Case Name: BOYER v. PAHVANT MERCANTILE & INVESTMENT CO.
Court: Utah Supreme Court
Jurisdiction: Utah
Decision Date: 1930-04-22
Citations: 76 Utah 1
Docket Number: No. 4614
Parties: BOYER v. PAHVANT MERCANTILE & INVESTMENT CO.
Judges: CHERRY, C. J., and EPHRAIM HANSEN, J., concur.
Reporter: Utah Reports
Volume: 76
Pages: 1–32

Head Matter:
BOYER v. PAHVANT MERCANTILE & INVESTMENT CO.
No. 4614.
Decided April 22, 1930.
(287 P. 188.)
Hamilton Gardner, of Salt Lake City, for appellant.
Charles D. Moore, of Salt Lake City, for respondent.

Opinion:
FOLLAND, J.
An opinion was heretofore written and filed in this case wherein the judgment of the district court was reversed and the cause remanded, with directions. Upon consideration of a petition for rehearing which was filed by respondent, we entertained some doubts as to the correctness of that opinion and granted a rehearing. The case was again argued by respective counsel. Upon further consideration we are of the view that the conclusions reached in the former opinion as to the disposition of the case were correct, although we reach such result by means of other reasons than those heretofore expressed. The former opinion, therefore, is withdrawn and will not be printed, but this opinion will stand and be published as the decision of the cause.
This case involves a controversy as to the priority of a trust deed and a warranty deed, both executed by a common grantor and affecting real estate situate in Millard county, this state. The execution of the trust deed was prior in time. The case hinges on the question of whether the trust deed was properly or effectively recorded so as to impart constructive notice of its contents to the grantee of the warranty deed, a subsequent purchaser for value and without knowledge of the trust deed. The plaintiff claims under the trust deed, the defendant under the warranty deed. No claim is made that defendant had knowledge or actual notice of the trust deed. The trial court rendered judgment in favor of defendant adjudging the warranty deed the superior and better title. Plaintiff appeals, claiming that on the facts found and stipulated, which are not in dispute, he, instead of defendant, was entitled to a judgment declaring the trust deed, which in effect is a mortgage, a lien superior to the warranty deed.
The material and stipulated facts are:
To secure the payment of a loan William D. Livingston and his wife executed and delivered the trust deed of the property in question, and of other real estate, to Boyer as trustee for the bank, which, on January 20, 1917, was filed for record by the plaintiff with the county recorder of Millard county, and entered in the entry book as entry No. 7001. The information entered in the entry book contains all that was required by the statute except a brief description of the property. The number of the instrument, name of grantor and grantee, the kind of instrument, date and time of filing were correctly noted. The trust deed was thereafter timely recorded, or copied, at length in Book E of Mortgages, pages 351 to 359 of the Record of the county recorder. It was indexed in the indices of grantors, grantees, and mortgagors and mortgagees of the records, but without any description of the property covered by said deed being entered in the indices or any of them except for the words "See record for description." The trust deed was at the time abstracted as to all of the land described in it except the property in question, which was omitted from the abstract record. Some time during the years 1925 and 1926 the county recorder corrected the abstract record by including therein a proper description of the land in question.
On February 7, 1921, for value, the Livingstons, by warranty deed, conveyed the property in question to the Western Securities Investment Company, who by warranty deed, in June, 1921, for value, conveyed it to Pahvant Mercantile & Investment Company, the defendant here. These warranty deeds, on the face of each, purported to convey a clear and unincumbered title to the land described, and each was timely and properly filed for record and recorded in the office of the county recorder of Millard county.
It is also stipulated and found that, when the Western Securities Investment Company purchased the property, it caused a search of the record title of the property to be made in the office of the county recorder by the Fillmore Abstract Company, licensed to search land titles and make abstracts thereof, 'but, because of the failure of the county recorder to make any notation of the trust deed in the abstract record pertaining to the particular land in question, the abstract company failed to find the record of it, and failed to report the trust deed to the company. The Western Securities Investment Company and the defendant, at the time of their respective purchases, both were without actual knowledge of the existence or transcription upon the official records of said county of said deed of trust or of the contents thereof as far as said deed of trust covers or relates to the land in controversy other than such knowledge and notice, if any, as they may be chargeable with by reason of the recording of the trust deed in the manner stated.
The trial court entertained the view that under our recording statutes the record was such that it did not impart notice to subsequent purchasers of the contents of the trust deed, and held respondent's title superior to the claim of appellant.
Here are two claimants to a parcel of land — the appellant as prior mortgagee, the respondent as the subsequent purchaser. Both acted in good faith and paid a valuable con sideration. Through fault of the county recorder in failing to enter a description of the land referred to in the trust deed in the indices and entry book, and to make any entry thereof in the abstract record, one of the parties must lose the land and be left to his action for damages against his warrantor or the county recorder.
