Case Name: FREDERICK S. GOULD, Executor, etc., Respondent, v. JOHN WISE, Appellant
Court: Supreme Court of California
Jurisdiction: California
Decision Date: 1893-03-16
Citations: 97 Cal. 532
Docket Number: No. 19021
Parties: FREDERICK S. GOULD, Executor, etc., Respondent, v. JOHN WISE, Appellant.
Judges: 
Reporter: California Reports
Volume: 97
Pages: 532–542

Head Matter:
[No. 19021.
Department One.
March 16, 1893.]
FREDERICK S. GOULD, Executor, etc., Respondent, v. JOHN WISE, Appellant.
Deed — Delivery — Assent oe Grantor. — Delivery is the force that vitalizes an instrument; and a deed can take no effect until delivery, which is dependent upon the assent of the grantor.
Id. — Clandestine Possession oe Grantee—Non-euleillment oe Agreed Conditions—Title. — Where a grantee named in a deed secures possession thereof clandestinely, or in any manner without a fulfillment of the agreed conditions, or consent of the grantor to a delivery, there is no delivery of the deed, and no title passes to the grantee.
Id. — Fraudulent Mortgage by Grantee before Delivery — Mortgage to Grantor eor Purchase-money — Priority. — Where an intending purchaser of land contracted with the owner thereof for its purchase, agreeing to pay part of the purchase-money in cash, and to execute a mortgage for the balance, and after the deed was signed and acknowledged, and while it was lying upon the table of a conveyancer, who was engaged in preparing the notes and mortgage, which were to be delivered contemporaneously with the deed, the purchaser took it from the room, and without the knowledge of the grantor negotiated a loan thereon from a third party, executing a mortgage therefor, and about a half-hour thereafter he returned to the grantor and signed the mortgage and notes: held, that the delivery was not complete until the mortgage and notes to the grantor were signed, and that the mortgage of the grantee created no lien upon the property as against the grantor.
Id.—Negligence of Grantor — Estoppel — Non-delivery oe Deed.—. In such case the act of the grantor in allowing the deed to be removed from the room before the execution of the mortgage, even conceding it to be negligence on his part, was not such degree of negligence as to create an estoppel against him in favor of the mortgagee of the grantee without notice to prevent a plea of non-delivery of the deed to the grantee.
Appeal from a judgment of the Superior Court of Los Angeles County, and from an order denying a new trial.
The facts are stated in the opinion of the court.
Willis & Appel, and Houghton, Silent & Campbell, for Appellant.
Richards & Carrier, and Del Valle & Munday, for Respondent.

Opinion:
Garoutte, J.
Upon the sixth day of March, 1888, appellant, Wise, entered into an agreement with Charles O. and Asa Adams to convey to them certain land. Upon March 12, 1889, Charles Adams, one of the parties to the agreement, transferred his interest in the property to his co-purchaser, Asa Adams. On the same day, Asa Adams, having procured the deed from his co-purchaser, applied to appellant, Wise, for a deed of the premises contracted for, representing to him that he would pay one thousand dollars cash, which, together with five hundred dollars which had been paid at the date of the execution of the contract, would amount to fifteen hundred dollars paid on the purchase price, and that he would execute the mortgage provided for in the agreement aforesaid for the balance. Appellant at the time was weak and infirm from old age and sickness, and was conveyed by Asa Adams in a vehicle to the office of a notary, and there the deed and the notes and mortgage set forth in the cross-complaint herein were executed in the manner hereinafter stated. Before the payment of the one thousand dollars, Adams, without the consent of Wise, took the deed from the notary's office, presented it to R. W. Poindexter, a real estate agent who was loaning money for the deceased, Julia F. Gould, and there executed the note and mortgage set forth in plaintiff's complaint. He thereupon returned to the notary's office, where Wise was awaiting him, executed the notes and mortgage to Wise, and gave him a check for the cash payment, and Wise thereupon had his mortgage recorded. Prior to this time, Poindexter went to the recorder's office, recorded the deed from appellant to Adams, and also the mortgage given to plaintiff. Ap pellant was ignorant of the transaction between Adams and Poindexter, and had no notice whatever concerning plaintiff's mortgage. When respondent's mortgage became due, he commenced this action, and impleaded therein appellant, Wise, who answered, and filed his cross-complaint seeking to foreclose his mortgage, and claiming that it was prior and superior to plaintiff's mortgage.
The sole question involved in this case arises as to the relative priority of these respective mortgages. Upon the trial, judgment went for the respondent, and this appeal is prosecuted from that judgment, and from the order denying a new trial.
We will not enter into a discussion of the question whether the contract of sale constituted an equitable mortgage lien of which the respondent had constructive notice, and which continued down to and merged in the mortgage made to Wise under the provisions of his contract. The case can be disposed of, and therefore should be disposed of, upon much more simple grounds.
