Quaschneck v. Blodgett
| Decision Date | 09 October 1915 |
| Docket Number | 1915 |
| Citation | 156 N.W. 216,32 N.D. 603 |
| Court | North Dakota Supreme Court |
On petition for rehearing February 5, 1916.
Appeal from the District Court of Dickey County, Frank P. Allen, J.
From a judgment in plaintiff's favor, defendant Blodgett appeals.
Affirmed.
Watson & Young and E. T. Conmy, for appellant.
Where possession of land is consistent with the record title, it is presumed to be under such title, and is not notice of outstanding unrecorded equities. Smith v. Yule, 31 Cal. 180, 89 Am. Dec. 167; Dutton v. McReynolds, 31 Minn. 66, 16 N.W. 486; Townsend v. Little, 109 U.S 504, 27 L. ed. 1012, 3 S.Ct. 357; Williams v. Sprigg, 6 Ohio St. 585.
Where a vendor remains in possession after conveyance, such possession is not notice that he claims any rights inconsistent with the conveyance he has made. Abbott v Gregory, 39 Mich. 68; Sprague v. White, 73 Iowa 670, 35 N.W. 751; Eylar v. Eylar, 60 Tex. 315; Cook v. Travis, 20 N.Y. 400; Van Keuren v Central R. Co. 38 N.J.L. 165; Groton Sav. Bank v. Batty, 30 N.J.Eq. 126; Red River Valley Land & Invest. Co. v. Smith, 7 N.D. 241, 74 N.W. 194.
Where a deed, or contract for a deed, has not been recorded, possession is not actual notice, and does not protect the possessor against an otherwise innocent purchaser or encumbrancer. Tuttle v. Churchman, 74 Ind. 315; Brophy Min. Co. v. Brophy & D. Gold & S. Min. Co. 15 Nev. 113, 10 Mor. Min. Rep. 601; Exon v. Dancke, 24 Ore. 110, 32 P. 1045; Lamb v. Pierce, 113 Mass. 72; Patnode v. Deschenes, 15 N.D. 100, 106 N.W. 573; Wilson v. Wall, 6 Wall. 83, 18 L. ed. 727; Pickford v. Peebles, 7 S.D. 166, 63 N.W. 779; Hull v. Diehl, 21 Mont. 71, 52 P. 782; Jackson v. Reid, 30 Kan. 10, 1 P. 308; McCarthy v. Nicrosi, 72 Ala. 332, 47 Am. Rep. 418; Red River Valley Land & Invest. Co. v. Smith, 7 N.D. 236, 74 N.W. 194; 27 Cyc. 1200, 1201.
Plaintiff is estopped to question the validity of the mortgage, he having paid interest on the same as it became due, and generally recognized the mortgage as a valid lien. Dickerson v. Colgrove, 100 U.S. 578, 25 L. ed. 618; Horn v. Cole, 51 N.H. 287, 12 Am. Rep. 111; Lee v. Porter, 5 Johns. Ch. 268; Buck v. Wood, 85 Me. 204, 27 A. 103; Leavitt v. Fairbanks, 92 Me. 521, 43 A. 115; Bates v. Leclaire, 49 Vt. 229; Herman, Estoppel & Res Judicata, 970.
Defendant Blodgett is a purchaser of negotiable paper in good faith and for value, and is not affected by equities existing between the original parties, or claims of third persons, even if such were known to his assignor. 1 Jones, Mortg. § 834; Carpenter v. Longan, 16 Wall. 271, 21 L. ed. 313; First Nat. Bank v. Flath, 10 N.D. 281, 86 N.W. 867; American Nat. Bank v. Lundy, 21 N.D. 168, 129 N.W. 99; Walters v. Rock, 18 N.D. 45, 115 N.W. 511.