The legal questions presented are stated by respondent as follows:
"(1) Did the mere filing of appellant's mortgage for record absolve appellant from all further responsibility in respect of seeing that the instrument was properly recorded and charge the appellee with constructive notice of the contents of the recorded instrument irrespective of the sufficiency of the record?
" (2) If the burden rested on the appellant to see that the mortgage was recorded in the manner required by Statute, was the record of the mortgage in question sufficient to impart constructive notice of its contents to appellee?"
Both these questions have been ably and fully argued in the briefs. In view of the facts stipulated by the parties, which are substantially followed in the findings of the court, we deem it unnecessary to pass directly on the first question stated above, notwithstanding both parties in their briefs devote most of their space to that point.
It may become necessary at some future time, and in a proper case, for this court to decide whether a mere filing of an instrument for record with the recording officer is sufficient to impart constructive notice. The facts before us do not call for a decision on this point. Anything we say not required by the facts stipulated by the parties and found by the court may well be regarded as dicta.
The trust deed was not only filed for record with the proper recording officer, but was noted in the entry book with the information required by statute as to names of parties thereto, its date, time of filing, and number. The requirement of a brief description of the premises was omitted. The instrument was fully and accurately recorded by being copied into the proper record book, and correctly noted in the grantor's, grantee's, mortgagor's, and mortgagee's indices. All that was lacking in . these index entries was the "brief description of the premises," but in lieu thereof was written the words, "See record for description."
The recorder is required by statute (section 1579, Comp. Laws Utah 1917, subd. 6) to keep an "abstract record" in which shall be entered all mortgages, deeds of trust, and other instruments showing the number of the instrument, names of parties, brief description of property charged, etc. There was an entire failure on the part of the recorder to make any entry affecting the property in question in the "abstract record" until some time after respondent had acquired its deed to the premises.
It is specifically stated in the stipulation of facts that "because of the failure of the County Recorder of Millard County to make any notation of the said trust deed in the abstract record in the county recorder's office pertaining to the land above described, the said abstract company failed to find the record of said deed of trust," etc.
It is nowhere said in the stipulation of facts that the failure to find the record of the trust deed was because of any faulty indexing or deficient entry in the entry book, but it is definitely stated to be because it was not included in the abstract record. After a careful search and the reading of scores of cases, we are unable to find any case which turns upon the failure of the recorder to abstract any instrument in the abstract record. No such case is cited in the briefs. The relevant cases all involve one or more of the following deficiencies, namely, of faulty recording (that is, copying into the record book) : Failure to index at all, or failure to correctly index. The naked question for decision, therefore, is whether or not the record of the trust deed by filing, entry in the entry book, copying into the record book, and the indexing, though incomplete, was nevertheless sufficient to impart constructive notice to subsequent purchasers. The sections of the statute, Comp. Laws Utah 1917, material to he considered here are sections 4875, 4900, and 4901. These sections are in title 93 under the general heading "Real Estate." Section 4875 requires that "every instrument of writing, to operate as notice to third persons, shall be proved or acknowledged and certified in the manner prescribed by this title and recorded in the office of the recorder of the county in which such real estate is situated. " Section 4900 states that "Every conveyance or instrument in writing required by law to be recorded in the office of the county recorder, shall, from the time of filing the same with the recorder for record, impart notice to all persons of the contents thereof, and subsequent purchasers, mortgagees, and lien-holders shall be deemed to purchase and take with notice." Section 4901 provides that every such conveyance "which shall not be recorded as provided in this title, shall be void as against any subsequent purchaser," etc.
There is nothing in these sections nor the other sections in title 93 which specifically defines what is meant by the word "recorded." Sections 1576, 1579, and 1592, all in title 20 under the general heading "Counties," and in the chapter entitled, "County Recorder," contain matter pertinent to the recording of instruments. Section 1576 specifies the manner of recording documents, thus:
"He [the recorder] must, on the payment of the fees for the same, record in books provided for the purpose, in a fair hand, or by means of a typewriter, camera, or other machine, all papers, documents, records, and other writings required or permitted by law to be recorded."
This section, which defines the manner of recording, indicates that this is done by transcribing or copying into the proper record book, and by implication negatives the idea that "recording" includes indexing or abstracting. Section 1579 provides for the books which the recorder must keep, and under each heading specifies the kind of entries to be made therein. In this section it is provided that the re corder must keep an "entry book," a "grantor's index," a "grantee's index," a "mortgagor's index," "mortgagee's index," and an "abstract record." Section 1592 covers the liability of the recorder for failure to do his required duty:
"If any recorder to whom any instrument proved or acknowledged according to law, or any paper or notice which may by law be recorded, is delivered for record:
"1. Neglects, or refuses to record such instrument, paper, or notice within a reasonable time after receiving the same; or
"2. Records any instrument, papers, or notices, wilfully or negligently, untruly, or in any other manner than is hereinbefore directed; or
"3. Neglects or refuses to keep in his office such indexes as are required by this chapter, or to make the proper entries therein; or
"4. Neglects or refuses to make the searches and to give the certificate required by this chapter; or
"5. Alters, changes, or obliterates any record or paper deposited in his office, or inserts any new matter therein,
"He shall be liable to the party aggrieved for three times the amount of damages which may be occasioned thereby."
