Dendy v. Commercial Bank & Trust Co.

• Decision Date: 22 February 1926
• Docket Number: 25349
• Citation: 143 Miss. 56,108 So. 274
• Parties: DENDY et al. v. COMMERCIAL BANK & TRUST CO. et al. [*]
• Court: Mississippi Supreme Court

108 So. 274

143 Miss. 56

DENDY et al. v. COMMERCIAL BANK & TRUST CO. et al. ^[*]

No. 25349

Supreme Court of Mississippi

February 22, 1926

Division B

Suggestion of Error Overruled May 10, 1926.

APPEAL from chancery court of Calhoun county, HON. N. R. SLEDGE Chancellor.

Suit by S. T. Dendy and others against the Commercial Bank & Trust Company and another for partition, in which the named defendant filed a cross-bill. From decree dismissing complainants' bill and canceling their claims to certain land, complainants appeal. Reversed and remanded.

Judgment reversed, and cause remanded. Suggestion of error overruled.

J. H. Ford, for appellants.

I. The proceedings for partition brought in 1909 and ended in 1910 were in their inception and termination a legal fraud on the rights of appellants. Appellants were then mere babies with no other person to look to for protection in their helplessness but their mother. She conducted the proceedings for herself and as next friend for them. She undertook to have a lien established in her favor for one thousand nine hundred seven dollars as against their rights, which she sought to have paid to her from the proceeds of the sale of the lands before any distribution should be made to them of any part thereof, though in her testimony in this suit she denies that she was entitled to it, or wanted it established, or that it was established; or if it was established, that it was not valid as to the minors.

It is undisputed in the case that W. B. Wells bought in the land at the sale for Mrs. Dendy and complainants by previous arrangement with her and her attorney. In pursuance of that agreement, Wells bid it off at one thousand five hundred fifteen dollars and ninety-five cents, received a deed to the land on confirmation and immediately deeded it to Mrs. Dendy for a recited consideration of one thousand six hundred twenty-five dollars. The confirmation was procured by her. The deeds were executed at the same time and that from Wells to Mrs. Dendy was placed on record just before that from the commissioner to him. Nothing whatever was paid by Wells or Mrs. Dendy except that she paid the expenses of the proceedings.

This method of buying through Wells as a by-bidder constituted a purchase by her the same as if she had appeared and bid it off and received a deed from the commissioner directly to her. 39 Cyc. 367; 28 C. J., p. 1187, sec. 327; Brockett v. Richardson, 61 Miss. 766; Brandeau v. Greer, 95 Miss. 100, 48 So. 519.

II. The purchase of the land at the sale by Mrs. Dendy, the next friend of the minors, was a fraud in law on their rights and was voidable at their election. Memphis Stone & Gravel Co. v. Archer, 120 Miss. 453, 82 So. 315; Smith v. Strickland, 103 So. 782.

III. Appellee had notice that Mrs. Dendy was the purchaser at said sale when it took its deed of trust. All this was of record when the bank took its deed of trust on September 10, 1920. Mr. Jagoe testified that he knew these proceedings were pending, but he made no effort to find out the facts shown and established in those proceedings before he took the deed of trust, and did not have an abstract of title made to the land in 1917 brought down to date before he took it.

Appellant and Mrs. Dendy were at this time and up to the date of the decree in this case in constructive possession of said lands, the rents being collected therefrom and the taxes paid thereon by her. From this, it would seem conclusive that at the time this deed of trust was taken, the bank had full means of knowing from the records of Calhoun county, if it did not in fact have actual knowledge, that Mrs. Dendy was the real purchaser of the land at the sale in 1910, and that appellants still owned or at least claimed their interest in the land on September 10, 1920. Having such notice, it will not "be heard to say that Mrs. Dendy through whom it claims bought the land and obtained the order affirming her purchase in good faith; that is, that it did not know that it did not thereby obtain good title to the land." Therefore, its deed of trust and the trustees' deed made to it in foreclosure thereof are likewise voidable at the election of complainants.

IV. It was contended that since it was alleged in the bill that Wells purchased at the partition sale in 1910 for Mrs. Dendy and these appellants, and that appellants were omitted from the deed from Wells to her by mistake, no fraud was practiced on them by her and that appellants would have to prove that such a mistake made in writing the deed at the time and also that appellee had notice thereof when it took its deed of trust, before they could recover in this suit.

