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complaint could perform the office of such an | this case. Clay v. Bilby, 72 Ark. 101, 78 S. affidavit; but in neither does the court's at. W. 749." And the decree recites that the tention appear to have been directed to the defendants “were severally constructively provision, ‘and provided further, actual serv- summoned by publication,

proof of ice of summons shall be had where the de- which has been previously filed herein.” The fendant is in the county or where there is an contention of plaintiffs in error is therefore occupant upon the land. In the arrangement answered by Grignon v. Astor, 2 How. 319, of the act this provision is somewhat sepa- 11 L. ed. 283; Sargeant v. State Bank, 12 rated from the others which it is obviously How. 371, 13 L. ed. 1028; Voorhees v. Jackdesigned to modify and restrain, and, in son, 10 Pet. 449, 9 L. ed. 490; Applegate v. the absence of any controversy respecting it, Lexington & C. County Min. Co. 117 U. S. it may well be that it was not observed by 255, 29 L. ed. 892, 6 Sup. Ct. Rep. 742. the court." We cannot concur in the suppo- The other assignments of error do not resition. We think those cases can be better quire specific mention. They are either anexplained by a different supposition. In the swered by that which we have already said case at bar plaintiffs in error are not in a or do not involve jurisdictional questions. position to make the objection. They do not Decree affirmed. assert that, though nonresidents of the county, they were present therein or that their Mr. Justice Brewer concurs in the judg. lands were occupied by a tenant or other rep-ment. rentatives, as was the case in Banks v. St. Francis Levee District, supra. They, on the contrary, assert, and make it a ground of JOHNSTON ARMSTRONG, Ancillary Re. relief under the Constitution of the United

ceiver for the New South Building & States, that, as nonresidents, they were dis- Loan Association of New Orleans, Louisi. criminated against, in that the act of 1895 ana, Appt., did not require the same notice to be given to nonresident owners as to resident owners JAMES A. ASHLEY, Mary M. Ashley, Hay. or to persons owning and having tenants up- den H. Ashley, Ralph B. Ashley, Mary A. on the land.

Breckinridge, Henry F. Beardsley, and JoPlaintiffs in error, it is true, allege that no

seph R. Beardsley, and Emma B. Jenkins. “sufficient affidavit of the plaintiff” was filed Lis pendens,effect of defective index. “stating positively or sufficiently any one

1. Failure of the clerk properly to inof the facts” required to be stated, and that dex amended declarations in ejectment covthe clerk did not make, on the complaint orering additional property, which were duly otherwise, any warning order to plaintiffs filed in his office, does not excuse the failin error, or to either of them, to appear in ure of a searcher to examine the files.* the suit as required, or which obliged them Principal and agent-imputed knowledge. to appear therein or bound them by the pro- 2. Knowledge of the local attorney and ceedings which were had therein. But there president of the local board of directors of was no allegation that either of them was in a foreign building and loan association in the county or that there was an occupant sphere of their duty, and acquired while

matter coming within the upon their lands. Not being defendants who acting with reference thereto, and before were entitled to personal service, they can sending to the company at its home office not urge against the decree that they were the report which it was their duty to make, not given personal service, or complain that must be imputed to the company.f the complaint was insufficient as an affidavit Principal and agent-imputed knowledgefor service by publication, because it did not effect of agent's fraud. deny the existence of conditions which there

3. The fraud of an agent cannot alter

the legal effect of his knowledge with reis no pretense existed. Another assignment of error is that “there spect to his principal in regard to third

parties who had no connection whatever was no sufficient proof of the publication of with such agent in relation to the perpetraany warning order, or any notice to the tion of the fraud, and no knowledge that plaintiffs in error, filed or produced in court any such fraud had been perpetrated. I when the decree of sale of their lands was Mortgage-equitable lien for improvements rendered.” To this contention the supreme -constructive notice. court replied: “The act under which the 4. Land in the possession of the true aforesaid proceedings were instituted does owners, as established by their successful not require a warning order to be entered on prosecution of ejectment actions, which record or on the complaint, and, if it had, were pending when the defendant executed the proceedings could not be attacked col. corded, to secure a loan of money to be

a deed of trust of the property, duly relaterally unless such entry was made juris- used in erecting improvements thereon, candictional, as it was in Gregory v. Bartlett, not be subjected, at the suit of the mort55 Ark. 30, 17 S. W. 344, and it was not in'gagee, to an equitable lien for the value of

