Murphy's Hotel Co. v. Benet

89 S.E. 104, 119 Va. 157, 1916 Va. LEXIS 88
CourtSupreme Court of Virginia
DecidedJune 8, 1916
StatusPublished
Cited by1 cases

This text of 89 S.E. 104 (Murphy's Hotel Co. v. Benet) is published on Counsel Stack Legal Research, covering Supreme Court of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Murphy's Hotel Co. v. Benet, 89 S.E. 104, 119 Va. 157, 1916 Va. LEXIS 88 (Va. 1916).

Opinion

Harrjson, J.,

delivered the opinion of the court.

This controversy involves the right of priority between certain judgment creditors and a deed of trust creditor of Mary Lee Benet, in the distribution of the proceeds of certain real estate in which their debtor had an interest. It appears from the record that Mary Lee Benet became, in 1908, when her mother died, the owner of an undivided one-fourth interest in a large estate known as the “A. J. Ford trust estate.” This estate was being administered at the time under the orders and decrees of the Chancery Court for the city of Richmond. In 1910, Mary Lee Benet filed her bill in the Chancery Court for the city of Richmond, where most of the property was situated, asking for a partition of this trust estate among the parties entitled thereto, which was heard with the suit then pending for the general administration of the trust estate, and in April, 1910, a decree was entered directing a sale of all of the Ford trust property. Among other properties belonging to this estate were certain lands lying in the county of Gloucester. By deed duly recorded in Gloucester county November 21, 1910, Mary Lee Benet conveyed with general warranty to a [159]*159trustee all of her right, title and interest in these Gloucester lands to secure to,Thomas Toby a note for $10,000. At the time this lien in favor of Toby was recorded there was another and prior deed of trust upon the same property securing the sum of $3,000. The judgments in question were obtained against Mary Lee Benet by the several appellants in sundry courts of the city of Bichmond in the year 1909, but were never docketed in the county of Gloucester. The prior deed of trust mentioned securing $3,000 was paid off in 1914, and is, therefore, not involved in this controversy. The present litigation is between Thomas Toby, the beneficiary under the second deed of trust securing $10,000, which was recorded in Gloucester county in November, 1910, and the appellants, whose judgments were obtained and docketed in 1909, in the city of Bichmond. The lower court held that the deed of trust in favor of the appellee, Thomas Toby, had priority over the judgments asserted by the appellants, and decreed accordingly.

The appellants contend that when Mary Lee Benet gave the first deed of trust for $3,000 on her one-fourth interest in the Gloucester county lands, she had left only an equity of redemption, and that the trustees in the second deed of trust securing Toby $10,000 did not acquire the legal title but a mere equity, and is not therefore a purchaser for value without notice. In other words, the contention is that a second deed of trust takes subject to any judgments obtained against the grantor, whether docketed in the county or corporation wherein the real estate is located or not.

This proposition is without merit. It is a common occurrence for loans to be secured by a second deed of trust, and when such loans are made the trustee there[160]*160in can be as truly a purchaser for value and without notice as the trustee in the first deed can be. If he is a purchaser for value without notice, the beneficiary takes subject only to the rights secured by the first mortgage and is not affected by the liens of judgments not docketed before his deed of trust was duly recorded. Shurtz v. Johnson, 28 Gratt. (69 Va.) 657.

In that case the facts, briefly stated were as follows: In 1859 White conveyed certain real estate in York county, Virginia, to Peachy, trustee, to secure a certain debt. In 1866 he conveyed the equity of redemption in the same property by a second deed of trust to Williams, trustee. Certain creditors recovered judgments against White which were not docketed in the county of York until 1867. Judge Burks, in delivering the opinion of the court, said in part: “At the time the deed was made to Williams (trustee), 31st May, 1866, neither the trustee nor the creditors secured by the deed had any notice of them. If they had been docketed in said county within twelve months from the date of their recovery, they would have constituted liens on White’s equity of redemption of the deed to Peachy (trustee), as of the date of their recovery (Code, 1860, ch. 186, secs. 6, 8), which, being prior, would have been superior to the lien created by the .deed to Williams (trustee). The trustee in the last named deed and the creditors secured therein are ‘purchasers for valuable consideration’ within the meaning of section 8, ch. 186, Code of 1860, and having had no notice of the judgment at the time the .deed was executed and recorded, the lien created by the deed takes precedence of the lien of the judgments.”

It is further contended by the appellants that the second deed of trust under which the appellee, Toby, [161]*161claims is only a quit claim deed, and that he is, therefore, not protected as • a bona fide purchaser. If it were conceded that one who takes under a quit claim deed cannot occupy the position of purchaser for value without notice, the concession would not avail the appellants for the reason that the deed on its face wholly fails to justify the contention that it is a quit claim deed. The instrument is in the usual form of a trust deed. It conveys all of the right, title and interest of the grantor in the lands described, with covenants of general warranty, and clearly states that it is to secure the payment of a $10,000 note to the holder thereof. The presence of a warranty in a deed is one of the distinguishing characteristics between a quit claim deed and a warranty deed.

“The doctrine that one who claims under a quitclaim deed will not be protected against a prior unrecorded deed must be limited to the strict sense of that technical species of conveyance. If from the terms of the deed, the adequacy of the price paid, or other circumstances, it appears that the grantor intended to convey, and the grantee expected to be invested with, a fee-simple title or other particular estate,' the purchaser will be entitled to protection.” 24 Am. & Eng. Enc. of Law, p. 122, and note 2.

In the case before us, it appears from the terms of the deed that the consideration was adequate, that the grantor intended to convey, and the grantee expected to be invested with right and title to the property conveyed so far as it was necessary to satisfy the debt thereby secured. The record does not furnish a fact or circumstance to sustain the contention that the deed in question was intended to be or was in fact a quit-claim deed.

It is further contended by the appellants that the recitals in the deed of trust taken by the appellee, [162]*162Toby, gave him constructive notice of their judgments. It is one of the agreed facts in this case that neither Toby, his trustee, nor his attorney had any notice of the judgments asserted by the appellants, save only such notice as the law would impute to them from the deeds recorded in Gloucester constituting links in the chain of title. The claim of the appellants is that the deed of trust, by which the debt due appellee was secured, referred to a prior deed, in the chain of title,, which made reference to the several suits, heard together in the city of Richmond, involving the administration and settlement of the A. J. Ford trust estate, and that if the appellee had investigated those suits he would have discovered the existence of the judgments which were then unknown to appellee.

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Cite This Page — Counsel Stack

Bluebook (online)
89 S.E. 104, 119 Va. 157, 1916 Va. LEXIS 88, Counsel Stack Legal Research, https://law.counselstack.com/opinion/murphys-hotel-co-v-benet-va-1916.