Opinion
No. 40500.
May 6, 1957.
1. Notice — registry statutes — constructive notice — imputes only such knowledge as instrument there recorded discloses.
Under registry statutes, constructive notice arising from the record of a muniment of title imputes only such knowledge as the instrument there recorded discloses, and not what diligent inquiry into its meaning might disclose. Secs. 867-869, 1555, Code 1942.
2. Reformation of instruments — registry statutes — notice — grantee in deed of trust entitled to reformation against grantor but not entitled to reformation against judgment creditors.
In action by grantee of a deed of trust against grantor and trustee for reformation of description of land, and an injunction restraining sale of such land under execution, wherein Chancellor entered a decree reforming deed against grantor and denying priority of liens of intervening judgment creditors, Supreme Court held that where deed of trust contained an improper description of land owned by grantor, mere fact that it recited that land in question contained 60 acres more or less when tract of land owned by grantor was only 40 acres, was not sufficient to put judgment creditors on notice that an entirely different tract of land was intended to be included therein, and did not give notice of a description which a diligent search of the records might have disclosed as to other land belonging to grantor, and while grantee was entitled to reformation as against grantor, he was not entitled to reformation as against judgment creditors executing on land actually owned by grantor. Secs. 867-869, 1555, Code 1942.
Headnotes as approved by Hall, J.
APPEAL from the Chancery Court of Amite County; F.D. HEWITT, Chancellor.
Gordon Gordon, Liberty; Henley, Jones Woodliff, Hazlehurst, for appellants.
I. The description in the deed of trust from Mrs. Maude Sproles to Worth Jackson of NE 1/4 rather than the NE 1/4 of SW 1/4 is void as against appellants. Sack v. Gilmer Dry Goods Co., 149 Miss. 296, 115 So. 339; Simmons v. Hutchinson, 81 Miss. 351, 33 So. 21; Y.D. Lbr. Co. v. Refuge Cotton Oil Co., 153 Miss. 302, 120 So. 447; Great Southern Land Co. v. Valley Securities Co., 162 Miss. 120, 137 So. 510; Pan-American Life Ins. Co. v. Crymes, 169 Miss. 701, 153 So. 803; Burkett v. Peoples Bank of Biloxi, 225 Miss. 291, 83 So.2d 185; Secs. 867-869, 1555, Code 1942.
II. The deed of trust executed by the judgment debtor, Mrs. Maude Sproles, to the appellee, Worth Jackson, cannot be reformed to make the judgment liens of the appellants subordinate to said deed of trust. Nugent v. Priebatsch, 61 Miss. 402; Loughridge v. Bowland, 52 Miss. 546; Duke v. Clark, 58 Miss. 465; Humphreys v. Merrill, 52 Miss. 92; Mississippi Valley Co. v. Railroad Co., 58 Miss. 847; Harper v. Tapley, 35 Miss. 506; Sack v. Gilmer Dry Goods Co., supra; Great Southern Land Co. v. Valley Securities Co., supra; Burkett v. Peoples Bank of Biloxi, supra.
Roach Jones, McComb; Lowery Stratton, Liberty, for appellee.
I. The Chancellor did not err in holding that the judgment creditors had constructive notice necessary to put them on inquiry from the record of the deed of trust and other muniments of title of the lands owned by Mrs. Maude Sproles, as it applied to the lands situated in Section 28, Township 3 North, Range 3 East. Simmons v. Hutchinson, 81 Miss. 351, 33 So. 21; Bright v. Buckman, 39 Fed. 247; Partridge v. Smith (S.C.), 2 Biss. 183; Dead River Fishing Hunting Club v. Stovall, 147 Miss. 385, 113 So. 336; Parker v. Foy, 43 Miss. 260, 5 Am. Rep. 484; Deason v. Taylor, 53 Miss. 697; Alliance Trust Co. v. Nettleton Hardwood Co., 74 Miss. 584, 21 So. 396, 36 L.R.A. 155, 60 Am. St. 531; Baldwin v. Anderson, 103 Miss. 462, 60 So. 578; Crago v. Vitter, 120 Miss. 103, 81 So. 646; Stovall Adams v. Hill (Miss.), 44 So.2d 457.
