Thames v. Asia's Janitorial Serv., Inc.

• Decision Date: 30 June 1992
• Docket Number: No. L-91-180,L-91-180
• Citation: Thames v. Asia's Janitorial Serv., Inc., 611 N.E.2d 948, 81 Ohio App.3d 579 (Ohio App. 1992)
• Parties: THAMES, a.k.a. Thomas, et al., Appellants, v. ASIA'S JANITORIAL SERVICE, INC. et al., Appellees. *
• Court: Ohio Court of Appeals

Page 579

81 Ohio App.3d 579

611 N.E.2d 948

THAMES, a.k.a. Thomas, et al., Appellants, v. ASIA'S JANITORIAL SERVICE, INC. et al., Appellees. ^*

No. L-91-180.

Court of Appeals of Ohio, Sixth District, Lucas County.

Decided June 30, 1992.

Alan J. Lehenbauer, Swanton, for appellants.

David L. Honold, Joseph J. Pilkington and C. Allen McConnell, Toledo, for appellees.

ABOOD, Judge.

This is an appeal from a judgment of the Lucas County Court of Common Pleas which granted defendants-appellees' motion to dismiss, following the completion of plaintiffs-appellants' evidence in an action to quiet title tried by the court without a jury.

Appellants set forth two assignments of error:

"I. The trial court abused its discretion and committed prejudicial error in granting appellees' motion at the close of appellants' case, and said decision was against the manifest weight of the evidence.

"II. The trial court erred in granting appellees' motion as the words 'subject to' contained in a certificate of transfer conveyed an estate less than fee simple to appellees and as such the transfer of the property to appellees continued to be subject to the land contract."

This appeal arises out of a dispute over the rights of the parties to three parcels of real property comprising approximately ten acres of land in Swanton Township, Lucas County, Ohio ("the property").

The undisputed chronology of facts which led to the filing of this action to quiet title are as follows.

(1) On December 16, 1963, Sim and Mary Harris, husband and wife, acquired the property.

(2) On February 14, 1969, Sim and Mary Harris entered into a land contract with Velma Thames, Mary's sister, and Booker Thames, Velma's husband, for the purchase of the property. The land contract was signed and acknowledged in the presence of only one witness and was not recorded.

(3) On August 4, 1970, Mary Harris died testate.

(4) On August 17, 1971, a certificate for transfer of Mary's interest in the property to her widowed husband, Sim, was received and recorded by the Lucas County Recorder. The certificate contained a legal description of Mary's interest in the property, followed by the words: "SUBJECT TO LAND CONTRACT to Booker and Velma Thomas."

(5) On March 6, 1978, a general warranty deed, "for valuable consideration paid," was properly executed in which Sim Harris, widowed and unmarried, granted title to the property to Booker Thames, widowed and unmarried. This deed was not recorded.

(6) On May 15, 1982, Sim Harris died.

(7) On November 5, 1985, a certificate of transfer of Sim Harris' entire interest in the property to Georgia Smallwood was received and recorded by the Lucas County Recorder. This certificate contained no reference to the land contract.

(8) On April 11, 1988, Georgia Smallwood conveyed the property, "for valuable consideration paid," by general warranty deed to Asia's Janitorial Services, Inc. This deed contained no reference to the land contract and was received and recorded by the Lucas County Recorder on May 16, 1988.

On June 21, 1990, appellants, the heirs of Velma and Booker Thames, a.k.a. Velma and Booker Thomas, filed their complaint in this action to quiet title brought against appellees, Asia's Janitorial Service, Inc. ("Asia's"), Asia J. Peterson and Georgia Smallwood. On August 10, 1990, appellees filed their answer and a motion to add Northwest Ohio Title Agency, Inc. ("Northwest") and Safeco Title Insurance Co. ("Safeco") as third-party defendants. On August 23, 1990, the trial court ordered that Northwest and Safeco be joined as third-party defendants instanter and, on August 29, 1990, appellees filed their cross-claim for indemnity and contribution against them. On November 7, 1990, Northwest and Safeco filed their responses to the complaint and cross-claim.

On April 25, 1991, the case proceeded to trial to the court. Victor Crouch, appellants' expert, testified as follows:

"Q. * * * is Mr. Peterson * * * on notice as to an unrecorded land contract interest in your opinion?

"A. In my opinion, the reference to an unrecorded land contract in a certificate of transfer would put a person on notice for further inquiry. * * *

"Q. Now, if hypothetically he doesn't have that information after having ordered title papers to reflect that, is he on notice?

"A. No, not as far as the record goes."

