Case ID: sd_40/html/0423-01.html
Source: Caselaw Access Project
Author: {"author": "POLLEY, J. WHITING, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

HULSETHER, Respondent, v. PETERS et al., Appellants.
    (167 N. W. 497.)
    (File No. 4289.
    Opinion filed May 13, 1918.)
    1. Mortgages — Recording of — Non-resident Mortgagee, Filing by in County Where Land Believed to Be — Determinative Court Decision, Negligence, as Affected By.
    Where land which many supposed to lie in S-tanley county, hut which the Supreme 'Court decided, in 1912, to be in Lyman county, was mortgaged to plaintiff, a resident of Wisconsin, who recorded the mortgage in Stanley county, held, that, it appearing that he did not become aware of said decision for a considerable time after its rendition, bis failure to file tbe mortgage in Lyman county for nearly two years thereafter did not constitute negligence.
    2. Vendor and Purchaser — Grantee’s Knowledge of Incumbrance— Paramountsy of Mortgage.
    Persons having knowledge of existence of a mortgage at time of taking title to the land, take subject thereto.
    3. Conveyancing — Deed, Grantee in Blank, Inserted Without Written Authority, Validity — Statute.
    Civ. Code, 'Sec. 938, provides that an estate in realty, other than an estate at will or for a term not exceeding one year, can be transferred only -by operation of law or by an instrument in writing subscribed by bim disposing of same or by his agent thereunto authorized by writing. Held, that a deed executed with name of grantee in blank, which was subseqeuntly inserted by one having no written authority, and delivered to such nominal grantee, is void.
    
      4. Same — Grantee in Blank — Void Deed, Who May Attack? Others Than Grantor — Statute;
    Where a deed was void for want of a grantee when executed, under Civ. Code, Sec. 938, requiring conveyances to he subscribed by tbe iparty disposing of the property or by his agent thereto authorized by writing, not merely tbe grantor, but any person whose rights would he affected by it, may take advantage of its invalidity.
    5. Principal and Agent — Knowledge of Void: Deed — Agent’s Knowledge, Chargeable to Principal.
    A grantee, whose name was subsequently to its execution inserted therein as grantee, the deed being void therefor, is chargeable with his agent’s knowledge of such invalidity.
    Wiqting, P. J., dissenting.
    Appeal fom Circuit Court, Lyman Oounity. Hon. William Williamson, Judge.
    Action by H. A. Hul'sether, against John W. Peter© and others, to /foreclose a realty mortgage. Prom ia judgment for plaintiff ,and from an order denying a new trial, defendants appeal.
    Affirmed.
    
      Bartine & Bartine, and1 W. V. Steutemlle,. for Appellants.
    
      House & Dyer, for Respondent.
    (3) To point three of the opinion, Appellants oited: Orfsby v. Johnson, 24 S. D. 494, 124 S. W. 436; Guthrie v. Field, L. R. A. (U. S.) 326 (Ran.) -and oases in note; McClearey v. Wakefield, 2 L. R. A. 529.
    Respondent cited': Lund1 v. Thackery, 18, S-. D., 113/ Upton v. Archer, 4 Cal, 85.
    (5) To point five of the opinion, Appellant cited: V'oi. 7, Ruling Case Law, 659; 2 Corpus Juris:, Secs, 519, 520, 521, page 837; See. 723, M'acham on Agency, page 553.
   POLLEY, J.

This action wias Commenced to foreclose a mortgage on a quarter section of land in Lymian county. ' Findings of fact and conclusions of law were in favtor of plaintiff, and decree of. foreclosure entered -accordingly. Defendants assign Hie insufficiency of the evidence toi support the findings- of fact, and appeal to this court.

After a careful examination of the evidence, we are satisfied that tbe findings are not against .the weight of 'the evidence, and they -should not be disturbed.

