Simonson v. Wenzel
| Decision Date | 05 June 1914 |
| Docket Number | 81912 |
| Court | North Dakota Supreme Court |
Appeal from District Court, McHenry County, A. G. Burr, J.
From a judgment in plaintiff's favor, defendant M. C. Krupp appeals.
Affirmed as modified.
Affirmed.
Christianson & Weber (Edward Eugerud, of counsel), for appellants.
The term "conveyance" embraces every instrument in writing by which any estate or interest in real property is created, alienated, mortgaged, or encumbered, or affected except wills and powers of attorney. Rev. Codes 1905 §§ 5038, 5039.
The interest of a vendee under an unperformed executory contract does not constitute real property of such vendee. Miller v. Shelburn, 15 N.D. 182, 107 N.W. 51; Cummings v Duncan, 22 N.D. 534, 134 N.W. 712.
Equity will not regard a thing as done which is not done, when it would injure third parties who have sustained detriment and acquired rights by the things that have been done. Casey v. Cavaroc, 96 U.S. 467, 24 L.Ed. 779.
This is a mere equitable fiction, and does not in reality create an interest or estate in the land in the vendee. Chappell v. McKnight, 108 Ill. 570; Warvelle, Vend. & P. p. 187, § 2; Sutherland v. Parkins, 75 Ill. 338; Smith v. Jones, 21 Utah 270, 60 P. 1104; Miller v. Shelburn, 15 N.D. 186, 107 N.W. 51.
Under such a contract the vendor remains the owner of the land to all intents. The relation is personal. Davis v. Williams, 130 Ala. 530, 54 L.R.A. 751, 89 Am. St. Rep. 55, 30 So. 488; Smith v. Jones, 21 Utah 270, 60 P. 1104; Bradwell v. Bank of Bainbridge, 103 Ga. 242, 29 S.E. 756; Chappel v. McKnight, 108 Ill. 570.
The words "real property" are coextensive with "lands, tenements, and hereditaments." Rev. Codes, §§ 4736, Subdiv. 2, 4738, 6721.
The practice of recording instruments is purely a statutory creation, and the constructive notice provided for thereby exists only to the extent which the statute declares. The recording of an instrument not required or entitled to be recorded has no effect, either on the instrument or the parties. Mesick v. Sunderland, 6 Cal. 297; Lewis v. Barnhart, 145 U.S. 56, 36 L.Ed. 621, 12 S.Ct. 772; Burck v. Taylor, 152 U.S. 634, 38 L.Ed. 578, 14 S.Ct. 696; Lynch v. Murphy, 161 U.S. 247, 40 L.Ed. 688, 16 S.Ct. 523; Ludlow v. Van Ness, 8 Bosw. 178; LeNoir v. Valley River Min. Co. 113 N.C. 513, 18 S.E. 73; Bassinger v. Spangler, 9 Colo. 175, 10 P. 809; Rev. Codes, § 5042; Payne v. Markle, 89 Ill. 69.
Any instrument executed by one not having a record title would be out of the chain of title, and not binding on anyone. Garber v. Gianella, 98 Cal. 527, 33 P. 458; Doran v. Dazey, 5 N.D. 167, 57 Am. St. Rep. 550, 64 N.W. 1023; Rev. Codes, § 5042.
A purchaser is not required to look one day or one page beyond that which shows the title of his grantor. Ford v. Unity Church Soc. 120 Mo. 498, 23 L.R.A. 561, 41 Am. St. Rep. 711, 25 S.W. 394; Connecticut v. Bradish, 14 Mass. 296; Corbin v. Sullivan, 47 Ind. 356; Odle v. Odle, 73 Mo. 289; Hibbs v. Union Cent. L. Ins. Co. 40 Ohio St. 543; Sands v. Beardsley, 32 W.Va. 594, 9 S.E. 925; Bingham v. Kirkland, 34 N.J.Eq. 229; Farmers' Loan & T. Co. v. Maltby, 8 Paige, 361; Calder v. Chapman, 52 Pa. 359, 91 Am. Dec. 163; Bright v. Buckman, 39 F. 243; Donovan v. Twist, 105 A.D. 171, 93 N.Y.S. 990; Losey v. Simpson, 11 N.J.Eq. 246.
The record of a mortgage before the records disclose title in the mortgagor is not constructive notice to a second grantee. 2 Devlin, Deeds, 3d ed., p. 1330, 1331, § 724; Farmers' Loan & T. Co. v. Maltby, 8 Paige, 361; Losey v. Simpson, 11 N.J.Eq. 246; Calder v. Chapman, 52 Pa. 359, 91 Am. Dec. 163; Page v. Waring, 76 N.Y. 463; Buckingham v. Hanna, 2 Ohio St. 551; Doswell v. Buchanan, 3 Leigh, 365, 23 Am. Dec. 280; Hetzel v. Barber, 69 N.Y. 1; Schoch v. Birdsall, 48 Minn. 441, 51 N.W. 382; Turman v. Sanford, 69 Ark. 95, 61 S.W. 167; Sarles v. McGee, 1 N.D. 365, 26 Am. St. Rep. 633, 48 N.W. 231; Union Nat. Bank v. Moline M. & S. Co. 7 N.D. 201, 73 N.W. 527; Rev. Codes N.D. § 5042.
