Hawkins v. Stoffers

• Decision Date: 28 May 1929
• Docket Number: 1535
• Parties: HAWKINS v. STOFFERS et al.
• Court: Wyoming Supreme Court

278 P. 76

40 Wyo. 226

HAWKINS v. STOFFERS et al.

No. 1535

Supreme Court of Wyoming

May 28, 1929

Frazer & Wallis, of Salt Lake City, Utah, and H. R. Christmas, of Kemmerer, for respondent.

OPINION

BLUME C. J.

The respondent has filed a petition for a rehearing herein. The first point urged is that we were wrong in holding that the unrecorded deed of the Guaranteed Securities Company was not good as against Hawkins, a purchaser in good faith and for a valuable consideration, under an executory contract of purchase. Counsel argue that, because the deed was recorded in the fall of 1925, about 30 days prior to the recording of the executory contract for sale, the deed takes precedence notwithstanding the fact that Hawkins purchased the property, paid most of the purchase money, and went into possession, and remained in possession about 18 months after he purchased the property and notwithstanding the fact that the deed was not recorded for approximately 2½ years after it was made. In other words, the facts are about as follows: A, the original owner of a piece of land, sells it to B, giving a deed, the deed not being placed of record and no possession being taken under it. Some 8 months after this deed was given, A sells the same land to C on a contract for a deed. C pays most of the purchase price, goes into possession of the land, and makes improvements thereon. Some 2 ½ years after the deed was made to B, he places it of record; the contract for deed to C not being then recorded. It is the contention of counsel for the respondent that the possession of C under his contract of deed is of no importance whatever, and that the fact that B recorded his deed before C recorded his contract the rights of B are prior and superior. The question is of vital importance; the bar in the state would, we think, be surprised if we should state that to be the rule, and we have thought it best to reconsider the subject at some length.

The statutes of this state to be considered herein-and we must, in the absence of evidence, presume the laws of Utah to be the same as the laws of this state-are sections 4576, 4609, and 4610, Wyoming Compiled Statutes 1920, which read as follows:

4576. "The term ‘conveyance,’ as used in chapters 291 to 294 inclusive, shall be construed to embrace every instrument in writing by which any estate or interest in real estate is created, alienated, mortgaged or assigned, or by which the title to any real estate may be affected in law or in equity, except wills, leases for a term not exceeding three years, executory contracts for the sale or purchase of lands, and certificates which show that the purchaser has paid the consideration and is entitled to a deed for the lands, and contain a promise or agreement to furnish said deed at some future time."

4609. "Each and every deed, mortgage, instrument or conveyance touching any interest in lands, made and recorded, according to the provisions of law, shall be notice to and take precedence of any subsequent purchaser or purchasers of such land from the time of the delivery of any such instrument at the office of the register of deeds of the county in which the lands described in such instrument are situate, for record."

4610. "Every conveyance of real estate within this state, hereafter made, which shall not be recorded as required by law, shall be void, as against any subsequent purchaser or purchasers in good faith and for a valuable consideration of the same real estate or any portion thereof, whose conveyance shall be first duly recorded ."

It is a well-known fact that the design of the recording laws is to prevent fraud in transactions by securing certainty and publicity in such dealings, and for that reason purchasers of real estate should have their conveyances seasonably recorded. Atwood v. Bearss, 47 Mich. 72, 10 N.W. 112. Inasmuch as this is the primary purpose of the recording laws, they should not, if possible, be construed so as to produce fraud, but so as to prevent it, in order to be in harmony with the ultimate and primary intent of the Legislature. Counsel for the respondent claim that, even though a subsequent purchaser is a purchaser in good faith and for a valuable consideration, nevertheless the sole criterion as to priority depends upon which of the conveyances shall be first duly recorded, as mentioned in the last sentence of section 4610, supra. That sentence is contained in the laws of a number of states, and is somewhat remarkable. It may well be doubted that the requirement of recording the instrument of purchase of a subsequent purchaser subserves any of the purposes, or at least primary purposes, intended by the Legislature.

