Case Name: Charles H. Burke v. Adam Scharf
Court: North Dakota Supreme Court
Jurisdiction: North Dakota
Decision Date: 1909-11-19
Citations: 19 N.D. 227
Docket Number: 
Parties: Charles H. Burke v. Adam Scharf.
Judges: Ellsworth and Spalding, JJ., concur.
Reporter: North Dakota Reports
Volume: 19
Pages: 227–249

Head Matter:
Charles H. Burke v. Adam Scharf.
Opinion filed November 19, 1909.
Rehearing denied January 5, 1910.
Champerty and Maintenance — Law in Force in This State.
1. The common-law doctrine making void, as against a person in possession, a deed of land adversely held as against the grantor, where the grantor has not been in possession of the land or received the rents thereof for a period of' at least one year, remains in force in this state. (Galbraith v. Payne, 12 N. D. 161, 96 N. W 258, followed.)
Champerty and Maintenance — Deed by Person out of Possession.
2. Section 8733, Rev. Codes 1905, prescribes that it shall be a misdemeanor to convey a pretended title by a person out of possession not receiving the rents of the premises for one year. Deeds executed in violation of that section are void as to the persons in possession, and as to them the title is in the grantor, notwithstanding such deed.
Quieting Title — Adverse Claims — Right to Possession Adjudicated.
3. Under chapter 5, page 9, Laws 1961, an action to determine adverse claims and to quiet title may be brought by one in possession or by one out of possession, and the right of possession may be determined in such action, and a restitution of the possession may be adjudged in the decree.
Vendor and Purchaser — Vendee’s Possession is that .sf Vendor.
4. Under contracts for the purchase of real estate where possession is given to the vendee by the vendor, such possession is that of the vendor, while the contract remains in force and until it is complied with or repudiated, and such possession is not adverse to the vendor.
Vendor and Purchaser — Purchase of Outstanding Titles — Estoppel.
5. While the contract remains in force, and the vendee remains in possession .thereunder, he is estopped from buying an outstanding title, and thereby repudiate the vendor’s contract and at the same time retain the possession secured by him. by virtue of the contract.
Vendor and Purchaser — Champerty and Maintenance — Purchase of Outstanding Title.
6. Where an action is brought by one out of possession against the vendor and vendee in such contract, and the plaintiff in that action has legal title to the land and conveys such legal title to the vendee, and the action is afterwards dismissed this does not constitute a constructive eviction of the vendee, entitling him to retain possession -under the title thus purchased against the- vendor on the contract, as such deed to him is void and champertous as against the vendor in possession.
Champerty and Maintenance — Purchase of Outstanding Title — Conveyance to Grantee in Possession.
7. When the holder of the legal title to real estate who is out of possession conveys such title to a third person who is not in possession of said real estate, and at the same time said holder of the legal title- conveys to one who is in the legal possession of said premises’ through a vendee holding under a contract for .the purchase of the land, and the -deed to the person not in possession is fir-st delivered, said first deed is void on account of the adverse possession of the land as against the grantor, and the second deed, after its 'delivery, becomes' effective, and conveys .the legal title to t-he .premises.
Appeal from District Court, Ramsey county; Cowan, J.
Action by Charles H. Burke against Adam Scharf to determine adverse claims to real property, and to quiet title. Judgment for plaintiff, and defendant appeals.
Affirmed.
• Anderson & Traynor and Guy C. H. Corliss, for appellant.
Burke, Middaugh & Cuthbert, for respondent.

Opinion:
Morgan, C. J.
