Norton v. Stroud State Bank

Opinion of the court by Irwin, J.: Three grounds are urged by plaintiffs in error for a reversal of this ease: First, that defendant in error, plaintiff below, was a hona fide holder of said note in due course of trade: Second, that said note sued on was a non-negotiable note: Third, that as a matter of law, the consideration for said note totally failed, in that said rental contract or lease was absolutely void. *299 As to the first assignment of error, we think in this ease it is immaterial whether the defendant in error, plaintiff below, was not a Iona fide holder of said note in the due course of trade, and had all the rights pertaining to such holder. It is apparent from the record in this case, that this note was assigned to the defendant in error by the original payee of.the note. That assignment would give him the right to sue on the note, and to recover and to maintain any and all rights which the original payee had therein. As to the second assignment of error, while under the holdings of this court construing our statute as to negotiable instruments, this would not be a negotiable instrument, this would only affect the note to the extent of allowing any and all defenses to it which might have been made against the original holder. In our judgment, the only assignment of error that should be considered here, is the third. That is, was the lease absolutely void, and has the consideration totally failed, and if so, are the defendants in the court below, plaintiffs in error here, in a position to raise this proposition? We think the position of plaintiff’s in error is one which does not appeal to the sense of justice or equity of the court. Under the admitted state of facts as disclosed by the pleadings, the plaintiffs in error entered into possession under this assignment of the lease, had the uninterrupted peaceable possession of the premises, and enjoyed all the benefits of the lease, and in equity should now be estopped from setting up any invalidity of the lease as a defense to the note given in consideration of the assignment. By the stiprdation filed by the parties, it is agreed that all of the allegations of the plaintiff’s pleadings are true. On page 38 of the record, is *300 this statement, contained in the reply of plaintiff in the court below: “That the said M. W. Lynch had a due and valid lease to said real estate and conveyed the same in due form to the defendants, and delivered the possession of said premises to the defendants, and the defendants entered upon and occupied and cultivated the same, and plaintiff is informed and believes that they still continue to occupy and enjoy the same.” And we take the rule to be that where a guardian makes a lease of the premises of his ward, without complying with all the requirements of the law, and the party to whom the lease is made, without warranty, conveys the same to a third party who enters upon the premises and enjoys the peaceable and uninterrupted possession of the premises, and reaps the fruits of the lease, he cannot be heard to question the validity of the lease or the assignment, in defense of a note given in consideration of such assignment. In the case at bar, the assignment of the lease is as follows: “That I, M. W. Lynch, of Lincoln county, in the Territory of Oklahoma, the within named lessee in consideration of the sum of one hundred and fifty dollars, to himself in hand paid, the receipt whereof is hereby acknowledged, do hereby sell, assign, transfer, set over and convey all his right, title and interest unto Albert Norton and T. A. Norton, heirs and assigns, the within lease, to have and to hold the same, subject nevertheless to the conditions therein contained.” It will be seen by this assignment, that Lynch, the person making the assignment, made no representations, or covenants of anj" kind, whatever, but simply sold whatever rights he had under the written contract or lease, and put the assignees in possession of the premises. They are presumed *301 to know the law. They bought without warranty, and without any representations, whatever rights Lynch had. Lynch sold just such rights as he had under the law, and no more, and we take the rule of law to be well settled that in the absence of fraud or warranty, the purchaser of real property takes the title at his own risk, and if he has not taken the precaution to secure himself by covenants, he has no remedy for the recovery of his money, even on failure of title. In the case of Sanborn v. Cree, 3 Colo. 149, the supreme court of that state say: “In an action on a note, given in consideration of an assignment of a lease without warranty, the assignee cannot set up a defect of title. He stands like a purchaser under a quit claim deed.” In the case of Owings v. Thompson, 4 Ill. 502, the supreme court of that state say: “■Where a note is given for the purchase of land, in the absence of an agreement that the title is good, or that the note shall not be paid if the title fail, and in the absenec of fraud, although untrue representations are in fact made as to the title, a failure of title will not constitute a failure of the consideration of the note.” In the case of Ward v. Packard, 18 Cal. 392, the supreme court of that state say: “The mere fact that a vendor of land was aware of the existence of a judgment which was an incumbanee on the land at the time of his sale, and failed to inform the vendee of the existence of such judgment, is not a fraud so as to constitute a defense to suit on a note for the purchase money, where the means of information, to-wit — the county record— were equally accessible to both parties. In such case, if the vendee neglect to inform himself he is guilty of negligence, *302 and cannot set up his ignorance as a ground of fraud, unless