Court Opinion

ID: 9538420
Source: CourtListenerOpinion
Date Created: 2023-08-07 07:36:16.601576+00
Date Added: 2024-06-11T14:57:51.990029
License: Public Domain

OPINION SUTIN, Judge. Ortiz sued Lane for a return of property held under a real estate contract in which Lane held the legal title. Judgment was entered that Lane execute a quitclaim deed conveying the property to Ortiz based upon the doctrine of equitable estoppel. We reverse and hold that Ortiz is entitled to a return of the property but not to a quitclaim deed from Lane. The trial court made the following findings of fact and conclusions of law: Findings of Fact 1. That on or about July 5, 1974, the plaintiff purchased the property described in the First Amended Complaint of John C. Brooks and Roberta M. Brooks. 2. That U. S. Life Title Company was the title and closing agent and the Albuquerque National Bank, East Central Office, was the escrow agent in the transaction and that Glenn Justice Mortgage Company was the mortgage company to whom the first mortgage was to be paid. 3. That all parties necessary to the transaction were notified and all payments necessary to the transfer of title were made. 4. That on June 11, 1974, the defendant, David Lane, had said property assigned to him by prior owners for a real estate commission owed to David Lane for the sale of said property. 5. That on November 5, 1974, the defendant, David Lane, sent a notice of default to John C. Brooks and Roberta Brooks for One Hundred Eighty-two Dollars ($182.00) due as commission for the sale of said property. 6. That the plaintiff has heretofore deposited with the Court the sum of One Hundred Eighty-two Dollars ($182.00), which is all the money due defendant, David Lane, as a real estate commission. 7. That on December 6, 1974, the defendant, David Lane, recorded a Special Warranty Deed from John C. Brooks and Roberta Brooks to Henry D. Baca and Martha A. Baca in an effort to effectuate a prior recorded deed from Henry D. Baca and Martha A. Baca to David Lane which was recorded on June 12, 1974. 8. That at the time the defendant David Lane recorded the Special Warranty Deed of December 6, 1974, he had actual and constructive knowledge that plaintiff had purchased the property in question. 9. That the defendant, David Lane, did not send notice of default letters to the plaintiff pursuant to the terms of a certain Real Estate Contract under which he claimed an interest in the property herein. 10. That the plaintiff made mortgage payments on the first mortgage to Glenn Justice Mortgage Company from July 1974 through August 1975, even though during most of said time the defendant, David Lane, was in possession of and receiving rental income from said property- Conclusions of Law 1. That this Court has jurisdiction over the parties and subject matter of this action. 2. That the defendant, David Lane, is equitably estopped from asserting title to or interest in the property described as follows: Lot numbered Twenty (20) in Block numbered Sixteen (16) of Plat of Blocks 13 to 25 inclusive of Altamont, an Addition to the City of Albuquerque, New Mexico, as the same is shown and designated on Plat of said Addition, filed in the Office of the County Clerk of Bernalillo County, New Mexico, on February 9th, 1953. as he had actual and constructive knowledge that the plaintiff had purchased said property prior to recordation of the Special Warranty Deed on December 6, 1974, and any rights, title or interest which defendant, David Lane, claims in said property constitutes a cloud on plaintiffs title and the defendant shall execute a Quitclaim Deed transferring said property to the plaintiff. [Emphasis added.] On January 10, 1974, Baca sold Brooks the property above described under a real estate contract, subject to a mortgage to Glenn Justice Mortgage Co., Inc. Brooks was required to make payments of $162.00 per month on the mortgage and $20.00 per month on tho real estate contract due Baca, all payable to Albuquerque National Bank as escrow agent. Pursuant to the contract, Brooks executed a Special Warranty Deed to Baca under the same date. Lane was the real estate salesman who handled this transaction and for which Baca owed Lane a real estate commission. On June 11, 1974, Baca conveyed to Lane by warranty deed and by an assignment all of his interest in the property and Lane made two mortgage payments that totaled $657.22. Lane obtained this property for investment purposes. The assignment was executed because Lane agreed to assume the mortgage payments in arrears. Ortiz also became interested in the purchase of this property for investment purposes. On June 24, 1974, without knowledge of Lane’s title, Ortiz inquired of Lane the type of real estate contract held. Lane told Ortiz that a balance was due and that a real estate commission was owed to Pargin Realty, a company by whom Lane was employed. In this conversation, Ortiz told Lane that he, Ortiz, was negotiating to buy the property, and Lane made no claim to ownership. Ortiz engaged a title company to search the title and prepare the necessary papers. Lane was informed by the title company that Ortiz was purchasing the property and would bring the payments up to date. Ortiz negotiated the purchase with Brooks. On July 5,1974, Brooks, with an equitable title, conveyed the property to Ortiz by warranty deed subject to the Baca-Brooks real estate contract. It was duly recorded the same day. This deed was prepared by the staff of the title company. The parties agree that this instrument was an assignment to Ortiz of Brooks’ equitable and beneficial estate in the property. The title company also notified the Albuquerque National Bank of Ortiz’ purchase of the property and Ortiz paid the bank $794.60, $657.72 of which was paid to Lane to reimburse him for previous payments made on the mortgage. Lane repeatedly denied any knowledge of the source of this refund. The title company also notified Glenn Justice Mortgage Co. of the Ortiz purchase and thereafter Ortiz made payments due on the mortgage from July through November, 1974. Here, again, Lane testified that he had no knowledge of the person making the payments. In the interim period, Ortiz made improvements on the property to prepare it for rental purposes. On November 5, 1974, Lane, with