Sheorn v. Robinson

22 S.C. 32 | S.C. | 1884

The opinion of the court was delivered by

Mr. Chief Justice Simpson.

Witte Bros., of Charleston, held a mortgage on one A. L. Monroe, of Kershaw County, executed in 1877, and covering the land in dispute. This mortgage was foreclosed by proper proceedings in 1880 and the land ordered to be sold. At this sale, made in February, 1881, the appellant, Sheorn, became the purchaser, and finding the defendants in possession of sixty-six acres of the land mortgaged, brought the action below for possession and damages for the detention. The defendants interposed an equitable defence growing out of the following facts: That in 1870, some years before the execution of the mortgage by Monroe to Witte Bros., the defendant Robinson bought from the said Monroe the sixty-six acres in controversy, a portion of which he sold to his co-defendant Truesdel, and .although no conveyance was delivered by Monroe, yet that he immediately went into possession under this purchase, and with his co-defendant has continued in possession ever since, having in the meantime paid nearly all, if not the entire, purchase money.

The fact of possession by the defendants, as stated, from 1870 is conceded, and it is also admitted that Sheorn, appellant, had full knowledge of this possession at the time he bought at the foreclosure sale. Witte Bros., however, had no actual knowledge of the sale by Monroe to Robinson, or of the possession of Robinson, at the time they took their mortgage under the foreclosure of which'Sheorn purchased. Under this state of facts, the Circuit judge held that although Witte Bros, had no actual knowledge of the possession of Robinson, yet the fact of this . possession, like the record of a deed, operated as notice, and that therefore the appellant, standing in the shoes of Witte Bros., was not a subsequent purchaser without notice. The appeal questions this ruling, and this is the only question in the case.

The ruling of the Circuit judge in its full meaning is that possession of .land by a vendee under a contract of purchase operates as notice to a subsequent purchaser or encumbrancer, although such possession as matter of fact is unknown to such subsequent purchaser at the time of said purchase. The possession in such case stands in the place of a record of the deed where the vendee has purchased with a conveyance regularly executed and delivered, and as the record of a prior deed is notice, whether it is actually known or not, so possession, whether known or not, is also sufficient notice.

.In Jones on Mortgages, section 600, the doctrine on this subject is laid down in general terms as follows: “Possession by a vendee under a contract of purchase, whether it be personal or by a tenant, is constructive notice of his equitable rights as purchaser, and any one taking a mortgage under such circumstances from his vendor takes subject to his rights.” It is not distinctly stated here whether the knowledge of the fact of possession must be brought home to the subsequent encumbrancer or purchaser, yet it is held that the possession is the foundation of the notice, and therefore, like recording, must operate as constructive notice, whether.actually known or not.

The ground upon which the recording of a deed operates as notice, whether the fact of record be known or not, is that it is always in the power of the subsequent purchaser, by searching the records, to ascertain whether or not there has been a previous conveyance; and if he fails to make the necessary examination, it is his own fault, and his rights must be determined by the facts of the record within his reach on the subject. So, too, it is an easy matter for a purchaser of land to ascertain at the time of his purchase'whether his vendor or some one else is in possession, and if he fails to do so, he should 'take the consequences. Mr. Pomeroy, in treating of constructive notice, says: “The constructive notice thus described, like that arising from a record or registration, does not seem to depend upon any actual knowledge or information of the possession communicated to or had by the subsequent purchaser, since he is hold to be charged with notice even though he be a resident of another state.’,’ Pom. Eq. Jur., § 615.

And in our case of Massey v. McIlwaine, McCardell and King, 2 Hill Ch., 427, where the land of King had been sold under executions against him in favor of creditors who had no knowledge of the possession of Massey, who was holding under a contract of purchase, the court, in discussing the effect of the possession, said: “He (Massey) was also in possession, and that, according to some of the English cases, was not only a notice to creditors, but sufficient to repel the claim of a subsequent purchaser. In Daniels v. Davidson (16 Ves., 254), the Lord Chancellor (Eldon) observes that there was considerable authority for the opinion which he held, that where there was a tenant in possession under a lease or agreement, a person purchasing the estate was bound to inquire on what terms he was in possession, and was bound by the terms of the lease or agreement, and refers to the case of Douglas v. Whitrong, in which Lord Kenyon held that possession was sufficient notice, and to the case of Taylor v. Stibbert, 2 Ves., Jr., 440, in which it was expressly ruled; and if possession alone be notice to a purchaser, it is necessarily so to creditors.”

In the case of Massey v. McIlwaine and others, supra, while it was conceded that Mcllwaine and McCardell, the purchasers, had full notice of the transactions between Massey and King before they pui’chased at the sheriff’s sale, yet it was not pretended that the creditors of King had any information whatever as to the sale by King to Massey, or of Massey’s possession;' and it was also conceded that McCardell and Mcllwaine had the right to stand in the shoes of the creditors who had no notice. "With these facts, however, the court held that the claim of Massey was superior to that of the purchaser, basing its judgment partly, at least on the ground that the possession of Massey operated as notice.

