Doe on the demise of Newlin v. Osborne, 51 N.C. 128, 6 Jones 128 (1858)

Dec. 1858 · Supreme Court of North Carolina

51 N.C. 128, 6 Jones 128

Doe on the demise of JOHN NEWLIN v. MATTHEW OSBORNE.

Where the fraudulent donee of a tract of land, made a deed of trust of the same, to secure a debt to a third person, under which the land was sold for a valuable consideration, and without notice of the fraud, for which the purchaser gave his bond to the creditor and took the trustee’s deed, it was Held that his coming to a knowledge of the fraud after such sale, and before such bond was collected from him, would not affect his title.

Ejectment, tried before Dick, J., at the last Fall Term of Alamance Superior Court.

Both the plaintiff and defendant claimed title under one Thomas Davis. The former exhibited a bond executed to him by Davis, and the record of a suit and judgment thereon in 1848. Execution had issued on this judgment, which was levied on the land in question, and it was sold to the plaintiff, at public auction, and a sheriff’s deed made to him accordingly.

The defendant, who was the son-in-law of Davis, claimed title under a deed from the said Davis to himself, the consideration of which was expressed to be $1600. This deed was dated on the 12th of April, 1845. lie exhibited also a deed of trust, made by himself to one Murchison, for the securing of debts due to one Testal. This deed was dated 17 th of May, 1845. lie also exhibited a deed from Murchison, the trustee, to Jeremiah Osborne, dated 28th of May, 1846, which recited a consideration of $726,10, as being then paid. The trustee testified that he sold the land in question, at public auction, to Jeremiah Osborne, after due advertisement. This sale was advertised to be for cash, and was so offered; but after it was cried off to Jeremiah Osborne, by an arrangement among the parties, Vestal took the said Jeremiah’s bond for the money, with the present defendant as security; whereupon, a deed was executed by the trustee to the said Jeremiah. The bond to Testal was afterwards sued on and collected, under an execution in 1850. There was much evidence, tending to show, that the conveyance of Davis, to the defendant, was fraudulently to Linder and delay the lessor of the plaintiff in the-collection 'of liis debt, and it was insisted by him, that the-deed of trust to Murchison, and the sale by him to Jeremiah-Osborne were, in furtherance of this fraudulent purpose, anct, that the two latter were privy to that design. On the other-hand, it was contended by the defendant, that the deed off trusty and the sale to Jeremiah Osborne, were bona fide, and; that the latter was a purchaser, for full consideration, and without .notice of the alleged fraud. So that, the-title being-out of the lessor of the plaintiff, he was not entitled to-recover in this action.

The Court instructed the jury, “that if the conveyances of Davis to the defendant, were made to hinder, delay, or defraud the plaintiffs lessor, in getting satisfaction for his debt, they were fraudulent and void as against his execution ; but if they were satisfied that Jeremiah Osborne had purchased the land for value and without notice of the alleged fraud, his title would be good, and would bar the plaintiff’s recovery.. But, that although Jeremiah Osborne had purchased for value,, if at the time of his- purchase, or before he paid the purchase-money, he had notice of the alleged fraud, he had not a good-title, and the plaintiff was not barred of his recovery by reason of it..” Defendant excepted to this charge.

Yerdiet for the plaintiff. Judgment. Appeal by the defendant.

Graham, for the plaintiff.

T. Muffin, Jr., for the defendant.

Peaeso^c, G. J.

ITis Honor was of opinion, that, assuming the conveyance, from Davis to the defendant, to be fraudulent as to creditors, and that the fraud was not purged by the conveyance from the defendant to Murchison, in trust, to pay a bona fide debt due to Testal, and, assuming further, that Murchison sold and conveyed the land to Jeremiah Osborne for a valuable consideration, which was satisfied by the note of Jeremiah Osborne,, given and accepted by Yestal in discharge of the debt of Davis to Yestal, in respect to which, the deed of trust had been executed, so that Jeremiah Osborne had acquired the title as a Iona fide purchaser for valuable consideration, without notice of the fraud between Davis and the defendant; yet, if Jeremiah Osborne, afterwards, and before he paid the note given by him to Yestal, received notice of the alleged fraud, his title was, by the force of such notice made void and of no effect; and the plaintiff was entitled to recover.

In this opinion we do not concur Without discussing the subject generally, a particular view will be sufficient. In order to give to the fact of notice, any effect, either at law, or in equity, it is necessary that it should be received in time to enable the party to avail himself of it. After a purchaser has paid the price, and taken a conveyance, it comes too late. In our case both acts had been done; Jeremiah Osborne’s note had been given and accepted in discharge of the debt secured by the trust, and when he received notice of the fraud, he had no more ground, or moans by reason thereof, for resisting the collection of the note by Yestal, than he would have had for recovering the money back if it had been paid.

It is unnecessary to notice the other points.

Pbb CüRIAm, Judgment reversed, and a venire de novo.