Urich v. McPherson
| Decision Date | 20 May 1915 |
| Citation | 27 Idaho 319,149 P. 295 |
| Parties | ORLO URICH, Respondent, v. GEORGE F. MCPHERSON et ux., Appellants |
| Court | Idaho Supreme Court |
SALE OF TOWN LOTS-DEED IN ESCROW-LIENS-COVENANTS OF WARRANTY-ESTOPPEL.
1. Where M. executes a deed conveying certain town lots to B and said deed is placed in escrow to be delivered to B. upon the payment of the purchase price as agreed, and thereafter B. has certain improvements placed on said lots, and then sells said lots to U., and U. has full knowledge of said transactions and is advised by M. and others that said improvements have not been paid for and that liens may be filed against said lots, and U. takes the advice of his attorney that the time for filing liens had passed, and purchases said lots from B. and pays to M. the balance due from B. on the purchase price of said lots, and pays to B the balance of the purchase price which he had agreed to pay to B. for said lots, and in order to save the expense of recording two deeds, it is arranged that the escrow deed should be destroyed and that M. should convey said lots direct to U., which he did, held, under the facts that although M. conveyed to U. by grant, bargain and sale deed he did not warrant the title to said lots against liens thereafter filed for the construction of said improvements.
2. Held, under the facts of this case that U. is estopped from claiming that M. warranted the title to said lots as against said liens.
APPEAL from the District Court of the Second Judicial District for the County of Idaho. Hon. Edgar C. Steele, Judge.
Action to recover on an alleged warranty the amount paid to relieve the property involved from mechanics' or laborers' liens. Judgment for plaintiff. Reversed.
Reversed and remanded, with instructions. Costs awarded to the appellants.
H. Taylor and W. N. Scales, for Appellants.
If the theory of the plaintiff is correct that under the facts the warranty in his deed bound him, there were no liens or claims on the lots for which he or McPherson were responsible or for which there could be a foreclosure of the lien. (Steel v. Argentine Min. Co., 4 Idaho 505, 95 Am. St. 144, 42 P. 585.)
The implied covenants in a deed by the use of the word "grant" do not include encumbrances done, made or suffered by the grantor unless he was under personal obligation to pay it. (Polak v. Mattson, 22 Idaho 727, 128 P. 89.)
It is well settled that parol evidence is admissible to show the state of facts existing at the time of the conveyance and that the land was taken subject to the encumbrances of which the purchaser had knowledge, and to show that while a warranty deed was given the maker of the deed should not be held to said warranty when it was understood and agreed between the parties that he was not to be so held. ( Allen v. Lee, 1 Ind. 58, 48 Am. Dec. 352; Hays v. Peck, 107 Ind. 389, 8 N.E. 274; Fitzer v. Fitzer, 29 Ind. 468; Laudman v. Ingram, 49 Mo. 212; Carver v. Louthain, 38 Ind. 530; Watts v. Welman, 2 N.H. 458; Pitman v. Conner, 27 Ind. 337; Maris v. Iles, 3 Ind.App. 579, 30 N.E. 152; Young v. Stampfler, 27 Wash. 350, 67 P. 721.)
W. H. Casady, for Respondent.
The effect of the use of the word "grant" in a conveyance of real property is defined in sec. 3120, Rev. Codes, and the word "encumbrance" is defined in sec. 3121, and establishes beyond question that the deed in question was a warranty deed and warranted against the encumbrance of the liens which the plaintiff had to pay to protect his title to the lots.
This is an appeal from a judgment rendered in favor of the plaintiff for damages on account of an alleged warranty in a deed executed by the defendants to the plaintiff for certain lots in the village of Cottonwood, Idaho county.
The following facts appear from the record:
About the 1st of August, 1908, the defendant, McPherson, entered into a contract with one Beatty whereby he sold to Beatty four town lots for the agreed price of $ 250, to be paid in monthly payments of ten dollars each. A deed was placed in escrow in the German State Bank to be delivered to said Beatty when the full purchase price was paid. Under that agreement Beatty paid fifty dollars. He then sold said lots to the plaintiff for $ 400. After Beatty had purchased said lots and before he had sold them to Urich, he caused to be erected on said lots certain buildings and improvements. The plaintiff was informed of the deal between McPherson and Beatty and knew of the improvements which Beatty had placed on said lots prior to his purchase from Beatty, as he lived just across the street from said lots.
