Stout v. Hyatt

The opinion of the court was delivered by Valentine, J.: This was an action for the recovery of real property; two trials were had; verdict and judgment for the plaintiff below, defendant in error. The land in dispute is a part of section 16, township 3, range 21, in Doniphan county, and was originally school land. The records of the board of county commissioners of said county show among other things the following facts, to-wit: On February 2d, 1857, the county board allowed H. Culbard to'pre-empt said land, and to assign his pre-emption right to Asa K. Hubbard, and ordered a transcript of the record to be given to said Hubbard. On the same day the board appointed Ebenezer Blackstone a commissioner to secure the purchase-money for school lands. On July 17th, 1857, said board allowed said Hubbard to have entered on the records of the board an assignment of said pre-emption right from Hubbard to Reuben Middleton. On August 7th, 1857, said board appointed said Blackstone school treasurer for Doniphan county, and on the same day he duly qualified and took possession of the office. On July 15th, 1858, said Middleton made proof of his right — 240 — to pre-empt said land, and of payment therefor to said board, by presenting to them a receipt for the amount to be paid for said land, signed by said Blackstone, school treasurer, and the board then made the following entry, to-wit: “It is therefore considered by the court, that the said Reuben Middleton has complied with the provisions of an act of the legislative assembly of the Territory of Kansas entitled ‘An act to grant pre-emptions to school lands in certain cases/ and the instructions of the executive department in relation to the same, and that he is entitled to receive the patent for said land.” The receipt given by Blackstone to Middleton, and copied into the records of the board of county commissioners, reads, according to the evidence in the case, as follows: “No. 16. Received Troy Oct. 13th, 1857, of Reuben Middleton the sum of two hundred dollars, it being the purchase-money for the following described quarter-section of school land, to-wit: The southwest quarter of section sixteen, township three, of range twenty-one, in the county of Doniphan, and Territory of Kansas. Ebenezer Blackstone, School Treasurer for Doniphan Co., K. T.” Hubbard also executed a deed for said land to Middleton, February 16th, 1857. Middleton executed a deed for the land to Hughes, September 19th, 1858, and Hughes to Hyatt, the plaintiff below, May 13th, 1862. This constitutes the plaintiff’s title. The defendant Stout holds under a patent issued by the state of Kansas to himself on August 31st, 1870. There are many other facts which we have not yet stated, but which we shall state as we proceed. The plaintiff in error, defendant below, claims that the court below committed many errors: for instance, that the court erred in impanneling a jury; that the court erred in holding that a party may have both a legal and an equitable title to land; that the court erred in allowing the plaintiff below to recover on the strength of an equitable title, as against the defendant who holds the legal title; that the court erred in admitting illegal evidence, and excluding legal evidence; that the court erred in giving improper instructions, and refusing to give proper ones, etc.; all of which we shall consider as we proceed. But as to many — 241 — of said supposed errors, all that we can do will be to decide the questions involved therein without entering into any discussion of said questions. I. It is not a substantial error for the district court to discharge a juror during-the time the jury are being impanneled, although the juror may be discharged for an insufficient reason, where an unexceptionable jury is afterward obtained, and where the party complaining has not exhausted his peremptory challenges. II. A party may have both a legal and an equitable title to a piece of land. He may in fact possess the whole title, both legal and equitable, and be the entire owner of the property. III. A party may in an action for the recovery of real property under § 595 of the civil code recover on the strength of an equitable title only, even though the adverse party may hold the legal title, provided however that such equitable title is paramount to and stronger than the title held by such adverse party. IV. Where the plaintiff seeks under said § 595 of the code to recover real property on the strength of a paramount equitable title against a defendant who holds the legal title, the action is in the nature of an equitable action; and although such action is frequently called an action of ejectment, yet the final determination of the rights of the parties must be governed by the rules pertaining to equitable actions. That is, the plaintiff in such a case must make out in every respect as complete a right to recover, and by the same kind of evidence, as though he had commenced his action in the form of an equitable action. V. Although the facts in an action for the recovery of real property under said § 595 of the code are not usually and need not necessarily be set out in the pleadings in detail, nor with any degree of particularity, still either party under such pleadings may prove whatever would strengthen his own title, or defeat his adversary’s title, in the same manner and to the same extent as he could do if the facts were set out with — 242 — all the circumstantial minuteness and fullness of detail that they usually are in equitable actions. VI. Since the decision in the case of The State v. Stringfellow, 2 Kas., 263, 316, we suppose there can be no question concerning the power of the territorial authorities of Kansas to sell school lands during the time that Kansas was a territory, or concerning the validity of the laws of the territorial legislature passed for that purpose. VII. Pre-emption rights could be assigned under § 5 of the territorial pre-emption laws of 1855, (page 646,) and this assignment could be made by a simple instrument in writing. The assignment where the land had not been paid for was at most only the assignment of an equitable interest. No estate was conveyed, and of course it was not necessary to execute