Dowse v. Kammerman , 122 Utah 85 ( 1952 )

WOLFE, Chief Justice.

This is an action to quiet title to Lot 7, Block 1, Holland Subdivision. The defense is based on equitable estoppel. The defendants appeal from the judgment which quieted title in the plaintiff upon payment by him of $105.57 for the taxes and a sewer assessment which the defendants or their predecessors in interest paid while in possession.

One Charles E. Pittorf acquired the fee title to the property in 1907. General taxes were paid each year until 1930. The taxes were not paid for 1930, and in due course the Treasurer of Salt Lake County executed a tax sale certificate thereon to Salt Lake County. Thereafter, general taxes were added for the years 1931 to 1935 inclusive, amounting to $49.99 in all, and under date of March 31, 1936, an Auditor’s tax deed issued to Salt Lake County. In April, 1945, plaintiff purchased the tax title from Salt Lake County under authority of Section 80-10-68, U. C. A. 1943. Two months later, plaintiff and his wife conveyed by quitclaim deed to Doris Trust Company for “$10.00 and other valuable consideration.” The Doris Trust Company took possession of the property and paid the general taxes thereon for the years 1946 through 1949, plus a special sewer assessment levied in 1947. In February, 1950, Doris Trust Company conveyed the premises to defendants by warranty deed. While the consideration paid by defendants for said property to Doris Trust Company is not mentioned in the agreed statement of facts, revenue stamps attached indicate a consideration of $500 to $1,000. Six months after defendants purchased the property, plaintiff filed his complaint in this action. The flaw in the chain of title is that the Auditor’s affidavit was missing from the tax assessment, and the tax sale upon which the tax deed was predicated was void as decided by this court in Telonis v. Staley, 104 Utah 537, 144 P. 2d 513, and Equitable Life and Casualty v. Schoewe, 105 Utah 569, 144 P. 2d 526.

Plaintiff was apparently aware of this defect when the title was in his hands. The record shows that Charles E. Pittorf died at Great Falls, Montana, July 12, 1912, leaving a widow and a daughter as heirs. In March, 1950 the plaintiff acquired quitclaim deeds from the widow for $25 and from the daughter for $10. Plaintiff thereafter filed a petition to probate the estate of Charles E. Pittorf and pursuant to this proceeding, a decree of distribution of the property here involved was made to the plaintiff. The Doris Trust Company having given a warranty deed to defendants, it is stipulated that counsel for the defendants is attorney for the Doris Trust Company and that

“defendants are subrogated to any and all rights, claims and interest which said Doris Trust Company has or may have as if inter-pleaded herein”.

Thus, the actual defendant, Doris Trust Company, charges that the trial court erred in not holding that plaintiff should be estopped from asserting his present interest after he sold the tax title to the Trust Company and later purchased the record title for a nominal consideration in order to oust the defendants, Kammerman brothers.

There is no diversity of opinion to the rule that estoppel by deed operates only where the conveyance is intended to convey a particular estate, which the grantor subsequently acquires. A quitclaim deed does not raise an estoppel as to an after acquired title. Thompson on Real Property, Permanent Edition, §§ 3845, 3846; Breen v. Morehead, Tex. Civ. App., 126 S. W. 650, 655; U. S. National Bank of La Grande v. Arthur Ben Miller, 122 Or. 285, 285 P. 205, 58 A. L. R. 339; Annotation 58 A. L. R. 360. As stated in Breen v. Morehead, at page 656 of 126 S. W.:

“* * * where there is in the deed an express or implied representation that the grantor at the time of his conveyance was possessed of the title which his deed purports to convey, if such representation is false, whether he committed a fraud or was acting under an honest mistake, he is estopped from denying that he has a title; and, consequently, if he afterwards acquire the title, he cannot by setting it up defeat his own grant. (Citing cases.) But if the deed conveys ‘all right, title, and interest’ of the grantor, instead of an absolute estate, the grantor will not be estopped from setting up an after-acquired title, since he did not undertake to convey a greater interest, or better title than he then had. (Citing cases.)”

Defendant seeks to enlarge this doctrine of estoppel by deed by citing cases of equitable estoppel which he contends are in point and gives this court authority to order that title be quieted in him. In Clyburn v. McLaughlin, 106 Mo. 521, 17 S. W. 692, 27 Am. St. Rep. 369, the court held that where an owner of land which is sold for taxes, with knowledge of all the facts, accepts the surplus from the sheriff’s sale, he thereby recognizes and ratifies the validity of the sale so that he is estopped from later contesting it. Quotations from the opinion which illustrate the view there adopted are as follows:

“ ‘When a sale of land is made no person can be permitted to receive both the money and the land * * To permit these plaintiffs to affirm the sale and hold the proceeds in one hand, and to reject the sale and take the land with the other, would be an encouragement of bad faith, which courts of equity will not allow.”

If this court were to apply the broad equitable “clean hands doctrine” and refuse to quiet title in the plaintiff Dowse, still we could not grant defendants affirmative relief and quiet title in them without overturning the principle that an after-acquired title does not pass by a quitclaim deed. As stated by Justice Holmes in Ayer v. Philadelphia & Boston Face Brick Co., 159 Mass. 84, 34 N. E. 177:

“* * * the existence of the estoppel does not rest on the prevention of fraud, or on the fact of a representation actually believed to be true. It is a technical effect of a technical representation, the extent of which is determined by the scope of the words devoted to making it.”

The law has not yet gone so far as to admit parol evidence to show that a quitclaim deed was intended to convey property in which the grantor orally stated that he stood lawfully seised with a good right to convey the same. The inequity of allowing the plaintiff to retain whatever purchase money he received from the Doris Trust Company and also regain possession of the land, may amount to grounds for rescission of the quitclaim deed, or it may be a basis for a suit in unjust enrichment but it does not constitute an estoppel by deed. That technical property doctrine is not to be confused with, or enlarged by the ordinary equitable estoppel.

The heirs of Charles E. Pittorf could have quieted title in themselves because of the defective tax sale. Neither they, nor a grantee of theirs, could be estopped from asserting the record title because of the fact that plaintiff informed them of their rights in the land. The Doris Trust Company presumably knew that a quitclaim deed only passes the right, title and interest which the grantor then has, Section 78-1-12, U. C. A. 1943, and that the validity of all tax titles depends upon strict compliance with the statutory procedures necessary to a tax sale.

The judgment is affirmed. Costs awarded to respondent.