Johnson v. Georgia Loan & Trust Co.

PARDEE, Circuit Judge, after stating the facts, delivered the opinion of the court. There is evidence in the record, pointed out in the briefs of appellant, tending very strongly to show that Armistead had actual notice of the conveyance under which appellant claims, and a very strong argument is presented to show that he was charged with constructive notice; but on both propositions the master and the Circuit Court found in Armistead’s favor. If the fact that Armistead was a purchaser without actual or constructive notice gave him title to the lands in controversy as against the prior conveyance to the Georgia Loan & Trust Company, we should, under the evidence and the perhaps misleading mistake in the description in the deed, feel concluded from going into the matter. But the absence of notice will not alone protect Armistead as a purchaser. He must be a bona fide purchaser for value. In his answer he says that Jep White bought the land of Martin for the price of $20 per acre, allowed as a credit • on a note held by White against Martin, and entered in his own right, having bought said land bona fide, for full value, without notice, etc., and that Jesse White sold the land to Norville for full value bona fide and executed deed therefor, and that Norville bought said land bona fide, for full value, in the utmost good faith, etc., and that he (Armistead) bought the land from Norville in the utmost good faith, bona fide, and for full value. Nowhere in his answer does Armistead aver that either he or White or Norville ever paid any actual price or consideration in any of the several alleged purchases. He attaches to his answer certified copies of a warranty deed from Martin to White, reciting a consideration paid of $1,500, and a “quitclaim and forever defend” deed from Norville to Armistead, reciting .a consideration of $1,500. The record does not 'show that on the hearing before the master the above-mentioned deeds were offered in evidence, but the appellees’ counsel claims that copies of the deeds attached to the answer were by agreement used in lieu of originals, and the master in his report treats the said copies as in evidence. [597] If the said copies were duly offered in evidence or were put in by agreement, no effort was made or evidence offered to supplement them with proof as' to any actual payment of any consideration. In his findings of facts, the master says that “in the absence of evidence to the contrary it is assumed that the consideration expressed in the deeds was actually paid for the land,” evidently considering that the recitals in the deeds imported full, proof. In his third conclusion of law the master finds that the defendant Armistead is a bona fide purchaser, for a valuable consideration, without notice, etc. In Boone v. Chiles, 10 Pet. 177, 211, 9 L. Ed. 388, an elaborately argued and considered case, it was held that a bona fide purchaser will not be protected on mere averment or allegation. “The answer setting it up is no evidence against the plaintiff, who is not bound to contradict or rebut it. [Simon v. Hart] 14 Johns. 63, 74; [Payne v. Coles] 1 Munf. 396, 397; [Clason v. Morris] 10 Johns. 544, 548; [Leeds v. Ins. Co.] 2 Wheat. 383 [4 L. Ed. 266]; [Lenox v. Prout] 3 Wheat. 527 [4 L. Ed. 449]; [Hughes v. Blake] 6 Wheat. 468 [5 L. Ed. 303]; [Smith v. Bruch] 1 Johns. Ch. 461. It must be established affirmatively by the defendant, independently of his oath. [James v. McKernon] 6 Johns. 559; [Green v. Hart] 1 Johns. 590; [Skinner v. White] 17 Johns. 367; [Anderson v. Roberts] 18 Johns. 532 [9 Am. Dec. 235]; [Hart v. Ten Eyck] 2 Johns. Ch. 87, 90; 4 Bro. C. C. 75; Amb. 589; 4 Ves. 404, 587; [Huntington v. Nicoll] 3 Johns. 583. In setting it up by plea or answer, it must state the deed of purchase, the date, parties, and contents briefly; that the vendor was seized in fee and in possession; the consideration must be stated, with a distinct averment that it was bona fide and truly paid, independently of the recital in the deed. Notice must be denied, previous to and down to the time of paying the money and the delivery of the deed; and, if notice is specially charged, the denial must be, of all circumstances, referred to, from which notice can be inferred; and the answer or plea show how the grantor acquired title. Sugden, 766, 770; 1 Atk. 384; 3 P. Wms. 2801, 243, 307; Ambl. 421; 2 Atk. 230; [Wormley v. Wormley] 8 Wheat. 