Where no appeal lies from a decree of a circuit court to this
Court, the circuit court may, under the 88th Rule in Equity, allow
a petition for a rehearing and may rehear the cause after the
adjournment of the court for the term in which the original decree
was rendered.
After such a petition is filed, and a hearing had on it in the
court below, it is too late to file affidavits and to claim that
the amount in controversy exceeded the jurisdictional sum, so that
an appeal could have been taken.
The receipt of a quitclaim deed does not of itself prevent a
party from becoming a
bona fide holder, and the doctrine
expressed in many cases that the grantee in such a deed cannot be
treated as a
bona fide purchaser does not rest upon any
sound principle.
This is a suit in equity commenced in June, 1885, in the Circuit
Court of the United States for the District of Nebraska to quiet
the title of the complainant to certain real property
Page 148 U. S. 22
described in the bill as the southeast 1/4 of section No. 31,
township No. 3 north, of range 8 east, of the sixth principal
meridian in Nuckolls County, State of Nebraska, to which the
defendant, a citizen of that state, claims some adverse interest
and title. The bill alleges that the complainant is a citizen of
New York, and that at the commencement of the suit, and for a long
time prior thereto, he was the owner in fee simple, and entitled to
the possession, of the described premises. His chain of title is as
follows:
1. A patent of the land in controversy, and of other land, from
the United States dated November 1, 1871, issued to George L.
Bittinger, and recorded in Nuckolls County, December 31, 1883.
2. A deed bearing date on the 22d of August, 1882, executed by
Bittinger and his wife to L. P. Dosh, of Scott County, Iowa,
reciting a consideration of one hundred dollars, by which they
sold, conveyed, and quitclaimed all their "right, title, and
interest in and to" the premises in controversy. This deed was
recorded September 19, 1882.
3. A warranty deed, dated October 27, 1882, of the premises by
L. P. Dosh and his wife to J. R. Dosh, of Guthrie County, Iowa,
reciting a consideration of $1,513. This deed was recorded November
20, 1882.
4. A warranty deed of the premises, dated June 30, 1883, by J.
R. Dosh and his wife to the complainant, James K. O. Sherwood,
reciting a consideration of $1,800. This deed was recorded April
24, 1885.
The bill alleges that the complainant purchased the premises in
question, that is, the southeast quarter of section 31 of the
township named, at their full value, in the regular course of
business, but that the defendant claims that, by some secret and
unrecorded deed from Bittinger, he has acquired a superior title to
the premises, which claim so affects the title of the complainant
as to render its sale or disposition impossible, and disturbs him
in his right of possession, but of the nature of the claim, except
as above stated, he is ignorant. He therefore prays that the
defendant may disclose the nature of his estate, interest, and
claim in the
Page 148 U. S. 23
premises, that the title of the complainant therein may be
quieted, and that the defendant may be decreed to have no estate or
interest therein, and be enjoined from asserting any.
The defendant, in his answer, denies that the complainant has
any estate in or title to the premises, and sets up that on the 23d
day of June, 1870, George L. Bittinger, the patentee of the United
States, and his wife, by a warranty deed conveyed the premises for
a valuable consideration to one Guthrie Probyne; that such deed was
recorded August 20, 1883; that on the 24th day of August, 1883,
Probyne and wife, for a valuable consideration, by a warranty deed,
conveyed the premises to the defendant, and that the same was
recorded August 28, 1883.
The defendant also, by leave of the court, filed a cross-bill in
which he alleges that at the commencement of the suit, and a long
time prior thereto, he was the owner in fee simple and in
possession of the premises in controversy, and that his ownership
of the estate rests upon the following muniments of title, namely,
the patent mentioned from the United States of the described
premises to Bittinger, dated November 1, 1871, the warranty deed of
the premises by Bittinger and wife to Guthrie Probyne, dated June
23, 1870, and the warranty deed of Probyne and wife to the
defendant, Theodore J. Moelle. The cross-bill also refers to an
alleged tax deed of the premises by the Treasurer of Nuckolls
County, Nebraska, to one Ferdinand Faust, and a quitclaim from him
to L. P. Dosh; but no notice is taken of the tax deed, as it is
conceded to be invalid. The prayer in the cross-bill is that the
title of the complainant, the defendant in the original bill, may
be adjudged perfect and valid.
