Langhorne v. Payne , 53 Ky. 624 ( 1854 )

Judge Crenshaw

delivered the opinion of the court.

The decree rendered in favor of Mrs. Langhorne in 1836, for the forecloseureof Payne’s equity of redemption, and the sale of the lands in controversy, was final, and no writ' of error could have been prosecuted to reverse that decree after three years from its redition; and bills of review are limited to the same period. When Payne filed his cross-bill of review some ten years had elapsed from the rendition of the decree, and, as a bill of review, it was barred by time. This controversy, therefore, must be determined, not by a _ , , „ ., review of the decree of 1836, but from a consideration of the equity alleged by Payne to exist in his favor. This alleged equity arises out of an arrangement charged to have been made with Thomas Y. Payne, the agent of Mrs. Langhorne, whereby the decree of 1836, for the sale of the land, was obtained, and the sale made, and the lands purchased by the agent of Mrs. Langhorne at an immense sacrifice.

2. P. being1 indebted to L. gave a mortgage upon certain lands to secure the debt, L. gave P. authority to sell to rthe debts, dying his administratrix made an agreement with P. by which a decree dg^’ and the adminlstrator became the purchaser under an agreement with P. that he should still go on to sell to raise funds to pay the debt, and that in that way the debt was to be extinguished, and the remainder belong to P., mortgagor, and the lands were sold and the debt paid. Held, there appearing no fraud, that P. had a right to a decree for the lands purchased by the administrator of P., and not sold to pay the debt.

It is proved by Thomas Y. Payne that such an arrangement was made, and that it was by the consent and approbation of Mrs. Langhorne. But, if the arrangement was made, we apprehend that its effect must be the same, whether made by the consent and approbation of Mrs. Langhorne or not — what may have been done by her agent must be regarded as done by herself; and the consequences to John Payne are the same, whether done by her in person or through her agent. And that the alleged arrangement was made, is, we think, satisfactorily shown by the record. Indeed we think that a contrary conclusion cannot be rationally deduced from the facts and circumstances developed in the cause.

In the lifetime of John T. Langhorne John Payne had been empowered by him to sell these lands for the purpose of extinguishing the debts due by Payne to Langhorne, and under the mortgage to Langhorne, and the defeasance to Payne, any lands which might remain after the satisfaction of the debts, would of course belong to Payne. And, notwithstanding the revocation of the power of attorney to Payne by Langhorne, Payne would still be entitled to whatever might remain after the payment of Langhorne’s claims upon and liabilities for Payne. Thus the matter stood between Payne and Langhorne, at Lang-home’s death in 1832 or 1833. In consequence of Langhorne’s death the legal title to the land descended to his infant heirs, and no further sales could be made so as to vest purchasers with complete titles. In this state of things it was natural and reasonable that an arrangement should be desired, whereby sales, might be continued and good title made, as by this means only could money continue to be realized for the extinguishment of the claims of Langhorne. And, according to the proof, it was agreed that Mrs. Langhorne, the administratrix of her husband, should file her bill, foreclose Payne’s equity of redemption, sell, and purchase the lands, in order that sales and titles might be made as in the lifetime of John T. Langhorne, and that Payne should still have the remainder after paying his dues to Langhorne. In short, the agreement as proved, was, that Payne should still have his equity in the lands, as if no decretal sale had been made.

That such was the agreement appears not only from the testimony of Thomas Y. Payne, but from circumstances exhibited in the record. After the decretal sale, at which Mrs. Langhorne became the purchaser, John Payne was empowered to sell the lands, and pay over the proceeds to Mrs. Langhorne; he continued to give in and pay the taxes on the lands, as before the sale, and Mrs. Langhorne neither gave them in for taxation, nor paid the taxes thereon; she exercised no other or further control over them, except through her power of attorney to Payne to sell them, than she had done before the sale and purchase under the decree. And matters continued thus for more than ten years alter the decretal sale, when, on the 26th of April, 1847, Mr. Waller, son-in-law and agerlt of Mrs. Langhorne, receipted to John Payne for a list of claims of some $5,000, headed “a list of notes delivered over by John Payne to Eliza B. Langhorne for land sold by him as her agent, on account of ñis debí to her.” From this it would seem that the proceeds of the lands were still regarded as a means of extinguishing the debts owing by Payne to Langhorne, which is inconsistent with the idea of absolute ownership by Mrs. Langhorne. in, the lands, but is altogether consistent with the idea of an equity therein on the part of Payne. Other circumstances might be mentioned, tending to corroborate the testimony of Thomas Y. Payne, but it is deemed unnecessary to do so.