The complaint of' the plaintiff states the following facts: On the 26th day of April, 1901, the defendant and one Brown entered into a contract in writing, whereby the defendant- purchased from said Brown 160 acres of land in Ramsey county, -N. D., for the agreed price of $1,600, payable by delivering to said Brown one-half of the crops grown upon said lapd each year. The defendant has paid upon said contract the sum of $516.88, in two payments, the last payment having been made in January, 1903, and no payments have been made after that date, although the defendant has raised crops upon said land during other years, but has not turned-.over the proceeds thereof; that said Brown has sold and transferred, by a quitclaim deed, all his right, title and interest in the land and in the contract, to plaintiff herein; that on the 3d day of January, 1905, the plaintiff served a notice upon the defendant wherein his defaults in making payments upon said contract were recited, and he was required by said notice to comply with the terms of the contract within thirty days from the date of service,of said notice upon him; that the said notice was personally served upon said defendant, and on the 19th day of September, 1905, the plaintiff caused to be-served upon said defendant a further notice in. writing wherein and whereby- he was notified that the- .contract entered into by him and said Brown, which had been duly assigned by said Brown to the plaintiff, was canceled, terminated, and erided, and the defendant was further required to relinquish possession of said premises. In said notice, the note which said defendant had given to said Brown for the purchase price of said land, dated April 26, 1901, for the sum of $1,600, was offered to be returned-to the defendant; that the defendant refused to -áccept- said promissory-note, and the plaintiff thereafter caused the same to be deposited in the Ramsey County National Bank of Devils Lake, with instructions to said bank to deliver it to., said defendant without conditions upon his demand therefor.
The complaint also contains the following.,allegations: "That, by reason of the premises, defendant's right to .said premises and the possession thereof have ended, and the plaintiff is the owner in fee simple and entitled to the immediate possession of said premises and the whole thereof, and on information and belief that the said defendant claims certain estates or interests in, or lien, or incumbrances upon said premises adverse to the plaintiff." The prayer for relief is in the following language: "Wherefore, plaintiff prays judgment that it be adjudged ,and decreed that- the said defendants be required to set forth all their - adverse claims to the property above described, and that the validity, superiority, and priority thereof be determined; (2) that the same be adjudged null and void, and that they be decreed to have no estate or interest in, or lien, or incumbrances upon said property; (3) that this title be quieted as to such claim, and that defendants be forever debarred and enjoined from further asserting same; (4) that he recover possession of the premises described (if possession be desired) ; (5) that he have such other general relief as may be just, together with costs and disbursements."
The defendant appeared and answered, setting forth the following facts: After admitting the making of the contract, and that crops were grown on said land during the years 1903 and 1904, and that no payments were made upon said contract except those set forth in the complaint, and that the defendant did not accept the return of the promissory note, send that the notices set forth in the complaint were duly served upo'q. the defendant, the answer alleges that all defaults were waived by the .plaintiff by reason of his delay in forfeiting said contract. The answer further contains a denial that the plaintiff or said Brown is, or ever was, the owner of said premises or in possession thereof. The answer further alleges that the defendant is now the owner in fee simple of said land, by virtue of a conveyance thereof to him from one Verone Deutz, who was the owner thereof on the 19th day of December, 1903, on which day she conveyed the same to this defendant; that said Verone Deutz was the absolute owner of said premises by virtue of having title thereto, through regular conveyances in regular chain from Howard, the original owner and patentee of said land. The answer demands the following relief: "Wherefore, the defendant asks that he be decreed to be the owner in fee simple of the above described land; that the plaintiff be decreed to have no interest in said property; that the title to said property be quieted in said defendant; that the defendant have possession of the promissory note, for his costs and disbursements herein, and for such other and further relief as the court deems equitable."
The complaint sets forth a cause of áction to determine adverse claims. The facts show that the plaintiff claims to be the absolute owner of this land, through a sheriff's deed under a foreclosure of the Howard mortgage, and alleges cancellation and forfeiture of the contract between Brown and the defendant. The complaint is drawn under chapter 5, p. 9, laws 1901, prescribing when an action to quiet title and determine adverse claims may be brought by one in possession, or by one out of possession. This was intended, and does serve the same purpose as the action of ejectment under the old practice. Under this act, title to land may be determined and possession of land decreed to the party having the title thereto, after proper proceedings. In other words, the title to land and restitution of the possession may be decreed in an equitable action brought to determine adverse claims and to quiet title under said chapter.
