Boyer v. Pahvant Mercantile & Investment Co.

• Decision Date: 22 April 1930
• Docket Number: 4614
• Citation: 76 Utah 1,287 P. 188
• Parties: BOYER v. PAHVANT MERCANTILE & INVESTMENT CO
• Court: Utah Supreme Court

287 P. 188

76 Utah 1

BOYER v. PAHVANT MERCANTILE & INVESTMENT CO

No. 4614

Supreme Court of Utah

April 22, 1930

Appeal from District Court, Third District, Salt Lake County William M. McCrea, Judge.

Action by T. W. Boyer, as trustee for the First National Bank of Rock Springs, Wyo., against the Pahvant Mercantile &amp Investment Company. Judgment for defendant, and plaintiff appeals.

REVERSED AND REMANDED, with directions.

Hamilton Gardner, of Salt Lake City, for appellant.

Charles D. Moore, of Salt Lake City, for respondent.

FOLLAND J. CHERRY, C. J., and EPHRAIM HANSEN, J., concur. STRAUP, J., ELIAS HANSEN, J., dissenting.

OPINION

FOLLAND, J.

An opinion was heretofore written and filed in this case wherein the judgment of the district court was reversed and the cause remanded, with directions. Upon consideration of a petition for rehearing which was filed by respondent, we entertained some doubts as to the correctness of that opinion and granted a rehearing. The case was again argued by respective counsel. Upon further consideration we are of the view that the conclusions reached in the former opinion as to the disposition of the case were correct, although we reach such result by means of other reasons than those heretofore expressed. The former opinion, therefore, is withdrawn and will not be printed, but this opinion will stand and be published as the decision of the cause.

This case involves a controversy as to the priority of a trust deed and a warranty deed, both executed by a common grantor and affecting real estate situate in Millard county, this state. The execution of the trust deed was prior in time. The case hinges on the question of whether the trust deed was properly or effectively recorded so as to impart constructive notice of its contents to the grantee of the warranty deed, a subsequent purchaser for value and without knowledge of the trust deed. The plaintiff claims under the trust deed, the defendant under the warranty deed. No claim is made that defendant had knowledge or actual notice of the trust deed. The trial court rendered judgment in favor of defendant adjudging the warranty deed the superior and better title. Plaintiff appeals, claiming that on the facts found and stipulated, which are not in dispute, he, instead of defendant, was entitled to a judgment declaring the trust deed, which in effect is a mortgage, a lien superior to the warranty deed.

The material and stipulated facts are:

To secure the payment of a loan William D. Livingston and his wife executed and delivered the trust deed of the property in question, and of other real estate, to Boyer as trustee for the bank, which, on January 20, 1917, was filed for record by the plaintiff with the county recorder of Millard county, and entered in the entry book as entry No. 7001. The information entered in the entry book contains all that was required by the statute except a brief description of the property. The number of the instrument, name of grantor and grantee, the kind of instrument, date and time of filing were correctly noted. The trust deed was thereafter timely recorded, or copied, at length in Book E of Mortgages, pages 351 to 359 of the Record of the county recorder. It was indexed in the indices of grantors, grantees, and mortgagors and mortgagees of the records, but without any description of the property covered by said deed being entered in the indices or any of them except for the words "See record for description." The trust deed was at the time abstracted as to all of the land described in it except the property in question, which was omitted from the abstract record. Some time during the years 1925 and 1926 the county recorder corrected the abstract record by including therein a proper description of the land in question.

On February 7, 1921, for value, the Livingstons, by warranty deed, conveyed the property in question to the Western Securities Investment Company, who by warranty deed, in June, 1921, for value, conveyed it to Pahvant Mercantile & Investment Company, the defendant here. These warranty deeds, on the face of each, purported to convey a clear and unincumbered title to the land described, and each was timely and properly filed for record and recorded in the office of the county recorder of Millard county.