II. The Chancellor did not err in holding that the deed of trust given by Mrs. Maude Sproles to Worth Jackson, appellee, could be reformed under the facts involved in this law suit. Willis v. Gattman, 55 Miss. 721; Simmons v. North, 3 Sm. M. 67; Wall v. Arrington, 13 Ga. 88; White v. Wilson, 6 Blackf. (Ind.) 448; Stone v. Hale, 17 Ala. 557; Ellis v. Tousley, 1 Paige 280; Gouverneur v. Titus, 6 Paige 347; Vol. I, Story's Equity Jurisprudence, p. 165.
On February 4, 1953, Mrs. Maude Sproles executed and delivered a deed of trust to Worth Jackson, which was not recorded until January 27, 1955. The scrivener made an error in the description of a part of the land intended to be covered by this deed of trust in that it described the S 1/2 of SE 1/4 of NW 1/4 and NE 1/4, Section 28, Township 3, Range 3 E., containing 60 acres, more or less. Mrs. Sproles did own the S 1/2 of the SE 1/4 of the NW 1/4 of said section and that land is not involved in this suit. She did not own the NE 1/4 of said section but owned only the NE 1/4 of the SW 1/4 of said section.
Mrs. Sproles was engaged in business in the City of Gloster in partnership with her son-in-law Sidney Hughes. On February 22, 1955, the Wesson Oil and Snowdrift Sales Company obtained a judgment against Mrs. Sproles and Hughes in the amount of $530.16, plus interest and court costs, which judgment was duly enrolled upon the judgment roll of Amite County, Mississippi, on February 25, 1955. On June 14, 1955, a judgment was entered against Mrs. Sproles and Hughes in favor of Corenswet, Inc. in the amount of $326.32, plus interest and court costs, which judgment was duly enrolled on the same day. On August 18, 1955, Mississippi Industries for the Blind obtained a judgment against Mrs. Sproles and Hughes in the amount of $132.03, plus court costs, which was duly enrolled on August 30, 1955. On August 18, 1955, American Scales Manufacturing Company obtained a judgment against Mrs. Sproles and Hughes in the total amount of $210.75, which includes principal, interest, attorney's fees and court costs, and this was enrolled on August 30, 1955.
On September 8, 1955, executions were issued on the said judgments and the sheriff thereafter proceeded to give notice of sale under said executions. Prior to the proposed sale Worth Jackson filed a bill of complaint against Mrs. Maude Sproles and R.E. Smith who was the trustee in the deed of trust held by him, wherein he sought to reform the said deed of trust so as to change "NE 1/4" to read "NE 1/4 of SW 1/4". On November 12, 1955, Worth Jackson filed an amendment to his original bill of complaint wherein he made Ira Jenkins, Sheriff of the county, a defendant to the bill and prayed for an injunction restraining the sheriff from selling the land described as the NE 1/4 of the SW 1/4 and on the same date, by a fiat of the chancellor, a writ of injunction was ordered to be issued and was issued enjoining the sheriff and all other parties from selling the said forty acres of land under the executions.
On November 25, 1955, the said judgment creditors were permitted by the court to intervene as defendants to said bill of complaint, and on January 17, 1956, they filed an answer to the bill of complaint and amendment, wherein, among other things, they charged that their rights as judgment creditors had already attached against said NE 1/4 of SW 1/4 and that it was too late to reform the deed of trust insofar as their rights were concerned and denied that the complainant was entitled to that relief, and prayed that the injunction issued against the sheriff be dissolved and that the sheriff be allowed his fees and expenses by reason of the wrongful suing out of the injunction.