The defendant answers by setting forth absolute ownership in himself, and asks for affirmative relief; that the title be quieted in him by virtue of such ownership under the Deutz deed. The district court made findings of fact and conclusions of law in favor of the plaintiff and against the defendant, and ordered judgment in favor of plaintiff quieting the- title in him, and ordered that the plaintiff have possession of said premises. The judgment or decree did not adjudge that the plaintiff have possession of the premises. The defendant has appealed from the judgment entered pursuant to such findings of fact and conclusions of law, and demands a review of all the evidence under the provisions of section 7229, Revised Codes 1905.
The following facts are conceded: Both parties claim title through Howard as their source of title, and he was the patentee of the land from the United States government. Plaintiff claims through a sheriff's deed under foreclosure of a mortgage given by said Howard. This foreclosure is conceded to have been invalid. It is not disputed that Brown was in possession of the premises under the sheriff's deed, or that he placed the defendant, Scharf, in possession of said land under the executory contract for the purchase of said land, set forth in the plaintiff's complaint. It is also now conceded that Scharf has never been out of such possession under said contract since April 26, 1901, when said contract was entered into. No person has ever been in actual possession of said land except the plaintiff, or Brown, or the defendant, since the year 1886, when Howard left said premises. On June 1, 1901, one, Joseph Blass, who continued to be the owner of the fee to this land on account of said invalid foreclosure, conveyed the same to one Walters, for a nominal' consideration of $5.50, and, on the same day, said Blass conveyed the same to said Brown for a consideration of $5.50. The Walters deed was delivered first, although both deeds were mailed to the Respective grantees at the same time, but the Brown deed was sent, to- a bank at Devils Lake with instructions to deliver to him when-said consideration was paid, which Caused the delay in the delivery of this deed. The plaintiff contends that the Walters .deed was void under .the provisions of section S?^, Rev. Codes- 1905, making it á misdemeanor to convey a pretended title unless the grantor. has been in. possession of the land, or received the rents thereof for a space of one year.before the giving of the deed. It is beyond dispute that the land was then adversely, held as against Blass, by Brown or Scharf, .and that Blass had not been in possession thereof, nor had he received the rents thereof for more than one year prior to- giving such deed. The defendant claims that Blass' deed could not convey and did not convey any title to Brown for the reason that there wa.s no title that Blass could convey to Brown .after the Walters deed. In other words, the contention is that the Brown deed was a nullity because' Blass had conveyed all of his title to Walters, and, because that deed was first delivered, the Brown deed never became effective for any purpose/
Conceding, for the purpose of this case only, that the Brown deed was subsequent to the Walters deed because held by the bank until the consideration was paid and until after the Walters deed was delivered, we cannot agree with the conclusion that the Brown deed was a nullity. When the Walters deed was executed.and delivered) neither Blass nor Walters was in possession of the land. The possession was. actually in Scharf, and his grantor, Brown. This being true, the Walters deed was void as to the persons in possession and holding adversely, under the decision of this court in Galbraith v. Payne, 12 N. D. 164, 96 N. W. 258. So far as the persons in possession of the land are concerned, the deed conveyed nothing, and, as against these parties, the title was still in Blass. After the delivery of the deed to Brown the title passed to him, as the possession of Scharf was not adverse • to him. Scharf's possession was Brown's possesion. Such possession was held solely by virtue of'the contract for the purchase-of the land between Brown and Scharf. That contract was still in force, and there is no contention that payments had been fully made thereon, or that the terms'- of same had been fully complied with.
