2. ESTOPPEL-BY CONDUCT-WHAT CONSTITUTES.

It is not essential to an estoppel that there should exist a preconceived design to defraud, as the wrong consists in denying what the conduct has induced another to believe and act upon in good faith.1

Appeal from circuit court, Warren county.

J. McCabe and C. F. McCabe, for appellant. C. V. McAdams, for appellee.

ELLIOTT, C. J. We condense from the special finding of the trial court these material facts: In October, 1884, the appellant, her sisters, Catherine Evans and Sarah Pugh, and their nephew, Samuel Etchison, were the owners in fee of the undivided one-fifth part of a tract of land, and Samuel Etchison was the occupant of the land, yielding rent to his co-tenants. In the month named, Etchison made a contract with each of his co-tenants for the purchase of their respective interests in the land. Pursuant to the terms of the contract, the appellant, who lived in Jasper county, in conjunction with her husband, on the twenty-seventh day of December, 1874, signed and acknowledged a deed conveying the land to Etchison. This deed she sent by mail to her sister Catherine Evans, with instructions to deliver it to Etchison, only upon the condition that he paid the amount of the purchase money of the land, $317, and not to deliver the deed until the money was paid. These instructions were received by Catherine Evans before she gave the deed to Etchison. After these instructions had been imparted to her, Catherine Evans did, in violation of those instructions, deliver the deed to the grantee named in it, without the payment of the purchase money, delivering, at the same time, her own deed, and her sister Sarah also delivered hers. The deeds were all delivered on the false and fraudulent representation of Etchison that he would immediately mortgage the land, thus obtain money, and pay for the land. The delivery of the deed to Etchison was made without the knowledge or consent of the appellant. The deeds received by Etchison were placed on record on the fifth day of March, 1885. After the deeds were recorded, and while Etchison was in possession of the land, it was purchased of him in good faith, without notice of any fraud, for a fair price, fully paid, and in the belief that the deeds were valid, and with knowledge of Etchison's possession, by the appellee, George Milligan, and a deed was executed to him by Etchison.

It is the contention of the appellant that on these facts the law should have been declared to be with her. This contention is asserted by counsel on the strength of the cases which hold that, where a deed is placed in the hands of a third person, to be delivered to the grantee upon the performance of a certain condition by the grantee, a delivery in violation of the condition will not make the deed effective. In support of this position, counsel cite many cases; among them, Berry v. Anderson, 22 Ind. 36; Robbins v. Magee, 76 Ind. 381; Freeland v. Charnley, 80 Ind. 132; Vaughan v. Godman, 94 Ind. 194; Burkam v. Burk, 96 Ind 270; Stringer v. Adams, 98 Ind. 541; Vaughan v. Godman, 103 Ind. 499; S. C. 3 N. E. Rep. 257; Harkreader v. Clayton, 56 Miss. 383; S. C. 31 Amer. Rep. 369; Chipman v. Tucker, 38 Wis. 43; S. C. 20 Amer. Rep. 1; Stanley v. Valentine, 79 Ill. 544; Smith v. South, etc., Bank, 32 Vt. 341; People v. Bostwick, 32 N. Y. 445; Black v. Shreve, 13 N. J. Eq. 458; Dyson v. Bradshaw, 23 Cal. 536; Ogden v. Ogden, 4 Ohio St. 191; White v. Core, 20 W. Va. 272.

1It is not necessary to an estoppel that there should be an intention to deceive, Ward v. Berkshire Life Ins. Co., (Ind.) ante, 361; Beebe v. Wilkinson, (Minn.) 16 N. W. Rep. 450; Tiffany v. Henderson, (Iowa,) 7 N. W. Rep. 683; Coleman v. O'Neil, (Minn.) 1 N. W. Rep. 846; if it would be a breach of good faith to allow the truth to be shown, see cases last cited, and Sutton v. Wood, (Minn.) 7 N. W. Rep. 365.

As to what constitutes an estoppel, see Johnson v. Connecticut F. Ins. Co., (Ky.) 2 S. W. Rep. 151, and note; Lyles v. Lescher, ante, 365; Richey v. Merritt, ante, 368.

