Messersmith v. Smith

MORRIS, Chief Justice.
Caroline Messersmith and her nephew, Frederick S. Messersmith, were each the owner of an undivided one-half interest in this land, having acquired it by inheritance. The land was unimproved except for being fenced. It was never occupied as a homestead. Section 1 was leased to one tenant and Sections 3 and 11 to another. They used the land for grazing. One party had been a tenant for a number of years, paying $150 a year. The amount paid by the other tenant is not disclosed. The plaintiff lived in Chicago. Caroline Messersmith lived alone in the City of Dickinson where she had resided for many years. She looked after the renting of the land, both before and after she conveyed her interest therein to her nephew. She never told her tenants about the conveyance.

On April 23, 1951, the defendant Smith, accompanied by one King and his prospective wife, went to the Messersmith home and negotiated an oil and gas lease with Miss Messersmith covering the three sections of land involved herein. According to Miss Messersmith, all that was discussed that day concerned royalties. According to the testimony of Mr. Smith and Mr. King, the matter of the mineral deed was discussed.

Two or three days later, Smith and King returned. Again the testimony varies as to the subject to conversation. Miss Messersmith said it was about royalties. Smith and King say it was about a mineral deed for the purchase of her mineral rights. No agreement was reached during this conversation. On May 7, 1951, Smith returned alone and again talked with Miss Messersmith. As a result of this visit, Miss Messersmith executed a mineral deed for an undivided one-half interest in the oil, gas and minerals under the three sections of land. Smith says this deed was acknowledged before a notary public at her house. She says no notary public ever appeared there. She also says that Smith never told her she was signing a mineral deed and that she understood she was signing a 'royalty transfer.' The consideration paid for this deed was $1,400, which is still retained by Miss Messersmith. After leaving the house Smith discovered a slight error in the deed. The term 'his heirs' was used for the term 'her heirs.' He returned to the home of Miss Messersmith the same day, explained the error to her, tore up the first deed, and prepared another in the same form, except that the error was corrected. According to Smith's testimony, he took the second deed to the same notary public to whom Miss Messersmith had acknowledged the execution of the first deed and the notary called Miss Messersmith for her acknowledgment over the telephone and then placed on the deed the usual notarial acknowledgment, including the notary's signature and seal. The notary, who took many acknowledgments about that time, has no independent recollection of either of these acknowledgments. It is the second deed that was recorded on May 26, 1951, and upon which the defendant, E. B. Seale, relied when he purchased from the defendant, Herbert B. Smith, Jr., the undivided one-half interest in the minerals under the land in question.

The trial court reached the conclusion that the transaction resulting in the mineral deeds to Smith was not fraudulent and he so found. While Miss Messersmith was an elderly woman, 77 years of age, she appears to have been in full possession of her faculties and a person of considerable business experience. She owned a number of other farms upon which she had executed oil and gas leases previous to the time she made the lease of this land to Smith. Although Miss Messersmith is very positive that she did not know she signed a mineral deed, she is very vague as to what she thought she was signing. She knew she had already signed an oil and gas lease to all of the land in favor of Smith, so she does not contend that she thought she was signing another lease. On cross-examination she was asked:
'Q. Well, will you tell the Court what you thought you were signing? A. Thought that I was selling a certain percentage of it on royalty. That's what I thought.'

A day or two after signing the deed she wrote to the plaintiff, her nephew, and he wrote a letter back by air mail. She did not send him a copy of the mineral deed. In fact, there is nothying in the record that indicates a copy was ever made. She testifies that Smith tore up the first deed in her presence and put the pieces in his pocket. He took the second deed with him. Without consultation with anyone, except the correspondence with her nephew, she wrote the defendant Smith on May 26, 1951, as follows:

This letter indicates that she fully understood that she signed a mineral deed. She complains of no fraud in its procurement.

The trial court found 'that such deeds, or either of them, were not procured through fraud or false representation.' The evidence does not warrant this court in disturbing that finding.

The determination that the mineral deed from Caroline Messersmith to Herbert B. Smith, Jr., was not fraudulently obtained by the grantee does not mean that the defendant, who in turn received a deed from Smith, is entitled to prevail as against the plaintiff in this action. At the time Miss Messersmith executed the mineral deed she owned no interest in the land, having previously conveyed her interest therein to the plaintiff. Smith in turn had no actual interest to convey to the defendant Seale. If Seale can assert title to any interest in the property in question, he must do so because the plaintiff's deed was not recorded until July 9, 1951, while the deed from Caroline Messersmith to Smith and the deed from Smith to the defendant Seale were recorded May 26, 1951, thus giving him a record title prior in time to that of the plaintiff.

It may be stated as a general rule that the recording of an instrument affecting the title to real estate which does not meet the statutory requirements of the recording laws affords no constructive notice. The applicability of the rule is easily determined where the defect appears on the face of the instrument, but difficulty frequently arises where the defect is latent. Perhaps the most common instance of this nature arises when an instrument is placed of record bearing a certificate of acknowledgment sufficient on its face despite the fact that the statutory procedure for acknowledgment has not been followed.

It avails the purchaser nothing to point out that a deed is valid between the parties though not acknowledged by the grantor--for Caroline Messersmith, having previously conveyed to the plaintiff, had no title. The condition of the title is such that Seale must rely wholly upon his position as an innocent purchaser under the recording act.

In this case we have the unusual situation of having two deeds covering the same property from the same grantor, who had no title, to the same grantee. The only difference between the two was a minor defect in the first deed, for which it was destroyed. The evidence is conflicting as to whether or not the first deed was acknowledged. The second deed clearly was not. It is argued that the transaction should be considered as a whole, with the implication that if the first deed was actually acknowledged, the failure to secure an acknowledgment of the second deed would not be fatal to the right to have it recorded and its efficacy as constructive notice. We must again point out that the right which the defendant Seale attempts to assert is dependent exclusively upon compliance with the recording statutes. His claim of title is dependent upon the instrument that was recorded and not the instrument that was destroyed. Assuming that Smith is right in his assertion that the first deed was acknowledged before a notary public, we cannot borrow that unrecorded acknowledgment from the destroyed deed and, in effect, attach it to the unacknowledged deed for purposes of recording and the constructive notice that would ensue.

In Dixon v. Kaufman, we sustained the title to nonhomestead lands of purchasers for value and without notice whose title rested upon a deed bearing a certificate of acknowledgment regular on its face but which in fact had not been acknowledged by the grantors. In that case the grantors were the actual owners of the property at the time they signed the deed and as to nonhomestead property the delivery of the deed without acknowledgment was sufficient to pass title which the grantees then had. This title was then purchased by defendants who paid the value therefor in good faith and without notice of any claimed defects in the execution of the deed. The deed executed by the plaintiffs which they sought to attack conveyed a title which, at the most, was voidable. In that case plaintiffs sought relief from the consequences of their own acts which would result in loss to innocent parties. The situation here is entirely different. The plaintiff seeks relief from the consequences of the acts of a third party, Caroline Messersmith, who, after deeding to the plaintiff her entire interest in the property, executed the mineral deed to Smith. This deed contained a warranty but it actually conveyed no title. As a conveyance it was good between the parties only in theory, for the grantor had nothing to convey. For the loss which resulted from her acts, the plaintiff in this case is not to blame. His failure to record his deed will not defeat the title which he holds unless there appears against it a record title consisting of instruments executed and recorded in the manner prescribed by our recording statutes. The title asserted by the defendant Seale does not meet these requirements and the trial court erred in rendering judgment in his favor.

The judgment appealed from is reversed.