Miller v. Palmer

55 Miss. 323

• Court: Mississippi Supreme Court
• Decided: October 15, 1877
• Status: Published

Opinion

Simrall, C. J.,

delivered the opinion of the court.

When will a court of equity relieve against a judgment at law ? A party will not be aided after trial at law unless he can impeach the justice of the verdict on • grounds of which he could not have availed himself at law, or was prevented from doing so by fraud, accident, or the act of the opposite party, unmixed with negligence or fault on his part. Insurance Co. v. Hodgson, 7 Cranch, 336; Smith v. McIver, 9 Wheat. 532; Le Guin v. Governor & Kimble, 1 Johns. Cas. 491.

One of the most elaborate cases in our books on this subject is Green v. Robinson, 5 How. 104. The principle stated is that, if the matter was capable of discussion and adjudication in a court of law, it is not enough to show merely that the verdict works a hardship, but that the party could not then have made his defense. The rule is the same where the jurisdiction is concurrent. In such cases the defense must be made in the court that first acquires jurisdiction. That principle was declared by the Supreme Court of the United States in Smith v. McIver, ubi supra — that in all cases of concurrent jurisdiction “ the court which first has possession of the subject must decide.”

If the Chancery Court should afterwards intervene, it would, in reality, exercise indirectly a power of review of the trial at law. That jurisdiction directly would be repudiated. The intervention is confined to cases where the subject which is the ground of relief in chancery was not discussed and adjudicated at all in the court of law, either from fraud in the opposite party or from accident, surprise, or ignorance, without the negligence or fault of the complainant. It is not sufficient that the complainant did not know his defense; it must appear that he could not have obtained such information by the use of ordinary diligence. Miller v. Gaskins, Smed. & M. Ch. 525.

The jurisdiction rests on the ground, not merely that the defense was good, but that it was not known to the party at the trial, and that negligence and laches are not imputable to him. The settled doctrine in this state is that, if the defense could have been made at law (although a court of equity had concurrent jurisdiction), and was not made, the complainant must show two facts ; first, that the defense is good and ought to have been successful; and, secondly, the failure to make it must be satisfactorily explained. Hiller & Co. v. Cotton & Co., 48 Miss. 602, and cases there cited. Of course, if the defense were purely equitable, the trial at law would have no prejudicial effect in the equity suit.

The case closest in analogy to the one before us is Shipp v. Wheeless, 33 Miss. 650. The allegations were that the guardian’s sale was illegal and void, and complainant acquired no title. The prayer was for relief against a judgment on one of the notes. Among other reasons, the relief was denied because the grounds alleged constituted a valid defense at law; ‘ ‘ and there is no showing whatever, nor an attempt at showing, that the appellant could not have availed himself of that defense at the trial.”

The sale to Miller was made May 26, 1860, and confirmed at the next June term. Judgments by nil dicit was rendered in 1861, with a stay of execution for six months. When execution was issued, Miller moved to quash, and prosecuted unsuccessfully a writ of error to the decision of the court overruling that motion. After a levy on his property, and an impending sale in 1870, he filed this bill. He had been in possession for ten years, during which time, from bad husbandry and other causes, such waste has been committed or suffered in the decay of buildings, destruction and removal of fences, cutting down timber; that the property has greatly depreciated in value. Some witness estimated the value at one-tenth of the price at which Miller bid it off.

The excuse for not defending at law is contained in this allegation of the bill: “ Having full faith and belief in the lawfulness and validity of said sale, he made no defense in said suit, but allowed judgment by default; that since said judgment he has employed lawyers to examine into the validity of said title, and upon their advice he states said sale was and is invalid,” etc. The bill is not specific as to the time when the discovery was made, except that it was after the judgment was rendered; but how long afterwards is left to conjecture.

Within what period of time (if, indeed, there be any definite limit) the purchaser of a decedent’s real estate must prefer his objection to the title, as ground of relief from payment of the purchase-money, has not been determined in this state, that we are aware of. He is not chargeable with knowledge or notice of defects in the judicial proceedings which would avoid the sale. If that were so, he would accept the deed at his peril. It has been settled that he may plead that defense to an action on his note or bond, whether that action be brought one, two, or five years after the sale. It has also been settled that if he had knowledge of such defects before or at the trial at law, so that he might have relied upon them to defeat a recovery of the purchase-money, he is precluded from relief in equity. An action at law is suggestive that if he has reason why he should not pay the money, he should then urge it, or afterwards hold his peace ; whether it would be wise and just to go further, and declare that he must then examine into his title, and if he fails to do' so he is negligent, and will not afterwards be heard to complain of fatal defects, is a doctrine that has support in our books, as respects sales of personal property. Quite all of the cases were where slaves had been sold, and the defense was not made until after their emancipation. The loss of the property was not referable to defective title, but to a great event in our history, ex post facto the gale, their emancipation. It was not possible to make restoration.

