Astor v. Wells

• Decision Date: 01 February 1819
• Citation: 4 Wheat. 466,4 L.Ed. 616,17 U.S. 466
• Parties: ASTOR v. WELLS et al
• Court: U.S. Supreme Court

17 U.S. 466

4 Wheat. 466

4 L.Ed. 616

ASTOR v. WELLS et al.

February Term, 1819

APPEAL from the Circuit Court of Ohio. The bill in equity filed in this cause stated, that Arnold Henry Dorhman, in 1806, became indebted to the United States, in the sum of $6515.10, for duties upon the importation of certain goods, payable at the custom-house in the city of New York. The plaintiff, Henry Astor, became bound with Dorhman for the payment of those duties; and thereupon, Dohrman, to secure Astor, executed and delivered the mortgage deed of the 14th of August 1806, in the bill mentioned, for the 13th township, in 7th range, then lying in Jefferson county, in the state of Ohio: and Dorhman became further indebted to the plaintiff in the sum of $2700, to secure which, upon said township, he afterwards, on the 25th of August 1807, executed another mortgage deed of the same premises. Both the deeds were recorded in the county of Jefferson, on the 2d of October 1810, and in Tuscarawas, on the 21st of October 1812, which county was erected in part from Jefferson, after the execution, and before the recording therein of said deeds.

On the 26th of August 1807, the plaintiff released to Dorhman one-fourth of said township, by deed, recorded in Tuscarawas county, on the 9th of March 1813. On the 24th of October 1810, Dorhman gave the defendant Wells, a deed of trust of the three-fourths of said township, not released, to secure the payment of $5000, for which the defendant Wells had become liable for Dorhman, by indorsing his paper, at the bank of Steubenville, which was recorded in Tuscarawas, the 13th of January 1811. On the 12th of February 1813, the defendant Wells took another deed from Dorhman, for the quarter sections which had been released, which was recorded in Tuscarawas county on the 10th of March 1813, to secure $3000, for further indorsements by Wells for Dorhman. The bill then charged the defendant Wells with notice of the plaintiff's deeds and lien upon said lands, before his deeds, indorsements, or any payments made by him; and that he accepted the deeds, made the indorsements, and payments, if any, with knowledge, &c. charged a secret understanding, that the released sections, conveyed to Wells, by the last-mentioned deed, were to inure to Dorhman or his family; and that neither transaction between Wells and Dorhman was bond fide. Dorhman died on the 21st of February 1813, nine days after his last deed to Wells, who commenced a suit against the heirs of Dorhman, on the 27th of August following; and obtained a decree of sale, under which he purchased the premises; all which was charged to be fraudulent.

The widow and heirs of Dorhman, by their answer, admitted all the deeds, and answered, generally, that they knew nothing of the other transactions. The answer of Wells admitted the plaintiff's deeds; stated his own deeds to be bon a fide, and denied notice and fraud.

Obadiah Jennings, who was examined as a witness in the cause, testified that he prepared the first deed to Wells, and saw it executed, but said that Dorhman employed him, and he considered himself exclusively employed by Dorhman, and not as the agent or attorney of Wells, in that transaction; that it was probable, he had held some conversation with Wells as to his liabilities for Dorhman, and the nature of the security to be given, before Dorhman applied to him to draw the deed; and that Wells sent the deed to him in a letter, to carry to be recorded in Tuscarawas county. Dorhman informed him, that Astor's agent had brought Astor's deeds and put them on record; and Dorhman wished to give Wells the preference, and consulted him how it could be done. The witness examined the record, and knew of Astor's deeds and lien on those lands. He advised Dorhman to give Wells a deed, which, if recorded in Tuscarawas, would give him the preference; but never gave Wells any information respecting Astor's deeds.

March 6th.

Brush, for the appellant and plaintiff, argued: 1. That the defendant's (Wells) deed was void, under the second section of the statute of Ohio, entitled an 'act for the prevention of frauds,' &c., which declares, 'that every gift, grant or conveyance of lands, tenements, hereditaments, &c., made or obtained with intent to defraud creditors of their just and lawful debts or damages, or to defraud or deceive the person or persons who shall purchase such lands, &c., shall be deemed utterly void, and of no effect.' Rev. Laws of Ohio, 321. The bill shows Astor to be a creditor; the answer admits it; and Jennings proves that Dorhman informed him such was the fact. The debt being secured by mortgage upon the lands in controversy, only makes the fraud more palpable. Still, he was and is a creditor; and it is manifest, Dorhman made the deed to Wells to defraud Astor, his creditor.

