When one party to an action has in his exclusive possession a
knowledge of facts which would tend, if disclosed, to throw light
upon the transactions which form the subject of controversy, his
failure to offer them in evidence may afford presumptions against
him.
Where land is used for the purpose of a home and is jointly
occupied by husband and wife, neither of whom has title by record,
a person proposing to purchase is bound to make some inquiry as to
their title.
The possession of real estate in the District of Columbia under
apparent claim of ownership is notice to purchasers of the interest
the person in possession has in the fee, whether legal or equitable
in its nature, and of all facts which the proposed purchaser might
have learned by due inquiry. This principle applies with peculiar
cogency to a case like the present, where the slightest inquiry
would have revealed the facts, and where the purchaser deliberately
turned his back upon every source of information, and a purchase
made under such circumstances does not clothe the vendee with the
rights of a
bona fide purchaser without notice.
This was a bill in equity filed by Maria E. Tallmadge against
the appellants to set aside and remove, as a cloud upon her title,
a deed made by the appellants Richard H. Miller, Elizabeth
Houchens, and Ella A. Goudy, claiming to be heirs at law of one
John L. Miller, deceased, dated August 30, 1888, and purporting to
convey to the appellant Kirby the property therein described. The
bill further prayed for the cancellation of a trust deed executed
by the appellant Kirby and his wife to the defendants Willoughby
and Williamson, and for an injunction against all the defendants
except Kirby restraining them from negotiating certain notes given
by Kirby for the purchase of said lots, etc.
The facts disclosed by the testimony show that, in 1882, Mrs.
Tallmadge, the appellee, purchased of one Bates, for a home, lots
Nos. 77 and 78, in square 239, in the City of Washington, with the
improvements thereon, for the sum of ten thousand dollars, five
thousand of which were paid in cash, the residue to be paid in five
installments of one thousand dollars
Page 160 U. S. 380
each. Instead of taking the title to the property in herself,
she furnished the money to John L. Miller, a friend of the family,
who paid the five thousand dollars cash with the money thus
furnished, and at her request took the title in his own name, and
executed notes for the deferred payments, which he secured by a
deed of trust upon the property. Subsequently, and in June, 1883,
Miller also purchased with the funds of Mrs. Tallmadge the
adjoining lot, No. 76, taking title in his own name and executing a
deed of trust for the deferred payments, amounting to $1,266.
Mrs. Tallmadge took immediate possession of the premises, and
has occupied them as her own from that day to the time the bill was
filed, paying taxes, improvements, and interest on encumbrances,
reducing the principal $2,266, and holding open and notorious
possession under her claim of title.
Mr. Miller, who claimed no title or right to the premises in
himself, on December 27, 1883, by a deed signed by himself and
wife, conveyed the legal title to Mrs. Tallmadge; but this deed,
through inadvertence or otherwise, was not recorded until October
4, 1888. Mr. Miller died in February, 1888, and by his will, which
was dated December 1, 1880, devised his estate to his widow.
On June 16, 1888, defendants Miller, Houchens, and Goudy,
collateral heirs of John L. Miller, who had made a contract with
the defendants Willoughby and Williamson to give them one-quarter
of whatever they could get for them out of the estate of Miller,
filed a bill in the Supreme Court of the District against the widow
and executor of Miller, the holders of the notes given by him, and
the trustees in one of the deeds of trust, praying for a partition
or sale of the property, the admeasurement of the widow's dower,
and for a charge upon the personal estate of Miller for the unpaid
purchase money of the property.
To this bill the widow of John L. Miller made answer that her
husband never had any interest in the property in question; that
the title was taken in his name for Mrs. Tallmadge, and that, long
before his death, he had, by deed, duly conveyed it to her, and
that neither she nor his estate had or ever
Page 160 U. S. 381
had any interest in the property. In August, 1888, the pendency
of this suit coming to the knowledge of Mrs. Tallmadge, she sent
the original deed from Miller to her, then unrecorded, by Mr.