We are not willing to announce the doctrine that the sale of a decedent’s property, real or personal, must be regarded with suspicion and doubt, and that purchasers are put on prompt inquiry to investigate the Judicial proceedings. The wiser rule is to encourage confidence in titles thus devolved, so that property may bring its full value. As to the title of the testate or intestate, purchasers take the risk. As to that, the principle of caveat emptor applies. But the purchaser is not under the operation of that principle, as to the sufficiency and validity of the judicial proceedings, to divest the title of the devisee or heir. It is incumbent on the executor or administrator to see to that. The consideration paid, or agreed to be paid, is a transfer, by valid proceedings, and sale, to the , purchaser the title as it went to the devisee or heir. There is no warranty that such title is good ; there is no protection of covenants which are assumed to be a sufficient indemnity, as in ordinary bargains and sales between individuals. Cozan v. Frisby, 36 Miss. 184, 185; Ware v. Houghton, 41 Miss. 381; George v. Bean et al., 30 Miss. 150.

Hence the purchaser, without eviction; may defend against the purchase-money, or may proceed to annul the sale. Laughman v. Thompson, 6 Smed. & M. 269; Puckett v. McDonald, 6 How. 273. But if he knew of the defects, and failed to plead or rely upon them at law, he will be precluded from relief in chancery unless he can attribute such failure or omission to the fraud or contrivance of his adversary, or his ignorance of it. Nevitt v. Gillespie, 1 How. 108; Green v. Robinson, 5 How. 80; Smith v. Walker, 8 Smed. & M. 131.

The bill, in its main aspect, is for a rescission of the sale — not technically so, but the relief sought is substantially of that sort. It is predicated of those allegations which discover the failure to pursue the directions of the statute, so as to acquire jurisdiction over the subject and the parties; the result being, the administrator did not obtain the authority of the law to sell the property and transfer the title. If the deed ■did not transmit to Miller the title which was in the intestate, and which descended to his heirs, there has been a failure of •consideration, and the purchase-money ought not to be collected. A decree of perpetual injunction is a dissolution of the ■apparent contract of sale between the administrator and Miller. .Such decree would absolve him from the debt, and would be complete relief so far as the administrator was concerned. Put if nothing more were, or could be, done in the suit, Miller would be left in possession of the land, and in the enjoyment of its revenue. Plainly, the equity of the heirs to a i-estoration of the land and an account is as strong,as his equity to be discharged from the judgment; and when the situation of the suit, as to parties, will admit of it, complete justice should be done by the decree.

In Shipp v. Wheeless, ubi supra, the court manifestly regarded that to be the scope and object of the bill in that case. It is stated that for the failure in the consideration of the,bonds (for the purchase-m'oney) the guardian ought to be restrained from collecting the judgment on one of them, and the two outstanding bonds; and it is added: “ It is clear that this ought not to be done unless the sale also should be ■declared void and set aside, and the parties placed in statu quo, by a restoration of possession of the wards’ land to the guardian, and an account for the rents, etc., during appellant’s possession of the same.” The bill was held to be fatally •defective for an omission of an offer so to do.

In such case there would be no embarrassment in the administration of that relief. The guardian would be entitled, •on a rescission, to possession of the land; and he is the proper person with whom the purchaser ought to account for the rents and profits. It is plain equity that a purchaser who has enjoyed an estate for several years, under a probate sale, ought not, in a court of chancery, to be discharged from the payment. of the money, unless he restores the possession and pays for the use of the land.

But it is said, where the sale has been made by an administrator, the only question that can be litigated in a court of' equity is between the debtor and creditor, precisely as it might have been in an action at law on the obligation for the price. It is argued by counsel that the heirs of the intestate are not-necessary or proper parties to a bill brought by the purchaser to be.relieved from payment of the money. As to that, the-only proper parties are the purchaser (the debtor) and the administrator.

The maxim that he who seeks equity must himself do-equity is as old as chancery jurisdiction; and, that it may be-fully accomplished, that court may bring before it all parties interested, so that their rights may be protected. A court of law, proceeding according to inflexible rules and formulas, respects nothing but legal rights and titles. Hence it adjudges, in the action on the bond or note, if the sale was void, the consideration has failed, or there never was one, and acquits from the debt. It has no means by ydiich to settle the equities between parties, consequent on that decision. It, therefore, has no concern with them, but turns the parties-over to another tribunal.

But if the purchaser, in ignorance of his defense, has suffered a judgment to go against him at law, and brings his plaint into a court of chancery for relief because the sale was void, why may not the chancellor do complete justice to-all concerned — release the purchaser from the debt, restore the land to the heirs, and compel him to account for the rents and profits ? Are not these subjects so associated and mutually dependent that they may be discussed and adjudicated in one suit? The predicate of it is that the judicial proceedings terminating in the sale were utterly abortive — nothing has been accomplished by them. It follows from that, that inasmuch as the relations of parties to the property have been seriously changed, because of the assumption that all things had been rightfully done, the condition of the statu quo should, •as far as maybe, be restored. That is precisely the course pursued when a contract of sale between A and B is adjudged void. It is the essential condition of rescission, where a guardian has sold under judicial license ; and the suggestion of reason and justice are equally cogent that it should be pursued where the administrator is the vendor. •

Is there anything in the constitution of a court of chancery, •or in its methods of pleading and relief, which compels it to release the purchaser from payment of a judgment for the ■purchase-money, and stops there? If the heirs, as in this •case, are before the court, what hinders an adjustment of the equities between them and the purchaser at the same time that it gives effect to his equity against the administrator? ■One is the natural and legal consequence of the other. If the purchaser is released of the debt, it follows that the land must be surrendered, and its use accounted for. The rescission puts the rights of the heirs in,the same category they were before the sale : in effect, they are declared to have been ■owners during all the time of the purchaser’s possession, having the right to compensation for the use and occupation. They have the right to immediate occupation of their inheritance. The restoration is to them, and not to the administrator.

