Pearson v. Daniel, 22 N.C. 360, 2 Dev. & Bat. Eq. 360 (1839)

Dec. 1839 · Supreme Court of North Carolina

22 N.C. 360, 2 Dev. & Bat. Eq. 360

HUBBARD PEARSON et uxor et al. vs. DUDLEY D. DANIEL et al.

Information given to one about to purchase a tract of land, that a particular family has a claim to it, affects him with notice of the equitable claim of the wife to have the land settled to her separate use.

Proof that a husband represented that certain money which he advanced for the purchase of a tract of land, was part of the separate estate of his wife, is competent to establish the fact that it was the wife’s money, against one claiming as a purchaser at an execution sale, against a third person — iliter if the claim had been under an execution sale against the husband.

A purchase at an execution sale, against one who held in trust for the separate use of a married woman, held, upon the testimony of one witness only, supported by corroborating circumstances, against the positive denial of the defendant, to have been made with notice of the equitable claim of the wife, and upon an agreement to convey it to her use, upon being paid the amount of the debt due him for which the land was sold.

On the 25th of May, 1808, in contemplation of a marriage about to take place between Hubbard Pearson, of this State, and Martha Rogers, of South Carolina, several negro slaves, the property of the said Martha, were duly conveyed unto John Rogers and Nathaniel Pearson, their executors, administrators and assigns, upon trust, to the use of the said Martha until the intended marriage should be solemnized; and after the said marriage should be solemnized, then lor the sole and separate use of the said Martha for life, free from the control or dominion of her husband, with a power to said Martha, notwithstanding her coverture, to dispose of the same by her last will and testament, or writing in nature thereof; and after the death ot the said Martha, in case she should not exercise the said power of disposition, then for the use, benefit and behoof of such child or children, issue of the said marriage, as should be living at her death, to his, her or their heirs-forever. The contemplated marriage was soon after solemnized; John Rogers, one of the trustees in the marriage settlement, died in South Carolina, and Francis S. Lee, of that State, administered there on his estate. Nathaniel Pearson, the surviving trustee, removed from this State to the State of Mississippi. In September, 1832, upon the petition of the plaintiff, Martha Pearson, formerly Martha Ror gers, and of the said Francis S. Lee, in the Court of Equity for the county of Anson, that Court appointed Benjamin F. Pearson and Clinton Pearson trustees for the purposes of said settlement, in lieu of the said Nathaniel Pearson and Francis S. Lee. At the September term, 1835, this bill was filed by the said Hubbard Pearson and Martha, his wife, Benjamin F. Pearson and Clinton Pearson and others, the children of the said Hubbard and Martha, against Dudley D. Daniel, Angus McRae and Henry Buchanan. The bill charged, in substance, that after the execution of the said settlement, and' the marriage of the said Hubbard and Mary, the trustees permitted him to receive the profits of the trust property, for the purpose of applying them according to the trust declared in the settlement, until the sum of two thous- and dollars arising therefrom had accumulated, when John Rogers, one of the trustees, having died, the said Hubbard, at the request of the said Martha, purchased from Nathaniel. Pearson, the surviving trustee, a tract of land, with the said sum of money, for the purpose of having the same, settled to the same trusts as were declared in that settlement; and that thereupon, and with the intent of carrying this purpose into execution, on the 24th day of January, 1826, the said Nathaniel and one William Johnson and Hugh McKenzie, who had some lien or encumbrance on the said tract, joined in a deed whereby the said Nathaniel bargained and sold, and the said William and Hugh confirmed, unto a certain John M. Rogers, the son and administrator of the deceased trustee, in fee simple, the tract aforesaid, with the buts and boundaries set forth in the bill; and that the said sum of $2,000 was thereupon paid unto the said Nathaniel, William and Hugh —and averred that, it was the intention of all the parties to said deed', as well as of the said ■ Hubbard and Martha, that the conveyance aforesaid should be upon the same trusts as were declared in the settlement; but that the person who drafted the deed, by mistake, omitted to insert the proper clauses for expressing said trusts; which omission was then overlooked by the persons interested in the transaction. The 'bill further charged, that in the year 1828, the defendant, Daniel, recovered a judgment at law against the said John M. Sogers, for the smnof $456:11 1-2 cents, sued outexecution thereon, and caused the same to be levied on the said , , , , tract of land, bought the same at the sale, under the execution, for the sum of $389:53 ets.; and having obtained a deed therefor from the sheriff, conveyed the same to the defendant, McRae., who afterwards conveyed it to the defendant, Buchanan — that before the said Daniel so purchased, he well knew that the said land had been conveyed to the said John M. Rogers, as a trustee for the trusts in the marriage settlement expressed; and that the said McRae and Buchanan had also full knowledge thereof respectively, before they severally contracted for or paid the purchase money for said land.— The bill then especially charged, that one William Chapman attended the sale by the sheriff, for the purpose of satisfying the execution against Rogers, and thereby, preventing the sale,|having been requested so to do by the said Hubbard, who preferred to pay the amount of the judgment, rather than permit his wife and children to be harassed by a law-suit; that before the sale was made, the said Chapman informed the defendant, Daniel, of his purpose, and proffered-to pay the amount of the judgment; but Daniel declined receiving it, stating that it was not material in what way the business was managed; that his object solely was to secure the debt, and preferred purchasing the land at sheriff’s sale, declaring at the same time, that whenever the debt due to him should be paid, he would then convey the land to the persons entitled to it; that this declaration and undertaking was made in the presence of the said Chapman, of'the said Hubbard, and many others; and they all reposing full confidence therein, permitted the sale to proceed; and the tract of land, well worth $2,000, was bid off by Daniel, at the price of $389:53 cents. The plaintiffs charged that they had paid to Daniel the residue of his debt, and had repeatedly offered to refund to him the amount of his bid; but that he had refused to re- • ceive the same. And they prayed that the said defendants might be decreed to convoy the land to the trustees for the plaintiff, Martha, upon the trusts declared in the marriage settlement, and to account for the rents received from the said land, and damages thereunto done, since they had taken possession thereof.

