Tripp v. Sieler

FOLLEY, J. This a'ction, grew out of a contract to purchase a quarter section of land in Todd county. The respondent, who brings the action for the purpose of setting aside the contract and recovering hack certain sums that have been paid on the purchase price, contends that the defendant is not able to furnish a merchantable title such ¡as is contemplated1 by the contract. The land involved is an Indian allotment. The instrument evidencing the allottee’s title is designated as a “trust patent” and — 325 — contains provisions and restrictions upon, alienation by the al-lottee similar to those found in a like instrument set out in Egan v. McDonald, 36 S. D. 92, 153 N. W. 915. Some time after the issuance of the so-called trust patent, the allottee died, and thereafter, on the 27th day of January, 1909, certain parties, purporting' to be his heirs at law, executed a deed conveying' said land to- appellant. On the 19th day of November, 1910, the 'contract of sale involved in this action was entered into between appellant and one Heinert. On -the same day, said Heinert assigned said contract to defendants E. H. and' E. A. Guenthner, and on the 19th day of December, 1914, said Guenth-ners assigned 'said contract to respondent. By the terms of the said contract, appellant agreed to deliver a deed and abstract showing good and sufficient title on the 19th day of November, 191 t. Said contract contained the following provisions: “It is understood and agreed that, in case of the failure of title from any cause, or should the - government refuse to approve the original sale of said lands, then this contract is to be cancelled and settled by the prompt return of all money paid by the purchaser, including" taxes. “As soon as said purchase money and the interest thereon shall be fully paid, said party of the first part agrees to make, execute and deliver to said party of the second part, a good-and sufficient warranty 'deed conveying said real estate to purchaser in fee simple, free of all incumbrance, except as to taxes for the year 1910, and subsecpment years, also1 an abstract of title for said premises.” [1] The deed from the heirs of the allottee to the appellant was duly approved by the Secretary of the Interior on the 27th day of July, 1909,'pursuant to the provisions of section 7 of an act of 'Congress approved May 22, 1902, and found at page 275 of 32 Stat. at L. (U. ¡S. 'Comp. St. 1913, § 4223). The execution of' this deed and the approval thereof by the Secretary of the-Interior not only divested the government of the -title and terminated the jurisdiction of the government over the land -Conveyed by -the -deed1, 'but it transferred the exclusive jurisdiction •ever said land to the state.-courts-. Egan v. McDonald, supra. On -and between tibe 17th day of April, 1912, and the nth day of August, 1914, the Guemthners made four -several payments, — 326 — aggregating some $2,000, to apply on the purchase price of the land. Shortly after the assignment to plaintiff, plaintiff made certain objections to 'appellant’s title, and, contending that appellant was unable to deliver the kind of title specified in said contract, brought this action to recover from appellant all the money that had 'been- paid' him on the purchase price of the land by plaintiff’s predecessors in interest. The Guenthners are named as defendants but entered no appearance in the case. The plaintiff had judgment as prayed for in the complaint, and defendant Sieler appeals. [2] It is first contended by the respondent that one of the alleged heirs was not competent to execute said deed. This contention -is based upon the fact, as found by the trial court, that one of the said heirs is what is known as a “refractory Indian” and, for that reason, was incompetent to execute the said deed. This is wholly immaterial. Section 7 of -the federal statute above referred to provides that the adult heirs of a deceased allottee may sell and convey lands inherited1 from a deceased allottee, and, when such conveyance is approved1 by the Secretary of the Interar, it convey® the full title to the purchaser the same as though there had1 been no restriction upon the power of alienation by the allottee. This statute maltes no distinction between Indians who are known as refractory and those who are not refractory. Neither of them, is considered competent to dispose of land so inherited without the consent and approval of the Secretary of the Interior, and it is for that reason that the approval by the Secretary of the Interior is necessary 'before the title passes. [3] It is also contended by respondent that the deed from the alleged' heirs of the allottee to the defendant w'as not acknowledged before amy officer authorized to- take acknowledgments, and that, for that reason, said deed was not entitled to1 record and does not constitute good' record title. The acknowledgment in question was taken. On tire 27th day of January, 1909, by a person who signs .himself as follows:: “EdKvardi B. Kelley, Supt. & Spl. List. Agent, Department of the Interior, Office of Indian Affairs.” Sections 970-973, inclusive, Civ. Code, ■ as amended by-chapter 3, Laws of 1907, enumerate the various officers who were authorized to take acknowledgments in January, 1909. By chapter 2, Laws.of 1911, Indian superintendents and' agents aje author — 327 — ized to take acknowledgments in Indian country, provided such superintendent or agent has filed for record, in the office of register of