Jewell v. Truhn

Vanderburgh, J. The plaintiff was the owner in fee of the lands in controversy, subject to the claim asserted by defendant under a tax certificate issued to one Michael Schmitz, upon the sale under the tax judgment for the taxes of 1877, entered July 22, 1878. The defendant purchased the land of Schmitz for a valuable consideration, and received a warranty deed therefor, under which he entered into possession in 1883, without actual notice of any defects invalidating his title, and has since made improvements, which are found to be of the value of $1,900, and the value of the land is assessed by the jury at the sum of $1,000. It is also found by the court that the plaintiff, prior to the commencement of the action, never had any notice, actual or constructive, of the fact of defendant’s possession, and that the defendant did not enter under an official deed, but only under the conveyance to him made by Schmitz, and that no title was vested in Schmitz under the tax sale, by reason of his failure to cause notice of the expiration of the time of redemption to be served, as provided by law. The question here presented is whether the defend [436] ant is entitled to insist upon the payment of the value of his improvements, under Gen. St. 1878, c. 75, §§ 15,17, or whether he is obliged to pay the plaintiff the value of the land as a condition of retaining the possession, which plaintiff has duly demanded, under section 18. An ineffectual attempt was made to serve notice of the expiration of redemption, and there .was no further evidence offered on that question except the indorsement of the county auditor upon the certificate, prior to its being recorded, that the time had expired, and the land was unredeemed. The burden rested on the defendant to prove the service of the notice, and the auditor’s certificate in question was not such proof. Gen. St. 1878, c. 11, § 121; Nelson v. Central Land Co., 35 Minn. 408, (29 N. W. Rep. 121.) Such certificate was evidence only that the land remained unredeemed. Gen. St. 1878, c. 11, § 100. Title was not acquired, therefore, under the tax certificate, which never became operative as a conveyance, or “official deed,” and possession thereunder was unauthorized. Gen. St. 1878, c. 11, § 84. But, since it is conceded that the defendant’s entry under Schmitz’s deed was under color of title in fee, his right to an election to be paid the value of bis improvements depends upon the question whether the plaintiff had seasonable notice of the defendant’s possession; for the statute makes this distinction between cases where the land-owner, or claimant, as he is styled, has such notice and where he has not. As the statute (section 15) limits the right of recovery, by the occupant, to the value of improvements made upon the land previous to actual notice of plaintiff’s claim, so if.the claimant, having notice, stands by, and suffers such improvements to be made by the occupant in good faith, without disclosing or asserting his claim, he is required to pay the value thereof, to be assessed in the action, as a condition of the recovery of the possession, and is not entitled to his election to sell the land. The rule is declared in section 15, requiring such reimbursement “except as hereinafter provided;” and the exception is found in section 18, which in substance provides that a claimant, in a case like this, where the occupant is in possession under color of title in fee, but not under an official deed, may, if he have no “notice, actual or constructive, of the occupant’s possession,” require the occupant to pay him the assessed value of • the land as [437] therein provided. The burden rests upon the occupant in the first instance to allege and prove his good faith, and to negative notice of the claim of the true owner; and on the other hand, we are of the opinion that it devolves upon the latter to bring himself within the exception we have referred to, and deny notice in his pleading, and so far negative it in his evidence as to make a prima facie case, which the occupant would be required to meet by showing affirmatively, in rebuttal, the facts and circumstances necessary to establish it. As the record shows that there was no evidence whatever on the subject in this case, we think the court was not warranted in finding that the plaintiff had no notice, actual or constructive, of defendant’s possession, and as upon this finding is based plaintiff’s right to demand the payment of the value of the land, instead of paying for the improvements, it was error for which a new trial should be granted. But the defendant contends that his possession was in itself constructive notice to the plaintiff, and that the latter is bound by it. It is evident, however, that the statute cannot bear this interpretation ; otherwise the claimant would in all cases be chargeable with constructive notice, and there would be no cases falling within the exception provided for in the first half of section 18. And, to entitle the oceupant to this superior equity, the notice to the claimant must precede the improvements in question; but the making and existence of the improvements may be the chief or only evidence of open and notorious adverse possession. The claimant cannot be chargeable with negligence or bad faith in suffering improvements to be made, the existence of which is alone relied on to establish notice thereof. But the circumstances and length of the possession, the situation of the premises and the parties, may doubtless be evidence, more or less material, depending upon the nature of the case. Upon the subject of constructive notice in such cases, it is said by Chancellor Kent, (4 Comm. *179:) “It is, indeed, difficult to define with precision the rules which regulate implied or constructive notice, for they depend upon the infinitely varied circumstances of each case. The general doctrine is that whatever puts a party upon an inquiry amounts, in judgment of law, to notice, provided the inquiry becomes a duty, — as in the case of purchasers and creditors, — and [438] would lead to the knowledge of the requisite fact by the exercise of ordinary diligence and understanding.” Whatever is notice enough to excite attention, and put a party upon his guard, and call for inquiry, is notice of everything to which such inquiry might have led. Kennedy v. Green, 3 Mylne & K. 699, 722. But the present disposition of the courts is not to extend, but rather to restrict, the doctrine of constructive notice. Bisp. Eq. § 269. The general rule is that a purchaser of land is bound to take notice of the rights of the party in possession; but where an entry has been made upon unoccupied or unimproved lands by one claiming adversely to the true owner, the question whether his possession is sufficiently notorious and unequivocal, or for such length of time; as to put the owner upon inquiry, or whether, from the nature of the case, “inquiry had become a duty,” so as to charge him with constructive notice, must necessarily depend upon the special circumstances of each case. In this case, for the reasons herein stated, it is clear that the general finding of the court, in respect to the defendant’s occupancy and improvements, is insufficient to warrant the presumption of constructive notice, within the meaning of the statute in question. Judgment reversed, and new trial granted.