Huggins v. Davidson

RAILEY, C. This is a proceeding in equity, commenced by plaintiffs in the circuit court of Tesas County, Missouri, on October 24, 1914. The petition charges that on or about August 26, 1914, plaintiffs and defendant Ellsworth Davidson entered into an agreement, by which the latter was to convey, or cause to be conveyed, to plaintiffs, by general warranty deed, th'e northeast quarter of Section 27, Township 13, Range 33, located in Lincoln County, Nebraska, containing 160 acres more or less, in exchange for the southeast quarter of the southwest quarter of Section 2, and the east half of the northwest quarter and the southwest quarter of the northwest quarter of Section 11, all in Township 2.8 north, of Range 8 west, located in Texas County, Missouri; that at the time of said agreement, said defendant had in his possession a general warranty deed, purporting to convey said Nebraska lands, from one Mary E. Nichols and her husband, James M. Nichols, duly acknowledged in Montgomery County, Kansas, on July 31, 1914, in which said deed there was a blank space for the name of the grantee, no name having been inserted therein; that in part performance of said agreement, said defendant filled in, or caused to be filled in, the names of these plaintiffs as grantees in said deed, and delivered the same to them; that in performance of plaintiffs’ said agreement, they made, executed and delivered their warranty deed to said Ells-worth Davidson, by which they conveyed to him the Texas County lands aforesaid, which said deed was recorded in Texas County aforesaid, in Book 104, at page 609, of the Recorder’s office of said county. It .is further alleged that at the time of said agreement and exchange, the defendant Ellsworth Davidson, for the purpose of inducing the same, positively, and with intent that it be relied upon, stated and represented to plaintiffs, that he was the owner of said Nebraska lands; that said deed would convey to plaintiff's the fee simple, absolute title thereto; that for the — 39 — purpose of confirming and supporting Ms statement and representation as aforesaid, lie exhibited and delivered to plaintiffs what purported to be an abstract of title to said Nebraska land, and positively, with the intent to have the same relied upon, stated that it was a true abstract thereof, made by a reliable and bonded abstract- or in the county where said* Nebraska land is located; that upon examination of said abstract plaintiffs were convinced of the perfection and goodness of the title to be conveyed by said deed, and relying upon the representations of said defendant, as to such abstract, and being deceived thereby, they were induced to, and did, make and enter into said contract of exchange; whereas in truth and in fact, neither the said Mary E. Nichols, James M. Nichols, nor tlie defendant Ellsworth Davidson then, or at any other time, had, or held, a good, sufficient fee simple title, or any other kind of title, to said Nebraska lands; nor was the abstract so exhibited by said defendant a true or genuine abstract to said lands, made by a competent, reliable or bonded abstractor of the county in which said real estate was located, or elsewhere ; but on the contrary, the title to said real estate, as well as possession thereof, was then vested in, and held by, one P. Gunderson, of Lincoln County, Nebraska; that said abstract, although originally made by a reliable and bonded abstractor, after the making thereof, and before the same was exhibited or delivered to plaintiffs, had been altered by entering the name of said P. Gunderson, as one of the grantors in a deed, shown in said abstract, and under which said deed the said Mary E. Nichols claimed by mesne conveyances; whereas in truth, and in fact, the said P. Gunderson did not join in said deed, nor did the records of Lincoln County, Nebraska, show such joinder ; nor did the abstract as originally prepared and certified to by said abstractor show such joinder. The petition further alleges that on the 5th day of September, 1914, defendants, Ellsworth Davidson and Annie Davidson, his wife, executed and delivered to the American State Bank of Coffeyville, Kansas, their — 40 — promissory mote, for $275, due six months after date, ■with, ten per cent interest from date of same, and for the purpose of securing same, executed a mortgage on the Texas County lands aforesaid, which said mortgage is duly recorded in said county, in Book 108, at page 54, of the Recorder’s office. It is averred that on or about October' 20, 1914, plaintiffs first learned of their entire lack of title, and of the worthlessness of said deed to the Nebraska lands, and instantly offered to return said deed to defendant Ellsworth Davidson, or any other proper party, and