Atkinson v. Greaves

• Decision Date: 17 October 1892
• Citation: 11 So. 688,70 Miss. 42
• Court: Mississippi Supreme Court
• Parties: W. H. ATKINSON v. J. M. GREAVES ET AL

11 So. 688

70 Miss. 42

W. H. ATKINSON v. J. M. GREAVES ET AL

Supreme Court of Mississippi

October 17, 1892

FROM the chancery court of Madison county, HON. H. C. CONN Chancellor.

The appellees exhibited the bill in this case against the appellant, Atkinson, seeking to establish a trust in certain lands. They claim through their deceased mother. The lands were purchased prior to 1859 by S. A. D. Greaves, the father of complainants, who took the title in his own name. Complainants averred that the purchase-money paid was that of their mother, whereby a trust resulted in her favor. The defendant answered, denying the material allegations of the bill. Among other things, he set up the defense of a bona fide purchaser. He held under the sale mentioned in the opinion. The cause was heard on pleadings and proofs, and there was a decree in favor of two of the complainants, the bill being dismissed as to the other. Defendant appeals. The other facts necessary to an understanding of the points decided are stated in the opinion.

Decree reversed and complainants' bill dismissed at their costs.

W. H Powell, for appellant.

When Greaves executed the trust-deed in favor of Estlin & Co. they granted to him, in consideration thereof, an extension of time for the payment of their large debt. They thus became bona fide incumbrancers. This being so, the purchaser under their trust-deed will be protected, regardless of any notice imparted by the record in the bankrupt proceedings. 46 Miss 489; 54 Ib., 159.

Nugent & Mc Willie, on the same side.

The defense of a bona fide purchaser was fully made out, and should have prevailed in the court below.

F. B. Pratt, for appellees.

1. Atkinson is not a purchaser without notice. He derived title through a sale under a decree of the bankrupt court, the records of which recited that Greaves had only a life-estate.

Again, the purchaser of land at a bankrupt sale takes it subject to all equities. Steadman v. Taylor, 17 Nat. Bk. Reg., 284.

2. The land was acquired by Greaves prior to the code of 1857, and the resulting trust in favor of his wife could only be defeated by purchasers without notice.

But, whether the law of 1857 controls or not, Estlin & Co. were not purchasers for value. They did not give credit on the faith of Greaves' legal title. They participated in the bankrupt proceedings, which recited that he only had a life-estate, and this shows that they had notice. Only the actual interest of Greaves was sold under the decree. The bankrupt court could not affect the rights of the remainder-man. Kelly v. Mills, 41 Miss. 273; U. S. Rev. Statutes, § 5053. All that the bankrupt court court could do was to sell the land, discharged of the lien in favor of Estlin & Co. U. S. Rev. Statutes, § 5075. And this is what was done. If Estlin & Co. had a lien against the estate in remainder, and never enforced it, the defendant acquired no rights under that. As the life-estate only was sold, he will not be heard to say there was no remainder, or that the burden of proof should be on the complainants. The burden of proof is on him to show that the remainder, subject to which the sale was made, did not exist.

H. B. Greaves, on the same side.

1. The proceedings in bankruptcy, under which appellant claims, contained full notice of appellee's equitable title, therefore, the defense of a bona fide purchaser is not good. Appellant and his vendors are conclusively presumed to have had notice of the facts and recitals of this record. 16 Am. & Eng. Enc. L., 798; 12 Kans., 186; 86 Tenn. 383; 1 Am. St. R., 826, and note, p. 829; Ib., 296, 299; 7 Ib., 129; 24 Miss. 208; 66 Ib., 21.

If wrong in this, we submit that complainants were entitled to recover, because the appellant has no title. He claims through the sale made by the bankrupt court.

If we concede that S. A. D. Greaves owned the land absolutely, yet, inasmuch as he only surrendered in bankruptcy a life-estate, this is all the defendant acquired. Under United States Revised Statutes (§§ 5014, 5015), the bankrupt was required to file schedules, showing the particulars concerning the title of property surrendered. This was the method by which the court was vested with the authority to deal with the land in question, and formed the basis of all the proceedings through which appellant claims.

The decree should be affirmed.

Argued orally by W. L. Nugent, for appellant, and F. B. Pratt, for appellees.

OPINION

COOPER, J.

It is unnecessary to consider whether the evidence of complainants is sufficient to establish a resulting trust in their favor in the lands in controversy by reason of the payment of the purchase-money by their deceased mother.

Conceding that their father, S. A. D. Greaves, to whom the land was conveyed, paid for it with the money of his wife, and that a trust resulted to her, and that by her death the complainants succeeded to her right, and might have established the trust against S. A. D. Greaves, or against any one claiming under him, other than a purchaser in good faith, the complainants must fail in their suit, because the defendant's title is...