Case Name: Fallass, Administrator, vs. Pierce and others
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1872-06
Citations: 30 Wis. 443
Docket Number: 
Parties: Fallass, Administrator, vs. Pierce and others.
Judges: 
Reporter: Wisconsin Reports
Volume: 30
Pages: 443–482

Head Matter:
Fallass, Administrator, vs. Pierce and others.
Recording act, construction and effect of— Owner of fee, when barred from taking title by tax deeds — Effective acknowledgments, effect of record of —Re-hearing, effect of‘refusing or granting motion for.
I. Per Cubiam.
1. The protection of the recording act (R. S., ch. 86, sec. 26), which declares an unrecorded deed void, as against a subsequent purchaser in good faith, and for a valuable consideration, whose deed shall be first recorded, is not confined to a subsequent purchaser immediately from the same grantor, but applies to one who takes from him through mesne conveyances; and it protects him, if a purchaser in good faith, for value, in case the chain of title to him is first on record, although the intermediate grantees were chargeable with bad faith, or paid nothing. (Con®, J., dissents.)
2. P. mortgaged land to B., and the mortgage was recorded. B. assigned the mortgage to R., and the assignment was not recorded. B. then released the land by deed to P. (who knew of the assignment to R.), and this release was recorded; and thereupon P. conveyed to X., a purchaser in good faith, for value, who neglected to record his deed from P. until after the assignment to R. and also an assignment from R. to plaintiff’s intestate, were recorded; said intestate having taken such assignment in good faith, for value. Held, that the deed to X., if recorded before the assignment of the mortgage, would have prevailed against the mortgage, under the recording act; hut in the absence of such prior record, it does not cut off the mortgage. (Conn, J., dissents.)
3. X. having acquired the fee, subject to said mortgage, and being presumptively in possession and liable for taxes subsequently levied, could not take title by tax deed for such taxes unpaid.
4. Two powers of attorney to sell and convey lands situate in this state, were 'executed in 1852, and were acknowledged respectively before a justice of the peace and a county clerk in Illinois, and were recorded in the proper register’s office in this state in 1855 and 1859, respectively ; but were without the certificates authenticating the signatures and official character, etc., of said justice and clerk, required by sec. 10, eh. 59, R. S., 1849. Held, that under sec. 105, ch. 137, R. S., and sec. 1, ch. 272, Laws of 1864 (2 Tay. Sts., 1619, § 159), the record of a deed executed in pursuance of such warrants of attorney and otherwise duly recorded, must be held in all legal proceedings prima-facie a valid record, binding purchasers like any other recorded deed.
5. A motion for a rehearing denied isa bar to another motion for the same purpose by the same party.
6. But where a rehearing is granted, and the cause is again heard and decided, the same party may move a second time for a rehearing.
II. Pm' DixoN, C. J., arguendo.
1. A deed recorded without authority has only the effect of an unrecorded deed.
2. A purchaser of real estate is conclusively presumed to know every conveyance propm'ly of record, by which the title to such real estate is, or may be, affected inlaw, and buys at his peril in view of its possible legal effect.
3. If an earlier deed to A. is recorded after a later one, (from the same grantor) to B., a subsequent purchaser from B. takes subject to all rights which A. has as against B.
4. But if A., knowing of B.’s recorded deed, neither records his own earlier one, nor brings suit to cancel that to B., (filing notice of lis pen.dens), but merely takes and records a later deed to himself from the common grantor, he represents himself to the world as merely a subsequent pwrehaser, by deed later both in execution and record than that of B., and should be held estopped from setting up his earlier deed as against one who afterwards purchased from B. in good faith, for value. The decision in Ely v. Wilcox, 20 Wis., 523, sustained on this ground.
5. Tlie “ subsequent purchaser ” spoken of in the recording act (sec. 25), is one who takes his deed after the actual execution of a deed to another, and the good faith required of him is a want of knowledge or information • that such deed exists, or of facts which should have put him upon inquiry as to its existence. The provision has no reference to one who, knowing that another party has bargained and paid for the land, still takes in fact the earlier deed, and has it first recorded.
6. In the last mentioned case, the legal title passes by the first executed deed, as before the statute, and the other purchaser is still left to his remedy in equity.
APPEAL irom the Circuit Court for Outagamie County.