Further, Blodgett is protected under the recording act. A contract for deed is a conveyance, and should be recorded, and failure to record it renders his assignment of the mortgage prior. Henninges v. Paschke, 9 N.D. 489, 81 Am. St. Rep. 588, 84 N.W. 350; Jackson ex dem. Hyer v. Van Valkenburgh, 8 Cow. 260; Recording Act, 1 Rev. Stat. 756, §§ 37, 38; Decker v. Boice, 83 N.Y. 215; Morris v. Beecher, 1 N.D. 130, 45 N.W. 696; 1 Jones, Mortg. §§ 469, 472, 814; Pritchard v. Kalamazoo College, 82 Mich. 587, 47 N.W. 31; Dulin v. Hunter, 98 Ala. 539, 13 So. 301; Ogle v. Turpin, 102 Ill. 148; Merrill v. Luce, 6 S.D. 354, 55 Am. St. Rep. 844, 61 N.W. 46; Fallass v. Pierce, 30 Wis. 443; Day v. Clark, 25 Vt. 402; Bacon v. VanSchoonhoven, 87 N.Y. 446; Swartz v. Leist, 13 Ohio St. 419; Yerger v. Barz, 56 Iowa 77, 8 N.E. 769; Henderson v. Pilgrim, 22 Tex. 464; Boone, Mortg. § 92; Reeves v. Hayes, 95 Ind. 521, and authorities there cited; Connecticut Mut. Life Ins. Co. v. Talbot, 113 Ind. 373, 3 Am. St. Rep. 655, 14 N.E. 588; Thompson v. Cheesman, 15 Utah 43, 48 P. 477; Ladd v. Campbell, 56 Vt. 529; Donaldson v. Grant, 15 Utah 231, 49 P. 780; Frank v. Snow, 6 Wyo. 42, 42 P. 485, 43 P. 78; Hull v. Diehl, 21 Mont. 71, 52 P. 784; Jackson v. Reid, 30 Kan. 10, 1 P. 308; Harrison v. Yerby, Ala. , 14 So. 321.
The protection of the registry laws is not to be overthrown except upon clear evidence showing want of good faith on the part of subsequent purchasers. Betts v. Letcher, 1 S.D. 182, 46 N.W. 193; Woods v. Farmere, 7 Watts, 382, 32 Am. Dec. 772.
It was plaintiff's duty, upon discovering the mortgage, to make no further payments on his contract, and the defendant is entitled to credit for all payments made thereafter. Jaeger v. Hardy, 48 Ohio St. 335, 27 N.E. 863; Gouverneur v. Lynch, 2 Paige, 300; Young v. Guy, 87 N.Y. 457; 1 Warvelle, Vend. & P. p. 188; 2 Warvelle, Vend. & P. p. 687; Dalrymple v. Security Improv. Co. 11 N.D. 65, 88 N.W. 1033; Halloran v. Holmes, 13 N.D. 411, 101 N.W. 310; Watkins v. Reynolds, 123 N.Y. 211, 25 N.E. 322; Gifford v. Corrigan, 117 N.Y. 257, 6 L.R.A. 610, 15 Am. St. Rep. 508, 22 N.E. 756; Fairbanks v. Sargent, 117 N.Y. 325, 6 L.R.A. 475, 22 N.E. 1039; Citizens' Bank v. Shaw, 14 S.D. 197, 84 N.W. 779.
Defendant is entitled to subrogation, as to the amount paid in satisfaction of prior mortgages of record at the time of the contract for deed. Emmert v. Thompson, 49 Minn. 386, 32 Am. St. Rep. 566, 52 N.W. 31; Tradesmen's Bldg. & L. Asso. v. Thompson, 32 N.J.Eq. 133; Gans v. Thieme, 93 N.Y. 225; Sidener v. Pavey, 77 Ind. 241; McKenzie v. McKenzie, 52 Vt. 271; Cobb v. Dyer, 69 Me. 494; Levy v. Martin, 48 Wis. 198, 4 N.W. 35; Detroit F. & M. Ins. Co. v. Aspinwall, 48 Mich. 238, 12 N.W. 214; Crippen v. Chappel, 35 Kan. 495, 57 Am. Rep. 187, 11 P. 453; 3 Pom. Eq. Jur. §§ 1211, 1212; Harris, Subrogation, 811, 816; Dixon, Subrogation, 165; Home Sav. Bank v. Bierstadt, 168 Ill. 618, 61 Am. St. Rep. 146, 48 N.E. 161; Coe v. New Jersey Midland R. Co. 31 N.J.Eq. 105; Tyrrell v. Ward, 102 Ill. 29; Tradesmen's Bldg. & L. Asso. v. Thompson, 32 N.J.Eq. 133; Upton v. Hugos, 7 S.D. 476, 64 N.W. 523; Heisler v. C. Aultman & Co. 56 Minn. 454, 45 Am. St. Rep. 486, 57 N.W. 1053; Wilton v. Mayberry, 75 Wis. 191, 6 L.R.A. 61, 17 Am. St. Rep. 193, 43 N.W. 901; Union Mortg. Bkg. & T. Co. v. Peters, 72 Miss. 1058, 30 L.R.A. 829, 18 So. 497; Haverford Loan & Bldg. Asso. v. Fire Asso. of Philadelphia, 180 Pa. 522, 57 Am. St. Rep. 657, 37 A. 179; Bank of Ipswich v. Brock, 13 S.D. 409, 83 N.W. 438; Frederick v. Gehling, 92 Neb. 204, 137 N.W. 998; Bankers' Loan & Invest. Co. v. Hornish, 94 Va. 608, 27 S.E. 459; Home Invest. Co. v. Clarson, 21 S.D. 72, 109 N.W. 507.
