OF THE Supreme Court of the United States AT DECEMBER TERM, 1865. [Names of Counsel who actually appeared and argued the case, as shown by the Minute Book, are given in heavy faced type.] with interest. The court below rendered a decree for the plaintiff for $4,000 only and interest, and he appealed to this court. The case is stated by the court. Messrs. Lorenzo Allis, W. D. Davidge, N. Wilson, and Peckham for appellant. Messrs. C. D. Gilfillan and J. M. Carlisle for appellees. Mr. Justice Miller delivered the opinion of the court: This is a suit to foreclose a mortgage for $6,000, given to secure a loan of money. It is conceded that at the time the mortgage was executed and delivered, only $4,000 of the loan was received by defendant; it being stipulated that the remaining $2,000 was to be advanced when defendant should finish a building on the lot conveyed by the mortgage, and cause it to be insured for the benefit of plaintiff. The loan was negotiated in some part through the banking house of Caldwell & Co., of St. Paul, where the defendant resided. On the 30th day of July, the defendant brought to Caldwell & Co. the policy of insurance, and satisfied them that the condition on which he was to receive the last $2,000 had been complied with, and Caldwell & Co. drew on plaintiff, residing in Boston, for that sum, and the draft was duly honored. On the 9th day of August, Caldwell & Co. failed without having paid over the money to defendant; and the sole question in the case is, For which of the parties of this suit did they hold the money at the time of their failure? It is a mere question of the weight of testimony, and we are not able to see that any principle can be settled or illustrated by its discussion. It is, perhaps, sufficient to say that the testimony satisfies us that the money was held by the bankers as a deposit to the credit of the defendant, and that he knew and so understood it before their failure. We will mention only a few of the reasons which induced this belief. Caldwell, one of the banking firm, testifies that it was under the instruction, and at the request of defendant that doing so he acted solely for defendant, and on he drew on plaintiff for the money; that in the day of the date of the draft, he permitted the defendant to check against this money on his bank for the sum of $250, and that in all, defendant checked on him against that fund for over $800. The clerk and bookkeeper of Caldwell & Co. testifies that, on the day the draft was drawn, defendant was credited on their books for $2,000 on account of said draft, and that he continued to draw it out by checks, until they amounted to over $800 at the day of their failure. The pass-book of plaintiff with Caldwell & Co. is produced by himself, and shows a credit of $2,000 dated August 30th; but as this was sometime after their failure and after they had had this pass-book in their hands, it is evidently a mistake as to date. The clerk above mentioned says it was intended for August 1st, as the arrangement was made on Saturday, July 30, after banking hours, and it was his custom to carry such transactions on the books of the next business day. This explanation seems reasonable, and as he swears that it conforms to the memorandum on his blotter, we see no reason to doubt it. The checks are shown which defendant drew between July 30, and August 9, and it is not denied that unless drawn against this money, the defendant was overdrawing his account. No proof is offered of any agreement or customary dealing by | acres of land so purchased by him; Horbach at which he was authorized to do this. These facts leave no doubt in our minds that the money must be considered at the time of the assignment of Caldwell & Co., a credit of the defendant with them, with his knowledge and consent, and the loss must be his. The decree of the District Court is, therefore, reversed, with costs, and the case remanded to the Circuit Court for the District of Minnesota, with directions to enter a decree in conformity with this opinion. JOHN A. HORBACH et al., Appts., 0. JOHN R. POTTER et al., and JOHN A. HORBACH et al., Appts., v. JAMES BROWN. Deed to purchaser having notice of prior title is void possession is notice of rights in land -decree not reversed on conflicting testimony. Where one, having equitable title to land, sold the same, and then procured such title to be set aside by the Secretary of the Interior and a patent to be issued to himself, and then conveyed the lands to another, the last conveyance is fraudulent and void, the vendee having had constructive notice of the rights of the