Mississippi River Logging Co. v. Blue Grass Land Co.

Winslow, J. The only question presented which is deemed necessary to be considered is whether the defendant is in the position of a purchaser in good faith without notice of the prior unrecorded deed from Harding to the Wisconsin River Land Company. The principle is well understood that one who purchases with knowledge of an outstanding claim of title or information sufficient to put an ordinarily prudent man upon inquiry is not a bona fide purchaser. Prickett v. Muck, 74 Wis. 199, 42 N. W. 256. We can entertain no doubt that the Home Investment Company had such information. It knew of the deed from Comstock to Harding, executed in 1882, by which these lands with twenty other descriptions had been conveyed for $4,100. It had access to a tract index of the title. It knew that as far as the records showed Harding had never conveyed his title and that other parties were executing conveyances of the lands as if they owned them. In this situation it sent an agent to the heirs of Harding to obtain a quitclaim deed from them for a practically nominal consideration, and that agent stated to the heirs that their father had no title, and the heirs confirmed that statement. This amounts to a confession that the title sought was not a real title but only a nominal one. It demonstrates beyond cavil that the company knew that it was buying a purely speculative title which had only the appearance of validity. The fact that it was buying for $200 lands less than half of. which it proposed at once to transfer to others for $1,500 and which were in fact worth the latter sum only adds certainty to the conclusion that it knew facts entirely discrediting the title which it was getting. It can hardly say now that it knew [15] no fact in May, 1902, tending to throw doubt on the Harding title, when it appears that it then bought that title for a •song on the statement that it was worthless. As to the defendant the conclusion is the same, although the facts are somewhat different. Its attorney had examined the abstract before the consideration money was paid. By this examination it was informed of the deed from Comstock to Harding in 1882 by which thirty-five descriptions were conveyed for a consideration of $4,100; also of the subsequent tax deeds taken by Comstock and his quitclaim to the Wisconsin River Land Company in 1885; also of the warranty deed of the last-named corporation to the plaintiff by which the lands in question were conveyed for an average consideration of $236.36 a description; and it was also informed of the quitclaim deed ten years later by the Harding heirs to the Home Investment Company by which it obtained apparent title to said thirty-five descriptions for a consideration of $200 or about $5.70 a description. It knew also that the taxes had been regularly paid or redeemed by some one, that the lands were actually worth $1,500, and that it was about to pay that sum for them. Surely these facts were ample to suggest a robust doubt as to the validity of the Harding title. Here is no question of constructive notice of a collateral deed not in the chain of title, but the question is as to the effect of actual knowledge of the fact that other persons not in the apparent chain of title have been deeding the land as if they were owners for substantial considerations, in connection with the fact that the apparent title is based on a quitclaim ■deed executed but yesterday for a nominal consideration. The defendant’s attorney, of course, knew the general legal proposition that the after-acquired title of a grantor in a warranty deed inures to the benefit of his grantee; hence he knew that apparently the tax deeds subsequently taken by Comstock were merely so many additional supports to the Harding title. Nevertheless he saw by the abstract that Comstock assumed [16] to quitclaim his subsequently acquired title to the Wisconsin Eiver Laud Company,'which company thereafter deeded the laud by warranty deed for ample consideration to the plaintiff. Here, too, was certainly an unusual circumstance well calculated to stir the prudent mind to inquiry. The mere recording of a deed of lands is an assertion of title. Sec. 3186, Stats. (1898); Maxon v. Ayers, 28 Wis. 612; Broderick v. Cary, 98 Wis. 419, 74 N. W. 95. Actual knowledge that a stranger to the chain of title has placed a deed of the land on record is held to he sufficient to put an intending purchaser on inquiry, especially if the title which he is about to purchase appears to have been acquired for a merely nominal consideration. Dillon v. Shugar, 73 Iowa, 434, 35 N. W. 509; Knapp v. Bailey, 79 Me. 195, 9 Atl. 122; Clark v. Holland, 72 Iowa, 34, 33 N. W. 350; Doran v. Dazey, 5 N. Dak. 167, 64 N. W. 1023, 57 Am. St. Rep. 550. In the present case it appears that an inquiry made of the Wisconsin Eiver Land Company at its office would have resulted in the finding of the missing deed and the explanation of the singular state of the record. The defendant chose to make no such inquiry, and must abide the results. By the Gourt. — Judgment affirmed.