We have not the slightest doubt that the abstract proposition stated by counsel is correct, for we understand it to be a rudimentary rule in the law of real property that a deed delivered as an escrow is not effective if placed in the hands of the grantee in violation of a condition upon which the person who holds as an escrow is authorized to deliver it. If this proposition is broad enough to cover the case, the appeal must be sustained; but we cannot grant this essential requisite, for there remains the question of estoppel. It might be conceded that, in ordinary cases, where the grantor remains in possession, the delivery of a deed by one who received it as an escrow, in violation of the condition upon which he was authorized to deliver it, would not make the deed effective to convey title, and yet there might be circumstances which would estop the grantor from asserting title against a bona fide purchaser. Title to land may be transferred and acquired by estoppel. Pitcher v. Dove, 99 Ind. 175, and cases cited. In speaking of the application of the doctrine of estoppel to land, a recent writer says: "The principle applies, irrespective of the nature of the property sold, and the estoppel will be so moulded as to prevent fraud and injustice, in whatever form it may present itself." Herm. Estop. 1053.

The supreme court of the United States, in discussing the general subject, said: "The vital principle is that he who, by his language or conduct, leads another to do what he would otherwise not have done, shall not subject such person to loss or injury by disappointing the expectations upon which he has acted. It involves fraud and falsehood, and the law abhors both. The remedy is always so applied as to promote the ends of justice." Dickerson v. Colgrove, 100 U. S. 578.

In our own court it has been said: "It is not necessary, in order to the existence of an equitable estoppel, that there should exist a design to deceive or defraud. The person against whom the estoppel is asserted must, by his silence or his representations, have created a belief in the existence of a state of facts which it would be unconscionable for him to deny, but it is not necessary that he should have been guilty of positive fraud in his previous conduct." Anderson v. Hubble, 93 Ind. 570. This doctrine has been asserted by this court in other cases, and is well sustained by the decisions of other courts. Pitcher v. Dove, supra; Vilas v. Mason, 25 Wis. 310; Foster v. Bettsworth, 37 Iowa, 415; Rudd v. Matthews, 79 Ky. 479; Racine Co. Bank v. Lathrop, 12 Wis. 466; Chynoweth v. Tenney, 10 Wis. 397; Continental Bank v. National Bank, 50 N. Y. 575; Blair v. Wait, 69 N. Y. 113.

The wrong constituting the legal fraud is the repudiation of what the conduct of the party has made appear true to the injury of another, who, in good faith, has acted upon an apparent state of facts created by the conduct of the person who makes the denial of what his conduct implies. Negligence may sometimes constitute legal or constructive fraud, as is well illustrated by the forcible opinion in Stevens v. Dennett, 51 N. H. 324, where it was said: "Thus, negligence becomes constructive fraud, although, strictly speaking, the actual intention to mislead or deceive may be wanting, and the party may be innocent, if innocence and gross negligence can be compatible.'

There is another principle applicable here, and that is this: Where one of two innocent persons must suffer, he must be the sufferer who put it in the power of the wrong-doer to cause the loss; or, as it has been said: "He, certainly, who trusts most, ought to suffer most. Where one of two innocent parties must suffer, he through whose agency the loss occurred must sustain it." Le Neve v. Le Neve, 3 Atk. 646; New v. Walker, ante, 386, (December 7, 1886;) Hunter v. Fitzmaurice, 102 Ind. 449; S. C. 2 N. E. Rep. 127.

It is also a familiar principle that where one is in possession of land, and has a deed of record, the possession will be referred to his deed, unless there are facts known to one who is about to acquire an interest in the land indicating a different possessory right. 1 Washb. Real Prop. (4th Ed.) top p. 58.

Possession is often presumptive evidence of title, and one who finds on record a deed duly executed and recorded may, surely, act upon the presumption that, as the paper title and the possession coincide, the possession is under the deed. 1 Washb. Real Prop. (4th Ed.) top p. 58.

In discussing a question very similar to the one before us, MARSHALL, C. J., said: "Titles which, according to every legal test, are perfect, are acquired with that confidence which is inspired by the opinion that the purchaser is safe. If there be any concealment or defect, arising from the conduct of those who had held the property long before he had acquired it, of which he had no notice, that concealed defect cannot be set up against him. He has paid his money for a title good at law. He is innocent, whatever may be the guilt of others, and equity will not subject him to the penalties attached to that guilt. All title would be insecure, and intercourse between man and man would be very seriously obstructed, if this principle were overthrown." Fletcher v. Peck, 6 Cranch, 133. This doctrine was unqualifiedly approved in Somes v. Brewer, 2 Pick. 184.

