Court Opinion

ID: 5144948
Source: CourtListenerOpinion
Date Created: 2022-01-02 01:24:51.267939+00
Date Added: 2024-06-11T08:24:43.260762
License: Public Domain

HURST, C.J. (dissenting).
The question for decision is whether an oil and gas lessee, whose lease is properly acknowledged and recorded, may sue to cancel a voidable recordation of a subsequent lease which was placed of record first, and thereby secure priority in right over the subsequent lease. The decision must be based upon a proper construction of our recording statutes, 16 O.S. 1941 §§15, 16:
“Except as hereinafter provided, no acknowledgment or recording shall be necessary to the validity of any deed, mortgage, or contract relating to real estate as between the parties thereto; but no deed, mortgage, contract, bond, lease, or other instrument relating to real estate other than a lease for a period not exceeding one year and accompanied by actual possession, shall be valid as against third persons unless acknowledged and recorded as herein provided.” Section 15.
“Every conveyance of real property acknowledged or approved, certified and recorded as prescribed by law from the time it was filed with the register of deeds for record is constructive notice of the contents thereof to subsequent purchasers, mortgagees, encumbrancers or creditors.” Section 16.
It is my view that section 16, above, refers to constructive notice to “subsequent” purchasers, mortgagees, encumbrancers or creditors only, and that it has no application here, since Shaw was a prior purchaser, and that the majority opinion is based upon the false premise or fiction that Shaw, a prior purchaser in fact, was in law relegated to the position of a subsequent purchaser. I think Shaw was in law as well as in fact a prior purchaser and a “third” person within the meaning of section 15, above, since the recording of the Elsey lease was voidable as to Shaw and subject to cancellation of record in a direct attack, as here, by him.
The parties cite no case, and I have been able to find none like the present case, where one of two innocent purchasers whose conveyances are both of record has sued to cancel of record the conveyances of the other first of record and to thus be adjudged to have the superior right.
The recording statutes of the various states may be fairly classified as follows: (1) those which authorize the grantee to file his instrument within a certain time and, if the instrument is filed within the time specified, the recording relates back to the execution of the instrument and has priority over instruments made subsequent to execution but before the recording of the same; (2) those which protect a subsequent innocent purchaser for value against a prior unrecorded instrument without the recordation of the second instrument; (3) those which protect the subsequent innocent purchaser against *705the prior unrecorded instrument only if the subsequent purchaser has recorded his instrument first. See 32 A.L.R. 345; 66 C.J. 1142-1144; 45 Am. Jur. 502-506.
Our statute, 16 O.S. 1941 §15, is of the third class. Accordingly, we hold that the first instrument of record has priority. Bates v. Rogers, 178 Okla. 164, 62 P. 2d 481. We are also committed to the rule that an instrument acknowledged before an interested notary public, where the interest of the notary public is latent, is entitled to record and the recording operates as notice to subsequent purchasers and encumbrancers, as long as the instrument is of record. Ardmore National Bank v. Briggs M. & S. Co., 20 Okla. 427, 94 P. 533; Lankford v. First National Bank, 75 Okla. 159, 183 P. 56; Harjo v. Collins, 146 Okla. 131, 293 P. 179. And this is the general rule. 19 A.L.R. 1079; 66 C.J. 1155; 1 Am. Jur. 339. However, the recording of such a defectively acknowledged instrument is voidable. Lankford v. First National Bank, above.
The recordation of such a defectively acknowledged instrument may be directly attacked in a suit brought for the purpose of having it canceled of record by a party entitled to bring the suit (Lankford v. First National Bank, above; Harney v. Montgomery, 29 Wyo. 362, 213 P. 378) but it may not be attacked collaterally. 1 Am." Jur. 339; 1 C.J.S. 827; 1 C.J. 803; Monroe v. Arthur, 126 Ala. 362, 28 So. 476, 85 A.S.R. 36. I think Shaw is a proper party to make such a direct attack as he has done in the present case.
The recording statutes of Wyoming are of the third type, above mentioned, and are very similar to ours. In Harney v. Montgomery, above, the court followed the rule stated in Lankford v. First National Bank, above, and held that the mortgagor could cancel of record a mortgage so defectively acknowledged, and used this pertinent language:
“An officer acting illegally, as did the defendant Armstrong in this case, should not, generally speaking, at least, be permitted to acquire for himself and his associates, a valuable right through and by virtue of his illegal act.” . . .
“Clearly, as between the parties to the original instrument, charged with knowledge of the illegal act of the notary, the mortgage in controversy should be considered as though it were not acknowledged at all; otherwise, the illegal act would indirectly, through the recording of the instrument, put the-power of sale into operation, and thus-confer a right on the mortgagees which, they otherwise would not possess.”
It would seem to logically follow that, if the grantor or mortgagor may make a direct attack upon such an instrument, a prior innocent grantee-should be entitled to make such an attack. Where, as in Oklahoma, the conveyance or mortgage is valid between the parties without acknowledgment,, and one who purchases subsequent to the recording of such an instrument-takes with constructive notice thereof and may not attack it, it would seem that a prior innocent purchaser would be about the only person who could make an effective attack and give meaning to our rule that such a recording is voidable. The majority opinion does-not expressly deny the rule that such a recording is voidable, but the effect of the opinion is to prevent its avoidance by the “third” party sought to be-protected by section 15.
Our rule that the’ instrument first recorded is the superior instrument has-reference to instruments properly acknowledged and recorded. It has not heretofore been applied to instruments, whose recordation is voidable, which are subject to cancellation of record in a direct attack.
The cases of Kee v. Ewing, 17 Okla. 410, 87 P. 297, and Ardmore National Bank v. Briggs M. & S. Co., 20 Okla. 427, 94 P. 533, involved collateral attack, as no attempt was there made to-cancel the instruments of record, and' they are, therefore, not contrary to the-rule, allowing a direct, but not a collateral, attack. The Kansas case cited! *706in the majority opinion did not involve a contest between the holders of two recorded instruments, as here, but held that the' holder of an instrument made before, but recorded after, a suit was filed involving the land took as a pendente lite purchaser.
The majority opinion cites no authority supporting the conclusion that Shaw could not attack the recording of the Elsey lease because of the latent defect in the acknowledgment independent of an attack upon the lease itself. Thus Elsey is permitted to acquire and retain a valuable right by virtue of his illegal act in taking an acknowledgment to his own lease, as against Shaw, whose only error was in following a custom among lease brokers of withholding the filing of his leases until he obtained his block, a custom which the record shows Elsey followed except as to this and two other leases. Of twenty-one leases he obtained, eighteen were recorded from eight days to two months after they were obtained.
Shaw was entitled to have cancellation of the recording of the Elsey lease, and when canceled he had the only lease of record, and under the recording statutes he has priority.
If, as held in Harney v. Montgomery, above, the holder of such a defectively acknowledged instrument may not retain a valuable right against the grantor by reason of the voidable recording, I see no reason why he should retain such right against an innocent prior purchaser.
For the foregoing reasons, I respectfully dissent.