Penrose v. Cooper

121 P. 1103, 86 Kan. 597, 1912 Kan. LEXIS 349

• Court: Supreme Court of Kansas
• Decided: March 9, 1912
• Docket: No. 17,215
• Status: Published

Opinions

The opinion of the court was delivered by

Porter, J.:

The property in controversy consists of two lots in the city of Wichita. Plaintiff’s title rests upon a tax deed to The Hartford Western Land Company, dated November 28, 1896, recorded December 7, 1896, a quitclaim deed from the tax-title holder to The Anthony Investment Company, dated September 10, 1898, and a quitclaim deed from The Anthony Investment Company to plaintiff Penrose, dated October 2, 1901, which was recorded April 7, 1909. The plaintiff proved these conveyances and that possession was taken under the tax deed September 10, 1898, and held continuously until February, 1904, when defendant Cooper obtained possession without plaintiff’s knowledge or consent and after a tenant of plaintiff had vacated the premises without plaintiff’s knowledge.

Defendant Cooper’s title rests upon mesne conveyances from the government. It appeared that two deeds from former proprietors conveying the property to him were executed and delivered with the name of the grantee omitted; but the defendant offered evidence to show that the instruments were delivered with authority on his part to insert his name as grantee.

.The defendant objected to the introduction of the tax deed as evidence on the ground that it was invalid for reasons appearing upon its face, which, however, do not require specific mention here. The objection was overruled. There was a trial to a jury and a verdict for the plaintiff. The jury also returned a number of special findings.

It is claimed that the court erred in admitting the tax deed in evidence over the objections of the defendant, and in not adjudging the tax deed void. The same deed was before this court in Penrose v. Cooper, 71 Kan. 720, 725, 81 Pac. 489, 84 Pac. 115. That was an action in ejectment in which Cooper was plaintiff and Penrose defendant and involved the same property. Cooper recovered and Penrose appealed. On the first hearing the tax deed was held void on its face and the judgment was affirmed. Upon rehearing it was held that the deed having been of record five years before it was attacked, the defécts were cured by inferences fairly to be drawn from a consideration of the entire instrument; and, therefore, the judgment was reversed and a new trial ordered with directions to admit in evidence the “five-year-old -tax deed.” (p. 727.)

That action has not been retried, but is still pending, the proceedings having been stayed by the district court to await the final disposition of the present action, which was commenced by Penrose as plaintiff, February 10, 1906, immediately following the mandate in the former case. When the former action was here the record showed that the petition was filed in the district court December 9, 1901, which was two days more than five years after the tax deed was recorded. It appears from the abstract in the case before us that since the former action was remanded the district court, by an order nunc pro tunc, has corrected the record so as to show that the petition in fact was filed December 4, 1901. It is obvious, therefore, that had the record when that case was before the court spoken the truth the tax deed would have been held void, since it was not five years old when Cooper brought his action.

Under these circumstances appellee’s contention that the former decision of this court is res judicata can not be sustained. The decision is conclusive and binds the parties upon the facts as they were shown to exist when the case was first tried. If on the retrial a different state of facts is shown to exist the law declared in the former decision may have no application. (Cahn v. Tootle, 58 Kan. 260, 48 Pac. 919.) This court did not determine Penrose to be the owner of the property; nor did it direct judgment in his favor. On the contrary the cause was remanded for another trial with directions to admit in evidence the five-year-old tax deed. If upon the second trial it appear that the tax deed was in fact less than five years old when it was attacked, the trial court, upon the principles of law declared on the first decision (Penrose v. Cooper, 71 Kan. 720, 725, 81 Pac. 489, 84 Pac. 115), would be bound to adjudgé that on the fourth day of December, 1901, the deed was void. The real question is whether W. B. Penrose is bound by the proceedings in the first ejectment suit from the date the action was begun, or only from December 9, 1901, when he was first made a defendant. To determine this question a further statement of facts, is required.

The Anthony Investment Company held the tax title and .was in possession of the premises. From March 25, 1901, S. W. Shattuck, jr., had control of the property and leased the same and collected the rents as agent for the company. On October 2, 1901, The Anthony Investment Company conveyed the property by quitclaim to W. B. Penrose. The deed' was sent to S. W. Shattuck, jr., as the agent of Penrose, who was a nonresident. Shattuck did not record the deed, but took pains to inform the tenants sometime after he received it that he was collecting the rents for W. B. Penrose. He withheld the deed from record until after the tax; deed was five years old and after Cooper’s action in ejectment was commenced. In fact it was not recorded until 1909.

In the proceedings to correct the record in Cooper v. Penrose it was shown that the petition with the praecipe for summons was deposited in the clerk’s office December 4, 1901. The deputy clerk with whom they were left did not file them when they should have been filed, but afterwards put thereon the file-mark with a. stamp showing that they were filed December 7, although the trial court finds that they were actually filed December 4, 1901. The evidence taken at the same time shows that on the evening of December 7 Mr. Shattuck went to the clerk’s office and found the papers there in the possession of Grant Knepple, deputy clerk. The action had not yet been entered upon the appear-anee docket. It was afterwards entered on the appearance docket, December 9, and with a pen the deputy clerk changed the date in the file-stamp from December 7 to December 9, but when he did this is not shown. Mr. Shattuck testified that on the evening of December 7, when he went to the clerk’s office and found the papers there, Mr. Knepple told him that Mr. Bru-bacher had requested that the papers be not filed until he, Brubacher, should furnish a journal entry, showing the dismissal of a similar action in October previous. On December 9 Shattuck informed Bru-bacher, the attorney of Cooper, that Penrose had an interest in the property. Brubacher at once amended the petition and made Penrose a defendant. By this, time the tax deed was more than five years old.

