Sheppard v. Sandfer

102 P.2d 668, 44 N.M. 357
CourtNew Mexico Supreme Court
DecidedApril 25, 1940
DocketNo. 4518.
StatusPublished

This text of 102 P.2d 668 (Sheppard v. Sandfer) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sheppard v. Sandfer, 102 P.2d 668, 44 N.M. 357 (N.M. 1940).

Opinion

MABRY, Justice.

There are here involved two principal questions. One, whether the property, the title to which was sought to be quieted by plaintiffs, J. L. Sheppard and D. Sheppard, and which was by judgment and decree of the trial court quieted in their successors in title, appellees Mabie and wife, had been conveyed by defendants Sandfer and wife as by a mortgage deed securing a note, or whether the deed they gave was an outright conveyance; as on its face it purported to be. The other question goes to the right of the trial court to vacate and set aside, for alleged irregularities, a judgment and decree theretofore made and entered by it. This conveyance, which presents a question as to the character of title passing to one Fears, the original grantee of appellants Sandfers, and therefore a like question as to his subsequent grantees, was in the form of a warranty deed and conveyed the same property which some five years before had been conveyed by the conventional form of mortgage deed likewise given by the said Sandfers to the said Fears. Appellants say that this was a conveyance in trust, or of a character unlike that which, upon its face, it appeared to be. The trial court took an opposite view and this is the error upon which appellants rely for a reversal.

The comfort which appellants Sandfers seek to obtain from a reversal of the cause is, that appellees be required to bring suit to foreclose, as of a mortgage, rather than to permit them or any of them as successors in title, to rely upon the deed as an absolute conveyance.

For convenience, appellants may, at times, hereafter be referred to as defendants, or the “Sandfers”, and appellees; the Sheppards, as plaintiffs, or the “Sheppards”, while appellees, Gilbert, Milton Mabie, and Louise Massey Mabie, may at times be designated as “Gilbert” and the “Mabies”, respectively.

On December 5, 1927, one of the appellants, W. J. Sandfer, gave a mortgage to one Fears upon the land here in question, to secure a note in the sum of $2,670, representing an indebtedness admitted to have been owing at the time. Thereafter and on January 2, 1933, defendants, the said Sand-fer and wife, conveyed to the said Fears the same property by warranty deed; and then, within a year thereafter, the said Fears conveyed the same property by quitclaim deed to one E. J. Whitaker, through whom all appellees claim title.

The Sandfers here and now contend that the legal title to the property did not pass by the deed from them to Fears since such deed was intended for nothing more than to merely change the form of security for the indebtedness represented by the mortgage of December 1927, and that therefore the legal title to the property is still vested in Sandier and may be divested only by foreclosure of the mortgage and not by suit to quiet title, as was attempted in this case. Appellees refute this claim, and likewise rely upon the proposition that the Sandfers are advancing the theory that the deed represents a mere change in the form of security for the first time upon appeal.

Appellees say (and the record supports them), that in the court below, defendants defended in the suit upon the sole ground that the mortgage indebtedness had already, and otherwise, been paid, and that the deed given by them to Fears, in 1933, was without consideration and for the purpose merely of putting the property conveyed beyond the reach of Sandfers’ creditors, and that the grantees, Fears, and Whitaker, likewise, took only as trustee. This point will be hereinafter more fully noticed. Appellees, the Mabies, appear in the picture claiming by purchase in 1938 as innocent purchasers for value without notice of any equities existing between appellants and the other appellees, Gilbert and the Sheppards.

It is clear from the record that Sandfers, in the court below, took the position that they had already paid the mortgage indebtedness to the mortgagee Fears, and that when he. and his wife gave the warranty deed in 1933, some five years thereafter, the same was given to put the said land beyond the reach of appellants’ creditors, and that the said Fears took it with that understanding. Appellees would require the appellants to stand by. this position taken and relied upon below, and object to their effort to now change the theory of their case, as by their brief it may appear that they are endeavoring to do. Appellees’ position upon that point, is well taken, though the result would be the same in any event.

In determining the rights of all appellees as against those of appellants, let us look first to the stipulation of the parties, the evidence and the findings of the court. A complete review of the evidence, including that showing the chain and the muniments of title as this appears in the abstract, would unnecessarily lengthen the opinion without affording aid to our conclusions or light to the profession. We shall, therefore, point out only briefly the salient facts upon which the parties rely.

It is shown by the court’s findings, supported by the stipulation of parties and substantial evidence, that appellees Mabies purchased this property on October 12th, 1937, through appellee Gilbert, who was successor in title to the Sheppards, entirely upon the record title and with no notice of outstanding equities, if any. The deed from Sandfers to Fears, upon its face, appeared to be a warranty deed and nothing else; none of the other deeds of record and no other circumstances shown by the evidence were of a character to put the Mabies on notice that the Sandfers had any interest in the land, unless it may be said the fact that the mortgage from the Sandfers to Fears in 1927 had not been released of record, and the additional circumstance that, in the probate of the estate of the said Fears who died in 1934, one of the Sheppards, a legatee under the will of the deceased and executor of the estate, inventoried this old mortgage and accounted for it in closing the administration, gave such notice.

We hold that the status of the Mabies as innocent purchasers for value without notice, was not, under the circumstances, jeopardized because the abstract and record upon which they relied in purchasing, showed this old and unreleased mortgage. Having no other notice, and their immediate predecessors in title being in possession at the time of the purchase, and, in view of the warranty deed of January 1933, conveying fee simple title from the mortgagors Sandfers to the mortgagee Fears, aided by a circumstance hereinafter noticed, appellees had the right to assume that the mortgage was paid and satisfied. The circumstance of Sheppard and appellants then strangers to the title, trying to revive and involving the paid and discharged note and- mortgage in the estate of the deceased Fears, by listing it as an asset, could not affect the rights of others, and certainly not those of the Mabies. The circumstances offering support for this result are, that the record discloses that at a time some four months prior to the Mabie purchase, a suit to quiet title to this property had been filed by the Sheppards, against the Sandfers, a defense interposed and then withdrawn, thus knowingly permitting the Sheppards, plaintiffs, to take default judgment establishing their right in the property as against the Sandfers. The trial court was correct in holding the record gave no warning of which the Mabies were required to take notice.

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Bluebook (online)
102 P.2d 668, 44 N.M. 357, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sheppard-v-sandfer-nm-1940.