Edwards v. Thompson

• Decision Date: 30 June 1874
• Court: North Carolina Supreme Court
• Parties: JAMES W. EDWARDS v. JAS. H. THOMPSON and others.

71 N.C. 177

JAMES W. EDWARDS

v.JAS. H. THOMPSON and others.

Supreme Court of North Carolina.

June Term, 1874.

Possession, if open, notorious and exclusive, puts a purchaser upon enquiry, and is notice of every fact which he could have learned by enquiry; and if the purchaser lived in another State, the principle of constructive notice applies notwithstanding.

The possession of a tenant has the same effect in regard to notice as possession by the landlord.

A contract to purchase, though in some respects regarded as a mortgage, is not void as to subsequent purchasers for want of registration.

In a proceeding to foreclose a mortgage, when the defendant pleads that the debt has been paid, the Judge below must decide whether a proper case has been made, justifying him in suspending a judgment for a plaintiff whose legal right of possession is not denied, until the determination of the question whether the mortgage debt has been paid or not. If the debt has not been paid, the plaintiff is entitled to judgment, unless the defendant shall pay under the order of the Court, what is found to be due and unpaid.

( Webber v. Taylor, 2 Jones Eq. 9; Taylor v. Kelly, 3 Jones Eq. cited and approved.)

CIVIL ACTION for the recovery of real property, and damages for withholding the same, tried before Buxton, J., at the January (Special) Term, 1874, of WAYNE Superior Court.

The material facts are fully stated in the opinion of Justice RODMAN.

On the trial below there were a verdict and judgment in favor of the plaintiff, from which defendants appealed.

Smith & Strong, for defendants .

Faircloth & Grainger, contra .

RODMAN, J.

This action is to recover land and damages for withholding the possession. It was originally brought against James H. Thompson and one Redford, his tenant.

The answer of Thompson admits that he and Redford were in possession. He says that the land belonged to him until some time in 1861, when the Sheriff of Wayne sold the same and a slave under execution, when one O. H. Whitfield purchased, and received a deed from the Sheriff on 4th April, 1861. On the same day, Whitfield entered into a written contract with him whereby he agreed that if Thompson would within twelve months after that day, pay to Whitfield $601.28, the price which he had paid for the land and slave, and would also during the same time pay to Bright Thompson a note for $1530 to which Whitfield was surety for James H. Thompson, then he (Whitfield) would convey the land and slave to said Thompson. He further says that he has paid the note to Bright Thompson and fully indemnified Whitfield, and that he and Whitfield were partners in making turpentine in the years 1866 and 1867, and that by reason thereof, and otherwise, Whitfield became and was at the time of his sale to plaintiff, and still is indebted to him in a much larger sum than $601, and interest thereon; that Whitfield being thus indebted to him, for the purpose of defrauding him, on 26th March, 1867, sold the land for an inadequate price to the plaintiff who well knew of his rights in the premises. James H. Thompson, after having answered, died and his heirs became parties defendant, and adopted his answer.

The case made for this Court sets forth the purchase of Whitfield under execution, and his agreement with James H. Thompson (a copy of which is made part of the case and corrects some omissions made by the Judge in stating its contents,) in substance as they are stated in the answer. The agreement was never registered. The case further sets forth that after the execution of that agreement James H. Thompson remained in the possession of the land personally, or by his tenants, until his death after the commencement of the action, and that one Simon was in possession as a tenant of said Thompson, on 26th March, 1867, when Whitfield sold to plaintiff, who was a a resident of South Carolina. That plaintiff had no knowledge of the agreement between Whitfield and Thompson, or of any incumbrance whatever on Whitfield's title, except so far as such knowledge would be inferred from the fact of Simon's being in possession, which fact also was unknown to plaintiff. It is denied in the answer that plaintiff was a purchaser for value in the legal sense of that term, but as no question on that point appears to have been made at the trial, it is unnecessary to notice what is stated on that point. Some only of the heirs of Thompson took possession of the land after his death, and some questions were made as to the liability for mesne profits of those who did not take possession. In the view we take of the case it is unnecessary to consider these questions.

The principal question on the trial was whether the plaintiff was a purchaser without notice. The defendants contended that the possession by Simon, whether the plaintiff actually knew of it or not, was notice to him of the equity of James H. Thompson, and that the plaintiff therefore purchased subject to such equity.

His Honor instructed the jury that the continuance in possession by Thompson after the Sheriff's sale, would in the absence of any special agreement, make him a tenant at sufferance, and that his possession in March, 1867, was notice to the plaintiff that he claimed as such tenant, but was not notice of any other or greater claim by him. Upon this instruction the jury found that the plaintiff was a bona fide purchaser, for value and without notice.

There is some difference among the authorities on the question as to whether actual possession by a person is notice to a purchaser, of an equity in favor of such person against a vendor. But the decided weight of authority is in favor of the proposition that possession, if open, notorious and exclusive, puts a purchaser upon enquiry, and is notice of every fact which he could have learned by enquiry.

Webber v. Taylor, 2 Jones Eq., 9, and Taylor v. Kelly, 3 Jones Eq., are to this effect. These cases are fully supported by the following English and American cases, which with many others we have examined; 2 Sugden, V. and P. 337; 2 Ves. V., 440; 13 Ired. 121; 2 Lehs. and Lef., 583; 2 Ball and Beat, 416; 1 Mer., 282; 1 Russ and Mylne, 39; 19 Iowa, 544; 10 California, 181; 12 Ired., 363; 22 Illinois 310; 1 Story Eq. Jur. S., 400.

These cases clearly go beyond the line laid down by the Judge. They held that if the tenant in possession has a contract to purchase, notice of the possession is notice of that contract, because it might have been found out on enquiry.

The plaintiff, however, says that all these cases are distinguishble, as in all of them the purchaser knew, or from...