Hunter v. Coe

• Decision Date: 30 November 1903
• Court: North Dakota Supreme Court

97 N.W. 869

12 N.D. 505

JAMES HUNTER v. ALFRED N. COE AND JOHN MCDEVITT

Supreme Court of North Dakota

November 30, 1903

Appeal from District Court, Ramsey county; Cowan, J.

Action by James Hunter against John McDevitt and others. Judgment for plaintiff. Defendant McDevitt appeals.

Reversed.

Case remanded. Judgment set aside and a new trial ordered. Appellant recovered costs.

Townsend & Denoyer, for appellant.

McDevitt was a bona fide purchaser for value with neither actual nor constructive notice of Hunter's rights. Section 3594, Rev. Codes 1899.

For definition of good faith see Rev. Codes 1899, section 5114.

Constructive notice is defined in section 5118, Rev. Codes 1899.

The English rule, viz.: "If a purchaser had not actual knowledge that the property was in some way affected, it must appear that for the purpose of avoiding knowledge, he knowingly and designedly abstained from making inquiry," is adopted in Alabama, Delaware, Georgia, Illinois, Iowa Kentucky, Massachusetts, Ohio, Oregon, Virginia, and the U S. Circuit Court of Appeals. 23 Am. & Eng. Enc. of L. (2d Ed.) 497, and note on page 498; Williamson v. Brown, 15 N.Y. 354; Jackson v. Given, 8 Johns 137; McMechan v. Griffling, 3 Pick. 149.

Information to be sufficient to cast upon a subsequent purchaser the duty to inquire, must be credible in its character and source, and communicated under such circumstances as to excite belief in the minds of reasonably prudent men. 16 Am. & Eng. Enc. of L (1st Ed.) 796, 797.

Rumors and statements by strangers are insufficient to charge a person with constructive notice. 21 Am. & Eng. Enc. of L. (2d Ed.) 586; 11 Am. & Eng. Enc. of L. (1st Ed.) 797; Maul v. Rider, 59 Pa. 172; 23 Am. & Eng. Enc. of L. (2d Ed.) 497; Wilson v. McCullough, 23 Pa. 440.

A party purchases land subject to the rights of persons in possession. Such possession must be actual, open and visible, not equivocal, occasional, or for a special or temporary purpose. 16 Am. & Eng. Enc. of L. (1st Ed.) 802; Betts v. Latcher, 46 N.W. 193.

If Hunter's title be declared superior to that of McDevitt, the decree must be modified to the effect that the purchase price be paid to McDevitt, who bought from Coe, the owner, subject to the contract held by Hunter. Winslow et al v. Crowell et al, 32 Wis. 639; Smith v. Doak, 3 Tex. 215; Boise v. Satterthwait, 180 Pa. 542; McPherson v. Parker, 30 Cal. 455; Bailey v. Myrick, 36 Me. 50; Vanderveer v. Holcomb, 17 N.J.Eq. 87, 547; Blackwood v. Jones, 57 N.C. 54; Ingram v. Smith, 38 Tenn. 411; Oliver v. Piatt, 44 U.S. 333, 11 L.Ed. 622.

In adjusting the rights and equities of different claimants in or to the same piece of land, the court will require compensation from the party benefited to a person who has, under color of title and in good faith, believing such title to be valid, and relying thereupon, placed permanent improvements upon the land. Walden v. Bodley, 39 U.S. 156, 10 L.Ed. 398, 20 Enc of Pl. & Pr. 500; Benson v. Cutler, 53 Wis. 107; Waterman on Spec. Perf. 521.

McClory, Barnett & Adamson, for respondent.

When the pleadings disclose that the contents of a document in the possession of an adverse party will necessarily have to be proved in order to establish a link in the proof of the other party's cause of action or defense, a notice to produce such document at the trial is not necessary in order to permit the introduction of secondary evidence of its contents. Nichols & Shepard v. George Carlebois, 10 N.D. 446, 88 N.W. 80.

If Coe enters into a contract to sell land to Hunter and afterwards refuses to perform his contract, and sells the land to McDevitt, for valuable consideration, Hunter can compel McDevitt to convey to him, provided he is chargeable with notice at the time of his purchase of Hunter's equitable title under his agreement. Lord MacClesfield Atsherley v. Vernon, 10 Mod. 518; Wigned v. Lefbury, 2 Eq. cases Abr. p. 32 Pl. 43, and other cases.

The notice given to McDevitt of the agreement to sell was sufficient to put him upon inquiry. Hunter took possession of the land, although but for a short time, party prepared it for crop, and afterwards rented it to Olson and put him in possession. Olson informed McDevitt of the fact that he had rented the land from Hunter, the plaintiff.