The doctrine of substitution or subrogation may be applied although there is no contract, express or implied. Cheesebrough v. Millard, 1 Johns. Ch. 409, 7 Am. Dec. 494; 1 Story, Eq. Jur. § 493; Barnes v. Mott, 64 N.Y. 397, 21 Am. Rep. 625; Gans v. Thieme, 93 N.Y. 232; Upton v. Hugos, 7 S.D. 476, 64 N.W. 523; Home Invest. Co. v. Clarson, 15 S.D. 513, 90 N.W. 153; Arlington State Bank v. Paulsen 57 Neb. 717, 78 N.W. 303; Tradesmen's Bldg. & L. Asso. v. Thompson, 32 N.J.Eq. 133; Levy v. Martin, 48 Wis. 198, 4 N.W. 35; Rachal v. Smith, 42 C. C. A. 297, 101 F. 159.
Yonker & Perry and Harrington & Dickinson, for respondent.
The occupation of the premises involved, under the unrecorded contract for deed, was so open, visible, notorious, and exclusive as to put a mortgagee in good faith on inquiry. The possession of the holder under the contract was wholly inconsistent with the record title as it then was; the holder was not only in open, actual possession, but he paid the taxes, made all the improvements, leased the buildings, paid rent to no one, and exercised all rights of ownership. Watters v. Connelly, 59 Iowa 217, 13 N.W. 82; Kent, Com. 179; Niles v. Cooper, 13 L.R.A. (N.S.) 104, note; Georgia State Bldg. & L. Asso. v. Faison, 114 Ga. 655, 40 S.E. 760.
Possession, as notice, is not confined to subsequent purchasers alone, but includes mortgagees and assignees. Meade v. Gilfoyle, 64 Wis. 18, 24 N.W. 413; Doolittle v. Cook, 75 Ill. 354; Humphrey v. Moore, 17 Iowa 193; Niles v. Cooper, 13 L.R.A.(N.S.) 106, note, and cases cited; Jamison v. Dimock, 95 Pa. 52; Jaeger v. Hardy, 48 Ohio St. 335, 27 N.E. 863; Ranney v. Hardy, 43 Ohio St. 157, 1 N.E. 523.
There is no estoppel as to plaintiff in this case. The essential element of estoppel is that the party relying thereon has been prejudiced by the other party. Nothing of such nature exists in this case. 16 Cyc. 722; Dumont v. Peet, 152 Iowa 524, 132 N.W. 955; Gunn v. Mahaska County, 155 Iowa 527, 136 N.W. 929.
One has the right at all times to question the validity of a mortgage placed on his land, without his knowledge or consent. Boone v. Clark, 129 Ill. 466, 5 L.R.A. 276, 21 N.E. 850.
The question here to be determined is that of the right of a party in possession, as against third parties claimant. It is a question of notice to the world by possession. The recording act is not involved. Coe v. Manseau, 62 Wis. 81, 22 N.W. 155; Meade v. Gilfoyle, 64 Wis. 18, 24 N.W. 413.
Subrogation can only be made in furtherance of justice, and cannot be invoked against the rights of a third person, as is plaintiff in this case. He purchased the land under contract, free of all encumbrance; took possession under his contract and has remained in possession. The mortgage was without his knowledge or consent. 37 Cyc. 471; Wormer v. Waterloo Agri. Works, 62 Iowa 699, 14 N.W. 331; Shinn v. Budd, 14 N.J.Eq. 234; Kitchell v. Mudgett, 37 Mich. 81; Gilbert v. Gilbert, 39 Iowa 657; 3 Pom. Eq. Jur. 1212.
This case is here for trial de novo. Plaintiff seeks to have certain adverse claims determined, and to quiet his title to certain real property in Dickey county. The facts as we find them to exist are substantially as follows: On November 23, 1907, one George D. Hall, who was...
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