Steele v. Sioux Valley Bank

• Decision Date: 05 February 1890
• Citation: 79 Iowa 339,44 N.W. 564
• Parties: STEELE ET AL. v. SIOUX VALLEY BANK.
• Court: Iowa Supreme Court

79 Iowa 339

44 N.W. 564

STEELE ET AL.

v.SIOUX VALLEY BANK.

Supreme Court of Iowa.

Feb. 5, 1890.

Appeal from district court, Woodbury county; GEORGE W. WAKEFIELD, Judge.

The issues involve a question of the priority of the liens of the respective parties; the necessary facts as to the liens of each being as follows: One B. F. Lauber, being the owner of 240 acres of land, was indebted to the plaintiffs in the sum of $4,700, and, for the purpose of securing the debt, Lauber made to the plaintiffs a bond for a deed of the premises in question on the 8th day of June, 1887. This bond was not recorded. Lauber, being also indebted to the defendant in the sum of $5,000, made to it a quitclaim deed of the same premises, June 14, 1887, to secure the debt. The defendant, when it received the deed, had no actual knowledge of the bond held by the plaintiffs. The bond of Lauber to the plaintiffs was placed on record June 25, 1887, prior to which time Lauber had absconded, and was insolvent. These facts are sufficient to present the main question in the case. The district court gave judgment for the plaintiffs, from which the defendant appeals.Hubbard, Spalding & Taylor, for appellant.

E. C. Herrick and Marsh & Henderson, for appellees.

GRANGER, J.

1. It will be observed that the question is fairly presented as to the effect of a quitclaim deed given for a consideration, without actual notice of, and after the execution and delivery of, an unrecorded bond for a deed for value. Counsel for appellant commence their argument with this statement: “The case here is one exactly parallel to the case of Pettingill v. Devin, 35 Iowa, 353;” and we think the statement true. Appellees do not, as we understand, controvert it, but urge that the Pettingill Case has been repeatedly overruled, and is no longer the law of the state. The arguments in the case are mainly devoted to the question of how the case of Pettingill v. Devin is affected by subsequent rulings. It may be said that the case is nowhere in terms overruled. As to the necessary or legal effect of other decisions upon it, we must inquire.

A reference to the Pettingill Case will show how nearly the facts of the two cases are alike as to the particular question involved. Coffin held an unrecorded bond, of which the defendant Devin had no actual notice. Devin afterwards obtained a quitclaim deed, for which he paid a consideration. It was held that the quitclaim deed took precedence of the unrecorded bond. The holding was based largely on section 2220 of the Revision of 1860, as follows: “No instrument affecting real estate is of any validity against subsequent purchasers, for a valuable consideration, without notice, unless recorded in the office of the recorder of deeds of the county in which the land lies, as hereinafter provided.” Section 1941 of the Code is identical in its language. This court has repeatedly held that the holder of a quitclaim deed takes it charged with knowledge of prior equities; that he is not an innocent holder. To a proper disposition of the question before us, it is important that we consider, to some extent, at least, the particular facts under which these holdings were announced; and we think it may be done in a general way, without referring to each particular case. Appellant, recognizing the fact that, including the Pettingill Case, two rules have been announced as to the effect of a quitclaim deed, makes this statement: “The cases decided by this court, in which the broad doctrine is announced that a purchaser taking a quitclaim takes subject to equities, are all of them based upon one of two thoughts,--either all the right, title, and interest of the person executing the quitclaim have been previously conveyed, so that he has no right, title, and interest to convey, or some equity not at all dependent upon a written instrument, or the record thereof, has arisen against the land.” We do not see how the fact that the grantor in the quitclaim deed had, before its execution, disposed of all his interest in the land could make or justify a different rule; and we find no intimation in any of the cases that that fact is made the basis for a distinction. Under such a rule, if A., being the owner of land, should dispose of it to B., and, without actual or constructive notice, should quitclaim to C., the latter would, by operation of law, be charged with notice of B.'s interest. Now, if instead of conveying the entire estate to B., A. should convey an undivided one-half, and a quitclaim should be made to C., with the facts as before stated as to notice, C. could take the land discharged of B.'s equities. Before such a distinction is maintained, it should have the support of authority or strong reason, and we discover neither. The latter part of appellant's statement, that the cases are based on “some equity not at all dependent upon a written instrument, or the record thereof,” has support in some of the cases; and we think, if the distinction is to be maintained, it must be on that theory. In the case of Springer v. Bartle, 46 Iowa, 690, the court, having under consideration the protection afforded by a quitclaim deed as against the fraudulent title of the grantor, used this language: “Ide quitclaimed to the defendant all his right, title, and interest in and to the land in controversy. It was held in Watson v. Phelps, heretofore cited, that ‘one holding under such a deed is not to be regarded as a bona fide purchaser without notice of equities held by others.’ In an argument evidencing much ability, we are asked to overrule this decision; and counsel in their zeal claim that this court has held otherwise in Pettingill v. Devin, 35 Iowa, 353. This is a grave mistake. No such point was presented in that case. The point decided was that, under the recording act, a person holding under a quitclaim deed acquired a prior right to one claiming under a bond for a deed, of which he did not have notice. In that case the party executing the quitclaim deed owned the legal title; but in the case at bar, Ide's title was tainted with fraud, against which the quitclaim deed did not protect the plaintiff. Besides which, the statute expressly provides that such a purchaser as Devin is protected against a prior unrecorded conveyance. Code, § 1941. The doctrine announced in Watson v. Phelps was approved in Smith v. Dunton, 42 Iowa, 48; Light v. West, Id. 138; and Besore v. Dosh, 43 Iowa, 211. These decisions meet our approbation, and we are unwilling to take, at this late day, the time and space requisite to vindicate their correctness.” In that case it will be seen that the equity as to which the quitclaim deed was held subject was not one that would have been manifest if all instruments of conveyance had been recorded. The cases of Watson v. Phelps, Smith v. Dunton, and Besore v. Dosh, are all ruled on facts of like legal import. The record of conveyances would not have given notice of the equities involved. The following cases sustain the samelegal proposition: Winkler v. Miller, 54 Iowa, 476, 6 N. W. Rep. 698;Ballou v. Lucas, 59 Iowa, 24, 12 N. W. Rep. 745;Kaiser v. Waggoner, 59 Iowa, 41, 12 N. W. Rep. 754;Laraway v. Larue, 63 Iowa, 412, 19 N. W. Rep. 242;Butler v. Barkley, 67 Iowa, 491, 25 N. W. Rep. 747;Bradley v. Cole, 67 Iowa, 653, 25 N. W. Rep. 849. There are, however, some cases where the facts are different, and where the equities urged as against a quitclaim deed would have been apparent from the recording of the instruments under which claims were made, but where they were not recorded. In the case of Wightman v. Spofford, 56 Iowa, 145, 8 N. W. Rep. 680, it must be taken for granted that the contracts and instruments there referred to were not recorded, as, if they were of record, the questions discussed could not have well arisen. The only equities in the case, as it was ruled, arose out of contracts and deeds of conveyance which might have been of record. There, Casaday, who owned the land and had given a contract of sale under which plaintiff indirectly claimed the title, afterwards gave to Robertson a quitclaim deed, by virtue of which Robertson claimed the title. The court, in disposing of Robertson's interest, used these words: “As he bases his title upon a quitclaim deed, he cannot be regarded as a purchaser without notice of plaintiff's equities.” The facts of the case, so far as pertains to their legal...