McLeod v. Lloyd

Mr. Chief Justice Moore,

after stating the facts in the foregoing terms, delivered the opinion.

It is contended by defendant’s counsel that the complaint does not state facts sufficient to constitute a cause of suit, and that the court erred in overruling the demurrer thereto interposed on that ground, because: (1) The allegations of the complaint refer solely to the abstract of title, and not to the actual condition of such title; (2) it does not appear from the abstract that the deeds under which plaintiff claims title were sealed or acknowledged ; (3) the patents do not seem to have been countersigned by the Recorder of the General Land Office; (4) the complaint fails to point out the infirmities in the deeds which it is claimed cloud plaintiff’s title; (5) it presents no question of equitable right, thus showing that plaintiff’s remedy was at law ; (6) this suit cannot be maintained under Section 516, B. & C. Comp., as that statute was not designed to try legal titles only, but, if it was so intended, it is contrary to the organic law of the state, which guarantees to the defendant the right of a trial by jury; (7) Emma L. Watson, through whom plaintiff claims title, could not maintain this suit for want of an averment that defendant' had notice of her title, because the deeds to her express a consideration of only $1 each, and therefore the conveyances were prima facie gifts, her deed not having been recorded until after her grantors reconveyed the premises by warranty deed to the defendant for full value; (8) plaintiff claims title under a quitclaim deed releasing only the grantor’s interest in the land, and neither plaintiff nor his grantor was ever in possession of the premises, while de- • fendant claims title under a warranty deed from the same parties through whom plaintiff deraigns title, and hence plaintiff is not entitled to equitable relief; and (9) plaintiff secured a quitclaim deed to the land on February 18, 1902, for the expressed consideration of only $5, that he might bring this suit, which was instituted the next day, and therefore he is not entitled to invoke the aid of a court of equity.

1. Considering the legal principles insisted upon, in the order stated, it is argued by defendant’s counsel that the complaint, the abstract of title attached thereto, and the verification clearly show that the cause of suit relates to the record title as shown in the abstract; that the actual title, and not the record title, controls; that there may be deeds executed to the defendant for said land that are not of record, but are binding on plaintiff, which give defendant a perfect title; that there may be facts not appearing of record that are binding on plaintiff, rendering his title inferior to the defendant’s ; and that it is not a sufficient averment to allege that plaintiff has the better title “according to the attached abstract of record.” It will be remembered that the complaint alleges that plaintiff is the absolute and unqualified owner in fee simple of all the real property described therein, “as is shown by the abstract of title hereto attached, marked ‘Exhibit A,’ and made part hereof.” It has been held in this state that identified exhibits attached to a pleading constitute a part thereof, not for the purpose of supplying material averments, but with the design of particularizing the description and of itemizing the values stated therein: Caspary v. Portland, 19 Or. 496 (24 Pac. 1036, 20 Am. St. Rep. 842); Riley v. Pearson, 21 Or. 15 (26 Pac. 849). The exhibit which is made a part of the complaint is specific in character, and, under tjie rule adopted by this court, the statement in the pleading that plaintiff is the owner of the real property, as described by such exhibit, is equivalent to alleging that his title was secured from the source and derived from the persons named in the abstract. It is possible that facts not stated in the complaint, or that unrecorded deeds, may be in existence showing that defendant has the superior title ; but, if this were so, no difficulty would have been encountered in alleging such facts in the answer. The averment of facts in the complaint, in respect to the title to the premises, as disclosed by the abstract, made a prim a facie showing of the actual condition of the title, sufficient to render the allegation invulnerable to the demurrer, and, if the statement be false, the defendant had the privilege and should have controverted the facts stated therein.

2. An examination of the abstract discloses that the several deeds were acknowledged, and the names of the officers making the certificates thereof given, but it fails to specify that any of the deeds were sealed. The statute prescribing the mode of transferring the title to real property is as follows : “Conveyances of lands, or of any estate or interest therein, may he made by deed, signed and sealed by the person from whom the estate or interest is intended to pass, being of lawful age, or by his lawful agent or attorney, and acknowledged or proved, and recorded as directed in this chapter without any other act or ceremony whatever:” B. & C. Comp. § 5333. The term “deed,” in this state, is synonymous with a sealed instrument, so that the statement in the abstract, not only of the deed adopted to effectuate the transfer of the title, but the character thereof, sufficiently implies that the several instruments enumerated in the chain of title were sealed.

