Hackett v. Callender

(In Chancery.) Chancery. Reasonable inquiry. Execution. E'otice. H. purchased and paid for land of which he took and kept the open and pub. lie possession, but the deed was taken in the name of F. E., an attorney, having demands against H. in his hands for collection, inquired of the latter if lie owned tie land, and lie replied in the negative. Subsequently E., having received a demand against E. for collection, and desiring to secure it by an attachment of the same land, inquired of H. if he owned it, and received the same reply, but he did not disclose to H. his purpose in making the inquiry, and intended not to do so. E. then caused the land to be attached and levied upon as the property of E.; Held, that the possession of the land by H. was sufficient notice of his equitable interest therein to put the creditors of E. upon inquiry before attaching it; and that under the circumstances, the last inquiry by E. of H., in regard to the title of the land, was not properly made, and that H.’s answer did not rebut the presumption of notice of his equitable interest raised by his possession of the land. When a person is inquired of as to a matter in respect to which his answer may aifect his pecuniary interests, he has a right to know whether the person making the inquiry has an interest which entitles him to make it, and what the object of the inquiry is, and that his answer will be relied upon. Unless correctly informed upon these points his answers will not affect his legal rights or pecuniary interests. If an attaching creditor has notice after his attachment but before levy, that the land attached does not belong to the debtor but to another person, though the record title is in the debtor, such notice, if true, will be sufficient to protect the equitable interest of the real owner against the levy.

The bill set forth that on the 2d of January, 1849, the orator purchased of the administrator of the estate of one I. W. Cushman certain lands in Middlehury, and paid for the same ; that the orator’s father, John Hackett, senior, and Royal Flint assisted the orator in raising a portion of the money to pay for such purchase, by signing with him, as his sureties, a note payable to one Darling, and another note payable to the Bank of Middlehury; that for the purpose of securing his father and Flint for becoming his sureties upon these notes he caused the deed of the land to be executed to them instead of to himself, under the agreement that the land should be held by them in the first instance as such security, and secondly in trust for the orator, and that they should convey the land to him upon his paying the notes signed by them as sureties; that the deed of said land to Flint and Hackett, senior, was duly recorded; that the prator entered into possession of the land at the date of that deed, and had ever since continued in possession thereof, had paid all the taxes thereon, and made improvements upon the same; that the orator had paid the note to the Bank of Middlehury, and was ready and willing to pay the note to Darling, as soon as the administrators of Hackett, senior, would execute to the orator a deed of their intestate’s interest in said land; that Flint, on the 15th of January, 1852, quitclaimed all his'title and interest in said land to your orator, by a deed of that date duly acknowledged and recorded; that the defendant Callender, by the defendant Wright, as his attorney, on the 5th of January, 1852, commenced a suit in his favor, upon a pre-existing debt, against Flint, who was then insolvent, and therein attached all the land in Middlebury as Flint’s property, in which suit he recovered judgment against Flint at the December Term, 1852, of the Addison county court, upon which an execution was issued, which, on the 21st of March, 1853, was levied upon a fractional portion of an undivided half of said land; that the defendant Wright, having in his hands, as attorney for Callender, another claim in favor of the latter against Flint, brought a suit thereon in his own name against Flint, on the 5th of January, 1852, returnable before a justice of the. peace, and therein also attached all the land in Middlebury as the property of Flint; that judgment was rendered on the 19th of March, 1852, in this suit in favor of Wright against Flint, and an execution was issued thereon, which, on the 21st of March, 1853, was also levied upon a fractional portion of an undivided half of said land; that Callender commenced an action of ejectment against the orator on the 1st of December, 1853, to recover the land on which his execution was levied as aforesaid, which action was pending when the bill in this case was brought; that Wright' had also commenced an action of ejectment against the orator to recover the land included in his levy, which was also pending, and that the orator was in danger of losing the title to his land by the judgment of the court of law in which these actions of ejectment were pending, for the reason that the record title of said land was in Flint and Hackett, senior, as aforesaid; that both of said judgments and levies belonged in fact to the defendant Callender, and that both of said actions of ejectment were, brought in his behalf and for his benefit; and that before