Action for the foreclosure of a mortgage. On the 28th day of March, 1859, the defendant, William H. Pierce, mortgaged the lands in controversy, to the defendant Blanchard, the mortgages being recorded upon the same day. On the 2d day of April, in the same year, Blanchard assigned the mortgages to Rice, but the assignments were not recorded until June 21, 1861. Blanchard then executed to Pierce, on the 10th of August, 1859, an instrument embracing both a quit-claim deed of the premises and a release of the mortgages, which instrument was recorded 'December 8, 1860. This instrument was taken by Pierce with knowledge of the previous assignments of the mortgages by Blanchard to Rice. On the 19th of September, 1860, Pierce conveyed to the defendant Parles, a purchaser in good faith, and for value, who neglected to put his deed upon record until after the assignments of the mortgages to Pice were recorded, and after the assignments of the same mortgages by Bice to Carrie J. Eallass, by whose administrator the action was brought, were made and recorded. Two powers of attorney in the chain of title relied upon by plaintiff to defeat defendant’s claim of paramount title, were executed and purported to have been acknowledged, respectively, before a justice of the peace and a county clerk in Illinois, but neither of them bore any certificate authenticating the official character, genuineness of signatures, authority of the officers and formality of the acknowledgements, as required by ch. 59, § 10, R. S., 1849. Tbe court found as conclusions of law, that the quit-claim deed and release of Blanchard to Pierce were fraudulent and void as to the plaintiff, and that Eice and Carrie ,J. Eallass were bona fide purchasers of the mortgages for value. Judgment of foreclosure against all the defendants, from which they appealed.
Palmer, Boolcer & Pitkin and H. Pierce, for appellants,
contended that the release of the mortgages being recorded before Carrie J. Eallass, or either of the purchasers acquired any interest in the property, they all took their interests with knowledge of such release. The record of the release, being notice of the extinguishment of the mortgage interest, the subsequent record of a prior assignment could not change the character of that notice. The record of an assignment of a mortgage is not notice to a purchaser from the mortgagor, so as to invalidate a payment to or settlement with the mortgagee. Revised Statues, ch. 86, § 38. To the point that the record of the powers of attorney was not sufficient to charge subsequent purchasers with notice, in that it failed to show any certificate of the official character of the officers taking the acknowledgments in another state, counsel cited Revised Statutes, ch. 59, §10; Ely v. Wilcox, 20 Wis., 523.
Jason Downer, for respondent,
argued that an assignment of a mortgage, or even a mere release, was a conveyance of real estate, as defined by sec. 35, ch. 86, R. S. The term “ purchaser,” as defined by the statute, see. 34, embraces the assignee of a mortgage, the vendee in a quit-claim deed, or the releasee in a release of a mortgage. The doctrine of Fort v. Burch., 5 Denio, 187, under recording acts in New York, similar to those in Wisconsin, was that a junior mortgagee who took his mortgage with notice of a prior unrecorded mortgage, gained no advantage by first recording his own mortgage, and that the as-signee of the junior mortgage without notice, is not entitled to .preference unless he record his assignment before the prior mortgage is recorded. If he omits so to record it, his want of notice will not avail Mm. Before 1828, in New York, a differ-ents tatute and rule prevailed. See 19 Johns., 281; 5 Paige, 104, explaining former statute. But Rice having recorded the assignments of the mortgages to Mm before the deed to Parks was recorded, the record of the mortgages and of the assignments thereof were all in full force and undischarged, and as appeared of record; and the recording of the assignments made before the release of the mortgages, made the record show that the release was fraudulent. Jackson v. Post, 15 "Wend., 588; Van Rensselaer v. Clark, 17 Wend., 25.

Opinion:
The following opinion was filed at the June term, 1870:
Cole, J.