3. All patents issuing from the General Land Office shall be issued in the name of the United States, and be signed by the President, and countersigned by the Recorder of the General Land Office, and shall be recorded in the office, in books to be kept for the purpose: Rev. Stat. U. S. § 458 (U. S. Comp. St. 1901, p. 259). It shall be the duty of the Recorder of the General Land Office, in pursuance of instructions from the Commissioner, to certify and affix the seal of the office to all patents for public lands, and to attend to the correct engrossing, recording, and transmission of such patents: Rev. Stat. U. S. § 459 (U. S. Comp. St. 1901, p. 259). In McGarrahan v. Mining Co. 96 U. S. 316, Mr. Chief Justice Waite, in speaking of the several steps necessary to evidence a transfer of public lands by the general government, says : “Thus it appears that a patent for lands must be signed in the name of the President, either by himself or by his duly appointed secretary, sealed with the seal of the General Land Office and countersigned by the Recorder. Until all these things have been done, the United States has not executed a patent for a grant of lands. Each and every one of the integral parts of the execution is essential to the perfection of the patent. They are of equal importance under the law, and one cannot be dispensed with more than another. Neither is directory, but all are mandatory.” It being incumbent upon the Recorder of the General Land Office to countersign all patents for public lands, and to affix his seal of office thereto, and also to attend to the transmission of such instruments, the statement in the abstract that the patents there mentioned were recorded invokes the presumption that official duty has been regularly performed (B. & C. Comp. § 788, subd. 15), and justifies the inference that the patents in question were issued with all the formalities that the law requires.

4. A suit to remove a cloud upon a title is instituted to determine the invalidity of an apparently efficacious instrument, the infirmities of which cannot be ascertained from inspection, but resort must be had for that purpose to extrinsic evidence, to let in which it is necessary to allege in the complaint the facts constituting such invalidity: Teal v. Collins, 9 Or. 89; Moores v. Clackamas County, 40 Or. 536 (67 Pac. 662). In Shannon v. Portland, 38 Or. 382 (62 Pac. 50), Mr. Justice Wolverton, commenting upon the sufficiency of the allegation and the nature of the proof necessary to sustain a suit of this character, says: “It is essential to the maintenance of such a suit to assert and establish (1) the particular muniment or record constituting the cloud; and (2) thé infirmity attending it which renders it a nullity as to the complainant, for, if he does not show it to be a nullity, he must fail of his purpose.” In Lick v. Ray, 43 Cal. 83, the court, defining what constitutes a cloud on title and when a suit for its removal may be maintained, say: “It is settled by a long line of decisions in this court that if the title against which relief is prayed be of such a character as that, if asserted by action and put in evidence, it would drive the other party to the production of his own title in order to establish a defense, it constitutes a cloud which the latter has the right to call upon the court to remove and dissipate.” It must be assumed in the case at bar that the deeds set out in the abstract, numbered 3, 7, and 10, respectively, are apparently valid instruments, and that an inspection thereof would not disclose any imperfections therein; but when the deeds executed to Emma L. Watson, and recorded prior to those the defendant received, are considered, the conclusion reached necessarily tends to render the latter’s deeds ineffectual, because his grantors, having parted with the title to the land, had none to transfer. It will be remembered that the complaint alleges that the defendant claims some interest, right, or title to said lands, which claim is unfounded, illegal, unjust, and contrary to law and to equity, as shown by said Exhibit A. This averment, aided as it is by the exhibit, which calls attention to the public record, is, in our opinion, a sufficient compliance with the rule requiring the complaint to allege the facts constituting the invalidity of the instruments which cast a cloud upon title; for the object of every pleading is to call the attention of the court and of the adverse party to the facts relied upon to sustain the theory adopted by the pleader, and, when such facts are matters of public record, the volume and page of which are given, as in the case at bar, and thus presumptively within the defendant’s knowledge, the necessity for the same degree of particularity in stating them does not exist as in other cases.