• The defendant, McRae, did riot answer the bill, and the same was.duly taken fro confesso and ordered to be heard ex parte against him; The defendant, Buchanan, answered merely that in April, 1834, he purchased from the defendant, McRae, three tracts of land adjoining each other, of which .the tract, described in the bill was one, at and for the price of $4,250, which he averred to be a full and fair price, and that he paid the whole of the purchase money before the filing of the bill — that while in treaty witbr'McRae, having heard a rumour that there was some dispute as to the title of some part of the land, he enquired nearly of all the neighbors respecting the title; all of whom informed him that there was no difficulty as to McRae’s title, except one William Johnson, who told him that there had been a talk that Hubbard Pearson intended to file a bill about the land — that in consequence of this information, he applied to the Clerk and Master of the Court of Equity, who stated that no such bill was filed, nor had he heard of any person purposing to file one— that thereupon he confirmed his bargain with McRae, and heard no more of the dispute until he had paid the purchase money and obtained the possession of said land. This defendant also said that the plaintiffs resided within a mile or .two of this tract of land, while he was in negotiation for it; and, as he believed, had knowledge thereof while it was going on; but they did not set up or pretend a claim to said land, or give him notice thereof, although they had abundant opportunities for doing so. The answer of the defendant, Daniel, stated that at the January term, 1828, he obtained a judgment against John M. Rogers for $423:09 cents, principal money, and $21:85 cents, • interest, besides costs of suit; and that execution having been sued out upon that judgment, and levied on the tract of land described in the bill of the complainants, as the land of said Rogers, the said tract was sold in April,.1828, when he became the purchaser, at the price of $425; which price, after paying sheriff’s commissions and costs, paid off $389:53 cents of the debt recovered — that the defendant took a deed of conveyance from the sheriff, and afterwards obtained the possession — that after having had possession for some-years, he sold the land to the defendant, McRae, for $1,625, payable in four annual instal-ments; that the said defendant then took possession, and early in 1835, sold and conveyed the same to the other defendant, Buchanan, in whose possession it then was. This defendant positively denied that William Chapman, in the bill named, or any one else, offered before the sale to satisfy said execution, or that the defendant used any means to prevent said Chapm'an or any other person from discharging it, or that he ever told Chapman that he only wished to secure his debt, and that he would re-convey to Hubbard Pearson, or any one else, on payment of his execution and costs — but averred the facts to be, that some time previous to the sale, he received a letter from Chapman, who lived at Cheraw, in South Carolina, requesting the defendant to have the sale postponed until the Tuesday or Wednesday of the court week; and stated that Chapman would attend on that day and satisfy the execution; that the sale was postponed, as requested; that Chapman attended at the appointed day, but declined to have any thing to do in the matter, and refused to satisfy the execution, and thereupon the sale proceeded. The defendant further stated, that after the sale was over, arid on the same day, Chapman applied to the defendant and proffered to pay him the amount of his execution, if defendant would convey the land to him; which offer defendant refused — that afterwards, on the same day, Hubbard Pearson applied to him, and desired to know if the defendant would not let him have the land, in case he would pay the defendant the amount of the judgment and costs; which proposition was also refused. But, defendant admitted, “ that inasmuch as the said Hubbard Pearson was principal in the note on which said judgment was obtained, and the uncle-in-law to the defendant in the execution,” that he did agree, on the same day, after the sale had been made, with the said Hubbard, that if he, the said Hubbard, would pay this defendant $700 on a specified day, then this defendant would re-convey the land to such of the children of said Hubbard as the said Hubbard might direct — and said that Hubbard Pearson failed to pay at the appointed day; and defendant, at his urgent solicitations, and the solicitations of his wife, gave him time repeatedly to make the proposed payment — and after the time. last appointed expired, defendant took possession of the premises; which possession had been continued, as he believed, for seven years adversely, and he claimed the. benefit of such possession as if he had specially pleaded it. The defendant also stated that he never heard it suggested, until he saw the allegation in this bill, that the land in question was the property of the plaintiff Martha, nor did he believe that it was bought with her separate money; and averred that he was informed before the sheriff’s sale, by Hugh McKenzie, one of the persons who executed the deed to John M. Rogers, that Rogers’s title was unquestionably good; that Hubbard Pearson was present at the sale, and no claim'inconsistent with the title of Rogers was then set up by him or any other person thereto — that since defendant had taken possession of the " land, he rented the same to Hubbard Pearson, and took his obligation for the rent, in which the said Hubbard acknowledged the land once to have been that of John M. Rogers— that plaintiffs have repeatedly offered to buy the land from him, and never pretended to question his title to it — defendant further said that he never heard of the omission alleged to have Been, made by mistake in the deed to Rogers; and alleged, if the land was paid for, and the omission made by mistake, as charged by plaintiff, both of which he denied, that he was a purchaser for valuable consideration and without notice. The plaintiffs entered a general replication to these answers, and proofs were taken on both sides.