deeds for the county in which such superintendent or agent is stationed, his certificate of appointment as such superintendent or agent, signed iby the Secretary of the Interior. This law, however, is not retroactive, and, were it not for the provisions of chapter 3, Laws of 1911, said' acknowledgment would be invalid. Said chapter 3 reads as follows: "Sec. I. Any instrument affecting real property, which was, previous to the time of the passage and approval of this act, copied into, the proper hook of record, kept in the office of any register of 'deeds, shall he 'deemed to ¡impart, after that date, notice of its contents to subsequent purchasers and incumbrancers, notwithstanding any defect, omission or informality in the execution of the instrument, or in the certificate of acknowledgment thereof, or in the absence of any such certificate, the omission of any notarial or corporate seal, from such instruments; but nothing herein shall be deemed1 to affect -the rights of .purchasers or in-cumbrancers previous to the date of this act going into1 effect. Such instruments, the records of the same or certified copies thereof, may be read in evidence with the same effect as though such instruments were duly acknowledged, and recorded with notarial and corporate seals.” [3] The deed in question had been recorded in the office of the register of deeds of the proper county before the passage or approval of the above act. This cured the defect in the acknowledgment, and' the said' deed, or the record thereof, was properly admissible in evidence. [4] It is next contended by respondent that appellant’s title to said land- is incumbered by an outstanding mortgage. It appears from the record .that some time after the contract of sale was executed one Buechler executed a certain mortgage on the premises described in the contract. Buechler, however, does not appear to have had any title to the property. It .is not claimed that the said mortgage was made at appellant’s request nor with his consent, nor does he appear to> have had1 any knowledge of such mortgage until it appeared in the abstract of title. It is not shown that Buechler was ever connected with the chain of title in any way, nor that he claimed any rights in the premises that — 328 — were superior to the rights of plaintiff. On the other hand, plaintiff alleged' in his 'complaint, and' the trial court found as a fact: ‘‘That defendants * * * and' Christ liuechler claimed Some interest in or upon said land; that said interests, if any, are inferior to- that of this plaintiff.” [5] This finding is conclusive upon the plaintiff and, in view of such finding, it must be held’ that whatever interest Buecbler may have had in the premises is inferior to the interests of the plaintiff. Under these circumstances, appellant contends that said mortgage constitutes no incumbrance upon the said premises and casts no cloud upon his title thereto. Courts do not seem to be unanimous in regard to just what will constitute a cloud ,upon the title to real property -but they seem to be generally agreed that a conveyance or incumbrance attempted by one who has no interest in the property and is a stranger to the chain of title does not constitute a cloud upon such title. In. Pixley v. Huggins, 15 Cal. 108, Chief Justice Field stated the rule as follows : “The true test, as we conceive, ,by which the question whether a deed would cast a cloud’ upon the title of the plaintiff may be determined, is this: Would the owner 'of the property, in an action of ejectment brought by the adverse party, founded upon the deed, he required to- offer evidence to defeat a recovery? If such .proof would be necessary, the cloud would exist; if the proof would be unnecessary, no shade would be cast by the presence of the deed. If the action would fall of its own weight, without proof in rebuttal, no1 occasion could arise for the equitable interposition of the court; as in the case of a deed void upon its face, or which was the result of proceedings void, upon their face, requiring no' extrinsic evidence too disclose their illegality.” Since that time this rule seems to have 'been generally adopted by the courts. Cummings v. Dolan, 52 Wash. 496, 100 Pac. 989, 132 Am. St. Rep. 896; Ward v. Dewey, 16 N. Y. 519; Thompson v. Etowahi Iron Co., 91 Ga. 538, 17 S. E. 663; Lick v. Ray, 43 Cal. 83; Lytle v. Sandefur, 93 Ala. 396, 9 South. 260. A “merchantable title” 'does not mean a title that is free from every technical defect that can be conjured up. As ¡is said' in Cummings v. Dolan, supra, the authorities hold that: — 329 — “To render a title marketable, k is only necessary that it shall be free from reasonable doubt; in other words, that a purchaser is not entitled to demand a title absolutely free from every possible technical suspicion. He can only demand such title as a reasonably well informed and intelligent purchaser, acting upon business principles, would be willing to accept.” And in Todd v. Union Dime Sav. Inst., 128 N. Y. 636, 28 N. E. 504, it is said: “A purchaser is not entitled to demand a title absolutely free, from all suspicion or possible defect. He may claim a marketable title, and that means a title which a reasonable purchaser, well informed as to tire facts and their legal bearings, willing and anxious to perform his contract, would, in the exercise of that prudence which business men ordinarily bring to bear upon such transactions, he willing to accept and ought to accept.” [6] Tested by this