demanded a return of their Texas County lands, which said offer and demand were refused; “and now in court plaintiffs tender said deed and offer to make any conveyance or do anything necessary to place defendants in the position they occupied prior to such exchange, and to restore anything they have received by reason of the transaction.” They allege that-they, the defendants, and said Nichols and wife, are residents of Montgomery County, Kansas; that said agreement and deeds were made in said county; that it is located about 300 miles from the Nebraska land, and the records pertaining to its title; that defendant Davidson and wife, and Nichols and wife, are insolvent, and that an action at law against them would be useless in a, suit on the covenants of said deed; that plaintiffs have no adequate remedy at law. The petition concludes, by asking the court to cancel the deed of the Texas County lands to Ells-worth Davidson, and the mortgage aforesaid- given to defendant bank. They ask, in addition to> foregoing, general relief. Defendant Davidson and wife answered in said cause with a general denial, except as to such matters as are afterwards admitted. It is. admitted that Ellsworth and Annie Davidson are husband and wife; that Mrs. Davidson had nothing to do with said trade, and has no interest in this controversy, except as the wife of said Ellsworth Davidson. They allege that Mrs. Davidson told Jason M. — 41 — Huggins she did not want her husband to trade the Nebraska land, but wanted to keep it; that said Huggins traded for said land within one hour after said conversation. It is alleged that Ellsworth Davidson, on or about the 26th of August, 1914, entered into an agreement with the plaintiff, Jason M. Huggins, to exchange the Nebraska land aforesaid for said Texas County lands; that he notified said Huggins that he had procured the title to said Nebraska land, from said Mary E. Nichols and husband; that the deed was in blank as to the second party; that he had the authority from said Nichols and husband to fill in the names of the grantees in said conveyance to whomsoever he might sell or trade the same. Defendant Ellsworth Davidson further avers that he did not guarantee the title to said Nebraska land, but he believed then and now, that the title to same was vested in said Nichols and her husband, who exhibited to him an abstract of title, which he had had examined by an attorney; that said attorney stated the abstract seemed to show a merchantable title in said Mary E. Nichols and her husband. Said defendant further avers that he stated all the facts within his knowledge with reference to the title of said property to said Jason M. Huggins, who seemed to be negotiating the trade for himself and his son, Charles W. Huggins; that he gave to said Jason M. Huggins the abstract of title; that the latter had said abstract examined by one A. C. Bowman; that the latter, in his presence, stated to said plaintiff that the abstract, in his judgment, showed a merchantable title to said Nebraska land. He avers that he told plaintiff Jason M. Huggins that he would not guarantee the title; that he did not know anything about it, only what was shown by the abstract, and what was told him by said Jamies M. Nichols, which was communicated to said plaintiff; that said plaintiff, in the presence of Bowman and others, stated that he expected he was stung, but that he was — 42 — going to make the trade any way, and proceeded to close the deal; that the names of Jason M. Huggins and Charles W. Huggins were written in the blank left for that purpose, the names of the grantees having been left blank by said Nichols and husband; that plaintiffs, with full knowledge of all the facts, jointly and severally, accepted saN deed thus executed without any warranty or covenants of warranty on the part of these defendants, hut succeeded to all the rights of ownership that were possessed by the said Mary E. Nichols, and James M. Nichols, to the said Nebraska land. It is alleged that the deed to the Missouri land was then delivered to these defendants with the name of the grantees blank, in exchange for the Nebraska land. Said defendants further aver that they made no false or fraudulent representations to said Jason Huggins, to induce him to trade for said land; that he acquainted said Huggins with all the facts, as far as they had come to his knowledge; that said plaintiffs acted on their own judgment in trading for said Nebraska land; that said Ellsworth B'avidson suggested to said Jason M. Huggins, to not close the deal for said land, at that time, but to wait and investigate the title fully; that he would leave the trade open until such time as said plaintiff could satisfy himself about the title to the Nebraska land, but said