Illinois Valley Trust Co. v. Sells

1933 OK 671, 27 P.2d 1045, 167 Okla. 58, 1933 Okla. LEXIS 26
CourtSupreme Court of Oklahoma
DecidedDecember 19, 1933
Docket21701
StatusPublished
Cited by3 cases

This text of 1933 OK 671 (Illinois Valley Trust Co. v. Sells) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Illinois Valley Trust Co. v. Sells, 1933 OK 671, 27 P.2d 1045, 167 Okla. 58, 1933 Okla. LEXIS 26 (Okla. 1933).

Opinion

OSBORN, J.

This is an action for foreclosure of a real estate mortgage filed in the district court of Sequoyah county by the Illinois Valley Trust Company against Sol Sells, Katie Sells, his wife, and Jenkins Sanders, on certain lands situated in said county. Defendant Jenkins Sanders filed an answer and cross-petition, alleging that he was, in fact, the owner of said lands by virtue of allotment thereof as a citizen of the Cherokee Nation, and attacking the validity of a guardianship sale of the county court of Sequoyah county, and alleging fraud on the part of the guardian, and further alleging that plaintiff was chargeable with knowledge of said fraud, and praying that the mortgage be canceled and title be quieted in him. The cause was tried to the court and a judgment rendered in favor of Jenkins Sanders against plaintiff, canceling the mortgage and quieting title in said Jenkins Sanders, from which judgment plaintiff has appealed.

There is little dispute as to the facts in *59 the case. On May 10, 1920, Jenkins Sanders was a minor, and D. X. Sanders, his father, filed an application for appointment of himself as guardian. 1-Ie was thereafter appointed and qualified as guardian of the person and estate of Jenkins ganders, and on May 10, 1921, procured an order of sale directing the sale of the lands involved. Sol Sells was the purchaser at said sale and thereafter executed the mortgage in question.

The testimony is undisputed that the entire arrangement was a scheme to raise funds to pay outstanding indebtedness of D. X. Sanders; that no • consideration ever passed from Sol Sells to the guardian, but, as soon as the sale was confirmed to Sells, he immediately executed the mortgage and a deed conveying the land back to Jenkins Sanders, which deed was filed of record some time later. The loan was made by the Graves Farm Loan Investment Company and the mortgage was thereafter assigned to plaintiff. The proceeds thereof were applied on the indebtedness of D. X. Sanders. Sanders thereafter paid certain installments on the loan, but having defaulted in some of his paj'ments, the foreclosure proceedings were instituted.

Plaintiff contends that it is an innocent purchaser for value of the mortgage without knowledge or notice of any facts which would put it on inquiry as to any defect or irregularity in the guardianship sale. In this connection plaintiff offered testimony to the effect that it was not engaged in the business of making loans, but in the business of purchasing mortgages; that relying upon the record, it purchased the said mortgage from the Graves Farm Loan Investment Company and paid therefor the face value of the loan, plus accrued interest; that the officers of th© plaintiff company were not acquainted witli any of the parties to the original transaction involving the guardianship sale, and the only relationship existing between plaintiff and the Graves Farm Loan Investment Company was that of vendor and vendee. This testimony is undisputed.

In the case of F. B. Collins Investment Co. v. Waide, 70 Okla. 193, 173 P. 835, it is said:

“A guardian entered into and carried out a conspiracy resulting in a fraudulent sale of his ward’s land. Such sale was made under order of the county court, and the proceedings in regard thereto, on their face, were regular, including the confirmation of the sale, and the execution of a deed to a bogus purchaser, who subsequently, in furtherance of the conspiracy, executed, without consideration, a deed to another conspirator for said lands, who secured a loan from an investment company, and executed a mortgage upon said land to secure the payment of the loan, which mortgage was by the trial court ordered to be canceled upon the ground of fraud, but the court found that no actual knowledge of such fraud came to such investment company. Held, that, in the absence of proof that such investment company had knowledge of facts which, if followed, would have disclosed the fraud practiced in the sale of said lands, it was reversible error to order said mortgage canceled.”

In the case of Ross v. Groom, 90 Okla. 270, 217 P. 480, it is said:

“* * * Even though the guardian had been guilty of fraud, if the purchaser at the sale was a bona fide purchaser for value and without notice of the fraud, or if the subsequent purchasers were bona fide purchasers for value and without notice, the sale cannot be invalidated because of the alleg'éd fraud. Scott v. Abraham, 60 Okla. 10, 159 P. 270; Tucker v. Leonard, 76 Okla. 16, 183 P. 907.”

In (he case of Brooks v. Tucker, 83 Okla. 255, 201 P. 643, it is said:

"Where the lands of minors have been sold by their guardian in consummation of a fraudulent agreement between the guardian and the purchaser, and the probate procedure under which such sale was made is regular, the title of the property sold under such sale vests in a bona fide purchaser of the grantee at such sale without notice of the fraudulent agreement; the remedy of the wards is an action against the guardian and his bonds for the amount of their damage resulting from the fraudulent sale. Berry v. Tolleson et ux., 68 Okla. 158, 172 P. 630.”

See, also, Atkinson v. King, 93 Okla. 37, 219 P. 914; McNaughton v. Lewis, 124 Okla. 181. 254 P. 972; Plant v. Shrock. 102 Okla. 97, 227 P. 439; Allison v. Crummey, 64 Okla. 20, 166 P. 691.

Defendant contends that at the time of the execution of the mortgage in question, he was in possession of said land, which fact was known or should have been known to plaintiff, which was sufficient to put plaintiff upon inquiry as to the validity of the proceedings and as to the source of the title of the mortgagor. It has been repeatedly held by this court that knowledge that a grantor, under whom the vendor claims, is in possession of the property, is not such knowledge as to put a purchaser upon inquiry as to the title of such grantor. Riddle v. Keechi. O. & G. Co., 74 Okla. 73, 176 P. *60 737; Plant v. Shrock, supra; F. B. Collins Inv. Co. v. Waide, supra.

Defendant Jenkins Sanders contends that the order of sale entered by the county court is invalid and insufficient and does not comply with the requirements of section 1283, O. S. 1931 (1275, C. O. S. 1921), which is as follows:

“The order of sale must describe the lands to be sold and the terms of sale, which may be for cash or may be for one-third cash and the balance on a credit not exceeding two years, payable in gross or installments within that time, with interest as the court may direct. The land may be sold in one parcel or in subdivisions, as the executor or administrator shall judge most beneficial to the estate, unless the court otherwise specially directs. If it appears that any part of such real estate has been devised and not charged in such devise with the payment of debts or legacies, the court must order the remainder to be sold before that so devised. Every such sale must be ordered to be made at a public auction, unless, in the opinion of the court, it would benefit the estate to sell the whole or some part of such real estate at private sale; the court may, if the same is asked for in the petition, order or direct such real estate, or any part thereof, to be sold either at public or private sale, as the executor or administrator shall judge to be most beneficial to the estate.

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Bluebook (online)
1933 OK 671, 27 P.2d 1045, 167 Okla. 58, 1933 Okla. LEXIS 26, Counsel Stack Legal Research, https://law.counselstack.com/opinion/illinois-valley-trust-co-v-sells-okla-1933.