McBee v. O'Connell

OPINION. HANNA, J. -There are seven assignments of error, which present but two points for our consideration, the first being that: “The court erred in granting the motion of defendants to strike from plaintiff’s amended reply the following allegation to-wit: “And had said contract and assignment made a matter of record in the office of the probate clerk ■and ex-officio recorder of Eoosevelt county, New Mexico, which made same notice to all persons of plaintiff’s equity and right in and to said property.’ ” 1 The first, second, fifth and sixth assignments of error have to do with the first proposition contended for by the appellant and is to be briefly disposed of by us upon the ground that the question involved was presented by the first appeal to the Territorial Supreme Court, and has become the law of the-case so far as we are now con-cerned. As was held in a late opinion of the Territorial Supreme Court, in the case of Davisson vs. Citizen’s Nat’l Bank, 16 N. M. 689, 120 Pac. 304: “Upon a second or subsequent appeal, ‘nothing will be ■considered except the proceedings occurring after remand, the former decision being the law of the case, whether right or wrong, so that a question which could have been considered on the former appeal will not be considered on the subsequent appeal.” The second point requiring pur consideration is raised by the third, fourth and seventh assignments of error, which are as fqjlows: “(3) The court erred in refusing to permit plaintiff to-introduce evidence showing that defendant -had constructive notice of plaintiff’s right, title and interest in and to said property. , (4) The court erred in instructing the jury That there is not sufficient evidence in the case to charge the defendants or either of them, with knowledge or notice of the interest of the plaintiff under the assignment from J. M. Bay, to him of the property in question, and for that reason-under the direction of the court you will find the issues in favor of the defendants.’ (7) The court erred in taking from the jury the fact of possession' of the property by plaintiff through his tenant Deeper’ and his agent ‘Fitzhugh’. Thus holding in effect, that the possession of the property by plaintiff through his-tenant Deeper’ and his agent ‘FitzhuglT at the time defendants claim to have purchased the property from J. M. Bay, was not notice to defendants of plaintiff’s interest in the property, and the court further erred in taking this fact and evidence from the jury.” 2 The proposition of law involved is briefly whether the-occupancy and possession of plaintiff’s tenant was such as " would put the defendants upon notice of plaintiff’s rights, or be such constructive notice of those rights as will negative defendants’ claim of good faith as a bona fide purchaser. This particular point has received the attention of numerous courts and there is a great preponderance of authority in favor of appellant’s position upon the-question, although the authorities are hot uniform on the question. It is, of course, to- be conceded, in the existing status of this case, that unless the defendants were put upon inquiry as to plaintiff’s title and right to possession by the-occupancy of the tenant the defendants must prevail and the judgment of the trial court be affirmed. One of the best considered cases to which our attention is directed is-that of Randall et al., vs. Lingwall (Ore.) 73 Pac. 1. The Supreme Court of Oregon following the rule as stated by Mr. Justice Cole in Dickey vs. Lyon, 19 Iowa 544, held that: “A person who purchases an estate in the possession of another than his vendor is in equity, that is, in good faith, bound to inquire of such possessor what right he has in the estate. If he fails to make such inquiry, which ordinary good faith requires of him, equity charges him with notice of all the facts that such inquiry would disclose.” The Oregon court further held that the possession of the tenant is sufficient to put an intending purchaser from a third person upon inquiry as to the landlord’s rights, and to charge him with constructive notice thereof if he fails to make such inquiry. 3 We believe these conclusions receive the sanction of the great weight of American authority and therefore adopt the rule contended for by appellant. The Oregon case collects and considers numerous authorities which we have considered but do not cite in support of this opinion. Other later cases to the same effect are the following: Penrose vs. Cooper, 86 Kan. 597, 121 Pac. 1103; Wood vs. Price, 81 Atl. 983; Brady vs. Sloman, 120 N. W. 795; see also, Pomeroy’s Equity Juris. Sec. 625. 4 An exception to the rule stated should be made where the subsequent purchaser shows that he pursued an inquiry, with proper diligence, and failed to obtain the knowledge of the unrecorded instrument, or of the right of the parties claiming under it. Penrose vs. Cooper, 121 Pac. 1103. We do not overlook the fact that appellee contends that the second proposition as to constructive notice by possession and occupancy of tenant, was disposed of by the first appeal, but we do not consider this to be true. The appellee here was the appellant in the former appeal and did not raise the question and it was not incumbent upon the appellee in the former case to there raise the point now raised upon this appeal by him. As pointed out in this opinion, the former appeal in this case turned upon the record title of the appellant on the appeal, he having prevailed upon that issue in the trial court, but suffered a reversal in the Supreme Court because of a defective acknowledgment. Upon the retrial of the case he relied upon a contention that the possession -of luis tenant was constructive notice to a subsequent pur•cliaser of Ms rights in the premises, and this issue is presented to the appellate court for the first time and was not involved in the first appeal. . The judgment of the district court is reversed and the ■cause remanded, and, IT IS SO OBDEBED.