It will be noted that the basis for liability is segregated. Subdivision 1 has to do with the failure to record an instrument. Subdivision 2 covers faulty recordation. No. 3 has to do with failure to index. This section would indicate that the word "record" as used in the statute has reference alone to the transcription of a document into the record book. This language, taken in connection with that contained in section 1576, would seem to indicate that an instrument might be "recorded," though not indexed or abstracted.
The weight of authority seems to be that an index is no part of the record, and that a mistake in it does not invalidate the notice afforded by a record otherwise properly made. 5 Thompson on Real Property, 146, § 4124; 23 R. C. L. 190, § 48; 1 Jones on Mortgages, 907, § 637; Warvelle on Abstracts, 72, § 68. Note in 96 Am. St. Rep. 404; Sinclair v. Gunzehauser, 179 Ind. 78, 98 N. E. 37, 100 N. E. 376; Seat v. Louisville & Jefferson County Land Co., 219 Ky. 418, 293 S. W. 986. The rule is stated in Jones on Mortgages, supra, as follows:
"The general policy of the recording acts is to make the filing of a deed, duly executed and acknowledged, with the proper recording officer, constructive notice from that time; and although it be provided that the register shall make an index for the purpose of affording a correct and easy reference to the books of record in his office, the index is designed, not for the protection of the party recording his conveyance, but for the convenience of those searching the records; and instead of being a part of the record, it only shows the way to the record. It is in no way necessary that a conveyance shall be indexed, as well as recorded, in order to make it a valid notice."
There are cases, however, to the contrary, particularly in the states of Iowa, Washington, and North Carolina. It is unnecessary for us in this case to align this court with either the majority or minority rule on that question.
Irrespective of whether the index is considered essential to complete recording or not, the rule is that it will be sufficient if enough is disclosed by the index to put an ordinary prudent examiner upon inquiry. 1 Jones on Mortgages, 910 ; 23 R. C. L. 193; 5 Thompson on Real Property 152, 153, § 4126; 41 C. J. 568, "Mortgages"; 91 Am. Dec. 109, Note; Warvelle on Abstracts, 73.
In Iowa it is held that indexing is essential to complete recording. Barney v. McCarty, 15 Iowa, 510, 83 Am. Dec. 427. The record is, nevertheless, sufficient to impart notice where the recorder, instead of noting the description of the property in the index, has, in lieu thereof, written "see record" (Calvin v. Bowman, 10; Iowa, 529; White v. Hampton, 13 Iowa, 259), or "certain lots of land" (Bostwick v. Powers, 12 Iowa, 456). In each instance the subsequent purchaser was charged with constructive notice. To similar effect are Oconto v. Jerrard, 46 Wis. 317, 50 N. W. 591; Bardon v. Land & River Imp. Co., 157 U. S. 327, 15 S. Ct. 650, 39 L. Ed. 719; Breed v. Conley, 14 Iowa, 269, 81 Am. Dec. 485; Jones v. Berkshire, 15 Iowa, 248, 83 Am. Dec. 412; Sinclair v. Slawson, 44 Mich. 123, 6 N. W. 207, 38 Am. Rep. 235.
The case of Barney v. McCarty, supra, is relied upon and quoted at length in respondent's brief. The decision was written by Judge Dillon. A mortgage, given by the owner of real property, was filed for record and recorded at large in the proper record book, but an index of the instrument was entirely lacking. Later the property was sold and a deed given. The question for determination was whether the record as made imparted notice; the mortgage not being indexed at all. The court held that the index was essential under the statutes of Iowa to impart notice. That the case of Barney v. McCarty supra, did not go beyond that specific point is clearly indicated by the case of Barney v. Little, 15 Iowa, 527. That decision was also written by Judge Dillon speaking for a unanimous court. In Barney v. Little, handed down the day after the decision in Barney v. McCarty, the only question presented was whether the registry of a mortgage was so imperfect and incomplete as not to charge subsequent purchasers and mortgagees with constructive notice. The statute provided that the recorder must keep an entry book and an index which must show (1) the grantors, (2) the grantees, (3) the time when the instrument is filed, (4) the date of the instrument, (5) the nature of the instrument, (6) the book and page where the record may be found, and (7) the description of the lands. The mortgage was recorded in the proper book. The index gave the name of the mortgagor and mortgagee and the nature of the instrument, but, in referring to the page where recorded, it gave the paging inaccurately. There was wholly omitted from the index the time of filing, the date of the instrument, and a description of the lands conveyed. It was held, however, that subsequent searchers of the record were chargeable with notice of plaintiff's mortgage. In the course of the opinion Judge Dillon says:
"In the case of Barney v. McCarty, decided at the present term, we had occasion to consider the nature of the index book under the former recording act in this State. It was there held that the total omission to index the plaintiff's mortgage, deprived the record of it of the quality of imparting implied notice. '
'The general nature and spirit of that law and of the present one are the same. The chief object of the index book is that which its name implies. Its function is in the first place to indicate the existence of all instruments which are recorded or on file to be recorded. If there is no index of an instrument the searcher after titles has a right to assume that none such is on file or on the record.
