Frank v. Hicks

Decision Date16 January 1894
Citation35 P. 475,4 Wyo. 502
CourtWyoming Supreme Court

Rehearing Denied March 14, 1894, Reported at: 4 Wyo. 502 at 534.

Commenced in District Court August 15, 1891.

ERROR to District Court for Laramie County, HON. RICHARD H. SCOTT Judge.

This was a suit brought by Truman B. Hicks, as trustee for the benefit of the bondholders of the Cheyenne Land and Live Stock Company, for the foreclosure of a certain deed of trust, executed by the said company to said Hicks and William W. Corlett, since deceased, to secure the payment of certain bonds of said corporation. The deed was executed on the 22nd day of October A. D. 1886, and recorded October 25th, 1886. Elise Frank, on June 27th, 1889, obtained judgment against the corporation, and on July 3rd, 1891, levied execution thereunder on all the lands upon which the deed is attempted to be foreclosed, and began advertising said property for sale. Thereupon this suit was brought praying among other things for an injunction restraining Elise Frank from selling the said property, upon which a temporary injunction was granted.

After the bringing of this suit Charles A. Badgette obtained judgment against the company, and thereupon levied execution upon the water right and ditches that had theretofore been used with the lands of the said corporation, as to which this suit was brought, and advertised the same for sale under said execution.

And thereupon a supplemental petition was filed, asking that defendant, Charles A. Badgette, be restrained from selling the property levied upon by him. Upon which a temporary injunction issued against said defendant, Badgette.

On the trial the court below found that the trust deed which it was sought to foreclose was not executed in accordance with the laws of Wyoming and was not a legal mortgage; but that it constituted an equitable mortgage, which as against Elise Frank, was a superior lien upon the lands specifically described in the deed.

The court further found that the lien of the trust deed upon lands acquired after the execution of the deed was inferior and subject to the judgment and execution lien of Elise Frank, upon such lands, and was inferior and subject to the judgment and execution levy of Charles Badgette, upon the water rights and ditches levied upon by him.

Elise Frank, and Truman B. Hicks, as Trustee, etc., each prosecuted error. The other material facts are stated in the opinion and in briefs of counsel.

Case remanded.

Potter & Burke, for Elise Frank.

The defective execution of the trust deed prevented any interest in presenti being created. (Secs. 1, 8, 24 Rev. Stat., 1887.) The attesting of a conveyance by witnesses constitutes a part of the execution. (Crane v. Reeder, 21 Mich. 24; Galpin v. Abbott, 6 Mich. 17-43; Tarpey v. Salt Co., 5 Utah 205; Thompson v. Morgan, 6 Minn 292; Gardner v. McClure, id., 250; Prout v. Shaubert, 5 Minn. 323.) An acknowledgment is an essential feature of the execution. A specific lien had been acquired by levy of execution. Equity will not declare a lien in presenti to be created by a defectively executed deed as against such a specific lien. (Pierce v. Cutts, 29 Ga. 142; Recouillat v. Sausevain, 32 Cal. 376; Main v. Alexander, 9 Ark. 112; Bloomfield v. Humason, 11 Or. 229; White v. Denman, 16 O., 60; Building Asso'n v. Clark, 43 O. St., 427.) Under a statute like that of Wyoming, equity will not prefer the lien of a defective deed to a subsequent judgment lien, whether the creditor is with or without notice. (Van Thornilly v. Peters, 26 O. St., 474; Thompson v. Morgan, 6 Minn. 292; Tarpey v. Salt Co., supra; White v. Denman, supra; Bloom v. Noggle, 4 O. St., 45; Hawkins v. Files, 51 Ark. 417; Dodd v. Parker, 40 Ark. 536; Swigart v. Bank, 17 B. Mon., 268; Building Asso. v. Clark, supra.) A court of equity cannot put vitality into an instrument having none in itself. (Lindley v. Smith, 58 Ill. 250; Murphy v. Williamson, 85 Ill. 150; Tulley v. Davis, 30 Ill. 103; Adams v. Bishop, 19 Ill. 395; Montag v. Linn, 19 Ill. 399; Emeric v. Alvarado, 90 Cal. 444.) Where a statute requires a mortgage to be recorded in a certain time to be valid, a judgment creditor obtaining a specific lien by levy is held to have a prior lien to a mortgage not so recorded. (Davidson v. Cowan, 1 Dev. Eq. (N. C.), 470; Cowan v. Davidson, 2 Dev. Eq., 533; Davidson v. Beard, 2 Hawks (N. C.), 520; Butler v. Maury, 10 Humph., 420; Lillard v. Ruckers, 9 Yerger, 64.) A mortgage defectively executed is not entitled to record. An unrecorded mortgage, or one defectively executed does not vest in the mortgagee any interest in the property, either legal or equitable as against subsequent purchasers, or judgment creditors of the mortgagor. As between the parties equity will give it effect. A defective mortgage, when reformed, will not affect the lien of an intervening judgment. The deed did not afford constructive notice. There is no evidence of actual notice. It was necessary that the secretary should have acknowledged the execution of the deed. (Kelley v. Calhoun, 95 U.S. 710; Merrill v. Montgomery, 25 Mich. 73, 77.) The deed was not delivered. Not being recordable, its record does not give rise to a presumption of delivery. The secretary left the deed for record and it was returned to him. The original instrument was seen in possession of the Secretary of the company in 1889 or 1890. Its execution was incomplete, and all ordinary presumptions are therefore overthrown. Although for a time in Mr. Corlett's safe, there are no circumstances shown as to how it came there, except that he drew up the document. (See Healey v. Seward, 5 Wash., 319.) There were no equities established. The proof fails to disclose that any money was ever received by the company for the bonds issued. There is no proof either, except as to one bond, that the bonds were actually issued. The deed was uncertain as to description.