, At the time respondent loaned the money and took 1 the mortgage as security for the loan, Adams had no j title to the land, and as a necessary consequence re-I spondent got no security for the money loaned. This view of the matter is not directly presented in appellant's argument, but" it goes to the heart of the case, and is so apparent from a reading of the evidence that we cannot avoid its consideration. Appellant gave the only evidence bearing upon this branch of the ease, and his testimony was as follows: " I am eighty-three years old; I was sick on the 12th of March, and Adams came to my house in a buggy; he had a deed for my property with him, ready; he got me to sign it in the wagon; then he took me to a place to give a mortgage. He- was to give me one thousand dollars, and a mortgage and notes for the balance. He hurried me up, so that he could get the money out of the bank before it was closed. A man came out of a door with a pen and ink, and swore me, and I signed the deed. Then Adams drove off, and took me to another place. He had spoke to a man to make out the mortgage, and he staid there a little hit, and the man was making out the mortgage and writing it up; I thought I was to have the first mortgage. He says, ' Let me see that deed.' He got the deed and cleared out with it; I didn't like it very good; I hadn't got no mortgage yet, and he left the mortgage and these notes laying there. He was not gone more than half an hour. He didn't leave the notes and mortgage with anybody, — left them laying where the man was writing them. When he came back, we drove to the court-house, and I recorded my mortgage. He gave me a check for seven hundred dollars, and paid me most of the balance of the one thousand dollars afterwards in small sums. The deed laid on the table, and he says, ' Let me see that deed.' He reached over and pulled it away. I did not think he was going away, but he was gone. He signed the mortgage and notes when he came back, and gave me the check then."
This evidence, sifted of immaterial matters, discloses that after the deed was signed and acknowledged, and while lying upon the table in the presence of both parties, it was taken therefrom by Adams, who thereupon left the room with the deed in his possession. At that moment, the conveyancer was engaged in preparing the notes and mortgage which formed the principal consideration for the deed, and which were to be delivered contemporaneously with the deed. Upon this state of facts, it is apparent that no delivery occurred at the time Adams obtainedf possession of it, and that, as a consequence, no title was in him at the time he negotiated the loan, "and no mortgage lien was secured upon the realty by the mortgagee at that date, as against the grantor, Wise. Delivery is the force that vitalizes the instrument. Here there was no life in the instrument, because there was no delivery. Delivery is dependent upon the intention, the consent of the grantor, and here there was an entire absence of intention to make a delivery until the notes and mortgage were also delivered.. The respective acts of the grantee and grantor as to the delivery of the deed and the securities were to be concurrent. The delivery of the deed was dependent upon the assent of the grantor, and his assent was dependent upon the performance of acts by the grantee. The grantee's possession of the deed upon any other terms or "conditions was against the assent of the grantor, and for that reason the instrument had no life. This principle is elementary, but is fully discussed in Everts v. Swift, 4 Wis. 343; 65 Am. Dec. 314; Henry v. Carson, 96 Ind. 412; Fitzgerald v. Goff, 99 Ind. 28; Jones v. Loveless, 99 Ind. 317.
Again, it has been repeatedly held that the fraudulent procurement of a deed deposited as an escrow from the depositary by the grantee named therein will not operate to pass the title, and the subsequent purchaser from such grantee, without notice, and for a valuable consideration, derives no title thereby, and will not be protected. (Everts v. Swift, 6 Wis. 453; Shirley v. Ayres, 14 Ohio, 308; 45 Am. Dec. 546; Stanley v. Valentine, 79 Ill. 544; Harkreader v. Clayton, 56 Miss. 383; 31 Am. Rep. 369; Henry v. Carson, 96 Ind. 412; Tisher v. Beckwith, 30 Wis. 55; 11 Am. Rep. 546.) The foregoing cases are conclusive to the effect that if a grantee secure possession of a deed clandestinely, or in any manner without a fulfillment of the agreed conditions, there has been no delivery with the assent of the grantor, and therefore no title has passed.
These principles of law being established, there is nothing remaining to defeat appellant's rights in the premises, unless he was guilty of such negligence in allowing the deed to be taken from his presence and from the room as to create an estoppel against him in favor of respondent as an innocent third party, and we think no such state of facts is disclosed by this record. The principle of equity that where one of two innocent persons must suffer by the act of a third, he who has enabled such third person to cause the loss must bear it, is entirely too' broad in its scope to be invoked in this character of action. That principle is specially applicable where the loss has been occasioned by reason of a trust or confidential relation having existed, to some extent at least, toward the third party. But we have failed to find a case where an estoppel has been successfully pleaded under the circumstances here presented. To create an estoppel against the grantor in this character of action, if one can be created, requires the proof of that degree of negligence upon his part which could only result from the want of ordinary care. As was said in the case of Burson v. Huntington, 21 Mich. 436, in discussing this principle with reference to the delivery of a promissory note: "The maker, therefore, cannot be held responsible for any negligence. There was nothing to prove negligence, unless he was bound to suspect and treat as a knave, a thief, or a criminal the man who came to his house, apparently on business, because he afterwards proved himself to be such. This, we think, -would be preposterous."
In Tisher v. Beckwith, 30 Wis. 55, 11 Am. Rep. 546, Chief Justice Dixon, in speaking to this subject, said: "It might possibly be that a case of that kind could be presented where the negligence of the supposed grantor in this respect was so great, and his inattention and carelessness to the rights of others so marked, that the law would on that account estop him from-setting up his title as against a bona fide purchaser for value under such deed." Even conceding some negligence upon the part of the grantor, Wise, in allowing the deed to be removed from the room, it certainly does not reach that degree of negligence which would justify an estoppel against a plea of non-delivery of the deed.
For the foregoing reasons, let the judgment be reversed, and the cause remanded.
Harrison, J., and Paterson, J., concurred.
Hearing in Bank denied.
Beatty, C. J., dissented from the order denying a hearing in Bank, and filed the following opinion on the 28th of April, 1893: —