We have examined the English cases of Daniels v. Davidson and Taylor v. Stibbert, above referred to. In the latter, it seems that the possession of the adverse claimant was known to the purchaser, and the court said that there was no difficulty in holding that whoever purchases an estate from the owner, knowing it to be in possession of tenants, is bound to inquire into the estates of these tenants. In the former case, it was said: ‘‘That to maintain the plea of purchase for valuable consideration without notice, the defendant must .aver that the vendor was, or pretended to be, seized, and that he was in possession, which would be satisfied by the possession of his tenant.” This seems to imply that if he bought with some one else in possession, other than his vendor, his failure to know this fact would be inexcusable, and he could not aver that said vendor was in possession, a necessary averment in the plea of bona fide purchase without notice.

There are two kinds of notice, actual and constructive. Either is sufficient to prevent the plea of bona fide purchase without notice. It is not necessary to discuss actual notice. That is well understood, and such notice is not claimed here. The case turns on constructive notice. An illustration of constructive notice is found in the recording of deeds. As we have said, recording amounts to notice, whether known or unknown, because the means of information are at hand. We think this principle should apply where at the time of the sale the vendor is out of the possession and a third party is in. It is the business of one who buys land, or attempts to secure a lien on land, to know the surroundings. In justice to his own interests, and certainly in justice to the interests of a party who has contracted to buy in advance of his purchase, and who is notoriously in possession, claiming it and using it as his own, he should examine into and ascertain the facts. One in possession under an equitable title has nothing that he can record ; and possession, open and unconcealed, is the only mode by which he can give notice to the ivorld of his rights; and when this notice is given in the only way in which it could be given, he should be protected. We think, upon authority and principle, the ruling of the Circuit judge was correct.

It is the judgment of this court that the judgment of the Circuit Court be affirmed.

Mr. Justice McGowan concurred. Mr. Justice McIver.

It seems to me that the terms of the deed from Moore to Monroe, one of the links in the chain of plaintiff’s title, were sufficient to put the purchaser upon inquiry, which, if followed up, would have disclosed the facts that the sixty-six acres had been sold to Robinson ; that he was put into possession, and that a deed for the same, rvith plat attached, had been signed, though not delivered. This, according to well-settled principles, would have been sufficient notice of Robinson’s equity. I therefore concur in the result reached by the majority of the court.

I am not prepared, however, to assent "to the doctrine that mere possession, unknown by the purchaser, or rather by the creditor under whom he claims, is sufficient notice. This would, in effect, annul the recording law,, for the logical result would be that one in possession under an unrecorded deed would prevail over another holding a deed duly recorded ; and this is conceded to be the necessary consequence by the distinguished author upon whose authority the conclusion reached by the majority of the court mainly rests. See Pom. Eq. Jur., § 615. Besides, it would be mounting a presumption upon another presumption : first, a presumption that the purchaser knew of the possession; second, that he knew such facts as a knowledge of the possession would lead him to, by a proper prosecution of the inquiry.

Again, the very idea of the efficacy of constructive notice, in defeating a better legal title, is based upon fraud; that one should not he permitted to buy property which he has good reason to know some one else has a just claim to. Now, unless he knows the facts which would lead to such a conclusion, he cannot be said to be guilty of any fraud. \ When a purchaser examines the records of the proper office, which the statute law informs him. is the proper source to go to for information, and finds that his vendor has a clear legal title, he has a right to presume that everything is right, as the law presumes that he who has the legal title is constructively in possession; and unless some fact, as, for example, the fact that some one, other than his vendor, is in actual possession, is brought to his knowledge, which would naturally lead him to suppose that there was some outstanding equitable claim, he has a right to stand upon such legal title. ■

It is true that the doctrine announced in the opinion of the majority of the court has the support of authority, cited in the opinion, of great weight. But, while recognizing the weight of such authority, I do not think it should be allowed to control, when the effect, as it seems to me, would be to annul, or at least defeat, the operation of a portion of the statute law of this state. I do not think that the case of Massey v. McIlwaine, 2 Hill Ch., 421, decides the point now before us; for although it did appear, in that case, that the creditors had no notice of the equity set up by Massey, yet it did not appear whether they did or did not have knowledge of the fact of Massey’s possession, and therefore it does not seem to me that the question which Ave are iioav called upon to determine Avas considered in that case.

In the absence of any authoritative decision in this state, I am umvilling to adopt a conclusion, liOAvever well supported by authority elseAvhere, the effect of Avhich Avould be to defeat the operation of a part of the statute Hav of this state.

Judgment affirmed.