If we assume that the quit-claim deed containing the release of the two mortgages was fraudulent and void, so far as William H. Pierce is concerned, and that Parks is an innocent purchaser, for a valuable consideration, how then would the case stand under the recording acts ? That quitclaim deed was executed by Blanchard, the mortgagee, to Pierce, August 10, 1859, and recorded December 8,1860. The mortgages were assigned by Blanchard to Rice, previously, April 2, 1859 ; but those assignments were not recorded until June 21, 1861. Assuming these as facts clearly established, the evidence that Pierce had full notice when the quit-claim deed was executed by Blanchard to Mm, of the prior assignments of the mortgages, and that the land in his hands was subject to those liens, what is the position of his grantee, Parks, who purchased without notice of such assignments, and before they were recorded? It appears that Parks purchased the mortgaged premises September 19, 1860, though his deed was not recorded until January 10, 1868. And therefore the question is, whether the assignments to Rice, being made before the deed to Parks, and recorded after, but before that deed -was recorded, shall have priority over that deed, the mortgage 1 being apparently discharged when that deed was given, but not when it was recorded ? It is claimed bj tbe counsel for tbe respondent, that Parks could only acquire a preference by recording bis deed before tbe assignments were recorded. We are referred, in support of this position, to tlie eases of Jackson v. Post, 15 Wend., 588; Van Rensselaer v. Clark, 17 do., 25, and Foot v. Burch, 5 Denio, 187. Without stopping to analyze these cases, it seems to us a sufficient comment to malee upon them, to say that they establish a rule different from, and in conflict with tbe one laid down by this court in Ely v. Wilcox, 20 Wis., 523. In this latter case, tbe New York rule referred to, which bolds that the record of a prior deed, though not recorded till after the second deed, and before the conveyance by the vendee in the second deed, is notice to a purchaser from him, not only of the first deed, but such notice that he is bound to inquire whether the grantee in the second deed was a Dona fide purchaser, and that rule is disapproved, as carrying the doctrine of constructive notice to an unreasonable extent. It is true there is a difference between the case of Ely v. Wilcox, and the one under consideration, that the deed from Mat-son and wife to Ely, of January 23d, 1856, which was in due form of law, was subsequent in date, and was upon record when the fraudulent grantee, Nathaniel Gr. Wilcox, conveyed the property to Timothy D. Wilcox, while here, when Parks purchased the premises in September, 1860, neither the assignments of the mortgages by Blanchard to Bice, nor the quit-claim deed executed by Blanchard to William H. Pierce, were upon record. But still we cannot see that the assignee of the mortgages can derive any advantage from this circumstance, since the assignments were not then recorded, and were not, in fact, recorded until after the conveyance to Parks and the quit-claim was upon record. Besides, Parks testifies that when he purchased of William H. Pierce, he delivered to him this quit-claim deed, and that he bought upon the faith of that deed, believing the mortgage upon the property actually released by that instrument. Of course, as already observed, there was nothing upon record to give notice to Parks of the fraudulent character of this quit-claim deed, and that Blanchard had no right to release the mortgages upon the property. There was produced and shown him a good and sufficient release of the mortgages executed by Blanchard, the mortgagee. And while in this condition of the record, Pierce, the fraudulent grantee in the quitclaim deed, conveys the mortgaged premises to Parks, a bona fide purchaser, without notice of the assignment of the mortgages. Does he not take the property discharged of those liens ? It seems to us that he is to be protected by the rule that if one purchases Iona fide for a valuable consideration, without notice, from a fraudulent grantee, he takes a valid title, and is not affected by the notice of his grantor. See Mass, cases cited in Ely v. Wilcox. In this case, if Parks had not purchased until after the assignments were recorded in June, 1861, the quitclaim deed having been recorded in December, 1860, when it in fact was, then he would come fully within the doctrine laid down in Day v. Clark, 25 Vermont, 402, and be protected. The doctrine of this case is approved in Ely v. Wilcox, as containing a more reasonable rule than that laid down by the New York cases. And we are unable to perceive any valid ground for holding that Parks is now in a worse position, having purchased the mortgaged premises in September, 1860, when he did without notice of the assignment of the mortgages by Blanchard, and believing that those incumbrances had actually been released by the quitclaim deed, than he would have been if he had not purchased until after 21st of June, 1861. Section 25, chap. 86, R. S., which provides that every .conveyance of real estate within this state thereafter made, which shall not be recorded as provided by law, shall be void as against any subsequent purchaser in good faith and for a valuable consideration of the same real estate or any portion thereof, whose conveyance shall be first duly recorded, obviously applies to successive purchasers of the same real estate, from the same seller, and must be limited to cases of that description. Raynor v. Wilson, 6 Hill, 469.
But again, it is said that Parks is not entitled to protection as an innocent purchaser, because he does not fully state in his answer what he gave for the land, and how and when this consideration was paid. He was permitted to prove, and did, in fact, prove the actual consideration paid, which was, as he stated, $6,000, in notes he held against William H. Pierce, and $1,000 in money. This evidence was without objection, and it seems to us too late now to object that the answer was insufficient for not stating what the precise consideration was, and how and when paid. Manifestly if any such point had been made on the trial, the court would, upon application, have permitted Parks to amend his answer, so as to obviate the objection. We are, therefore, inclined to hold the answer good, asno point was made upon it in the court below.
We do not notice the other questions discussed by the counsel, since the point decided is fatal to the judgment.
By the Court. The judgment of the circuit court is reversed and the cause remanded for further proceedings.