Tallmadge, to Willoughby and Williamson, solicitors for Miller's
heirs, who examined and made minutes from it.
On August 30, 1888, Houchens, Goudy, and Miller, who had filed
the bill for partition, executed a deed conveying the property to
the appellant Kirby, subject to the dower rights of Mrs. Miller,
for a consideration of $12,000, $3,000 of which was said to have
been paid in cash, and $9,000 by notes secured by a mortgage or
trust deed upon the property, to Willoughby and Williamson, as
trustees. Kirby thereupon claimed the property as an innocent
purchaser without notice of the prior deed. He at once gave notice
to Mr. Tallmadge that he would demand rent for the property at the
rate of $1,000 per annum.
On receipt of this notice, Mrs. Tallmadge filed this bill to
cancel and set aside the deed and deed of trust. Answers were filed
by the defendants, and testimony taken by the plaintiff tending to
show the facts alleged in her bill. Neither of the appellants took
proof, nor did they, or either of them, offer themselves as
witnesses, but stood upon their answers.
Upon final hearing the court below, in special term, rendered a
decree in accordance with the prayer of the bill, setting aside the
deed and deed of trust as fraudulent and void, from which decree
defendants appealed to the general term, which affirmed the decree
of the court below, and further directed that Miller, on the demand
of Kirby, return to him the $3,000 which Kirby claimed to have
paid, and which Miller admitted to have received.
Page 160 U. S. 382
MR. JUSTICE BROWN, after stating the facts in the foregoing
language, delivered the opinion of the Court.
The controversy in this case arises from the fact that the deed
from John L. Miller to Mrs. Tallmadge, which was given December 27,
1883, was not put upon record until October 4, 1888. In the
meantime, and in February, 1888, Miller, in whose name the property
had been taken for the benefit of Mrs. Tallmadge, died, and on
August 30, 1888, Houchens, Goudy, and Richard Henry Miller,
collateral heirs of John L. Miller, executed a deed of the
property, subject to the dower rights of Miller's widow, to
defendant Kirby, for an expressed consideration of $12,000, of
which $3,000 are said to have been paid down in cash, and $9,000 in
notes payable to Willoughby and Williamson. Kirby now claims to be
an innocent purchaser of the property, without notice of the prior
deed from John L. Miller to Mrs. Tallmadge.
There are several circumstances in this case which tend to
arouse a suspicion that Kirby's purchase of the property was not
made in good faith. Within three months after the probate of the
will of John L. Miller, his collateral heirs, Houchens, Goudy, and
Richard H. Miller, who had made a contract with Willoughby and
Williamson to give them one quarter of whatever they could get for
them out of the estate of Miller, filed a bill for the partition of
real estate, and to set off the widow's dower. His widow, Lola,
answered, admitted that her husband did not purchase the lands
described in the bill, and alleged that he had conveyed them away
in his lifetime.
Mrs. Tallmadge, hearing of this suit, instead of appearing
formally therein, submitted her deed from Miller to the solicitors
for the complainants in the partition suit, who did not amend their
bill or make her a party, but apparently allowed the suit to drop,
inasmuch as the complainants, being heirs of John L. Miller, took
only his actual interest in the land, of which, owing to his deed
to Mrs. Tallmadge in his lifetime, nothing remained at his death.
Shortly thereafter, the complainants
Page 160 U. S. 383
in that suit, who must have been well aware that they had no
title to the property, executed a deed to Kirby of all their
interest in the land for a consideration of $12,000, subject to the
dower right of Mrs. Miller, the debts of John L. Miller, and so
much of the notes of $5,000 as were unpaid, after applying his
personal estate. Kirby alleges in his answer that he examined the
premises twice, and approached the house, but never seems to have
entered it, and apparently took up with the first proposition made
to him to buy it without any of the bargaining that usually
precedes the consummation of a sale of property of that value.