a deed of conveyance. Said instrument in writing may be and must be proved in the same manner as any other simple instrument in writing. VIII. The proceedings of the county board under § 8 of the territorial pre-emption laws of 1855, (page 646,) are in the nature of judicial proceedings, and should be treated with about the same respect as the proceedings of other tribunals of special and limited jurisdiction. IX. While the county board had the power under- said pre-emption laws to determine whether any particular person had the right to pre-empt any particular piece of land, yet they had no power to determine whether any such person or any other person had at any time' paid for said land. The payment was to be made to the school treasurer, and hence the records of the county board would not be evidence of such payment. X. The receipt given by Blackstone, school treasurer, to Middleton, was regular upou its face, and was given by the proper officer. (See the following statutes in the following order, to-wit: Laws of 1855, page 646, § 6; Laws of 1857, page 86, §3, (took effect Feb. 20th, 1857;) Laws of 1855, page 646, § 7.) And hence said receipt was prima fade evidence that said money therein mentioned was paid. But, as — 243 — we think, it was only prima facie evidence of that fact. The receipt was not intended as evidence of title, but only evidence of payment. Under the said pre-emption laws whenever payment was made for the land the title thereto immediately vested in the purchaser. (Laws of 1855, page 646, § 7.) It required no receipt, patent, or other instrument to vest this title. This title however was only an equitable title. The receipt for the money was then given for the money paid. The purchaser then presented this receipt to the secretary of the territory. The patent for the land was then issued by the governor and secretary, and the legal title to the. land passed from the territory to -the purchaser. The main object in giving the receipt seems to have been to enable the purchaser to obtain his patent. In the present case the court below held that said receipt, taken in connection with the records of the board of county commissioners, was conclusive evidence of said payment. In this we think the court below erred. It is true said receipt would be conclusive as against any person except the state (then territory,) or some person holding under the state (or territory,) for no one except the state (or. territory) or some person holding thereunder would have any right to said land or to the money. But the defendant below holds under the state, and holds precisely the same rights to said land that the state held immediately prior to his purchase. He holds the legal title, with all the equities that the state held prior to his purchase; and therefore he may dispute the supposed payment made by the said Middleton to the same extent that the state might have done if the state had continued to hold the legal title. That receipts in general are only prima facie evidence of payment, we suppose will not be disputed. XI. It is claimed that the plaintiff Hyatt is a bona fide purchaser of said land, without any notice of a want of payment therefor, and that therefore said receipt cannot be disputed. Now, it may be that the plaintiff is a bona fide purchaser in fact, as he claims; but we hardly think that such can be so in law. At the time the plaintiff purchased — 244 — said land no patent for the same had yet been issued. The legal title to the land wás therefore still in the territory of Kansas, and was not in Hughes, the plaintiff’s grantor. The plaintiff could therefore at most obtain only an equitable title from his grantor. And a party purchasing a merely equitable title must always take notice of all counter equities which may be outstanding in favor of the person holding the legal title. A party purchasing a merely equitable title cannot be a bona fide purchaser so as to defeat prior equities existing in favor of the person holding the legal title. XII. It would seem from some of the evidence that the purchase-money for said land has- never in fact been paid, but that a certain note was given therefor, and that the note has not yet been paid. Now, this may or may not avoid the plaintiff’s title. If it is to be considered that the land has not been paid for at all, we should think that the plaintiff’s title had been forfeited. (Laws of 1855, page 646, § 6.) But if it was understood by Middleton, the school treasurer, the county commissioners, and the parties who executed said note, that the land was paid for, and that said note was given for money loaned by the school treasurer to the persons who executed said note, and that all was done in good faith, then we should think that the plaintiff’s title should be held good. Under the school laws as they existed at the time said receipt was given, the school treasurer had a right to loan said money on good security to be approved by the county commissioners. (Laws of 1857, page 86, §3.) And if the money was to be paid in by the purchaser and loaned out to the borrower on the same day, it was not necessary that the money should actually pass into the hands of the treasurer. If all the parties considered that the purchaser’s debt as such was extinguished, and that the borrower’s debt was created, that was sufficient. If the borrower was satisfied to look to the purchaser for the money, that was sufficient. And then if the purchaser should pay the borrower and the borrower should never pay the note, it would not defeat the purchaser’s title. It may be however that under the peculiar circumstances of this particular case — 245 — before the plaintiff should be allowed to recover (if he may recover) he should be compelled to pay to the defendant, (as a trustee holding the legal title for plaintiff’s benefit,) what the payors of said note may now owe thereon, if in fact said note has never been paid, for, as we have before intimated, this is substantially an equity action. But as we have not all the facts before us we .shall not comment on this matter further. The judgment of the court below will .be reversed, and cause remanded for further proceedings in accordance with this opinion. All the Justices concurring.