449 [5 L. Ed. 651]; [Potter v. Gardner] 12 Wheat. 502 [6 L. Ed. 706] ; [Potter v. Gardner] 5 Pet. 718 [8 L. Ed. 285] ; [Jewett v. Palmer] 7 Johns. Ch. 67 [11 Am. Dec. 401], The title purchased must be apparently perfect, good at law, a vested estate in fee simple. [Wilson v. Mason] 1 Cranch, 100 [2 L. Ed. 29]; [Lambert v. Paine] 3 Cranch, 133, 135 [2 L. Ed. 377]; [Hurst v. McNeill] 1 Wash. C. C. 75 [Fed. Cas. No. 6,936]. It must be by a regular conveyance; for the purchaser of an equitable title holds it subject to the equities upon it in the hands of the vendor, and has no better standing in a court of equity. [Shirras v. Caig] 7 Cranch, 48 [3 L. Ed. 260] ; [Vattier v. Hinde] 7 Pet. 271 [8 L. Ed. 675] ; Sugden, 722. Such is the case which must be stated to give a defendant the benefit of an answer or plea of an innocent purchaser without notice. The case stated must be made out. Evidence will not be permitted to be given of any other matter not set out. [Vattier v. Hinde] 7 Pet. 271 [8 L. Ed. 675] ” [598] Boone v. Chiles has been cited, approved, followed, and distinguished in a long line of cases running through federal and state Reports to the present time (volume 3, Rose’s Notes, 559 et seq.), and the ruling above quoted has been particularly followed. Id. 562. Some of the cases are directly in point. In Smith v. Orton, 131 U. S. Append, lxxviii, it was held: “But, secondly, the rule which affords protection to a bona fide purchaser without notice has no application to this case. To bring the defense within it, it must be averred in the plea or answer, and proved, that the conveyance was by deed, that the vendor was seized of the legal title, and that all the purchase money was paid and paid before notice. There must not only be a distinct denial of notice before the purchase, but a denial of notice before payment. Even if the purchase money has been secured to be paid, yet if it be not in fact paid before notice, the plea of purchase for a valuable consideration will be overruled. Jewett v. Palmer, 7 Johns. Ch. 65, 11 Am. Dec. 401; Vattier v. Hinde, 7 Pet. 252, 271, 8 L. Ed. 675; Boone v. Chiles, 10 Pet. 177, 211, 9 L. Ed. 388; Story, Eq. Pl. §§ 805, 806.” In Simmons Creek Coal Co. v. Doran, 142 U. S. 437, 12 Sup. Ct. 239, 35 B. Ed. 1063, it was held that the recitals in deeds cannot be relied upon as proof of the payment of purchase money, citing Boone v. Chiles, and numerous other cases. In United States v. California, etc., Land Co., 148 U. S. 41, 13 Sup. Ct. 458, 37 L. Ed. 354, again Boone v. Chiles is approved. In Secombe v. Campbell (C. C.) 2 Fed. 358, the plea of innocent purchaser was held bad for not setting forth the amount of the consideration. In Morse v. Godfrey, 3 Story, 364, Fed. Cas. No. 9,856, it was held “that a transfer of property to secure an old debt will not make a party a bona fide purchaser.” In Curts v. Cisna, 7 Biss. 265, Fed. Cas. No. 3,507, it was held “that a purchaser under a contract for a deed is not protected as a bona fide purchaser.” In Nickerson v. Meacham (C. C.) 14 Fed. 884, Lakin v. Sierra Buttes Gold Mining Co. (C. C.) 25 Fed. 342, and Davis v. Ward, 109 Cal. 189, 41 Pac. 1010, 50 Am. St. Rep. 29, it was held that actual payment before notice must be shown. In Watkins v. Edwards, 23 Tex. 447, it was held that proof of the payment of purchase money apart from the acknowledgment in deed must be made. See, also, Brown v. Welch, 18 Ill, 346, 68 Am. Dec. 549Richards v. Snyder, 11 Or. 510, 6 Pac. 186. As Armistead failed to aver the payment of the purchase money within the rule laid down in Boone v. Chiles, and as he failed to prove such payment under any of the deeds relied on by him, he cannot be held to be an innocent purchaser for value in bar of appellant’s equities, although he may have had no notice, actual or constructive, of the prior deed to the Georgia Loan & Trust Company. J. J. Perry, claimant of 4(5 acres of the land in controversy, in an unsigned and unsworn answer, pleads a purchase from Armistead, “in the utmost good faith, bona fide, and paid full value for it without notice of any equity or claim of complainant or the Georgia Loan & Trust Company,” etc.; but he makes no proof to support his answer. The decree of the Circuit Court is reversed, and the cause is remanded, with instructions to decree for the complainant below, appellant here, substantially as prayed for in the bill, and against all the appellees in this appeal.