Baird & Churchill, for Hicks, Trustee.

The deed was delivered.

Record is prima facie evidence of delivery, and is conclusive so far as the grantor is concerned. Devlin on Deeds, Sec. 292; Robinson v. Gold, 26 Ia. 89; Lawrence v Farley, 24 Hun., 293; Bensley v. Atwell, 12 Cal. 231; Kille v. Ege, 79 Pa. 15; Warren v. Jacksonville, 15 Ill. 236; Bullitt v. Taylor, 34 Miss. 708; Burke v. Adams, 80 Mo. 504.

The signing and acknowledging of an instrument by grantor admits the delivery. Rigler v. Cloud, 14 Pa. 361.

Assent by the grantees completes the case as to delivery. Parmalee v. Simpson, 5 Wall., 81-86; Boady v. Davis, 20 N.H. 140; Snider v. Lackenour, 2 Ired. Eq., 360; Hedge v. Drew, 12 Pick., 416.

The possession of a deed by the grantee is presumptive evidence of delivery to him, as grantee and not as attorney. Devlin on Deeds, Sec. 294; Roberts v. Swearington, 8 Neb., 363; Chandler v. Temple, 4 Cush., 285; Brittain v. Work, 13 Neb. 347; Newlin v. Beard, 6 W.Va. 110; Kidder v. Stevens, 60 Cal. 414; Cutts v. York Co., 18 Me. 190; Canning v. Pinkham, 1 N.H. 353; Carnes v. Platt, 41 N. Y. S.Ct. 435; Green v. Yarnall, 6 Mo. 326; Reed v. Doutit, 62 Ill. 384; Tuttle v. Turner, 28 Tex. 759; Houston v. Stanton, 11 Ala. 412; Boody v. Davis, 20 N.H. 140; Tunison v. Chamblin, 88 Ill. 379-381.

The offer of the original deed by the attorney for the grantee at the trial is of itself sufficient evidence to establish the presumptive delivery of the deed, and acceptance by the grantee. (Branson v. Cauthers, 49 Cala., 374.)

The trust deed contained a sufficient description of the lands to effect a conveyance. (Quinn v. Champagne, 38 Minn. 322.)

Courts will take judicial notice of government surveys and political subdivisions. (Hurley v. Brown, 98 Mass. 545; Scanlan v. Geddes, 112 Mass. 15; Atwater v. Schenck, 9 Wis. 160; Russell v. Sweezey, 22 Mich. 235; Beal v. Blair, 33 Iowa 318; Butler v. Davis, 5 Neb., 521; Harding v. Strong, 42 Ill. 148; Clark v. Powers, 45 Ill. 283; Romans v. Langevin, 34 Minn. 312.)

Sufficient equities were established to warrant foreclosure of the trust deed. The bonds were payable to bearer and negotiable. (Stanton v. Ala. & C. R. Co., 2 Woods, 527; Com'rs v. Aspinwall, 21 How., 539; Woods v. Lawrence, 1 Black, 386; Mayer v. Muscatine, 1 Wall., 384; Murray v. Lardner, 2 Wall., 110; Morawetz Private Corp., Sec. 341; White v. Vermont, Etc., R. R. Co., 21 How., 575; Moran v. Miami Co., 2 Black, 722; Mercer Co. v. Hackett, 1 Wall., 95; Clark v. Iowa City, 20 Wall., 583; Brainard v. R. R. Co., 25 N.Y. 496; Haven v. Grand Junction, etc., Co., 109 Mass. 88; Miller v. R. R. Co., 40 Vt. 399; Mason v. Frick, 105 Pa. 162; Phila., etc., R. R. Co. v. Smith, 105 Pa. 195.)

And when the bonds of a corporation have come into the hands of a bona fide purchaser, even though wrongfully issued, the purchaser may enforce their payment to the same extent as the purchaser of any other negotiable instrument before maturity. (Beach Private Corp., Sec. 664; Hackensack W. Co. v. DeKay, 36 N.J. Eq. 37, 548; Pierce v. Madison, 21 How., 442; Grand Rapids, etc., Co. v. Sanders, 17 How., 552.)

The bondholders of the Cheyenne Land & Live Stock Company, for the purposes of this suit, are not necessary parties. (Beach v. Private Corp., Sec. 765; Vose v. Bronson, 6 Wall., 452; Shaw v. Little Rock, etc., R. R. Co., 100 U.S. 605; Chicago, etc., R. R. Co. v. Howard, 7 Wall, 392; Credit Co. v. Ark. Cent. R. R. Co., 5 McCrary, 30-31.)

Nor is it necessary that all the bonds be offered in evidence on the trial on foreclosure. (Hackensack Water Co. v. DeKay, 36 N.J. Eq. 548.)

The trust deed is for the benefit of all the bondholders, who though not parties to the suit, may come in and prove their claims equally with the bondholders who are ...

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