2. The recording of Astor's deeds in Jefferson county, was notice to the defendant, Wells. During all the time given for recording, the lands lay in that county; it was, therefore, the proper place for recording those deeds, and the recording afterwards must have relation to the time when and the place where they ought to have been recorded; considering the township as part of the county for that purpose. Heath v. Rose, 12 Johns. 140; 1 Johns. Cas. 85; Vin. Abr., tit. Relation, 288. And the recording ought to be considered as nunc pro tunc, yet not so as to affect any deed made and recorded prior to the making this record: and as to all subsequent, no inconvenience or injustice could be complained of, inasmuch as every purchaser would be bound to search those records for all deeds there recorded prior to the division. Using such diligence as he was bound to use, knowing the lands originally lay in that county, he would have discovered Astor's deed there recorded, before any deed made to him; and ought, therefore, to be charged with notice. To what time does the act of assembly relate, when it says the deed shall be 'recorded in the county in which such lands shall be situate?' Revised Laws of Ohio, 318. To the time of making and delivery of the deed, or to the time of recording? The latter would make the deed take effect from the recording, not from the delivery, as is the law. The case of Taylor v. McDonald's Heirs, is not analogous, as there the lands did not lie in the county where the deed was recorded; and the question was upon the effect of the deed at law.

3. By accepting the deed prepared by Jennings, the defendant, Wells, has made Jennings his agent, by legal implication; and notice to him is notice to his principal. Jennings acted in the transaction; advised Dorhman how to give Wells the preference prepared the deed; saw it executed, and at the request of Wells carried, it to be recorded; and had some previous conversation with Wells as to his liabilities for Dorhman, and the nature of the security to be given. In Le Neve v. Le Neve, Ambl. 438, the defendant 'denied notice of the first articles and settlement, till six months after the marriage; and denied that Norton was employed as her solicitor, though she put confidence in him because he was concerned for her husband, and recommended by him, who assured her, he (Norton) would make a handsome provision for her; and Norton assured her, he had taken care to secure her an annuity of 150 a year, and did not then, or any time before, give her any notice of any former settlement.' Although the defendant here has not been as candid as the defendant was in that case, yet by his artful taciturnity and scanty pleading upon the most important subject, much is to be inferred against him. In the case of Jennings v. Moore, 2 Vern. 609, Blincorne acted the very part Jennings has in this transaction, so far as the conduct of either is material to affect the purchaser; and so far as there is any difference, it would seem, the case at bar presents much the strongest ground of equity, to set aside the subsequent incumbrancer or purchaser. Moore had completed his purchase, by paying the money; Wells had not. Blincorne was a bona fide creditor, and had an interest in the estate of Whitlatch, the vendor, and his object was, to secure an honest debt; but Wells's purchase, and the sale to him, was made to defraud and defeat a bon a fide creditor. Moore was charged, upon the naked fact of acceptance; but in this case, strong circumstances and inferences, beside that, implicate Wells. He, most undoubtedly, knew the handwriting of Jennings, his friend, and was bound to inquiry; but Jennings was careful not to mention it to him in any way! So was Blincorne, and so Norton; and the care which all have taken for the purchaser implicates him with their agency, if he will accept, they having notice, and contriving to conceal from him, is the ground of mala fides, and the foundation for the charge of notice against the purchaser. Brotherton v. Hatt, 2 Vern. 574, maintains the same principle, and is called by Lord HARDWICKE 'a clear authority.' The same scriveners were witnesses, and engrossed all the securities, and were quasi agents for all the lenders. Not that the fact of agency was otherwise established, than by the fact of accepting or receiving the securities, engrossed by the same scriveners, who had notice; the concealment of which by them, if the law could tolerate it, would make frauds practicable, without the means of detection. In the latter case above cited, it does not appear, that Mrs. Hatt, the third mortgagee, had any better knowledge who the scriveners were, than Wells in this case. If such had been the fact, that she knew who engrossed the deed for her, and such fact deemed important, it would have been noticed in the report. And it is not mentioned as a fact, or material, in the case of Le Neve v. Le Neve, where the case is cited with approbation by the Lord Chancellor; but in all these cases, they seem to have gone much upon the ground of the fraud of those third persons, and the danger of sanctioning such fraud,...