Winston for the plaintiffs.

No counsel appeared for the defendants in this Court.

Gaston, Judge,

after stating the pleadings as above, proceeded as follows: The material facts in this cause are those which are put in issue by the answer of the defendant, Daniel. For, as to the special defence set up by the defendant Buchanan, that he is a purchaser for a valuable consideration, and without notice, that may speedily be dismissed. He offers no proofs that he has paid any thing. In his answer, there is enough to fix him with notice. He admits that he had 'heard from Mr. Johnson, that there had been a talk of H. Pearson filing a bill for the land; and although the Pearsons lived within a mile or two of the land, he pro- , , -, . . , , ceeded to buy it without making an enquiry of them, or any of them, in relation to this supposed claim. But Mr. Johnson’s testimony states the information communicated to him in much stronger terms than it is expressed in his answer. — • He informed the defendant that the Pearsons did have a claim to the land — although he believed they were too careless to prosecute it. Having chosen to speculate upon the title, after receiving this information, the defendant must abide the result.

The question raised upon the pleadings from whom moved the consideration for the 'land conveyed by Nathaniel Pearson to John M. Rogers, might have been one of difficulty, if the defendants had set up title under a purchase at execution sale'against. H. Pearson. The evidence is full that it passed through his hands, but not so full whether it was his money or the money of Mrs. Pearson, although the weight of the evidence is in favor of the latter position. Nathaniel Pearson- — with whom H. Pearson, as the agent of his wife, contracted for the purchase — and who was the surviving trustee in the marriage settlement — states his belief that the money paid by H. Pearson, to discharge the encumbrances tlien upon the land, was the separate money of his wife. It is true, that he gives no other reason for his belief than H. Pearson’s insolvency; but it is not easy to' suppose, from the relation in which he stood both to H. Pearson and his wife, but that he must have had the best means of knowing .whence the funds.came. But the pleadings raise no question between the creditors of H. Pearson and the plaintiff Martha; and as to all others but his creditors, the proof that the consideration moved from her is full. It was paid by him as her money, and the conveyance from Nathaniel Pearson, the surviving trustee, to John M. Rogers, the son of the deceased trustee, was made, as Nathaniel Pearson testifies, upon the explicit understanding that the money was hers, and that he was to hold the land as a part and portion of her trust estate, and for no other purpose; and no part of the consideration was paid by John M. Rogers. • Besides, it appears that the Pearsons took possession, and held possession of the land so conveyed, until after January, 1829; and no claim was ever set up to it by Rogers, in his life-time.

