HAZZARD v. FITZHUGH et al., 78 F. 554

SPEER, District Judge. Tliere are two principles of equity which should control this case. They are;

(1) Between equal equities the law will prevail.

(2) The equity of the party who has been misled is superior to that of the party misleading. Now, Mrs. llazzard holds the legal title. She is a purchaser in good faith. The deed with the affidavits of the Fitzhughs disclose to her no purpose to defeat the homestead laws of Texas, but affirmatively show the eonirary. She bought the security in good faith as an investment, and, conformably to its terms, she became the purchaser at the sale by the substituted trustee. She is then a bona fide purchaser, without notice of Mrs. Fitzhugh’s alleged equity. Conceding the latter to exist, the equities are equal.

The good faith of the purchase is expressly recognized in the opinion of the learned circuit court. It seems clear, then, that the legal title of Sirs. llazzard should prevail. If is not a sufficient reply to this to point out that the Security Mortgage & Trust Company, which may have known the transaction to be colorable, has- guarantied the value of the security that Mrs. Hazzard bought. She has obtained, as the result of her investment, the legal title, by regular and lawful methods, and the equitable title of a bona fide purchaser.

This title is good against everything except a superior equity which would overcome it, and her equity is at least, tapial to that upon which the complainant relies. A court of equity, therefore, may not enjoin her efforts to recover the land to which she is entitled. In addition to this, the Fitzhughs, including Mrs. Fitzhugli, placed on the market a security which upon its face was valuable and negotiable, and attractive to investors like Mrs. Hazzard. It was commended to her. Without suspecting the faith of husband, wife, and son, Mrs.

Haz-zard had no reason to doubt that the conveyance of title was valid and absolute. Tt is judicially ascertained that this was her conclusion. Her broker and her confidential adviser had formed the same opinion. If the conveyance failed to disclose a right in Mrs. Fitzhngh to avoid the sale, Mrs. Hazzard was misled, -and misled by the complainants. Now, Mrs. Fitzhugli seeks a court of equity to cancel the purchase to make which she (all innocently, we may assume) misled Mrs. llazzard. It follows that the equity of Mrs. Hazzard must prevail.

Since it is not impossible to sell the homestead under the Texas law, it seems that Mrs. Hazzard has purchased the homestead of Mrs. Fitzhugh, and her title is good. For these ■ reasons, the decision of the circuit court should be reversed, and a decree to settle the controversy should be granted on the cross bill of the respondents. The decree of the circuit court is reversed, and the cause is remanded, with instructions to enter a decree on the original bill in favor of the defendant therein, Mrs.

Fisher Hazzard, and dissolving the injunction, with costs, and to enter a decree in favor of the cross complainant, Mrs. Fisher Haz-zard, on her cross bill, confirming and quieting her title to the premises in controversy, with such other relief as may be proper in equity. .