The facts that are material to a determination of the questions involved, are as . follows: Defendant Peters wa-s the owner o|f the mortgaged land), afe patentee from the United States government. On the 18th day of August, 1909, he executed and dlelivered to plaintiff his promisory note for $700, and, as security for the .payment of said sum of money, executed and delivered to plaintiff a mortgage on said land. This! mortgage described the. land a® being hr Stanley county, and) the mortgage w!as immediately recorded in that county. The reason why the mortgage was recorded in Stanley county is because tihe mortgaged preanises are a part of a strip of land about two miles in width, lying along' the boundary line between Lyman anldl Stanley counties, 'and which', prior to. October, 1912, was believed' -by many to be fin Stanley county. But, by a decision of this Court, handed* down on the 1st day of October, 1912 (Collins v. Lyman County, 30 S. D. 104, 137 N. W. 600), it was determined thar said) strip of land i® within and is a part of Lyman County. Plaintiff <w>a® a resident icif Wisconsin, and does not appear to- have become aware of said' decision for a considerable length of time after it had been handed clown., and did .not file his mortgage for record in Lyman county until the 22d day of May, 1914. Because of the reasons set out in the opinion of ¡the court in Collins-v. Lyman County, supra, negligence oamniot be imputed to- plaintiff for not having- sooner filed his mortgage for record in Lyman county.

On the 30th day of July, 1913, defendant Peters (the mortgagor) executed a quit-claim deed, purporting to convey tih-e title to the mortgaged premises, but which -deed contained no mention of plaintiff’s- mortgage. This deed, as- -origin-ally prepared, contained the name of defendant Williams, as grantee, but his name was erased, and defendant Chew’s name inserted as grantee. Whether this change Was made before or after the d'ee-d was executed by Peters does not appear from the evidence. Chew, on the s-ame day, executed a .deed- in which- ntoi mention of plaintiff’s mortgage is, miadle, and' which contained full covenants of warranty, purporting to convey the title te» said land to tihe defendant Williams. On tíre same -day Chew forwarded tihe patent, the deed from Peters to Chew, amid! tihe deed! from Chew to William®, to the register of deeds olf Lyman! county, and all of said instruments were received and filed for record in the office of Ithe said register of ¡deeds on the.3.1st ’day of July,-1913. On tlie i6bh clay ¡of August, 1913, defendant Williams and wife acknowledged the execution of a warranty -deed, bearing date August 8, 1913, purporting to ’convey áre mortgaged premises, tout which did not contain die name of a grantee. This instrument Williams left w-i'th. Chew, with permission to-Grew to linisert his ow-n name a® grantee or that of any one else to wlnoim. he might wish -to' -sell die property. This -dleed remained ini the possession of Chew until -about the 6th day of May, .'1914, when he -and owe J. E. Leas, who wias acting' as agent for defendant Lumld, negotiated an exchange ©If the said mortgaged premises for ia -pi-ace of land1 -owned1 by Lunid in the state ©f Minnesota. Lumld’is land wad deeded to Chew, and the dleed that hiadi been executed1 in ’blank by Williams- and! wife was, by Chew, turned1 'over to sai-d Leals. Thereafter one StoMesterinserted!- Lund’s name therein a® grantee, and' the deed- was delivered to Lund. This deed wlasi reco-r-deid in Lyman county on tíre 8th day of June, 19x4, a period ©If 17 dia-ys after plaintiff’s mortgage was recorded in that county. The trial court found las a fact that, at the time Chew and' Williams took their title to the land' they todito had actual knowledge of plaintiff’s mortgage. Having had knowledge of the existence of plaintiff’s1 mortgage -at the time they took their title, they, o-f course, took such titíe subject to plaintiff® rights under tíre mortgage.

- It is the contention of the respondent that the deed under which -defendant Lund ’is -claiming title, having been executed in bilamk, is void for any purpose, under the rule announced -by this court in Lund v. Thackery, 18 S. D. 113, 99 N. W. 856, and again affirmed in Ballou v. Carter, 30 S. D. 11, 337 N. W. 603. Lund v. Thackery, supra, is practically on all fours with this case. The grantor executed' and! acknowledged a purported dleed, ’leaving the name (oif the grantee blank. Said deed wa’s then forwlarded to -an agent, with direction® to -insert the name of the grantee and, upon tpaymmt of the purchase price, to deliver .such deed to isu’cfa -grantee. The party to whom the deed was for-waddled! sent it to, a third party, with- directions similar to those given by -tíre grantor. This party inserted the name of a grantee and delivered the deed to, s-udlx grantee. This court held' that,_ in view of the provisions of section 938, Civil Code, such deed iwa's void. It is true the deed! ini that case contained neither Ale consideration for the conveyance nior the name of tine grantee; 'but that is molt material. If one es'sembial' element of the deed may be omitted-, so may others. In Lund v. Thackery, supra, thfei court, quoting from' Chase v. Palmer, 29 Ill. 306, said:

