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OFFICAL REPORTS, CALIFORNIACALIFORNIA OFFICIAL REPORTS9443 SPRINGBORO PIKEMIAMISBURG, OH 45342-4425

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PHILIP PELL v. WILLIAM C. McELROY, JOHN K. KELLY, and GEORGEHEARST[NO NUMBER IN ORIGINAL]SUPREME COURT OF CALIFORNIA

36 Cal. 268

;

1868 Cal. LEXIS 186

October 1868

PRIOR-HISTORY:

Appeal from theDistrict Court, Twelfth JudicialDistrict, City and County of SanFrancisco.

COUNSEL:

S. Heydenfeldt, J. H.Saunders,

and

H. C. Hyde,

forAppellants.

Charles Halsey,

for Respondent.The points and authorities made andcited in the briefs of counsel arestated and discussed in the opinion ofthe Court.

JUDGES:

Sprague, J.

OPINION BY:

SPRAGUE

OPINION

This is an action for the recoveryof the amount due upon a promissorynote made by the defendant McElroy toplaintiff for the purchase price ofcertain real estate described in theamended complaint, and to enforce thepayment of such amount as a vendor'slien upon such real estate. The causewas tried by the Court without a jury,and upon specific findings of factsthe Court rendered judgment againstdefendant McElroy for the amount dueupon the note, and decreed a sale ofthe described premises in satisfactionof such portion of the judgment asshould remain unsatisfied on return ofexecution on the judgment againstdefendant McElroy. The defendantMcElroy made default; defendantsHearst and Kelly separately answered,and have separately appealed, theformer from the judgment, and thelatter from the judgment and orderdenying him a new trial.The facts, as found by the Courtbelow, are fully justified by theevidence; they are substantially asfollows: On the 10th of December,1862, plaintiff was, and for ten yearstheretofore had been, in the actualpossession, by his personal residencethereon, substantial inclosurethereof, and cultivation by tenantspaying him rent therefor, of everypart of the land described in theamended complaint, and during thewhole of such time had claimed rightto the said premises in virtue of suchresidence thereon, inclosure, andcultivation thereof. While so in thepossession, plaintiff, on the said10th day of December, 1862, executedand delivered to defendant McElroy adeed of conveyance, whereby he soldand conveyed to him the said premises,which deed was properly acknowledgedon the 11th day of December, 1862, andduly recorded on the 16th day ofDecember, 1862, in the Recorder'soffice of the City and County of SanFrancisco. The consideration named insuch deed of conveyance was fourthousand dollars, and although thesame was therein recited as havingbeen paid, yet in fact it was notpaid, and nothing, in fact, was paidby McElroy to plaintiff for suchlands, or conveyance thereof; butcontemporaneously with the execution

and delivery of the deed, (December10th, 1862,) it was verbally agreed byand between plaintiff and defendantMcElroy that he, McElroy, should,twelve months after that date pay toplaintiff or his order the sum of fourthousand dollars, with interest at therate of one per cent per month, forsaid land and conveyance thereof; andat the same time it was furtherverbally agreed by and between them,that until said sum of four thousanddollars, and interest thereon asaforesaid, should be paid, theplaintiff should retain thepossession, control, and use of thepremises and every part thereof, andreceive the rents and profits of thesame, as he, plaintiff, was thenenjoying, and had previously enjoyedthe same. At the same time defendantMcElroy executed and delivered toplaintiff his certain promissory notefor said agreed purchase money andinterest, as aforesaid, payable to theorder of plaintiff, which has neverbeen paid, nor any part thereof, andis now and continuously since itsexecution and delivery has been andremained in the possession of theplaintiff, and has never beennegotiated or transferred by him toany one; and plaintiff, ever since hisexecution and delivery of the deedaforesaid to McElroy, has been and isin the open, notorious, and visibleuse and occupation, by himself and histenants, of the premises so by himconveyed, and every part thereof; thesame having been, during all thatperiod, and being still subject to theexclusive dominion and use of theplaintiff, without any use orpossession of any part thereof by orin the defendants, or either of them,at any time or in any manner. Afterthe execution and delivery byplaintiff of the aforesaid deed of thepremises to defendant McElroy, andafter the same had been dulyacknowledged and recorded, to wit: onthe 28th day of February, 1863,McElroy conveyed to defendant Kelly aportion of the premises for and inconsideration of eight hundreddollars, which was much less than theactual value of the premises soconveyed to Kelly; and afterwards, onthe 20th day of January, 1864, McElroyconveyed to defendant Hearst theremaining part of said premises forthe consideration of six thousanddollars, which was the full value ofthe part so conveyed to defendantHearst. At the time of the purchase bydefendant McElroy from plaintiff ofthe premises, December 10th, 1862,defendant McElroy was and ever sincehas been insolvent.The Court did not find thatdefendants Kelly and Hearst, or eitherof them, prior to their respectivepurchases, had any actual notice thatthe purchase money of the premisesfrom plaintiff by McElroy had not beenpaid.The fact of open, notorious, andexclusive possession and occupation oflands by a stranger to a vendor'stitle, as of record, at the time of apurchase from and conveyance by suchvendor out of possession, issufficient to put such purchaser uponinquiry as to the legal and equitablerights of the party so in possession,and such vendee is presumed to havepurchased and taken a conveyance fromthe vendor with full notice of all thelegal and equitable rights in thepremises of such party in possessionand in subordination to these rights;and this presumption is only to beovercome or rebutted by clear andexplicit proof on the part of suchpurchaser, or those claiming underhim, of diligent, unavailing effort bythe vendee to discover or obtainactual notice of any legal orequitable rights in the premises inbehalf of the party in possession. Andwhen the location of the lands is suchas to render personal application toand inquiry of the occupantpracticable, a purchaser failing tomake such application and inquiry isno more entitled to be regarded

a purchaser in good faith

than if he hadso inquired and ascertained the realfacts of the case.Such, we understand, is the wellsettled general rule of law in thisState, sustained by preponderantauthority of American and EnglishCourts. (

Hunter v. Watson, 12 Cal.