Hood v. Fahnestock

• Decision Date: 01 January 1845
• Citation: 1 Pa. 470
• Parties: JOHN M. HOOD, Plaintiff in error, who was Defendant below, v. OBED FAHNESTOCK, Defendant in error, who was Plaintiff below.
• Court: Pennsylvania Supreme Court

Page 470

1 Pa. 470

JOHN M. HOOD, Plaintiff in error, who was Defendant below, v. OBED FAHNESTOCK, Defendant in error, who was Plaintiff below.

Supreme Court of Pennsylvania.

ERROR to the Common Pleas of Mercer county.

COPYRIGHT MATERIAL OMITTED

Holstein, for plaintiff in error, whose written argument was read by

Stewart, cited 2 Sugden on Vendors, 238, 239; 7 Watts, 384; 4 Kent's Com. 4th ed. 179; 5 Bin. 134; 2 Sumner's Rep. 554; 7 Watts, 271; 4 Whart. 259.

Pearson, contrà, cited 8 Watts, 489; 4 Whart. 259; 4 Dana, (Kent,) 238; 7 Watts, 276; 1 Little, 352; 6 Bin. 120; 6 Serg. & Rawle, 84.

The opinion of the court was delivered by ROGERS, J.

It seems to be conceded, that the conveyance of Jacob Herrington to his brother, James Herrington, was fraudulent, and as such, void against his creditors. The title, therefore, that Magill the sheriff's vendee acquired, was avoidable by the creditors of the grantor. The defendant contends that he is in a better situation than Magill, because he insists, that he stands in the attitude of a bonâ fide purchaser for a valuable consideration, without notice, and protected by the statute of 13 and 27 Eliz., 8 Watts, 489, Hood v. Fahnestock. This case depends on the doctrine of notices, viz., whether the defendant had either express or implied notice of the fraudulent transaction between the original grantor and grantee. It appears, that after the fraudulent conveyance the grantor retained the possession as before, exercising every act of ownership over it, and at the time of the purchase he was in the actual possession, holding the premises by his tenant. Under this state of facts, the court instructed the jury that the possession of the lot in controversy by Jacob's tenant, when Magill sold to Hood, was constructive notice to Hood of Jacob's fraudulent conveyance to his brother James. This instruction is assigned for error. The doctrine of constructive notice, says Mr. Justice Sergeant in Jaques v. Weeks, 8 Watts, 271, seems not to be very accurately settled. It is difficult, observes Mr. Sugden, to say what will amount to constructive notice. Sugden on Vendors, 534. And Chancellor Kent remarks that the doctrine of constructive notice is very greatly surcharged with cases abounding in refinement. It is difficult to define with precision the rule which regulates implied or constructive notice, for it depends on the infinitely varied circumstances of each case. To this I must be permitted to add, that there are no class of cases which require stricter scrutiny and more minute attention than transfers of real estate from fraudulent grantors; for there is no device more common among the multiplied and infinite schemes of villany, than attempts to cover up and conceal from investigation the iniquity of the original transaction, by covenous conveyances to third persons. Although it is true, that the doctrine of constructive notice in all cases may not be accurately defined; yet there are certain elementary principles embracing a wide circle of cases which are well settled. Thus, whatever puts a party on inquiry amounts in judgment of law to notice; provided the inquiry becomes a duty, as in the case of purchasers and creditors, and would lead to a knowledge of the required fact by the exercise of ordinary diligence and understanding. So every purchaser of land must be presumed to know, whether the possession be vacant or not. The purchaser of an estate in the possession of tenants is chargeable with notice of the extent of their interests as tenants; for, having knowledge of the tenancy, he is bound to inform himself of the conditions of the lease. Jaques v. Weeks, 7 Watts, 276, and Kent's Com. 179.

Now, how stands the case? Hood, the purchaser from Magill, knew, or, which in law is the same thing, ought to have known, that there was a tenant in possession of the estate he was about to purchase. He was bound to inform himself, as we have seen, of the conditions of the lease; and in doing so he must have discovered, if he was before ignorant of the fact, that the person in possession held it as the tenant of Jacob Herrington, the man who, in conjunction with his brother, concocted the fraud. The purchaser was bound to make inquiry; and if this duty, which the law throws upon him, had been exercised with due diligence and proper discretion, can a doubt remain, it would have led to a knowledge of the important fact, that Jacob Herrington was the landlord of the tenant in possession? — a position of things totally inconsistent and irreconcilable with the title of Magill. Possessed of this information, the most natural inquiry would be, why is it that you, Jacob Herrington, claim to be landlord of the tract in possession, after the conveyance of all your interest in the premises to James Herrington? This would have been a question difficult to answer, and must have eventually led to a knowledge of that which was notorious to the whole neighborhood, and to none more than Magill himself: that the whole matter was a vile contrivance to defraud the creditors of the fraudulent grantor. Hood must, at any rate, have discovered, that doubts and...