“lit is said! Aere must be in every grant a grantor, a grantee, and ¡a thing -granted1, and1 a deed! wanting' in either essential is absolutely void.”

-It is 'contenldfed1 by appellants that it its only Aa grantor who cam take advantage of an infirmity such as existed in. Ae deed1 involved in this case. But in Ai-s contention they are i-n errfolr. The name of the grantee -in- Ae deed1 from- Will-dams to Lund, not -having been inserted Aereio by a person- having written- authority so to- 'do, said deed) was void under Ae provisions of section 938, Civil Code. Lund v. Thackery, supra; Ballou v. Carter, supra; Chase v. Palmer, supra. And, such deed being void!, any person may take advantage of its infirmities whose rights wloiu-ld be affected' by it. Neither is defendant Lund in position to icla-i-m -any -rights as an- -innocent purAaser. WheAer be bad personal' knowledge oif sutoh- 'defect in- Ae deed when he parted with Ae consideration Aerefdr is immaterial. H-is agent Leas haldl -such knowledge, anld) Lund -is chargeable wiA Ae knowledge possessed by his agent.

Plaintiff’s -rights under h-is- mortgage -are n-ot .'dependent upon nor affected1 by the registration -llaw. Therefore it is not necessary to consider Ae condition of Ae records in Lyman county.

.T-he judgment appealed! from is -affirmed.

WHITING, P. J.

(dissenting). I am- 'at a loss- to understand Ae exact view-s -of Ae majority of Ai© court. Do Aey intend to hold Aat, because “negligence cann’ot be imputed to plaintiff,” Ae recording olf bis mortgage was’ timely and his rights were preserved under Ae recording act? On the other band1, do Aey intend to hold Aat Lund’s; rights under 'h-is -deed, if such 'deed1 had been valid, would1 have been prior to and Would have cut -out plaintiff's -rights under his mortgage, -but Aat Lund acquired nothing under 'his deed!? In Ae one case all Aat is siai-d as to! Ae validity of Lund's deed is obiter; in Ae -oAer -case -any reference to Ae recording aict i-s obiter.

Thé trial court held that Lunid- acted in .absolute good faith. That being true, though plaintiff’® failure to record his mortgage in Lyman county iwas through lan .honest mistake as to the county in which the land was situate, it seams clear that Lurid1’® rights would have been superior, provided he acquired anything through his deed1; in other words, if Lund's name had been- properly inserted in his deed1 prior to its delivery, Lund’s rights would have been; under the recording act, superior to plaintiff’s.. . ■

Is it a fact that Lund did not acquire Wiliam’s title? I think not. Plaintiff and the majority of this count rely Upon the decision in Lund v. Thackery, but Ml- Ita reoagndze the difference between, the facts in- that case and those in this one. In Lund v. Thackery, the grantor attempted to recall the deed ‘before it was ever filled, out or delivered; he repudiated the acts oif Hunt and the /banks-; -and he did not receive or accept the consideration paid. The instrument he ihaldl executed remained1 invalid, and therefore never conveyed any title. In the cas-e before us, ¡tibe consideration; Lu-nd’s deed ltd Chew, wa-s delivered to and received by Chew, who- clearly had authority from Williams to receive same, 'Chew being in fact the owner of the equitable title to this land. By receiving such' consideration, the act of filling in itlh-e grantee’s name wa-s ratified, and neither Williams or Chew could1 ever question -¡the validity of sludli deed oir Lund’s title thereunder. Lund having received, in -good faith, prior to. tlie recording of plaintiff’s mortgage, the full title to- -this land, -exactly 'as he -would have received -it if hi® name had -been inserted in the deed by Williams, the recording act furnished him full protection.