Durham v. Hadley

¶1The opinion of the court was delivered by

¶2This action was brought by T. J. Hadley and C. M. McEntire, as assignees of Mrs*. M. A. Bowen, to recover the sum of $500, alleged to have been deposited with Hogue, Burch & Miller, real-estate agents, by Thomas Durham, as part purchase-money for certain real estate alleged to have been purchased by Durham from Mrs. M. A. Bowen, through Hogue, Burch & Miller, as her agents. Afterward, by order of the court, Thomas Durham was made a party defendant, and filed his answer claiming the money. Hogue, Burch & Miller answered, admitting the payment of the money to them as agents of Mrs. Bowen, disclaiming all right thereto, and brought it into court to be paid to the party entitled thereto.

¶3Trial was had by the court, without a jury, and, at the request of Durham, the court made special findings of fact and conclusions of law. Judgment was afterward rendered in favor of Hadley and McEntire, and against Hogue, Burch & Miller for the recovery of the money, and against Durham for the costs of suit. Durham excepted, and brings the case here.

¶4It appears from the record that $400 in cash and a note of $100 were deposited, on March 30, 1887, by Thomas Durham *79with Hogue, Burch & Miller, agents of Mrs. M. A. Bowen, on a contract for the sale of land, which contract was never consummated. On February 13, 1888, the day before this action was brought, Mrs. M. A. Bowen assigned her claim to the $500, in writing, to Hadley and McEntire. After the written contract of the 30th of March, 1887, the evidence shows that Mrs. M. A. Bowen remained in possession of the land. After the contract was delivered, T. J. Hadley, the son-in-law of Mrs. M. A. Bowen, furnished an abstract of title of the land to Thomas F. Durham, the agent of Thomas Durham. As soon as the abstract was furnished and examined, Durham objected to the title, and paid nothing further upon the contract. Mrs. Bowen deposited a deed of the land with Hogue, Burch & Miller, and then demanded the money stipulated in the contract, and, when it was not paid over, she claimed the $500 as a forfeit or penalty. In 1860, Charles H. Thompson was the owner of the land by a patent from the government. On the 3d of March, 1859, he conveyed the land by warranty deed to Simeon F. Hill. On the 11th day of May, 1859, Simeon F. Hill and wife executed a mortgage on the land to Charles H. Thompson to secure $834, payable February 10, 1860. This mortgage was duly recorded in the office of the register of deeds of Johnson county on May 23, 1859. No assignment of the mortgage appears of record, and no release thereof appears on the margin of the record. On May 30, 1862, Benjamin M. Jewett and Matilda Jewett filed a release and quitclaim deed, reciting that Simeon F. Hill had paid to them the mortgage executed to Thompson. It was decided in O’Neill v. Douthitt, 40 Kas. 689, that —

¶53. Title,clouded -purchaser, when not compelled to pay. “ Where an abstract of title shows that a mortgage on the land has been recorded, it is then necessary, in order that the abstract shall show a good and complete title, that it shall also show that the mortgage was not only re]easec[ an(j discharged of record, but also that the person releasing or discharging the same had full and complete authority of record to do so.”

¶6*80There is nothing in the office of the register of deeds of Johnson county showing, or tending to show, that Benjamin F. Jewett and wife had any authority to release or discharge this mortgage. The title of the property described in the contract executed by Mrs. Bowen and Thomas Durham was clouded or affected by the real-estate mortgage when the contract was executed, and the cloud had not been removed when Mrs. Bowen tendered her deed. It is said in O’Neill v. Douthitt, supra, that—

“ The general policy of the law in this state is to require, as far as practicable, every interest in real estate to be evidenced, not only by writing, but also by some public record of the county in which the real estate is situated. (See statutes of frauds and perjuries, §§ 5 and 6; statutes relating to trusts and powers, § 1; registry laws; acts relating to conveyances, to mortgages, to the records of courts, to mechanics’ liens, to other liens, and to taxes.) Under our statutes and in law, as contradistinguished from equity, everything affecting real estate must be in writing, (see statutes above cited,) and every instrument in writing affecting real estate may be recorded, (conveyance-act, § 19,) and, to be considered as valid as against persons without actual notice, it must be recorded. (Conveyance Act, § 21.) Now the release or discharge of a real-estate mortgage certainly affects real estate, or, to speak more accurately, it affects the title thereto or some interest therein. Hence, a valid release of a real-estate mortgage should not only be shown by a valid writing, but it should also be shown by a valid record. Such has always been the view taken by this court. (Burhans v. Hutcheson, 25 Kas. 625; Lewis v. Kirk, 28 id. 497; Perkins v. Matteson, 40 id. 165; same case, 19 Pac. Rep. 633.)”

