Russell v. Gerlach , 24 Okla. 556 ( 1909 )

In the case of Cooper v. Flesner et al., ante, p. 47,103 P. 1016, section 888, c. 16, § 12, "Conveyances," Wilson's Rev. Ann. St. 1903, which is relied on by plaintiffs in error in this case, was construed, and it is here held that "the words 'actual notice' do not always mean in law what in metaphysical strictness they import. They more often mean knowledge of facts and circumstances sufficiently pertinent in character to enable reasonably cautious and prudent persons to investigate and ascertain as the ultimate facts." It was also held, in the same case, that "one who purchases land with knowledge of such facts as would put a prudent man upon inquiry, which, if prosecuted with ordinary diligence, would lead to actual notice, of rights claimed adversely to his vendor, is guilty of bad faith if he neglects to make such inquiry, and is chargeable with the 'actual notice' he would have received." So that if the plaintiffs in error had knowledge of such facts as would put them, as prudent men, upon inquiry, which, if prosecuted with ordinary diligence, would lead to actual notice of the rights of the defendant in error adversely to the mortgagor, Rawdon, and they neglected to make such inquiry, they are chargeable with the actual notice they would have received had they made such inquiry.

The court found that the plaintiff had a lien by reason of such mortgage, prior to and superior to the conveyance made to the plaintiffs in error L. D. West and John R. Russell, by the said Rawdon, and that the legal title to said land was in the plaintiffs in error; they acquiring title thereto by the trade of a patent right to Rawdon. The journal entry further recites:

"The case, however, turns upon a question of law. The mortgage was first in point of time in execution and recorded first. The deeds were second in execution and delivery, but both made prior to the recording of the mortgage, but recorded subsequent. The court therefore finds the mortgage to be a valid lien on the land prior and superior to the deeds of the defendant West and Russell, and that plaintiff is entitled to a foreclosure of his mortgage."

The plaintiffs in error, prior to the execution and delivery of the deeds to them, had knowledge of facts and circumstances sufficiently pertinent in character to enable them, had they been reasonably prudent and cautious, to investigate and ascertain the facts, and, having purchased the land with knowledge of such facts, they are chargeable with actual notice of the mortgage held by the defendant in error. Although the mortgage was unrecorded, said plaintiffs in error, under the rule laid down in Cooper v. Flesner et al., supra, having actual notice as to the claim of the defendant in error, the same was equivalent to recording.

There appearing no reversible error in the record, the judgment of the lower court is affirmed.

All the Justices concur.