plaintiff preferred not tó delay the closing of the trade, accepted the deed as it was, without any guaranty of title on the part of said defendant, but stated he was going to close the trade and “take a chance on it any way,” and further stated that he had traded for a part of the Missouri land without looking at it, and that he was going to trade for the Nebraska land “sight unseen;” that there was no fraud or deception of whatsoever nature or kind practiced on the part of this defendant on said plaintiffs or either of them; that if the title to said Nebraska land should not be good, “this defendant, Ellsworth Davidson, was deceived by the representations made by the said Mary E. Nichols and James M. Nichols, and by the abstract — 43 — exhibited to him to the same extent that these plaintiffs are deceived;” that this defendant should not be charged with any fraud or misrepresentations, for the reason that plaintiffs had all the avennes to obtain information that the above defendant had; that the latter, at the time said conveyance was made by said Nichols and husband to him, believed the title to said Nebraska land was good, and believes so yet; that if plaintiffs are in any way defrauded, in accepting the title to the Nebraska land, as stated in the petition, it is by reason of the lack of judgment of said plaintiffs and not the fault of this defendant; that the loss, if any, should be borne by said plaintiffs. The ease was tried as though a reply had been filed. Although this is an action in equity, instructions were asked, given and refused, which are not set out or considered by us in passing upon the merits of the case. The facts-, as far as necessary, will be considered in the opinion. The trial court found the issues in favor of plaintiffs as against defendants Ellsworth Davidson and Annie Davidson, and for the defendant American State Bank of Coffeyville, Kansas, to the extent of the mortgage aforesaid, upon the ground that said bank was an innocent holder for value of the note aforesaid, described in said mortgage, sought to be cancelled. The court further found that the deed from plaintiffs to the Texas County lands was without consideration, and was given as the result of fraud and misrepresentations upon the part of said defendant Ellsworth Davidson, and that said defendants have’ no right, title or interest in said real estate. The decree cancelled said deed from plaintiffs to Davidson, and declared the former the owners of said Texas County lands, subject to the mortgage of the bank aforesaid, etc. Defendants Ellsworth Davidson and Annie Davidson filed their motion for a new trial, which was overruled, and the cause was duly appealed by them to this court. — 44 — False Representations. I. It is contended by respondents that as an inducement for the exchange of the lands aforesaid, the defendant Ellsworth Davidson represented to the plaintiff Jason M. Huggins, that be (D'avidson) was the owner of the Nebraska land and that the abstract of title to said land delivered to plaintiffs was reliable. Plaintiffs further contend that they relied upon said representations, believed them to be true and made the trade accordingly. What are the facts with respect to this matter?’ The two principal witnesses who testified on this subject are Jason M. Huggins, and defendant Ellsworth Davidson. Their testimony, in some respects, is in irreconcilable conflict, with regard to the material facts of the case. "In considering the evidence, by way of convenience, we will designate Jason M. Huggins as plaintiff, and Ells-worth Davidson as defendant. The former testified that about the 25th of August, 1914, defendant came to his place of business at Coffeyville, Kansas, and opened up negotiations in regard to the exchange of said lands. The plaintiff' had never seen the Nebraska lands, which were located about 300 miles from Coffeyville, Kansas, nor. does it appear from the evidence that defendant had ever seen the Texas County land. Plaintiff testified that during the above talk, defendant advised him that he could call upon a certain barber in Coffeyville and talk with him! about the Nebraska land. Plaintiff says he did so> and the barber disclaimed any personal knowledge of the Nebraska land, but said he had husked corn up and down the river bottoms, and thought it was good country. Plaintiff says he then went to defendant’s little hotel to see him, but did not find him; that on his way back up town, he met defendant and talked with him again about the Nebraska land; that he asked defendant if he had a good clear abstract for it, and ¡he said he had. Plaintiff says he then told him if he had that he would trade with him.' .He says defendant then asked him, if he (plaintiff) had an abstract for the Missouri