Vanderhoof v. Gravel Products, Inc.

Decision Date16 April 1987
Docket NumberNo. 11169,11169
Citation404 N.W.2d 485
PartiesLeona VANDERHOOF, John G. Weiss, Arnold T. Weiss, Elmer Weiss, Laura Chapman, and Reinhard Weiss, Plaintiffs, Appellees, and Cross-Appellees, v. GRAVEL PRODUCTS, INC., a corporation, Defendant, Third-Party Plaintiff, Appellant, and Cross-Appellee, and Edgar Weiss, Defendant, Third-Party Plaintiff, Appellee, and Cross-Appellee, v. Allegra I. BOECKEL, Third-Party Defendant, and Leroy L. Boeckel and Allegra Boeckel, Third-Party Defendants, Appellees, and Cross-Appellants. Civ.
CourtNorth Dakota Supreme Court

James E. Nostdahl, of Pringle & Herigstad, Minot, for plaintiffs, appellees, and cross-appellees.

Larry Quast, of Hagen, Quast & Alexander, Beulah, for defendant, third-party plaintiff, appellee, and cross-appellee.

Joseph A. Vogel, of Vogel Law Firm, Mandan, for third-party defendants, appellees, and cross-appellants.

Lyle Witham, of Lamont Law Office, Minot, for defendant, third-party plaintiff, appellant, and cross-appellee.

VANDE WALLE, Justice.

Leroy and Allegra Boeckel [the Boeckels] appeal from the notice of entry of a district court judgment which awards damages to Leona Vanderhoof, John Weiss, Arnold Weiss, Elmer Weiss, Laura Chapman, Reinhard Weiss, and Edgar Weiss [the Weiss heirs] for trespass to and conversion of gravel. Gravel Products, Inc., appeals from the entry of a district court judgment requiring it to indemnify the Boeckels for their share of the damages awarded. We affirm in part, reverse in part, and remand for further proceedings in accordance with this opinion.

On June 12, 1979, the Weiss heirs executed an agreement creating a trust to facilitate sale of land which had passed to them through their parents' estates. The heirs deeded the property to Leona Vanderhoof as trustee. The trust agreement and deed executed by the Weiss heirs expressly reserved all minerals, including gravel.

Vanderhoof, assisted by legal counsel, 1 listed the land for sale in area newspapers. Leroy Boeckel submitted a written bid on the property and participated in subsequent oral bidding on the property at the trustee's attorney's office on September 12, 1979. Boeckel's high bid was accepted and he paid 7 percent of the purchase price on that date. It was agreed that the balance would be due within 25 days, at which time a deed would be delivered.

The trustee executed a deed to Allegra Boeckel (Leroy's wife) on September 12, 1979, upon condition that it be held by the trustee's attorney until the balance of the purchase price was paid. The deed conveyed the property to Allegra Boeckel but contained the following provision:

"Subject, however, to all outstanding easements, rights-of-way, and mineral severances of record."

The trust agreement and the deed from the Weiss heirs to the trustee were recorded on September 13, 1979, the day after the sale at the attorney's office. The deed from the trustee to Allegra Boeckel was delivered to Leroy Boeckel on October 8, 1979, and this deed was recorded on May 13, 1980.

In September 1983 the Boeckels entered into a gravel lease with Gravel Products, Inc., covering the property obtained from the trust. Gravel Products mined gravel on the premises between October 4 and October 21, 1983. Gravel Products continued to remove gravel which had been stockpiled on the property and continued to pay royalties to the Boeckels after being advised by the trustee that the gravel had been reserved to the Weiss heirs.

The Weiss heirs, except Edgar Weiss, sued Gravel Products for trespass and conversion of the gravel. Edgar was named as a defendant pursuant to Rule 19, N.D.R.Civ.P. Edgar answered the complaint seeking to quiet title to his share of the gravel and sued Gravel Products for conversion. Edgar also sued Allegra Boeckel as a third-party defendant, alleging conversion of Edgar's share of the gravel. Gravel Products answered the complaint with a general denial and also sued Leroy and Allegra Boeckel as third-party defendants, seeking indemnity. The Boeckels answered the third-party complaints, alleging that they had acquired all mineral interests, including gravel, by the deed of September 12. The Boeckels sought to quiet title to all minerals, including gravel, and counterclaimed against the plaintiffs for indemnity for any money judgment against the Boeckels by Gravel Products for breach of the covenant of quiet possession. The Boeckels also counterclaimed against Gravel Products, seeking indemnity for any money judgment against them in favor of the plaintiffs and Edgar. In an amended answer and counterclaim the Boeckels sought rescission of their purchase of the land.

