Sinclair v. Gunzenhauser

• Decision Date: 10 January 1913
• Docket Number: No. 21,728.,21,728.
• Citation: 179 Ind. 78,100 N.E. 376
• Parties: SINCLAIR et al. v. GUNZENHAUSER et al.
• Court: Indiana Supreme Court

179 Ind. 78

100 N.E. 376

SINCLAIR et al.

v.GUNZENHAUSER et al.

No. 21,728.

Supreme Court of Indiana.

Jan. 10, 1913.

On petition for rehearing. Former opinion modified, and petition overruled.

For former opinion, see 98 N. E. 37.

Wm. J Whinery, Jno. F. Reilly, and John H. Gillett, all of Hammond, for appellants. Knapp & Campbell, of Chicago, Ill., John B. Peterson, of Crown Point, John R. Cochran, of Chicago, Ill., Peter Crumpacker, of Hammond, H. F. McCracken, of Gary, and Otto J. Bruce, of Crown Point, for appellee.

MYERS, C. J.

Three principal positions are taken by counsel as to the original opinion.

[1] First. That the court was in error in holding that the conveyance by Dewey to Susan Sinclair was in legal effect a conveyance to Joseph Sinclair and Proudfoot, and in holding in that particular that section 4024, Burns 1908, applied, and insisting that the conveyance falls within sections 4017 and 4019, Burns 1908, because it is found that by oral agreement “Susan Sinclair was to take the title to said land in trust for Joseph F. Sinclair and the said William S. Proudfoot,” and “that it was so taken without fraudulent intent to cheat, hinder, or delay the creditors of said Joseph F. Sinclair, or any other person whomsoever, and without any fraudulent intent whatever.” The deed did not on its face disclose a holding by Susan Sinclair as trustee, or that the title was held for the use or benefit of any other person. It had been held in Jackson v. Myers (1889) 120 Ind. 504, 22 N. E. 90, 23 N. E. 86, and in the same case on a second appeal, 135 Ind. 136, 34 N. E. 810, and in Greenwood, etc., Co. v. Stanton, 28 Ind. App. 548, 63 N. E. 574, that section 4024 applied where no trustee or beneficiary was named, and upon a more careful examination we conclude that they must each be disapproved upon that point. It is impossible that the statute can execute the use where a naked trustee is named, and no beneficiary is named, because it is impossible to discover the beneficiary therefrom. Such a deed might give notice of a holding, not in the grantee's own right, but for an undisclosed beneficiary, but the statute cannot execute the use for lack of disclosure of the beneficiary. The matter is best put by Cruse when he says in his Digest of Real Property: “A trust is a use not executed by the statute of 27 Henry VIII.”

[2] No one would seriously contend that a title held as here disclosed was not the subject of levy and sale as the property of Sinclair and Proudfoot, or that its sale as the property of Susan Sinclair could have been enjoined. Cox v. Arnsmann, 76 Ind. 210;Watkins v. Jones, 28 Ind. 12;Glidewell v. Spaugh, 26 Ind. 319;Catterson v. Hall, 37 Ind. App. 341, 76 N. E. 889; Greenwood, etc., Co. v. Stanton, supra. The legal effect is therefore the same in either case, that the holding was wholly for the benefit of Joseph F. Sinclair and William S. Proudfoot, under section 4019, Burns 1908, and the original opinion is as to that point so modified.

Second. That the court erred in holding that the record entry book memoranda of the Libbey deed was not constructive notice of its existence sufficient to put all upon inquiry as to the contents of the deed in the miscellaneous record. It is urged in the brief that the question was not raised on the original briefs, and that appellants have had no opportunity to brief and argue that question. On oral argument the query was suggested by the court as to the force of the entry book memoranda, and was there argued by counsel, and they were then granted time, and each filed extended briefs on the subject, but not until the inquiry came from the court to appellees was there the slightest intimation from appellants that the entry book memorandum constituted constructive notice of the Libbey trust deed. The act does not provide that the “entry” book or mere registration constitutes notice. Under the English and Irish Registry Acts, it has been the rule of holding that the registry is intended to give priority according to time of registration, but that registry does not of itself import or constitute notice. Ford v. White, 16 Beav. 120; Underwood v. Courtan, 2 Sch. & Lef. 40; Doswell v. Buchanan's Ex'rs (1831) 30 Va. 365, 23 Am. Dec. 280. This would clearly be true in cases under our laws where priority of record constitutes priority of title or lien, and in the absence of a statute making it notice.