knowledge that Ortiz intended to and had purchased the property, mailed a notice of default to Brooks for failure to remit the sum of $182.00 per month as provided for in the contract. Notice was not sent to Ortiz, the purchaser who made the mortgage payments. On December 6, 1974, Lane executed an affidavit of default and termination of the Baca-Brooks real estate contract, which affidavit was directed to Brooks. Lane also obtained possession of the Brooks-Baca Special Warranty Deed from the Albuquerque National Bank, and recorded both instruments on the above date. On December 20, 1974, Ortiz met Lane at the property and a dispute ensued over its ownership. Lane changed the locks on the doors of the house, excluded Ortiz and rented the property. On January 15, 1975, Ortiz sued Lane for a return of the property. During the pend-ency of this suit, Ortiz continued to make the mortgage payments until September, 1975 even though Lane was in possession of the property receiving rental income. Nevertheless, Lane testified that, during the first five months of 1975, he was without knowledge of the person making the payments. He did tell Glenn Justice Mortgage Co. not to accept payments from anyone but it refused to do so. Lane began making mortgage payments in March, 1975, some 10 months after he obtained legal title. Unquestionably, Lane impliedly consented to the Brooks-Ortiz assignment.  We do not hesitate to say that Lane and Ortiz were both negligent with respect to their relationship and their lack of concern about the ownership of the property and the payments on the mortgage. Neither do we commend the title company which prepared a “warranty deed” from Brooks to Ortiz. We repeat our admonition that “equity” is a synonym of right and justice; that fairness, justness and right dealing should dominate all commercial transactions and practices. Ott v. Keller, 90 N.M. 1, 558 P.2d 613 (Ct.App.1976). “It requires that one should do unto others as, in equity and good conscience, he would have them do unto him, if their positions were reversed, [citation omitted] Its compulsion is one of fair play.” McNeely v. Walters, 211 N.C. 112, 189 S.E. 114, 115 (1937).  The trial court found that on July 5, 1974, Ortiz purchased the property from Brooks. This was evidenced by the “odd” warranty deed. Lane contends that Ortiz could not purchase the property because Brooks did not own it. Lane is mistaken. “The commonly accepted definition of ‘purchased’ is a binding agreement to pay an agreed price. * * * Under any definition of ‘purchase’ the transaction must be viewed in its entirety and if sufficient events occur a purchase can be found.” First Nat. Bank & Trust Co. of Chickasha v. United States, 462 F.2d 908, 910 (10th Cir. 1972). The real estate “contract operates as an equitable conversion. The vendee’s interest becomes realty and the vendor’s interest becomes personalty. In equity the purchaser is regarded as the owner liable for payment of the purchase price. The vendor holds the legal title in trust for him.” (Ibid.) The evidence of Ortiz’ “purchase” was substantial. When Brooks purchased the property he was vested with the beneficial and equitable title thereto. Snipes v. Dexter Gin Co., 45 N.M. 475, 116 P.2d 1019 (1941). Baca, as the vendor, held the legal title as trustee for security only. Trickey v. Zumwalt, 83 N.M. 278, 491 P.2d 166 (1971). When Lane obtained Baca’s interest in June, 1974, he only had a legal title, a title that was held in trust for security only. Absent default, he had no beneficial interest in the property. Ortiz, however, is not entitled to a complete title until the Glenn Justice Mortgage is paid in full. Lane protests findings Nos. 4, 5 and 6 that are limited to references to Lane’s real estate commission. We agree that there is no evidence to support these findings. However, these references are immaterial. Ortiz did not contest Lane’s legal title, and Lane’s notice of default was sent to the wrong person. The harmless error arises because the trial court blindly adopted the requested findings of Ortiz. The requested findings and their adoption by the court do not receive our plaudit. The other findings of the trial court are sustained by substantial evidence. The trial court concluded that Lane was equitably estopped from asserting title to or any interest in the property; that Lane’s title was a cloud on Ortiz’ title. Therefore, Lane shall execute a quitclaim deed transferring said property to Ortiz. Here, again, the trial court adopted Ortiz’ conclusion of law. Although we do not applaud Lane’s conduct, we can discern no evidence nor any findings that support this conclusion. If trial lawyers would learn the art of presenting proper findings and conclusions to the district court, and the district court would learn the art of reading the requests, we would not be burdened with these types of appeal. Requested findings and conclusions should not slip through the judge’s fingers like an eel. Appellate counsel for Ortiz was not trial counsel and he is absolved of any criticism.  The status of this case in the trial court is as follows: It was wrongful for Lane to obtain possession of and file the Brooks-Baca Special Warranty Deed. Lane holds only legal title to the property in trust for security. Ortiz is the owner of the beneficial and equitable title to the property and is entitled to possession thereof. He must undertake the same duties that Brooks had under the Baca-Brooks real estate contract except the payment of Lane’s real estate commission. Lane has received sufficient income from the rental of the property to pay his commission. Lane is under no duty to execute a quitclaim deed to Ortiz. This case is reversed and remanded to the district court. The trial court shall vacate the judgment entered. A judgment shall be entered (1) that Ortiz is entitled to possession of the property under the BacaBrooks real estate contract; (2) that the Brooks-Baca Special Warranty Deed shall be placed in the possession of the escrow agent; (3) that Lane shall prepare for filing proper instruments that will declare that the Special Warranty Deed was inadvertently filed and that he does not hold the complete title to the property. IT IS SO ORDERED. LOPEZ, J., concurs. HERNANDEZ, J., specially concurs.