Fullerton Lumber Co. v. Tinker

• Decision Date: 18 November 1908
• Citation: 22 S.D. 427,118 N.W. 700
• Parties: FULLERTON LUMBER COMPANY, Plaintiff and respondent, v. F. D. TINKER et al., Defendant, and H. B. Williams, Defendant and appellant.
• Court: South Dakota Supreme Court

22 S.D. 427

118 N.W. 700

FULLERTON LUMBER COMPANY, Plaintiff and respondent,

v.

F. D. TINKER et al., Defendant, and H. B. Williams, Defendant and appellant. South Dakota Supreme Court Appeal from Circuit Court, Charles Mix County, SD Hon. E. G. Smith, Judge Affirmed G. M. Caster Attorney for appellant. C. H. Dillon Attorney for respondent, Opinion filed Nov. 18, 1908 (See also 21 SD 647, 115 NW 91)

CORSON, J.

This action was instituted by the plaintiff to foreclose a mortgage executed on a lot in the village of Lake Andes by E. D. Tinker and wife to the plaintiff. Findings and judgment being in favor of the plaintiff, the defendant H. B. Williams has appealed.

The defendant Williams answered the complaint, and alleged that he was a purchaser of the property in good faith, for value, without notice, actual or constructive, of the plaintiff’s mortgage, and claimed by reason of these facts that the title of the property in him was superior and paramount to the lien of the plaintiff’s mortgage. It appears from the findings of the court that on the 18th day of May, 1904, the Lake Andes Townsite Company, which will hereafter be denominated the “Townsite Company,” was the owner of lot 11, in block 25, in the town of Lake Andes, and that on that day the Townsite Company entered into a verbal agreement with the defendants Tinker and wife to sell to them the said lot for the sum. of $250, agreeing with them that they should have a reasonable time in which to pay for the same, and it was further agreed between the Townsite Company and the Tinkers that the latter should have the privilege of taking possession of the lot and erecting a building thereon; that in pursuance of such verbal agreement and arrangement the Tinkers entered into possession of the lot and erected thereon a two-story frame building to be used for restaurant and hotel purposes, and procured the lumber for the erection of the same from the plaintiff company; that on the 27th day of July of that year, and about the time of the completion of said building, and while the Tinkers were in possession of the same, they executed in payment for the material to the plaintiff a note of $950, securing the same by a mortgage on said property, which said mortgage was duly recorded on the 29th day of July. In November of the same year the Tinkers entered into a contract with the defendant John A. Smith for the sale of said property to him for the sum of $1,950, the consideration to be paid on December 1st, and it was orally agreed between Tinkers, Smith, and the secretary of the Townsite Company that $495 should be paid to the Townsite Company, $250 on account of the lot, and the balance to be used in payment of small bills due the creditors of the Tinkers, and out of the balance the debt due the plaintiff should be paid; that thereupon the said defendant Smith entered into possession of said property, but the contract between the Tinkers and Smith was neither acknowledged nor recorded; that on or about the 15th day of April, 1905, the said Townsite Company executed a deed of conveyance of said lot to said defendant Smith for the sum of $250, which deed was duly recorded on April 17th; that on or about April 17, 1905, Smith and wife conveyed the property to the defendants Ellsworth and wife for the consideration of $2,000, by deed which was duly acknowledged and recorded; that on the 22d day of April Ellsworth and wife executed and acknowledged a deed for said property, and which deed at the time of its execution did not contain the name of any grantee or any consideration; and that thereafter, on the 21st day of June, the property was sold to the defendant and appellant H. B. Williams, and his name was inserted, and also the consideration of $2,500. The court further found that the said defendant Williams, at the time of said purchase, had notice of sufficient facts and circumstances to put him upon inquiry as to the existence of plaintiff’s mortgage, and that he did not pay a good and fair consideration for the property so received by him.

The court, in its conclusions of law, after finding the amount due the plaintiff on its mortgage, concludes that the defendant, H. B. Williams was not a purchaser in good faith for full consideration, and that Smith, Ellsworth, and Williams took and accepted their conveyances to said property with full notice and knowledge of the existence of plaintiff’s mortgage, and are bound thereby. It is disclosed by the record that the following questions were submitted to a jury called by it to assist in the determination of the case:

“Q. Did the defendant H. B. Williams have notice of circumstances sufficient to put a prudent man upon inquiry as to the existence of plaintiff’s mortgage?

A. Yes.

Q. Did the defendant H. B. Williams in his trade, give a fair and reasonable consideration for the Lake Andes lot?

A. No.”

It will be observed from the foregoing statement of facts as found by the court, that the title of the property was originally in the Townsite Company; that...