McDonald v. Sullivan

Winslow, O. J. The plaintiff claims that under the allegations of his complaint the deeds which he attacks are shown to be invalid as to> him upon two grounds: First, because made with intent to defraud prior or subsequent purchasers of the land, contrary to the provisions of sec. 2297, Stats. (1898); and second, because cut off by the provisions [365] of the recording act, see. 2241, Stats. (1898). These contentions will he considered in their order. 1. See. 229Y, ahoye referred to, provides as follows: “Every conveyance of any estate or interest in land or the rents and profits of lands, and every charge npon lands or upon the rents and profits thereof, made or created with the intent to defraud prior or subsequent purchasers for a valuable consideration of the same lands, rents or profits, as against such purchasers, shall be void.”. It must at once be admitted that a complaint which seeks to set aside a deed because made in contravention of the terms of this section must either allege directly that it was made with the particular intent to defraud which the statute specifies, or must allege facts from which such intent must be inferred when the allegations are given that liberal and reasonable construction to> which they are entitled. This court has consistently held in numerous cases, and in accord with the weight of authority elsewhere, that mere general allegations of fraud or fraudulent conspiracy are of no value in stating a cause of action, unless, indeed, the act which is charged to be fraudulent is necessarily so. Generally speaking, fraud is a conclusion of law, and. facts, not conclusions, must be stated in a pleading. Crowley v. Hicks, 98 Wis. 566, 74 N. W. 348; New Bank v. Kleiner, 112 Wis. 281, 87 N. W. 1090, and cases cited. The great essential fact which is necessary to bring the making of the deeds within the condemnation of the section quoted is that they were made “with intent to defraud- prior or Subsequent purchasers for a valuable consideration.” Intent to defraud creditors-merely will not be sufficient, nor will intent to- accomplish other-unjust results which may properly be called fraudulent in a general sense, such as the depriving a prospective wife of dower rights, defeat the deeds at the suit of a purchaser. There must have been the specific intent to defraud purchasers. Mere multiplication of epithets, even of an un [366] pleasant nature, carries little or no weight. The pleader in the present case has industriously ransacked the dictionary in order to pile up adjectives and adverbs characterizing the transactions attacked as generally reprehensible, fraudulent, and void; but it is apparent that he has been equally industrious in omitting any statement that the intent required by the statute ever existed. In the absence of any such statement or of any other statement of fact from which such intent must necessarily follow, the complaint cannot be said to state a case of fraud under the terms of sec. 2297. 2. The charges of fraud and conspiracy being thus eliminated from the complaint, we come naturally to the consideration of the effect of the recording act upon the rights of the parties. Our recording act — sec. 2241, Stats. (1898) — provides that “Every conveyance . . . which shall not be recorded as provided by law shall be void as against any subsequent purchaser in good faith and for a valuable consideration of the same real estate or any portion thereof whose conveyance shall first be duly recorded.” A. E. Knaup was the common source of title. The complaint alleges that both Stone, the plaintiff’s immediate grantor, and the plaintiff himself were purchasers in good faith for a valuable consideration. The plaintiff, therefore, stands in the shoes of Stone and is entitled to' the same rights which Stone would have had against the defendants if he had made no conveyance to the plaintiff. The good faith of Sullivan is not impeached, nor is it alleged that his conveyance was not founded upon due consideration, so< he also is entitled to be treated as a purchaser in good faith for a valuable consideration. Stone’s deed was delivered August 25th and recorded September 11th. Sullivan’s deed from Euller was dated August 28th, delivered September 12th, and recorded September 17th. If the question of priority depended solely on priority of delivery and recording as between these two deeds, the plaintiff’s title would unquestionably be para [367] mount, for Ms deed is prior both in delivery and in record. Sullivan, however, is entitled to all tbe rights which Fuller had. He is entitled to no more under the recording act; for, in order to be protected under that act, it is established in this state that his conveyance (in this case the deed from Fuller to Sullivan) must be first recorded. Fallass v. Pierce, 30 Wis. 443; Butler v. Bank of Mazeppa, 94 Wis. 351, 68 N. W. 998. So, when the rights of Fuller as against Stone under the recording act are determined, the rights of Sullivan ■as against Stone are also determined so far as the provisions of that act are concerned. Fuller’s deed from Werner was dated June 29, 1906, and Werner’s deed from Knaup was dated June 28, 1906, and both are recorded August 29th. Thus they were dated before Stone’s deed was delivered, and recorded after Stone’s deed was -delivered but before it was recorded. Both of them, it is true, were without consideration, but Fuller’s deed was recorded before Stone’s, and so Stone, though a purchaser in good faith for a valuable consideration from Knaup, does not come within the protection of the recording act as against Fuller, because his conveyance was not first duly recorded. The principle was thus stated by HixoN, C. J., in Fallass v. Pierce, 30 Wis. 443, 471, 472, as follows: “The statute does not read: ‘Every conveyance in good faith and for a valuable consideration of real estate within this state hereafter made, which shall not be recorded,’ etc. The first deed may be executed and received, therefore, mala fide- and without the payment of any consideration of value, and yet, if the grantee therein causes the same to be recorded ■before the deed to the subsequent purchaser in good faith for value is recorded, the statute does not save or protect the rights of the latter or give him any advantage by or through the subsequent recording of his own deed. . . . The subsequent purchaser in such case can gain nothing by such subsequent recording, but must resort to his remedy by action to set aside the prior conveyance on account of the fraud, if it be a fraud upon him or such as to give him that right.” [368] Tbe language exactly fits tbe present case. Stone did not. record bis conveyance first, and tbe benefit of tbe recording act is confined to one wbo does record bis conveyance first.. If the conveyances to Werner and Euller were made with intent to defraud Stone, be bad bis remedy by timely action to-set them aside, and that remedy doubtless passed to the* plaintiff, unless possibly there be circumstances wbicb would estop tbe plaintiff from enforcing sucb a remedy against Sullivan, in analogy to tbe principle laid down in Marling v. Nommensen, 127 Wis. 363, 106 N. W. 844. Tbe mere delay of Stone in recording bis deed for seventeen days after its-delivery, unaccompanied by any other act or default on bis-part upon wbicb Sullivan placed reliance, especially in view of tbe fact that Stone’s deed was actually on record before Sullivans deed was delivered, cannot be held to constitute an, estoppel. By the Court — Order affirmed.