Markham v. O'connor

• Decision Date: 31 January 1874
• Citation: 52 Ga. 183
• Parties: Marcellus O. Markham, plaintiff in error. v. Elizabeth P. O'Connor, defendant in error.
• Court: Georgia Supreme Court

52 Ga. 183

Marcellus O. Markham, plaintiff in error. v. Elizabeth P. O'Connor, defendant in error.

Supreme Court of the State of Georgia

(Atlanta, January Term, 1874.)

Estoppel. Mortgage. Registry. Before Judge Hopkins. Fulton Superior Court. April Term, 1873.

On the 19th day of July, 1866, William Markham, by deed of warranty, conveyed to Holmes Sells, city lot number sixty-two in the city of Atlanta, comprising one-half acre of ground, fronting on Marietta street, and extending back to Walton street. For the purchase money of this lot, Sells executed to Marcellus O. Markham, the son of the aforesaid William Mark-ham, to whom the latter had given the debt, his two promissory notes, each for the sum of $5,000; one due thirty days thereafter, and the other due on the 25th day of December, 1866. To secure the payment of these two notes, Sells simultaneously executed to said Marcellus O. Markham his mortgage on the same property—reciting in *the mortgage that it was executed to secure the payment of said notes, as the purchase money for said city lot, number sixty-two. This mortgage was duly recorded in eleven days from its date, to-wit: on the 30th day of July, 1866. Some short time thereafter, Sells divided the single lot into several lots, moved the house that was on Marietta street back on Walton street, and then resold the half fronting on Walton street, to Marcellus O. Markham for $6,000 00. Out of this fund, added to other payments, Sells discharged the note for $5,000 00 first falling due, and received from Marcellus a note for $3,000 00, a balance due to Sells on said last sale. Markham desired this sum of $3,000 00 to be credited on the remaining note for $5,000 00 not then due, but Sells would not agree to that credit. He afterwards negotiated this latter note of $3,000 00 in bank. He divided up the remainder of lot sixty-two into four lots, fronting on Marietta street, and sold them at public auction on the 13th day of September, 1866. At this sale, Patrick O'Connor and his associates purchased two of the lots—gave their notes to Sells for the purchase money, and took his obligation to make a valid title when the notes should be paid. These notes were negotiated by Sells to Dobbins and others. When the last note given by Sells to M. O. Markham became due, it was not paid. Markham proceeded to foreclose his mortgage, and obtained a rule absolute. An execution issued, and was levied by the sheriff on the property. Before the day of sale, O'Connor obtained an injunction. His bill charges, "that at the time said sub-divisions of said half of said city lot were sold, the said Holmes Sells caused proclamation to be made before the sale commenced, to the persons who had assembled on the lots to bid for the same, by George W. Adair, his auctioneer and agent upon that occasion, that the title to the said land was perfectly good, and that the same was unincumbered by lien or otherwise, and that the purchasers would get a good title unincumbered. That at the time said announcement was made, to the best of your orator'sinformation and belief, Marcellus O. Markham was present—heard the announcement made by *George W. Adair, the said auctioneer for Holmes Sells—knew that your orator, as well as the other bidders, were bidding for said property with the understanding that the titles were good, or that they would get a good title unincumbered to such parcels as they should bid off. That this was the impression produced upon the mind of your orator. Yet the said Marcellus O. Markham did not make known to the bidders or to your orator that he held a mortgage upon the premises, which was outstanding and unsatisfied; which failure of the said Marcellus O. Markham, the mortgagee, your orator charges to be a fraud upon the rights of your orator." The bill prays that said Markham, and the sheriff, be enjoined from selling the portion of property bought by complainant and his associates (all of which he now claims—having paid all the purchase money except $400 00,) and for such other relief as the circumstances may require, etc. Discovery was waived.

