Burr v. Kase

• Decision Date: 13 May 1895
• Docket Number: 298
• Citation: 31 A. 954,168 Pa. 81
• Parties: C. A. Burr, Committee of A. E. Burr, Appellant, v. John Kase and H. Stone
• Court: Pennsylvania Supreme Court

31 A. 954

168 Pa. 81

C. A. Burr, Committee of A. E. Burr, Appellant, v. John Kase and H. Stone

No. 298

Supreme Court of Pennsylvania

May 13, 1895

Argued March 1, 1895

Appeal, No. 298, Jan. T., 1895, by plaintiff, from judgment of C.P. Lackawanna Co., Sept. Term, 1891, No. 10, on verdict for defendants. Affirmed.

Ejectment for a tract of land in Carbondale township.

The facts appear by the opinion of the Supreme Court.

The court charged in part as follows:

"[It is necessary for you to find, before you can render a verdict for the plaintiff in this case, that H. Stone, the other defendant, had knowledge of this agreement between Dr. Burr and John Kase. If Stone was a bona fide, innocent purchaser for value of this property, without any notice, at or before the time of the purchase, of this secret arrangement between Dr. Burr and Mr. Kase, then he is not chargeable with that arrangement, and your verdict will have to be for the defendant.]" [1]

Plaintiff's points were among others as follows:

"2. That even if H. Stone did not have notice of the agreement between Dr. Burr and John Kase, which converted the sheriff's deed into a mortgage, if the jury find that such an agreement was made before he purchased of Kase, it appearing that only a portion of the purchase money was paid he would be entitled to protection to the extent of the money he had actually invested in the property before notice of Dr Burr's claim, either by way of purchase money or improvements with interest thereon, and it is for the jury to find this amount from all the evidence in the case. Answer: This point is refused." [2]

"7. A bona fide purchaser is entitled to protection only to the extent of the money paid before notice. Therefore H. Stone is entitled to protection in this case, even if the jury find he was an innocent purchaser for value, provided they find for the plaintiff as to the trust arrangement, only to the extent of the money he expended prior to Nov. 27, 1891, and this amount the jury is to fix upon all the evidence in the case. Answer: This point is refused."

Defendant's points were among others as follows:

"3. If the jury should find from all the evidence that there was a written agreement made prior to said sheriff's sale between John Kase and A. E. Burr, by which John Kase agreed upon certain conditions to reconvey said property to A. E. Burr, and that said conditions had been fulfilled at the time suit was brought, and should further find from all the evidence that the said defendant, H. Stone, had no notice at the time or prior to his purchase of the land in question of John Kase, there can be no verdict against the defendants. Answer: I affirm this point." [4]

"4. If the jury find from all the evidence in the cause that H. Stone was an innocent purchaser without notice of any equities in the plaintiff, A. E. Burr, the plaintiff cannot recover, and the verdict must be for the defendants. Answer: If you find that H. Stone was an innocent purchaser for value and without notice, the verdict must be for the defendants. With this qualification I affirm this point." [5]

Verdict and judgment for defendant. Plaintiff appealed.

Errors assigned were (1-5) above instructions, quoting them.

Judgment affirmed.

A. A. Vosburg and Everett Warren, W. S. Hulslander with them, for appellant. -- To entitle an alleged bona fide purchaser to absolute protection free and clear of secret trusts, he must show that he paid all the purchase money before notice: Pomeroy's Equity, 751; Union Canal Co. v. Young, 1 Wh. 410; Griffiths v. Sears, 112 Pa. 530; Hoffman v. Strohecker, 9 W. 183; Boynton v. Winslow, 37 Pa. 315; Filby v. Miller, 25 Pa. 264; Deckers v. Temple, 41 Pa. 234; Juvenal v. Jackson, 14 Pa. 519; Coxe v. Sartwell, 21 Pa. 486; Youst v. Martin, 3 S. & R. 433; Bolton v. Johns, 5 Pa. 151; Lloyd v. Lynch, 28 Pa. 435; Rogers v. Hall, 4 Watts, 362; Merritt v. N.R.R., 12 Barb. 605.

An unrecorded defeasance changes a sheriff's deed into a mortgage: Gaines v. Brockerhoff, 136 Pa. 175; Saunders v. Gould, 134 Pa. 445; Sweetzer's App., 71 Pa. 264; Beck v. Uhrich, 13 Pa. 636.

A bona fide purchaser without notice must aver and prove not only that he had no notice of the plaintiff's rights before his purchase, but that he had actually paid the purchase money before notice: Jewett v. Palmer, 7 Johns. Ch. 65; Maccauley v. Smith, 132 N.Y. 532; Jackson v. McChesney, 7 Cow. 360; Stone v. Welling, 14 Mich. 514; Wormley v. Wormley, 8 Wheat. 450; Birdsall v. Cropsey, 45 N.W. 921; Rush v. Mitchell, 71 Iowa 333; Wood v. Rayburn, 22 P. 521.