land, and — 45 — he told him he did. They were then to meet at Bowman’s office the next day''to finish the trade. The defendant in his testimony does not refer to the above conversation, nor did any other person testify as to what then occurred, except the plaintiff. This is an important matter to be considered in weighing the testimony as a whole, in respect to what defendant said to plaintiff, about the abstract of title. It appears from the evidence that plaintiff and defendant met at Bowman’s office on the morning of August 26, 1914, to close the exchange. Plaintiff says that defendant, after stating what he gave for the Nebraska land, produced a deed from Nichols, with the name of grantee blank; that he said to defendant, “I thought you owned this land,” and defendant said: “I do, it belongs to me, but I expect to trade it .again and I just took the deed in blank. ’ ’ Plaintiff' then asked Bowman if that was customary, and was advised by him that it was frequently done. Plaintiff identified “Exhibit A” as the abstract of title which defendant gave him, and testified that he relied upon it. He said when he received the abstract, at Transfer No. 10 thereon, the words “ And P. Gunderson, single” were there. Plaintiff also testified, as follows: “I objected to taking the deed to the Nebraska land in blank and having my name placed in it, I wanted a deed from Davidson and he (Davidson) says, ‘There’s a good reliable abstract, made by a bonded abstractor and what more do you want?’ ” Plaintiff testified that he had Bowman examine the abstract; that he was willing to take chances- on the quality of the Nebraska land, but that he relied on the abstract. Defendant Davidson testified that he did not change the abstract after he got it; that there'was not much said, about the abstract at the time of the trade. He said plaintiff asked him if he (defendant) had had the abstract examined. He answered in the affirmative, and told plaintiff Mr. Campbell had examined it. Defend — 46 — ant further testified as follows, in regard to the abstract': “I did not tell him [plaintiff] whether it was a correct abstract or not. I said I did not know anything about the abstract, that I had had it passed on and had traded for it with the understanding• that it was all right. I never told him it was a correct abstract.” (Italics ours.) Mr. Bowman testified in substance that while plaintiff and defendant were in his office, the latter told plaintiff he wouldn’t guarantee anything in connection with the transaction; that defendant then told plaintiff he didn’t know whether the abstract was correct or not, that he was simply transferring what he had. Witness gave it as his opinion that the abstract, as shown to him with P. Gunderson appearing as grantor in No. 10, showed a good title. On cross-examination, Biowmian testified as follows: “I don’t recollect hearing Mr. Davidson say that there was a good abstract made by a bonded abstractor and what more did he want.” We have the unchallenged testimony of plaintiff as to what occurred when he and defendant met on the street and the latter told him he had a good clear abstract df title to the Nebraska land. The testimony of defendant, in regard to the abstract, heretofore set out, shows he was inducing the plaintiff to rely on its correctness. Here was a trader, with a deed for Nebraska land, with the name of the grantee left blaiih; with an abstract of title containing a forgery as to the name of one of the necessary grantors in the chain of title, seeking to exchange his “stock in trade” for Missouri land. No explanation was ever made as to the forgery, except that defendant denies he committed it. He does not even offer to show that Nichols and wife had any title to the Nebraska land, nor that P. Gunderson, whose name was forged, was not the real owner of said land. The trade was made on August 26,1914, and on September 5, 1914, the mortgage for $275 was executed by — 47 — defendant and wife to tfie bank aforesaid on the Texas County land. This was the excuse he offered for refusing -to rescind, when plaintiff told him he had no title, and demanded a rescission. Without further consideration of this question, we find from the record that defendant represented to plaintiff he was the owner of the Nebraska land; that the abstract of title which he delivered to plaintiff was reliable; that plaintiff relied upon said representations, believed them to be true, and by reason thereof made the exchange of lands aforesaid. II. It is clear from the evidence that defendant claimed to be the oivner of the Nebraska land which he traded to plaintiff. According to his own testimony, he délivered the abstract of title to plaintiff, knowing that the latter was having Bowman examine the same with the view