*Ed. Note.-For cases in point, see vol. 33, Cent. Dig. Lis Pendens, § 27. tEd. Note. For cases in point, see vol. 40, Cent. Dig. Principal and Agent, $8 670, 679, 680. *Ed. Note.-For cases ir point, see vol. 40, Cent. Dig. Principal and Agent, & 690.

such improvements, on the theory that such | same square, comprising the property in. owners were charged with the duty of ac- volved herein, were included in the declara. tive investigation to discover from what tions in those actions. A statement of facts source the money used in the improvements regarding the title to these various lots may was obtained and on what security, where be found in Bradshaw v. Ashley, 14 App. D. the mortgagee, even if unaware of the pend: C. 485, and in this court, upon review of that ency of the ejectment actions, had knowledge that a suit in equity, raising the ques decision, in 180 U. S. 59, 60, 45 L. ed. 423, tion of the mortgagor's title to the prem- 428, 21 Sup. Ct. Rep. 297, where the ex. ises, had been begun, and dismissed for pression "ink-lot” is explained as referring want of prosecution, without prejudice.* to certain ink numbers on a map of the lots

in square 939, on file in one of the public of [No. 122.]

fices of the city, and which also had pencil Argued December 7, 10, 1906. Decided Jan. numbers on it, which were different. In that uary 21, 1907.

litigation the Ashleys, the respondents here

in, finally established their right to the posPPEAL from the Court of Appeals of the session of the property, and obtained judg.

District of Columbia to review a decree ment to that effect against Bradshaw, de. which affirmed a decree of the Supreme fendant in the ejectment actions, in the suCourt of the District, dismissing a bill to es. preme court of the District some time in tablish an equitable lien upon certain prop. 1897, and in this court in 1901. These reerty for the value of improvements erected spondents were thereupon placed in possesthereon. Affirmed.

sion of the property, including these lots. See same case below, 22 App. D. C. 368.

While the litigation in these ejectment ac.

tions was pending, and some years before Statement by Mr. Justice Peckham: judgment therein, Bradshaw, while defending

This suit was brought in the supreme them, became a stockholder in the company court of the District of Columbia by the ap- in order to obtain a loan from it, and sucpellant, who is the ancillary receiver for the ceeded, in October, 1893, in borrowing $20,New South Building & Loan Association of 000 from the company, secured by a deed New Orleans, Louisiana, hereinafter called of trust upon the property in litigation in “the company," against the owners of the the actions in ejectment other than ink-lot real property described in the bill, to estab-1 above mentioned. The deed was duly relish an equitable lien upon the property for corded and the money was to be used for the the value of improvements placed thereon construction of buildings, which were subsewith money which the company loaned to quently placed on these lots. one Bradshaw for that purpose, Bradshaw was advanced to Bradshaw by the company claiming to be the owner at the time. After in instalments, the last being in April, 1894. hearing, the bill was dismissed on its merits

It was obtained from the company by by the trial court, and the decree of dismis- means, as alleged, of a fraudulent combinasal was affirmed by the court of appeals of tion between Bradshaw and one Walter, the the District. The opinions of both courts are president of the local board of directors of to be found in 22 App. D. C. 368. The re- the company at Washington (who claimed to ceiver has appealed here.

have been the owner at one time of the propThe title to the property, which consisted erty, but whose title, whatever it was, had of certain numbered lots in square number been acquired by Bradshaw), together with 939 in Washington, had been in dispute some

the local attorney of the company in this time prior to 1891. During the year 1889, District. The local attorney, in carrying out 1890, or 1891 one Aaron Bradshaw, acting, as

the alleged fraud, sent a defective so-called

"chain of title," which, nevertheless, had who claimed to have acquired the title of been accepted by the local board of the comGeorge Walker, entered upon and took forci- pany in Washington. It omitted certain tax ble possession of the lots in question, and claimed title in themselves. This defective

and other deeds under which the respondents proceeded to erect a small brick structure on the corner lot, whereby to continue to hold the title, but was not revised by them. Thej

paper was continued by other examiners of possession.