the commencement of the said suits against Flint in favor of Callender and Wright, the latter had notice that the land in question was held by Hackett, senior, and Flint in trust for the orator, and that the orator, claimed it as his own. \ '.' The bill prayed for a decree that Callender and Wright should be enjoined from prosecuting their actions of ejectment for the land in question, and should release to the orator all claim to the land embraced in their levies ; that Flint and the administrators of Hackett, senior, should convey to the orator the said land upon the payment by the orator of the note held by Darling, and for further relief, etc. From the answers of the defendants and the testimony in the case, it appeared that all the allegations in the bill were sustained except that Wright in his testimony denied any notice to him, previous to the commencement of the suits against Flint, that Flint and Hackett, senior, held the title to the land in question merely in trust for the orator. The material portion of Wright’s testimony was that in May, 1849, having certain demands in his hands for collection against the orator, the latter informed him that he had no interest in the land in question; that in January, 1850, in a conversation with the orator about certain claims against him, the latter repeated that he did not own the lands in controversy ; that in 1852, and a few days before the attachments of the land were made in the suits against Flint, Wright, having the Callender demands in his hands for collection, inquired of the orator if he had any claim or title to the land deeded by the administrator of Cushman to Hackett, senior, and Flint, and that the orator replied that he had not, and that if Wright did not believe it he could go to the town clerk’s office, or the administrator of Cushman, and ascertain the fact; and that at that time Wright was aware that the orator was oecu-. pying the premises in question. On cross-examination Wright testified that in this last conversation with the orator he did not give him to understand that he: held any demands against Flint, and that he made no disclosures to hinuof his purpose in making the inquiry in regard to the ownership of the land, and that it was his object not to make any. It appeared that at the time of £he two first conversations about the land between Wright and the orator, the former did not have the Callender demands against Flint in his hands for collection. It also appeared that the copies of the writs of Gallender v. Flint ppd Wright v, Flint,-were riot delivgrgd to Flint until the 15th of January, 1852, and that on that day Flint notified Wright that he had no interest whatever in the land iu question, except for the purpose of security for signing the Darling note for the orator. It also appeared that the Darling note had been paid by the administrators of the estate of John Hackett, senior. The Chancellor, Bennett, J., at the December Term, 1858, in Addison county, dismissed the bill as to Wright and Callender, with costs, and decreed that upon the payment by the orator to the administrators of the estate of John Hackett, senior, of the amount due from him to that estate within ninety days, the said administrators should deliver to the orator a quitclaim deed of the land in question from the heirs of John Hackett, senior, to the orator, excepting such portions of the land as were embraced in the Callender and Wright levies; and that they should recover costs of the orator. From this decree the orator appealed. I. There was sufficient notice of the trust in favor of the orator to exempt the property from attachment on the debts of the trustee'. 1. The possession of the orator was of itself sufficient notice. Especially in connection with the acts of ownership on his part, and the absence of any claim or interference by those who held the title; Pinney v. Fellows, 15 Vt. 325, and cases there cited. 2. Flint gave actual notice to Wright before the attachments were completed that the property belonged to the orator. 3. Before any judgment or levy under the attachments, Flint conveyed to the orator. In view of all these facts it cannot be doubted and is not denied, that Wright knew that the land did not belong to Flint. II. The orator is not estopped by what he is claimed to have said to Wright, from showing the truth in regard to the title to the land. 1. We deny that the testimony of Wright, himself a defendant and the attorney of the other defendant, is sufficient to prove these statements. The conversation took place under circumstances that strongly discredit the witness. The clearest proof should be required before a party should be held estopped. Evidence in regard to admissions, obtained in casual conversation, by an interested witness seeking to make testimony against a person unsuspicious of his object, is the least reliable of any that is ever heard in a court of justice, and the very last that ought to be held sufficient to estop a party from showing what is conceded to be the truth. It will be observed that an addition of only a word or two by way of strengthening, makes the entire-difference between what the orator is claimed to have said on. this occasion and the strict truth. 