The appellant cites but one case in attempting to sus,tain,.the doctrine contended for by him that the Brown deed was a nullity by reason of the former deed to Walters. The case relied, on is Dever v. Hagerty, 43 App. Div. 354, 60 N. Y. S. 181. This case was expressly overruled on the appeal to the Court of Appeals in 169 N. Y. 481, 62 N. E. 586. The reasons given for a reversal, in the opinion of the Court of Appeals, are conclusive, in our judgment, of, fallacy in appellant's contention in this case. The fact that the Walters deed was void as to the persons in possession, and that" the Blass deed to Brown conveyed the title to. Brown, would determine this appeal in plaintiff's favor, were it not for the. fact that Scharf is, and has been, in possession of the land under the contract for the sale thereof by Brown to him. Blass conveyed to Walters, Walter to Deutz, and Deutz to Scharf. The'latter deed was given for an actual consideration of $500. The deed from Blass to Walters being void for the reason stated, the other deeds conveyed nothing, as they were based upon the void deed of. .Blass to Walters, Whether the deed from Blass to Brown was valid is a disputed point in this case, upon another ground, which is that Scharf was the only person actually in possession of the land, and, that in consequence thereof, the deed to Brown was void by reason of the provisions of said section 8733. Brown's possession, it is claimed, was not actual, but constructive only. This is appellant's contention, although the evidence shows, beyond dispute, that Brown placed Scharf in possession of the land under the contract. Scharf admits this in his testimony, and there is no countershowing. It is not attempted to be proven that Scharf had fully complied with the contract. He had never relinquished the. possession that he, secured solely by virtue of the contract. He,.had not repudiated the '.contract in any way when the Blass deed w4s given to Walters. He does not claim that he was originally in possession by virtue of any other claim to the land, nor under any other deed or conveyance of title. It remains, thérefore, to be decided who was in possession of the land as between Brown and Scharf as against the Blass deed. It is undisputed that Scharf was in actual, physical possession 'of the land, and it cannot he denied that Scharf's pos-' session was under Brown and could not be maintained at that time except under Brown's contract. .There are authorities which lay down a principle of law that, before a deed is-void by reason of champerty or maintenance, the adverse possession must be actual (5 Am. & Eng. Enc. Law, 839); but it is not a fair construction of these authorities to say that they mean anything more than that the possession must be actual as against a merely constructive possession. As between Scharf and Brown, this court has decided whose possession it was, and that it was, as a matter of law, the possession of Brown, under facts the same as in this case. Schneller v. Plankinton et al., 12 N. D. 561, 98 N. W. 77. In that case the court said: "Counsel for respondent seek to sustain the validity of the deed by contending 'that the prohibition of sections 7001 and 7002, Rev. Codes 1899, which perpetuate the common-law doctrine, cannot be invoked against the plaintiff's deed because (a) the defendant, Plankinton, is not .an adverse possessor; and (t>) that, even though he were such, he cannot raise this question for the first time in the Supreme Court.' Neither of these contentions can be sustained. It is true, Plankinton was not personally in possession, but he had color of title, and the possession of Holstrom and Peterson, under their contracts, in law, was his possession. (Citing cases.) The purchaser of real estate entering into possession under executory contract holds under his vendor; and, under statutes relating to adverse possession, it is universally held that the possession of the purchaser is, in legal effect, the possession of his vendor." This decision, it seems to us, settles this controversy so far as the possession of the land at the time the Walters deed was given is concerned. The possession was beyond question that of Brown. We do not think it is necessary to cite further cases on this point, but there are many. See, also, Coates v. Cleaves et al., 92 Cal. 427, 28 Pac. 580; Harral v. Leverty et al., 50 Conn. 46, 47 Am. Rep. 608; Curran v. Banks, 123 Mich. 594, 82 N. W. 247; Greeno v. Munson et al., 9 Vt. 37, 31 Am. Dec. 605.
In the Matter of Department of Parks, 73 N. Y. 560, the court said: "But Dally entei'ed into possession under Harxds. Whatever he possessed was clearly under his parol agreement of purchase. He did not claim the land in hostility to Harris, but all he claimed, and all he could claim, was such right as his agreement gave him. It is too well settled to be disputed that one who enters upon land under a mere agreement to purchase does not hold the land adversely as against the vendor until his agreement has been fully performed, so that he has become entitled to a conveyance." Atxthorities holding that the possession of the vendee is under the vendor in such contracts, and what constitutes adverse possession un der champerty statutes, are collected in volume 4, American Digest, Decennial Edition, under the title "Champerty and Maintenance."