Jessie Barksdale testified that she was Velma Thames's sister and Mary Harris' sister, and that in April 1987 she bought property adjacent to the property in dispute. It appears from her testimony, when viewed in conjunction with the title work that is contained in the record, that Velma and Booker lived at the property commencing when Sim Harris entered into a land contract to buy it in 1958 up until they vacated it in 1982. She testified further that she had known Peterson for over twenty years; that she told him that Velma and Booker's daughter, Marie Sims, had paid the property off; that when Peterson " * * * got interested (in the property), I told him, I said, A.J., I say, you better be careful, and he knowed that"; and that Peterson did not indicate to her at that time that he already owned the property. She also testified that "Georgia Smallwood supposed to be the so-called daughter of Sim Harris"; that she telephoned Smallwood in Pennsylvania when she discovered that the property was transferred to Smallwood after Booker died; and that, at that time, Smallwood " * * * thought my sister Velma and Booker Thames still owned the property." On cross-examination, she stated that she does not know whether Peterson had already purchased the property when she spoke with him.

Peterson testified that he is the president of Asia's, that he never met Smallwood, that he did not look at the property before he bought it, that he did not know before he bought it that it was vacant, that he had no discussions about the property with the Thameses or Barksdale prior to purchasing it, that he had not seen any document reciting that the property was subject to a land contract, and that he did not know the nature of the Thameses' relationship with the property. He testified further, however, as follows:

"Q Now, did you know Marie Sims?

"A Yes, I did.

"Q And who is Marie Sims?

"A That's Velma and Booker's daughter.

"Q And didn't they once live on the property you purchased?

"A Yes.

" * * *

"Q And you visited her at the property?

" * * *

"A * * * I stopped in there periodically. I used to go out hunting out in their vicinity. I might stop in, have a coffee, something of this nature.

"Q And who was Kevin Sims?

"A Kevin Sims is Marie's son.

"Q Is he any relationship to you?

"A He's my son.

"Q Your son. Did he reside at that property also?

"A Yes, he did.

"Q Do you know what years he resided there?

"A Well, I would say from '61 up until he moved out, and I don't know just when he moved out.

"Q Do you know the approximate number of years?

"A Probably 15, somewhere around in there.

"Q So it was '61 through '76 approximately?

"A I would say that's pretty much so, correct.

"Q And Booker and Velma Thames resided there this whole time also?

"A Yes.

" * * *

"Q So you knew * * * at some point in time Booker and Velma had owned the property?

"A I never knew they owned the property. I was told, I'd heard from discussions that they were buying the property. I did not know how.

"Q But you knew they had some ownership interest in the property potentially?

"A I was--I heard this in conversation.

"Q Okay. That was prior to your purchasing the property that you had that awareness?

"A Yes." (Emphasis added.)

Selby Thames testified that he is the son of Velma and Booker Thames and the nephew of Sim and Mary Harris, that he resided at the property with his parents " * * * in '56 maybe '57", that his sister Marie made the final payment for his parents on the land contract, that he has known Peterson for twenty-five years, that Peterson " * * * was out there (at the property) quite a bit when he was courting my sister," that Peterson visited the property on a regular basis for approximately fifteen years, and that Velma and Booker lived there for approximately twenty-five years. He also testified that he never had any conversations with Peterson regarding the property and the ownership of it, but that he believes that Peterson had prior knowledge that his parents were purchasing the property " * * * because him and my father was real close and they did a lot of talking."

At the close of appellants' case-in-chief, appellees moved for a "judgment of acquittal." The trial court found that Peterson did not have constructive or actual knowledge of the " * * * previous interests in any land contract," that " * * * the plaintiff has not met the burden of proof with respect to this case * * * " and granted judgment in favor of appellees. Appellees then dismissed their cross-claim. On May 9, 1991, the trial court filed its judgment entry which granted what it referred to as appellees' "motion for direct [sic] verdict." It is from this judgment that appellants' bring this appeal.

I. CONSTRUCTIVE NOTICE/ACTUAL KNOWLEDGE

In support of their first assignment of error, appellants argue that the evidence establishes that Peterson had constructive and/or actual knowledge " * * * of an outstanding interest at the time he purchased the property." Constructive notice, they reason, exists statutorily by virtue of the recital of the "subject to" language contained in the recorded deed of August 17, 1971. They also argue that the unrefuted evidence is that Smallwood knew of the Thameses' ownership prior to her transfer to Peterson and, therefore, the contract is invalid in equity between Smallwood and the other appellees even if Peterson is found to be a bona fide purchaser. Appellants do not contend that Smallwood is not subject to the rule set forth in R.C. 5301.25(A) because she is not a purchaser for value.

Appellees respond that when the...