The answer to the cross-bill sets up the various conveyances
under which the complainant in the original suit claimed title to
the premises, and, while admitting that the alleged deed to Probyne
from Bittinger and wife, dated June 23, 1870, of the land in
controversy, was placed on record August 20, 1883, it charges that
no such deed of the premises was ever signed, acknowledged, or
delivered by the grantors named, but avers that the deed signed,
acknowledged, and delivered by them to
Page 148 U. S. 24
him on the day designated conveyed different property from the
premises embraced in the deed, recorded August 20, 1883, being part
of a different quarter section of the township,
viz., the
southwest quarter of section thirty-two, and not the southeast
quarter of section thirty-one, and was recorded June 3, 1871, with
this different description. It alleges that subsequent to the
record, the deed was changed so as to read, "the southeast quarter
of section thirty-one," instead of the southwest quarter of section
thirty-two, and in such changed condition was recorded August 20,
1883.
The depositions taken in the case established the alteration
made in the deed to Probyne as set forth in the answer to the
cross-bill. It is to be observed also that the date of the
execution of the alleged deed to him by the patentee is more than a
year prior to the issue of the patent. The testimony of the
complainant, Sherwood, was taken in the case, and was to the effect
that before purchasing the property, he examined an abstract of
title to it and found a regular chain of conveyances from the
United States to J. R. Dosh; that he also found, from the records
of certain tax sales, a regular chain of conveyances from the
grantee of the tax deed to the same party; that no other instrument
affecting the title appeared of record, and that he was satisfied
that the title was perfect. He then had the land examined, and it
was reported to him to be a fair quantity of wild prairie, lying
vacant and unoccupied, and never had been occupied, and he paid
$1,800 cash for the property. In answer to a question, he stated
that at the time, he believed he was getting a good title, and had
no idea that any such controversy as now exists would arise. The
land was unoccupied, the price of the land a reasonable one, and he
believed that he was getting a valuable piece of property, with a
perfect title, for a fair consideration.
The case was heard at the January term of the circuit court,
1888, and on the 9th of March, which was in the same term, a decree
was rendered dismissing the bill. At the following term of the
court, on the 18th of May, the complainant made a motion for leave
to file a petition for a rehearing, representing to the court that
at the hearing of the cause, and
Page 148 U. S. 25
when the decree was rendered, it was believed by him that the
property in controversy was of sufficient value to give
jurisdiction to the Supreme Court of the United States, and that an
appeal would lie from the decree, but that since then, he had
become assured that no appeal would lie, by reason of the fact that
the premises in dispute were in value less than $5,000. The
petition was accompanied by the affidavit of one of the solicitors
of the complainant that the allegations were made after careful
investigation, and believed to be true. On the 29th of October,
which was during the May term, the cause was submitted with the
petition for a rehearing, and both were decided on the same day,
and a decree rendered in favor of the complainant quieting his
title as prayed. 36 F. 478. From that decree the present appeal is
taken.
Page 148 U. S. 26
MR. JUSTICE FIELD, after stating the facts in the foregoing
language, delivered the opinion of the Court.
The appellant asks for a reversal of the decree below on two
grounds -- first that the petition for a rehearing was allowed, and
a rehearing had, after the adjournment of the court for the term in
which the original decree was rendered, and second that the decree
as finally rendered was against the settled law as to the effect of
the quitclaim deed through which the complainant claims.
As a general thing, the jurisdiction of a court over its decrees
terminates with the close of the term at which they were rendered.
