Moelle v. Sherwood/Opinion of the Court

The appellant asks for a reversal of the decree below on two grounds-First, that the petition for a rehearing was allowed, and a rehearing had, after the adjournment of the court for the term in which the original decree was rendered; and, second, that the decree, as finally rendered, was against the settled law, as to the effect of the quitclaim deed through which the complainant claims.

As a general thing, the jurisdiction of a court over its decrees terminates with the close of the term at which they were rendered. An exception to this doctrine is allowed by the 88th rule in equity, in cases where no appeal lies from the decree to the supreme court of the United States. It was on that ground that the motion was made for leave to file the petition for a rebearing in this case, and the allegations of the insufficiency of the amount involved, as the reason that no appeal from the decree would lie, does not appear to have been controverted by the defendant, but to have been conceded as true. The petition was therefore properly allowed; and, the case being submitted with such petition, there was no error in the court considering its merits on the legal propositions presented. Although the appellant has, by affidavits since filed, shown that the amount involved exceeds the sum of $5,000, it is too late for him, on that account, to object to the rehearing granted. His concession, upon which the petition was heard, cannot now be recalled. He should have shown that the land in controversy was sufficient at the time the motion was argued, instead of conceding its insufficiency, as alleged.

Of the merits of the decree rendered in favor of the complainant, and sustaining his title, we have no doubt. His title is traced directly from the patentee of the United States, by various intermediate conveyances. The quitclaim by him to Dosh, bearing date on the 22d of August, 1882, was executed while the title still remained in him. The deed to Probyne, bearing date, as it would seem, prior to the issue of the patent, and on which the defendant relies, does not cover the premises in controversy, but only property situated in a different section of the township. Even if it be conceded that the parties intended that the conveyance should embrace the premises in controversy, they did not carry out their intention, and in its original condition the deed was placed on record, and there allowed to remain, giving notice to all parties interested in section 31 of township No. 3 that the conveyance to Probyne of June 23, 1870, did not effect them. The change in the description of the property, made after the delivery of the deed to the grantee, and its record in the register's office of the county, did not give operation and force to the deed, with the changed description, as a conveyance of the premises in controversy. An alteration in the description of property embraced in a deed, so as to make the instrument cover property different from that originally embraced, whether or not it destroys the validity of the instrument as a conveyance of the property originally described, certainly does not give it validity as a conveyance of the property of which the new description is inserted. The old execution and acknowledgment are not continued in existence as to the new property. To give effect to the deed as one of the newly-described property, it should have been re-executed, reacknowledged, and redelivered. In other words, a new conveyance should have been made.

But if the deed as altered in its description of the property conveyed be deemed valid as between the parties from the tiem of the alteration, though not re-executed, it could not take effect and be in force, as to subsequent purchasers, without notice, whose deeds were already recorded but as to them, by the statute of Nebraska, it was void. The statute of that state upon the subject is as follows: 'All deeds, mortgages, and other instruments of writing which are required to be recorded shall take effect and be in force from and after the time of delivering the same to the register of deeds for record, and not before, as to all creditors and subsequent purchasers in good faith without notice; and all such deeds, mortgages, and other instruments shall be adjudged void as to all such creditors and subsequent purchasers without notice, whose deeds, mortgages, and other instruments shall be first recorded: Provided, that such deeds, mortgages, or instruments shall be valid between the parties.' Section 16, c. 73. Comp. St. Neb. 1891, p. 647.

The form of the quitclaim to Dosh on the 22d of August, 1882, did not, therefore, prevent the passing of the title of Bittinger to the grantee. Until then the title was in him. The deed previously executed to Probyne, if effectual for any purpose when it was altered without re-execution, was inoperative, as against the grantee in the quitclaim, by force of the above statute.