5. The mode provided for the recovery of real property is as follows : “Any person who has a legal estate in real property, and a present right to the possession thereof, may recover such possession, with damages for withholding the same, by an action at law. Such action shall be commenced against the person in the actual possession of the property at the time, or if the property be not in the actual possession of any one, then against the person acting as the owner thereof”: B. & C. Comp. § 326. It will be remembered that the complaint, in referring to the real property in question, contains the allegation “that the said lands are all unseated, unimproved, and unoccupied, and not in the actual possession of any person.” It will be observed that the language quoted does not in express terms negative the fact that defendant, though not in possession of the real property, may have been acting as the owner thereof at the time the suit was instituted ; but we are of the opinion that the averment that “said lands are all unseated, unimproved, and unoccupied” is equivalent to such negation. In Kennedy v. Daily, 6 Watts, 269, it was held that residence without cultivation, or cultivation without residence, or both, constitutes seated land. The term “unseated,” when used to denote a condition of real property, would therefore seem to mean that class of lands which are neither in the possession of or cultivated by any person. It must be admitted that almost every act of ownership of real property necessarily results in improving its condition, for, in Garner v. Marshall, 9 Cal. 268, in illustrating the expression, “exercise of acts of ownership,” Mr. Justice Field remarks that they are “such as inolosure, cultivation, and the like,” and hence the averment that the premises in question were unimproved impliedly negatives the fact that defendant was acting as the owner thereof, so that, if it be necessary to negative a right of action for the recovery of real property before a court of equity could acquire jurisdiction to remove a cloud from the title thereto — a question not necessary to a decision herein — the complaint complies with such requirement.

6. The statute regulating the mode of removing a cloud from and of quieting the title to real property is as follows : “Any person claiming an interest or estate in real estate not in the actual possession of another may maintain a suit in equity against another who claims an interest or estate therein adverse to him, for the purpose of determining such conflicting or adverse claims, interests, or estates”: B. & C. Comp. § 516. Though a suit to remove a cloud and one to quiet title are essentially different in the manner of stating the facts constituting the equitable right, the relief is substantially identical in both cases, and, this being so, a person claiming an interest or estate in real property not in the possession of another may maintain, a suit to remove a cloud on his title without being in the actual possession of the premises, the amendment of the statute (Laws, 1899, p. 227) having enlarged the equitable remedy : Moores v. Clackamas County, 40 Or. 536 (67 Pac. 662). In Head v. Fordyce, 17 Cal. 149, Mr. Chief Justice Field, construing the language of a similar act, says: “The statute giving this right of action to the party in possession does not confine the remedy to the case of an adverse claimant setting up a legal title, or even an equitable title; but the act intended to embrace every description of claim whereby the plaintiff might be deprived of the property, or its title clouded, or its value depreciated, or whereby the plaintiff might be incommoded or damnified by the assertion of an outstanding title already held or to grow out of the adverse pretension. The plaintiff has a right to be quieted in his title whenever any claim is made to real estate of which he is in possession, the effect of which claim might be litigation or a loss to him of the property.” To the same effect see Dean v. City of Madison, 9 Wis. 402. The invalidity of defendant’s claim to the premises is not apparent from an inspection of his deeds, and is only shown by the introduction of plaintiff’s deeds. The editors of the Encyclopedia of Pleading and Practice, in a note to volume 17, page 286, in discussing the adequacy of a legal remedy to defeat a suit instituted to remove a cloud on title, say : “ Where the facts which show the invalidity of the claim are all of record, the bill will not be entertained.” The force of this rule, in the absence of a statute prescribing a contrary method, is not to be denied, but it must be admitted that the legislative assembly possessed plenary power to regulate the mode of procedure in suits in equity in all cases, and may enlarge the jurisdiction of courts in reference thereto, unless in doing so the rights of a defendant are necessarily abridged.