An exception to this doctrine is allowed by the 88th Rule in Equity
in cases where no appeal lies from the decree to the Supreme Court
of the United States. It was on that ground that the motion was
made for leave to file the petition for a rehearing in this case,
and the allegations of the insufficiency of the amount involved as
the reason that no appeal from the decree would lie does not appear
to have been controverted by the defendant, but to have been
conceded as true. The petition was therefore properly allowed and,
the case being submitted with such petition, there was no error in
the court's considering its merits on the legal propositions
presented. Although the appellant has, by affidavits since filed,
shown that the amount involved exceeds the sum of $5,000, it is too
late for him on that account to object to the rehearing granted.
His concession, upon which the petition was heard, cannot now be
recalled. He should have shown that the land in controversy was
sufficient at the time the motion was argued, instead of conceding
its insufficiency, as alleged.
Of the merits of the decree rendered in favor of the
complainant
Page 148 U. S. 27
and sustaining his title we have no doubt. His title is traced
directly from the patentee of the United States, by various
intermediate conveyances. The quitclaim by him to Dosh, bearing
date on the 22d of August, 1882, was executed while the title still
remained in him. The deed to Probyne, bearing date, as it would
seem, prior to the issue of the patent, and on which the defendant
relies does not cover the premises in controversy, but only
property situated in a different section of the township. Even if
it be conceded that the parties intended that the conveyance should
embrace the premises in controversy, they did not carry out their
intention, and in its original condition, the deed was placed on
record and there allowed to remain, giving notice to all parties
interested in section thirty-one of Township No. 3 that the
conveyance to Probyne of June 23, 1870, did not effect them. The
change in the description of the property, made after the delivery
of the deed to the grantee, and its record in the register's office
of the county, did not give operation and force to the deed, with
the changed description, as a conveyance of the premises in
controversy. An alteration in the description of property embraced
in a deed so as to make the instrument cover property different
from that originally embraced, whether or not it destroys the
validity of the instrument as a conveyance of the property
originally described, certainly does not give it validity as a
conveyance of the property of which the new description is
inserted. The old execution and acknowledgment are not continued in
existence as to the new property. To give effect to the deed as one
of the newly described property, it should have been reexecuted,
reacknowledged, and redelivered. In other words, a new conveyance
should have been made.
But if the deed as altered in its description of the property
conveyed be deemed valid as between the parties from the time of
the alteration, though not reexecuted, it could not take effect and
be in force, as to subsequent purchasers, without notice, whose
deeds were already recorded but as to them, by the statute of
Nebraska, it was void. The statute of that state upon the subject
is as follows:
Page 148 U. S. 28
"All deeds, mortgages, and other instruments of writing which
are required to be recorded shall take effect and be in force from
and after the time of delivering the same to the register of deeds
for record, and not before, as to all creditors and subsequent
purchasers in good faith without notice, and all such deeds,
mortgages, and other instruments shall be adjudged void as to all
such creditors and subsequent purchasers without notice whose
deeds, mortgages, and other instruments shall be first recorded,
provided that such deeds, mortgages, or instruments shall
be valid between the parties."
Sec. 16, c. 73, Compiled Stats. of Neb. 1891, p. 647.
The form of the quitclaim to Dosh on the 22d of August, 1882,
did not, therefore, prevent the passing of the title of Bittinger
to the grantee. Until then, the title was in him. The deed
previously executed to Probyne, if effectual for any purpose when
it was altered without reexecution, was inoperative as against the
grantee in the quitclaim by force of the above statute.