Mrs. Sproles was seventy-seven years of age and unable to attend court because of illness but she testified by deposition as to the error which was made in the description of land in the deed of trust. She also testified that the deed of trust was given in good faith and for value. She did not know, and the record does not disclose, how much balance due is owing on the indebtedness secured by the deed of trust. By stipulation it was agreed that as between the complainant and Mrs. Sproles he was entitled to a reformation of the deed of trust but that the question of priority of liens of the judgment creditors and Worth Jackson were submitted to the court and it was further stipulated and agreed that the judgments in question are all regular and valid.
The chancellor entered a final decree reforming the deed of trust as prayed for, not only as against Mrs. Sproles but as against all of the judgment creditors, and he held "that sufficient record information existed to furnish the intervenors, defendants, with notice and to place them upon inquiry of the error of the scrivener and the rights and equities of the complainant Worth Jackson to assert and claim his lien on the forty acres of land levied upon for sale under the judgments."
(Hn 1) Section 1555, Code of 1942, makes provision for a lien of an enrolled judgment upon all property of the defendant in the county where so enrolled and provides that the same shall have priority according to the order of enrollment in favor of the judgment creditor against the judgment debtor and all persons claiming the property under him after rendition of the judgment.
Section 867, Code of 1942, provides for the recording of conveyances and for priority, and Section 868, Code of 1942, provides that all deeds of trust and mortgages shall be void as to all creditors and subsequent purchasers for a valuable consideration without notice unless they be acknowledged or proved and lodged with the clerk of the chancery court of the proper county to be recorded in the same manner that other conveyances are required to be acknowledged or proved and recorded, and the said section further provides that a failure to file such instrument with the clerk for record shall prevent any claim of priority by the holder of such instrument over any similar recorded instrument affecting the same property in the absence of actual notice. Section 869, Code of 1942, provides that every deed of trust, etc. shall take effect as to all creditors only from the time when delivered to the clerk to be recorded and that no deed of trust which is unrecorded or has not been filed for record shall take precedence over any similar instrument affecting the same property which may be of record; and this section further provides that the priority thereof shall be governed by the priority in the time of the filing of the several instruments, in the absence of actual notice.
In the case of Simmons v. Huthchinson, 81 Miss. 351, (356, 357), 33 So. 21, this Court said: "Constructive notice arising from the record of a muniment of title is imputed to purchasers and creditors from a mere presumption of law, and it imputes only such knowledge as the instrument there recorded discloses, and not what a diligent inquiry into its meaning might disclose. The registration of an instrument is constructive notice to the world of the contents of the paper there recorded, or intended to be recorded, and of its particular contents only, and it will have no operation or effect unless the original instrument correctly and sufficiently describes the premises which are to be affected. The effect of the registration law is to impute to a purchaser notice of what the instrument recorded, or intended to be recorded, actually conveys, and has no operation in the way of putting him upon inquiry as to what premises were intended to be conveyed, unless they be substantially described therein. 2 Pomeroy's Equ. Jur., secs. 653, 654.
"There are authorities (notably, Patridge v. Smith, 2 Biss., 183, s.c., Fed. Cas., No. 10,787) which proceed upon the idea that the registration of an instrument is notice not only of its contents, but notice of every fact to which an actual knowledge of its contents, diligently pursued, would lead — that is, it puts upon the purchaser the burden of hunting up what premises the instrument intended to describe, where they are defectively or imperfectly described. But Vanderburg, J., in Bailey v. Balpin, 40 Minn., 322 (41 N.W., 1054), says: `Patridge v. Smith goes further than is consistent with sound principles or authority.' He, further, says the description, to operate as constructive notice, must be sufficient to identify the land; but, if it be correctly and sufficiently described, mistakes in details will be helped by construction where the intention is reasonably clear from the face of the record. In Bright v. Buckman (C.C.), 39 Fed., Toulmin, J. (page 247), says: `The description of the property upon which the mortgage is an incumbrance must be such as reasonably to enable subsequent purchasers to identify the land; otherwise the record of the mortgage is not notice of an incumbrance upon it. If the description in the mortgage is erroneous, and it is apparent what the error is, the record is constructive notice of the mortgage upon the lots intended to be described; but, if it is not apparent what the error is, then the record is not constructive notice.'"
