The question is not whether a deed may be collaterally attacked for fraud in ejectment. The question is this: If A gives B a power of attorney to sell his (A's) land, can A show that B did not sell it, but gave it away, or merely put the title in C, for his (B's) own benefit? In other words, does a gift mean a sale, or does a power to the Attorney to sell mean a power to the Attorney to settle the property on himself and family? This is the plain question. It is no answer to say that the deed, on its face, imports a sale by the Attorney: we can show there was no sale. We do this by parol, it is true. The deed was made by Price to Van Nostrand; and we suppose it never had been disputed that a party--not himself--signing a deed, but some one else signing it in his name--could show by parol that he had not authorized it--that it was a forgery--that it was an escrow--that it was procured by fraud--that it was never delivered. Why not at law as well as in equity? If the deed does not really follow the power, it is void: does the mere fact that the Attorney says it follows the power, make it good? If so, a deed gets its force, not from what the principal does, but from what the agent says; and this in favor of the agent himself! That this novelty is not law, any more than reason, we apprehend can be no serious question.
If this were the only point in the case, it would be useless to argue further. But the respondent says that Payne & Dewey were innocent purchasers of Price; and that Van Nostrand had conveyed to Price. Now, we say that Van Nostrand took no title--because the deed of Price to him was not in pursuance of the power, and he knew it. He could take nothing more than if he had stolen the deed, simply because the agent had no authority to make him the deed, under the circumstances. It was a fraudulent excess of authority--the doing of an act which the agent had no right to do--therefore, passing nothing to the grantee. The legal title seemed to have passed--but in reality, did not pass: any more than a deed to cheat creditors passes the title, at law or equity, against those creditors; or deed of a Sheriff passes title when he had no execution. The question is one of power to convey--which power is not satisfied by a mere form of conveyance, but by an actual compliance with conditions. And when the vendee knows there is no compliance he gets no title, because there is then no power to convey, and he knows it. It might as well be contended that if A makes a power to B--which is recorded--and then revokes it--revocation not recorded--but B sells to C, with full knowledge of the revocation, C gets a title--because all the papers seem to be regular! This being clear, how do Payne & Dewey stand--do they stand in the shoes of Price? What better title do they get than Price? This depends on two other questions:
1. Are they purchasers of the legal title without notice?
2. Does a quit-claim vendee, under a power of attorney from A " to sell all his" (A's) " property in California," take any property which A held as trustee?
As to the first question: Payne & Dewey bought of Scott, Attorney for Price. Did Price have the legal title by virtue of the assignment on the back of the deed from Price to Van Nostrand?--supposing that assignment delivered by Van Nostrand to Price, which we say was not done. This assignment is in the usual form of an assignment of a lease. We repeat that the word " assign" is not a word which alone will create a fee--and we refer to the cases cited by us, which we think maintain that opinion. But the word " assign" applies to the paper--not to the land. This assignment is found on the back of the deed; it purports to be an assignment of the interest of assignor " in the instrument, and every clause, article, or thing therein contained; " and then appoints Price assignor's Attorney to take all legal means, etc. The respondents contend that the words made a transfer of the land--whether under the term " clause," or " article," or " thing," they do not aver. The absurdity of this pretense is too manifest for serious argument. That the word " thing," following the other words, was not intended to mean the land described in the deed, is manifest. It was a mere cumulative word, designed to show that the instrument, and all parts of it, were assigned; and the fact that the assignee was made Attorney for the assignor is conclusive to show that the fee was not designed to pass; for then there could be no authority to deal with the property in the name of Van Nostrand, from whom all title and dominion had gone. It is nothing that the words " to his own use" are added; they may show an interest, but they do not show a legal estate--a divestiture of the fee.
The learned discussion of words rather clouds than illustrates; but the plain English of the few words in their context defies all grammatical jargon to make them obscure. The cases from Ohio are in point. See, also, Clark v. O'Margay, 2 Brev. 134; Towner v. Moore, 1 Brev. 236, where this very question is decided.
The fact of a consideration does not alter the case. The consideration was not paid, or ever intended to be; and, even if paid, it is not perceived why a power of attorney may not be as well given on consideration as without it.
It would be endless, as useless, to review the authorities cited; though the counsel has shown considerable ingenuity in selecting so many which miss the point in controversy. We answer several of them by saying we do not say that the words of the assignment might not create an equity. We say that they do not create a fee; and this is enough for us.