There is no proof of a mistake on the part of the draftsman, of the conveyance from Nathaniel Pearson to John M. Rogers in omitting the declaration of trusts intended to be inserted therein. But Rogers accepted the conveyance of the. legal estate, without advancing any part of the cohside-ration money, with a knowledge that the same had been paid as the proceeds of the property secured to Mrs. Pearson, in the marriage settlement. — and, therefore, independently of his parol undertaking, became, in construction of law, a trustee for the purposes of that settlement.

The next and most important controversy of fact, is, whether the defendant Daniel purchased at the execution sale, upon an agreement that he would convey the land to the purposes of the settlement, upon being paid the amount of his judgment against John M. Rogers. Some light is thrown upon this question, by certain records filed by the defendant as exhibits. From these, it appears, that at the July Term, 1827, of Anson County Court, two actions were instituted by the defendant Daniel, one against John M. Rogers, by an attachment which was levied on this tract of land, and the other against H. Pearson, by original writ, and that both of these were brought upon a joint and several note of the said Pearson and Rogers, executed 30th January, 1837, for the sum of $423:09 cents, payable to the said Daniel, on the 10th day of March then next following. Judgments were obtained in both at the January Term, 1828, a venditioni issued upon the judgment against Rogers, to sell the tract of land so attached, and a fi. fa. upon the judgment against Pearson. Upon they?, fa. which was endorsed, “ this judgment the same as D. D. Daniel v. John M. Rogers, and one satisfies both, except costs,” the sheriff returned “ no goods.” The venditioni, which was endorsed “ this is the same as No. 38, and one satisfies both, except costs,” was returned “land sold and bid off by D. D. Daniel for $425,15th April, 1838.” These exhibits, in connection with the defendants’statement in his answer, shew that the sale at which the defendant bought, was upon a judgment recovered against Rogers, for ¿tabt ^ue ^rom ^631'8011 as principal, and Rogers as surety. The testimony of William Chapman is, that he was Present at rite sale — that it was stated to the defendant Ball-iel, in his presence, by H. Pearson and H. McKenzie, that the laud was held by Rogers, in trust for Mrs. Pearson; that Daniel appeared to consider the land as the separate estate of Mrs. Pearson — professed to desire no more than his money from the trustee — did expressly agree with McKenzie and Pearson, in the presence of the witness, that he would bid off the land and convey it to Mrs. Pearson, or to a trustee for her and her children, upon receiving the amount of money due him; that upon this distinct understanding, he was allowed to become the purchaser; that in two hours after the sale, the witness having heard from McKenzie and Pearson, that they had become suspicious, from some things said by the defendant since the sale, that he might not act correctly, offered, as the friend of Rogers, the trustee, (who was absent,) to pay him at once the amount of his judgment; but the defendant refused to receive the money, making some evasive answer. If this testimony is credited, the allegation in the bill which we are now examining, is fully proved. Rut it is objected that this is the testimony of one witness only, a-gaiust the positive and unequivocal denial of the defendant. True, there is but one witness who expressly and directly testifies to the controverted fact — but his testimony is so upheld by corroborating circumstances, a,nd the part of the answer which opposes it is so obviously disingenuous, that we have no difficulty in 'determining to which we ought to give credit. The Pearson family were in actual possession of the land at the time of sale. Did this circumstance awaken no suspicion in defendant’s mind, that they might have some right to the land so held? H. Pearson was notoriously insolvent. Did this fact, connected with the former, lead to no enquiry on the part of the defendant, his creditor-, whether this land was liable for his debt? The answer leads us to infer that he did enquire of Hugh McKenzie; for it says that he was told by McKenzie, before the sale, that Rogers’s title was good. We are not informed xohy he made the enquiry, but can we doubt but that McKenzie, being privy to the purposes of tiie conveyance from Nathaniel Pearson to John M. Rogers, when informing defendant that the title to Rogers was good, informed him also for whom Rogers took that ti-tie? Besides, what mean the applications which defendant states to have been made to him directly after his purchase, first by Chapman — and then by H. Pearson, to pay him up the amount of his judgment? If there was no understanding before the sale, that its purpose was to secure the amount the judgment, what could induce either to suppose fora moment, that the defendant would take $400 for a piece of land absolutely his, and which he afterwards sold for $1,600? But while he peremptorily rejected all offers for the land from Mr. Chapman, Rogers’s friend, he did consent to sell for less than half price, that is to say, for $700, to Mrs. Pearson and her children; and the motive assigned for this act of benevolence is so singular that its modus operandi is unintelligible. We may imagine that sympathy for the suffering surety might induce a person of ordinary humanity, on a re-sale to him property bought very cheap at execution, to abate something of its actual value — but how compassion could be excited for the condition of the principal, because of a sacrifice of the surety's property, certainly is not easy to be conceived. If Mr. McKenzie were alive, it would have been desirable to have his testimony also — but he is dead' — and no other person now living is represented as having been privy to the transaction other than H. Pearson; and he could not be a witness, in whatever manner the bill had been framed. The rule of equity, as well as of law, forbids husband and wife to be witnesses for or against each other. “ The foundations of society would be shakened” by permitting it (Vowles v. Young, 13 Ves. 140). It is, perhaps, proper to notice a document which has peen produced by the defendant, and which . • J 7 is relied on as evidence either to shew an abandonment of Mrs. Pearson’s equitable right, or to confirm the defendant’s denial that she ever had such right in the land in question. This is a note signed by her husband, dated the 23rd of June, ■1828, promising payment to the defendant, Daniel, of the sum of ten dollars, on the 1st January, 1829, “ for and in consid-of the use and rent of a tract of land for part of the year formerty e property of John M. Rogers-^— .how the property of the said D. D. Daniel.” On this is an indorsement by the defendant of some small demands of H. Pearson; and further, that “ he is willing- they shall balance the note, if the maker has no objection.” It is very certain that this document neither purports to be, and if it did, could not operate as a release of Mrs. Pearson’s equity. And with us it has no weight,- as tending to prove that she never had such equity. The deposition of Vincent Parsons, taken by the defendant, shews that from the date of the sheriff’s sale, in April 1828, up to February, 1829, Mrs. Pearson was, from time to time, striving to make the best terms she could with the defendant, to prevent herself and family from being turned out of possession. It is during this period of moral duress that the signature of her husband is obtained to to the paper exhibited, which obviously was framed and used, not for the purpose of securing rent, but to serve as an acknowledgment that the land when sold belonged to John M. Rogers, and that it became the property of Daniel under the sale. We view it as a shallow artifice to prop a title, which the defendant was conscious needed support. Upon the proofs, therefore, the Court holds that the defendant, Daniel, did buy the land in question, with notice that it was held by John M. Rogers, for the purposes of the trust in the marriage settlement, and upon an agreement to convey it to those trusts, when he should be fully satisfied the amount due him of the debt oi H. Pearson and John M. Rogers.