Possession is of itself sufficient notice, prima facie, whether it is actually known to the other party or not; but this presumptive notice from possession is subject to rebuttal by proof showing that an inquiry, duly or reasonably made, failed to disclose any legal or equitable title in the occupant. But failure to make such inquiry is regarded as an intentional avoidance of the truth which it would disclose, and voluntary ignorance under such circumstances effectually deprives the subsequent party of the character of a bona fide purchaser. Betts v. Letcher (S. D.) 46 N.W. 193; Grimstone v. Carter, 3 Paige 421, 24 Am. Dec. 230; Flagg v. Mann, 2 Sum. 486, 554; Thompson v. Pioche, 44 Cal. 508.

McDevitt heard of Hunter's title from his neighbors, who heard it from Hunter, and told McDevitt. That McDevitt thought enough of these reports in regard to James Hunter having bought the property to cause him to talk it over with different parties shows that he considered them sufficient to put him on inquiry.

Defendant's admissions are to be taken most strongly against him, and he must be considered as having notice of circumstances sufficient to put a prudent man on inquiry, and having omitted to make such inquiry with reasonable diligence, he must be deemed to have constructive notice of the fact itself. Gress v. Evans et al, 46 N.W. 1132; Frerking v. Thomas, 89 N.W. 1005; Hannan v. Seidentopf, 86 N.W. 44; Nolan v. Grant, 5 N.W. 513.

Possession of the tenant is constructive notice of the landlord's title. Dickey v. Lyon, 19 Ia. 544.

OPINION

YOUNG, C. J.

This is an action to compel the specific performance of the written contract of defendant Coe to sell and convey to the plaintiff a certain eighty-acre tract of land situated in Ramsey county, and to cancel and declare void a deed of conveyance of said land executed and delivered by said Coe to the defendant McDevitt after he had entered into the contract to convey the same to the plaintiff. The plaintiff alleges in substance, that the land in question was formerly owned by Nettie Coe; that upon her death, which occurred on April 28, 1900, the defendant Alfred N. Coe, her husband, was appointed administrator of her estate, and has since acted as such; that said estate does not exceed in value the sum of $ 5,000, and no claims have been filed against it; that the said defendant Alfred N. Coe is the sole heir of said deceased, and entitled to a decree from the county court conveying to him all of the property of decedent, including these premises; that the administration of the estate has not been completed, in this: that the final decree of distribution of said estate, formally assigning the above real estate to the defendant Alfred N. Coe, has not been made; that on April 24, 1901, the plaintiff and the defendant Alfred N. Coe, entered into a written contract, through correspondence, wherein the plaintiff agreed to purchase and the defendant Coe agreed to sell to the plaintiff the land in question, and convey the same upon a good and sufficient deed upon said Alfred N. Coe receiving from the plaintiff the sum of $ 475, and that by the terms of said contract the plaintiff received possession of the premises, and was to have clear title upon the county court issuing its decree vesting title in defendant Alfred N. Coe; that in pursuance of said contract the plaintiff took possession and prepared part of the land for crop, and that he has ever since been in the open possession of the same, and has at all times been ready and willing to pay the said sum of $ 475 upon the delivery of a good and sufficient deed of conveyance; that thereafter, and with full knowledge of the above contract and of plaintiff's possession thereunder, the defendant John McDevitt purchased said land from said Coe, and received a warranty deed therefor, which said deed the defendant caused to be placed of record; that the said McDevitt claims to own said land, and threatens to take forcible possession thereof. Plaintiff prays that the contract made by defendant Coe may be specifically performed; that the deed of conveyance delivered by Coe to McDevitt be declared null and void, and be canceled of record; and for general equitable relief. The defendant Coe was served, but did not answer. McDevitt, answering for himself, in addition to a general denial, alleges that in May, 1901, relying upon the apparent ownership of Coe of the premises, and on the advice of an attorney that Coe could give a good title, he purchased the same, and received a good and sufficient deed of conveyance, and paid therefor the sum of $ 525 in cash; that he paid the delinquent taxes upon the premises, and on the 10th day of June, 1901, caused his deed to be recorded, and upon receiving his deed entered into possession, and has ever since been in the sole, open, and complete possession thereof; that he has made valuable, permanent improvements thereon to the value of at least $ 800, and is still in possession. He further alleges that the plaintiff is not, and never has been, in possession of the premises; that Coe was in possession up to the time of the latter's conveyance to him; and that this defendant, up to the time of receiving his deed, had no notice whatever of any claim on the part of the plaintiff, or that he had or pretended to have any interest or estate in said premises. The trial court found that the facts alleged in the complaint and above set out were true, and, in addition, the court found that the...