Jordan v. McNeil

The opinion of the court was delivered by VALENTINE, J.: Lena McNeil, the defendant in error, plaintiff below, alleges in her petition below that on the 26th day of January, 1880, desiring to convey property therein described as follows: Lot number eight, in block number one hundred and sixty-seven, in the city of Winfield, to one Martha E. McNeil, she went to the office of one Charles H. Payson, a lawyer, at Winfield, Kansas, and requested him to draw up a deed for that purpose. She afterward went to Payson’s office, when he shpwed and read to her a deed drawn in accordance with her wishes. She stated that it was satisfactory, and they then went to the office of a notary public to sign and have it acknowledged. She further alleges that Payson there substituted another deed for.the one previously read to her, which conveyed the property before described to himself, and she, in ignorance of the substitution, signed and acknowledged the same, and left it in the possession of Payson for record, and it was by him duly recorded in the office of the register of deeds for Cowley county, Kansas, on the following day; that on the next day Payson executed a mortgage on said property [463] to James Jordan to secure a loan’ of $480, and still later, on the 2d day of February, 1880, deeded the property to George H. Buckman for $200, Buckman assuming the mortgage; that on the 23d day of February; 1880, defendant in error discovered that the deed she had executed conveyed the property to Payson instead of to Martha E. McNeil, and immediately brought suit, filed her petition setting forth the foregoing facts, alleging actual, open and exclusive possession of the premises all the time, and asking that the deed from her to Payson, and also the deed from Payson to Buckman and the mortgage from Payson to Jordan be canceled and declared null and void. To this petition Jordan and Buckman separately demurred, on the ground that the petition did not state facts sufficient to constitute a cause of action, which demurrers were overruled by the court and held to be frivolous, and these plaintiffs in error were required to make a showing for leave to answer. Thereupon both Jordan and Buckman made sworn statements, alleging innocence of any knowledge of the fraud of Payson; that they had made careful examinations of the records before consummating their transactions with Payson; that their transactions with- Payson were in good faith, and for sufficient consideration, setting forth the details thereof, denying the actual and exclusive possession of the premises by the defendant in error, Lena McNeil, as alleged by her in her petition, alleging that at the dates of the mortgage and deed from Payson, that Payson himself was in possession, and that the demurrers were not made for delay, etc. The court held this showing insufficient, refused to permit the plaintiffs in error, Jordan and Buckman, to answer, and gave judgment for the defendant in error, in accordance with the prayer of her petition. The plaintiffs in error now bring the ease to this court, and assign for error the foregoing rulings of the district court.' But preliminarily, the defendant in error moves to dismiss ' the petition in error, on the ground that the plaintiffs in error have no joint or common interest in the controversy; and further claims in her behalf, that the plaintiffs in error [464] have not assigned the rendering of the judgment for error. Now they certainly have a common interest in sustaining the validity of the deed from Lena McNeil to Payson, and we think they have sufficiently assigned the rendering of the judgment for error. But even if we were to consider the petition in error as defective in these particulars, still, in a doubtful case, such as this must then be, we would allow the plaintiffs in error to amend at any time, without costs, by filing separate petitions in error, and assigning specifically and unmistakably the rendition of the judgment for error. The present petition in error says: “And the plaintiffs in error aver that there is error in said judgment and proceedings, in this, to wit,” and the particulars supposed to render the judgment and proceedings erroneous are then set out. Other errors are also assigned. The motion to dismiss will be overruled. We now come to the merits of the case; and from the rulings of the court below, we would think that the court below must have held that a deed procured by fraud, as the deed in this case was, is absolutely void, and that no rights can under any circumstances vest under it, or can be obtained under it, even by innocent and bona fide purchasers. This is certainly not the law, as is evidenced by an almost unbroken line of decisions holding the contrary doctrine. .One of the leading cases on this subject is that of Somes v. Brewer, 2 Pick. 184, where the court held that where a grantee obtained a deed of land by fraud and imposition upon the grantor and without consideration, and entered under the deed, and afterward conveyed the land to a bona fide purchaser for a valuable consideration, without notice of the ” fraud, such purchaser had a valid title as against the first grantor. In this case, Parker, C. J., after a careful and exhaustive review, of the authorities, thus epitomizes the law: That a deed made under such circumstances (that is, in fraud of the grantor’s rights) “is not a nullity, but that it is effectual to pass the estate, and that it remains valid until defeated by the grantor or those who have the right under him; so [465] that a conveyance from a fraudulent grantee to a third person without notice, for a valuable consideration, will vest an indefeasible title- in such second purchaser. This has been the received doctrine from the earliest times, not alone in this country and England, but also in those countries which act upon the civil law as an authoritative code.” (2 Pick. 196.) This doctrine, that a deed obtained through fraud and deceit is only voidable, and that a bona fide purchaser, for value, without notice, will hold the property, is supported by a large number of authorities, among them Cook v. Moore, 39 Tex. 255; Deputy v. Stapleford, 19 Cal. 302; 3 Washburn on Real Property, p. 299. It is a general principle of law,- that wherever one of two innocent persons must suffer loss on account of the wrongful acts of a third, he who has enabled the third person to occasion the loss must be the person who- shall suffer. As between the original parties to the deed in this case, and as to all others having notice of its fraudulent inception, we might treat the deed as absolutely void; • but could we so treat it as to innocent persons who afterward purchased the property in good faith and for a sufficient consideration? We would think not;, and therefore we think the court below erred in refusing to allow the defendants below to answer, setting up their said defenses. For the purposes of this case we shall assume that the petition of the-plaintiff below was sufficient, and yet we do not think that the demurrers thereto were absolutely frivolous; certainly not so absolutely frivolous that the defendants , forfeited all their rights in the case by filing them. The petition alleges that the plaintiff was in the actual, open and exclusive possession of the property in controversy at the time that the mortgage from Payson to Jordan and the deed from Payson to Buckman were executed; but, the plaintiff being the grantor of Payson, it may be questioned whether her possession was notice to Jordan and Buckman that she held adversely to Payson; and if she did not hold adversely to him, what was there to prevent Jordan and Buckman from [466] procuring rights in the property by the deed and mortgage executed by Payson to them respectively? For the purposes of this case, we shall also assume that the plaintiff’s possession was notice to Jordan and Buckman of her rights; but whether it was or not, is certainly questionable, and being questionable, the demurrers were certainly not frivolous for raising the question. A demurrer is never frivolous when it raises a question upon which different minds may reach different conclusions. But passing this question, and coming to the defendants’ proposed defenses, we find that they deny that the plaintiff, Lena McNeil, had the possession of the property, as she alleges she had in her petition. They in fact claim that Pay-son had the possession of the property, and propose to prove it. We are satisfied that we are not now in possession of the real facts concerning the possession of the property, and hence we shall say nothing further with regard to possession. Indeed, we imagine that the whole case, with all its various questions concerning possession, innocence, bona fides, etc., may turn out, when the true facts are ascertained by a trial, to be a very different case from the one now presented to this court; and hence we do not now wish to enter into an elaborate discussion of any of the questions which may seem to be involved in the case, nor into any discussion further than has already been presented. We hold that the demurrers were not frivolous, and that the defendants below made a sufficient showing to entitle them to file answers setting up their proposed defenses; and therefore the judgment of the court below will be reversed, and the cause remanded with the order that the defendants be permitted to answer. All the Justices concurring.