While he avers in his answer, and Miller admits, the payment of
$3,000 in cash, defendants introduced no testimony whatever in
support of their case, but relied solely upon their answers. As
they had it in their power to explain the suspicious circumstances
connected with the transaction, we regard their failure to do so as
a proper subject of comment. "All evidence," said Lord Mansfield in
Blatch v. Archer, 1 Cowper 63, 65,
"is to be weighed according to the proof which it was in the
power of one side to have produced and in the power of the other
side to have contradicted."
It would certainly have been much more satisfactory if the
defendants, who must have been acquainted with all the facts and
circumstances attending this somewhat singular transaction, had
gone upon the stand and given their version of the facts.
McDonough v. O'Neil, 113 Mass. 92;
Commonwealth v.
Webster, 5 Cush. 295, 316. It is said by Mr. Starkie, in his
work on Evidence, vol. 1, p. 54:
"The conduct of the party in omitting to produce that evidence
in elucidation of the subject matter in dispute, which is within
his power and which rests peculiarly within his own knowledge,
frequently affords occasion for presumptions against him, since it
raises strong suspicion that such evidence, if adduced, would
operate to his prejudice."
But the decisive answer to the case of
bona fide
purchase made by the defendant Kirby is that Mrs. Tallmadge had,
ever since the original purchase of the land by Miller in 1882,
been in the open, notorious, and continued possession of the
property, occupying it as a home. The law is perfectly well
Page 160 U. S. 384
settled both in England and in this country -- except, perhaps,
in some of the New England states -- that such possession under
apparent claim of ownership is notice to purchasers of whatever
interest the person actually in possession has in the fee, whether
such interest be legal or equitable in its nature, and of all facts
which the proposed purchaser might have learned by due inquiry. 2
Pomeroy's Eq.Juris. § 614; Wade on Notice, § 273. The same
principle was adopted by this Court in
Landes v.
Brandt, 10 How. 348,
51 U. S. 375,
in which it was held that
"open and notorious occupation and adverse holding by the first
purchaser when the second deed is taken is, in itself, sufficient
to warrant a jury or court in finding that the purchaser had
evidence before him of a character to put him on inquiry as to what
title the possession was held under, and that he (the subsequent
purchaser) was bound by that title, aside from all other evidence
of such possession and holding."
The principle had been steadily adhered to in subsequent
decisions.
Lea v. Polk County Copper
Co., 21 How. 493, 498;
Hughes v.
United States, 4 Wall. 232,
71 U. S. 236;
Noyes v. Hall, 97 U. S. 34;
McLean v. Clapp, 141 U. S. 429,
141 U. S. 436;
Simmons Creek Coal Co. v. Doran, 142 U.
S. 417.
Defendants' reply to this proposition is that the occupancy in
this case, being that of a husband and wife, is by law referable to
the husband alone, as the head of the family; that the purchaser
was not bound by any notice, except such as arose from the
possession of the husband, and that, as he had no title to the
property, Kirby was not bound to ascertain whether other members of
the family had title or not. There are undoubtedly cases holding
that occupation by some other person than the one holding the
unrecorded deed is no notice of title in such third person, and
that the apparent possession of premises by the head of a family is
no notice of a title in a mere boarder, lodger, or subordinate
member of such family, or of a secret agreement between the head of
a family and another person. As was said by this Court in
Townsend v. Little, 109 U. S. 504:
"Where possession is relied upon as giving constructive notice,
it must be open and unambiguous, and not liable to be misunderstood
or misconstrued.
Page 160 U. S. 385
It must be sufficiently distinct and unequivocal so as to put
the purchaser on his guard."
In this case, one James Townsend bought and took possession of a
public house in Salt Lake City, and lived in it with his lawful
wife and a plural or polygamous wife, the latter, who was the
appellant, taking an active part in conducting the business of the
hotel. He subsequently ceased to maintain relations with the
appellant as his polygamous wife, but, being desirous of having the
benefit of her services, both concealed this fact. He made a secret
agreement with her that if she would thus remain, she should have a
half interest in the property. He afterwards acquired his legal
title to the property without a disclosure of the secret agreement.