The answer of defendant admits that Sells sub-divided the land fronting on Marietta street into four lots, and sold the same at public auction, but says he is informed there were two sales, one of two of the lots in September, 1866, and the other in July, 1867. The defendant is informed that com plainant purchased at the first sale, and at that sale defendant thinks he was present, though at first he did not remember he was present; but denies that he heard any such proclamation that the purchaser would get a perfect, unincumbered title, as alleged in complainant's bill, and denies that he had any agency in creating any such understanding or impression on the mind of complainant or other person, or was in complicity or privity with any person who did create such an understanding or impression. He denies that he committed any fraud on complainant. Says Sells was then in good financial condition and report, and it never occurred to him that he, or anybody else, was in danger of suffering loss, or that the title could be doubtful. He states that complainant had notice of the mortgage, before he paid all the purchase money, from William Markham, and that the mortgage itself was duly re-corded *as required by law. He admits the mortgage is entitled to two credits, one of $1,400 00, amount paid by Healey for one of the lots at second sale; and one of $200 00, amount collected from Peck on lumber bill, due by Peck to Sells. The remainder of the note for $5,000 00, secured by said mortgage, the answer insists is justly due, and ought to be collected out of the lots levied on.

On the trial, the deed from William Markham to Sells, the mortgage from Sells to M. O. Markham, the bond for titles from Sells to O'Connor and others, and the mortgage fi. fa., and entries on each, all being exhibits to complainant's bill, were considered in evidence.

The complainant examined George W. Adair, Holmes Sells, Miles G. Dobbins, J. A. Hayden and C. W. Hunnicutt, on the stand, and read the depositions of John J. Thrasher and Thomas Alexander.

George W. Adair testified as follows: "After I had advertised the property, I met Wm. Markham on the streets. I had an impression about this property having been sold by Coe's administrator, and that orphans were interested in it. The property had been sold by the administrator for Confederate money. I had doubts about such titles being good, because of their being Confederate transactions. It was soon after the war, and I did not know how such titles would be held. I met William Markham and satisfied myself on this point. He traced the titles, and said the property had been sold by Judge Hayden as administrator, etc., of Coe. He said nothing about any mortgage, for I never dreamed of such a thing. After I had thus satisfied myself that the titles were correct, I announced that the titles were good as far as I knew, and I invited buyers to come up, as I thought they would get good titles. I announced distinctly that they were good titles, as I had relieved my own mind by talking, as I have said, with William Markham about how it came from Judge Cone. The lots sold well; brought every dollar they were worth. Calvin W. Hunnicutt was bidding, and I followed him with my eye as he moved round, and in this way I saw Marcellus *O. Markham sitting on the steps, and Hunnicutt sat down by him. I did not know when Markham came; saw him for the first time, as stated, when Hunnicutt was bidding. I knew nothing about a mortgage, and I announced nothing about one. I do not know whether Marcellus Markham heard my announcement. I said the chain of titles came from old Judge Cone to Coe, and then to William Markham; I was trying to make known the general idea that the titles came through a good crowd, and was a clear claim. As I said at first, there was some question about the validity of titles where the payments had been made in Confederate money; I wished to relieve the crowd of any such impression about this property. There was a kind of doubt on all of us, as I said, about Confederate titles; I knew nothing about any mortgages, or incumbrances, or liens; I said everything I could to induce everybody to believe the titles were good; it never occurred to me that it was incumbered, coming as it did from these persons. At that time Sells was good; he was flush; he had a good deal of property at the time. If I had been a bidder, and known of a mortgage, I should have wanted it cleared up, though I should have thought that he could have cleared up the mortgage, as he was rich at the time. I always make statement about titles at the beginning of a sale, and then 'inject' it through the sale."

Holmes Sells testified as follows: "I saw Marcellus Markham at the sale, and before the sale. I talked with Marcellus before and after the sale; I don't remember what we talked about. He seemed anxious that the property should bring a good price. There was no understanding between us what should be done with the proceeds; I had no agreement with him at all. He did not consent or object to the sale. He was there all the time. He said nothing for or against the sale—nothing to me, at least. No doubt he thought it good property; all thought so. I don't know of anything being said by any one about mortgages or liens; if there had been anything said about it, I should havebeen likely to have heard it. I possessed property, and was solvent then; I have *failed since that time, and am now insolvent. I don\'t remember that Marcellus Markham and myself had any conversation about the sale. He knew that persons were bidding upon the property, but I do not know that he knew they were bidding with the expectation of getting good titles. I don\'t remember that I heard the announcement made by Colonel Adair about the property."

Cross-examined: "My purpose in that sale was certainly honest, and I had no...