The jury had before them all the facts concerning the commencement of the former action. Their general verdict is in favor of Penrose. Included in their special findings are findings to the effect that Cooper did not know of the change in title prior to December 9, 1901; that he went to the premises about December 1, 1901, to ascertain the rights of the occupants therein and who their landlord was; that he did not ascertain from the tenants that there had been any change of title or interest; that he knew that Shattuck had been acting as the agent of The Anthony Investment Company in collecting the rents and managing the property. They also state, in answer to another question, that they do not believe that Cooper had reasonable grounds for believing that Shattuck was still collecting the rents for the company. In another answer they say they do not believe that Cooper, before bringing his action, used ordinary care and prudence to ascertain whether or not any other person had or claimed any interest in the property.

The appellant makes the contention that the finding of the jury upon the issue of due diligence is not conclusive because there is no dispute in the evidence or in the findings as to what Cooper did before bringing his action to ascertain the facts in reference to the title and possession. The jury have found not only as a fact that due diligence was not exercised, but they have also found every fact from which they have drawn that inference. It is stated as a challenge by the ap-pellánt in his abstract and brief that there was no fact or circumstance shown in the evidence putting appellant on inquiry or notice of the title or possession of Penrose, except as set forth in the foregoing statement. The record before us sustains the challenge. The appellant therefore urges that the situation presented is to some extent similar to that where the facts have been found or agreed to, and that in affirming the judgment we must either conclude that the facts show beyond cavil Cooper’s failure to exercise due diligence, or that upon the facts reasonable minds might reach a different conclusion upon that question.

The recording act declares that conveyances of real estate not filed for record shall be void except as between the parties thereto and such persons as have actual notice thereof. The courts have uniformly held that “actual notice” as used in the act may be either express or implied. (Pope v. Nichols, 61 Kan. 230, 59 Pac. 257; Faris v. Finnup, 84 Kan. 122, 113 Pac. 407.) If the holder of an unrecorded deed is in the open, notorious, exclusive possession of the premises, a subsequent purchaser, and all others, have such implied notice of his rights as will amount to actual notice of his title. (Deetjen v. Richter, 33 Kan. 410, 6 Pac. 595; Stough v. Lumber Co., 70 Kan. 713, 79 Pac. 737; Lang v. Adams, 71 Kan. 309, 312, 80 Pac. 593.)

The English rule is that possession by the tenant is notice simply of his tenancy, and never notice itself of the title of the lessor. And the English courts have held that it is not incumbent upon the purchaser to ask tenants found in possession to whom they pay their rent. (Hunt v. Luck [1900], 1 Ch. 45, 70 L. J. Ch. 30; Note, 13 L. R. A., n. s., 99.) There is great confusion and conflict among the American cases. Some follow the English rule; others hold that the possession of the tenant is the possession of the landlord, and that notice of the former is notice of the latter as fully as his own possession would be. (Glendenning v. Bell, 70 Tex. 632, 8 S. W. 324. See, also, Note, 13 L. R. A., n. s., 100.) We think the better rule, and one which finds abundant authority for its support, is that although possession by a tenant is the-landlord’s possession, it is not itself notice of the landlord’s title, but is, however, sufficient notice to put a person about to deal with the title upon inquiry. The law presumes that, having notice of the possession, he has either made inquiry and ascertained the extent of the occupant’s right, or has been so negligent that he can not be regarded as a bona fide purchaser. This presumption, howevér, is but a mere inference of fact which may be rebutted by proof that the purchaser made diligent inquiry and failed to discover the prior right. (Williamson v. Brown, 15 N. Y. 354; Betts v. Letcher et al., 1 S. Dak. 182, 46 N. W. 193; Fair v. Stevenot, 29 Cal. 486.) Thus, in Thompson v. Pioche, 44 Cal. 508, it was held that although the possession of a tenant is not of itself notice of the landlord’s title, yet such possession is sufficient to put a person dealing with the property upon inquiry, and is proof of notice, unless it is shown that the inquiry, having been prosecuted with due diligence, did not disclose the title of the landlord.

Possession is notice and necessitates inquiry, which-must be prosecuted with due diligence. In Deetjen v. Richter, 33 Kan. 410, 6 Pac. 595, it was held under the facts in that case that due diligence required the purchaser to follow up the suggestion implied from information obtained from the tenant, by making further inquiry of the landlord. Through inquiry of the tenant the purchaser learned the name of the landlord; and it was said in the opinion, quoting from section 286 of Wade on Notice: “Inquiry can not safely stop here; for the next step suggested by the circumstances would be to inquire of the landlord.” (p. 414.)

The jury evidently applied to the facts here the rule declared in that case and doubtless believed that under all the circumstances in evidence Cooper should have followed up the information, and inquired of Shattuck who the owner was whom he represented. We must affirm the judgment unless we can say as a matter of law that due diligence did not require him to make further inquiry. It is not a question of law, but one of fact, which has been determined by the jury. It is no longer an open question. It is true that there is no conflict in the evidence or the findings as to just what inquiry was made, but the inference to be drawn from those facts is for the jury and not for the court. It follows, therefore, that the judgment must be affirmed.