A contingency arose in the affairs of the estate when it became the duty of the administrator to treat the lands as assets for creditors. In such case he may be armed with power over the title, by judicial decree, to transfer it to a purchaser. In this case the proceedings and decree of the Probate Court did not confer power to sell and pass the title. But this deed conferred color of title, under which Miller entered, and enjoyed the estate for ten years. The administrator represents the creditors on whose behalf he made the sale, in respect of the obligations for the purchase-money. The heirs represent the title and the claim for rents and profits. These parties, administrator and heirs, are concerned and. interested in the subject of this suit, and in any relief, full, adequate, and complete, that would compose all the interests, involved.

The essential idea implied in a rescission is that the money paid shall be refunded, or, if the obligations for it are outstanding, that they shall be surrendered and canceled; and, on the other side, that the vendee shall return the possession, and compensate the vendor for the use. It is plain and easy to work out that result in a transaction between A and B„ both having acted sui juris. It is a little more involved where the guardian is the vendor, since he acted in autre droit. But the guardian no more than an administrator has title by virtue of his office; when either sells, it is by force of the-decree of a competent court. The subject becomes more involved when the administrator sells ; he does not have possession, nor the right of possession, like the guardian, nor has. he a right to the profits. When his sale is annulled, he could be compelled to return the money, or surrender the notes or bonds given for it. The other redress, to make it perfect and complete, must be meted out to the heirs by restoring the-property, which is theirs, and accounting to them for rents and. profits.

It would not be doubted that if Miller had defeated a. recoveiy on his bond for the price, that a court of equity would have entertained a bill by the heirs for an account of the profits. The purchase!’ need not wait for an action to recover the purchase price. But he .may himself take the initiative, and claim a rescission because the sale was void and he got no-title. But a court of equity might well pause before it would separate the equities of the several parties interested, and in one suit, for the relief of the purchaser, enjoin the administrator from the collection of the money, and in another suit compel the purchaser to do justice to the heirs. It would unite these several parties in one contestation, and eliminate the rights and redress appropriate to each.

The chancellor, in that part of the decree ordering a resale of the land, went on the idea that the probate sale did not pass the title, but that it would be divested by the decree and resale, and vest in a purchaser. The court overlooked the distinction between the defective execution of a power given by a party and the defective execution of a power given by the law. In the former, irregularities maybe cured; not so in the latter. 1 Story’s Eq., sec. 96 ; 1 Story, 487.

The law empowers the administrator, by apt judicial proceedings, to obtain authority by sale to transfer the title. Such power is derived from the decree. It does not arise out of contract, or the license or consent of the owner. If the directions of the law have not been pursued, the power has not been conferred at all; and the chancellor cannot supply omissions or irregularities by a curative decree and sale. Of that character is the decree, and for that object the sale was directed to be made. *

It is well settled that the purchaser of personal property must return, or offer to return, it, as a condition of defense at law against the purchase-money. He is not required to make that offer in the ease of real estate, because the administrator has no right to the possession. In Williamson et ux. v. Williamson, 3 Smed. & M. 749, the heirs succeeded in setting aside a sale made under a private act of the Legislature. The purchaser was held to an account for the rents. Davis v. Heard, 44 Miss. 60, illustrates a corresponding equity in behalf of a vendee who has procured the rescission of a contract on account of the default of the vendor. He has an equitable lien on the land for reimbursement of the money advanced. When the vendee resorts to a court of equity for redress, he submits himself to such equitable conditions as connect themselves with the subject.

Miller has made the infant heirs of the intestate defendants. Infants stand before the court of equity on a different footing, in many particulars, from adults. The guardian ad litem submits, in the formal auswer, their interests to the favorable consideration and protection of the court. Nothing can either be admitted or waived that would be to their prejudice. The chancellor will apply for their benefit whatever defense arises on the record, without formal preferment in pleading. Price v. Crone, 44 Miss. 577, and cases there cited.

No sound reason is perceived why Miller, in obtaining relief against the judgment, should not be put on the terms of doing equity to these infants. Their right to be restored to the possession of the land, and to an account, arises out of the same condition of facts which manifest his claim to relief. His averments disclosing an equity in his own behalf bring distinctly to light their equally strong equity.

We think, therefore, the justice of the case requires that, when the case returns to the Chancery Court, there ought to be a perpetual injunction of the judgment against Miller, a restoration of the possession of the land to the heirs, and an account between them and Miller. This may be done on the present state of the pleadings, or by cross-bill.

Decree reversed and cause remanded for furthei’proceedings.