It was said by the Supreme Court of Washington in the case of Swanstrom v. Washington Trust Co., 41 Wash. 561, 83 P. 1112, as follows: "Recordation is required for the protection of subsequent purchasers only. To require a subsequent conveyance of title to be recorded in order that a prior purchaser of the same property may be able to obtain information of its existence would not be in furtherance of the general design of these statutes, which was to protect purchasers from being undone by prior secret conveyances by making the means of obtaining information thereof available to that end. And so it is not necessary to his full protection in the absence of statutory provisions so requiring, that the subsequent purchaser record the instrument under which he claims before the recordation of the conveyance of the prior purchaser."

The case quotes from 24 Am. & Eng. Ency. L. (2d Ed.) p. 140, where a number of cases to the same effect may be found.

The recording acts in many, if not in most, of the states, do not require the recording of a subsequent instrument. Note, Ann. Cas. 1912A, pp. 194 to 200. Under section 4609, supra, instruments of conveyance touching interest in land give notice to subsequent purchasers, and take precedence only from the time when the instrument is delivered at the office of the register of deeds for recording. It is hard to perceive what, if any effect this section has, if the construction contended for by counsel for the respondent is correct. If that section stood alone, there can be no doubt, we think, that a subsequent purchaser in good faith would be protected against an unrecorded deed, even though he did not record his instrument. Home Savings Bank v. Peoria, etc., Society, 206 Ill. 9, 69 N.E. 17, 99 Am. St. Rep. 132. And see cases cited in note, Ann. Cas. 1912A, 194.

In considering this question, we may in the first place call attention to the fact that, under the provisions of section 4576, supra, an executory contract for the sale or purchase of land, such as was held by Hawkins in this case, is not a conveyance, and it would accordingly seem that such contract can hardly be contemplated in the clause "whose conveyance shall be first duly recorded," mentioned in section 4610, supra. See 39 Cyc. 1732, note 19. Yet it is hardly possible that the Legislature did not intend to protect a purchaser in good faith and for a valuable consideration, under an executory contract of sale, at least to the extent of his interest in the land. In fact, the provisions of section 4609 would seem to be ample for his protection.

The basis of the former decision for holding Hawkins protected under his contract was that he paid most of his purchase price, went into possession of the land, and held it for approximately a year and a half. Open, visible, and exclusive possession is ordinarily held to take the place of registration. Thus it is said in note, 104 Am. St. Rep. 353, that such possession is notice to all the world of the title or right of the occupant. And on page 345 of the same volume it is said: "It seems to be generally considered that possession under an unrecorded deed or contract of purchase is equivalent to registration of the deed or contract, and affords the same protection."

The contention of counsel for the respondent, however, seems to be that such possession takes the place of registration only if it is the possession of a prior purchaser and not of a subsequent purchaser, as Hawkins was in the case at bar. In 27 R. C. L. p. 719, it is not so limited, and it is said that possession protects not only a subsequent purchaser with notice, but also gives protection "where it is sought to charge a subsequent purchaser or incumbrancer with notice of an unrecorded deed and thereby defeat his right to protection under the recording acts." We have been surprised in making a somewhat exhaustive investigation of the subject, that so few cases seem to be reported which deal with this direct question.

Counsel have cited us to the case of Pennsylvania Salt Mfg. Co v. Neel, 54 Pa. 9, and that case seems to sustain their contention. The facts were very similar to those in the case at bar. The statute in that state at that time provided that a deed not recorded within 6 months should be considered to be "fraudulent and void against any subsequent purchaser or mortgagee for a valuable consideration, unless such deed or conveyance be recorded as aforesaid, before the proving and recording of the deed of conveyance under which such subsequent purchaser or mortgagee shall claim." The prior purchaser in that case recorded his deeds on December 24, 1839. Previously, and on February 26, 1834, Neel bought the same land, went into possession of it, and paid all of the purchase price under a contract of purchase, without recording the latter. The Supreme Court held that the first purchaser was protected. Neel contended that under his contract of purchase he was not entitled to a deed until he had paid for the land, and he could not, accordingly, record it, but the Supreme Court answered that...