Various motions for summary judgment were filed. The court granted summary judgment quieting title to the minerals, including gravel, in the Weiss heirs, and held that Gravel Products was liable to the plaintiffs and Edgar for trespass and conversion of the gravel and that Allegra Boeckel was liable to the plaintiffs and Edgar for conversion of the gravel. The court further ordered that Gravel Products indemnify Allegra Boeckel for any damages for which she was liable. 2

The case proceeded to trial on the issues of the amount of damages and whether the conversion and trespass were willful or innocent. The jury returned a verdict finding that Gravel Products had willfully trespassed and converted the gravel, and that Allegra Boeckel had willfully converted the gravel. Damages were assessed in the amount of $69,205.95. The court entered judgment on the jury verdict, and Gravel Products and the Boeckels have appealed.

Before considering the issues on their merits we must, because of the notices of appeal filed in this case, determine whether or not we have jurisdiction of this appeal. The right of appeal in this State is purely statutory and is a jurisdictional matter which we will consider sua sponte. Midwest Federal Savings Bank v. Symington, 393 N.W.2d 753 (N.D.1986). Gravel Products has attempted to appeal from "the entry of Summary Judgment," and the Boeckels have attempted to appeal from "Notice of Entry of Summary Judgments ... and Notice of Entry of Judgment on Jury Verdict."

We have previously held that an attempted appeal from an order for judgment or a memorandum decision will be treated as an appeal from a subsequently entered consistent judgment, if one exists. Dunseith Sand & Gravel Co. v. Albrecht, 379 N.W.2d 803 (N.D.1986) (order for judgment); Federal Savings and Loan Insurance Corp. v. Albrecht, 379 N.W.2d 266 (N.D.1985) (memorandum decision). Similarly, we believe that the interests of justice require that we treat an attempted appeal from the entry of judgment or the notice of entry of judgment as a proper appeal from the previously entered judgment. We therefore treat the appeals as being from the judgments and proceed to dispose of the case on the merits.

The following issues are dispositive of this appeal:

I. Did the Boeckels have constructive notice of the terms of the June 12 deed and trust agreement?

II. Are the Boeckels entitled to indemnity from Gravel Products?

I

The Boeckels sought to have title to the gravel quieted in themselves, alleging that the Weiss heirs should be estopped from asserting title to the gravel. The Boeckels alternatively sought rescission of the contract. In effect, these issues were disposed of by the trial court's determination that the Boeckels had constructive notice of the prior reservation of gravel by the Weiss heirs and therefore took subject to the reservation. The Boeckels allege on appeal that the trial court erred in holding that they had constructive notice of the prior reservation of gravel.

An unrecorded instrument is valid as between the parties and those who have notice thereof. Section 47-19-46, N.D.C.C. Notice may be either actual or constructive. Section 1-01-22, N.D.C.C. Constructive notice is notice imputed by law to a person not having actual notice. Section 1-01-24, N.D.C.C. Section 1-01-25, N.D.C.C., provides:

"1-01-25. What deemed constructive notice.-- Every person who has actual notice of circumstances sufficient to put a prudent man upon inquiry as to a particular fact and who omits to make such inquiry with reasonable diligence is deemed to have constructive notice of the fact itself."

The issue presented in this case is whether the Boeckels had knowledge of facts sufficient to put a prudent person upon inquiry as to the true state of the trustee's title.

The Boeckels admit that they learned that the land was for sale through an advertisement in a local newspaper. The newspaper ad specifically stated that "no mineral interests will pass with the land," and that the land would be sold "subject to any leases, encumbrances, covenants, reservations, restrictions, easements, conditions and rights appearing of record." In spite of those clear indications that there might be prior reservations of interests in the property, the Boeckels did not conduct any inquiry into the state of the trustee's title but rather assumed that they were receiving the gravel underlying the property.

The fact that the seller was a trustee should also have indicated to the Boeckels the need to inquire about the state of the trustee's title. In a case applying Section 1-01-25, N.D.C.C., to a purchaser of land from a trust, we stated that "[t]he presence of the word 'Trustee' after [the seller's] signature on the earnest money agreement certainly suggests possibilities a prospective purchaser should investigate." Gerhardt Construction Co. v. Wachter Real Estate Trust, 306 N.W.2d 223, 226 (N.D.1981).

The Boeckels are deemed to have constructive notice of the records in the register of deeds' office. Burlington Northern, Inc. v. Hall, 322 N.W.2d 233 (N.D.1982); see Section 47-19-19, N.D.C.C. A review of the records in the register of deeds' office on or just prior to September 12, 1979, would have shown that the individual Weiss heirs were the record owners and that the trustee had...

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