The doctrine expressed in many cases that the grantee in a
quitclaim deed cannot be treated as a
bona fide purchaser
does not seem to rest upon any sound principle. It is asserted upon
the assumption that the form of the instrument -- that the grantor
merely releases to the grantee his claim, whatever it may be,
without any warranty of its value, or only passes whatever interest
he may have at the time -- indicates that there may be other and
outstanding claims or interests which may possibly affect the title
of the property, and therefore it is said that the grantee, in
accepting a conveyance of that kind, cannot be a
bona fide
purchaser, and entitled to protection as such, and that he is in
fact thus notified by his grantor that there may be some defect in
his title, and he must take it at his risk. This assumption we do
not think justified by the language of such deeds or the general
opinion of conveyancers. There may be many reasons why the holder
of property may refuse to accompany his conveyance of it with an
express warranty of the soundness of its title, or its freedom from
the claims of others, or to execute a conveyance in such form as to
imply a warranty of any kind, even when the title is known
Page 148 U. S. 29
to be perfect. He may hold the property only as a trustee, or in
a corporate or official character, and be unwilling for that reason
to assume any personal responsibility as to its title or freedom
from liens, or he may be unwilling to do so from notions peculiar
to himself, and the purchaser may be unable to secure a conveyance
of the property desired in any other form than one of quitclaim, or
of a simple transfer of the grantor's interest. It would be
unreasonable to hold that, for his inability to secure any other
form of conveyance, he should be denied the position and character
of a
bona fide purchaser, however free in fact his conduct
in the purchase may have been from any imputation of the want of
good faith. In many parts of the country, a quitclaim, or a simple
conveyance of the grantor's interest, is the common form in which
the transfer of real estate is made. A deed in that form is in such
cases as effectual to divest and transfer a complete title as any
other form of conveyance. There is in this country no difference,
in their efficacy and operative force, between conveyances in the
form of release and quitclaim and those in the form of grant,
bargain, and sale. If the grantor in either case, at the time of
the execution of his deed, possesses any claim to or interest in
the property, it passes to the grantee. In the one case -- that of
bargain and sale -- he impliedly asserts the possession of a claim
to or interest in the property, for it is the property itself which
he sells and undertakes to convey. In the other case -- that of
quitclaim -- the grantor affirms nothing as to the ownership, and
undertakes only a release of any claim to or interest in the
premises which he may possess, without asserting the ownership of
either. If in either case the grantee takes the deed with notice of
an outstanding conveyance of the premises from the grantor, or of
the execution by him of obligations to make such conveyance of the
premises, or to create a lien thereon, he takes the property
subject to the operation of such outstanding conveyance and
obligation, and cannot claim protection against them as a
bona
fide purchaser. But in either case, if the grantee takes the
deed without notice of such outstanding conveyance or obligation
respecting the property, or notice of facts which,
Page 148 U. S. 30
if followed up, would lead to a knowledge of such outstanding
conveyance or equity, he is entitled to protection as a
bona
fide purchaser upon showing that the consideration stipulated
has been paid and that such consideration was a fair price for the
claim or interest designated. The mere fact that in either case the
conveyance is unaccompanied by any warranty of title and against
encumbrances or liens does not raise a presumption of the want of
bona fides on the part of the purchaser in the
transaction. Covenants of warranty do not constitute any operative
part of the instrument in transferring the title. That passes
independently of them. They are separate contracts, intended only
as guaranties against future contingencies. The character of
bona fide purchaser must depend upon attending
circumstances or proof as to the transaction, and does not arise,
as often though we think inadvertently said, either from the form
of the conveyance, or the presence or the absence of any
accompanying warranty. Whether the grantee is to be treated as
taking a mere speculative chance in the property or a clear title
must depend upon the character of the title of the grantor when he
made the conveyance, and the opportunities afforded the grantee of
ascertaining this fact, and the diligence with which he has
prosecuted them, will, besides the payment of a reasonable
consideration, determine the
bona fide nature of the
transaction on his part.
In the present case, every available means of ascertaining the
character of the title acquired, both at the time of his own
purchase and at the time the purchase of his predecessors in
interest were made, were pursued by the complainant. When he looked
at the records of the county where the property was situated, he
saw that the only deed executed by the patentee, the original
source of title, was for property other than the premises in
controversy. No mere speculative investment in the chance of
obtaining a good title could therefore properly be imputed to
him.
Decree affirmed.