It will be noted that the Court there said that constructive notice arising from the record of a muniment of title is imputed to purchasers and creditors from a mere presumption of law and imputes only such knowledge as the instrument there recorded discloses, and not what a diligent inquiry into the meaning might disclose. It will be noted that the chancellor wholly disregarded the foregoing statement and merely held that there was sufficient record information to furnish the creditors with notice or to place them upon inquiry of the error of the scrivener, and in this we think that he was in error.
In the case of Y.D. Lumber Company v. Refuge Cotton Oil Company, et al., 153 Miss. 302 (313), 120 So. 447, this Court said: "That the parties to that deed of trust may have intended to embrace the seed house therein is of no effect as against subsequent lien creditors, unless it contains a recital calculated to put a prudent person on notice thereof, and it contains no such recital. It is therefore of no efficacy as against the Y.D. Lumber Company and cannot be corrected as against it, for the reason that it acquired its lien on the seed house without notice of the Refuge Cotton Oil Company's claim thereto. Sack v. Gilmer Dry Goods Co., 149 Miss. 296, 115 So. 339; Goodbar Co. v. Dunn, 61 Miss. 619; Nugent v. Priebatsch, 61 Miss. 402; Mississippi Valley Co. v. Railroad, 58 Miss. 849."
In the case of Great Southern Land Company v. Valley Securities Company, 162 Miss. 120, (134-135), 137 So. 510, this Court said: "Our court held in Simmons v. Hutchinson, 81 Miss. 351, 33 So. 21, that constructive notice arising from the record of a muniment of title imputes only such knowledge as the instrument there recorded discloses, and not what diligent inquiry into its meaning might disclose; that it is only constructive notice of the contents of the paper there recorded, or intended to be recorded, and its particular contents only, and will have no operation or effect as to any existing facts not described or pointed out in the recorded instrument.
"To the same effect is Sack v. Gilmer Dry Goods Co., 149 Miss. 296, 115 So. 339. See, further, 23 R.C.L., p. 216, section 79, and case notes."
In the case of Pan American Life Insurance Company, et al. v. Crymes, 169 Miss. 701, (717), 153 So. 803, this Court said: "* * and as to the third deed of trust there is a misdescription in that instrument by which the property there described is located six miles distant from the property intended to be conveyed. No knowledge is charged by the bill against the purchaser except the constructive notice furnished by the records; and it is well settled in this state that the constructive notice given by a recorded instrument is only of what is actually described in that instrument or which is to be perceived from that instrument and that instrument alone was intended to be described therein. It does not give notice of other deeds or instruments not referred to therein so as to be made a part thereof, nor does it give notice of a description which a diligent inquiry might have disclosed. Simmons v. Hutchinson, 81 Miss. 351, 33 So. 21; Sack v. Gilmer Dry Goods Co., 149 Miss. 296, 115 So. 339. In the latter case there were two deeds which, if taken together, would have disclosed the property intended, but the court held that so far as constructive notice is concerned each deed stood alone; and that is the case here before us. The court is of the opinion therefore that the demurrer of the life insurance company should have been sustained."
(Hn 2) From the foregoing authorities it seems clear to us that the decree of the chancellor denying priority of the liens of the judgment creditors was clearly erroneous as a matter of law. There is no dispute as to the facts, and we do not think that the mere fact that the deed of trust recited that the land in question contained sixty acres more or less was sufficient to put the judgment creditors on notice that an entirely different tract of land was intended to be included therein. We do not think that it gave notice of a description which a diligent search of the records might have disclosed as to other lands belonging to Mrs. Sproles.
We are therefore of the opinion that the decree should be affirmed insofar only as it adjudged a reformation as against Mrs. Sproles but that it should be reversed insofar as the rights of the judgment creditors are concerned, and the cause should be remanded for further proceedings consistent with this opinion.
Affirmed in part, reversed and remanded in part.
McGehee, C.J., Lee, Arrington and Gillespie, JJ., concur.