Sackett v. Spencer

• Decision Date: 21 March 1870
• Court: Pennsylvania Supreme Court
• Parties: Sackett <I>versus</I> Spencer.

65 Pa. 89

Sackett versus Spencer.

Supreme Court of Pennsylvania.

March 16, 1870.

March 21, 1870.

March 16th 1870.

Before THOMPSON, C. J., AGNEW and SHARSWOOD, JJ. READ, J., at Nisi Prius

Error to the Court of Common Pleas of Bradford county: No. 72, to January Term 1870.

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E. Overton, Jr., and H. Peet, for plaintiff in error.—Recitals are evidence against parties and privies: Meals v. Brandon, 4 Harris 225. A resulting trust is raised only from fraud or payment of the purchase-money: Barnet v. Dougherty, 8 Casey 372. The trust set up here is by parol and against the Act of April 22d 1856, § 4, Pamph. L. 533, Purd. 497, pl. 3; Case v. Worthington, 1 Root 172; Gaylor v. Couch, 5 Day 223. The arrangement was a trust, being a confidence reposed in Forman: Burrell's Law Dic. 8, vol. 2, 549. A mortgage sometimes considered a trust: Richards v. Allen, 8 Pick. 405; Conard v. Atlantic Ins. Co., 1 Peter's R. 386; Pierce v. Dorr, 8 Pick. 239; Goldsmith's Equity 86; 1 Maddock's Chan. 512. But if a trust, it was without notice, and a purchaser could not be affected by notice from Spencer's possession alone: Scott v. Gallagher, 14 S. & R. 333; Banks v. Ammon, 3 Casey 175; Goepp v. Gartiser, 11 Id. 130; Probst v. Painter, 5 S. & R. 223; Swartz v. Moore, Id. 257; Bellas v. McCarty, 10 Watts 13; Heister v. Fortner, 2 Binney 40; McCulloch v. Cowher, 5 W. & S. 427. Spencer was bound by the endorsement on the contract and the recital in the deed: Olwine v. Holman, 11 Harris 284; Hill v. Epley, 7 Casey 331; Waters's Appeal, 11 Id. 525. A conveyance of land as security as between the parties is a mortgage, but to all without notice it is a conveyance only: Guthrie v. Kahle, 10 Wright 332; 4 Kent's Com. 141; Hilliard on Real Property 326. The declarations of Forman as to his reasons for passing the title were admissible as bearing on the question of fraud where great latitude is allowed: Deakers v. Temple, 5 Wright 241; Reinhard v. Keenbartz, 6 Watts 93.

Mercur & Morrow, for defendant in error.—The conversation with Forman was long after the deed, and could not be received to affect his credit, he not having been interrogated as to it: McAteer v. McMullen, 2 Barr 32; Wertz v. May, 9 Harris 274. The deed, although absolute upon its face, was in fact a mortgage only: Kunkle v. Wolfersberger, 6 Watts 126; Heister v. Maderia, 3 W. & S. 384; Russell's Appeal, 3 Harris 319; Kellum v. Smith, 9 Casey 158. The mortgagor is the owner of the land: Schuylkill Nav. Co. v. Thoburn, 7 S. & R. 411. A mortgagee has not such interest as is liable to execution: Rickert v. Madeira, 1 Rawle 325; Craft v. Webster, 4 Rawle 255; Asay v. Hoover, 5 Barr 35. It does not create a trust coming under the 4th section of Act 22d April 1856. To hold that the land was not subject to the trust would be a fraud both on his wife and Spencer: Renshaw v. Gans, 7 Barr 119. If the arrangement with Spencer had been denied, a trust ex maleficio would have arisen in his favor: Morey v. Herrick, 6 Harris 123; Plumer v. Reed, 2 Wright 46. A husband may receive his wife's money as her trustee: Johnston v. Johnston, 7 Casey 453; Tripner v. Abrahams, 11 Wright 221; Bachman v. Killinger, 5 P. F. Smith 414.

The opinion of the court was delivered, March 21st 1870, by AGNEW, J.

The complicated and rather difficult questions of mortgage and trust presented in the paper-book, disappear, when the material facts eliminated from the mass are shown in their proper relations. R. H. Sackett, the plaintiff, claimed title through a sheriff's sale of the land in suit, made in 1867; under a judgment against Thomas Forman, entered December 6th 1861. Forman had conveyed the land to Henry Spencer, the defendant, by a deed dated January 23d 1861, ten months prior to the entry of judgment. At the time of the entry of judgment, therefore, Forman had no apparent title, legal or equitable, consequently the plaintiff could recover only upon establishing such a fraud upon creditors as would destroy the deed from Forman to Spencer. This then was the only question in the case, for as plaintiff in the ejectment, Sackett could recover only on the strength of this position, and the burden of the proof of it rested on him. It is evident, therefore, that if the conveyance from Forman to Spencer was bonâ fide, and made on sufficient consideration, that is, if made upon an honest and fair undertaking to convey to Spencer, in consideration of the payment of the purchase-money procured by Spencer to be paid by another to Overton, the original grantor, the case of the plaintiff must fall, whether the deed from Overton to Forman was absolute or held in trust. The plaintiff made out a primâ facie case of fraud, by showing that the title was apparently absolute in Forman, and that he was deeply involved in debt at the time of his conveyance to Spencer, and that in three days afterwards Spencer reconveyed to Christiana Forman, the wife of Thomas Forman. To support this title the defendant then gave evidence of the previous relations and dealings between himself, Forman and wife, in relation to the land. Briefly stated, the facts alleged and proved by the defendant were these: Nehemiah Smith and his son had bought the land from Edward Overton, and made a small improvement. Spencer purchased the interest of the Smiths for $50, surrendered it to Overton and took another article to himself, dated December 11th 1850. He entered into immediate possession, extended the improvements, and continued in exclusive possession until this suit was brought against him in 1867. Having failed to pay Overton the purchase-money on the 30th of October 1856, and just as the last instalment was falling due, he with Forman called on Mr. Overton and had him convey the land to Forman, who paid him the purchase-money. At the same time Overton, probably to protect himself, made the following endorsement on Spencer's article of December 11th 1850: "Received this 30th of October 1856 of Edward Overton, a deed for the within land, I having acquired all right, if any there be, of Henry Spencer, who assents and agrees to such deed." This was signed by Forman and witnessed by Spencer. The defendant also alleged and proved that the money paid by Forman to Overton belonged to Mrs. Christiana Forman, Spencer's sister, and the wife of Thomas Forman, and that it was advanced by her under an arrangement with Spencer, to relieve him, and the deed taken to her husband acting as her agent, in order to secure its repayment. So the matter rested till 1861, when Spencer got Forman to convey to him by the before-mentioned deed of January 23d 1861, with the intention of raising the money and paying his debt to Mrs. Forman, but failing to raise it, he reconveyed the property to Mrs. Forman to keep her secure, by the deed of January 26th 1861. He afterwards made sundry payments to Mrs. Forman and...