Lessee of Swayze v. Burke/Opinion of the Court

An action of ejectment was brought in the western district of Pennsylvania, by the plaintiffs against the defendants, to recover the land in controversy. Both parties claim by descent from John Ormsby, sen. who died in Alleghany county, Pennsylvania, in December, 1805. The deceased had a son, Oliver, who survived him, and who administered on his estate; and a daughter, Sidney, who married Isaac Gregg. He had also a son called John Ormsby, jun. who married in the Mississippi country, and died in August, 1795. Mary Swayze, the wife of the plaintiff, is the daughter of this son; and was an infant at his decease.

In December, 1807, Oliver Ormsby gave bond as administrator of his father; but it seems he filed no inventory of the personal estate, as the law required, nor did he ever settle his administration account.

On the 6th September, 1826, as administrator, he confessed a judgment for four hundred and sixty-seven dollars and sixty-four cents, in favour of Messrs. Penns, Mr. James Ross acting as the attorney of the plaintiffs. An execution was issued on this judgment, and the premises were sold to Mr. Ross for three thousand dollars. He declared, publicly, at the sale, that Ormsby or any of his family might redeem the land, at any time, on the payment of 'debts and interest;' and Mr. Ross further states, that before the sale, Mr. Ormsby was informed that he only wanted the money on the judgment, and that he did not intend to buy the land to hold it.

No money was paid by Mr. Ross at the sheriff's sale, or at the time he received the sheriff's deed. Ormsby remained in possession of the land, receiving the rents and profits; and in April, 1831, four years after the sheriff's sale, he paid Ross five hundred and twenty-three dollars, the amount of the judgment and interest; and received from him a conveyance of the land. At this time, Ormsby receipted to the sheriff, as administrator, for the balance of the three thousand dollars, after deducting the amount paid to Ross. The sheriff's deed to Ross, and the deed from him to Ormsby, were recorded on the same day.

The land in controversy consists of eighteen coal-hill lots near Pittsburg, and thirty-five acres adjoining them, and which is now of great value; and was worth a large sum at the time of the sheriff's sale.

There was a letter in evidence, written by Oliver Ormsby to Mrs. Swayze, dated 19th March, 1828, at Natchez, in which he says: 'My father, at his death, was not possessed of more property than a sufficiency to pay his debts; having, from tim to time, sold to individuals, and conveyed to his children.' And there was evidence conducing to show, that the sale of two of the lots would have satisfied the judgment.

On these facts and others in the case, the counsel for the plaintiffs prayed the court to instruct the jury, that, 'in matters of fraud, courts of law and chancery have a concurrent jurisdiction. It is therefore within the province of the jury to inquire whether the conduct and proceedings of Oliver Ormsby, whereby the legal title to the property in dispute, became vested in himself, for his exclusive use and benefit, were in fraud of his co-tenant, Mary Swayze; and if they were, the verdict ought to be for the plaintiffs.' This instruction was given, as requested, with this qualification, 'that the fraud should be brought to the knowledge of Mr. Ross; and that, if he took a valid title under the sheriff's deed, the title of his vendee would be good, under the circumstances disclosed in evidence.'

To the refusal of the instruction as requested, and the instruction as given, an exception was taken; which raises the question of law, whether, to render the title of Ormsby, as set up by the defendants, inoperative and void, it is essential that Ross should have participated in the fraud.

The charge of the judge was explicit on this point. He not only instructed the jury, that, to make the title of Ormsby fraudulent, Ross must have had a knowledge of the fraud; but assuming, it would seem, the province of the jury, he declared that the fairness of the transaction was above suspicion.

That fraud is cognizable in a court of law, as well as in a court of equity, is a well established principle. It has been often so ruled in this Court.

As there is no court of chancery under the laws of Pennsylvania, an action of ejectment is sustained, on an equitable title, by the courts of that state. Such is not the practice in the courts of the United States; and in this case, if the plaintiffs fail to show a paramount legal title in themselves, they cannot recover.

It is unnecessary to inquire, whether, under the circumstances, Ormsby did not receive the conveyance of the land from Ross, in trust, for the heirs of his father, generally. This inquiry would be appropriate in the exercise of a chancery jurisdiction, on a bill framed for the purpose. But the jury were limited to the question of fraud. The deed by the sheriff to Ross, and the one from him to Ormsby, contain upon their face all the requisites of legal conveyances; and they must be operative to convey the title, unless the circumstances under which they were executed make them void.

In 1807, Ormsby took out letters of administration; but he seems to have acted, in the management of the estate, without regard to the law, or the obligations of his administration bond. He filed no inventory, made no settlement of his accounts. In 1825, he promised to pay the debt in the hands of Ross, but he took no step to fulfil this promise. It was his duty, as administrator, to make application to the orphans' court for authority to sell as much of the real estate as would pay the debt. But, to obtain this order, it would have been necessary to show that the personal assets were exhausted.

