high court of chancery,” &c. It is not known that this law was ever repealed, and it is supposed that the governor and council, who composed the court of appeals, continued to exercise chancery powers till the revolution. Equity having thus always constituted a part of the law of New Hampshire, though there was a long period after the revolution when there was no chancery court, and the jurisdiction conferred on this court in 1832 being as broad as equity itself, the question whether this court will lose their jurisdiction, because there is an adequate remedy at law, is to be decided here as it would be in England. If courts of equity had jurisdiction in certain cases, for which the ordinary proceedings at common law did not then afford an adequate remedy, that jurisdiction will not be lost, because au — 513 — thority to decide in such cases has been conferred on courts of law by statute, unless there are negative words, excluding the jurisdiction of courts of equity. King v, Baldwin, 17 Johns. 384; Varet v. Ins. Co., 7 Paige 560; 2 U. S. Eq. Dig. Jurisdiction, III; Cram v. Barnes, 1 Md. Ch. Dec. 151. Neither will the. jurisdiction in equity be impaired by the fact that equitable principles have been adopted in the courts of law, either from necessity, in the absence of equitable tribunals, as in Pennsylvania, and heretofore in this State, or otherwise. Sailly v. Elmore, 2 Paige 497; Mintura v. Farmer’s Loan, 3 Comst. 501; Wesley Church v. Moore, 10 Ban. 273. The equitable principles before stated, it is believed, have not been generally adopted at law in the case of real estate. Storrs v. Barker 6 Johns. Ch. 166; Heard v. Hall, 16 Pick. 460; though they are said to have been adopted in reference to personal property at law. Pickard v. Sears, 6 Ad. & E. 474; Thompson v. Sanborn, 11 N. H. Rep. 201; see Marshall v. Pierce, 12 N. H. Rep. 167. If the case of Ranlet v. Otis, 2 N. H. Rep. 167, were to be considered a case where the equitable rule was adopted at law, it would have little weight upon this question, since it was decided while no court of equity existed in New Hampshire, and while the courts were compelled to adopt equitible rules to prevent injustice. It has no tendency to prove that the same rule prevailed in courts of law differently situated. If it were to be held that the same rules of decision exist in these cases at law as in equity, it would by no means follow that a party has that plain and adequate remedy at law which would prevent a resort to a bill in equity. A party is entitled, not merely to the principles of equity, but he may claim the advantages of the modes of proceeding, and the course of practice adopted in those courts. It is well known that equitable relief can be but very imperfectly obtained in courts of law, because the powers of those — 514 — courts, and their modes of practice, are ill adapted for that purpose. In the investigation of all questions of fraud, the discovery by the oath of the party is one of the effectual means for its detection. The common law affords no means of obtaining such discovery, and the recent statutory provisions are but an untried experiment, which may fall much short of the discovery in chancery. Our opinion, then, is, that the complainant is not to be sent elsewhere for justice, under the idea that he has a plain and adequate remedy at law. III. Our view as to the second ground of demurrer is equally an answer to the third. IY. It is said that the title set up as a legal title has never been established at law. This objection seems to us to be met by the view of the equitable ground on which the complainant’s case rests, as already stated. He asks relief from the court, not on the ground that he has a legal title, but on the ground that, whether it is legal or otherwise, the defendant has taken such part in the proceedings relative to the sale to Furbush, that he has no equitable claim to be heard on that point. Demurrer overruled.