Passing from these questions to the facts. Whatever circumstantial discrepancy may exist in the testimony of Price and Van Nostrand, one thing is certain: that they both agree in these essentials, viz: that Price did not sell to Van Nostrand--but, by an arrangement between them, Price put the property in Van Nostrand's hands for his (Price's) own purposes; that Van Nostrand, finding he could not hold any longer, sought to transfer the control of the lot back to Price; that both of these papers were without consideration; that Price, to keep Dupont quiet, and avert inquiry, paid him $ 4,000 " on account of his property," but not communicating to him the facts; that Dupont never received this money with notice or knowledge of Price's acts, or with intent to ratify or confirm his sale, or conveyance; and, therefore, within the cases cited on the original brief, never gave effect to this contrivance. (Billings v. Hall , 7 Cal. 1; 2 Kent Com. 625; 15 Mass. 396.)
What is it to Payne & Dewey, and their successors, whether Dupont and Price have ever settled or not? The question is as to the original validity of the sale, and if originally invalid, (as we have shown,) the sale stands void until affirmed, and cannot be held affirmed by matter ex post facto, unless by some act of affirmance done with full knowledge, on the part of Dupont, of the facts; and this must be affirmatively shown. Of this there is neither proof nor probability, while it is necessary there should be express proof. It is not the case of a rescission of a contract for fraud, as the respondent vainly imagines, but the case of effect given to a contract, originally invalid, but afterwards confirmed; the confirmation stands in the place of the original contract. A sale not within the power is not less void because fraudulent, too. I take it, that if A buys land of B by parol, and receives $ 100 purchase-money, the mere receipt of the money does not validate the contract; but especially if C agrees to give away or sell B's land, B is not bound by the sale by merely receiving money of A, unless it is shown B knew how the money was raised. The confusion of the counsel arises from their not distinguishing between the case of a sale, invalid because not pursuing the terms of the power; between no contract at all, so far as Dupont is concerned, and a contract made by Dupont, but voidable for fraud; in which last case the party receiving something must restore it before he can avoid the contract; but Dupont, never having made this contract, is not bound by it until he indicates his election to be bound; and as no man can make a binding election until he has knowledge of all the facts, the affirmative is thrown upon the other side to show this knowledge before the election can be inferred. There is nothing in this record to countenance the notion that Dupont ever had notice of this disposition of his land by Price; of Price's sale to Van Nostrand; especially of the terms of the sale; of Van Nostrand's transfer back to Price; or of Scott's, Price's agent, sale to Payne & Dewey. Price got nothing from Van Nostrand. If any sale was ever contemplated, it was a sale on credit, to be paid at the mere option of Van Nostrand; no note taken; no money paid; no binding contract to pay. Price had no right to make any such contract. In truth, there was no understanding, except for Price's own benefit. And there is no presumption of acquiescence from silence--Dupont was out of the State, had no agent but Price, and Price's interest was to keep him in the dark.
No case can be found in which it has ever been held that an agent with limited authority, acting beyond the bounds of that authority, even at law or in equity, has got the title against the true owner; certainly not in favor of himself and those standing in his shoes. (See Chouteau v. Eckhart, 2 How. 344; 2 Id. 284; 6 Mo. 106.)
Most of the respondent's cases are cases in which the deed was collaterally attacked by third persons. The Louisiana case is on a statute of that State.
If the power in this case had been apparently executed according to its terms, the respondents might have said, if such were the fact, they were protected because they purchased on the faith that what seemed to be, was; but they stand in no such position. They saw no legal title in Price: at most he had a mere apparent equity; and this equity they were bound--as is the assignee of a chose in action or executory agreement--to look into and ascertain the true condition of. They took the place of Price: Price was in the shoes of Van Nostrand, and Van Nostrand and Price simply had no title at all, as against Dupont. If the contrary is held, it results that Van Nostrand got Dupont's land as a mere agent for Price, giving nothing for it, when the power under which he got it only authorized a sale of it; and Price would get from Van Nostrand the title, so conferred on him, to his principal's land, when he had only power to sell it for him. In other words, it would have to be held that an agent, empowered to sell, can change the title of his principal's property by the empty juggle of giving it to an accomplice for nothing--let the latter convey it to him for nothing--and then put his constituent at defiance! If he were to convey directly to himself for nothing, it would be void--but if he conveys indirectly to himself, it is good!