It is clear to our minds that these principles carry the case for the appellee, for it was the appellant who put it in the power of the wrong-doer to do the act complained of. She it was who suffered him to remain in possession of land, and placed in another's hands a deed which gave to that possession the fullest and most complete indicia of absolute ownership. The purchaser found the vendor equipped with the most potent evidences of ownership, for he had a recorded conveyance, and he had possession. There was nothing wanting to an absolute and perfect title, so far as visible and ascertainable facts disclosed.

Possession by the grantee named in the deed is an important element in the case, and it is an element that distinguishes the case from those cited by the appellant. Had the grantor retained possession, those cases might control; but here it was the grantee who had possession of the land. If a purchaser is not safe in buying where there is on record a properly framed deed, and the person named in the deed is in possession of the land conveyed by the deed, then, indeed, would titles be insecure, and the purchase of lands hazardous. We have no doubt that, where the two great elements of ownership are united in one person,-a deed and possession,-that a bona fide purchaser will be protected, although the person to whom the deed was intrusted to be delivered on the performance of a condition may have delivered the deed in violation of his duty. Judgment affirmed.

(109 Ind. 62)

PHILLIPS . LEWIS and others. *

(Supreme Court of Indiana. December 10, 1886.)

1. DRAINS AND SEWERS-ACTION TO ENFORCE ASSESSMENT-VOID PROCEEDINGS-PLEADING.

Where proceedings for the establishment of a ditch are absolutely void, under the law in force at the time they were had, a pleading based on such proceedings cannot be rendered good by an averment that they were had under the provisions of ar. act which had been repealed 18 months before they were begun.

2. JUDGMENT-RES ADJUDICATA-IRREGULARITY IN PROCEEDINGS.

A former adjudication will constitute a bar to any other suit between the parties for the same cause of action, where it is not absolutely void, although errors and irregularities may be found therein.1

1See Spencer v. McGonagle, (Ind.) 8 N. E. Rep. 266, and note; Barnard v. Barnard, (Ill.) 8 N. E. Rep. 320; Levan v. Mulholland, (Pa.) 7 Atl. Rep.

*Rehearing denied.

3. SAME-PRESUMPTION IN FAVOR OF RECORD-PLEADING.

Where a former adjudication is attacked for certain errors specified in the pleading, but no allegation is made that such errors are shown by the record of such former adjudication, it will be presumed that such record is regular and free from

error.

Appeal from circuit court, Grant county.

John Brownlee, for appellant. Steele & St. John, for appellees.

Howk, J. This was a suit by appellant and one James Hoggart, against the appellees, to recover the amount claimed to be due upon a certain ditch assessment, alleged to have been made on the fifth day of October, 1868, against certain real estate in Grant county, then owned by one William L. Noble. Before any steps were taken in the case, the record shows that, on motion of plaintiff James Hoggart, the cause as to him was dismissed. Appellees jointly answered four paragraphs, and also filed their cross-complaint herein. Appellant's demurrer was overruled as to the first and third paragraphs, and sustained as to the second and fourth paragraphs, of appellees' answer to the complaint. Appellant answered appellees' cross-complaint in three paragraphs, and also filed replies to the first and third paragraphs of appellees' answer to his complaint. Appellees' demurrer was sustained to the first and third paragraphs of appellant's answer to their cross-complaint; and their demurrer was also sustained to the first and third paragraphs of appellant's reply to the first and third paragraphs of their answer to appellant's complaint. It is then shown by the record that appellant withdrew the second and fourth paragraphs of his answer to the cross-complaint, and also the second and fourth paragraphs of his reply to appellees' answer, "electing to stand by his pleadings notwithstanding the demurrers." The court then adjudged that appellant take nothing by his suit herein, and that appellees recover of him their costs; and from this judgment this appeal is now here prosecuted.

In this court appellant has assigned a number of errors; but it is manifest, from the foregoing abstract of the record, that the only decisions of the court below which were adverse to him were the sustaining of appellees' demurrer to the first and third paragraphs of his reply to appellees' answer to his complaint, and the sustaining of appellees' demurrer to the first and third paragraphs of his answer to their cross-complaint. The last of these rulings, even if erroneous, was harmless to the appellant, because, as shown by the record, the appellees failed to recover upon their cross-complaint herein; so that the only error assigned by appellant upon the record of this cause, which we are required to consider and decide, is the error of the court in sustaining appellees' demurrer to the first and third paragraphs of his reply to the first and third paragraphs of their answer to his complaint herein. The first paragraph of reply is addressed to the first paragraph of answer, and the third paragraph of reply is addressed to third paragraph of answer.