Before completing the deal with Beatty, plaintiff had a talk with McPherson and informed him that he could purchase said lots cheap from Beatty and intended to make the deal. Thereupon McPherson advised plaintiff of the possibility of liens on said lots for the improvements which Beatty had placed thereon. The plaintiff went to Judge Duffey, a practicing attorney, to get his advice in regard to liens, and was informed by said attorney that the time for filing liens for the improvements placed on said land had already passed. The plaintiff also had a conversation with the president of the German State Bank (in which bank said deed was placed in escrow), who also advised him to look out for liens on said property. Hendrickson, the contractor who had placed some of said improvements on said lots, also informed the plaintiff of his claim and the claim of another contractor or laborer against said lots on account of said improvements. The plaintiff thereupon advised Hendrickson to come downtown at the time he was to pay the money to Beatty and he would see that he got his money. Hendrickson appeared at the time and place suggested by the plaintiff, but the plaintiff failed to appear. Plaintiff closed said deal with Beatty and paid him for said lots, or paid the balance of the purchase price to McPherson, amounting to about $ 209, and the balance of the purchase price to Beatty. Thereupon, at the request of Beatty and with the acquiescence of the plaintiff, it was understood between the plaintiff, McPherson and Beatty that as a matter of convenience and to save the recording of the deed from McPherson to Beatty, which had been placed in escrow, the escrow deed should be withdrawn and destroyed and a new deed be made from McPherson to the plaintiff to take the place of said deed in escrow; and it was fully understood and agreed that by said deed from McPherson to the plaintiff Beatty was conveying said lots and improvements to Urich. The purchase by plaintiff was from Beatty and not from McPherson. It clearly appears that McPherson did not intend to warrant or guarantee against any liens or encumbrances on said lots caused by said Beatty. The clear intention was that McPherson was to receive the unpaid balance that Beatty owed him on the lots and the remainder of the purchase price should go to Beatty, and that McPherson should not warrant the title to said lots from the acts of Beatty. The parties to the transaction fully understood the matter as stated.
After the plaintiff had fully investigated the probability of any liens being filed against said property because of the improvements placed thereon by Beatty, and being advised by his own attorney that the time for filing said liens had passed, Urich, the plaintiff, made the deal with Beatty for the purchase of said lots. After the purchase price from Beatty was paid to McPherson, Beatty was entitled to the delivery of said escrow deed and thereunder became the holder of the legal title. By mutual consent said deed was delivered or taken up and the deed referred to was made by McPherson, conveying the land to the plaintiff.
Thereafter liens were filed for labor, supplies and material contracted for by Beatty in the placing of said improvements on said lots, and McPherson was in no manner connected with said transaction. The plaintiff was thereafter compelled to pay the amount of said liens and brought this suit to recover the amount so paid.
But it is contended by respondent that said deed from McPherson to the plaintiff is a warranty deed, warranting the title against said liens and claims and that the terms of said warranty cannot be changed by parol evidence.
Under the facts of this case, we cannot agree with that contention. From the whole record it is clear that McPherson did not intend to warrant the title against said liens. The plaintiff was fully advised of the conditions and facts in regard to said liens, and he took his attorney's advice to the effect that the time for filing said liens had passed and for that reason they could not be made valid liens against said property. The Banker Nuxoll also advised him to be careful about those claims. The contractor himself advised him that he claimed a lien and the plaintiff arranged with him to be present when he paid the purchase price to Beatty, and that he, the contractor, would at that time receive the money due him for the improvements he had placed on said lots. The plaintiff disregarded said arrangement and paid Beatty with the full knowledge of all the facts in regard to the claims against said lots. McPherson was under no obligation to pay said liens; and he did not intend to, nor did he, under the facts, warrant the title against said lien claims.
This court held in Polak v. Mattson, 22 Idaho 727, 128 P 89, that implied covenants in a deed by the use of the word "grant" do not include encumbrances done, made or suffered by the grantor unless he was under personal obligation to pay them. McPherson was under no obligation to pay for said improvements. He had already executed a deed to said lots...
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