Fulgham v. Burnett

• Citation: 151 Miss. 111,117 So. 514
• Decision Date: 11 June 1928
• Docket Number: 26956
• Court: United States State Supreme Court of Mississippi
• Parties: FULGHAM v. BURNETT et al. [*]

117 So. 514

151 Miss. 111

FULGHAM v. BURNETT et al. ^[*]

No. 26956

Supreme Court of Mississippi

June 11, 1928

Division A

1 MORTGAGES. Bill seeking recovery of interest in land because of fraud in sale under trust deed held demurrable as against innocent incumbrancer.

Bill seeking recovery of interest in land on ground of fraud in sale under trust deed held demurrable as against innocent incumbrancer for value without notice of asserted right to require accounting for interest therein.

2 MORTGAGES. Bill seeking recovery of interest in land held to sufficiently charge fraud in sale under deed of trust.

Allegations of bill seeking recovery of interest in land on ground of fraud in sale under deed of trust held sufficient to charge fraud as against a minor on part of her relatives and purchaser thereof by affecting a chilling of bids at public sale.

3 MORTGAGES. Bill, seeking recovery of interest in land for fraud in sale under trust deed, need not charge beneficiary or trustee were parties thereto.

Bill seeking recovery of interest in land on ground of fraud in sale thereof under deed of trust, need not allege that either beneficiary or trustee were parties to fraud of purchaser and others in affecting a chilling of bids at public sale.

4. AUCTIONS AND AUCTIONEERS. Fraudulent agreement between prospective bidders to refrain from bidding renders sale as to any confederate void.

Prospective bidders at a public sale cannot fraudulently agree together to refrain from bidding one against the other, and to do so renders the sale as to any confederate void.

5. MORTGAGES. Bill alleging fraud in sale of land under trust deed held not demurrable for failure to allege complainant did not receive share of proceeds.

Bill seeking recovery of interest in land on ground of fraud in sale under trust deed held not demurrable for failure to alleged complainant did not receive part of money in excess of debt, since such proposition constitutes matter of defense, and is not maintainable on demurrer.

6. LIMITATION OF ACTIONS. Bill alleging sale under trust deed at time debt was barred held not demurrable for failure to allege debt had not been extended or renewed (Hemingway's Code 1927, section 2452).

Bill seeking recovery of interest in land on ground debt was barred by the six-year statute of limitations at time of sale under trust held not demurrable because of failure to allege that debt had not been extended or renewed within Hemingway's Code 1927, section 2452, Code 1906, section 2796, since a renewal or extension would constitute a matter of defense.

7. EQUITY. Demurrer conceded facts alleged in bill.

Demurrer interposed to bill operates to concede facts alleged therein.

HON. V. J. STRICKER, Chancellor.

APPEAL from chancery court, Second district of Hinds county, HON. V. J. STRICKER, Chancellor.

Suit by Mrs. Allie Heard Fulgham against Mrs. Olivia Burnett and others. Decree sustaining demurrers to the bill, and complainant appeals. Affirmed in part, and in part reversed and remanded.

Affirmed in part, and reversed in part, and remanded.

Hughes, Nobles & Lane, for appellant.

It is a well-established rule of law that prospective bidders at public sales cannot fraudulently confederate and agree among themselves to refrain from bidding one against the other, and to do so renders sales to such confederates void. 6 R. C. L. 810, sec. 210. The bill of complaint charges that Dr. Burnett conveyed to Mrs. Sallie Heard for the benefit of Cicero Heard a tract of land embracing one hundred sixty acres in consideration of Cicero Heard refraining from bidding against Dr. Burnett at said sale and a copy of the deed from Dr. Burnett to the wife of Cicero Heard is made an exhibit to the bill of complaint. It is further set out in the bill of complaint that just four days before the alleged trustee's sale that Dr. E. J. Burnett approached T. H. Heard and secured from him a deed to these lands for a recited consideration of one hundred fifty dollars, and that the one hundred fifty dollars was paid to Heard as a consideration for Heard refraining from bidding on the land at the trustee's sale in which Dr. Burnett became the bidder, and a copy of the deed from T. H. Heard to Dr. E. J. Burnett, is also made an exhibit to the bill. It is also clearly and unequivocably charged that Dr. Burnett and Cicero Heard and T. H. Heard entered into these unlawful plots for the specific purpose of defeating the complainant who was then a minor, seven years old, and her minor sister Ruby out of their interest in these lands which they had inherited from their deceased mother. The bill further charges that at the time Dr. E. J. Burnett conveyed this land to his wife, Mrs. Olivia Burnett, that the latter accepted the deed with full and complete knowledge of all of the fraudulent acts set up between her husband, her grantor, Cicero Heard, and T. H. Heard, and that the conveyance to her was subject to all of the infirmities that the trustee's deed to her grantor was subject to and that she did not become vested with title to the land as an innocent purchaser for value.