certificate regarding the title was sent, with The respondents herein claim to be the the defective chain of title, to the company owners of these lots, and in the latter part in New Orleans by the local attorney about of 1891 they or their grantors commenced May 26, 1893. The certificate approved the four actions of ejectment in the supreme application for the loan, but such loan was court of the District to recover possession of not acted upon favorably at that time. Subseparate and undivided interests in the des. sequently, in October, 1893, the loan was ignated "ink-lot” number 1, and subsequent-made, the company, as is stated, relying upon ly, by proper amendments, other lots in the the certificate of the local attorney for the

*Ed. Note.-For cases in point, see vol. 32, Cent. Dig. Lions, $ 28.

The money

period which it covered, and the certificate his agents or employees, entered upon the of the other examiner for the time thereafter grounds, they would be held liable for trespassing until the making of the loan. The passing thereon, as they (defendants herecompany has insisted that it acted at all in) were the owners of the lots, and had not times in good faith and made its advances given him or anyone else, the right or perupon the security of the trust deed, which mission to enter thereon for the erection of it supposed was perfectly good. The trial houses or any purpose whatever, and that, court found that before the money was paid as the improvements were not made with to Bradshaw, upon the security of this trust their authority, they would not be respondeed, the company was aware, through its sible for any liability contracted by Mr. general attorney in New Orleans, of the fact Bradshaw. that a suit in equity had (theretofore, in The defendants, in their answer, also al1890, and before the ejectment actions) been lege that it was not until in or about Febbrought by the Ashleys against Bradshaw, ruary, 1895, that defendants, or any of them, Walter, and others, in which the plaintiff's learned of the advances made by the comtherein claimed ownership of these lots, and pany or of the existence of the deed of wherein they asked for an injunction to re-trust. The trial court, in its opinion, stated strain the defendants from setting up any that although “there is no evidence contratitle to them. The bill on file in the equity dicting either of these denials, nor of actual suit showed a common source of title to all knowledge possessed by the defendants of the lots mentioned therein, which included the matters thus denied, still it seems to me the lots here in question. The attorney there is evidence in the record that facts . also knew that, although the suit had might readily have been ascertained by them been dismissed, yet it was only for from which they might well have learned want of prosecution, and was "without prej- at an earlier time of the building and of the udice.” The New Orleans attorney wrote source from which the money employed was to the Washington attorney, who then had derived." While not finding that the decharge of the matter, calling his attention to fendants had actual knowledge of the adthese facts. No notice seems to have been vances made by the company, the court did taken of the letter, but the certificate of impute knowledge of certain conveyances title by the examiner was given after its made to Bradshaw, and of the existence of receipt. The company insists that during the deed of trust to the company at earlier all the time it made advances to Bradshaw dates than those assigned in the answer, under the deed of trust it was ignorant of February, 1895. And in relation to an offer the existence of these ejectments actions, of compromise the joint answer alleged that and at any rate did not know that they cov- after that time, viz., about May 31, 1895, ered other than the corner lot, as described during negotiations for the compromise of in the declarations before they were amend the differences between the parties, Mr. H. ed, and the amendments they were ignorant F. Beardsley, one of the defendants, wrote of, because, as is alleged, the clerk of the to the attorneys representing the company, court in which the actions were pending had in behalf of himself and his associates, offer. not properly kept the books so as to show ing to sell to the company the lots upon the amendments and their nature, although which the houses then were "at their presthey had been filed. The corner lot was not ent market value or price, said value not to one of the lots upon which the buildings exceed the price at which similar lots (unwere erected.

improved) in the same or contiguous squares. The trial court, in the opinion delivered, are offered for sale. Upon the payment of said that the complainant charged the de said price, or sum, we will convey our title fendants with knowledge of the advances to them by deed or quitclaim, or make a made by the company to Bradshaw towards building agreement to so convey upon the the erection of the buildings; but to this determination of the pending suits, or a deed allegation the defendants interposed, in their in escrow, as counsel shall advise. We will answer (which was under oath) a positive hold this offer open until the 1st of July denial. They admitted that, although whol- next.This offer was not accepted, but ly ignorant of the source from which the there is nothing stating what, if any, obmoney came to construct the houses, yet, jections were made to it. soon after learning that one Childs, a con- Bradshaw had, in 1894, defaulted in his tractor, was engaged in their construction, payments of amounts due for his stock in they notified him in writing, January 4, 1891, the company, which he had taken in order to that he had been represented to them as a procure his loan. Thereafter some arrangecontractor and builder of the houses for ments were attempted between him and the 'which the ground had been broken, and company in regard to making his payments, which houses were then in course of erec- but they fell through, and nothing could be tion, and he was thereby notified that if he, done in the way of collecting anything on