2. The orator was not made aware that his statement to Wright was in any way to be acted on, nor for what purpose, nor in whose behalf the inquiry was made; On the contrary, the object of the conversation was sedulously concealed, and he was led to believe that it had reference to a different subject, and different parties. We deny that a statement so obtained and so made, was ever held to estop a party from proving the contrary. It is the very essence of an estoppel of this character, that the statement relied on is made in order to induce an innocent party to act on it to his detriment, or at least with knowledge that it will be so acted on. In such case the statement becomes an intentional fraud, and the party making it must abide the consequences. But nothing short of this will ever operate as an estoppel; 2 Smith’s Lead. Cases, 564 i Laeell v-. Odlet 3 Hill 215 ; Whitaher v. Williams, 20 Conn. 98 ; Steele v. Putneyj 3 Shepley, 327; Hides v. Oraw, 17 Yt. 374 ; Strong v. Ellsworth, 26 Yt. 374. The rule contended for by the defendants necessarily goes the length of holding every untrue statement, under whatever circumstances made, a perpetual estoppel thenceforth upon the party making it, from ever proving the truth of the matter in a court of justice, however or with whomsoever the question may arise. 3. The defendants have lost nothing by the orator’s alleged statement, and are therefore not authorized to claim it as an estoppel. The principle only extends in favor of those who would suffer by such a false statement if the party were afterward permitted to retract and contradict it. The debts against Flint were old and worthless. The attachments were not made in consequence of the orator’s statement, but the statement was ingeniously obtained (if at all) in aid of the proposed attachments. If they finally prove unavailable, the defendants have lost .nothing whatever hy the experiment. It is not pretended that they could meanwhile have secured their debt's in any other way. A mere fruitless attachment, without oth'er detriment, is not sufficient to entitle the defendants to claim an estoppel; Pinney v. Fellows, above cited. I. The title to an undivided moiety of the premises in question, at the time of the attachment, stood upon the record in the name of Flint, the execution debtor. It was attached by the creditor without any notice of the orator’s equity, (if he has any equity.) The case must be determined upon the facts as they stood at the time of the attachment, for it is then that the lien of the execution creditor commences and is acquired. Subsequent notice of an equitable title cannot affect him: Carter v. Champion, 8 Conn. 519 ; Stanley v. Perley et al., 5 Maine 369 ; Kent et al. v. Plummer, 7 Maine 464 ; Emerson v. Litchfield, 12 Maine 148 ; Slocum v. Gatlin et al., 22 Yt. 137. The onus is then thrown on the orator of showing such facts as will protect the "premises from attachment as the property of Flint. He can only do this by showing notice of his equitable interest to the creditor befqre the attachment, or what is in law equivalent thereto. 1. He has shown no such notice. 2. The only fact upon which he can rely which shall have the effect of notice is his possession of the premises at the time of the attachment. This fact may amount to implied notice that the orator was rightfully the possessor ; Rublee v. Mead, 2 Yt. 544 ; Oreen et ah. v. Slater et al., 4 Johns. Ch. 46. It is no notice whatever of the extent of the orator’s title. It is only available to put the attaching creditor upon inquiry after the title or right of the orator, that upon such inquiry its extent may be ascertained ; Pope v. Henry, 24 Vt. 565 ; Rogers v. Jones, 8 N. H. 264 ; Pinney v. Fellows, 15 Yt. 541; Crofton v. Ormsby-, 2 Sholes & Sepoy 599. The fact of possession admits of other explanation than the prima facie One of ownership. The possession of the orator in this case might have well been under Flint, as tenant or otherwise. If therefore the party in possession, upon inquiry by a creditor about to attach, denies his interest in the premises, and asserts the ownership to be where the record evidence leaves it, the possession is explained. It ceases to be notice, and the creditor may go by the record ; Sogers v. Jones, supra. In this case the orator (being in possession) is asked whether he has any interest in the premises, and he disclaims ownership, referring the agent of the execution creditor to the record for the state of the title ; the place to which he would be referred by the law. If the orator is not technically estopped by these acts, at least, the effect of his express disclaimer must be to overcome the implied notice of his possession. The defendant, as an attaching creditor, stands on the same footing as a purchaser; Garter v. Champion, supra; Bigelow v. lopliff, 25 Yt. 273; Burnell v. Bober.tson, 5 Gilman 282; 10 U. S. Dig., 54 sec. 41. Parties standing otherwise equal, the legal shall prevail over the equitable estate. The orator’s claim rests upon a supposed fraud in the defendant in undertaking, with knowledge of the facts, to defeat his equitable title; Pomroy v. Stevens, 11 Met. 244 ; Spofford v. Weston, 29 Maine 140. The defendant was bound to inquire; he did inquire. He acted according to the information received, and this is the fraud!