Court Opinion

ID: 3277233
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:45:59.073875+00
Date Added: 2024-06-11T13:13:13.917232
License: Public Domain

DISSENTING OPINION.
The undisputed evidence is that the ancestor of appellant and of appellee Thompson died about twenty-six years before the execution of the mortgage to appellee, Security Mortgage Company; that Thompson was in exclusive possession of the property, claiming title by inheritance as to an undivided interest, and from the other heirs under recorded deeds, and that the mortgage company made inquiry concerning the number *Page 283 
and identity of the heirs of the ancestor, and received evidence in the form of an affidavit that Thompson and his grantors in the recorded deeds were the only heirs. The chancery court found that the inquiry made by the mortgage company was sufficient, and that the company was an innocent purchaser for value.
All of the authorities mention, as the elements of a bona fide purchase of land, "a valuable consideration, the absence of notice, and the presence of good faith." This is the definition adopted by this court in Manchester v. Goeswich, 95 Ark. 582. Notice which will defeat the claim of innocent purchase may be either actual or constructive. It must be conceded that in the present case the mortgage company had no actual notice of appellant's adverse claim, for there is no evidence of any information conveyed to the mortgage company on that subject or any information which would lead to a discovery of appellant's claim. But the opinion of the majority holds, as I understand it, that the inheritance of the land from a common ancestor who was the holder of the record title constituted constructive notice of the number and identity of the heirs who inherited. That is the point of my disagreement with the majority. I concede that the devolution of the estate from the ancestor who held the record title constituted constructive notice to all subsequent purchasers from the heirs, but the matter of the identity of the heirs is not one of constructive notice, and rests upon evidence aliunde and depends upon actual notice, or notice of such facts as would put a purchaser upon inquiry. The identity of the heirs is a matter in pais, and necessarily depends upon actual knowledge, therefore there is no constructive notice of such identity.
Professor Pomeroy in his work on Equity Jurisprudence (4th ed., vol. 2, 607) says:
"It may be stated as a general proposition that, in all instances of constructive notice belonging to this class, where it arises from information of some extraneous facts, not of themselves tending to show an actual *Page 284 
notice of the conflicting right, but sufficient to put a prudent man upon an inquiry, the constructive notice is not absolute; the legal presumption arising under the circumstances is only prima facie; it may be overcome by evidence, and the resulting notice may thereby be destroyed. Whenever, therefore, a party has merely received information, or has knowledge of such facts sufficient to put him on an inquiry, and this constitutes the sole foundation for inferring a constructive notice, he is allowed to rebut the prima facie presumption thence arising by evidence; and, if he shows by convincing evidence that he did make the inquiry, and did prosecute it with all the care and diligence required of a reasonably prudent man, and that he failed to discover the existence of, or to obtain knowledge of, any conflicting claim, interest, or right, then the presumption of knowledge which had arisen against him will be completely overcome; the information of facts and circumstances which he had received will not amount to a constructive notice. What will amount to a due inquiry must largely depend upon the circumstances of each case."
We have here a typical case of the application of the doctrine. The mortgage company was dealing with one who was in actual occupancy of the land in controversy under record title, and there was nothing to constitute notice of an adverse claim. The ancestor had been dead twenty-six years, and, to protect itself, the mortgage company made inquiry as to the number of heirs. There is an element of estoppel involved in the application of the doctrine, and of this Professor Pomeroy (in 735) says:
"When the original legal owner has done or omitted something by which it was made possible that his property should come into the hands of a bona fide holder by an apparently valid title, it may be just to regard him as estopped from asserting his ownership, and thus to protect the subsequent purchaser. But, when the prior legal owner is wholly innocent, has done and omitted nothing, it certainly transcends, even if it does not violate, the *Page 285 
principles of equity to sustain the claims of a subsequent and even bona fide purchaser."
Appellant, by yielding possession to his cotenant, Thompson, clothed the latter with the highest evidence of ownership, and he thus made it possible for a subsequent purchaser to be deceived. He could have retained possession as evidence of his ownership, or he could have preserved his security in the form of a mortgage so that it could be put upon record as constructive notice. He did neither, and as he was, to that extent, in the wrong, he should be the sufferer instead of the subsequent purchaser, who was innocent of any notice of his claim.
The majority base their conclusions upon a statement from the textbook that "a bad title is not made good by the ignorance of the purchaser of its defects or his want of knowledge of a better title." This is far from being a correct statement of the law, as is evidenced by many decisions of this court. See Crawford's Digest, subject, "Vendor and Purchaser," vol. 4, 81 et seq. See especially Case v. Caddo River Lumber Co., 126 Ark. 240, where the opinion was written by the justice who now speaks for the majority. A bad title has, in fact, been often made good under certain circumstances by the ignorance of a subsequent purchaser. The books are full of cases where this rule has been recognized, for, if the statement of the law quoted by the majority is correct, then the doctrine of innocent purchaser is completely obliterated.
In Stubbs v. Pyle, 137 Ark. 538, we said: "Pyle had possession and the record title at the time he mortgaged the property to Brun, and at the time he subsequently executed the deed to Durham, and the parties who dealt with him had the right, in the absence of notice to the contrary, to assume that he was the owner. They were not bound to make inquiry concerning the prior possession of Jones under his unrecorded contract. The parties so dealing with Pyle had the right to treat this possession as referable to his record title." *Page 286 
I am unable to perceive why the identity of an heir of a deceased former owner of land should constitute absolute constructive notice any more than any other fact in pais. It is a fact which may or may not rest upon doubtful evidence, and if a purchaser, in accepting a conveyance from one in actual possession of land, makes such inquiry as a reasonably prudent person would make under the circumstances, then he is entitled to protection as an innocent purchaser. The extent of the inquiry, of course, depends upon the facts of a given case. Where the descent has been recently cast, the fact may be deemed so plain that there is no ground upon which a claim of innocent purchase can be rested; but where, as in this case, the ancestor has been dead a great length of time, and the heirs are scattered and their identity uncertain, I see no reason why the purchaser should not be protected, as well as from any other secret adverse claim. I do not contend that the real owner of land could "be deprived thereof by recitals in deeds of other heirs and owners that they were the only heirs," nor that a vendor could be deprived of his right to a lien merely on account of the fact that his deed of conveyance is unrecorded. I do contend, however, that, where one has no record title and for a long lapse of time permits his property to be held under circumstances which completely obscure his interest, one who buys for a valuable consideration and without knowledge of his claim should be protected as an innocent purchaser. *Page 287