Under sec. 2454, Hem. Code 1917, the right to bring actions for the recovery of realty is vouched sale and guaranteed to infants and persons of unsound mind for a period of ten years after reaching the age of twenty-one. Allen v. Hayes (Miss. not officially reported), 107 So. 208, does not overrule the case of Conn v. Boutwell, 101 Miss. 353, 58 So. 105; nor Clark v. Rainey, 72 Miss. 151, 16 So. 499. The reasoning of each of these cases is based on the different concrete facts found in the respective cases. They all harmonize. Barksdale v. Learnard et al., 112 Miss. 861, 73 So. 736, cannot be relied on by the appellee in this case because the rule announced in that case is that: "as against an innocent purchaser of land from one having the legal title, an infant having an equity in the land has no better standing than an adult." By an examination of the bill of complaint it will be found that Dr. E. J. Burnett and his wife, his vendee, cannot be treated as innocent purchasers. One of the precise questions presented for the court's decision is, can Mrs. Olivia Burnett here raise the bona-fide purchase for value defense by demurrer? Jones et al. v. Grimes et al., 115 Miss. 874, 76 So. 735.

Neither is there anything alleged in the bill that shows that the Federal Land Bank was an innocent purchaser or incumbrancer for value without notice. The bill shows that Dr. Burnett and his assigns went into wrongful possession of the land on the 16th day of February, 1903, and have continued in such possession up to this date; the bill shows on its face that the deed of trust under which the trustee sold when Dr. Burnett bought the land was barred, and that under the void sale Dr. Burnett and assigns went into wrongful possession of the land. So under the rules adhered to by the supreme court of our own state, neither the Burnetts nor the Federal Land Bank could set up the "bona-fide purchaser or incumbrancer defense" by demurrer. It is true the bill shows that the Burnetts in possession borrowed money from and executed to the Federal Land Bank a deed of trust, but the bill showed that the possession from the beginning of same had been wrongful. McDaniel et al. v. Short, 128 Miss. 520, 90 So. 186.

We take the position in the second place that the bank could not set up the defense of bona-fide incumbrancer for value without notice by demurrer, because the bill alleges that at the time of the pretended sale by the trustee to Burnett that the note and the deed of trust were barred by the statute of limitations. A copy of the deed of trust is filed with and made part of the bill of complaint; no due date is fixed in the deed of trust, and under the law it showed on its face it was due from on and after the date of its execution, and the record of the same was constructive notice to the Federal Land Bank that the deed of trust as security for the note was barred, on the date of the sale by the trustee to Dr. Burnett.

The demurrants take the position, and the chancellor concurred therein that the complainant could not plead and set up the bar of the statute of limitations in establishing her title to this land; that the statute barring the note and deed of trust could only be set up defensively, and not offensively; that the statute could be used as a shield, but not as a sword. As to the last proposition, we beg to call to the attention of the court that the bill of complaint does not undertake to show that complainant is asserting right and title to the land by virtue of the operation of the statute of frauds. The bill distinctly alleges that she became vested with the legal and equitable title to the land in question under the laws of descent and distribution; that her mother was the owner of the land, and that upon her death she fell heir to the land. The bill of complaint, incidentally, charges that through fraud, etc., alleged and pretended sales had taken place, and that deeds of conveyances thereunder had been filed and recorded, and that they were clouds upon complainant's title, and ask that they be cancelled, and for an order to sell for partition. We submit under these allegations of the bill that the statute of limitations barring the note and deed of trust could be set up for the purpose of showing that the sale under the barred note and deed of trust was void, and that this could be done in an affirmative or offensive manner.

Wells, Stevens & Jones, for appellee, Federal Land Bank of New Orleans.

The demurrer of the Federal Land Bank after adopting that of the other defendants sets up the following grounds: "Because there is no equity on the face of the bill; because comp...