222 Mich. 128 | Mich. | 1923
In October, 1898, the plaintiffs, Alexander T. Fischer and Mary Fischer, his wife, became the owners of a farm consisting of about 329 acres on the Gratiot road in the county of Wayne. In May, 1907, they mortgaged it to the Northwestern Mutual Life Insurance Company to secure a loan of $17,000. Afterwards, Mr. Charles E. Greening obtained a lien on it for a debt of $17,000. There were still other liens against it when the insurance company foreclosed its mortgage and Greening bid it in for $41,980. The defendants Anthony C. W. Lauhoff and Anna Lauhoff, his wife, advanced $25,000 to Mr. Fischer to assist him in redeeming it. A further loan of $16,000 was obtained from a savings bank in Mt. Clemens secured by a mortgage on the farm, exclusive of 20 acres which had previously been mortgaged to a Mrs. Brown. With the money secured from the Lauhoffs and the bank, and with other money provided by Mr. Fischer himself, the plaintiffs were able to pay to Mr. Greening the sum of $42,873.86, and a conveyance of the farm was made by him to Mr. and Mrs. Lauhoff on the 25th day of February, 1910. Previous to this time the Fischers and the Lauhoffs had had a long course of dealings in which Fischer had become indebted to them in a large amount for loans. On the 16th of November, 1909, they had a settlement, in which it was de
On the 31st day of December, 1919, Mr. and Mrs.. Lauhoff sold the farm to the Woodward & Watson Realty. Company by warranty deed purporting to convey the entire interest. This deed was recorded: January 9, 1920. The incumbrance on the farm at that time' consisted of a mortgage of $55,000. The Woodward & Watson Realty Company took the farm subject to this mortgage and were to pay Mr. and Mrs. Lauhoff $100,000 in certain securities and subject to certain conditions. The securities were delivered to a Mr. Maurer to be held in trust. He still held the securities at the time of the trial, except $8,000 which had been agreed to be paid to him as a. commission. At the time of the making and delivery of the deed by the Lauhoffs, an agreement was executed between Mr. Lauhoff and Mr. Higgins on behalf of the realty company whereby Lauhoff agreed to secure a three-year extension of the mortgage. It further provided that in default of the extension,, $52,000 of the bonds should be used to procure another loan to take care of the mortgage, and that $50,000' of the bonds should be deposited with Mr. Maurer until the renewal was accepted.
The deed of a half interest in the farm from the Lauhoffs to the Fischers made on the 4th day of March, 1910, had not been put on record and was not
The claim of the defendants Anthony Lauhoff and Anna Lauhoff is stated by the circuit judge as follows:
“Defendants Lauhoff deny that the deed of March 4, 1910, to plaintiffs of a one-half interest in the Butler farm is a valid deed; they admit their signatures to said instrument but claim they have never acknowledged it before a notary public; they claim that this deed is fraudulent and must have been signed :by them before any description was written in the «deed.”
These defendants also claim that plaintiff Alexander T. Fischer acted as their agent in handling this farm and other property for them, and that as such he has come into possession of large sums of money belonging to them for which he has made no accounting, and they ask that an accounting be ordered by the court.
The defendant Woodward & Watson Realty Company claims that it was a purchaser in good faith, that it had no notice of plaintiffs’ rights in the property; that they had no rights; that the deed under which they claim title to an undivided half interest is invalid and inoperative, and constitutes a cloud upon its title and asks that the court remove it.
Upon the hearing the circuit judge found that the deed of March 4, 1910, was a good and valid conveyance and vested in the plaintiffs an undivided one-half interest in the farm; that the deed from Lauhoffs to the Woodward & Watson Realty Company was a cloud upon plaintiffs’ title; that Woodward & Watson Realty Company was not a bona fide purchaser, but had notice of plaintiffs’ rights; and that an accounting should be had between the plaintiffs and the de
We think the circuit judge was correct in his conclusion that the deed of March 4, 1910, is a good and valid deed of conveyance, and that it vested in the plaintiffs an estate in fee simple to an undivided one-half interest in the land in question. The history of the dealings between the parties both before and after the conveyance, as well as the written evidence, amply supports this conclusion.
