Mercer Cnty. State Bank of Manhaven v. Hayes

• Decision Date: 08 August 1916
• Citation: 159 N.W. 74,34 N.D. 601
• Parties: MERCER COUNTY STATE BANK OF MANHAVEN v. HAYES et al.
• Court: North Dakota Supreme Court

34 N.D. 601

159 N.W. 74

MERCER COUNTY STATE BANK OF MANHAVEN

v.HAYES et al.

Supreme Court of North Dakota.

Aug. 8, 1916.

Syllabus by the Court.

Where the record shows that land was sold to the county of M. for taxes (though there is no proof of the issuance of a tax deed), and was afterwards quitclaimed by the county to A. by an instrument which recited that a tax deed had been issued to the county therefore, and was occupied by A. for five years and improved by him, and later sold by him by warranty deed to C., and then by C. conveyed by warranty deed to D., the last purchaser, D., cannot, when sued on a note and mortgage which were given by him as part payment on such purchase, avoid the payment thereof by alleging a lack of title in the original grantor, and by proof merely that there is no evidence of the issuance of a tax deed to the county, and, if the property was not obtained by the county under tax sale, the title remains in the original owners, who have never asserted any title thereto, or made any claim therefor; the said D. never at any time having offered to return the property, nor brought any suit to quiet the title thereto, nor attempted to rescind his contract of purchase, but, on the other hand, having remained in the possession of the premises, and being in such possession and collecting the rent thereof at the time of the trial.

Parties who claim a breach of warranty may do one of two things: They may rescind, or they may stand on their contract and sue for damages for the breach. They cannot do both.

“Seisin” implies possession. It is possession with a legal right to the estate in the land.

Appeal from District Court, Mercer County; S. L. Nuchols, Judge.

Action by the Mercer County State Bank of Manhaven against Bert A. Hayes and others. From a judgment for defendants, plaintiff appeals. Reversed and remanded, with directions.H. L. Berry and Thorstein Hyland, both of Stanton (Hyland & Madden, of Bismarck, of counsel), for appellant. John F. Sullivan, of Mandan, for respondents.

BRUCE, J.

This is an action to foreclose a mortgage which was given to secure part of the purchase price of several city lots. The defense is that the grantor, who was the vice president of the plaintiff bank, was not the owner of said lots or any part thereof, and that the plaintiff bank had full knowledge of this fact at the time that the mortgage was taken. The answer, however, does not ask for a rescission of the contract of purchase, nor does it offer to restore the property, nor does it contain any allegation of any ejection, actual or threatened, nor of an assertion of any paramount title, nor was there any proof upon the trial of any of these facts. All that the proof showed, or tended to show, was: That some time in the 80's, the lots were sold to the county of Mercer for taxes. That in 1906 all of the books and records of the register of deeds of Mercer county were destroyed by fire, and if any tax deed was issued to the county there is no record thereof. That later, and on the 28th day of April, 1909, the county of Mercer quitclaimed the premises to B. G. Letzring and Adelia Letzring, his wife, and that said deeds contained the following statements of a resolution passed by the board of county commissioners: “Whereas, the records in the auditor's office show that certain lots in the village of Stanton were deeded to Mercer county by tax deed in the years 1888 and 1889: Therefore be it resolved that Mercer county by its officers issue a quitclaim deed to any one who so desires to purchase said lots,” etc. That the said Letzrings lived on the said lots for about five years, and built thereon a livery barn and garage and a small residence. That later, and on the 24th day of June, 1913, the said Letzrings conveyed lots 16 and 17 by warranty deed, and the south half of lot 18 by special warranty deed, to the Mercer County Abstract Company. That later, and on the 9th day of August, 1913, the Mercer County Abstract Company conveyed the premises by warranty deed to E. M. Serr. That later, and on the 9th day of August, 1913, the said E. M. Serr and wife conveyed the premises by warranty deed to Bert A. Hayes and Effa I. Hayes, his wife, and that as a part payment of the purchase price, the said Heyeses executed and delivered to the Mercer County State Bank of Manhaven, of which the said E. M. Serr was vice president, a note and mortgage for $1,400, and which said note and mortgage are now sought to be foreclosed.

Not only is there no offer in the answer to return the premises, nor any allegation or proof of the assertion by any one of any adverse title, and not only is there no proof of any attempt to rescind the contract, but there is proof that the defendants Bert A. and Effa I. Hayes remained in the possession of the premises, either by themselves or by their tenants, up to the time of the trial, and at the time of the trial were collecting the rents therefrom, and stated that they intended so to do, and the only complaint is that, if no tax deed was issued and the county of Mercer obtained no title through the tax sale, the record title would be in the names of some third parties, the original owners and defaulting taxpayers, the McGraths. There was also on the trial some attempt to prove that the sale to the Hayeses was fraudulently made, and that they expected to receive the whole of lot 18, rather than a half thereof. The proof, however, does not sustain this claim or allegation.

The question, then, before us is this: Can a purchaser of land, which the record shows was sold to the county for taxes, though there is no proof of the issuance of a tax deed, and which has afterwards been conveyed by the county to another by a quitclaim deed, which recites that a tax deed had been issued to the county therefor, and which is occupied by such other for five years, and improved by him by the erection of buildings, and later conveyed by him by warranty deed to still another person, and then by such other person conveyed by warranty deed to him (the purchaser), when sued on a note and mortgage, which were given by him as part of such purchase price, avoid the payment thereof by alleging a lack of title in the original grantor, and by proof merely that there is no evidence of the issuance of a tax deed to the county, and, if the property was not obtained by the county under such tax sale, the title remains in the original owners, who have never asserted any title thereto, or made any claim therefor; the said purchaser never at any time having offered to return the property, brought any suit to quiet the title thereto, or attempted to rescind his contract of purchase, but, on the other hand, having remained in the possession of the premises and being in the possession and collecting the rents thereof at the time of the trial?

[1][2][3] We are satisfied that the defendants can avail themselves of no such defense. “It is true,” said this court in the case of Dahl v. Stakke, 12 N. D. 325, 96 N. W. 353, “that a total failure of title in many cases is not ground for resisting payment of the purchase price, if the purchaser remains in possession of the premises, and is not threatened with dispossession, and does nothing towards protecting himself against such adverse title, and is not in any way disturbed or damaged by such outstanding title; it not being hostilely asserted against him. The grounds upon which such cases turn are that such possession may ripen into a good title by the lapse of time, and that the law will not countenance a purchaser in accepting and holding possession and title which are not attacked, and to perfect which the purchaser has done nothing, and at the same time refuse to pay for the land.” “We recognize,” s...