by deceit or misrepresentation he has been misled.” In the case of Findley v. Richardson, 46 Iowa, 103, the Iowa supreme court sayf “A purchaser of real estate at a guardian’s sale, has no right to infer, from the guardian’s assurance that he will give a good title, that he has acquired a title in fee simple, and such assurance being given in good faith, without fraudulent intent, the purchaser, who thereby acquires all the interest of the ward in the land, cannot refuse to pay a promissory note given for the purchase money on the ground of a failure of consideration.” In the case of Bell v. Parks, 18th Kan. 152, the supreme court of that state, speaking through Justice Brewer, said: “Where it appears that P was an actual settler on a quarter section of the Sac-and-Fox lands, and had made improvements thereon; that by treaty between the government and the Sac-and-Fox Indians these lands were subject to preemption by actual settlers, and that P and B. made a contract whereby, in consideration of $1500 cash and a note for $500, P executed a quit claim deed of all his right, title and interest in said premises, and delivered the possession of the same with the improvements to B, held, that in the absence of any fraud or deception there was no failure of the consideration of the note, although the improvements were not worth over $700 — although the title to the land continued to remain in the government.” We are cited by counsel for plaintiffs in error, in support of their contention, to the case of Indian Land and Trust Co. v. Shoenfelt, 79 S. W. 134, but we think that case is not applicable to the case at bar, for the reason that case was a direct attack upon the lease. Shoenfelt, representing the Indian, was seeking to avoid the lease for the benefit of the *303 Indian, and in the case at bar, the attack upon the lease is at best bnt a collateral attack, and we think cannot be made available, even if the contention of the plaintiff was true, for the purpose of defeating the note given as consideration for the assignment of the lease. And, in this ease, we think there is no implied warranty, because by the express terms of the assignment it purports to convey all the right, title, and interest that Lynch had in the lease, and no more. This is a limitation of the title which Lynch purported to convey, and excludes all implied warranties of further .title. Neither can the rule implying a warranty of title in case of sale of personal property in possession of the seller be applied in this case, because it is not shown by the record that Lynch was ever in possession of the property. Neither do we think that the contention of counsel for plaintiff in error that this lease is absolutely void can be maintained, because section 17 of the Supplemental Creek Agreement, by act of congress of June 30, 1902, which was read and admitted in evidence, provides that “Creek citizens may rent their allotments for strictly non-mineral purposes, for a term not to exceed one year for grazing purposes only, and for a period not to exceed five years for agricultural purposes, but without any stipulation or obligation to renew the same. Such leases for a longer period than one year for grazing purposes and for a longer period than five years for agricultural purposes, and leases for mineral purposes may also be made with the approval of the secretary of the interior, and not otherwise. Any agreement or lease of any kind or character violative of this paragraph shall be absolutely void, and not susceptible of ratification in any manner, and *304 no rule of estoppel shall ever prevent the assertion of its invalidity. * * *” Now, this lease in question expressly provides that the minor is a Creek Indian; that the land is leased for five years for agricultural purposes, and contains no stipulation for a renewal of the same, and does not come within any of the restrictions of this act which would render it void. The lease assigned in this case was not forgery. It had actually been executed by the guardian of the minor. Lynch was the actual owner of the lease, and was the holder of whatever interests it conveyed, and the only objection to it urged by counsel for plaintiff in error is, they allege lack of authority on the part of the guardian to execute such an instrument. Now, we understand that such an instrument is not a void instrument, but only voidable.' So far as the record in this case shows, the Indian boy, and his guardian, still approve the lease, and consent to the lessees’ enjoyment of its benefits. The case at bar is not an instance of a party seeking to disaffirm or avoid a contract by the party having such right, but is an attempt by the assignees to set up the defect or invalidity in the contract to avoid paying a note given for the assignment of the lease which they purchased with knowledge of what they were getting, and after they had enjoyed all the benefits of their bargain. Not only is the record silent' as to any objection on the. part of the guardian, or his ward, but by the express stipulation of the parties, it is agreed that the lease to Lynch was a valid lease; that he made a legal assignment of it to plaintiffs in error; that he put the plaintiffs in error in possession; that they cultivated and used the premises, and are still in possession of them. Now, under this state of facts, we think it would be a gross inequity *305 and injustice to allow the plaintiffs in error to take the benefits of the lease, and then avoid the payment of the note given in consideration for the same. Having examined the entire record, and finding no error therein, the judgment of the district court is affirmed at the costs of the plaintiff in error. Hainer, J., who presided in the court below, not sitting; all the other Justices concurring.