¶7*811. Contract—sale of land-title implied warranty.*80The question therefore arises., whether, upon the conclusions of fact, Thomas Durham was compelled to perform his contract of the 30th of March, 1887, and, if he did not do so, whether the $500 deposited by him can be treated as a forfeit or penalty. The trial court found that Mrs. Bowen had fully complied with all of the conditions of the contract upon her part, and that she was the owner of the land in controversy, free and clear of all incumbrances. But, notwithstanding this fact, it appears from the records that the title to the land is doubt*81ful, or at least clouded, on account of the non-release upon record of the mortgage of $834, with interest. Mrs. Bowen agreed in her written contract that she would “convey and assure to Thomas Durham the 32 acres of land described therein in fee-simple, clear of all incumbrances whatsoever, by a good and sufficient warranty deed.” Under the contract, Durham was entitled, as the purchaser of the land, not only to a good title, but to a marketable title. In every contract for the sale of land there is always an implied warranty by J L J J the vendor that he has good title, unless such warranty be expressly excluded by the terms of the contract. The implied warranty exists so long as the contract remains executory, i. e., until the deed is given, when the party must rely on the covenants in the deed, unless there has been fraud, in which case relief may be afforded in equity.

¶8It is undoubtedly true that, where an incumbrance is discovered upon land, the vendor must discharge it before he or she can compel the payment of the purchase-money by the vendee at law or in equity. In this case, it is claimed that no incumbrance existed, because the mortgage had been paid; but the records in the office of the register of deeds show no release and no payment to any party having authority to release or accept payment. If Mrs. Bowen had commenced an action for specific performance of the contract against Durham, she could not have succeeded, because it is the rule that, in actions by a vendor,, the parties will not be forced to complete the contract unless the title is free from any reasonable doubt. Again, a specific performance will never be decreed at the action of the vendor, whenever the doubt concerning his title is one which can only be settled by further litigation. A vendee “will not be compelled to buy a lawsuit.” (Pom. Contr. §§ 198-208.) ' •

¶9*822. Case, followed.*81In this case, under the decision of this court in O’Neill v. Douthitt, although Mrs. Bowen may have had title to the land free from any incumbrance, neither the abstract of title nor the county records so showed, and as Durham not only wanted a good title, but a good, marketable title, one which appeared *82from the records of the county to be good and free from all incumbrances. he could not be comnelled to accept the deed of which he had notice, or be compelled to pay bhe money upon the contract, and then permit Mrs. Bowen to settle her title by litigation in the future, or be compelled to quiet his title by future litigation. Mrs. Bowen ought, before she made her contract, or offered her deed, or at least before this action was brought, to have had Charles H. Thompson release on the record the mortgage of $834 and all interest, if it is paid, or she ought to have had the written assignment of the mortgage to Benj. F. Jewett recorded, if Jewett was ever the legal owner thereof. She did none of these things, and none of these things have yet been done. The title is clouded with an apparent incumbrance, and the land, whether bought by Durham for speculation or for other purposes, is in no condition to be sold, as the seeming ineumbrance, not legally released, must affect the value thereof and interfere with the sale of the land to a reasonable purchaser. It is said, however, that Mrs. Bowen never agreed to furnish any abstract, and therefore that this case differs from the O'Neill-Douthitt case. It is immaterial whether there was any agreement to furnish an abstract or not. The cost of the abstract is not in controversy. The abstract was furnished, and whether Durham ascertained from the abstract, or from the records in the office of the register of deeds, that the title of the land was clouded by an apparent incumbrance, is of no concern. The facts ai~e, that Durham could not and cannot obtain a good marketable title. He cannot be compelled to accept any other title. The quitclaim deed of Durham of the 15th of November, 1887, is of no importance. If he had no title or interest in the land, the quitelaim deed transferred nothing.

¶10Upon the facts, we do not think that the money deposited with Hogue, Burch & Miller can be claimed as a forfeit or penalty; therefore the judgment must be reversed, and the cause remanded, with direction to the trial court to enter judgment upon the findings of fact in favor of Thomas Durham, and against Hadley and McEntire, the plaintiffs below.