It is also stipulated and found that, when the Western Securities Investment Company purchased the property, it caused a search of the record title of the property to be made in the office of the county recorder by the Fillmore Abstract Company, licensed to search land titles and make abstracts thereof, but, because of the failure of the county recorder to make any notation of the trust deed in the abstract record pertaining to the particular land in question, the abstract company failed to find the record of it, and failed to report the trust deed to the company. The Western Securities Investment Company and the defendant, at the time of their respective purchases, both were without actual knowledge of the existence or transcription upon the official records of said county of said deed of trust or of the contents thereof as far as said deed of trust covers or relates to the land in controversy other than such knowledge and notice, if any, as they may be chargeable with by reason of the recording of the trust deed in the manner stated.

The trial court entertained the view that under our recording statutes the record was such that it did not impart notice to subsequent purchasers of the contents of the trust deed, and held respondent's title superior to the claim of appellant.

Here are two claimants to a parcel of land--the appellant as prior mortgagee, the respondent as the subsequent purchaser. Both acted in good faith and paid a valuable consideration. Through fault of the county recorder in failing to enter a description of the land referred to in the trust deed in the indices and entry book, and to make any entry thereof in the abstract record, one of the parties must lose the land and be left to his action for damages against his warrantor or the county recorder.

The legal questions presented are stated by respondent as follows:

"(1) Did the mere filing of appellant's mortgage for record absolve appellant from all further responsibility in respect of seeing that the instrument was properly recorded and charge the appellee with constructive notice of the contents of the recorded instrument irrespective of the sufficiency of the record?

"(2) If the burden rested on the appellant to see that the mortgage was recorded in the manner required by Statute, was the record of the mortgage in question sufficient to impart constructive notice of its contents to appellee?"

Both these questions have been ably and fully argued in the briefs. In view of the facts stipulated by the parties, which are substantially followed in the findings of the court, we deem it unnecessary to pass directly on the first question stated above, notwithstanding both parties in their briefs devote most of their space to that point.

It may become necessary at some future time, and in a proper case, for this court to decide whether a mere filing of an instrument for record with the recording officer is sufficient to impart constructive notice. The facts before us do not call for a decision on this point. Anything we say not required by the facts stipulated by the parties and found by the court may well be regarded as dicta.

The trust deed was not only filed for record with the proper recording officer, but was noted in the entry book with the information required by statute as to names of parties thereto, its date, time of filing, and number. The requirement of a brief description of the premises was omitted. The instrument was fully and accurately recorded by being copied into the proper record book, and correctly noted in the grantor's, grantee's, mortgagor's, and mortgagee's indices. All that was lacking in these index entries was the "brief description of the premises," but in lieu thereof was written the words, "See record for description."

The recorder is required by statute (section 1579, Comp. Laws Utah 1917, subd. 6) to keep an "abstract record" in which shall be entered all mortgages, deeds of trust, and other instruments showing the number of the instrument, names of parties, brief description of property charged, etc. There was an entire failure on the part of the recorder to make any entry affecting the property in question in the "abstract record" until some time after respondent had acquired its deed to the premises.

It is specifically stated in the stipulation of facts that "because of the failure of the County Recorder of Millard County to make any notation of the said trust deed in the abstract record in the county recorder's office pertaining to the land above described, the said abstract company failed to find the record of said deed of trust," etc.

It is nowhere said in the stipulation of facts that the failure to find the record of the trust deed was because of any faulty indexing or deficient entry in the entry book, but it is definitely stated to be because it was not included in the abstract record. After a careful search and the reading of scores of cases, we are unable to find any case which turns upon the failure of the recorder to abstract any instrument in the abstract record. No such case is cited in the briefs. The relevant cases all involve one or more of the following deficiencies, namely, of faulty recording (that is, copying into the record book): Failure to index at all, or failure to correctly index. The naked question for decision, therefore is whether or not the record of the trust deed by filing, entry in the entry book, copying into the record book, and...