Fagan v. Hook

• Decision Date: 18 November 1905
• Citation: 105 N.W. 155,134 Iowa 381
• Parties: JOHN FAGAN, Appellant, v. E. W. HOOK
• Court: Iowa Supreme Court

105 N.W. 155

134 Iowa 381

JOHN FAGAN, Appellant, v. E. W. HOOK

Supreme Court of Iowa, Des Moines

November 18, 1905

Appeal from Hamilton District Court.--HON. J. R. WHITAKER, Judge.

ACTION to rescind contract for exchange of personal property for land. The defendant in a cross-petition prayed for specific performance, which was decreed, and plaintiff's petition dismissed. The plaintiff appeals.

Reversed.

Wesley Martin and E. A. Morling, for appellant.

D. C Chase, for appellee.

OPINION

SUPPLEMENTAL OPINION MONDAY, MAY 20, 1907.

LADD, J.

The defendant was owner of 116.46 acres of land, and on November 7, 1902, agreed to convey the same to the plaintiff "by warranty deed, with abstract showing good title," on or before March 1, 1903, in consideration of "$ 70. per acre, to be paid second party as follows: $ 2,500. in fixtures, tools, and utensils, meat market on Second street Webster City, Iowa sold this day to first party by second party, and tools, fixtures, and utensils used in slaughter house, 1 1/2 miles north of Webster City, and three head of horses, three colts, harness, four wagons, more particularly described in bill of sale from second party of even date herewith; and $ 500. as follows: Stock of meats in meat market, as shown by invoice to be taken Nov. 15th, and cash sufficient thereto to make up the $ 500.; and $ 300. Dec. 15, 1902; $ 2,500. by assuming a mortgage for that amount now against said premises; and the balance on March 1, 1903." All payments were made in conformity with the contract, save the last, which amounted to $ 2,352.20. This was tendered in writing March 24, 1903, and a warranty deed, with an abstract showing good title, demanded. An abstract had been sent to a bank at Emmetsburg for plaintiff's examination prior to March 1st, but it was so dilapidated that a new one was required. This reached plaintiff's attorney March 18, 1903, and upon examination he was able to discover nineteen defects in that to one tract and thirteen in that to the other, and his letter to this effect was returned to defendant, who submitted it to his legal advisor. With reference to the requisitions so made he declared the title marketable, and, with other suggestions, said as to the abstract of the first tract: "The school fund mortgage cuts off subsequent grantees of mortgagor, if made parties to the proceedings. They were all before the court, but John Stahl. By an affidavit it appears that John Stahl made no claim and occupied no part of the land, and that William H. Hook and his grantees had adverse possession for more than twenty years. This would cut off any equity of redemption existing at time of foreclosure in John Stahl, in my opinion." And to that of the other: "It appears at No. 8 that at time of foreclosure of mortgage referred to above the legal title to a part of the land appeared of record to be in the name of Henry Vegons. He should have been made a party to the foreclosure proceedings. However, as the grantors of Emory W. Hook have had adverse possession for over twenty years, any right of redemption he might have had would probably be cut off. I would suggest that, if he was not made a party to the foreclosure proceedings, an affidavit be procured showing the adverse possession of William M. Hook and his grantors, and that the said Henry Vegons made no claim and occupied no part of said premises since said foreclosure proceedings." Thereupon the defendant instructed the abstractor to correct the record and abstracts in accordance with his opinions. This had been done at the time of the trial, but he had not tendered them prior thereto.

We need do no more than refer to the requisitions mentioned in the above extracts. Land including a part of the first tract had been patented by the State of Iowa to Isaac Hook September 25, 1854. No conveyance from the general government to the State appears. Hook conveyed 37 acres, one-half of which was of the land so patented to him, to one Mutter in 1856, and the latter deeded it to McNeeley in 1857, and McNeeley to John Stahl October 2, 1860. The abstract does not indicate that Stahl had ever parted with title. Prior to these conveyances, in October, 1853, Hook had executed a mortgage covering this land to the school fund commissioner, and this mortgage was foreclosed in 1864, and the land conveyed by sheriff's deed to Hamilton county February 1, 1865. But Stahl was not made a party to these proceedings, and so far as the abstract discloses is still owner of the fee, with right of redemption. As to him the decree of foreclosure was not effective and did not divest him of title. Landon v. Townshend, 112 N.Y. 93 (19 N.E. 424, 8 Am. St. Rep, 712); Fowler v. Lilly, 122 Ind. 297 (23 N.E. 767); Hays v. Tilson (Tex. Civ. App.), 35 S.W. 515.