rule, the mortgage complained of by respondent does not constitute a cloud upon appellant’s title. Appellant’s! possession could not be disturbed by any one claiming through or under the said mortgage. Neither could he be called upon to introduce evidence 'in order to defeat an action for possession by one claiming under the sa:id mortgage. Such an action would fall of its own weight. [7] While the question does not appear to have been presented to, or to have been passed upon by, the trial court, one of the objections urged by respondent to appellant’s title is that it does not appear from the record that the estate of the allottee had ever 'been probated or that his debts had 'been paid, nor that the parties who executed: appellant’s deed, assuming that said parties were heirs of the allottee, are all of the heirs of s'aicl allottee. Whatever might have 'been the merits of this objection, had st been timely made, we are of -the opinion that it was waived by the appellant in this case. It is true that, 'by the assignment from Guenthners, respondent acquired all their rights under the contract; still having had knowledge of the material facts, he acquired no greater rights thereunder than the Guenthners had at the time the assignment was made. It appears from the terms of the contract th'at respondent knew the source of appellant’s title. He knew that it was necessary that appellant’s deed, in order to become effective, must be approved by the Secretary of the — 330 — Interior, and it was stipulated that the contract should be canceled and all sums of money paid on the purchase price should be returned1 to the purchaser if the deed1 was not so approved. But, the deed having been so approved, the contract was not subject to cancellation' on that account. [8] During- the month of May, 1911, appellant furnished to the Gueñtíbners, who then owned the contract, an abstract of title, showing all the facts concerning’ the condition of the title at that time. Thereafter and prior to the assignment to respondent, they made four payments on the purchase price of the land. ' By making such payments, they waived objection to the said apparent defects in appellant’s title, and, as we 'have already seen, respondent acquired no greater rights than was possessed by the Guenfhners at the time of the . assignment. Respondent is therefore estopped from making such objections after the assignment. That respondent had full knowledge of the allege:1, defects that he is now urging ¡in appellant’s title appears from a letter he wrote to 'appellant -before taking the assignment. In this letter ‘he said: “It appears that the patent nan to- a man who died before any conveyance, and there was never any administration of his estate, whereby it appears his debts were all paid, or who all of his heirs were. There ¡is then a conveyance -by some persons who represent themselves as heirs, do- not say they' are all :cf the heirs, or that the debts were paid, and it would make no difference if they did, for their statements could affect them only. It impresses me this is not a good record title.” If respondent was impressed that appellant’s title was not a “good record title,” the question that naturally presents itself is: Why did -he purchase it? He knew in advance what he was getting, and if lie did not consider the title “good,” he should have seen that apparent defects, if any, were removed before ¡he made the purchase. But be that as it may, in our opinion, the alleged defects relied upon by respondent áre not of such a nature as to entitle respondent, in- any event to rescind' the contract and recover the purchase money that had been paid, nor to deprive appellant of his right to recover the balance due on the purchase price. In the first place, there is- no- suggestion that the deceased allottee left any -debts; and, in the second place, we know of no — 331 — law, either state or federal, that makes an Indian’s debts a lien on land that is 'heild in trust for him by the United States government. Upon tlie other proposition, the situation is the same. [9, 10] The action of the Secretary of the Interior in approving1 the conveyance from the heirs of the allottee to the appellant is based upon a report made to the Commissioner of Indian Affairs by a special United' States Indian agent. In this report, said agent named the three parties who executed the deed to appellant as the sole heirs- of the allottee, specifying the amount of the -purchase money to which -each one -was entitled, a-nl also stated:- “There 'is no dispute as to- the lawful heirs.” While such recitals, nor the approval of the deed by the Interior Department, -do not amount to -an adjudication that the -parties who executed the deedi are the sole heirs of the allottee (Jennings v. Wood, 192 Fed. 507, 112 C. C. A. 657), the deed executed and approved under the above circumstances conveys good prima facie title, and it -was incumbent upon the respondent to- sho-w the existence of -other heirs before he can defeat appellant’s title on that -account. A -mere possibility that some -defect, not appearing of record, may exist or may arise in the future, is not sufficient to -cast -a reasonable doubt on an 'apparently good title. Spencer v. Lyman, 27 S. D. 471, 131 N. W. 802. The possible defects pointed out and- relied upon by respondent . are not sufficient to entitle him to rescind and -recover the ■purchase money that had been pai-d', and the judgment and order appealed from are reversed.