The organic law of the state contains the following declaration : “In all civil cases, the right of trial by jury shall remain inviolate Const. Or. Art. I § 17. The statute prescribing the character of the subject-matter of which equity will entertain jurisdiction is as follows : “The enforcement or protection of a private right, or the prevention of or redress for an injury thereto, shall be obtained by a suit in equity in all cases where there is not a plain, adequate, and complete remedy at law, and may be obtained thereby in all cases where courts of equity have been used to exercise concurrent jurisdiction with courts of law, unless otherwise specially provided in this title”: B. & C. Comp. § 390. In Grand Rapids & I. Ry. Co. v. Sparrow, 36 Fed. 210 (1 L. R. A. 480), a suit having been commenced in a state court to quiet the title to certain real property, was removed into a federal court, where it was contended that an amendment of a statute of Michigan, permitting a person claiming the legal or equitable title to lands, “whether in possession or not,” to institute a suit against any other person, “not in possession,” setting up a claim thereto in opposition to the title claimed by the claimant, violated the right of a trial by a jury. It was held, however, that the right insisted upon was not infringed, the court saying: “Respecting the argument that the act of the legislature of Michigan (Pub. Acts 1887, No. 260, p. 337), extending the jurisdiction of the court of equity to quiet titles to cases where the lands are unoccupied, is unconstitutional because it deprives the defendant of the right to trial by jury secured by the Constitution of Michigan (Article VI, § 27), I think it must be held that this constitutional provision extends only to cases where by the common law a trial by jury was customary. It does not reach those cases where the remedy is given by statute. At common law ejectment did not lie where the defendant was not in possession, and it is sustainable in such a case only by virtue of the statute in Michigan.” In Wong v. Astoria, 13 Or. 538 (11 Pac. 295), Mr. Justice Thayer., in speaking upon this subject, says : “The right of trial by jury provided for in the Constitution of the United States, and of various states, is understood to mean the common-law trial by jury.” The defendant not being in possession of the real property in controversy, nor acting as the owner thereof, plaintiff could not have maintained an action of ejectment against him (B. & C. Comp. § 326); and, as defendant’s common-law right to a trial by jury depended upon his possession, the statute enlarging plaintiff’s remedy by permitting him to maintain a suit to remove a cloud upon title, though also not in possession, does not deprive the defendant of any right guaranteed him by the fundamental law of the state.

7. The abstract attached to the complaint shows that the deeds executed by Watkins, Abbott, and Carson, respectively, to Emma L. Watson, under whom plaintiff’s title to the premises is derived, each express a consideration of only $1; and it is argued by defendant’s counsel that these conveyances to her were prima facie voluntary, and presumptively fraudulent as to the defendant, who paid full value for the premises, and that, as the complaint did not allege that defendant secured his deeds with notice of the prior conveyances to her, it did not state facts sufficient to constitute a cause of suit, and that the court erred in overruling the demurrer thereto. The statute of 27 Elizabeth, c. 4, provides in effect that all conveyances of lands, etc., made with intent to defraud subsequent purchasers, shall, as against such purchasers, their heirs, and all other persons claiming under them, who shall purchase for money or other good consideration, be void : Bispham, Equity, (4 ed.), § 250; 4 Kent, Com. *463. Our. statute upon this subject, so far as deemed applicable herein, is as follows: “Every conveyance * * of lands * * made * * with intent to defraud * * subsequent purchasers for a valuable consideration of the same lands * * as against such purchasers shall be void”: B. & C. Comp. § 5502. “ No such conveyance * * shall be deemed fraudulent in favor of a subsequent purchaser who shall have actual or legal notice thereof at the time of his purchase, unless it shall appear that the grantee in such conveyance * * was privy to the fraud intended ”: B. & C. Comp. § 5503. A perusal of this act will disclose that, to render such a conveyance inoperative, the grantor must have actually intended to defraud the subsequent purchaser, who must have paid a valuable consideration for the land and secured a deed therefor without notice of the prior conveyance; or, if he had such notice, then, to protect him, he must be able to establish the fact that the prior grantee was a party to the original fraud. To defeat plaintiff’s title, the burden of alleging a want of notice, or, if notice was given, then that the prior grantee participated in the fraud, was imposed upon the defendant. In McIntyre v. Kamm, 12 Or. 253 (7 Pac. 27), Mr. Chief Justice Waldo, discussing a similar question, makes the following observation : “ This being a controversy between legal titles, the defendants could have assailed the plaintiff’s title on the ground of notice or want of consideration at law: Jackson v. Burgott, 10 Johns. 457 (6 Am. Dec. 349). But the burden was on the defendants to set up the facts invalidating the plaintiff’s title, and to prove them at the trial.” Assuming, without deciding, that the recital of $1 as a consideration affords prima facie evidence of voluntary conveyances executed by Watkins, Carson, and Warwick to Emma L. Watson, the burden was not imposed upon plaintiff to allege or prove a negative, but upon the defendant to aver a want of notice, or, if such notice were given or implied, to state such facts as would obviate the effect thereof. Not having done so, the alleged want of notice cannot be raised by demurrer.

8. Plaintiff claims title under a quitclaim deed from persons who were never in possession of the premises, while defendant claims title by warranty deed for full value from the persons through whom plaintiff derives his title, and it is maintained that because the complaint fails to aver fraud, accident, or mistake, it does not state facts sufficient to warrant equitable interference. The point contended for is without merit, for in Dull’s Appeal 113 Pa. 510 (6 Atl. 540), it was held, in a suit to remove a cloud from title, that the authority of a court of equity to grant relief in such cases did not depend upon an allegation of the facts insisted upon, Mr. Justice Green, speaking for the court in deciding the case, saying : “ The jurisdiction has been asserted and enforced as an independent source or head of jurisdiction, not requiring any accompaniment of fraud, accident, mistake, trust, or account, or, indeed, any other basis of equitable intervention.”

