Austin v. Pulschen

Temple, J. — Action to foreclose a vendor’s lien. Judgment was entered for plaintiff foreclosing the lien, but subject to a mortgage in favor of defendant McDonald for $4,500. The land was owned by Bruce and Kent. Henderson contracted to purchase from them and paid a portion of the purchase price, but left $5,000 unpaid. Henderson sold one-half to plaintiff for $5,000—one-half paid in cash. A deed was to be made by Bruce and Kent upon payment of the other half with interest. March 28, 1891, plaintiff agreed to sell the property to Pulschen for $5,300, of which $2,700 was to be paid to Bruce and Kent in satisfaction of their claim upon the land. Three hundred dollars was to be paid to plaintiff in cash upon the delivery of a deed from her to Pulschen, [531] and $2,300 according to the terms of two promissory notes then executed by Pulschen. It was expressly agreed that plaintiff should retain possession of the premises as security until all the purchase money was paid. The contract between plaintiff and Pulschen does not appear to have been in writing. Pulschen applied to defendant McDonald for the money which would enable him to carry out the agreement with plaintiff. It seems he already owed McDonald $1,500. He required $3,000 more for immediate use in his agreement. McDonald referred the matter to his attorneys, Dorn & Dorn, who, after having examined the records, advised him that he could safely take the mortgage if Pulschen would first procure deeds from Bruce and Kent and from Mrs. Austin. Proceedings were then taken to procure those deeds.' Bruce and Kent signed and acknowledged a deed April 11th. This was, however, not delivered until April 17th, when the plaintiff also signed it. And on that day the money was paid by Pulschen, which he thus obtained from McDonald, as follows: To Bruce and Kent as principal $2,500, and as interest $200. To plaintiff $300, which was in pursuance of the agreement between herself and Pulschen. On the same day Pulschen acknowledged and delivered a mortgage to McDonald upon the premises for $4,500. It is found that at the time McDonald did not know that Pulschen had not paid plaintiff in full, and plaintiff did not know that Pulschen had mortgaged, or was about to mortgage, the property to McDonald. Under such circumstances, is McDonald an encumbrancer in good faith and without notice? The transactions, it will be seen, were practically simultaneous. The deeds, it is true, bore a different date, but the findings conclusively show that the mortgage and the deeds were all delivered on the 17th of April. Indeed, it fairly appears that McDonald, or his attorneys for him, paid the money to Bruce and Kent and to Mrs. Austin, for McDonald was advised that he could not safely loan the [532] money until deeds were obtained from them; and he did not until such deeds were had, and they were procured by the use of the money which he advanced. It is claimed that the fact that plaintiff was in possession of the premises was sufficient to put McDonald upon inquiry. So it did, and to protect himself against any claim she might have, he insisted upon getting, and did get, her deed. When one-in possession of land makes an absolute conveyance of it, the presumption is that he did so on an adequate consideration. Unless there is some circumstance which indicates the contrary, persons may deal with the grantee on that supposition, and are not under obligation to inquire. That a grantor should be in possession when he makes his deed is the natural and usual condition of things. If he remains in possession afterward, that fact gives rise to a different inquiry. Here, when McDonald took his mortgage, plaintiff had not remained in possession after her deed, for they were practically simultaneous. Whether the fact that a grantor remains in possession after the execution of his deed has the effect of putting parties dealing with the grantee on inquiry, is a mooted question. (2 Pomeroy’s Equity Jurisprudence, sec. 617.) In this state, where a deed absolute on its face may be shown to be a mortgage by paroi, the courts will probably feel themselves bound to hold that it does have that effect. Still, I cannot see how one could be put on inquiry until the possession has continued long enough to indicate to one who knows only the fact of possession that the grantor has remained in possession. But for still another reason plaintiff cannot enforce her lien upon the premises. On the eighteenth day of May, 1891, Pulschen made a deed of the premises to defendant Bosenerantz. On the fourteenth day of July, 1891, Bosenerantz paid plaintiff $270 for certain personal effects and for possession of the premises. She then delivered the premises to him, and executed and delivered to him two unacknowledged deeds to said [533] premises. And it is found that Rosencrantz entered into possession of the premises and has ever since remained in possession. Of course, if Mrs. Austin ever had a vendor’s lien she can assert no such claim after making those two conveyances. It is suggested that the finding does not say that plaintiff executed conveyances to Rosencrantz. The finding is that she executed and delivered deeds to said premises. The same word is used in the same sense in two other findings in this case, and in these cases the use has not been criticised. But the criticism is unfounded. A contract under seal is not a deed in this state. The only use of the word here is the popular sense meaning a conveyance of land, and, in that sense, its use has become common by lawyers and laymen. As used in the findings it is not ambiguous. I have discussed the case as though Mrs. Austin had once a vendor’s lien, but in my opinion she was never entitled to the vendor’s lien, which is the creation of courts of equity to secure to a vendor his purchase money. The title to the land was never in her, and, ■ by her agreement with Pulschen, was never to come to her. It was agreed that she was to be secured by being left in possession until she was paid. She had then other security, and was therefore never entitled to a vendor’s lien. As no defendant has appealed, the judgment in plaintiff’s favor will not be disturbed. The alleged erroneous rulings in regard to the introduction of testimony were upon immaterial matters and are correct. In regard to the motion to set aside the order granting a rehearing and for a remittitur, it is sufficient to refer for a consideration of the question raised to In re Jessup, 81 Cal. 466. The judgment is affirmed. Van Fleet, J., Harrison, J., Garoutte, J., and Henshaw, J., concurred.