Fisher v. Borden
Fisher v. Borden
Opinion of the Court
delivered the opinion of the court.
On the 21st day of December, 1892, Joseph D. Herrick, being the owner in fee of an undivided one-fourth interest in a certain tract of land in Princess Anne county, Virginia, conveyed the same to Wm. K. Woodhouse, trustee, for the purpose of securing W. H. Borden the payment of two bonds, the one for $200 and the other for $400, which deed was not recorded until March 5, 1894. In the meantime the same grantor had executed to the same trustee another deed conveying the same property interest to secure to James C. Herrick the payment of a bond for $300, 'which deed was dated May 4, 1893, and recorded August 28, 1893; that is to say, the Herrick deed, though subsequent in date and execution to the Borden deed, preceded it in recordation by about six months.
In January, 1904, James C. Herrick assigned said bond of $300, “and all benefits of the deed of trust securing the same,”
To this bill Fisher and James C. Herrick alone made answer, the bill being taken for confessed as to the other defendants, and upon the hearing of the cause upon the bill, the answers filed and depositions taken for both the plaintiff and the defendants, the court ruled that under the proof
In the written opinion of the judge, made a part of the record, the decree complained of here is rested upon several grounds, but in our view of the case it is only necessary for us to consider the question, whether or not the appellant was a purchaser for value of the debt secured by the Herrick deed, without notice of the prior lien of the Borden deed. In other words, did he know at the time he took the assignment of the debt-, or could he have known by inquiry suggested to him by facts and circumstances within his knowledge, that his assignor, James C. Herrick, took the Herrick deed with notice of the existence of the Borden deed ?
That Herrick knew of the Borden deed when he took the Herrick deed, is too clearly proven to admit of serious controversy, in fact it is not so controverted, the insistence of the appellant being that he was a purchaser without notice, when he took the assignment from Herrick, that- his assignor was not a purchaser for value and without notice; that is, appellant stands as an innocent purchaser unless he knew that James G. Herrick “took his deed of trust with knowledge of the Borden deed of trust.”
The debt assigned to appellant was a bond — a common law evidence of a debt — and it is not questioned that Wm. K. Woodhouse, named as the trustee in the Herrick deed securing the bond, is one and the same person named as the trustee in the Borden' deed. But the learned counsel for the appellant says that while it has been held (in fact settled by a number of decisions of this court, as well as of others), that the knowledge of a trustee will be imputed to the beneficiary named in the deed of trust, yet' this court has
Conceding that a plaintiff in a cause, as a general rule, must prove his case, jmt the facts and circumstances may be such as to vary the rule and shift the burden of proof from the party assailing a transaction to the one defending it. 6 Enc. Dig. Va. & W. Va. Rep., 505, and cases cited.
Assuming, however, for the argument’s sake, that the burden of proof remained upon the appellee, Borden, throughout this case, let us inquire whether or not the evidence is sufficient to entitle him to the relief his bill asked.
The fact of notice to appellant, before he took the assignment of the bond secured by the Herrick deed, that his assignor, James C. Herrick, knew of the prior deed held by appellee, Borden, before the Herrick deed was taken, may be inferred from circumstances as well as proved by direct evi-. dence. Farley v. Bateman, 40 W. Va. 540, 22 S. E. 72; Cranes Nest Coal Co. v. Va. Iron Co., 102 Va. 862, 54 S. E. 884, and cases there cited.
It is true that in the last named case and in those cited, while the rule is fully sustained, the qualification that the proof must be such as to affect the conscience of the purchaser, and must be so strong and clear as to fix upon him the imputation of bad faith, is also recognized; but it will be seen that under the facts proven in this case the qualification affixed to the rule will not avail appellant. The opinion of the learned judge below rightly viewed the evidence as showing the fact that appellant “had knowledge of both
“Q. (On cross-ex.) When you were talking to Mr. Fisher (appellant) prior to the time that he bought this note from James C. Herrick, you and Mr. Fisher talked over the whole situation, did you not ? A. Mr. Green, I have no doubt that we did, but I don’t recall all the conversation I had with Mr. Fisher.
“Q. You knew at the time of this deed to secure Mr. Borden? A. Certainly I did.
“Q. And he (Fisher) knew of it at that time? A. Oh yes, he was cognizant of it.”