In the first paragraph of their answer appellees admitted that, in 1868, appellant and James Hoggart petitioned the board of commissioners of Grant county for the drainage of certain lands, named in such petition; that an order was made by such county board granting the prayer of such petition; that such board then pretended to appoint Henry Stugart, Benjamin Glessner, and Eli T Hunt appraisers to assess the benefits and damages likely to result to the lands described; that said appraisers pretended to make and return an assessment of such benefits and damages, which assessment was filed with the complaint herein; and that the land in the complaint named was owned by William L. Noble, who was a non-resident of Grant county; and appellees averred that they were the owners of such land, and derived their title thereto, by and through said William L. Noble, who was their remote grantor; that the aforesaid petition and order of the county board, and all the proceedings thereunder, were and continued to be wholly void, because said petition failed

to locate or indicate the course and terminus of the ditch or drain so petitioned for; that the order of the county board to the aforesaid appraisers did not locate or indicate any course or terminus of such ditch or drain. Wherefore appellees said that such proceedings were void, and they denied each and every allegation in the complaint not admitted in this paragraph of answer, and demanded judgment for costs, etc.

In his reply to the foregoing paragraph of answer, appellant alleged that the ditch named in his complaint and proceedings was ordered, allowed, and established by the board of commissioners of Grant county, at its September term, 1868, which was so done and ordered according to the provisions of the law approved March 7, 1863; and, after setting out a description of the beginning, courses, distances, and terminus of the ditch or drain, appellant again alleged that the ditch or drain was, in all things, done, allowed, located, constructed, and the assessments made, in accordance with the provisions of such law of March 7, 1863; that each and all of the assessments for the construction of such ditch, referred to in his complaint, had been fully paid and satisfied, except the assessment on the land of William L. Noble, which was then the land of appellees, who purchased the same knowing that said assessment had been made and recorded, as stated in the complaint herein; that such ditch benefited their land much more than the amount of such assessment, and that such assessment was unpaid, and a valid lien on their land; that William L. Noble knew that the ditch was so located, and that appellant was constructing the same, and made no objection thereto, and agreed to pay his assessment therefor, all of which was due appellant, and James Hoggart had no interest therein. Wherefore, etc.

We are of opinion that the court did not err in sustaining appellees' demurrer to the foregoing reply. The paragraph of answer to which the reply was pleaded, stated, in bar of appellant's action, the fact that the ditch proceedings mentioned in the complaint were wholly void, because neither the petition to, nor order of, the county board located or indicated either the course or terminus of said ditch or drain. The substance of appellant's reply to this defense is that the ditch proceedings mentioned were had, and the ditch was constructed, under and in accordance with the provisions of the drainage act of March 7, 1863, which did not, in terms, require that either the petition, or the order of the county board, should locate or indicate the course or terminus of such ditch. The difficulty with this reply, and it is one which cannot be obviated by any averment, is that when the ditch proceedings mentioned were instituted, in September, 1868, the drainage act of March 7, 1863, was no longer in existence; but it had been superseded and repealed, expressly or by implication, by the drainage act of March 11, 1867, which latter act, by force of an emergency declared, took effect and was in force from and after its passage. The titles of the two acts were substantially the same, and the later act certainly covers the whole subject-matter of the older law, and adds new provisions, some of which are inconsistent with those of the older law. Longlois v. Longlois, 48 Ind. 60; Deisner v. Simpson, 72 Ind. 435; Wagoner v. State, 90 Ind. 504. Besides, the act of March 11, 1867, expressly repealed all laws, or parts of laws, in conflict with any of the provisions of such act. The act of March 11, 1867, was in force when appellant's ditch proceedings were begun and had, and was then the only law of this state authorizing any such proceedings. It is certain, we think, that the petition of appellant and Hoggart for the ditch did not conform to the requirements of the act of March 11, 1867, and was not sufficient to give the board of commissioners of Grant county jurisdiction of the subject-matter of such ditch. It follows, therefore, that all of such ditch proceedings, which were the foundation of appellant's supposed cause of action herein, were absolutely void, and they cannot be rendered valid by the averment that they were had under the provisions of a law which had been superseded and repealed 18 months before