Many authorities might be cited to show that there is no material distinction in this country, and at this day, between law and chancery as to fraud and its effect upon contracts; but that is unnecessary--for here the question between these parties and their privies is, not whether there was fraud in the sale, but whether there was any sale. That though as between the Attorney and third persons, purchasers of the legal title, the form of a sale is as good as the fact of a sale, yet as between the parties themselves and their privies there must be an actual sale; and that an agent cannot, by his own ipse dixit, change the nature of a transaction so as to protect himself from all inquiry as to whether he pursued his power or violated it: whether he sold his constituent's property or gave it away to himself.
To conclude: the counsel have cited no case in which the word " assign," standing alone, has been held to pass a fee. The New York cases (see 10 and 18 Johns.) rest on the statute of uses. But we have no such statute. According to the argument, I see no difference between a legal and equitable estate in lands. But even there it is not shown that the word " assign" alone would pass the fee, especially if no such word as " heirs," showing an intention to sell the estate, were used. In the cases, the words were taken in connection with the manifest intent otherwise shown. The word " assign," meaning a mere transfer, and no defined interest, estate, quantum, or portion described--certainly is neither the natural or appropriate term whereby to convey or sell an estate. If I say to B, " I hand over to you my land," this is not in legal language a sale of it--it gives him some control or dominion, but it does not indicate what; the same word might show dominion for a day, a year, or forever. It is not, therefore, a word of grant. According to the argument, this would be a good deed: " I assign A B my farm called A." This rule will certainly introduce great simplicity in conveyancing, and it is a pity Chancellor Kent had not thought of it when he gave his form; but the rule goes still further; I may sell by merely writing on a deed " I assign the within instrument, and every clause, article, and thing therein contained, to B; " and as, by the remarkable philology of our antiquarian linguists, land is a thing contained in a deed--a part of the deed, I suppose--the fee goes.
We contend that it is clear this was not the meaning:
1. Because the word " assign," written on the back of the deed, and expressly referring to the deed as the thing assigned, applies only to the paper.
2. Because the words used are the form of an assignment of a lease.
3. Because the natural signification of the words is as we allege.
4. Because the word " assign" is never applied to sales of land, but, when written on a paper, applies to the paper--the instrument.
5. Because, if a sale were intended, the word " heirs," or some other conveying the inheritance, would have been used.
6. Because the paper is (like Sutter's, in Mesick's case,) a power of attorney, which forbids the idea of a sale of the fee.
7. Because the design evidently was not to sell to Price, but to give the control to Price as the Attorney of Dupont.
The true rule is, that where the fraud attaches to the execution of the deed, (as here, as being without authority,) or is cotemporaneous with the deed--as procured by fraud--it may be as well assailed at law as in equity. (23 Wend. 267; 14 Pick. 303; 18 Id. 95; 14 Conn. 123; 4 Mass. 92; 7 Id. 119; 16 Id. 348.)
But there could be no such question here, for the paper of Van Nostrand which we attack was not under seal--it was no deed, and passed no title.
We think it unnecessary, however, to consume time by discussing this matter, for the reason that we contend that the paper is void, as evidence of a sale, when in truth there was no sale, but a mere gift; in other words, the Attorney Price had no right to make it. He was only authorized to sell, and he did not sell.
To remove the misapprehension of counsel as to our first point, I will briefly restate: a deed, not in fact authorized, though in form good, passes no title whatever to the grantee cognizant of the facts: but such grantee may give effect to it by selling to a vendee ignorant of the fraud or want of authority, upon the principle that it is equitable to protect the innocent; the principal is estopped; the guilty grantee has only title for the one purpose of conveying it to an innocent purchaser; but this must be a purchaser of the legal title. Van Nostrand took no other title than this--strictly, he took no title at all, any more than the purchaser of goods under false pretenses; and he conveyed only an apparent equity to Price--not the legal title; hence Price never had against us the legal title, and could not convey it, but the legal title, not affected by this trick, is still in us.
We think the cases cited by us, as well as the reason of the thing, show conclusively that a quit-claim deed made under a power of attorney, which power is general in its terms, authorizing a sale of the principal's property, cannot authorize a sale of any property which is not owned in proprietary right by the principal. Under such a power, the purchaser must, at his peril, see to the condition of the title; for the doctrine of caveat emptor applies in its full strictness to such a case.