His interest therein having subsequently passed into the hands of
innocent third parties for value, without notice of appellant's
claim under the secret agreement, it was held that the joint
occupation of the premises by herself and Townsend, under the
circumstances, was not a constructive notice of her claim, and that
she had no rights in the premises, as against a
bona fide
purchaser without notice. There were evidently two substantial
reasons why appellant's possession was not notice of her rights:
first, James Townsend took the legal title to himself in 1873, and
held it until 1878, when the purchase was made, and second, his
agreement with the appellant was not one with his lawful, but his
polygamous, wife, and was also a secret one. The case is obviously
not one of a joint occupation by a husband and his lawful wife,
neither of them having any title thereto.
In the case of
Thomas v. Kennedy, 24 Ia. 397, it was
held that where real estate is ostensibly as much in the possession
of the husband as the wife, there is no such actual possession by
the wife as will impart notice of an equitable interest possessed
by her in the land to a purchaser at execution sale under a
judgment against her husband, in whom the legal title apparently
was at the time of the rendition of the judgment. This case is also
a mere application of the rule that if there be any title to the
land in one who is in possession of it, the possession will be
referred to that title, or, as
Page 160 U. S. 386
said in 2 Pomeroy's Eq.Juris. § 616,
"Where a title under which the occupant holds has been put upon
record, and his possession is consistent with what thus appears of
record, it shall not be a constructive notice of any additional or
different title or interest to a purchaser who has relied upon the
record, but has had no actual notice beyond what is thereby
disclosed."
That the court did not intend to hold that a joint occupation by
a husband and wife is in no case notice of more than the occupation
of the husband is evident from the subsequent case of
Iowa Loan
& Trust Co. v. King, 58 Ia. 598, in which the court
said,
"It cannot, we think, be doubted that possession of real
property by a husband and wife together will impart notice of the
wife's equities, as against all persons other than those claiming
under the husband, their possession being regarded as joint by
reason of the family relation."
In this case, the occupation was by a husband and wife, and it
was held that such possession was notice of a title in the wife to
a life estate in the property, as against the holder of a mortgage
given by a son, who was a member of the family as a boarder,
lodging a part of the time in his mother's house and a part of the
time elsewhere, the legal title being in the son.
In the case of
Lindley v. Martindale, 78 Ia. 379, the
title to the lands was in a son of the plaintiff, who resided on a
portion of them, while plaintiff and her husband resided on another
portion. The lands had for a long time been cared for either by the
husband or the son, and it was held that one who, upon being told
that the title was in the son, took a mortgage from him to secure a
loan which was used for the most part to pay off prior encumbrances
placed on the land by the son, was not charged with the alleged
equities of plaintiff by reason of her claimed possession of the
land, the court holding that her possession was not such as the law
requires to impart notice. The case is not entirely reconcilable
with the last.
In
Harris v. McIntyre, 118 Ill. 275, a widow furnished
her bachelor brother money with which to buy a farm for their joint
use; the title to be taken to each in proportion to
Page 160 U. S. 387
the sums advanced by them respectively. He however took a
conveyance of the entire estate to himself, and they both moved
upon the place, he managing the land, and she attending to the
household duties. The deed was recorded, and he borrowed money,
mortgaged the land to secure the loan, and appeared to the world as
the owner for a period of over ten years, during which time the
sister took no steps to have her equitable rights enforced or
asserted. It was held that her possession under such circumstances
was not such as would charge a subsequent purchaser from her
brother with notice of her equitable rights. Here too the record
title was strictly consistent with the possession.
