Cowen v. . Withrow , 111 N.C. 306 ( 1892 )

In the absence of fraud, Mrs. Withrow, the grantee in the unregistered deed, was the equitable owner of the land in controversy. Ray v. Wilcoxson, 107 N.C. 515. The land was sold under execution against her grantor and was purchased by the plaintiff through his agent. There was testimony tending to show that this agent was notified at the sale, and before the bidding, of Mrs. Withrow's claim under the said unregistered deed. The court charged the jury that the notice to the agent was not notice to his principal, and that only "actual" notice to the latter could affect him with the equitable claim of Mrs. Withrow. The proposition that notice to an agent, when acting within the scope of his employment, is binding upon his principal, is an elementary principle of law, which we do not understand to have been denied by his Honor. The ruling seems to have been based upon the language of the proviso in Laws 1885 (ch. 147, sec. 1), in which it is declared that the said act shall not apply (310) to one who purchases with "actual or constructive notice" of an unregistered deed.

The court apparently was of the opinion that "actual notice," as used in the statute, was synonymous with actual knowledge or personal notice. In this there was error. "To qualify the rule in this manner, the notice which is given through an agent would be to cut off entirely from the possibility of notice a large class of litigants in cases requiring actual notice. . . . If the agent has actual notice, the principal is charged with notice of the same kind. . . . But if we wish to state the rule with greater accuracy, its true meaning may be given by stating it as universally understood, that notice to an agent is equivalent to notice to the principal." Wade on Notice, sec. 672.

If it were otherwise, an agent would be employed whenever it was convenient to remain in ignorance. Bank v. Davis, 2 Hill, 461. LordBrougham says the reason of the rule is that the "policy and the safety of the public forbid a man to deny knowledge while he is so dealing as to keep himself ignorant, and yet all the while let his agent know, and himself perhaps profit by that knowledge." Kennedy v. Green, 3 Mylune Keen, 699.

The plaintiff, however, insists that the proviso to which we have referred does not extend to purchasers at sheriffs' sales and that the error in the charge as to notice was therefore harmless. This is true in respect to constructive notice arising out of actual possession (see this case in 109 N.C. 636), but the reasoning upon which the decision is founded has no application to actual notice. Indeed, the Court plainly intimates that actual notice to such purchaser will save the rights of a grantee in an unregistered conveyance, and we are of the opinion that such is the law.

We see no force in the contention that the notice should not have the effect of impairing the rights acquired under the lien of the docketed judgment. A judgment lien and execution operate only (311) upon the interest of the judgment debtor, and the purchaser at an execution sale takes only such rights as he possessed. Rollins v. Henry,78 N.C. 352; Rutherford v. Green, 37 N.C. 121.

This principle is unaffected by the act under consideration, except, as has been held in the particular instance of an unregistered conveyance, when no notice has been given at or before the execution sale.

NEW TRIAL.

Cited: S. c., 112 N.C. 736; S. c., 116 N.C. 771, 775; Patterson v.Mills, 121 N.C. 267.