JUDGES: Field, J., delivered the opinion of the Court. Terry, C. J., concurring. Baldwin, J., having been counsel in the Court below, did not sit in the case.
OPINION
FIELD, Judge
The power of attorney from the plaintiff to Price authorized a sale of the premises. It did not authorize a gift of the property, or its transfer for any purpose, except in completion of a sale. The deed to Van Nostrand was not executed upon any sale. No consideration was paid, or stipulated to be paid. Both Price and Van Nostrand agree, in this respect, in their testimony. Price states that he transferred the property in order that Van Nostrand might control it and keep off trespassers, giving to him the privilege of retaining it for eight thousand dollars. He did not elect to retain it, nor did he offer to pay any portion of this sum. Van Nostrand states that the conveyance was made to him, in trust, for the wife, or some member of Price's family. It is immaterial for what purpose the deed was given, as it was not executed upon a sale. The power was special, and the deed, not being in pursuance of the power, could not pass any title from the plaintiff to Van Nostrand. Nor was there any ratification of this conveyance by the plaintiff. He was not aware of its existence. No information was communicated to him on the subject. It is true $ 4,000 was sent to him on account of his property generally, but not on account of the proceeds of any sale. No presumption of ratification can be indulged, as knowledge of the alleged sale, with its attendant circumstances, was not brought home to him. (Billings v. Morrow , 7 Cal. 171.)
As between the plaintiff and Van Nostrand, the conveyance had no more effect than if it had recited on its face that Price was only authorized to sell the property; but, for reasons best known to himself, made the conveyance without a sale. No parade of authorities could give to such an instrument any operative force in favor of a subsequent purchaser. These facts existing, though not apparent on the face of the deed, the same result must follow as between the parties. As between them, it was a nullity. In appearance, it conferred title, while, in fact, no title passed.
The question of protection to a bona fide purchaser, without notice, relying upon the form of the deed, cannot arise unless some conveyance was subsequently executed by Van Nostrand; and this involves an inquiry into the effect of the assignment indorsed on the back of the deed. It is as follows:
" Know all men by these presents, that I, the within-named Avert M. Van Nostrand, of the city of San Francisco, State of California, in consideration of $ 8,000 paid to me by Rodman M. Price, of the city of New York, have assigned to the said Rodman M. Price, and his assigns, all my interest in the within instrument, and every clause, article, or thing therein contained, and I do hereby constitute the said Rodman M. Price my Attorney, in my name, but to his use, to take all legal measures which may be proper for the complete recovery and enjoyment of the assigned premises, with the power of substitution.
" Witness my hand and seal, this 30th day of August, 1858.
" A. M. Van Nostrand."
This instrument was executed during the absence of Price from the State, and without his knowledge, and without any consideration therefor, and was never delivered. It is not under seal, and contains no words conveying any estate in the land. (Lessee of Bently's Heirs v. Deforest, 2 Ham. 222; Porter v. Read , 19 Me. 365; Wood v. Partridge , 11 Mass. 490; Clark v. O'Margey, 2 Brev. 134; Turner v. Moore, 1 Brev. 236; 4 Kent, 452.) It would seem a waste of time to cite authorities on the position that this instrument did not pass the legal title. And if we admit that the instrument was delivered, and the consideration paid, it could only create in Price an apparent equity, and the rule is well established that the purchaser of a real equity, even, is bound by a prior equity. The purchaser of an equitable title takes the property subject to all existing equities. He is not within the rule which protects a bona fide purchaser for value, and without notice, of the real or apparent legal title. He must take the imperfect title, with all its imperfections. (Chew v. Barnet, 11 Serg. & R. 393; Vattier v. Hinde, 7 Pet. 252.)
How, then, stands this case? Price, by the assignment, acquired an equity against Van Nostrand. The vendees of Price took only this equity, if anything. Upon inquiry, they would have found that the equity was only apparent; that the title was, in appearance, in Van Nostrand, but really in the plaintiff; that the conveyance to Van Nostrand, in fact, passed nothing, because not executed upon any sale in pursuance of the power to Price. The purchasers from Price stood in his shoes, and as he had no legal title, he conveyed none, and as against the plaintiff, neither Price or Van Nostrand possessed either legal or equitable title.
It is unnecessary to pursue the consideration of the points of the appellant any further. The views we have taken go to the marrow of the case, and conclude the defense.
Judgment reversed, and cause remanded.