9. If it be conceded that plaintiff secured a quitclaim deed to enable him to maintain this suit, and that he instituted it the next dav after his deed was executed, such facts did not defeat his right, and, believing, as we do, that the complaint stated facts sufficient to constitute a cause of suit, no error was committed in overruling the demurrer.

10. It is contended by defendant’s counsel that the plea in abatement shows that plaintiff was not the real party in interest, and that the court erred in sustaining a demurrer thereto. The complaint alleges that plaintiff is the absolute and unqualified owner of the property in fee simple, and the abstract tends to show that he held the legal title thereto. If, however, the conveyance was made to him in trust for the Astoria Company, he nevertheless by his deed secured such an interest in the premises as would enable him to maintain this suit, for the rule is well settled that an agent who makes a contract in his own name, without disclosing the name of his principal, may maintain a suit in his own name: Bliss, Code PI. § 57; Pomeroy, Code Rem. § 141. No error was committed in sustaining his demurrer to the plea.

11. It is also maintained by defendant’s counsel that there was no evidence introduced at the trial upon which to base the findings made by the court. There being no answer to the merits, no issue of fact was presented for trial, and, this being so, the court very properly made its findings in conformity with the averments of the complaint, which were tacitly admitted. The statute of this state limiting the time within which a deed should be recorded, and prescribing the consequences that may possibly result from a failure to comply therewith, is as follows: “Every conveyance of real property within this state hereafter made, which shall not be recorded as provided in this title within five days thereafter, shall be void against any subsequent purchaser in good faith and for a valuable consideration of the same real property, or any portion thereof, whose conveyance shall be first duly recorded”: B. & C. Comp. § 5359. In Fleschner v. Sumpter, 12 Or. 161 (6 Pac. 506), in construing the language quoted, it was held that, where neither of two conveyances is recorded within the time prescribed, the one that is thereafter first recorded will take priority. Mr. Justice Thayer, in deciding the case, says: “The prior recording of the prior conveyance at any time after its execution will give it precedence. ' So will the prior recording of the subsequent conveyance give it precedence over a prior one subsequently recorded, although neither of them be recorded within the five days.” In the case at bar the abstract, which is made a part of the complaint, shows, and the demurrer thereto admits, that the deeds executed to Emma L. Watson, plaintiff’s predecessor in interest, July 27 and 31, and August 3, 1901, respectively, were recorded September 21st of that year, and that the deeds executed by her grantors to the defendant and acknowledged August 20, 1901, were not recorded until November 16th of that year. The defendant’s deeds not having been recorded within five days after their execution, and those executed to plaintiff’s predecessor in interest having been first recorded, the court, by invoking the maxim that where there are equal equities the first in time shall prevail, properly concluded that plaintiff’s right to the relief sought was thereby established, and, concurring in that view, the decree is affirmed. Affirmed.

On Motion to Recall Mandate and For Leave to Answer.

Per Curiam. 12. This is a motion to recall the mandate in order that a provision may be inserted therein permitting the defendant to apply to the court below for leave to answer by pleading that the property in controversy is not in Lane, but is in Douglas County, and that the defendant’s deed, although of subsequent date to plaintiff’s, was first recorded in the latter county. In the court below the defendant demurred to the complaint, but his demurrer was overruled, and he declined to plead further. A decree was then entered in favor of the plaintiff, as prayed for in the complaint, from which an appeal was taken, and the decree was affirmed. In cases of this character, it is discretionary with this court either to enter a final decree here, or to remand the suit for such further proceedings as it may deem right and proper.

13. If the case be remanded, it is open to the court below to determine in the first instance whether the defendant shall be permitted to plead further : Powell v. Dayton S. & G. R. Co. 14 Or. 22 (12 Pac. 83); Fowle v. House, 30 Or. 305 (47 Pac. 787); State ex rel v. Metschan, 32 Or. 372 (46 Pac. 791, 53 Pac. 1071, 41 L. R. A. 692). The question as to the proper procedure in the present suit was presented and determined on the petition for rehearing, and the conclusion then reached necessarily disposes of the present motion. Motion Overruled.