"Its office in the next place is to point out the book and page where the instrument is recorded. These are' the essential uses and purposes of the index book. To facilitate the examination of titles, the present law, it is true, has directed the index to contain the date of the instrument; the date of filing and description of the property. Still this does not supersede the necessity of a record.
"The prior decisions of this Court have settled that, while the index, which serves, so to speak, as a finger board to direct the inquirer, must not mislead him to giving a totally wrong description of the lands. (Scoles v. Wilsey et al., 11 Iowa, 261), yet it is not necessarily and essentially a prerequisite to a valid registration that the index should contain a description of the lands conveyed. It is sufficient if it points to the record with reasonable certainty. Bostwick v. Powers 12 Iowa 456; Calvin v. Bowman, 10 Iowa, 529.
"If the grantor's and grantees' names are given in the index, with the book and page where the instrument is recorded, and if the instrument is there really recorded, we believe that this, so far as the object of the recording act is concerned, is a substantial, though it may not be in all respects, as to the index book a literal compliance with the law. For the record book and the index book are not to be considered as detached and. independent books, but related and connected ones, and a party (assuming it to be an instrument which the law authorizes and requires to be recorded) is, where the index makes the requisite reference, affected with notice of any facts which either book contains with respect to the title of his proposed grantor.
"Were it not for the mispaging in the index of the plaintiff's mortgage, we are all agreed that the requirements of the law were, in substance, observed. It remains briefly to consider the effect of this error.
"The proposition is indisputable and clear, founded in reason, and sanctioned by authority, that 'if an ordinarily diligent search of the records will bring to an inquirer knowledge of a prior incum-brance or alienation, he is presumed to know of it.' 2 Wash. Real Prop. 596, § 63; Flynt v. Arnold, 2 Metc. [Mass.] 619-625. The prior decisions of this court (Bostwick v. Powers, and Calvin v. Bowman), rest upon this principle; and although questioned by counsel, they have not produced any authority showing, or tending to show, that these cases should have been decided differently."
The court then points out that, notwithstanding the inaccuracy of the paging a competent and careful searcher of the records would be led to the document recorded, and that subsequent purchasers are chargeable with notice.
Another case strongly relied upon by respondent is Ritchie v. Griffiths, 1 Wash. 429, 25 P. 341, 12 L. R. A. 384, 22 Am. St. Rep. 155. This case holds that mere delivery of a deed for record does not impart constructive notice, as, under the Washington statute, indexing is an essential part of recording. Here the prior deed, while copied into a record' book, was not indexed at all in any of the index books.
Other cases are cited in the briefs addressed to the point of whether mere filing for record imparts notice. In view of the position we take as to the decisive question in the case, there is no need to further refer to them.
Our conclusion is that sufficient appeared on the records of the county recorder of Millard county to bind respondent with effective notice of the prior trust deed of appellants.
This, of course, in no way affects the duty of the county recorder to fully comply with the statute in the making of full and proper entries in the various books it is his duty to keep, including indices and an abstract record. "Public policy and the rights of those directly interested in the proper recording of instruments require that recorders be held to a strict and literal performance of their official duties." 23 R. C. L. 271. His duty in respect to entering recorded instruments in the abstract record is a duty owing to the subsequent purchaser rather than to the original grantee. Green v. Garrington, 16 Ohio St. 548, 91 Am. Dec. 103. The recorder may be liable to a subsequent purchaser who sustains damage as a necessary and proximate result of such official negligence. Rising v. Dickinson, 18 N. D. 478, 121 N. W. 616, 23 L. R. A. (N. S.) 127,138 Am. St. Rep. 779, 20 Ann. Cas. 484; Title Guaranty & Surety Co. v. Commonwealth, 141 Ky. 570, 133 S. W. 577. The index and abstract record are for the convenience of those who desire to examine the record. 23 R. C. L. 191.
The judgment of the trial court is reversed, and the cause remanded to the district court of Salt Lake county, with directions to proceed with the case in conformity with the views expressed herein; appellant to recover costs.
CHERRY, C. J., and EPHRAIM HANSEN, J., concur.