It is equally clear to our minds that in consequence of the alleged arrangement above alluded to, and commented on, the lands were sold at a great sacrifice ; this is manifested by the testimony of T. Y. Payne, Orr, and Schoolfield. But it is insisted, that whatever may have been the agreement, and however great the sacrifice in the sale, the agreement was in parol, and cannot be inforced, as it comes within the statute of frauds and perjuries. It is true that an agreement in parol, that one shall purchase land in his own name, with his own money, but in part or in whole for the benefit of another, cannot be inforced by the latter under ordinary circumstances, yet it is equally a principle of law that one cannot be deprived of his land or other property by another through fraud actual or constructive. It seems to be a clear principle of equity that if my land is about to be sold at public sale, and a professed friend should agree with me that he would purchase it in for my benefit, and this agreement is made known and understood by persons attending the sale, and they, in consequence thereof, decline to bid, and my land is purchased in by my professed friend at a great sacrifice, it would be a fraud upon my rights for him to hold my property in opposition to my claim under the agreement. Nay, whether there had been any agreement or not with the purchaser, if, by his instrumentality, others had been prevented from bidding, and he had thereby acquired my land at a sacrifice, he could not, according to the principles of the case of Martin v. Blight's heirs, 4 J. J. Marshall, hold it. Much less ought he to be allowed to do so, where the same object, by like means, has been effected under an agreement; for, in the latter case, others have not only been prevented from bidding, but trust and confidence have been betrayed. Why is it that after land has been sold under execution for less than two-thirds of its value, and the time of redemption has passed, and the title become complete, the defendant in execution is allowed still to redeem, where he has been lulled and deceived by parol promises, until the twelve months allowed for redemption have expired? Because, to permit the purchaser to hold the land under such circumstances, would be a fraud upon the rights of the defendant in the execution. That a state of case is presented in the record, which comes within the principles mentioned is, we think, beyond cavil.

But it is contended, that in the arrangement with John T. Langhorne in his lifetime, and in the arrangement with Mrs. Langhorne through her agent, Thomas Y. Payne, John Payne had the guilty purpose of hindering and delaying his creditors, and consequently the chancellor should turn a deaf ear to the prayer of his bill.

It is true that Payne was much embarrassed at the time of his arrangement with J. T. Langhorne, but it appears that he had liberally mortgaged property to his creditors for their indemnity, and that Langhorne was about the last creditor whom, in like manner, he secured. That he was largely indebted to Lang-home no one pretends to question, and that it was his duty to secure Langhorne in his debts and liabilities is equally unquestionable. The claims of Langhorne were real, not pretended, and, although the statements of Payne in his different answers are not altogether consistent, yet we do not think there is enough in the record to authorize the court to convict him of fraud. Mrs. Langhorne, in her answer to the suit of the trustees of the Bracken Academy, exonerates her hüsband from all fraud in the transaction with Payne, and it would be difficult to fix fraud upon Payne without involving the integrity of J. T. Lang-home also. He was the brother-in-law of Payne, and doubtless knew a good deal in regard to his embarrassments and purposes, and, if Payne were guilty of fraud in the arrangement made with him, it is not so easy to exculpate him. It would seem that if one is exonerated both should be.

In view of all that appears in the record, we do not feel authorized to conclude that either of them, by the mortgage to Langhorne, and defeasance to Payne for the lands purchased under execution, was guilty of a fraud upon Payne’s creditors, the most of whose debts appear since to have been paid. It is urged, however, that Payne in his answers to the bill of the trustees of the Bracken Academy, failed to disclose his entire arrangement with Langhorne. But this is a mistake, he disclosed the defeasance executed to him by Langhorne, in his first answer, so that the trustees were enabled to see his entire equity in the lands purchased by and mortgaged to Langhorne. It is true, that in a subsequent answer, in enumerating certain lands other than those held by Langhorne, he states that they were all the lands that he recollected, which he claimed title to in Kentucky, But he had already made known his equity in the lands held by Langhorne, and there was no impropriety in not mentioning it again. It cannot be said that he intended to deceive by concealing that which he had already disclosed. Besides, if he had actually deceived the trustees by a disingenuous answer, a fraud upon them could not, we suppose, contaminate the transaction between Payne and Langhorne.

As to the arrangement by which the mortgage to Langhorne was foreclosed, and a sale effected of the lands, we have already said that it was natural to desire it, in order to effectuate the original purpose had in view both by Payne and Langhorne; and we can see a sufficient motive, not vicious in character, to prompt him to this arrangement, and it would be improper to charge him with fraud in a transaction for which we can perceive an honorable and upright inducement. Still his motives may have been dishonorable, but we are not satisfied from the record that they were_ Fraud cannot be presumed, but must be proved — proved, to be sure, from circumstances, as other facts may be proved, but it should not be fastened upon a man merely because the circumstances may produce suspicion of illegitimacy of purpose, especially in a case where a contrary conclusion will work injury to no one. By refusing the prayer of Payrie great injustice might be done, but if it be granted, Mrs. Langhorne, it seems, will get her whole claim with interest, and can have, we think, no just cause to complain.

Wherefore, the decree is affirmed.