W. W. Watson, W. S. Diehl with him, for appellee. -- A bona fide purchaser for value of the land conveyed without notice of the circumstances alleged against the validity of the title holds it discharged from equities between the parties: Pancake v. Cauffman, 114 Pa. 113; Shaw v. Read, 47 Pa. 96, Ebner v. Goundie, 5 W. & S. 49; Poth v. Anstatt, 4 W. & S. 307; Hood v. Fahnestock, 8 Watts, 489; Meehan v. Williams, 48 Pa. 238; Scott v. Gallagher, 14 S. & R. 333; Bracken v. Miller, 4 W. & S. 102; Twyne's Case, 1 Smith's Leading Cases, 108.

Before STERRETT, C.J., GREEN, WILLIAMS, McCOLLUM, MITCHELL, DEAN and FELL, JJ.

OPINION

MR. JUSTICE GREEN:

The counsel of the parties made an agreement which is printed in the Appendix, to the effect that the appellant need not print any more of the testimony than such as related "to the transaction between John Kase and H. Stone together with the charge of the court and so much of the record evidence and exhibits as the appellant may see proper to print in his paper book." It is stated in the agreement by way of recital that, "the only question raised by the assignments of error is to what extent H. Stone is entitled to protection as an innocent purchaser without notice of any equities in the plaintiff, A. E. Burr, absolutely or only to the extent of the money actually paid before notice."

If the case depended only upon the solution of that question an agreement such as the foregoing might not be subject to objection. But in this case there is another question of far greater importance than this, the decision of which cannot be determined or even promoted by the solution of this. If the plaintiff's claim of title was of such a character that it cannot be sustained under all the evidence even against Kase, the sheriff's vendee of the title, it is only a waste of time to inquire to what extent an innocent purchaser from Kase can be protected against the plaintiff's claim. It is unfortunate that the testimony relating to the inception of Burr's claim of title was not printed in the paper-books, as it has nearly doubled our labor to discover it in a most voluminous record of 332 pages of type-written matter. After a wearisome expenditure of most precious time which we cannot afford to spare, we have reached the conclusion that the plaintiff's claim cannot be sustained in any point of view. It is grossly lacking in every element which is essential to its existence, and we could not possibly give it sanction without disregarding, and practically overruling a long line of decisions, the wisdom and justness of which have been demonstrated by a constantly recurring experience of more than half a century.

In 1879 and prior thereto the plaintiff was the owner of the surface of a small tract of land containing about twenty-five acres near Carbondale in Lackawanna county. It was incumbered with two mortgages amounting together to $3,500 and a judgment in favor of John Kase, one of the defendants. The plaintiff alleges that prior to the sheriff's sale of the property, which occurred in May, 1879, he made a written agreement with Kase whereby it was agreed that the property should be sold at sheriff's sale under Kase's judgment for $500, and that at the sale Kase should buy the property and thereafter hold it until he was repaid all his expenditure on account of the property, and when he was fully repaid he should reconvey the property to the plaintiff. The plaintiff's abstract of title contains no reference to this agreement, but in an amendment to the abstract the agreement is alleged substantially as above stated, and at the end of the amendment the plaintiff's claim is stated as follows: "That the sheriff's deed and the written agreement between A. E. Burr and John Kase formed part and parcel of the same transaction, and as the agreement was not recorded, the whole constituted an unrecorded mortgage, and was security for the said debt of $3,500."

The claim of the plaintiff, therefore, is that Kase held the title as a mortgagee only. Very often in this class of cases the attempt is made to hold the sheriff's vendee liable as trustee upon a trust arising ex maleficio. But our decisions have been perfectly uniform since Kellum v. Smith, 33 Pa. 158, decided in 1859, and indeed long before that, that a resulting trust cannot be created in that way, that "the fraud which will convert the purchaser at a sheriff's sale into a trustee ex maleficio, of the debtor, must have been fraud at the time of the sale. Subsequent covin will not answer, any more than subsequent payment of the purchase money will convert an absolute purchase into a naked trust. When the purchaser at a sheriff's sale promises to hold for the debtor, and afterwards refuses to comply with his engagement, the fraud, if any, is not at the sale, not in the promise, but in its subsequent breach. That is too late." From this decision we have never departed.

Looking now at the claim that Kase held title only as a mortgagee under an unrecorded defeasance, it will be at once perceived that the first and indispensable requirement is that there was a written agreement duly made and executed by the parties containing the terms of the...