McAlpine v. Hedges

21 F. 689, 1884 U.S. App. LEXIS 2436
CourtU.S. Circuit Court for the District of Indiana
DecidedSeptember 6, 1884
StatusPublished
Cited by2 cases

This text of 21 F. 689 (McAlpine v. Hedges) is published on Counsel Stack Legal Research, covering U.S. Circuit Court for the District of Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McAlpine v. Hedges, 21 F. 689, 1884 U.S. App. LEXIS 2436 (circtdin 1884).

Opinion

Woods, J.

Tho hill shows the recovery by the complainants of a judgment against John W. Hedges, and that shortly before the date of the judgment Hedges, for the purpose of defrauding the complainants, secretly conveyed certain real estate of which he was owner to another, who, in aid of the fraudulent design, conveyed tho same to said Hedges and his wife, in whom the title in part remains, and that for tho same fraudulent purpose the parties thereto had kept these deeds off the record and concealed the fact of their execution. To .this bill the respondents Hedges and wife have interposed a plea of the statute of limitations, wherein it is alleged simply that the cause of action did not accrue within six years before the commencement of the suit. Is it a good plea ?

If the action were at law, or governed by the Indiana Code, the averments of the bill in respect to the concealment of tho alleged fraud should probably be regarded as an attempt to anticipate the defense, and consequently rejected or disregarded as immaterial upon consule’ation of the plea; or, if this be not so, the plea should, perhaps, be construed as meaning that the alleged concealment had occurred and ended six years or more before the bringing of the action. But, the case being in equity, the allegations of the bill in respect to the secret nature and concealment of the fraud I suppose must be regarded as relevant and proper, and, since not specifically denied by the plea, must be taken as confessed, and the plea construed as meaning that the fraud in its origin only—that is, the making of the deeds—occurred outside the statutory limit. So regarded, the plea, in my judgment, is not good. It is claimed that the bill shows no affirmative act of concealment after the execution of the deeds; and in some of the decided cases expressions have been used to tho effect [690]*690that affirmative subsequent acts of concealment are necessary to stop the running of the statute; but, when considered with reference to the facts upon which these decisions were made, they do not go to the full extent claimed for them. When a fraud is of a secret nature, and in the particular case has been conceived and executed upon such a plan as to secure continued secrecy, without further acts of concealment except silence, the statute ought not to run until there has been a discovery. In such a case it may well be said to havei been a continuous concealment. The making of a fraudulent deed, and the keeping of it off the record by all the persons concerned in and cognizant of the transaction, combined with their purposed silence upon the subject, it certainly will not do to say is not a concealment, for which relief may be granted. See Meader v. Norton, 11 Wall. 442; Carr v. Hilton, 1 Curt. C. C. 238; Vane v. Vane, L. R. 8 Ch. 383; Rolfe v. Gregory, 4 De G., J. & S. 576; Hovenden v. Annesley, 2 Schoales & L. 634; Buckner v. Calcote, 28 Miss. 568. Cited to the contrary: Wynne v. Cornelison, 52 Ind. 319; Jackson v. Buchanan, 59 Ind. 390; Musselman v. Kent, 33 Ind. 458; Pilcher v. Flinn, 30 Ind. 202; Boyd v. Boyd, 27 Ind. 429.

In respect to the question raised by the defendants Gerard; who have demurred, to the bill, the proper conclusion may be less clear. As already stated, the bill shows that, as against the Hedges and their grantee in the alleged fraudulent deed, the judgment recovered by the complainants became, under the Indiana statutes concerning fraudulent conveyances, a valid lien upon the land in dispute. See In re Lowe, 19 Fed. Rep. 589. The charges of the bill against the Gerards are to the effect that after the rendition of the judgment, and while it remained of record an actual as well as apparent lien upon the • land, Hedges and wife conveyed a described part of the real estate in question to one Garrison, “who took the same subject to the lien of complainant’s judgment, * * * having no knowledge of said unrecorded deeds, but fully believing said real estate to be the property of said John W. Hedges, as in fact it was,” and afterwards conveyed the same part to the Gerards, “who took the same subject to said judgment, they having no knowledge of said unrecorded deeds, and supposing that they derived title only through John W. Hedges as owner, and not through him and his wife as tenants by entireties.” Counsel for respondents say:

“We insist in this connection on the two following propositions: (1) That judgment liens are not within the protecting policy of our recording acts. (2) That the question of the ability of John W. Hedges and wife to convey to the Garrisons a good title, depends, not on the knowledge of the Garrisons of the existence or non-existence of all or any of the deeds in Hedges’ chain of title, but it depended on the simple existence of those deeds, and the want of notice of the alleged fraudulent character of those deeds.
“The recording act of the state (Rev. St. 1881, §2931) provides ‘that every conveyance, mortgage, etc., shall be recorded in the county where the lands lie,’ and if not so recorded within the time prescribed in that section, ‘shall [691]*691be fraudulent and void as against any subsequent purchaser, lessee, or mortgagee, in good faith, for a valuable consideration.’ A judicial decision was iiardlv necessary to establish the proposition that a judgment creditor is neither a purchaser, lessee, or mortgagee; but, nevertheless, the supreme court has decided that proposition to the fullest extent. Sparks v. State Bank, 7 Blackf. 469; Doe v. Hurd, Id. 510; Runyan v. McClellan, 24 Ind. 165. Even a previously acquired equitable interest inlands has priority over the general lien resulting from a judgment against the holder of the legal title. Jones v. Rhoads, 74 Ind. 510; Monticello, etc., Co. v. Loughry, 72 Ind. 562. In Wiseman v. Hutchison, 20 Ind. 40, upon the question whether parties who claimed through an unrecorded deed were bound by recitals in the deed, it was held that the claimant was so bound. The court said: < The registry law has no application to the case. The defendant Bemlinger was hound to notice the recitals in the deed from Simpson to Wiseman, not because the deed was recorded, but beca,use slie claimed through it. • That deed constitutes a part of her chain of title, and she was bound to know its contents and recitals whether it was recorded or otherwise.’ In the case at bar * * * the Garrisons and Gerards would have been bound by any recitals in these (unrecorded) deeds whether they had ever learned the contents oí the deeds or not. * * * If this is true, the same parties must be entitled to the benefits of the same deeds, just as if they had been recorded in time.’’

It may be remarked, though it is perhaps not material to the discussion, that the doctrine that the general Hen of a judgment upon land is subject to any and all adverse equities or claims, whether secret and unknown, or recorded and known, does not prevail in Indiana against an assignee of a judgment who pays value and takes the assignment in good faith. Flanders v. O’Brien, 46 Ind, 284; Haffman v. Copeland, 86 Ind. 224, and cases cited. The complainants, however, sue, not as assignees, but as judgment plaintiffs, and are therefore subject to the general doctrine, so far as it is pertinent, to the question presented] but in my judgment it has little or no ap* plication.

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Bluebook (online)
21 F. 689, 1884 U.S. App. LEXIS 2436, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcalpine-v-hedges-circtdin-1884.