of determining whether or not it showed a good title in Nichols and wife. What other inference can be legitimately drawn from the delivery of the abstract of title to plaintiff under the foregoing circumstances, except that defendant was attempting to induce him to rely upon the correctness of said abstract? In Cnrwen on Abstracts of Title, section 36, it is said: “The object of the abstract is to furnish the buyer and his counsel with a statement of every fact, and an abstract of the contents of every deed on record, upon which the validity and marketableness .of the title depend; so full that no reasonable inquiry shall remain unanswered; so brief that the mind of the reader shall not be distracted by irrelevant details; so methodical that counsel may form an opinion on each conveyance as he proceeds in his reading; and so clear that no new arrangement or dissection of the evidence shall be required. The buyer has a right to demand a marketable title. He has a right to demand that the abstract of title shall disclose such evidence of that title, as will enable him to defeat any action to recover, or incumber, the land.” — 48 — The above quotation is cited with approval in several of the authorities hereafter-mentioned. In Attebery v. Blair, 244 Ill. l. c. 369, it is said: “An abstract of title is, in a legal sense, a summary or epitome of the facts relied on as evidence of title, and it must contain a note of all- conveyances, transfers or other facts relied on as evidences of the claimant’s title, together with all such facts appearing of record as may impair the title. [Heinsen v. Lamb, 117 Ill. 549.] It should contain a full summary of all grants, conveyances, wills, and all records and judicial proceedings whereby the title is in any way affected, and all encumbrances and liens of record, and show whether they have been released or not.” In Fagan v. Hook, 134 Iowa, l. c. 386, the Supreme Court of Iowa said: “The object of an abstract is to enable the vendee to pass upon the validity of the title, and to enable him to do so it should contain everything material concerning its sources and conditions.” In 1 Cyc. 213, the law upon this subject is clearly stated as follows: “The abstract should contain whatever concerns the source and condition of the title. It should contain a note of all conveyances and transfers or other facts relied on as evidences of the title,’ together with all such facts appearing of record as may impair the title. ’ ’ To the same effect are Kane v. Rippy, 23 Pac. (Ore.) 180; Taylor v. Williams, 2 Colo. l. c. 562; Smith v. Lander, 106 S. W. (Tex.) l. c. 704; Bruce v. Wolfe, 102 Mo. App. 384, 386-7; St. Clair v. Hellweg, 173 Mo. App. l. c. 666. Turning to the abstract of title delivered to plaintiff by defendant, we find from the undisputed evidence in the case, that it contains a forgery as to the name of one of the grantors and without whose name the abstract would not have shown that either Nichols or defendant was the real owner of the Nebraska land. — 49 — O. E. Elder, who made the abstract in controversy, lived in North Platte, Nebraska, .and had been engaged in the abstract business for about twenty years. He certified to above abstract in June, 1914, and at that time, mailed the same to James M. Nichols, of Oklahoma City, Oklahoma, and received a draft therefor. Among other things, he testified as follows: “The abstract Exhibit ‘A’ is the one I made, a part of it. There is missing from said abstract a history, of the foreclosure proceedings on which the sheriff’s deed shown at entry No. 9 was based. I did not see the abstract any more until a few days ago. At this time the history referred to was not in the abstract. I made this abstract from the county records of Lincoln County, Nebraska, and data which I have in my office consisting of a complete brief of all the records in the county clerk’s office in this county. Upon examination of said abstract Exhibit £A’ at this time I also note that Entry No. 10' there has been added to tfye names of the grantors the following: ‘and P. Gunder-son, single.’ “I examined this abstract after it was completed and before it was mailed to Mr. Nichols, and on the same day I sealed the abstract in the envelope arid attended to the mailing of it myself and the words ‘and P. Gunderson, single’ at Entry No. 10, were not in the abstract. ... I do not know by whom these words were inserted in the abstract.” R. E. Woodside, official stenographer of the Texas Circuit Court, after an examination of said “Exhibit A,” gave it as his opinion that the words “and P. Gunderson, single,” at Transfer 10 were made with another typewriter. No testimony was offered by defendant to contradict either Elder or Woodside. Sheet No. 9 of said abstract, shows a conveyance of .the Nebraska land by the sheriff of Lincoln County, Nebraska., to P. Gunderson, as grantee. It was dated and acknowledged July 18, 1902, and recites a considertion of — 50 — $215. This is the transfer referred to by Elder, from which', he says, the history of the sheriff’s foreclosure proceedings are missing from the aibstract. Sheet No. 10 of said. abstract now shows, as grantors, John Thomas and wife, Maud Thomas “and P. Gunderson, single.” The above words underscored, according to the undisputed testimony of Elder, were placed there after the abstract toas sent to Nichols. As this is a proceeding in equity, the exhibits from P> to I, inclusive, which were attached to the deposition of Elder, although' excluded by the trial court, should have been set out or the substance of same stated, in the record, in order that we might determine their relevancy and competency. It therefore stands uncontradicted in the record, that some one, after the aibstract left the hands of Elder, was guilty of spoliation of' same, by eliminating therefrom, the historical facts in regard to the sheriff’s sale of said land to P. Gunderson. It is likewise undisputed that some one, after Elder parted with said abstract, was guilty of forgery, in placing thereon, in Transfer No. 10, the words ‘‘and P. Gunderson, single.” The defendant Ellsworth Davidson was in possession of the above abstract containing said spoliation and forgery, .and by the use of same induced plaintiffs to< part with, the title to the Texas County land. He received his deed to the Nebraska land from Nichols, to whom the abstract was sent a.s made by Elder. This spoliation and forgery must have occurred while Nichols and wife* were the owners of the Nebraska land, or after it had been conveyed by them and delivered to defendant, with the names of the grantees left blank therein. The defendant, although in possession of said abstract, under the circumstances aforesaid, and after using the same to acquire title to plaintiffs’ land, stands mute in court, without even attempting to justify his conduct by offering to show that plaintiffs had obtained a good merchantable title to the Nebraska land regardless of the spoliation and forgery aforesaid. The plaintiffs, under the circumstances, were neither required’ — 51 — nor called upon to show that the title to the Nebraska lands had failed by reason of said spoliation and forgery. It would be a travesty upon the law and a mockery of justice, to permit the defendant to retain the Texas County land on the facts presented in this record. The conclusions above announced are in accord with the views of this court as expressed in Woolum v. Tarpley, 196 S. W. 1127; Johnson v. Jines, 193 S. W. 15, and Wilson v. Henderson, 191 S. W. 72. We accordingly reverse and remand the cause with directions to the trial court;' to set aside the decree heretofore entered by it and to enter a new decree in lieu thereof, finding th*f issues in favor of plaintiffs, as against said Ellsworth Davidson and wife, and setting aside the deed from plaintiffs to said defendants for the Texas County lands, subject to the mortgage of the defendant bank heretofore mentioned; to entel-as part of the decree, that defendants Ellsworth Davidson and wife be divested' of any and all interest they may have had in said Texas C-ounty lands, and that the title thereto, subject to said mortgage, be vested in said plaintiffs. The trial court is further directed to enter, as a part of said decree, in favor of plaintiffs, a personal judgment against said defendant Ellsworth Davidson, for the unpaid portion, if any, of the mortgage and interest due thereon to the defendant bank; and also, to enter a judgment against said defendant for the costs of this litigation. It is further ordered that plaintiffs shall execute a proper quit-claim deed to defendant, Ellsworth Davidson, for the Nebraska lands aforesaid, and file the same with the clerk of the circuit court of Texas County, Missouri, to be held by him in escrow as hereafter stated; and if said Ellsworth Davidson, shall pay off and satisfy said mortgage of record, within sixty days after the filing of our mandate in th’e circuit court of Texas County, Missouri, then said quit-claim deed shall be delivered to said defendant or his attorneys of record. If said mortgage, with the interest due thereon, is not paid off and satis — 52 — fied of record, within sixty days of the filing of our mandate as aforesaid, then said' quit-claim, deed shall he destroyed by the clerk, and the title, if any, to said Nebraska lands, remain where the deed from Nichols and wife placed it. Brown, C., concurs. PER CURIAM: — The foregoing opinion of Railey, C., is hereby adopted as the opinion of the court. All of the judges concur.