Spencer v. Steward

• Decision Date: 04 August 1923
• Citation: 218 P. 369,37 Idaho 610
• Parties: F. C. SPENCER, Appellant, v. P. A. STEWARD and MATTIE STEWARD, His Wife, RALPH PIERCE and NELLIE PIERCE, His Wife, and SOL CALDWELL, Respondents
• Court: Idaho Supreme Court

218 P. 369

37 Idaho 610

F. C. SPENCER, Appellant, v. P. A. STEWARD and MATTIE STEWARD, His Wife, RALPH PIERCE and NELLIE PIERCE, His Wife, and SOL CALDWELL, Respondents

Supreme Court of Idaho

August 4, 1923

UNRECORDED DEED WITHOUT POSSESSION-SUBSEQUENT RECORDED MORTGAGE-DEGREE OF INQUIRY INCUMBENT ON MORTGAGEE-NOTICE OF PRIOR CONVEYANCE-CONFLICTING TITLES.

1. One investigating the title to land with reference to its availability as mortgage security, upon finding the record title clear in the prospective mortgagor, and that the party actually in possession of the premises disclaims any interest in the title and represents that he holds such possession only on behalf of the record title holder, and having no notice either actual or contructive of any other claims affecting the title, is not bound to further pursue his inquiry.

2. Where one holds as grantee an unrecorded deed to land, but without possession, and subsequent to the date of such deed the grantor gives a mortgage upon the same land to a third party who receives no notice either actual or constructive of the prior deed and records his mortgage, the title of such mortgagee is superior to that of the grantee under the prior unrecorded deed.

APPEAL from the District Court of the Tenth Judicial District, for Nez Perce County. Hon. Wallace N. Scales, Judge.

Action to quiet title. Judgment for respondents. Affirmed.

Judgment of the district court, affirmed. Costs awarded to respondent Caldwell. Petition for rehearing denied.

Fred E Butler and Edward C. Butler, for Appellant.

Possession of land is actual notice of the right of the possessor and of all facts connected therewith which an inquiry would have disclosed. (13 L. R. A., N. S., 73; 27 R. C. L. 495; Austin v. Southern Bldg. & Loan Assn., 122 Ga. 439 50 S.E. 382; Dickey v. Lyon, 19 Iowa 547; Walker v. Neill, 117 Ga. 733, 45 S.E. 393; Edwards v Thompson, 71 N.C. 177; Security Loan & Trust Co. v. Willamette etc. Co., 99 Cal. 636, 34 P. 321.)

Possession of a tenant is actual notice of his landlord's title. (Pomeroy, Eq. Jur., par. 616, 625; 13 L. R. A., N. S., 100; 27 R. C. L., par. 490; Randall v. Lingwall, 43 Ore. 383, 73 P. 1; McBee v. O'Connell, 19 N.M. 565, 145 P. 123; Wood v. Price, 79 N.J. Eq. 620, Ann. Cas. 1913A, 1210, 81 A. 983, 38 L. R. A., N. S., 772.)

Possession of a tenant under a recorded lease is notice of any other rights or equities he may have. (Union Investment Co. v. Abell, 148 Minn. 229, 181 N.W. 355; Randall v. Lingwall, supra.)

Inquiry from a grantor is not sufficient to bind a grantee in possession. (Canfield v. Hard, 58 Vt. 217, 2 A. 136.)

McNamee & Clements, for Respondents.

A change of title without visible change of possession cannot operate as either actual or constructive notice of the change of title. (Fitzgerald v. Williamson, 85 Ala. 585, 5 So. 309; Vazie v. Parker, 23 Me. 170; Troy v. Walter Bros., 87 Ala. 233, 6 So. 54; Stockton v. National Bank, 45 Fla. 590, 34 So. 897; Rogers v. Jones, 8 N.H. 264; Paulk v. King, 86 Ala. 332, 6 So. 612; Bynum v. Gold, 106 Ala. 427, 17 So. 667; Griffin v. Hall, 111 Ala. 601, 20 So. 685; Smith v. Yule, 31 Cal. 180, 89 Am. Dec. 167; Smith v. Miller, 63 Tex. 72.)