The stipulation contained in the contract against such assignment or hypothecation was a valid, integral part of the contract itself. Mueller v. Northwestern University, 195 Ill. 236, 88 Am. St. Rep. 194, 63 N.E. 110; Barringer v. Bes Line Constr. Co. 23 Okla. 131, 21 L.R.A. (N.S.) 597, 99 P. 775; Zetterlund v. Texas Land & Cattle Co. 55 Neb. 355, 75 N.W. 860.
The holder of a junior equity by acquiring the legal title before he has notice of a prior equity obtains the superior right. Carlisle v. Jumper, 81 Ky. 282; Newton v. McLean, 41 Barb. 285; Rexford v. Rexford, 7 Lans. 6; Carroll v. Johnston, 55 N.C. (2 Jones, Eq.) 120; Hoult v. Donahue, 21 W.Va. 294; Fitzsimmons v. Ogden, 7 Cranch. 2, 23 L.Ed. 249; Simmons v. Ogle, 105 U.S. 271, 26 L.Ed. 1087.
C. W. Hookway and D. J. O'Connell, for respondent.
Any interest in property, which is capable of being transferred or conveyed, may be mortgaged. Rev. Codes 1905, § 6154.
A mortgage may be created upon property held adversely to the mortgagor. Rev. Codes 1905, § 6158; 27 Cyc. 1139, and cases cited.
In such cases one who attempts to buy the legal title from the owner is charged with constructive notice. Alden v. Carver, 32 Ill. 32; Crane v. Turner, 7 Hun, 357; Balen v. Mercier, 75 Mich. 42, 42 N.W. 666.
This is an appeal from a judgment of the district court of McHenry county, decreeing the foreclosure of a real-estate mortgage in plaintiff's favor. The appeal is upon the judgment roll proper, appellants' contention being that the conclusions of the trial court are not warranted by the findings of fact.
Such findings of fact are in substance as follows:
1. That on and prior to March 20, 1906, the defendant, Dakota Development Company, was the owner in fee of the real estate in controversy as disclosed by the public records in the office of the register of deeds. On such date this company entered into an executory contract with defendant Carl F. Wenzel, in the usual form, whereby, for a stated consideration of $ 100, $ 35 of which was paid in cash and the balance to be paid in equal instalments on March 20, 1907, and March 30, 1908, with interest, it promised and agreed to sell and convey such premises to the said Wenzel, such contract obligating the purchaser to pay all taxes and assessments levied, assessed, or imposed upon the premises in each year, and also contained a stipulation that "no assignment or transfer of any interest in and to this agreement or the lands described, less than the whole thereof, will be recognized by said vendor under any circumstances or in any event whatever, and no assignment shall be binding upon the vendor unless approved by its president." It also contained a stipulation "that time is to be the very essence of this agreement." Such contract also contained other stipulations relative to the vendor's right to declare a forfeiture in case the vendee failed in any respect to comply with his part of the contract, but we deem it unnecessary to set such provisions out in extenso.
2. Defendant Wenzel entered into the possession of the premises, and constructed a dwelling house thereon, which he and his family occupied as their homestead until about January 20, 1908, when he sold and assigned such contract to defendant M. C. Krupp.
3. On April 17, 1907, Wenzel and wife, for a valuable consideration, executed and delivered to plaintiff their promissory note for the sum of $ 914.70, payable on November 1st thereafter, with interest at the rate of 8 per cent per annum; and to secure the payment thereof they executed and delivered to plaintiff a mortgage on the land in controversy, which was filed in the office of the register of deeds of McHenry county on April 18, 1907, and recorded in book 31 of mortgages, at page 516.
4. That such note and mortgage have not been paid, and plaintiff is the present owner and holder thereof.
5. That Carl F. Wenzel paid to the Dakota Development Company the sum of $ 35 at the time of the execution of the contract for deed, but made default in the payment due March 20, 1907, and the same was not paid until after the assignment of such contract to defendant Krupp, as hereinafter set forth. That such contract for deed was at no time recorded or filed for record in the office of the register of deeds of McHenry county, and the record title of the premises at all times up to January 29, 1908, remained in the Dakota Development Company.
6. On or about January 20, 1908, Wenzel, while in possession of said land as his homestead, entered into negotiations with defendant Krupp for the sale to him of the contract for deed aforesaid, and the premises therein described, upon the terms that such contract was to be assigned to Krupp, who was to receive a warranty deed of the premises direct from the Development Company. Wenzel and wife thereupon assigned their interest in such contract to Krupp, and the latter paid to the Development Company the amount then remaining due upon said contract ($ 65 and interest), and Krupp also paid to Wenzel the agreed consideration of $ 1,000 less the payment aforesaid to the Development Company, and the Development Company did not, nor did its president or any one of its authorized officials, have any knowledge or actual notice of the execution or delivery of the mortgage to the plaintiff aforesaid.
7. That defendant Krupp purchased Wenzel's interest in such contract in good faith, and without any actual notice or knowledge of the existence of plaintiff's mortgage, and he had no intent to cheat or defraud the plaintiff, but acted in absolute good faith in the making of said purchase, and purchased and...
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