Jones v. Gates

Mr. Justice Moore delivered the opinion of the court: Assuming, without deciding, that a vendor’s lien exists in this' state, has the plaintiff by clear and convincing proof established his right thereto? Before plaintiff’s lien can be decreed it must appear that Rast was not an innocent purchaser; that he did not pay a valuable consideration, or that he had notice of plaintiff’s claim prior to said conveyance, or to the payment of the consideration. The evidence shows that Rast paid five thousand dollars for the property, which was a full consideration therefor; that Gates was in possession at the time of the conveyance, and executed a warranty deed therefor; and that, as Rast testified, the payment was made before he received any notice of plaintiff’s claim. This would make Rast an innocent purchaser for a valuable consideration. 1. Did he have any notice of plaintiff’s claim prior to his purchase, or to the payment of the consideration? A public writing is presumed to give notice of the contents thereof, whether seen’ by the party to be affected or not, but knowledge is information acquired by other means. Actual knowledge of the existence of a fact is equivalent to notice thereof. This knowledge must be such as to prompt any reasonable prudent man to make inquiry, which, if prosecuted, would lead him to discover the fact with which he would be affected. Idle rumors and vague suspicions will not answer, nor will general assertions made by strangers to the title, and resting on hearsay, be sufficient: Williams v. Miller, 16 Iowa, 111. No attach [414] ment was issued in the action brought by the plaintiff against Gates, and hence there could be no legal notice to East in that proceeding. The decision, then, must turn upon the question whether East had such knowledge of plaintiff’s claim against Gates was would cause a reasonable, prudent man to inquire into the existence of the fact. The plaintiff testified that he said to East at the time he commenced his action against Gates: “If I get a judgment against him I consider my property holding until it was paid for.” He also testified that he referred to the property in question, and said that at the time he made the statement he intended to hold this property. The defendant East testified that plaintiff told him at that time he intended to commence a suit against Gates, but he understood it to be for the settlement of accounts between them as partners, and that he never understood it to be for the purchase price of the land; and that he had paid the full consideration before he ever knew that plaintiff claimed any lien upon the property. There are circumstances shown by the record which appear to corroborate this theory. East testified that when he was negotiating for the purchase of the property, plaintiff advised him to buy it at the price asked by Gates; that after he had made the purchase, and paid the consideration, plaintiff then told him he claimed a lien upon the premises, and East asked him why he had not told him of his claim at the time he was negotiating with Gates, and plaintiff said he did not think of it. Thomas Criteser testified that he was present, and heard plaintiff advise East to buy the property, and that he did not at that time tell East he claimed any lien thereon. We must conclude from this that East did not have such knowledge as would lead a reasonably prudent man to make inquiry concerning plaintiff’s claim. 2. The defendant East has alleged that plaintiff advised him to buy the property without notifying him of his lien, and for that reason should now be estopped from [415] asserting it. The plaintiff knew about the negotiations for the purchase of the property; East told him he considered Gates asked too much for it, and with knowledge of these facts he advised East to buy it at the price demanded by Gates, without telling him anything about his claim. This was the time for the plaintiff to speak. He knew that East was about to purchase the property, and by remaining silent, when he should have spoken, it would seem to be inequitable to allow his claim to a lien after the negotiations were consummated and the consideration paid. Plaintiff permitted nearly ten years to run against his claim before he attempted to assert it. He allowed Gates to use the property as his own for more than seven years before it was conveyed to East, and thereby enabled him to acquire a credit he probably would not otherwise have obtained; and then, when the statute of limitations was about run, he commenced his suit to foreclose a secret lien. The tendency of modern legislation and decisions is strongly opposed to the creation or enforcement of secret liens. A registry system has been wisely provided to give notice of claims to real property, and conceding, for the sake of the argument, that a vendor’s lien exists in this state, the plaintiff, by his delay in commencing this suit, has permitted others to deal with Gates in relation to this property in a manner which would prejudice their rights if such a stale claim could be enforced. We are satisfied that no sufficient evidence has been offered to establish the alleged lien and the decree of the court below is AEEIEMED. Bean, J., having tried the case in the court below took no part herein.