The presumption that possession of land is constructive notice is only prima facie and rebuttable. (Emeric v. Alvarado, 90 Cal. 444, 27 P. 356; Hillman v. Levey, 55 Cal. 117; Scheerer v. Cuddy, 85 Cal. 270; 24 P. 713; Penrose v. Cooper, 86 Kan. 597, 121 P. 1103; McBee v. O'Connell, 19 N.M. 565, 145 P. 123; Alliance Trust Co. v. O'Brien, 32 Ore. 333, 51 P. 640; Penrose v. Cooper, 88 Kan. 210, 128 P. 362.)

STEELE, District Judge. McCarthy, Dunn, William A. Lee and Wm. E. Lee, JJ., concur.

OPINION

STEELE, District Judge.

--The plaintiff, Spencer, brings this action against P. A. Steward and Mattie Steward, his wife, Ralph Pierce and Mattie Pierce, his wife, and Sol Caldwell, for the purpose of quieting title to 390 acres of land in Nez Perce county. All the defendants defaulted except the defendant Caldwell, who filed his answer, claiming an interest in said land by virtue of a mortgage for $ 10,000, which he claimed was superior to the claim and title of the plaintiff. The evidence was heard, and the decree of the court was in favor of the priority of the mortgage of Caldwell, from which the plaintiff Spencer appeals.

There is but little if any dispute with reference to the essential facts in this case. On and prior to June 4, 1920, the defendant, P. A. Steward, was the record owner of and in possession of the 390 acres of land in question, subject to a mortgage of $ 16,000 to one Breier.

On the said fourth day of June, Steward, with his wife, Mattie B. Steward, entered into an escrow contract, whereby he agreed to convey the said premises to the defendant Pierce. Pierce immediately entered into possession thereof under such contract of purchase. The contract was acknowledged, so as to entitle it to be recorded, but was not placed of record.

Thereafter, and on or about January 18, 1921, Steward, the record owner of said land, borrowed the sum of $ 3,000 from the appellant, Spencer, giving his promissory note, signed by himself and wife, and as security for the payment of said loan, Steward and wife made an assignment of their rights to receive said money from said escrow agreement until the said sum of $ 3,000 had been paid to Spencer. Thereafter, and on November 7, 1921, Pierce failed to make a payment of $ 3,000, as provided in the escrow agreement and entered into a contract releasing Steward from the contract of purchase, which had theretofore been entered into between himself and Steward, and rescinded the same; and, for the purpose of further securing Spencer for the repayment of the $ 3,000, Steward made and executed a warranty deed in favor of Spencer and made an escrow agreement, whereby Steward and wife agreed that said deed should be delivered to Spencer on January 1, 1922, if said money was not paid prior thereto. On the same date, to wit, November 1, 1921, Spencer entered into an agreement with Pierce, whereby he agreed to convey the said premises to Pierce, in the event Steward failed to make the payment on January 1, 1922. Pierce remained in possession of the land, but there was no act done upon the premises by Pierce, or with reference thereto which would, in any way, tend to show any change of title from Steward.

On December 28, 1921, Steward and wife made, executed and delivered to defendant, Sol Caldwell, a mortgage covering the whole of said premises, to secure the payment of a promissory note in the sum of $ 7,000.

All of these contracts were properly acknowledged, so as to entitle them to be recorded, but none were recorded except the mortgage of the defendant, Caldwell.

The evidence also shows, without contradiction that at the time negotiations were commenced between Caldwell and Steward with reference to the note for $ 7,000 given to Caldwell, the latter knew of the contract of purchase which Steward and wife had entered into with Pierce, that Pierce had gone into possession under said contract, and that at the very beginning of the negotiations Caldwell inquired of Steward as to what right Pierce had in the said land, and was informed by Steward that Pierce had no interest in the land, and that the contract of purchase between Steward and Pierce had been rescinded. Caldwell then demanded of Steward that he produce the contract rescinding the contract of purchase,...