In
Rankin v. Coar, 46 N.J.Eq. 566, 572, a widow who
occupied part of a house in which she was entitled to dower, while
her son, the sole heir at law, occupied the rest of the house,
released her dower therein to her son by deed duly recorded. It was
held that her continued occupation thereafter would not give notice
to one who took a mortgage from the son, of a title in her to a
part of the house occupied by her, acquired by an unrecorded deed
to her from her son contemporaneous with her release of dower.
"Possession," said the court,
"to give notice or to make inquiry a duty must be open,
notorious, and unequivocal. There must be such an occupation of the
premises as a man of ordinary prudence, treating for the
acquisition of some interest therein, would observe and, observing,
would perceive to be inconsistent with the right of him with whom
he was treating, and so be led to inquiry."
So, in
Atwood v. Bearss, 47 Mich. 72, the title to
property, upon the record, appeared to be in the wife. Her
husband's previous occupation had been under her ownership and in
right of the marital relation, and nothing had transpired to
suggest that she had made the property over to him. She had,
however, given him a deed, which was not put upon record. It was
held that his continuance in possession was no notice of this deed,
since it was obviously consistent with the previous title in
herself.
Indeed, there can be no doubt whatever of the proposition
Page 160 U. S. 388
that where the land is occupied by two persons, as for instance
by husband and wife, and there is a recorded title in one of them,
such joint occupation is not notice of an unrecorded title in the
other. In such case, the purchaser, finding title in one, would be
thrown off his guard with respect to the title of the other. The
rule is universal that if the possession be consistent with the
record title, it is no notice of an unrecorded title. But where the
land is used for the purpose of a home, and is jointly occupied by
husband and wife, neither of whom has title by record, we think
that in view of the frequency with which homestead property is
taken in the name of the wife, the proposed purchaser is bound to
make some inquiry as to their title.
The case of
Phelan v. Brady, 119 N.Y. 587, is an
instance of this. In this case, a suit was brought to foreclose a
mortgage upon certain premises given by one Murphy, who held an
apparently perfect record title to the property. It appeared,
however, that before the execution of the mortgage, Murphy had
conveyed the premises to one Margaret Brady, who was in possession,
and, with her husband, occupied two rooms in the building on the
premises. She also kept a liquor store in a part thereof. The other
rooms she leased to various tenants; claiming to be the owner, and
collecting the rents. Her deed was not recorded until after the
giving of the mortgage. It was held that her actual possession
under her deed, although unrecorded and its existence unknown to
plaintiff, was sufficient notice to him of her rights to defeat any
claim under the mortgage. This case goes much further than is
necessary to justify the court in holding that Mrs. Tallmadge's
possession was notice in the case under consideration, as the
actual occupation of the wife was only of two rooms in a tenement
house containing forty-three apartments.
If there be any force at all in the general rule that the
possession of another than the grantor puts the purchaser upon
inquiry as to the nature of such possession, it applies with
peculiar cogency to a case like the present, where the slightest
inquiry either of the husband or wife would have revealed the
actual facts. Instead of making such inquiry, Kirby turns
Page 160 U. S. 389
his back upon every source of information, does not even enter
the house, makes no examination as to whether the property was in
litigation, and buys it of collateral heirs of Miller, subject to
his widow's dower if he had had the title, to an unpaid mortgage,
and to the chances of the property being required for the payment
of Miller's debts. It is clear that a purchase made under such
circumstances does not clothe the vendee with the rights of a
bona fide purchaser without notice.
We see no reason for impeaching the original purchase of the
land by Mrs. Tallmadge. Her account of the transaction is supported
by the testimony of all the witnesses, as well as by the receipts
and other documentary evidence. Her failure to cause the deed to be
recorded is not an unusual piece of carelessness, nor is it an
infrequent cause of litigation. Under the circumstances of the
case, it raises no presumption of fraud. What motives she may have
had for taking the title to the property in the name of Mr. Miller
is entirely immaterial to the present controversy, although it
appears from her testimony that she was possessed of money in her
own right, and took this method of investing it.
The decree of the court below is therefore
Affirmed.