A hnsb¡m(1 “«mot, in which a^bni Sed be jOvít.ness.f in respect 5 °etued1ío'<y herseparate use; for the rule of e-weiu^of JSf°¿bids and wife to es for* oTa-eaeh

We much desire that the nature of that debt were more fully explained — and we think it probable that this might have been done on the part of the defendant, had he deemed it expedient. It seems a little extraordinary that a person represented as so absolutely insolvent as H. Pearson, could find surety for upwards of four hundred dollars — and also, that the friends of Mrs. Pearson, when this land was put up for sale, seemed all to acquiesce in' the propriety of holding this debt a proper encumbrance upon it. These circumstances have induced us to apprehend that the debt was in some way connected with the payment made for the land when conveyed to Rogers — and that he joined the husband of Mrs. Pearson in this note, upon the faith that the money to take it r , J up should be raised out of the proceeds of Mrs. Pearson’s separate property. However that may be — in regard to which we make no declaration — as the plaintiffs found their claim to the relief of the Court, mainly on the agreement of the defendant to re-convey upon payment of this debt — we permit -the land‘to be regarded as a security for it.

There must be an account taken, as prayed for, of the profits and alleged waste of the land, since it has been possessed by the defendants respectively — and also of what is due to the defendant, Daniel, because of his said debt. When the result of these accounts is ascertained, the Court will then decree a conveyance of the land to the purposes of the trust, upon the payment of the balance which may be found due — . and such other relief as may then appear necessary.

Puk Curiam. Decree accordingly.