Maria Winchester and Robert Lemmon, vs. The Baltimore and Susquehanna R. R. Company, 4 Md. 231

Le Grand, C. J,, delivered the opinion of this court. This is an appeal from an order of the Superior court of Baltimore city dissolving an injunction, -which had been previously granted by that court on the filing of the bill of the appellants.

The equity of the bill may be stated thus: — it avers and charges, that George Winchester, the former husband of one of the parties, becoming possessed of a portion of the separate estate of his wife, invested it in real estate lying in York county, Pennsylvania, taking a deed for the same in his own name; that this occurred in the year 1830; that the said Winchester and wife, by their joint deed, in the year 1831, conveyed one-fourth part of the property, so alleged to have been purchased with the moneys of the wife, to Lemmon, as trustee, for her sole and separate use; that after the execution of this deed it remained in possession of Winchester, who neglected to have it recorded, which was not done until the year 1841; that in the year 1833, Winchester mortgaged the same property to certain directors of the rail road company, he being at the time its president, to secure the payment of an alleged indebtedness of himself, “the said company in fact having actual knowledge and notice of the interest and claims” of the appellants, and “ with such actual notice, did, nevertheless, accept the said mortgage.” The bill then proceeds to state, that the company is about to foreclose the mortgage, and prays an injunction to prevent it from doing so.

The bill does not require the answer of the defendant to be under oath. It was filed on the 16th of December 1852, and by the act of 1852, ch. 133, the answer of the defendant cannot be considered as evidence against the complainants.

It provides, “that no answer of any defendant to any bill or petition, to be hereafter filed in the courts of equity in this State, shall be evidence against the complainant or complainants, unless, by the bill or petition, such answer shall be required to be made under the oath of the respondent or. respondents; or unless, at the hearing of the cause, the complainant or complainants shall read the answer as evidence, in which case it shall have the same effect as to the party reading the same, as if it had been required to be made under oath.” Putting the answer out of view, the ease, as presented by the bill, is simply this: — the complainants had a claim on, and an equity in, the property in question, and the company, with actual notice of such claim and equity, took a conveyance of it.

There can be no doubt that actual knowledge is equivalent to registration, and that if, the company had such notice, it took the property subject to the equities of the complainants.

There is nothing, it is true, in the evidence to show actual knowledge; but, on the other hand, there is nothing to disprove it, and, in the present condition of the case, the averments of the bill must be assumed to be correct, except, (under the agreement filed in the cause,) in so far as they are rebutted, and we have already said, that under the act of 1852 the answer of the defendant cannot be invoked for that purpose on this appeal.

These observations dispose of the case as made by the bill and proof; but inasmuch as the act of 1832, ch. 302, makes it incumbent upon us to decide and determine all the ques* tions arising out of the record, we proceed to do so. It was urged in argument, that inasmuch as George Winchester was the president of the company at the time he executed the mortgage, any knowledge which he had in regard to the rights and equities of his wife must be taken as the knowledge of the company.

It is undoubtedly true, as a proposition of law, that the principal is affected with the knowledge and bound by the acts of the agent; but this principle can have no application to a case in which the one party does not act as agent, but avowedly for himself, and adversarily to the interests of the other. In the case now under consideration Winchester did not profess, and in fact did not represent, the company; it was represented in the transaction by the three directors with j whom he dealt.

To hold a company responsible for all the I acts of any of its officers, when they act confessedly in behalf of their own interests and in an adversary character, would be to sanction the grossest frauds. The distinction which we state is plainly taken in the case relied on in argument.

The court there intended, and did nothing more than assert the general proposition, that an agent, within the scope of his authority, may bind his principal, but not to countenance the' idea that an officer of a corporation may bind the latter in all cases whatever, especially not in a case where he professes to represent none other than himself, and to deal with the' company as though he had no official relation to it. 4 Paige, 127, 129.

See Story on Agency, sec. 140, (a and b.) From these observations it will appear we are of opinion, that the knowledge of George Winchester, unless it be shown to' have been communicated to the company, is not sufficient to affect its rights. Actual knowledge must be shown by proof, or at least such circumstances must be proved as would have been sufficient to put the company on the inquiry. An extract of

an act of the legislature of Pennsylvania of 1775, relating to the acknowledgment and recording of deeds, is set out in the record; and the property in controversy being -within that State, the company rely upon that statute. At the final hearing one of the questions for decision will be, necessarily, what is the influence of this statute on a case' like the' present?

The appellants claim under the same person as does the appellee; but insist, that their deed being older, although not recorded so soon as the deed of the latter, must have precedence on the ground of George Winchester having but an equity, because, as argued by them, the deed from the sheriff of York county was not recorded until after the execution of the instruments under which both appellants and appellee' claim.

According to the provisions of the statute, all deeds made find executed in the then province concerning any lands, tenements of hefe'ditaments, or whereby the same might be any way affected in' law or equity, are directed to be recorded in the office for recording of deeds, in the county where the lands lie, within six months after their execution; and such deeds as may not be so recorded, are to be judged fraudulent and void against any subsequent purchaser or mortgagee for valuable consideration, unless such deed or conveyance shall be recorded as aforesaid, before the recording of the deed or conveyance under which such subsequent purchaser or mortgagee shall claim.

The deed under which the appellants claim bears date the 1st July 1831, and was not recorded until 1841. The mortgage is dated 9th April 1833, and was recorded 5th of July of the same yearn The statute of 1775 is the only one which has been given in evidence, but, it was argued at the bar, and the printed reports of judicial opinions pronounced in Pennsylvania were cited to show, that there are other acts in force in that State which relate to sheriffs’ deeds.

When sueh acts are legally proved, they possibly may establish that the sheriff’s deed conveyed a legal title, without being recorded in what is known in that State as the record office. Of course we give no opinion on the effect of such acts, they not being now before us.

If, however, it should appear from these statutes a legal title passed to George Winchester under the sheriff’s deed, then the deed to the company, being first recorded, would prevail over that of the appellants, unless the allegation of the bill as to actual knowledge on the part of the company, or such circumstances can be made out as ought to have put it on the inquiry in regard to outstanding equities at the time the mortgage was executed. It has been said that S. C. Leakin, who was a director of the company, because of his being concerned with G.

Winchester in the original purchase, had notice Winchester was purchasing for his wife, and that this knowledge was notice to the company. We do not perceive how, necessarily, his interest in the purchase would give him notice of, or put him upon inquiry in regard to the rights of Mrs. Winchester, when the deed in fee for the whole property was taken in G. Winchester’s name. The fact of buying for and conveying to Leakin, Glenn and Freeman, three-fourths of the property, did not of itself inform Leakin that the other fourth was for Mrs. Winchester.

Three-fourths being bought for others, did not give the least information that the other fourth was not purchased for himself. The mortgage has been assailed in argument, as showing on its face that it was given for an antecedent debt, but the language of the instrument does not justify any such inference. I‘t is precisely the same language which would be used if the money had been lent the day on which the mortgage was executed.

From these views it will appear, we are of opinion, that the appellants have stated a good ease on the face of their bill, and that if it can be made out at the final hearing, they will be entitled to a decree in conformity with their prayer; but that the knowledge imputed to- the company cannot be established from the fact that G. Winchester was, at the time of the execution of the mortgage, its president; nor from any knowledge on the part of S. C. Leakin, growing out of the circumstances now disclosed in the case.

And, moreover, if the appellants be’ unable to make out knowledge on the part of the company,, or the existence of such circumstances as ought to have put a reasonable person on the inquiry as to outstanding equities, the right of the company cannot be interfered with. Order reversed and cause remanded for further proceedings under act of 1832, ch. 302.