[3][4] The general rule in this country and the acknowledged rule in this state is that it is the record of the instrument which imports notice in the absence of a statute making the memoranda of entry, or the index, notice of the instrument. Sowden, etc., Co. v. Craig (1868) 26 Iowa, 156, 96 Am. Dec. 125; Ely v. Wilcox (1866) 20 Wis. 523, 91 Am. Dec. 436, and note; Shepherd v. Burkhalter (1853) 13 Ga. 443, 58 Am. Dec. 523, and note; Davis v. Whitaker (1894) 114 N. C. 279, 19 S. E. 699, 41 Am. St. Rep. 793, and note; Koch v. West (1902) 118 Iowa, 468, 92 N. W. 663, 96 Am. St. Rep. 394. See notes 2 Pom. Equity § 665; 1 Jones on Mortgages, 518, and cases cited. The case of Pringle v. Dunn (1875) 37 Wis. 449, 19 Am. Rep. 772, goes as far in its reasoning to support appellants' contention here, or farther, than any case we have found as to the force of the entry book entry, an index required by statute being involved in that case; but the decision is finally made to turn upon the question of the relation of the mortgage back to the index as to the time when it was recorded. The fact that the mortgage was not entitled to record for lack of witnesses, as well as the index, were held not to give notice, which is in effect our holding by the original opinion, viz., that, when a deed is recorded, that recording relates back to the entry book as to the question of priority in recording, but if the deed is not recorded in a proper record, or is not entitled to be recorded, so as to constitute notice, which is the usual holding, it certainly cannot be the law that recording in a record where deeds are not entitled to be recorded can be of any greater efficacy than the case put, and it is held without deviation in this state that the record of an instrument not entitled to be recorded, as for want of acknowledgment, is not notice for any purpose, at least where not actually seen of record. Therefore much less can the entry book be, and this is true, even though as between the parties the deed is good without acknowledgment, and there is no evidence, or finding, that Isaiah Libbey saw either the entry or record, but it is found that he was a purchaser in good faith without notice. Walter v. Hartwig, 106 Ind. 123, 6 N. E. 5;Westerman v. Foster, 57 Ind. 408;Deming v. State, 23 Ind. 416;Kothe v. Krag, 20 Ind. App. 293, 50 N. E. 594;Brown v. Budd, 2 Ind. 442;Lambert v. Morgan, 110 Md. 1, 72 Atl. 407, 132 Am. St. Rep. 412, 17 Ann. Cas. 439. See note to Middletown v. Newport Hospital, 1 L. R. A. 191, 192.

[5] And the same thing is true as to recording in the wrong record book, where by statute filing for record is equivalent to actual recording, which is in effect our statute. Durrence v. Northern, etc., Bk., 117 Ga. 385, 43 S. E. 726; Sawyer v. Adams, 8 Vt. 172, 30 Am. Dec. 459; Gillig v. Naass, 28 N. Y. 191;New York, etc., Co. v. White, 17 N. Y. 469;Knickerbocker, etc., Co. v. Penn., etc., Co., 65 N. J. Eq. 181, 55 Atl. 231;Parsons v. Lent, 34 N. J. Eq. 69; Fisher v. Tunnard, 25 La, Ann. 179; Bernard v. Benson, 58 Wash. 191, 108 Pac. 439, 137 Am. St. Rep. 1051;People v. Burns, 161 Mich. 169, 125 N. W. 740, 137 Am. St. Rep. 466;Grand Rapids, etc., Bk. v. Ford, 143 Mich. 402, 107 N. W. 76, 114 Am. St. Rep. 668, 8 Ann. Cas. 102;Prouty v. Marshall, 225 Pa. 570, 74 Atl. 550, 25 L. R. A. (N. S.) 1211. Our attention is directed to the cases of Farabee v. McKerrihan, 172 Pa. 234, 33 Atl. 583, 51 Am. St. Rep. 734, and Ivey v. Dawley (1905) 50 Fla. 537, 39 South. 498, 7 Ann. Cas. 354, and note, and Swepson v. Bank (1882) 9 Lea (77 Tenn.) 713. In the first case there is a review of prior cases in that court, but the opinion is grounded on the fact that there was no law in Pennsylvania directing where different kinds of instruments should be recorded, and was an express statute that entry in the indexes of recorded deeds and mortgages “shall be notice.” In the Florida case the opinion is grounded on the fact that prior to June 13, 1892, there was no statute directing where mortgages should be recorded, with little discussion on the subject, but the note to 7 Ann. Cas., supra, points out the distinction we have made. In the Tennessee case the statute provided that the registry which corresponds to our entry shall be notice to all the world from the time it is noted for record. It will be at once seen that these cases cannot apply to a case where there is no provision that the entry or registry for recording shall constitute notice, and where the statute prescribes where certain instruments shall be recorded.

[6] But it is now for the first time urged that, being a deed of trust, the Washington Libbey deed is taken out of the category of conveyances required to be recorded in deed records, and therefore under the rule in Tipton, etc., Co. v. Barnheisel, 92 Ind. 88, it was proper to record it in the miscellaneous record. We should not be required under the rules to notice this claim, but we will do so. In the Barnheisel Case the question arose over an admission of evidence, and the language used with respect to the recording acts is shown by the opinion not to have been necessary to the decision of the point, or the cause.

[7] It is the established rule in this state that the transfer of any interest in real estate should be recorded in the deed records. That where there is no statute requiring recording in a particular record, an instrument may be recorded in a miscellaneous or other record, or, where the index or the entry by statute constitute notice, such record will be sufficient, is...