Bergstrom v. Johnson
| Citation | 126 N.W. 899,111 Minn. 247 |
| Decision Date | 17 June 1910 |
| Docket Number | 16,534 - (45) |
| Parties | ALEXANDER BERGSTROM v. ANTON JOHNSON and Another |
| Court | Minnesota Supreme Court |
Action in the district court for St. Louis county against Anton Johnson and Zenith Cedar Company to recover $10,360 for the removal of timber from certain land. Defendant Zenith Cedar Company in its answer justified the cutting pursuant to a certain permit bearing date October 8, 1906, from the Dixon Land Company, the owner of the land under a contract of purchase, in consideration of the sum of $2,500; alleged that it was prevented from removing the timber by the weather conditions and the timber permit was extended to September 1 1908; that plaintiff never purchased the soft wood timber that plaintiff was not an innocent purchaser thereof for value, but that plaintiff purchased the land with the hardwood timber and the mineral rights thereto, and that the purchase was made with knowledge of defendant's rights to the soft wood timber. The reply was in effect a general denial. The case was tried before Cant, J., who directed a verdict in favor of defendants. Plaintiff's motion for a new trial was denied. From the judgment entered pursuant to the verdict, plaintiff appealed. Affirmed.
Purchase subject to permit to cut timber -- good faith.
A deed conveying land to plaintiff was expressly made subject to an outstanding "permit to cut and remove the soft wood timber thereon, * * * expiring May 1, 1907." The date of the expiration of the permit was erroneously given in the deed. It in fact expired September 1, 1907. The permit contained a provision for an extension of the time within which to remove the timber. In addition to the information communicated by the deed, plaintiff at the time of the purchase of the land was verbally informed of the existence of the permit by the agent of the vendor. It is held:
1. The information conveyed both verbally and by the deed of the outstanding permit was sufficient to put plaintiff upon inquiry as to its terms and provisions, and, having failed to make the same, he was not in good faith a purchaser of the property.
2. Plaintiff was not justified in relying upon the recital in the deed, or upon the verbal information of the grantor, that the permit expired May 1, 1907. He should have made further inquiry into the matter, ascertained the name of the permit holder, and learned from him all the facts.
Walter L. Case and John A. Keyes, for appellant.
Fryberger & Fulton, for respondents.
Action to recover damages for the alleged wrongful and unlawful cutting and removing of a quantity of timber from land owned by plaintiff. A verdict was directed for defendant, and plaintiff appealed from an order denying a new trial.
The facts, undisputed, are substantially as follows: The Boston & Duluth Farm Land Company was the owner of the land, and had contracted to sell and convey the same to one Hendrickson, who assigned the contract to the Dixon Farm Land Company. That company, on October 8, 1906, sold the right to cut and remove all the soft wood timber standing upon the land to the Zenith Cedar Company, defendant herein, for the consideration of $2,500. The contract gave the Cedar Company until September 1, 1907, to remove the timber, with the privilege of an extension, if weather conditions interfered with its work, until September 1, 1908, upon the payment of all taxes then due upon the land. The Hendrickson contract of sale was never completed, and the title to the land reverted to the Boston & Duluth Farm Land Company. Thereafter, on December 31, 1906, that company sold and conveyed the land to plaintiff for the consideration of $702.37. Neither the Hendrickson contract, the assignment thereof, nor the logging permit, were ever recorded. Plaintiff's deed was not recorded until May 23, 1907. Prior thereto, in March, 1907, defendant entered upon the land and commenced cutting and removing the timber under its permit. Weather conditions interfered with its work, and defendant subsequently paid the taxes assessed against the land and secured an extension of the time for completing the work of removal, as provided for by the permit, until September 1, 1908. Before that date defendant cut and removed all the timber, and plaintiff brought this action to recover the value thereof.
The only question presented is whether plaintiff was a purchaser of the land in good faith and without notice of the rights of defendant under its logging permit. The conveyance to plaintiff, was, as expressed in the deed, "subject, however, to a permit to cut and remove the soft wood timber thereon, said permit expiring May 1, 1907." This exception was not only inserted in the deed, but at the time plaintiff purchased the land he was verbally informed of the existence of the permit, so that there is no controversy about the fact that he had actual notice of the fact that the timber had been previously sold. The permit in fact expired September 1, 1907, but the date was erroneously given in the deed as May 1.
Plaintiff testified in reference to his information of the outstanding permit that the agent representing the land company from which he bought the land, and who conducted all the negotiations with reference thereto, did not undertake to sell him the timber, but that "he made the price $702.37 on the land, and told me that I had a very good chance of getting the timber after the first of May." He further testified that he made no inquiry as to the terms of the permit, nor as to who held the same, and that he relied wholly upon the terms of the deed and the statement of the agent of the land company that it expired May 1, 1907.
The essential elements of a bona fide purchase of real property are (1) the payment of a valuable consideration; (2) good faith, without purpose to take an unfair advantage of third persons; and (3) absence of notice, actual or constructive, of outstanding rights of others. Of these, the last only is involved in this case.
It is the contention of plaintiff that he was required to take notice only of the permit mentioned in his deed, and, having bought and paid for the property in reliance on the recital therein that the permit expired May 1, 1907, he was not chargeable with bad faith by his failure to make further inquiry, and, in any event, that he was justified in relying and acting...
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