Lee v. Laughery

MR. JUSTICE HOLLOWAY delivered the opinion of the court. In March, 1910, W. A. Longley agreed to convey to Thomas E. Laughery nineteen lots in Laurel, and, in consideration thereof, Laughery agreed to convey to Longley the Miller ranch " in Carbon county. Longley made his conveyance, but Laughery, being unable at the time to comply with his part of the contract, conveyed to Longley another ranch known as the “Laughery” — 242 — ranch. The conveyance was by deed absolute in form. At the same time an agreement in writing was entered into between these parties, which recited in effect that the Laughery ranch had been transferred as security for the performance by Laughery of his obligation under the original agreement, and further provided that if Laughery should acquire title in fee simple to the Miller ranch and tender a deed therefor or the cash equivalent, on or before December 19, 1911, then the tender should be accepted and Longley should thereupon deed back the Laughery ranch. This agreement was signed by both parties, was acknowledged by Laughery only, and was filed for record and recorded on February 20, 1912. In the meantime Laughery leased the Laughery ranch from Longley-, and Longley on January 29, 1912, sold the same ranch to the Yellowstone Land & Grain Company. On March 9, 1912, the Yellowstone Land & Grain Company conveyed the Laughery ranch, by warranty deed, to plaintiff, Lee. Laughery thereafter asserted title to the land, and this action was instituted. The complaint contains two so-called causes of action — one to quiet title, the other in ejectment. The answer contains certain admissions and denials not now material, and an affirmative defense in which is recited the transactions between Longley and Laughery, followed by allegations to the effect that the deed and contract constituted a mortgage, that no proceedings for its foreclosure had been instituted, and that the Laughery ranch was at all times of much greater value than the Miller ranch. There was reply to the new matter, and upon a trial to the court without a jury the issues were determined in. favor of plaintiff. From an order denying him a new trial, defendant appealed. The findings made by the lower court refer to the deed and contract, to the conveyance to the Yellowstone Land & Grain Company, and to the deed to plaintiff. There is a finding that plaintiff obtained title without notice of any claim by defendant except such as might have been conveyed by defendant’s possession; that defendant had secured a lease of the Laughery ranch from Longley; and that he had not performed or offered — 243 — to perform the condition imposed upon him by the contract. The court concluded: (1) That the contract between Longley and Laughery was an agreement on the part of Longley to reconvey on condition to be performed by Laughery within a specified time, and that, by reason of Laughery’s failure to perform or offer to perform, he could not assert any claim to or interest in the Laughery ranch. (2) That defendant had held possession by virtue of a lease. (3) That the leasehold interest had terminated; and (4) That plaintiff is owner of the Laughery ranch, and his title thereto should be quieted. The judgment establishes title and right of possession in plaintiff and awards him possession and his costs. It then proceeds to declare that the claim of defendant is invalid, and he is enjoined from further asserting it. 1. The complaint does not state a cause of action to quiet title. [1] It is nowhere alleged that plaintiff is in possession or that the land is unoccupied. If the Laughery ranch was held adversely to plaintiff, then ejectment furnished a plain, speedy and adequate remedy. Either possession by plaintiff or the fact that the land is unoccupied is an essential ingredient of the action to quiet title (Montana Ore Pur. Co. v. Boston & Montana Co., 27 Mont. 288, 70 Pac. 1114; O’Hanlon v. Ruby Gulch Min. Co., 48 Mont. 65, 135 Pac. 913); and it is necessary that the one fact or the other be made to appear by appropriate allegation (32 Cyc. 1352). In the so-called second cause of action, it is alleged that defendant is in possession, and this of itself is sufficient to defeat plaintiff’s right to relief in equity. 