Another contention is that Brown was unable to give a good title to this land and could not, therefore, comply with the terms of the contract, and that this amounted to a constructive eviction of Scharf from the premises, and, having been thus constructively evicted, he had a right to buy the outstanding title to said land from Deutz; in other words, it is contended that, in the suit which was pending between Deutz as plaintiff, and Brown, Scharf, and others, as defendants, Deutz must inevitably have judgment for the ownership and possession of the land, and that Brown and Scharf would be ousted from the possession of this land under the Deutz deed. This does not at all follow. The Deutz deed was procured through Walters, and the deed from Blass to Walters was void'on account of adverse possession of Brown and Scharf. It follows from this that there was no title in Deutz, inasmuch as the title to this land had previously been conveyed to Brown by a valid deed from Blass, and the Deutz deed was therefore a nullity. If the Deutz suit had proceeded to judgment in the place of having been dismissed, there is no room for the statement that Deutz would have prevailed in the litigation. Furthermore, it is undisputed that Brown, in order to avoid the possibility of a decision that the Blass deed was void as to him, had procured a deed directly from Blass to Scharf, which would have been turned over to Scharf if he had not taken a deed from Deutz. By repudiating the contract with Brown and taking a void, conveyance from Deutz, he acted at his own -risk, and is not entitled to any equitable consideration by reason of the fact that he 'secured no rights to this land from Deutz. As already shown, the contention that Brown could not give a good title fails, inasmuch as the Blass deed made Brown's title good in view of his legal possession of the land.
There being no constructive eviction, and Scharf's possession not being adverse to Brown, but being legally Brown's possession, defendant, being in possession under his contract only, could not buy or take Walters' title as long as the contract with Brown was in force, and the Walters deed would have been unavailing to Scharf, but would have inured to Brown's benefit if it had been a valid deed. Some cases seem to distinguish between adverse possession rendering conveyance by those out of possession champertous and adverse possession for a period sufficient to give title by prescription (Barrett v. Coburn, 3 Metc. [Ky.] 510; Moore v. Baker, 92 Ky. 518, 18 S. W. 363); but, conceding that there, is. a distinction'as to what is sufficient possession, it has no materiality in this case. There-is no escape.from the conclusion.that Scharf's possession was under the Brown contract only, and-title by adverse possession could not ever be claimed by Scharf until that contract was repudiated and surrendered, or until circumstances arose entitling Scharf to buy an outstanding title under some one of the exceptions to the general rule stated. The possession of the vendee under such contracts is analogous to the possession o.f a lessee under leases of. real property.. Although such vendees are. not strictly tenants, it is generally held -that there is a similarity - in the relation so far as possession is concerned. The lessee is per-, mitted only in certain excepted cases to deny his landlord's title while he is in possession under his lease. See volume 4, American Digest, supra.
The defendant earnestly contends for a disaffirmance and .reversal of Galbraith v. Payne, supra. That decision is criticized as.recognizing a rule, that has become obsolete -and not now within the reason of the rule as existing when adopted. If we could concede all that is contended for by the appellant, our duty would be clear to uphold the Galbraith decision. Not only do we deem the rule binding under existing conditions, but it is well sustained, by the opinion in the case. That decision has done-much towards permanently quieting titles of those in possession under technically defective titles as against conveyances of a technically legal title by those out of possession. That case has been repeatedly cited in subsequent cases in this court, and has become a rule of procedure in respect to the property rights that should not be changed without some reason other than that a different rule is preferred. Unless shown to be wrong, stability in decisions 'should -be adhered to, or chaos must- inevitably follow in decisions of courts, in view of changes always certain to come in the membership of courts. However, if .we were to concede all that is said against that decision, the appeal for another rule should be made to the legislature and not. to the courts. Three sessions of the legislature have passed since that decision, without even an attempt to change the rule as to the effect of selling pretended titles as against those in possession. We are satisfied with the decision in that case, and do not deem it necessary to say anything further in its favor. -
It follows that the plaintiff is the owner of the 'land in question, and entitled to its possession as against Scharf.
The judgment is affirmed.
Ellsworth and Spalding, JJ., concur.