Guthrie v. Field

• Decision Date: 10 June 1911
• Docket Number: 17,103
• Parties: W. H. GUTHRIE, Appellee, v. F. B. FIELD et al. (J. W. RIFFIE, Appellant)
• Court: Kansas Supreme Court

116 P. 217

85 Kan. 58

W. H. GUTHRIE, Appellee, v. F. B. FIELD et al. (J. W. RIFFIE, Appellant)

No. 17,103

Supreme Court of Kansas

June 10, 1911

Decided January, 1911.

Appeal from Finney district court.

Judgment reversed and cause remanded.

SYLLABUS

SYLLABUS BY THE COURT.

DEEDS--Name of Grantee Left Blank--Delivery to Agent to Negotiate Sale--Wrongful Delivery by Agent to Third Person--Innocent Purchaser. Where the owner of real estate executes and acknowledges a deed thereto, leaving the name of the grantee blank, and intrusts it to another with authority to negotiate a sale of the land, fill in the name of the buyer, and deliver the deed upon certain conditions, and the holder of the deed in violation of his instructions delivers it to a third person, who fills in his own name and records the deed an innocent purchaser of the property upon the faith of the record acquires such a right that his claim of title can not be adjudged void at the suit of the original owner without compensation being made for what he has lost by the transaction.

James T. Burney & Son, and Hopkins & Hopkins, for the appellant.

O. H. Foster, Edgar Foster, and H. O. Trinkle, for the appellee.

OPINION

MASON, J.:

W. H. Guthrie recovered a judgment against F. B. Field, the Osage Live-stock Company, a Missouri corporation, and J. W. Riffie, quieting his title to a tract of land in Finney county. Riffle appeals. The facts, as found by the court or testified to by the plaintiff, are substantially as follow:

Guthrie, a resident of Finney county, on March 10, 1908, delivered to Field, who lived in Kansas City, a warranty deed to the property, fully executed and acknowledged, except that a blank was left for the name of the grantee. The arrangement between them was that Field was to have thirty days within which to find a purchaser, and upon collecting $ 2000 for Guthrie was to fill in the name of the buyer and deliver the deed. At the expiration of the thirty days Guthrie went to Kansas City and asked Field for the return of the deed. Field answered in substance that the land had been "about stolen" from him and that he did n't have the money to pay Guthrie. On April 14, 1908, Guthrie filed a petition in the district court against Field, alleging the sale of the property to him, and asking judgment for the price; he also caused an attachment to be levied upon the land as the property of Field, but no service was obtained and the proceeding was abandoned. On May 8 or 10, 1908, a stranger came to Guthrie with the deed, the blank still remaining unfilled, and asked him to insert therein his own name (that of the stranger). Guthrie, after examining the deed, which was handed to him for the purpose, returned it, saying that he had received nothing for it, refusing to fill the blank, and forbidding the stranger to do so, or to record the deed. On May 12, 1908, the deed was filed for record, containing the name of the Osage Live-stock Company as the grantee. On May 16, 1909, J. W. Riffie, of Kansas City, in closing a deal involving other property, accepted at a consideration of $ 800 a deed from that corporation, he acting in good faith, in reliance upon the record, and without notice of any irregularity. On June 17, 1908, Guthrie brought this action, seeking to set aside the two conveyances described.

The plaintiff contends that the original deed was absolutely void, and incapable of becoming a source of title in anyone, because no one but Field had authority to fill in the blank, and he appears not to have done so, inasmuch as the deed was shown to have left his hands without the name of any grantee having been inserted. The modern and, as we think, the better rule is that authority may be given by parol to insert the name of a grantee in a deed, even after delivery, and such authority may be implied from the circumstances. (2 Cyc. 159, 160, 168-172; 3 Enc. L. & P. 431-435.) We do not regard it as material by whose hand the blank was filled. If Field had complied with his instructions in all other respects--if he had collected the $ 2000 and remitted it to Guthrie--the fact that a representative of the Osage Live-stock Company, instead of Field, wrote in the name of the corporation, after the expiration of the thirty days, would hardly be deemed a sufficient ground to avoid the deed. The act of writing the name would have been essentially that of Field, though done by another hand. If the blank deed had been stolen from Field, and the thief had inscribed the name of a grantee, an entirely different situation would be presented. But Field's statement was that the land--not the deed--had been "almost stolen" from him, and this negatives the idea of a surreptitious taking. If Field delivered the deed in blank his breach of trust was as pronounced and the probable effects as readily to be anticipated as though he had first filled in the name of a grantee.

The effect of the delivery of a deed executed in blank must depend upon the circumstances, and upon the manner in which the question is raised. In Iowa the rule is firmly established that "one who takes a conveyance of property by delivery of a deed executed and delivered to his grantor by a prior owner and blank as to the name of the grantee becomes a purchaser without notice as effectually as though his grantor had executed a direct conveyance." ( Hall v. Kary, 133 Iowa 465, 470, 110 N.W. 930.) In Creveling v. Banta, 138 Iowa 47, 55, 115 N.W. 598, doubt is expressed as to the wisdom of the rule, but only on the ground that it gives opportunity for concealing property from creditors. We need not determine, however, what the immediate effect would have been if Field had delivered the deed to the Osage company in violation of his instructions, but for a fair consideration and without notice of any wrong. Whether (in accordance with the view taken in Lund v. Thackery, 18 S.D. 113, 99 N.W. 856) the mere existence of the blank would have prevented the company from acquiring rights as an innocent purchaser--would have charged it with the duty of learning the actual scope of Field's authority--need not be decided. The trial court was justified in finding that Field did violate his instructions and that the Osage company was chargeable with notice of the fact. Little evidence was available concerning the actual negotiations attending the delivery of the deed, and the circumstances shown did not compel a finding that the company acted in good faith.

It follows that under the evidence and findings the deed did not pass title--that as between Guthrie and the Osage company it could have been set aside. Riffie, however, stands upon a different footing. Either he or Guthrie must suffer by the wrongful act of Field. Riffie has been diligent throughout. His conduct has been that of the ordinary business man. He had no reason to suspect any irregularity and no means of ascertaining the real facts except by making an unusual investigation for which there was no apparent occasion. Guthrie, on the other hand, by intrusting Field with the blank deed, gave him the power to make a perfect record title in anyone he might choose. Guthrie intended that Field should fill in and deliver the deed, but only upon certain conditions. Guthrie reposed confidence in Field that he would act in accordance with his instructions, knowing that if he did not some innocent person might be misled. Field delivered the deed contrary to his instructions, and the consequence followed that might have been anticipated if he were to prove unfaithful--a stranger to the transaction parted with his money having every reason to suppose he was obtaining a good title. Under these circumstances the loss must fall upon Guthrie rather than upon Riffie. The principle involved is thus stated:

"It is a well-settled principle, applicable to both negotiable and nonnegotiable contracts, that, where a person, with intent to execute a contract, delivers to another an incomplete instrument, and such other has authority, either expressly given or implied by law, to complete the instrument, such instrument is enforceable in the hands of a purchaser for value and without notice, notwithstanding the blanks have been filled up in a manner violative of the authority conferred.

"This doctrine is based on principles of agency. The filling of such blanks in a wrongful manner by a person having express or implied authority to fill them in another way is deemed to be a breach of confidence merely, and is held to be within the scope of the principle that, where one of two innocent persons must suffer through the wrongful act of a third person, the loss must fall on that one who has reposed confidence in such third person and thereby enabled him to...