2. There are in the complaint sufficient allegations to state a cause of action in ejectment, and it is not contended, and could not be, that plaintiff did not make out a prima facie case upon that theory. When Laughery conveyed the land to Longley by deed absolute in form, he placed it within the power of Longley to convey a fee-simple title to anyone who paid value without notice of Laughery’s outstanding claim, and upon the pleadings and undisputed evidence the court had before it, at the close of — 244 — plaintiff’s case, a- perfect chain of title from Laughery to Lee, and therefore plaintiff acquired an absolute title, even though the land was encumbered by mortgage, unless he had notice of the mortgage. ' 3. The burden was upon the defendant to overcome this prima facie case, and this he sought to do, first, by an attempt to show that Lee purchased with actual knowledge of the outstanding equity; but upon the conflicting testimony the trial court determined the issue in plaintiff’s favor, and the evidence fully sustains the finding. 4. In the second place, defendant relied upon the recordation of the Longley-Laughery contract as imparting constructive notice. By the terms of that agreement Longley was the party to be charged. He agreed that if a tender was made of a sufficient deed to the Miller ranch, or its cash equivalent, he would accept the tender and reconvey the Laughery ranch. It is [2] . elementary that, in order that the recordation of an instrument shall impart constructive notice, the instrument itself must be one which the law authorizes to be recorded. Section 4646, [3] Revised Codes, provides that, before an instrument can be recorded,- its execution must be acknowledged by the person executing it. (The exceptions to the rule are not involved here.) According to defendant’s own theory, he conveyed the Laughery ranch to Longley by deed absolute, received back Longley’s contract to reconvey, and that the two instruments constituted a mortgage. Laughery’s signature to the contract -added nothing to it, and his acknowledgment of its execution was equally without force or effect. We have presented, a ease analogous to that of a deed acknowledged by the grantee alone. Since Longley was the party bound by the contract, he was the “party executing it,” within the meaning of section 4646 above; and, since he did not acknowledge its execution, it was not entitled to be recorded, and its recordation imparted no constructive notice whatever. (Baum v. Northern Pac. Ry. Co., ante, p. 219, 175 Pac. 872.) — 245 — The record lends much support to the court’s conclusion that the Longley-Laughery contract was merely an agreement on the part of Longley to reconvey upon condition to be performed by Laughery within a given time; but defendant’s position is not improved, if we accept his theory that the deed and contract constituted a mortgage, since plaintiff had' no notice, actual or constructive, of the existence of such mortgage. 5. It was not necessary for plaintiff to prove, in the first instance, that he paid an adequate consideration for the Laughery [4] ranch. The deed from his grantor furnished presumptive evidence of a consideration (sees. 5010 and 7962 [39], Rev. Codes), and the burden of showing want of consideration sufficient to support it was upon the defendant who sought to invalidate it, or to avoid the effect it otherwise would have (sec. 5011, Rev. Codes). It does not appear from plaintiff’s testimony that he did not pay an adequate consideration, and defendant offered no evidence on the subject. 6. It is suggested by appellant that there is not any evidence [5] that Lee’s deed was ever recorded. The record recites that his deed was offered and received in evidence, but it is not contained in the transcript. If it were before us, it would doubtless disclose whether it had been recorded. The burden of preparing the bill of exceptions was upon defendant in the lower court, and the burden of showing error is upon him in this court. The recital in the certificate that the bill of exceptions contains all the evidence cannot avail in the face of an affirmative showing that it does not. •7. It cannot be said that this cause was tried as a suit in [6] equity. - The record is equally consistent with the theory that plaintiff relied upon his complaint in ejectment and defendant upon his equitable defense; and even though it be conceded that the trial court erred in its theory in deciding the case — and this is not entirely clear — the record discloses that the same result must have been reached if a correct theory had been adopted. In other words, upon the record made, the plaintiff was entitled to a judgment that he is the owner of the Laughery — 246 — ranch, entitled to its possession and to Ms costs; and, since the 'judgment is sufficient, any additional recitals in it should be treated as surplusage. The order is affirmed. ''Affirmed. Mb. Chief Justice Brantly concurs.