Jerome v. Carbonate National Bank , 22 Colo. 37 ( 1895 )

Mr. Justice Campbell

delivered the opinion of the court.

The contest here is between one who claims under the lien of an attachment levy, and one who claims under a prior, but unrecorded, deed. The determination of these rights depends upon the meaning of the following section of our statute:

“All'deeds, conveyances, agreements in writing of, or affecting title to real estate or any interest therein, and powers of attorney for the conveyance of any real estate or any interest therein, may be recorded in the office of the recorder of the county wherein such real estate is situate, and from and after the filing thereof for record in such office and not before, sucli deeds, bonds, and agreements in writing shall take effect as to subsequent bona fide purchasers and incumbrancers by mortgage, judgment or otherwise not having notice thereof.” 1 Mills’ An. Stats., sec. 446.

Whatever the law may be in other jurisdictions, it is settled in this state that one who takes property in payment or security of a preexisting debt is to be regarded as a purchaser, for a valuable consideration. Knox v. McFarran, 4 Colo. 586.

In the same case, in 5 Colo. 217, it was held that an unrecotded deed will-not take effect against a subsequent purchaser without notice.

It is also settled that one who takes a deed of land before a judgment is recovered against its owner, but fails to record his deed until after a sheriff’s sale of the same land is made under such judgment, and until after the recording of the sheriff’s certificate of sale, holds subject to the rights of the purchaser at the sale without notice of the prior deed,— such purchaser being the judgment creditor, the amount of whose bid is credited on the judgment, — although the sheriff’s deed is recorded after the recording of the prior deed of the owner. McMurtrie v. Riddell, 9 Colo. 497.

It is said, however, that the doctrine of these cases is against the weight of authority in this country, and, for this reason, we are asked not to extend such doctrine by logically applying it to the facts of a case the same in principle, but to restrict it to such cases only as are exactly similar in their facts.

Applying this test, we are told that the case at bar presents a state of facts different from that of either of the cases above cited. There the statute was interpreted so as to protect bona file purchasers, who were also judgment creditors, while in the case at bar the one invoking the aid of the statute is but an attaching creditor, whose rank is inferior to that of a judgment creditor.

But we think the necessary and logical result of the doctrine announced makes the rights of the appellee here superior to those of the appellant for the following reason: An attaching creditor belongs to that class of lienors described in the statute as incumbrancers “ otherwise ” than by mortgage or judgment.

If vve agrée with appellant that under the rule nosoitur a sociis such incumbrancers must be of the same general class as those by judgment or mortgage, the application of this rule will not exclude an attaching creditor. The levy of the writ certainly constitutes some kind of an incumbrance upon the property, and, by the statute, the property so levied upon is to be preserved during the pendency of the suit to answer, and to be applied to, the satisfaction of whatever judgment may be recovered, and can be destroyed only by dissolution of the attachment or failure to recover judgment. Code of 1887, sec. 108; Drake on Attachments (7th ed.), sec. 224, et seq.

This incumbrance is of the same general class as an incumbrance by judgment, and while the inchoate rights of the former may not possess the same qualities, or be attended with the same results, as the latter, they are the same in kind, and differ, if at all, only in degree, and become exactly the same by the subsequent recovery of a judgment, when the lien of the attachment becomes merged in the judgment, saving to the latter the priority of the former. It follows that the rights of an attaching creditor, under this statute, stand upon the same basis as those of a judgment creditor, and the latter being clearly within the purview of the statute, so, also, are the former.

Unless, therefore, the appellee had notice of appellant’s claim of ownership, or what was equivalent to notice, the rights of the bank are superior. With respect to the character of possession which operates as notice of the rights of one claiming thereunder, it is said that “ neither actual occupation, cultivation, or residence are necessary to constitute actual possession, when the property is so situated as not to admit of any permanent useful improvement, and the continued claim of the party has been evidenced by public acts of ownership, such as he would exercise over property which he claimed in his own right and would not exercise over property which he did not claim.” Ewing v. Burnet, 11 Pet. 41; Simmons Creek Coal Co. v. Doran, 142 U. S. 417-442.

“It is a familiar principle of equity jurisprudence, that if one obtains a conveyance of property, with notice of an equity in relation thereto binding upon his grantor, he will also be bound.” Only innocent purchasers, without notice, are protected. Actual notice, however, is not essential. If the subsequent purchaser “ has knowledge of such facts as ought to put a prudent man upon inquiry as to the title, he is chargeable with notice of all facts pertaining thereto to which diligent inquiry and investigation would have led him.” If reliance is had upon possession, it must be visible and exclusive and continuous, and not temporary or occasional. It may be evidenced, however, by any acts which clearly show an appropriation of the property to the use of a person claiming the same. Mason v. Mullahy, 145 Ill. 383.

It has also been said that this possession must be inconsistent with the title of the apparent owner by the record. Brown v. Volkening, 64 N. Y. 76.

The purchaser is also held affected with notice of all that is patent on an examination of the premises he is about to buy, and is charged with whatever facts are in existence as to possession, and cannot be excused if his lack of knowledge is due to the fact that he made no examination. Hatch v. Bigelow et al., 39 Ill. 546.

There is no claim that this property was in the actual possession of the appellant at the time of the levy of the writ of attachment. The assessment of the land to Jerome, his paj’’ment of taxes, and his improving the land from time to time, are strong evidences of his claim of right to the property; and if he had continued payment of taxes for the statutoiy length of time his absolute right to the property as against all persons might have accrued; and if these different things had been brought to the knowledge or attention of the appellee, they would have been sufficient to put it upon inquiry, the result of which would probably have been the ascertainment by the bank of appellant’s claim of ownership. But they were not brought to its attention, and otherwise they do not constitute such.acts as put a purchaser upon inquiry. Ely v. Wilcox, 20 Wis. 523.

Besides, these acts were not inconsistent with the rights of the record owner, particularly as the latter, with Jerome’s knowledge and consent, exercised concurrent acts of ownership when he executed deeds to those who purchased lots from Jerome. An examination of the premises by the bank, which was its duty to make, would have disclosed nothing at all inconsistent with the ownership of the property by the one in whose name on the records the title stood, nor was there anything to lead the most careful person to suspect that Jerome, or any one else than Cline, asserted any claim to the ownership.

The point is made that as the appellee failed, upon the trial, to show an unsatisfied judgment, there should be a reversal. But the allegation in the amended answer that the judgment against Cline was unsatisfied, was not denied in the replication'. Hence, no testimony of witnesses was necessary to establish the fact thus admitted.

It follows that the appellee, not having notice of any”- rights to this property asserted by the appellant, the judgment of the court below should be affirmed for the reasons given.

Affirmed.