Alston v. Maxwell, 16 N.C. 18, 1 Dev. Eq. 18 (1826)

Dec. 1826 · Supreme Court of North Carolina

16 N.C. 18, 1 Dev. Eq. 18

Thomas Alston v. James Maxwell and Willie Perry, ex’rs of Stephen Outerbridge.

From Franklin.

Morality and good faith, require that the vendor should disclose to the vendee every circumstance which may induce the latter to change his mind as to the contract.

Where a trustee sold at vendue a fee simple in the trust land, and before the execution of the contract, the trustee and the eestni que trust, discovered that the trust deed created only a life estate, held that the concealment of this discovery was fraudulent, and vacated the contract, although the trust deed was publicly read and the trustee only underfoot to convey the title he had, and although the cestui que trust refused to guarantee the title of his trustee.

Bide eor an injunction the material allegations of which were, that one Marmaduke Jeffreys had conveyed a tract of land to Richard H. Fenner, in trust to secure a d.ebt due Outerbridge by Jeffreys. That the deed was defective, first because it was a deed of bargain and sale, and no valuable consideration was recited in it, as having passed from Fenner to Jeffreys. Secondly, because there were no words of inheritance in it, and at the most it conveyed only a life estate to Fenner. That both Outer-bridge and Fenner, his trustee, had express notice of these defects, having been informed of them by two gentlemen of the profession ; and that they fraudulently sold the land at vendue, without disclosing the defect in the title of Fenner, when the Plaintiff became the purchaser, and gave his bond for the purchase money. It was admitted in the bill that by the terms of sale, the trustee was only to convey the title which he held under the deed from Jeffreys, and that Outerbridge had refused to warrant the title of bis trustee,* but it was insisted that this was intended to apply only to the original title of Jeffreys, or to his estate in the land, at the date of his deed to Fenner, and not to the quantity of estate conveyed by Jeffreys to Fenner, In proof of which, it was averred that the land y,as sold «s a íce simple, and that the deed from Fenner to the Plaintiff, was properly draw» to convey a fee, if Fenner bad one.

It was also admitted, that tbe deed from Jeffreys to the frustee, was publicly read when the land was sold, but the PhúidiíT insisted that from his ignorance of the forms prescribed for conveyances, be was not aware of the defect at that time, nor did he become so until after the contract was executed. The bill prayed an injunction upon a judgment obtained on the Plaintiff’s bond, for the purchase, money and general relief.

Tbe Defendant it) his answer, denied all fraud, and insisted that the Plaintiff had bought with a full knowledge of the limitations in the deed to Fenner.

He also averred that ho was informed by his Counsel, who drew the deed from Jeffreys, that although it was informal, yet that it convoyed a fee simple in the land; this was fully supported by the testimony of his Counsel, Mr. Person.

A witness, Mr. Johnson, proved that he had informed both Outerbridge and Fenner after the sale, but before the execution of the deed from Fenner to the Plaintiff, and before the latter gave his bond for the purchase money, of the defects in the deed to the trustee.

The case was argued at June, Term 1326, the .¿¡fior-ney-General, Seawall, and Badger, appearing for the Plaintiff; and Gaston, for the Defendant; no note of that argument is in the possession of the Reporters.

Henderson, Judge.

— I accord with my brethren in saying that this contract should be set aside on the ground of fraud ; it appearing from unquestionable evidence, that both Outerbridge and bis trustee Fenner, knew before the title passed, and before the Plaintiff gave his bond, that the trustee could rightfully make but an estate for his life, sucli being only the extent of his own estate; notwithstanding the repeated declarations made, both by Outerbrldge ami his trustee at the sale, that only suchti-tie as the latter had, was offered for sale, and the reading- the deed aloud to shew what that title was, that the bidders might judge for themselves. It is evident that this was understood to relate to the title, and not the quantify of estate in the lands, and (hat a fee simple was offered for sale. Morality and good faith should have induced the Defendants Outerbrldge and Fenner, to disclose to distan, when about to take his bond, the discovery which had been made, for they certainly knew that such information, would have produced a total change in his intentions; and that Outerbrldge was about to get from distan, the full value of an estate in fee simple, which he knew that distan thought he was acquiring, when an estate only for Fenner’s life was conveyed to him. Upon strict principles of law, even if Outerbrldge and Fenner, were really ignorant of the quantity of es¿ tato in Fenner, yet as they professed to sell and did contract to sell an estate in fee, I doubt whether they have in reality, complied with their contract, or conveyed to distan, that estate which they had contracted to sell.— Fenner had but an estate for life, and could by estoppel only convey a larger estate By a reference in his deed to dlston, Jeffreys deed to him became part of the deed to dlston. Thus the matter was left at large, there being estoppel against estoppel.

But relief being clear upon the ground of fraud, I give no opinion upon this latter point.

Hard Judge.

— It may be taken for granted, in this case, that it was the understanding of the parties, that a title in fee simple in the lands, was conveyed from Jef-freys to Fenner, the trustee. This was the understanding of Person, who drew the deed of trust •, but it does not appear that the defendants were, undeceived in regard to that, before the sale of the land to Complainants

Person states, that after the execution of the. deed of trust, lie drew another, and recommended to Outer-bridge, to have the last executed, as it was drawn more fully than the first, though he believed the first was sufficient for all the purposes for which it was given.

However, it seems, that after the sale, hut before distort had executed his bond to Outerbridge, and before Fenner had executed the deed to Melon, Johnson, the attorney who drew the deed, informed both Fenner and Outerbridge, that nothing except a life estate was conveyed by the deed of trust from Jeffreys to Fenner.

It is true, Outerbridge refused to warrant the title of the land to the Complainant, but that was a fee simple title in Jeffreys for such it was apprehended was conveyed from Jeffreys to Fenner. The ground of refusal was, that Jeffreys’ title, in fee simple might not be good, not that he had conveyed a title less than a fee, or any title less than he had.

When Fenner and Outerbridge were informed by Johnson that only a life estate was conveyed to the former, they were apprised of an important fact relative to the title, to which Alston was a stranger — this fact they concealed, by doing so, they practised upon Alston that which the law pronounces to be a fraud, and that at a time when they were not in a worse situation than they stood in before the sale, or indeed, as far as it appears, at any time after the execution of the deed of trust.

I am therefore of opinion that the injunction should he made perpetual.

Taylor, Chief-Justice, concurred.

ÍN.tuNCTtoN -Perpetuated.