It was not necessary to allege in the bill that she was guilty of bad faith and fraud in order for complainants to recover on that ground, if sustained by the proof, as the fact that she was the real purchaser, as alleged in the bill, constituted in law bad faith and fraud on her part.

Appellants were entitled to any relief under their bill coming within the purview thereof, which was supported by the proof. Commercial Bank v. Williams, 103 So. 426.

V. Appellants were entitled to the relief prayed for in the bill whether or not appellee had notice of the legal fraud of Mrs. Dendy in purchasing and taking deed to the land at the sale in 1910, whether or not complainants were omitted from said deed by fraud or mistake.

Appellants had the right at any time to come into court and attack the sale of the land under the proceedings for partition of 1910, on the ground of error, or irregularity in the decree, or improper decree, or fraud or collusion, and were not required to wait until they attained their majority, and might proceed by original bill. McLemore v. Chicago, etc., R. Co., 58 Miss. 514; Sledge v. Boone, 57 Miss. 222; Belt v. Adams, 125 Miss. 387, 87 So. 666.

This was certainly true in the case at bar as to appellant, S. T. Dendy, Jr. He attained his majority on October 13, 1923. This bill was filed on February 21, 1924, and within one year thereafter. He had the right under section 646, Code of 1906 (section 408, Hemingway's Code) to bring this suit. See also Mayo v. Clancey, 57 Miss. 674; Sledge v. Boone, 57 Miss. 222; Vaughn v. Hudson, 59 Miss. 42; Adams v. Belt, 100 So. 191; Smith v. Strickland, 103 So. 782; Belt v. Adams, 125 Miss. 387, 87 So. 666.

We, therefore urge this court to reverse the decree of the court below and enter a judgment here in favor of appellants for their three-fourths interest in this land.

J. M. Thomas, for appellees.

It was contended by the appellants, complainants below, that the evidence supported the theory that there was fraud and that appellees, defendants below, first, were charged with knowledge; and, second, had actual knowledge. While, on the contrary, the appellees contended that there was no fraud, either chargeable to appellees or of which they had actual knowledge. In fact, there was no fraud in any sense.

The court below with these issues clearly drawn and understood found as a matter of fact that there was no fraud, and that appellees had not notice or knowledge of any infirmities in the title. This finding was made by the chancellor with all the witnesses before him, when he had the opportunity to decide the proper weight to give the testimony of each witness.

Therefore, we have before us the question of the application of well established principles of law to the facts of this case, as determined by the lower court, and the question of determining wherein the case at bar differs from the cited cases.

In the instant case, Windham, the commissioner, was the grandfather of the minor children. This case is distinguished from the other cited cases where the purchaser stood in trust relationship. The purchaser at the commissioner's sale by Windham was W. B. Wells, a distant cousin of Mrs. Chambers, formerly Mrs. Dendy, with whom she had never before had any business relations.

There was nothing in the record of the partition proceedings to indicate any agreement between Wells and Mrs. Chambers. Wells was not a party to the partition proceedings, merely a stranger. Any one looking at the record title could not be charged with notice of any relationship existing between Wells and the minor children, indicating a trusteeship. As a matter of fact, there was no trusteeship, so found by the lower court, and taking the testimony of Mrs. Chambers, which is the most favorable application that could be made in behalf of the appellants, she only testified that she had an agreement with Wells to deed the property back to the children but that by mistake he failed to do so, and had made the deed to her.

The court evidently took the view of her testimony in this respect as indicating that the use of Wells as a purchaser of the land was purposely to put the title in some one who would not be held to be a trustee, thereby enabling them to perfect a good title in an innocent purchaser who bought in good faith without actual knowledge of such a private agreement.

It would require actual knowledge on the part of the subsequent purchaser of the land of the trustee relationship in order to meet the requirements of the principle of law announced in Brockett v. Richardson, 61 Miss. 781. The principle involved in the instant case as to actual knowledge is further demonstrated in the Brockett case, wherein still a later purchaser, Peters, and his heirs, was found to occupy a position of being a bona-fide purchaser for value, which is the position that Commercial Bank & Trust Company occupies in the case at bar. See Brockett v. Richardson, 61 Miss. at 783.

The principle of law as applied to this case naturally leads to the conclusion that the Commercial Bank & Trust Company appellee, is...