The important question involved is whether the Woodward & Watson Realty Company was a boma, fide purchaser. The plaintiffs claim that their possession of the property at the time of the sale was notice of their interests sufficient to put the purchaser on inquiry.
“Open, notorious and exclusive possession of real estate, under an apparent claim of ownership, is notice to those who subsequently deal with the title, of whatever interest the one in possession has in the fee.” Wade on Notice (2d. Ed.), § 273.
Plaintiffs were not maintaining this sort of possession at the time of the sale. The character of their possession is correctly stated in the opinion of the circuit judge as follows:
“Prior to the time of the purchase and sometime during December, 1919, Mr. Higgins and Mr. Jacobs, agents for defendant Woodward & Watson Realty Company, visited the property to inspect it with a view to purchase; they found the land covered with snow; no one lived in the place and no animals of any kind were there; there was no barn on the premises ; the windows of one of the buildings on the farm were boarded up and the blinds were closed on the windows of the other building. There were some advertising signs of merchants along the Gratiot road; there were one or more ‘for sale’ signs, one followed by ‘phone Market 1230, Detroit;’ there were no tracks in the snow indicating there was anyone on or about*134 the farm; there was nothing on or about the premises giving notice to Messrs. Higgins- anil Jacobs of plaintiffs’ interest in the property.”
From this evidence it is clear that plaintiffs’ possession was not such as to constitute notice to the buyer of their interest in the property.
It is also claimed by. the plaintiffs that the Woodward & Watson Realty Company was not a bom fide purchaser because the records in the register of deeds’ office show four mortgages covering the land in question, in which the plaintiffs have joined as mortgagors with Anthony Lauhoff and Anna Lauhoff, and that the presence of these mortgages on the records was notice to the company of the plaintiffs’ title. After the Lauhoffs had acquired title to the land by deed from the plaintiffs, the following mortgages were given in which the plaintiffs joined as mortgagors. One for $20,000, given on March 12, 1912, and recorded March 13, 1912, to-the Ullrich Savings Bank. Another for $16,000, given February 8, 1910, and recorded February 25, 1910, and a third was for $32,000, given March 11, 1915, and recorded March 15, 1915, the fourth was for $55,000, given December 28, 1917, and recorded December 29, 1917. At the time of the purchase by the Woodward & Watson Realty Company, all of these mortgages had been paid and discharged except the fourth. Of this mortgage the defendant had actual knowledge. The abstract which was examined by its attorney showed that the plaintiffs formerly owned the land and had deeded it to the Lauhoffs on May 10, 1909. That thereafter they joined in these mortgages.
Were these mortgages and the plaintiffs’ former ownership of the title sufficient to put the purchaser on inquiry as to the interest of the mortgagors in the premises? A similar question was indirectly before this court in Peters v. Cartier, 80 Mich. 124 (20 Am.
“The rule has always been that the grantee or mortgagee must search for conveyances and mortgages made by any one who has held the title.” Pyles v. Brown, 189 Pa. St. 164 (42 Atl. 11, 69 Am. St. Rep. 794).
“Any conveyance which under these laws is entitled to be recorded, should be held to be constructive notice to all persons of the interest conveyed by any person in the chain of title from the government to the last purchaser.” Edwards v. McKernan, 55 Mich. 520.
Before the Woodward & Watson Realty Company parted with the consideration and received a deed of the premises in question, it knew that there was a recorded mortgage for $55,000 covering the property; that the plaintiffs were mortgagors in this mortgage and that they were in the chain of title. The facts were sufficient to put a prudent man upon inquiry as
Accounting. The defendants Anthony C. W. Lauhoff and Anna Lauhoff in their pleadings ask for an accounting from plaintiff Alexander T. Fischer of all moneys received by him in his various transactions with them. On March 4th and 5, 1910, a settlement was had between the parties, and any indebtedness from Fischer was discharged in consideration of an undivided one-half interest in the farm. The accounting should be confined to all transactions between them subsequent to the- date of that settlement. In this respect, the decree will be modified. In all other'respects it is affirmed. Plaintiffs will have costs.