the mortgage or deed of trust for the reason, to Bradshaw, the company was aware, that the ejectment actions resulted unfa- through its general attorney in New Orleans, vorably. The company, in 1899, became em- that a suit in equity had been commenced barrassed and went into the hands of a re- about March 1, 1890, by the Ashleys against ceiver in New Orleans, and the same person Bradshaw and others, wherein they alleged was appointed ancillary receiver in this Dis- their claim of ownership of the property, trict, and brought this suit with leave of which included the lots in question in this the court.

case, and in which the plaintiffs sought to The court of appeals held that Bradshaw enjoin the defendants from setting up any was an occupant of the premises in bad title thereto. It appeared that there was a faith, with the fullest possible knowledge of common source of title to all the lots menthe rights and claims of the appellees, and tioned in the bill. The bill charged fraudthat it could not be supposed that the gran- ulent and illegal acts on the part of Bradtee of an occupant in bad faith could have shaw, Walter, and other confederates, in unany better right than his grantor had. dertaking to seize possession of the lots

Some other facts are stated in the course there claimed to belong to the plaintiffs of the opinion.

therein (the defendants in this suit), and

specifically described the status of the parMessrs. George H. Lamar and Blair Lee ties then existing, and denied to Walter and for appellant.

Bradshaw any ownership or right to the Mr. J. J. Darlington for appellees. possession of the lots. The facts regarding

this equity suit were presented by the genMr. Justice Peckham, after making the eral attorney for the company, in New Orforegoing statement, delivered the opinion leans, to the local attorney of the company of the court:

in this District, and the fact that the bill The foregoing facts show that Bradshaw, had been dismissed only for want of proseif he were plaintiff, would have no cause of cution, and without prejudice, was specially action against the defendants, based upon called to the attention of the local attorney. any allegation that he was permitted by No action seems to have been taken regardthem to build on what he thought was his ing the contents of that letter by the local own land, while the defendants stood by and attorney after its receipt other than to cerdid not interfere to prevent it, although tify to the title, nor does the general attorknowing that the land was not his, and ney seem to have inquired further about the claiming title themselves. At all times facts. The bill was, of course, on file in Bradshaw had knowledge that not only was the clerk's office, and it showed the contenhis title denied, but that these defendants 'tion as to the title between these defendants were asserting, to the best of their ability, and Bradshaw and his associates. With this in actions of ejectment against him, the knowledge, therefore, it is impossible to say right to the possession of, and title to, the that the company was ignorant of the fact of property in question. Under such circum- the existence of a question as to the title of stances it would simply be at his own risk Bradshaw to the premises on which he was that he expended money on what might turn seeking to obtain this loan. The dismissal out to be other people's property, and which of the bill without prejudice, for want of he knew was so claimed. His attitude in prosecution, would not be evidence that the the matter would seem to have been that, title of Bradshaw was good or that the if he could successfully defend the ejectment controversy had been settled. It certainly actions, he could then pay the loan he had was a warning of the existence of a question obtained from the company; while, if he as to the title, and it was, at any rate, noshould prove unsuccessful in the defense, ittice enough to start the company upon some would be the company's misfortune.

investigation of the facts as to the actual The company now insists that the money condition of the controversy respecting it. was obtained from it through the fraud of And at this time the ejectment actions had Bradshaw and the others, as stated. But been brought and were pending. The declabefore coming to the question of what duty rations in those actions were then on file the defendants owed to the company, it may in the clerk's office of the supreme court of be well to examine for a moment the posi- the District, and showed the actions were tion of the company in the transaction lead-originally brought to recover possession of ing up to its loan to Bradshaw. It is true, the “ink-lot” 1. It is true that while that parcompany asserts that it has acted in good ticular lot did not include the premises faith throughout the whole matter. Upon ex- upon which the buildings were subsequently amining its position one fact is apparent and erected, yet the source of title to all the uncontradicted: Before the execution of the lots was the same. Some months before the deed of trust, and, of course, before the ad-deed of trust was executed amendments to vance of any of the moneys by the company I these declarations, which did include those lots, had been made and were on file in the transmitted at once to the main office, clerk's office among the papers in those ac- signed by the president, secretary, and attortions.

