McCoy v. Rhodes - 52 U.S. 131 (1850)
U.S. Supreme Court
McCoy v. Rhodes, 52 U.S. 11 How. 131 131 (1850)
McCoy v. Rhodes
52 U.S. (11 How.) 131
Where a bill in chancery alleges that certain lands were entered in the name of a third person with a view to cover them from the creditors of the person who had entered them, and this allegation is denied in the answer and not sustained by proof, the bill pro tanto must be dismissed.
But where the party entered the lands in his own name, and afterwards conveyed them to this third person, but the deed to the third person was not recorded until after a judgment had been obtained by a creditor and recorded in the parish where the land lies against the party who made the entry, it will not be sufficient merely to set up in the answer that this third person furnished the money with which to purchase the lands. The equity must be proved.
By the law of Louisiana, no notarial act concerning immovable property has effect against third persons until it shall have been recorded in the office of the judge of the parish where such property is situated. Therefore, where there was a judgment against the holder of the legal title rendered in the intermediate time between the execution of a deed and its being recorded, and the judgment was first recorded, the subsequent recording of the deed could not abrogate the lien of the judgment.
The forty-seventh and forty-eighth rules of chancery practice explained.
This was a bill filed by McCoy against Rhodes and wife under the following circumstances.
On 6 December, 1839, Rhodes purchased in his own name from the United States, under the preemption law of 1838, and entered at the land office at Ouachita, Louisiana, the following parcel of land: N.W. quarter of section 29, township 10 north, range 10 east, containing 160 20/100 acres, and paid for the same $1.25 per acre, making in the whole $200.25.
On the next day, viz., 7 December, 1839, Rhodes executed a deed for the above property to Eli Montgomery, a resident of the City of Natchez, in the State of Mississippi. The consideration stated in the deed was $1,500 cash. It was executed before Lewis F. Lanney, parish judge and ex officio notary public of the Parish of Concordia, in Louisiana. This deed, however, was not recorded in the office of the judge of the parish until 10 December, 1841.
On 10 December, 1839, Rhodes entered at the land office, in the name of Montgomery, the following pieces of land, viz.: S.W. quarter and west half of N.E. quarter of section 29, = 240 31/100 acres; S.E. quarter of section 30, = 161 60/100 acres; N.W. quarter of section 32, = 160 acres.
These three parcels were entered, as has just been remarked, in the name of Montgomery.
On 24 February, 1840, James H. McCoy obtained a judgment against Zachariah Rhodes in the Ninth District Court in the Parish of Concordia for $1,546.27, with interest thereon
at the rate of eight percent from 26 March, 1839, till paid, and costs.
On 7 March, 1840, this judgment was duly recorded in the office of the parish judge and ex officio recorder of mortgages in and for the Parish of Concordia.
On 10 December, 1841, Montgomery recorded the deed which had been executed to him by Rhodes on 7 December, 1839, and on the same day executed a deed of the three parcels of land which had been entered in his name to Thomas J. Ford of Adams County and State of Mississippi. The consideration is stated in the deed to have been the following, viz.:
"The sum of three thousand dollars cash, which the said Eli Montgomery doth hereby acknowledge to have received, and the eight promissory notes of the said Thomas J. Ford, of even date herewith, and payable to the order of the said Eli Montgomery, for the amount and for the time as follows, viz., first, a note for the sum of eight hundred dollars; second, a note for the sum of one thousand dollars; another note for the same sum of one thousand dollars, and a note for the sum of five hundred and thirty-three dollars thirty-three and one-third cents, all payable on 1 January, 1843; next, the two notes of the said Ford for the sum of one thousand dollars each, and also a note for the sum of thirteen hundred and thirty-three dollars thirty-three and one-third cents, payable on 1 January, 1844; and lastly, the note of the said Ford for the sum of three thousand three hundred and thirty three dollars thirty-three and one-third cents, payable on 1 January, 1845, all paraphed by me, the said notary, 'Ne varietur,' to identify them herewith, and payable at the office of the judge of the Parish of Concordia."
The wife of Montgomery renounced all her rights of dower and rights of every kind in and to the property, which stood mortgaged for the payment of the notes.
On 2 November, 1842, Ford conveyed the property to Mrs. Luminda Rhodes, for the consideration of ten thousand dollars. Zachariah, the husband of Luminda, being present, declared that he accepted this act for his said wife, and "duly authorizes and assists her herein."
On 28 January, 1845, James H. McCoy, a citizen of the State of Mississippi, filed his bill in the Circuit Court of the United States for the District of Louisiana against Zachariah Rhodes and Luminda Montgomery his wife. It averred that Rhodes conspired with Montgomery to cheat and defraud the complainant; that the conveyance of 7 December, 1839, from Rhodes to Montgomery, was fraudulent
and void; that the entry of the lands on 10 December in the name of Montgomery was fictitious and fraudulent, and that the whole transaction was intended to benefit Rhodes and defraud his creditors; that Luminda, the wife of Rhodes, was the niece of Montgomery; that the recording of the judgment on 7 March, 1840, operated as a judicial mortgage upon all the lands, and prayed for a sale of the lands in order to discharge the judgment.
On 3 December, 1845, Rhodes and wife answered the bill. They admitted the entry of the lands, but averred that they were paid for with money actually furnished by Montgomery, and were intended to be his property; that Montgomery afterwards sold the lands to Ford, and that the respondents had no interest or participation therein; that after said sale was made, the notes of the said Ford were paid to this respondent, Luminda Montgomery, by the said Eli Montgomery, for moneys due to her from the estate of her deceased father, Joseph Montgomery, of whom the said Eli Montgomery was executor or administrator of his estate, and that the said notes being secured by mortgage on all the said lands, and the said Ford having become embarrassed and unable to pay the same, the lands were taken by this respondent, Luminda, in satisfaction of said notes, by agreement between these respondents and said Ford, and the conveyance made accordingly, for the sole use of this respondent, Luminda.
They then denied all fraud, combinations, deceptions, or cheating &c.
A general replication was put in and depositions were taken.
On 24 January, 1848, the cause came on to be heard on the bill, answers, exhibits, and proofs, when the circuit court decreed that the complainant's bill should be dismissed, with costs.
A petition for a rehearing was afterwards filed, alleging that the decree was erroneous in this, amongst other things, that the recording of McCoy's judgment was prior in date to the recording of the deed from Rhodes to Montgomery, by which deed the land entered on 6 December was conveyed to Montgomery, the judgment being recorded on 7 March, 1840, and the deed on 10 December, 1841.
But the court overruled the application for a rehearing, upon which the complainant appealed to this Court.