Groff v. State Bank of Minneapolis

Mitchell, J. The undisputed facts in this case are that Benjamin B. Groff and Hugh. A. Gilson, being the owners as tenants in common of certain real estate, on May 4, 1887, without consideration, [237] conveyed it to one William H. Groff for the sole purpose of effecting a partition of the premises between them by having William H. Groff convey one half in severalty to each. This conveyance was recorded July 13, 1887. In pursuance and execution of this arrangement, William H. Groff conveyed one half in severalty to Gilson, but made no conveyance at that time of the other half (the premises in dispute) to Benjamin B. Groff; but the latter immediately (June 18,-1887) went into the actual, open, and exclusive possession and occupancy of it, and so continued until it was conveyed to the plaintiff, as hereinafter stated. While Benjamin B. Groff was thus in the actual possession and occupancy of the premises, but the title of record in William H. Groff, the defendant, on May 10, 1888, obtained and docketed a judgment against William H. Groff. On September 10, 1889, William H. Groff, at the request of Benjamin B. Groff, conveyed the premises to plaintiff, who immediately entered into the actual possession and occupancy of the same, and has ever since so continued. This action is brought to remove the cloud on plaintiff’s title caused by the apparent lien of defendant’s judgment on the premises. .1. It is not important whether or not the trust under which William H. Groff held the title for the benefit of Benjamin B. Groff was enforceable while still executory. It was entirely competent and lawful for him to recognize and execute the trust, although not enforceable, and he has done so. Randall v. Constans, 33 Minn. 334, (23 N. W. Rep. 530.) 2. Creditors may be postponed or defeated by notice of claims of third parties to property the record and title of which is in their debtor; and possession may be notice to them, as well as to a purchaser, so as to preclude them from obtaining a lien on the estate or interest of the occupant. Lamberton v. Merchants’ Nat. Bank of Winona, 24 Minn. 281. The general rule is that possession of land is notice to a purchaser of the possessor’s title. The only question in this case is whether this rule applies where the grantor remains, after the delivery of his deed, in possession of the granted premises. This is a question upon which the authorities are not agreed. (Opinion published 32 N. W. Rep. 651.) Some cases hold that the deed is conclusive that the vendor has reserved no interest in the land; that having, in effect, so declared by his conveyance, he is estopped from setting up any secret arrangement by which his grant is impaired; that, although he remains in possession, a person seeking to obtain an interest in the premises has a right to assume, without inquiry, that he is in possession merely for a temporary purpose, as tenant at sufferance of his grantee. But it seems to us that, inasmuch as the law allows possession to have the effect of notice, there is no good reason for making a distinction between possession by a stranger to the record title and possession by the grantor after delivery of his deed. In either case the possession is a fact inconsistent with the record title, and, if possession by the stranger is sufficient to make it obligatory upon a purchaser to ascertain his right, possession by the grantor is a circumstance entitled to equal consideration. An absolute deed divests the grantor of the right of possession as well as of the legal title, and when he is found in possession after delivery of his deed it is a fact inconsistent with the legal effect of the deed, and is suggestive that he still retains some interest in the premises. Under such circumstances, a purchaser has no right “to give controlling prominence to the legal effect of the deed,” in disregard of the other “notorious antagonistic fact,” that the grantor remains in possession just as if he had not conveyed. To say that the grantor is estopped by his deed is begging the question; for, if his possession is notice to third parties of his rights, there is no principle of estoppel that would prevent him from asserting against purchasers or creditors any claim to the premises which he might assert against his grantee. This view is abundantly sustained by authority. See Devl. Deeds, §§ 761-765; note to Le Neve v. Le Neve, 2 Lead. Cas. Eq. pt. 1, p. 180, et seq.; Pell v. McElroy, 36 Cal. 268. • In fact this court has already adopted it in New v. Wheaton, 24 Minn. 406. This disposes of the only questions in this case, and the result is that the judgment is affirmed.