Appellant when testifying for himself said that when Herrick sold him the bond for the first time he heard of the Borden deed, and that statement was made in the face of proof that he knew of that deed as well as the Herrick dfeed. On further examination, and when told that Mr. Kellam in his testimony said appellant had discussed that matter before that time (purchase of the bond) with him, he was asked: “Is he (Kellam) mistaken or not?” and the reply was not a denial of the fact, but “No, I don’t remember it. I don’t know the date now. I don’t know whether it is recorded first or not, really now.” Q. “Mr. A. E. Kellam was the man you got to examine the records for you, was he not?” A. “Yes.” Appellant admitted, both in his answer and when examined as a witness that at the time of his purchase of the bond Herrick told him that Borden had a deed of trust on the same prop
But the foregoing are not all the facts and circumstances to be considered in determining the question, whether or not the circuit court erred in holding that appellant was a purchaser with notice from a purchaser with notice, and that appellant made his purchase of the bond, notwithstanding.that fact, relying alone upon Kellam’s opinion that the Herrick deed was the first lien as it was recorded' first. Prior to his purchase of the Herrick bond, appellant had talked with Judge J. M. Keeling, who had mentioned the Borden deed to him, and appellant replied that he knew of it, but that his (appellant’s) lawyer would get that all straight. What was to be gotten “all straight” other than the trouble growing out of James C. Herrick’s knowledge of the Borden deed when he took the Herrick deed ? The record is silent as to any other trouble.
Another pregnant fact shown is that appellant purchased the bond for its face value, although there was at the time eleven years’ interest due thereon, and took the assignment without recourse to the assignor, which facts themselves this court said, in Selden v. Williams, 108 Va. 545, 62 S. E. 380, “suggests doubtful right in the assignor,” and in this case suggests that both assignor and assignee knew of the prior right of appellee, Borden, and that the assignor was anxious to get out of the situation he was in by taking far less for it than the bond was worth, if he was in fact an in
“It is well settled, that what is sufficient to put a person upon inquiry will charge him with actual Knowledge of the facts of which a diligent pursuit of that inquiry would have informed' him.” French v. Successors of the Loyal Co., 5 Leigh 627: Lennig's Ex'ors v. White, 1 Va. Dec. 873, 20 S. E. 831; Jameson v. Rixey, 94 Va. 342, 26 S. E. 861, 64 Am. St. Rep. 726. See also 27 Cyc. at p. 1201, where this rule of law is very fully and clearly stated.
Applying to the facts of this case the foregoing principles of law, appellant and those claiming under him cannot be regarded as purchasers without notice, and are, therefore, not entitled to protection as against the appellee, Borden.
With respect to the defense of laches on the part of appellee, Borden, set up by appellant, we deem it only necessary to say that there is nothing whatever in the record to show that he was misled by the appellee’s delay in bringing this suit, or that his ability to make defense has been in any manner impaired by such delay.
We are of opinion that the decree appealed from should be affirmed.
Affirmed.
Reference
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- 1. Evidence — Burden of Proof on Plaintiff — Exception to Rule. — As a general rule, a complainant who assails a transaction has the burden of proof, but the facts and circumstances may be such as to vary the rule and shift the burden of proof to the one defending it. t. Assignments' — Notice of Prior Rights — Circumstantial Evidence— Case in Judgment. — The fact that the assignee of a bond secured by a deed of trust took the assignment with notice that his. assignor knew of the existence of a prior deed of trust on the same property may be inferred from circumstances as well as proved by direct evidence. In the case in judgment, the evidence shows that both the assignor and the assignee of the bond secured by the second deed of trust had notice of the prior deed of trust on the same property. 3. Notice — Put Upon Inquiry. — Whatever is sufficient to put a party on enquiry will charge him with actual knowledge of the facts of which a diligent pursuit of that enquiry would have informed him. 4. Deeds of Trust — ■Prior Unrecorded Deed — Assignee Without Notice. — One who takes under a deed of trust is not protected by section 2465 of the Code against a prior deed of trust upon the same property unless he is without notice of the prior deed when he takes and records his own; nor is his assignee of the debt secured, unless he takes the assignment without notice that his assignor had knowledge, before taking his deed to secure the debt, of the prior lien of the unrecorded deed first made. 5. Deeds of Trust — Assignment—Prior Unrecorded Deed — Notice— Enquiry. — When a person about to purchase a debt secured by a deed of trust has knowledge of any fact or circumstance sufficient to put him upon enquiry as to the existence of some right or title in conflict with that which he is about to purchase, he can only be protected where he makes the enquiry suggested by such fact or circumstance, and the right detrimental to that he is about to acquire is conceded, or withheld from him. 6. Laches — When Delay Harmless. — The defense of laches is not available to a defendant when there is nothing in the record to show that he was misled by the complainant’s delay in bringing his suit, or that his ability to make his defense has been in any way impaired by such delay.