October 10, 2012

Casteel et al., v. Baugh's Admr, Laurel, 1902


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66 S.W. 996; 1902 Ky. LEXIS 523; 23 Ky. L. Rptr. 1991

February 26, 1902, Decided


Appeal from circuit court, Laurel county.

Action by J. R. Baugh's administrator against H. R. Casteel and others to enforce a purchase-money lien. Judgment for plaintiff, and defendants appeal.


COUNSEL: H. C. Eversole, for appellants.

Charles R. Brock, for appellee.




 [*996]  O'REAR, J. H. R. Casteel was the owner of an undivided half interest in a tract of land in Laurel county. He conveyed this interest by title bond to Richard Wilson. Wilson, by another bond for title, conveyed the interest thus acquired to Isaac Hughes on January 4, 1873. Hughes executed to Wilson the note sued on in this action, as evidence of the purchase price, or a part of it. On March 4, 1873, Wilson assigned that note to J. R. Baugh. Some years after the transaction above set out, D. W. Casteel, a brother of H. R. Casteel, and brother-in-law of Wilson, obtained possession of the original title bond from H. R. Casteel to Wilson; D. W. claiming that he had bought the land of Wilson. In this suit by Baugh to enforce the purchase-money lien evidenced by Hughes' note, the Casteels and Wilson and Hughes are made parties defendant. Baugh charged in his petition that D. W. Casteel knew of his (Baugh's) ownership  [**2] of the Hughes note and of Hughes' claim at the time of his purchase from Wilson, if he did purchase it. He further pleaded that in fact Hughes never rescinded the sale to him from Wilson, and that the claim of D. W. Casteel that he had purchased Wilson's title was a pretense and a fraudulent transaction. There is proof to support appellee's claim that D. W. Casteel knew of Hughes' title and knew of appellee's lien before he acquired the Wilson bond. While this is denied by appellants' testimony, many circumstances shown in the record tend to corroborate appellee's version of the transaction. The evidence showed that Isaac Hughes did not in fact rescind his trade with Wilson, but, having become involved in some difficulty, had for a time left that community. His wife then delivered his bond to Wilson, for what consideration is not shown. She is not shown to have had express authority to represent her husband in that transaction, and, in the absence of such authority, she had no right to dispose of his property, without or  [*997]  for consideration. Therefore Wilson's equity remained in Isaac Hughes, his first vendee. He owned nothing to transfer to D. W. Casteel. The record does not clearly  [**3] show whether Hughes' family was living on the land at that time. But it does show that they had been just before, with claim of ownership under purchase from Wilson, and had, as such purchasers and owners, set improvements on the premises. This was notorious in that community. But what we decide is that Wilson had originally but an equity, by his bond from H. R. Casteel. This he transferred to Hughes by his title bond, and to appellee by assignment of Hughes' purchase-money note. Any subsequent purchaser from Wilson, buying that same equity, must take notice of its actual status. His position is different from one who buys the legal title from the apparent owner. The latter purchaser's diligence is made satisfactory, ordinarily, when he has examined the proper public records, and found nothing there, and nothing connected with the possession of the property selling, to put him upon notice of outstanding equities. But a purchaser of such an equity as this must know that he is purchasing something incomplete, and subject necessarily to some condition, which may or may not have been performed. He buys merely what his seller had,—no more. He takes the chance of its being as represented.  [**4] Therefore the doctrine, "In a contest between equities, the elder prevails." In this case the elder equity is with appellee.

The circuit court so adjudged, and its judgment is affirmed.

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