55 Mich. 8 | Mich. | 1884
This was a bill to foreclose a mortgage given by the defendants Warren W. and Laura A. Cadwell, who are husband and wife, to complainant, to secure the payment of a money obligation (bond) executed by defendants Warren W. and Marvin S. Cadwell, who are brothers. Mary Cadwell, wife of Marvin S. Cadwell, was brought in as a defendant in possession of a part of the mortgaged premises, and is the only defendant who answered. In brief, her answer claims a homestead in lot one, block seventy-three, Lansing, a part of the mortgaged premises; that she had never parted with her interest therein ; and asks that the bill as to that parcel and as to herself be dismissed.
No proofs were taken, but a stipulation was filed in the cause as follows:
“ It is hereby stipulated and agreed by and between the parties hereto, by their respective solicitors:
First. That the facts as set forth in the bill and answer filed in this cause are true.
Second. That the complainant, at the time the loan was made, had no actual knowledge of the special matter of defense set forth in defendant’s answer.
Third. That the State land-office has never required the signature of the wife to the assignment of school-land certificates, and has never inquired whether or not school lands transfen-ed by such assignments have been used as homesteads, but patents have issued upon the sole assignment of the party holding the certificate of purchase.
The admitted facts show an actual occupancy of the premises in question by Marvin S. and Mary Cadwell and their family for a period of thirteen years previous to the giving of the mortgage to complainant. It is now more than eighteen years that it has been their home. The premises were held under a school-land certificate, part-paid. In 1879, without the knowledge of the wife, the husband, Marvin S. Cadwell, at Lansing, to procure money with which to carry on a lawsuit in Clinton county to which himself and his bro
After this, the defendant Marvin S. Cadwell deserted his wife, went to Chicago, and filed there a bill for divorce against his wife. This was answered by the wife. It was after hearing that her husband was out of the State, that Mrs. Cadwell began making inquiries as to the property, — when interest would become due to the State, etc.; she then first learned of the assignment and mortgage. The parcel claimed as a homestead is one lot, according to the plat of Lansing, worth with the dwelling-house less than fifteen hundred dollars.
■ The circuit judge was of opinion that defendants Mary and Marvin Cadwell had a homestead interest in the property in dispute, and that as to lot 1, block '73, complainant had acquired no lien by her mortgage. Decree was entered accordingly, and complainant appeals.
Since the case of McKee v. Wilcox 11 Mich. 358, it has been the settled law in this State that a homestead may be claimed inland of which a party is in possession under a contract of purchase. There is no reason why the principles of that case should not apply to a contract of purchase from the State,as well as from an individual. Under these contracts with the State, many advantages are secured which do not pertain to ordinary contracts of purchase from individuals. So long as the interest and taxes are paid, the balance of the principal, due on the purchase, is payable at the holder’s option. It may be levied upon and sold under an execution. Kerchevol v. Wood 3 Mich. 509. It may be mortgaged, and the purchaser at the execution or mortgage sale is deemed the assignee of
The controversy in this case turns upon the question whether complainant stands in the position of a bona fide incumbrancer. The admitted facts are that she had no actual knowledge of the special matter of defense set forth in defendant’s answer. At the same time it is admitted that at the time she made the loan defendant Mary Cadwell was in the actual possession and occupancy of the lot in dispute as the homestead of herself and husband. In Woodward v. Clark 15 Mich. 104, it was held that a purchaser from a vendor who had sold the
The law is too well settled to need any extended citations of authorities, that actual jmssession 0f real estate is notice to purchasers or incumbrancers, of the claim of those in possession. 2 Smith’s Lead. Cas. 180, and authorities cited; 1 Jones on Mortg. §§ 255, 591, 592.
The complainant is chargeable with notice of the homestead rights of defendant Mary Cadwell, and cannot be held to be a bona fide purchaser. Where parties other than the vendor are in the actual possession of premises conveyed, his deed or patent affords no information of the rights of those in possession, and a vendee or mortgagee has no right to presume, from the fact that their vendor or mortgager has the legal title, either that there are no parties in possession claiming adversely, or, if in possession, their rights are cut off by sale or mortgage from the holder of such legal title. The complainant’s duty was to inquire of the defendant in possession what her rights were ; and neglecting this duty, she is chargeable with all the information she would have obtained if inquiry had been made. Slie occupies no better position than her mortgager, Warren W. Cadwell, and as between him and Mary Cadwell, in equity the patent was void, because the defendant Mary Cadwell did not join with her husband in assigning the certificate of purchase to him.
Affirmed with costs.
Campbell, J. In the court below the mortgage in suit was held void, as against defendant Mary Cadwell, on the ground that at its date she ,was in possession of lot 1 as a homestead, as wife of Marvin Cadwell, and did not join with him in his transfer of the State land-office [certificate] to Warren Cadwell, to whom the patent was issued.
It appears that complainant lent her money in good faith, on the strength of the State patent, and there is no claim that she had actual notice of any right or claim of Mrs. Cadwell, or actual knowledge of her possession. The only ground of defense is that the possession is notice of her claim, and that the claim was valid.
I do not doubt that as to persons having actual knowledge of a homestead claim, it may exist in lands before patent, subject to the balance due the State. But I do not feel so clear that where husband and wife have no family of children living with them, the wife can insist that her domicile is the family home, when her husband, who is head of the family, sees fit to change it. I do not place my action in this case on that ground, but I think it open to serious question.
In my view the complainant cannot be affected by any supposed equities which were actually unknown to her, and which originated before the patent issued. The law has been uniformly laid down in this State, as it has been by the courts of the United States, that the patent conveys the legal title, and that if there are any equitable claims against the land they can only be worked out by holding the persons claiming interests under the patent as trustees.
I have found no authority for holding that any one is bound to look behind the patent to see whether it was issued to the right person, or on proper papers or assignments. If any one gets out a patent, with knowledge cf the adverse rights of others, it is plain enough that he should take sub
All of the cases which have been decided by us heretofore, holding persons having the patent title as trustees for those who have been defrauded, have involved actual notice of the rights set up. Such was the case in Boyce v. Danz 29 Mich. 146, decided at the same term with Damouth v. Klock. Davis v. Filer 40 Mich. 310 was also such a case. And in both Damouth v. Klock and Austin v. Dean, trusts were supported against all but the bona fide purchasers or incumbrancers.
It is very certain that Mrs. Cadwell’s claim is no better than that of the heirs in the other cases. Nothing had been done in either of those cases which bound any one; while here the land-officers had before them an assignment from the purchaser which was good on its face, and was genuine, however it may have lacked the concurrence of the wife.
The distinction between patents and other conveyances is a
The doctrine of constructive notice has been carried so far as to work fraud nearly as often as it prevents it. The fact of possession can only be known to those who see the property they purchase, and the policy of our laws, which make registry presumably correct, and the almost universal practice of purchasing from the registry, is not very consistent with the extreme application of the other rule. To make possession constructive notice to a person who is ignorant of it, concerning claims which can only be known by inquiry, is adding construction on construction, and makes it unsafe for anyone at a distance to deal in lands at all. I am not prepared to say that we have not gone far enough to do this, where the possessory rights arise under a legal title. But to hold that notice of such claims can be held by mere construction, when the legal title originates subsequently, is, I think, unwarranted by either principle or recognized authority.
I think the court below erred in holding Mrs. Cadwell’s claim superior to complainant’s, and that it should not have been maintained, and should to that extent be reversed.