Court Opinion

ID: 6686397
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:33:05.115251+00
Date Added: 2024-06-11T16:00:58.864103
License: Public Domain

Fuller, J.
(dissenting). The facts omitted from the majority opinion as immaterial, and which I deem conclusive of the questions of law presented, are these: On the 9th day of December, 1882, Oliver L. Taylor, a pre-emptioner, obtained a receiver’s final receipt, which was duly recorded six days later, when he mortgaged the premises described therein for $894, and appellant became the assignee of such mortgage more than one year after the entry of the pre-emptioner and mortgagor had been canceled by proper authority at the General Land Office of the United States. Three and one-half years before the cancellation of his entry, Taylor conveyed the mortgaged premises by warranty deed to. William A. Wilkes and Rollin J. Wells, and eighteen months after the cancellation of such entry, and four months after the assignment of the Taylor mortgage to appellant, it obtained from Wilkes and Wells the- warranty deed relied upon. Respondent’s source and chain of title emanat.es from the United States, and is traceable thus: William A. Wilkes placed a timber-culture filing on the land in controversy about 75 days after Taylor’s entry was canceled,, made final proof on the 2d day of August, 1893, and received a patent from the government April 27, 1895, since which date all taxes have been paid by *651respondent and his grantors. Alter making final proof, Wilkes and his wife mortgaged the land for $400, under date of August 11, 1893, to Edgar L. Smith, who obtained a sheriff’s deed on the 3d day of November, 1897, by virtue of a valid statutory foreclosure of such mortgage. On the 23d day of August, 1898, Smith and wife conveyed the property, for a valuable consideration, to Alpha D. Cadwell, by a warranty deed containing the covenant that ‘ ‘the premises are free from incumbrances since the issuance . of the patent from the United States, ’ ’ and, for a valuable consideration, Cadwell and wife conveyed on the 7th day of September, 1898, by the usual warranty deed, to C. C. Hortman, who, together with his wife, executed and delivered to respondent a warranty deed dated March 13, 1899, in which the grantors covenant that the premises are free from all incumbrances since the issuance of the patent, except the taxes of 1898 and a mortgage for $500, all of which was assumed by respondent, and subsequently paid in full and satisfied of record. Before obtaining the Taylor mortgage or the deed from its grantees, Wilkes and Wells, appellant knew that the title,' both legal and equitable, was in the United States; and the doctrine of after-acquired title, being in the nature of an equitable estoppel, should never be applied as against a purchaser in good faith for value, in favor of a gratuitous grantee not influenced by the recitals in his deed. Without determining whether the extinction of the Taylor interest relates back to the date of the pre-emption filing, or merely takes effect as of the date his entry was canceled, there is no escape from the conclusion that the cancellation of the entry imparted constructive notice to both grantors and the grantee that neither party had an interest in or lien upon the *652property when the deed was executed. It being shown by the undisputed evidence that the only consideration for such conveyance was the satisfaction of a mortgage rendered void by the cancellation of the Taylor entry, the inference is irresistible that nothing was paid for the deed, and the trial court is justified in its conclusion that appellant is not a bona fide purchaser of the land. Valuable consideration, absence of notice, and presence of good faith are the essential attributes of a bona fide purchaser. Bank v. Shaw, 14 S. D. 197, 84 N. W. 779.
As neither Taylor, the mortgagor, nor his grantees, Wilkes and Wells, possessed the slightest interest in the property, a sheriff’s deed upon foreclosure would convey no estate, and nothing is gained or lost by the satisfaction of a mortgage absolutely void. Mitigation of damages arising from a breach ©f warranty, and sustained by a bona fide purchaser, being the only reason for passing after-acquired title by operation of law, one who obtains his deed without any consideration whatever suffers no injury, and is hot entitled to invoke the doctrine as against the grantees of Smith, in favor of whom the after-acquired title of Wilkes inured. As previously stated, Taylor, against and under whom appellant claimed a mortgage lien and estate by virtue of the deed from such entryman’s grantees, never obtained a patent; and, at the time appellant became the assignee of the mortgage and grantee of the premises, the-entry, which was the only foundation for its claim of title, had been duly canceled.