In 1826, he confessed a judgment, and suffered an execution to be taken out, and the property in controversy to be sold. He remained in the undisturbed possession of the property, enjoying the rents and profits; and then received a conveyance of the land from Ross, on the payment of the judgment, and receipting to the sheriff for the balance of the purchase money. And, prior to this time, by his letters, he informs Mrs. Swayze, who lived in Mississippi, and still resides there, that the property left by his father would all be consumed in the payment of debts.

In deciding the question of law raised by the exception, it may not be proper for this Court to say whether these facts do not show fraud in the administrator. The facts were properly before the jury, and it was for them to determine the question of fraud. But, may Ormsby and his representatives hold the land under their deed, unless it shall be shown that Ross participated in the fraud?

A bona fide purchaser, without notice, is not affected by the fraud of his grantor; and it is admitted that a conveyance by such purchaser, to a person who may have knowledge of the fraud, would be valid. But, the purchase and conveyance of Ross, cannot be considered as coming within this rule.

In the first place, Ross did not purchase with the intention of holding the property. This was declared publicly at the sale; and some time before it took place, the same determination was made known by him to the administrator. And, in the second place, it appears the purchase was never perfected by Ross, He received the sheriff's deed, but he paid no part of the consideration. In this state the matter remained four years, and until the administrator paid the judgment, and receipted to the sheriff for the residue of the purchase money. On this payment, he received a deed from Ross; and then he caused the sheriff's deed to be placed on record.

In making the purchase, Ross seems to have had no design to aid the administrator in the perpetration of a fraud, if such were his intention: or to defeat or embarrass the claims of the heirs of John Ormsby, sen. By the proceeding, he was desirous of securing the debt placed in his hands for collection; and, for the payment of which, he felt himself personally responsible. The judgment, and the sale of the land, secured the desired object. It might have been secured by the judgment only.

The purchase, at the sheriff's sale, was not made by Ross on his own account, or for the benefit of the plaintiffs in the judgment. Having fixed a lien on the land by the judgment and sale, he did not desire to complete his purchase by the payment of the money. And, it is clear that a purchaser at sheriff's sale, cannot protect himself against a prior claim, of which he had no notice; or be held a bona fide purchaser, unless he shall have paid the money.

Had the administrator, under the circumstances of this case, become the purchaser at the sheriff's sale, could he have held the land as a bona fide purchaser? His omissions of duty, in failing to account for any assets which may have come into his possession, and his neglect to apply to the orphans' court, for authority to sell a part of the real estate to pay the debt, connected with the judgment and the proceedings under it; are facts from which a jury might, in the exercise of their judgment, have inferred fraud.

Had the administrator fraudulently furnished an agent with money, and employed him to purchase at the sheriff's sale, could a title thus acquired be held valid against the heirs of John Ormsby, sen. though the deed might have been made to the agent? The agent may be supposed to have been made the innocent instrument of fraud, by the administrator; and whether the title apparently remained in the agent, or had been conveyed to the administrator, could not the fraud be inquired into at law?

There may not have been, in terms, an agreement between Ross and the administrator, that the purchase should be made at the sheriff's sale, by the former, as agent of the latter. But, before the sale, the administrator was assured by Ross, that he would not purchase to hold the land; and his high character was a sufficient guarantee on the subject: and may not this conduce somewhat to show to a jury why the eighteen lots, and the thirty-five acres adjoining, were sold on the execution, when the sale of two or three of the lots would, probably, have satisfied the judgment? The money was paid by the administrator.

In making the purchase, Ross seems, in effect, to have acted as the agent of the administrator; and it was proper for the jury to inquire whether the transaction was not fraudulent. If the administrator suffered the land to be sold, through the agency of Ross, with the view of securing the title to himself, to the exclusion of the other heirs of his father, the proceeding was fraudulent and void. And, as Ross could not be considered a bona fide purchaser, against the legal and equitable right of the plaintiffs, he not having paid the purchase money; the deed which he executed to Ormsby is not a bona fide conveyance. Had the plaintiffs brought their action against Ross, he could not have defended himself, under the sheriff's deed; without showing the payment of the consideration. Nor is this deed a good defence against the right of the plaintiffs, under the circumstances of the case, when set up by Oliver Ormsby or his representatives. To the objection already stated to the title of Ross, may be superadded all the circumstances going to show fraud in the administrator; and of which the jury are the proper judges.

We think, therefore, that the judge erred in charging the jury that the deed to Ormsby was valid, unless they should find that Ross participated in the fraud; and, on this ground, the judgment of the court below is reversed, and the cause remanded for further proceedings.

This cause came on to be heard, on the transcript of the record from the district court of the United States, for the western district of Pennsylvania; and was argued by counsel. On consideration whereof, it is now here ordered and adjudged by this Court, that the judgment of the district court be, and the same is hereby reversed; and that this cause be, and the same is hereby remanded to the said district court, with instructions to award a venire facias do novo.