one holding the equitable Possession and cultivation of land is constructive notice of rights in land. title. [Nos. 189 and 190.] Submitted Dec. 1, 1865. Decided Dec. 18, 1865. A This was a bill in chancery, filed by the appellees here, in one of the district courts of Nebraska. A hearing upon the pleadings and proofs was had and a decree rendered according to the prayer of the bill. From this decree an appeal was taken to the supreme court of the territory, which court affirmed the decree below; and now this appeal is brought to reverse these decrees. In November, 1857, Horbach pre-empted a quarter section of land, of which the lands in question are a part. The Commissioner of the General Land Office for certain reasons vacated this entry, and ordered that the land should be sold at public auction, as an isolated and disconnected tract. This sale took place in December, 1860, at the land office in Nebraska, under the direction of the register and receiver thereof. The lands were bid off, at the sum of $800, by and in the name of Josiah S. McCormick, who attended the sale and bid off the land at the request and for the benefit of Horbach, and made payment therefor with $800 which Horbach furnished him for the purpose; and thereupon the usual patent certificate was issued by the land officers, to and in the name of McCormick, for Horbach. Horbach was at this time indebted to one Seely, an attorney, for professional services; and on the same day McCormick, in pursuance of Horbach's direction, conveyed with special warranty to Seely, ten the time promising Seely to make or cause to be made, any further necessary assurances effectually to vest the title in him, should the public sale to McCormick be vacated; and Seely relying on this promise, accepted the deed in satisfaction of Horbach's debt to him. This deed was on the same day duly recorded in the county registry; and Seely entered into the premises so conveyed. On the 26th of February, 1861, Seely sold and conveyed, for $300, five of the ten acres to Mrs. Porter, the wife of John R. Porter (the original complainants), and the deed was recorded on the following day. Horbach, it is alleged, knew of the negotiations between Seely and Mrs. Porter, while they were pending Immediately after the purchase Mrs. Porter entered into the premises, and cultivated, improved and fenced, and has ever since occupied and possessed them. On the 1st of April, 1862, the Secretary of the Interior reversed the Commissioner's decision touching the pre-emption entry, and restored it. vacated the public sale, and directed the $800 to be refunded to the person entitled to it, upon the return of the Horbach returned the certificate to the departcertificate made to McCormick. Thereupon ment and received the $800; and the usual letters patent were, in virtue of his pre-emption entry, issued to him for the lands. The proceedings to obtain a restoration of the pre-empknown to and concealed from the complainants. tion entry, were, during their pendency, unOn the 23d of the same April during which these proceedings were had, Horbach and his wife conveyed to Wiggins the ten acres deeded by McCormick to Seely. creed to convey the lands in question to Mrs. The bill prayed that the defendants be dePorter, and for an injunction, to restrain bringing an ejectment, and for general relief. Messrs. Redick & Briggs, for appellants: It is immaterial what view of the case the court may take as to Horbach's liability, or his good faith or bad faith in these transactions; for Wiggins can in no way whatever be affected, as the record shows conclusively that he is a bona fide purchaser for a valuable consideration without notice. 1. The answer, when responsive to the bill, is evidence for Wiggins, and it requires the testimony of two witnesses to overcome it. See 2 Johns. Ch., 92; 3 Wheat., 527; 1 Paige, 239; 2 Blackf. 324. 2. Innocent purchasers are entitled to great favor in a court of equity. See 2 Eq. Lead. Cas., pt. 1, 34, 86, 88, 99, 100; 2 Story, Eq. Jur., 1502, 1503. 3. Wiggins holds the legal title, and even if the equities were equal he must prevail. 4. Wiggins had no actual notice of the appellee's equity (if any he has). The record is conclusive on this point. 5. He had no constructive notice. The record of the deed from McCormick to Seely and Seely to appellee was no notice to Wiggins. Same Lead. Cas. 129. See Bates v. Norcross, 14 Pick. 224; 10 Watts, 412. 6. The appellee had not such a possession of the land when Wiggins purchased as to put him on inquiry or to amount to constructive notice. Horbach, and not Brown, was in the |