A like defect appears in the abstract to the other tract. It had been patented to Isaac Hook in 1854 and mortgaged to the school fund commissioner the same year. Henry Vegons acquired title to seventeen and one-half acres of the tract, through mense conveyances under Hook, in 1857. The mortgage was foreclosed in 1864, and a sheriff's deed executed to Hamilton county the year after. The abstract fails to show that Vegons was made party to the foreclosure proceedings or has since parted with title. With these outstanding titles in Stahl and Vegons, it is manifest that the abstract did not show good title in the defendant.

By good title is meant nothing less than an estate in fee simple. Gilespie v. Broas, 23 Barb. 370, 381. And though a good title has been held by some decisions to be one not absolutely bad, the great weight of authority is to the effect that the expression means a marketable title, one which can again be sold to a reasonable purchaser or mortgaged to a person of reasonable prudence as security for a loan of money. Moore v. Williams, 115 N.Y. 586 (22 N.E. 233, 5 L. R. A. 654, 12 Am. St. Rep. 844); Harrass v. Edwards, 94 Wis. 459 (69 N.W. 69); McCroskey v. Ladd (Cal.), 3 Cal. Unrep. 433, 28 P. 216; Smith v. Turner, 50 Ind. 367; Ladd v. Weiskopf, 62 Minn. 29 (64 N.W. 99); Herman v. Somers, 158 Pa. 424 (27 A. 1050, 38 Am. St. Rep. 851); Allen v. Atkinson, 21 Mich. 351, 361.

But according to the abstracts defendant had no title at all to these tracts. The attorney reading the abstract for defendant seemed to be of the opinion that these defects might be obviated by the fact, if such it was, that the land had been occupied by defendant's grantors adversely for the statutory period of limitation, and this might be made to appear by making affidavits thereof, having them recorded, and noted on the abstract. But the plaintiff was not excepting to his ability to convey a good title, nor questioning the contention that such a title may be acquired by adverse possession. By the contract defendant was "to convey unto the second party by warranty deed, with abstract showing good title." This had reference to the record title, which might be epitomized in the abstract and was a condition precedent to his right to demand the deferred payment. Lessenich v. Sellers, 119 Iowa 314, 93 N.W. 348; Martin v. Roberts, 127 Iowa 218, 102 N.W. 1126; Spooner v. Cross, 127 Iowa 259, 102 N.W. 1118; Brown v. Widen (Iowa), 103 N.W. 158. Nor was it enough that the title was in fact good. It should have so appeared on the abstract. Lessenich v. Sellers, supra; Brown v. Widen, supra; Spooner v. Cross, supra; Boas v. Farrington, 85 Cal. 535 (24 P. 787); Noyes v. Johnson (Mass.), 139 Mass. 436, 31 N.E. 767; Sheehy v. Miles, 93 Cal. 288 (28 P. 1046); Zunker v. Kuehn, 113 Wis. 421 (88 N.W. 605); Heller v. Cohen, 155 N.Y. 625, 49 N.E. 1098; Howe v. Hutchison, 105 Ill. 501; Gwin v. Calegaris, 139 Cal. 384 (73 P. 851); Bruce v. Wolfe, 102 Mo.App. 384 (76 S.W. 723). As said in Brown v. Widen: "The contract calls for an abstract showing good title, and nothing less than this would satisfy this condition, no matter what the vendor's real title might be."

The object of an abstract is to enable the vendee to pass upon the validity of the title, and to enable him to do so it should contain everything material concerning its sources and condition. Kane v. Rippey (Or.), 22 Ore. 296, 23 P 180; Bumaby v. Equitable Reversionary Interest Society, 54 Law J. Ch. 466; Taylor v. Williams, 2 Colo.App. 559 (31 P. 504); 1 Cyc. 213. "The object of an abstract," says Mr. Curwen, in his work on Abstracts (section 36) "is to furnish the buyer and his counsel with a statement of every fact and abstract of the contents of every deed on record upon which the validity and marketableness of the title depend, so full that no reasonable inquiry shall remain unanswered, so brief that the mind of the reader shall not be distracted by irrelevant details, so methodical that counsel may form an opinion on each conveyance as he proceeds in his reading, and so clear that no new arrangement or dissection of the evidence may be required. The buyer has the right to demand a marketable title. He has a right to demand that the abstract of title shall disclose such evidence of that title as will enable him to defeat any action to recover or incumber the land." The title may be good; but one to whom an abstract showing good title has been promised as a condition precedent is not bound to accept any evidence thereof, except that contained in the abstract. The vendee in such a case is not required to accept or rely on parol evidence of title, or information dehors the records, or the word of the vendor. That the title was not only to be good, but that the abstract was to so exhibit it, was a valuable consideration in entering into the agreement; for every one recognizes the superior salability of land with good paper title. Even if good title might be established by parol, the only...