27 S. C.-18.


ney of the local board on a form furnished Actual knowledge of the fact of the exist- by the association to applicants for a loan. ence of the ejectment actions in regard to Transactions of a local nature were put in ink-lot 1 is, however, denied by the company, charge of the local attorney, who representand a like denial is made in regard to the ed the company at his locality, and loans amendments to the declarations. The local were consummated by him and papers sent attorney had knowledge of them, or ought to him by the company for such action as to have had. But, so long as the company was necessary for the completion of a loan. had knowledge of the equity suit and the The knowledge of the attorney and of the contents of the bill therein, there was president of the board in regard to a matter enough to put the company on inquiry as to coming within the sphere of their duty, and the state of the title. If, under such facts, acquired while acting in regard to the same, the company loaned the money, it showed and sending to the company in New Orleans its willingness to take the risk of the valid- their report which it was their duty to ity and sufficiency of the title of Bradshaw. make, must be imputed to the company.

The company denied knowledge of the The fact that those agents committed a amended declarations because of the alleged fraud cannot alter the legal effect of their defect in the manner of keeping the books acts or of their knowledge with respect to in the clerk's office, wherein the ejectment the company in regard to third parties who actions were entered, but no statement was had no connection whatever with them in made on the page of the docket devoted to relation to the perpetration of the fraud, and those actions of the existence of amend- no knowledge that any such fraud had been ments to the declarations. The amendments perpetrated. There is no pretense of any were, however, duly filed in the clerk's office, evidence that the defendants had any conand the alleged failure of the clerk to prop-nection with these alleged frauds, and no erly index the amendments was no answer pretense that they had any knowledge of to the failure on the part of the searcher to their existence, if they did exist. In such examine the files for the purpose of seeing case the rule imputing knowledge to the the papers in existence in the actions. In company by reason of the knowledge of its this matter we agree with the opinion of the agent remains. court of appeals, in holding that the respond- But, even if it be assumed that the com. ents here were in nowise responsible for the pany had no more than a knowledge of the alleged failure of the clerk to make addi equity suit and its dismissal without prejutions to the docket or index book. Nor is dice, it simply shows that the company was there any evidence that the persons acting willing to take the risk of the title, alfor the company were in any way misled though confessedly questionable. by such failure, to the company's detriment. Upon these facts we cannot see that the

The company also insists that it ought not defendants can be held liable to the plainto be charged with any knowledge of any tiff on account of any failure of duty cu fact which was known only by Walter and defendants' part. If the buildings were being the local attorney. The company asserts, erected by Bradshaw, there was certainly no first, that Walter and the local attorney duty on the part of defendants to notify were not its agents; and, in any event, by him of their title to the property, and we reason of their fraud, knowledge by the cannot see that there was any such duty company should not be imputed to it be- resting upon the defendants to endeavor to cause of the knowledge of its agents. The find out through what sources Bradshaw obcompany asserts that Walter was simply the tained the money to erect the buildings, and president of its local board, composed of the to inform the person who was loaning the stockholders in the company residing or to money that the defendants claimed the propbe found in Washington, and that his action erty as theirs. was not the action of an agent under such Assuming, even, that the company made circumstances. It also asserts the same the loan in the bona fide belief that Bradshaw thing in regard to the local attorney, and had title, and that the claims of the dedenies liability for their acts. We think the fendants to the ownership of the lots were position cannot be maintained. The pres- not well founded, and also that no knowlident and attorney were directors of the edge of the agents of the company in Wash. local board and had to be directors before ington could properly be imputed to it, and they could hold either office, and the local we still have the fact that the company directors had to be approved by the board loaned its money with knowledge of the of the main office. It was to this local board equity suit and of the allegations of the that the application was first to be made for bill therein regarding the title of the dea loan, and it was to be approved by it and' fendants and the lack of any title in Brad.

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