Holgate v. Eaton

• Decision Date: 14 December 1885
• Citation: 116 U.S. 33,29 L.Ed. 538,6 S.Ct. 224
• Parties: HOLGATE and another v. EATON, Adm'r, etc. Filed
• Court: U.S. Supreme Court

6 S.Ct. 224

116 U.S. 33

29 L.Ed. 538

HOLGATE and another v. EATON, Adm'r, etc.

Filed December 14, 1885.

W. C. Holgate and H. Newton, for appellants, William C. Holgate and another.

Jas. S. Hoyt and H. S. Sherman, for appellee, Rufus J. Eaton, Adm'r, etc.

MILLER, J.

This is an appeal from the circuit court for the Northern district of Ohio. The suit was originally brought by a bill in equity, in the name of Elizabeth R. Eaton, by her next friend, Rufus J. Eaton. During its progress Mrs. Eaton died, and her next friend was appointed administrator of her estate, and it was revived by him in that character. Afterwards her heirs were made plaintiffs also. The case as it was presented to the circuit court for final decree, and as it comes before us, is to be gathered from the pleadings, documentary evidence, written correspondence, and depositions, which are voluminous. We shall not recapitulate the evidence, but state the material facts as we believe them to be established. John B. Eaton, the husband of the complainant, who resided with her in Maine, and who claimed to be the owner in his own right of 95 acres of land near the town of Defiance, in the state of Ohio, lying between the Wabash & Erie Canal and the Pittsburgh & Fort Wayne Railroad, was in July, 1874, at Defiance trying to sell it. Being in pressing want of money, he made his note for $400, payable to the Defiance National Bank in 90 days, dated July 30, 1874, with Holgate and Newbegin, who are appellants here, as his sureties. This note they after wards paid. On the same day Eaton made a conveyance, absolute on its face, to Holgate of the land above mentioned, and, at the same time, he and Holgate executed the following agreement:

'DEFIANCE, OHIO, July 30, 1874.

'This memorandum witnesseth that John B. Eaton, of Fryeburg, Maine, has this day sold to Wm. C. Holgate that part of the east half of section twenty-seven, (27,) T. 4 N., R. 4 E., lying between the Fort Wayne road and the W. & E. Canal, and containing 95 acres, more or less, excepting 12 75-100 acres now held by Michael Gorman, all more fully described and set forth in a deed this day executed by said John B. Eaton to said Holgate. It is understood said Holgate is to pay for said land the sum of six thousand dollars, and any valid tax claim Adam Wilhelm may hold on said premises; one thousand dollars of which is to be paid on or before October 1st next, two thousand dollars in six months thereafter, fifteen hundred dollars ($1,500) in one year thereafter, and fifteen hundred dollars in two years thereafter, with interest from and after October 1st. It is further understood said Eaton is to execute another deed of warranty, his wife being joined with him as grantor in same, and to forward said deed on to H. Newbegin for said Holgate, which is to be substituted for the deed this day executed to said Holgate as aforesaid. And said Eaton agrees to send on to said Newbegin the mortgage and notes on which the judgment was taken by which his title was ac- quired, in case he can find same, which are to be filed according to law. It is further understood and agreed that if, on or before said October 1st, from any cause, said Holgate shall prefer not to hold said premises on the terms herein set forth, said Eaton agrees to repurchase same of him, and to release any installment that is unpaid of said Holgate, or portion of same, and the obligation to pay said Wilhelm's tax claims; also to refund with interest four hundred dollars ($400) this day advanced on said $1,000 installment to come due October first next, and for any advancements to said Eaton by said Holgate that is or may be made, said Holgate shall have a lien on said premises and may hold the title for same as security till such advancements shall be adjusted. If, however, said Holgate shall be satisfied with said purchase on account of quality of land and all other particulars, he shall, at any time after 60 days, on demand of said Eaton, execute and deliver his notes for any unpaid part of said installments, secured by mortgage on the premises; it being understood that any amount the railway companies may pay over for the portion of said premises between the two railways shall be credited on the said $6,000 to be paid by said Holgate, or to go to said Eaton, less advancements aforesaid, if said Holgate shall prefer to release and reconvey his interest in the premises aforesaid. Given under our hands and seals the day and year above written.

J. B. EATON. [Seal]

'WM. C. HOLGATE. [Seal]

'Attest: HENRY NEWBEGIN.'

Holgate immediately assigned to Newbegin an undivided half interest in this contract, of which Eaton had due notice. He also, within the time limited, notified Eaton of his election to hold the property, and required him to furnish the deed, in which Mrs. Eaton was to join, and the mortgage and notes on which the foreclosure proceeding was had, and on which Eaton's title depended. This deed, however, was not tendered to appellants until December 7, 1876, though the notice and request for it was re- ceived before October 1, 1874. As appellants rely upon this delay as a defense to the suit for the purchase money, it is necessary to consider its importance in the contract and the excuses offered for the delay. It appears sufficiently, we think, on the final hearing, that Mr. Eaton had no other interest in the land at the time he executed this agreement and made his deed to Holgate than that of trustee for his wife. 'The mortgage and notes on which judgment was taken, by which his title was acquired,' were never produced until the hearing before the master in 1882, and the effect of them as evidence is thus stated by the master: 'It appears that, by the will of William A. Allen, brother of Elizabeth R. Eaton, a share of his estate was given to her. Bartley Campbell, of Cincinnati, her agent, seems to have had possession of this share of the estate, being personal property, and used it as his own. In accounting for the same, he assigned a mortgage which he held on lands in Defiance to John B. Eaton, her husband, in trust for Mrs. Eaton and her children. This mortgage was foreclosed under proceedings at Defiance, in which John B. Eaton appeared to be the only party in interest, and at the sheriff's sale he became the purchaser, and the sheriff's deed was made to him, of about ninety-five acres of land in Defiance.' It should be added that the assignment of this mortgage expressed on its face that it was for the benefit of Mrs. Eaton. It is said by the master that the deed from Mrs. Eaton required by the contract was unnecessary, because by the sale and purchase under the foreclosure proceedings Eaton had acquired title, and his deed to Holgate was sufficient to convey that title discharged of all equitable rights of Mrs. Eaton.

But we are of opinion that in this the master was in error. It is quite clear to us that Holgate had full notice of Mrs. Eaton's interest in the land, for he seems to have been aware of the nature of the assignment by Campbell of the notes and mortgage to Eaton, and therefore required that they be delivered up to him, if they could be found, and they were found. But, as a still further security against Mrs. Eaton's...