It is settled law that “parties who purchase of pre emptors before patent cannot maintain the position of bona fide purchasers, as they purchase only an equity. They take only such title as the vendees of the government had, and purchase *653subject to the action of the Land Department upon-the entries, either in confirming or canceling them.” Whitaker v. So. Pac. Ry. Co., 2 Copp. 919; Prisbie v. Whitney, 9 Wall. 187, 19 L. Ed. 668; Wilcox v. Jackson, 13 Pet. 498, 10 L. Ed. 264; Arnold v. Grimes, 2 G. Greene 77.
It is stipulated by the parties to the action that respondent purchased the premises for a valuable consideration, and it is quite apparent that his title was acquired without any notice of the deed upon which appellant relies.
In discussing the proposition that the registration of an instrument anterior to, outside of, and not connected with, the purchaser’s chain of title, is insufficient to charge him with constructive notice. Mr. Pomeroy says: “If two titles to the same land are distinct and conflicting, the superiority between them depends, not upon their being recorded, but upon their intrinsic merits. It is settled doctrine, therefore, that a record is only a constructive notice to subsequent purchasers deriving title from the same grantor. Intimately connected with, and, indeed, a branch of, this same doctrine, is the question, how far back is a purchaser bound to search the record title of his own vendor? If the records show a good title vested in the vendor at a certain date, and nothing done by him after that time to impair or incumber the title, it would seem that the policy of the registry act is thereby accomplished. The purchaser is protected. He is not bound to inquire farther back, and to ascertain whether the vendor has done acts which may impair his title prior to the time at which it was vested in him, as indicated by the records. This view is supported by many decisions — it seems by the weight of authority — which hold that a purchaser need not prosecute a- search for deeds or *654mortgages made by his own vendor further back than the time at which the title is shown by the records to have been vested in such vendor, or, in other words, a purchaser is not bound by the registry of deeds or mortgages from his vendor made prior to that time.” 2 Pom. Eq. Jur. 658. The following cases are to the effect that a valid government patent vests in the patentee an absolute, unconditional right to the land, and that a deed lying outside of a purchaser’s chain of title derived therefrom imparts no notice. Rankin v. Miller, 43 Iowa 11; Tydings v. Pitcher, 82 Mo. 379; Ford v. Unity Church (Mo.), 25 S. W. 394, 23 L. R. A. 561, 41 Am. St. Rep. 711; Harper v. Bibb, 69 Am. Dec. 397; Farmers’ Loan and Trust Co. v. Maltby, 4 N. Y. Ch. 462; Losey v. Simpson, 11 N. J. Eq. 246; Warner v. Sibley (Mich.), 19 N. W. 40.
In the case of Rankin v. Miller, supa, the court says: “To entitle one to recover ownership of lands upon the ground of superior equity in himself, he must have some right other than the acquisition of a void title in ignorance of the rights of another. * * * The patent for lands belonging to the United States, when issued to a party, vests in him the perfect legal title, which relates back to the time of entry of the land. -The-entry of the land and the issuing of the certificate transferred to him at the time all the property held by the government in the land, and conferred upon him all equity therein.”
In-the present case it subverts the purpose of our' registration law, and is utterly absurd, to require respondent, in the interest of a grantee who gave nothing and got nothing, to extend his search beyond the patent from the United States, by virtue of which his grantors acquired perfect title. By the *655sheriff’s deed, Smith acquired the absolute title of the mortgagor, and the deed from Cadwell to Hortman contains nothing but the usual covenants of warranty. If it were necessary, the familiar doctrine that a grantee with notice, who takes from a grantor without notice, takes also without notice, might be invoked in respondent’s behalf. Under the rule that an innocent purchaser without notice cannot be deprived of any of the inherent qualities of his property, including an absolute right to alienate his entire estate, his grantee with notice is fully protected in the acquisition of the title purged of all equities, not on its own merits, but on account of being the successor of a bona fide purchaser. Van Syckel v. Beam, 110 Mo. 589, 19 S. W. 946; Paul v. Kerswell, 60 N. J. Law 273, 37 Atl. 1102; Arrington v. Arrington, 114 N. C. 151, 19 S. E. 351; Bruen v. Dunn, 87 Iowa 483, 54 N. W. 468; La Fleur v. Chace, 171 Mass. 59, 50 N. E. 456; Buck v. Foster, 147 Ind. 530, 46 N. E. 920, 62 Am. St. Rep. 427.
Appellant is guilty of gross laches, and it seems to me that my associates have overlooked the equitable principles which fully justify the action of the trial court. The judgment appealed from ought to be affirmed.