The doctrine expressed in many cases, that the grantee in a quitclaim deed cannot be treated as a bona fide purchaser does not seem to rest upon any sound principle. It is asserted upon the assumption that the form of the instrument,-that the grantor merely releases to the grantee his claim, whatever it may be, without any warranty of its value, or only passes whatever interest he may have at the time,-indicates that there may be other and outstanding claims or interests which may possibly affect the title of the property; and therefore it is said that the grantee, in accepting a conveyance of that kind, cannot be a bona fide purchaser, and entitled to protection as such, and that he is in fact thus notified by his grantor that there may be some defect in his title, and he must take it at his risk. This assumption we do not think justified by the language of such deeds or the general opinion of conveyancers. There may be many reasons why the holder of property may refuse to accompany his conveyance of it with an express warranty of the soundness of its title, or its freedom from the claims of others, or to execute a conveyance in such form as to imply a warranty of any kind, even when the title is known to be perfect. He may hold the property only as a trustee, or in a corporate or official character, and be unwilling, for that reason, to assume any personal responsibility as to its title or freedom from liens, or he may be unwilling to do so from notions peculiar to himself; and the purchaser may be unable to secure a conveyance of the property desired in any other form than one of quitclaim, or of a simple transfer of the grantor's interest. It would be unreasonable to hold that, for his inability to secure any other form of conveyance, he should be denied the position and character of a bona fide purchaser, however free, in fact, his conduct in the purchase may have been from any imputation of the want of good faith. In many parts of the country a quitclaim, or a simple conveyance of the grantor's interest, is the common form in which the transfer of real estate is made. A deed in that form is in such cases as effectual to divest and transfer a complete title as any other form of conveyance. There is in this country no difference, in their efficacy and operative force, between conveyances in the form of release and quitclaim, and those in the form of grant, bargain, and sale. If the grantor, in either case, at the time of the execution of his deed, possesses any claim to or interest in the property, it passes to the grantee. In the one case,-that of bargain and sale,-he impliedly asserts the possession of a claim to or interest in the property; for it is the property itself which he sells and undertakes to convey. In the other case, that of quitclaim, the grantor affirms nothing as to the ownership, and undertakes only a release of any claim to or interest in the premises which he may possess, without asserting the ownership of either. If in either case the grantee takes the deed with notice of an outstanding conveyance of the premises from the grantor, or of the execution by him of obligations to make such conveyance of the premises, or to create a lien thereon, he takes the property subject to the operation of such outstanding conveyance and obligation, and cannot claim protection against them as a bona fide purchaser. But in either case, if the grantee takes the deed without notice of such outstanding conveyance or obligation respecting the property, or notice of facts which, if followed up, would lead to a knowledge of such outstanding conveyance or equity, he is entitled to protection as a bona fide purchaser upon showing that the consideration stipulated has been paid, and that such consideration was a fair price for the claim or interest designated. The mere fact that in either case the conveyance is unaccompanied by any warranty of title, and against incumbrances or liens, does not raise a presumption of the want of bona fides on the part of the purchaser in the transaction. Covenants of warranty do not constitute any operative part of the instrument in transferring the title. That passes independently of them. They are separate contracts, intended only as guaranties against future contingencies. The character of bona fide purchaser must depend upon attending circumstances or proof as to the transaction, and does not arise, as often, though, we think, inadvertently, said, either from the form of the conveyance, or the presence or the absence of any accompanying warranty. Whether the grantee is to be treated as taking a mere speculative chance in the property, or a clear title, must depend upon the character of the title of the grantor when he made the conveyance; and the opportunities afforded the grantee of ascertaining this fact, and the diligence with which he has prosecuted them, will, besides the payment of a reasonable consideration, determine the bona fide nature of the transaction on his part.

In the present case, every available means of ascertaining the character of the title acquired, both at the time of his own purchase and at the time the purchase of his predecessors in interest were made, were pursued by the complainant. When he looked at the records of the county where the property was situated, he saw that the only deed executed by the patentee, the original source of title, was for property other than the premises in controversy. No mere speculative investment in the chance of obtaining a good title could, therefore, properly be imputed to him.

Decree affirmed.