GRESHAM, District Judge, delivered the opinion of the court: This is a suit on a fire policy issued by the defendant to the plaintiffs, "on grain, seeds and sacks, their own, or held by them in trust or on commission, or sold but not delivered," contained in their elevator at Rochester, Indiana. The elevator and its contents were destroyed by fire. As to 2238 bushels of wheat in the elevator at the time of the fire, it is averred in the third paragraph of the answer, that this wheat was delivered to the plaintiffs by farmers, after the insurance was taken, every one of whom, at the time of such delivery, received and accepted from the plaintiffs a written instrument or contract specifying and describing the amount and character of wheat by him delivered, and concluding as follows: "Wheat in store subject to our charges. Fire at owner's risk." It is also averred that it was not the intention of those depositing the wheat, or the plaintiffs, that it should be covered by the policy sued on, and that, at the time of the fire, the plaintiffs had in the elevator wheat of their own. These facts are pleaded against a recovery for more than the plaintiff's lien for charges, on the 2238 bushels of wheat. The plaintiffs demur to the third paragraph of the answer. It is urged by the defendants counsel, that the wheat described in the paragraph demurred to was held on deposit, under an agreement between the depositors and the plaintiffs that it was not to be insured, and that therefore the plaintiffs, who were bailees, had no authority to put it under their policy and charge the depositors, who were bailors, for insurance. The plaintiffs were commission merchants, engaged in buying and selling grain, and in connec tion with their business they owned and operated an elevator in the usual way. Those who deposited wheat in this elevator took receipts for the same, knowing that it could never be distinguished from the mass with which it was mingled, and that the plaintiffs could and would sell and ship it as their own in the course of their business. It was not claimed that this 2,238 bushels of wheat was to be kept separate from other wheat in the elevator of the same grade. The title to this and other wheat deposited in the elevator as it was, remained in the depositors, or it passed into the plaintiffs. The contract between the plaintiffs and depositors was, not that the latter should on demand receive the identical wheat stored in the elevator, but that the plaintiffs should deliver wheat equal in amount and grade to that deposited, or account for its value. Being authorized to sell the wheat on their own account as fast as it was deposited in the elevator, I think the plaintiffs had such an interest in it as authorized them to insure it for its full value. They were under no obligation to restore the identical wheat stored in their elevator, and no one expected them to do so. Carlisle v. Wallace, 12 Ind. 252; Johnson v. Brown, 37 Iowa, 200. But on the theory that the title to the wheat described in the paragraph demurred to remained in the depositors, and that they took the risk of loss by fire under their contracts with the plaintiffs, still the latter were liable for its value if fire should result from carelessness on the part of their employees, and they had a right to protect themselves against this liability by insuring the wheat for its full value. And, further, if this wheat remained the property of the bailors, there was nothing in their contracts with the plaintiffs which prohibIted them as bailees from insuring it for its full value. The defendant was not a party to the agreement. It is true, there is an verment in the paragraph demurred to that it was not the intention of the depositors or the plaintiffs that the wheat should be covered by the policy sued on, but that is only the pleader's construction of the instruments or contracts which the depositors received from the plaintiffs. property in the chattels did not pass from H, and that L, who bought the chattels of R and eonverted them to his own use, without knowledge of the fraud, was liable to H for their value; and the fact that R, at the time the chattels were delivered to him, paid H part of the price agreed on, will make no difference, except as to the amount recovered against L. Error to the District Court of Williams County. In 1874, O. T. Letcher & Co. were engaged at Bryan, Williams County, in buying and shipping hogs. Geo. W. Hamet, a farmer residing in that county, had a lot of hogs for sale. On October 16 of that year, Jacob J. Rohner, representing himself to be the agent of O. T. Letcher & Co., bought the hogs of Hamet for $173.25, which was a fair price for the same, paying to him on the purchase $55. Hamet knew Letcher & Co. to be responsible, and would not let Rohner have the hogs on his own account. He believed Rohner's representation that he was such agent, and relied on the representation. In fact, Rohner was not the agent of Letcher & Co., nor had he any authority to purchase hogs on their account. Rohner, receiving the hogs under such circumstances from Hamet, drove them to Bryan, where he sold them, as his own hogs, to O. T. Letcher & Co., who were ignorant of the fraud by which they were obtained. Believing that Rohner was the owner, the firm received the hogs, paying him full value for the same. Shortly thereafter Hamet demanded of the firm payment for the hogs, but payment was refused, and thereupon he brought suit against the firm, in the Court of Common Pleas of Williams County, to recover the value of the property. In that court it was held that, on the facts stated, Hamet was not entitled to recover; the district court affirmed the judgment, and Hamet, on leave, filed in this court a petition in error to reverse both the judgments. Pratt & Bentley and Sheldon & Boothman, for plaintiff in error: J. Pillars and S. E. Blakeslee, for defendants in error. OKEY, C. J., delivered the opinion of the court: A remark made in Cundy v. Lindsay, 3 App. Cas. 459, is quite applicable here. There it was said, "You have in this case to discharge a duty which is always a disagreeable one for any court, namely, to determine as between two parties, both of whom are perfectly innocent, upon which of the two the consequences of a fraud practiced upon both of them must fall." But our duty in this case, as in all others, is simply to declare the law. The only question here is whether, in view of the facts set forth in the statement of the case, the property in the hogs passed from Hamet. If it did, the judgments in the courts below are right; if it did not, they are wrong. In the decisfon of cases of this sort, difficult questions are sometimes presented, but the principles upon which they should be determined are firmly established. If Rohner had offered to buy the hogs for himself, and Hamet had agreed to sell them to him, and had made a delivery thereof in pursuance of such sale, the property in the hogs would have passed to Rohner, although the sale had been induced solely by fraudulent representations made by Rohner. That would have been a defacto contract; and while it might have been avoided by Hamet, by reason of the raud, while the property remained in the possession of Rohner, yet if Rohner had sold the hogs, before the contract was thus avoided, to Letcher & Co., they having no knowledge of the fraud, the latter would have acquired a perfect title. Rowley v. Bigelow, 12 Pick. 397; Hoffm n v, Noble, 6 Met. 68; Schaeffer v. Macqueen, 1 Disney, 453; Attenborough v. Dock Co., 3 C. P. D. 450; Babcock v. Lawson, 4 Q. B. D. 394: affirmed, 5 Q. B. D. 284. In a case where this principle was enforced (Moyes v. Newington, 4 Q. B. D. 32), Cockburn, C. J., said: "The reasoning on which this conclusion is based, may not appear altogether consistent with principle, but, agreeing in the result, we should prefer to adopt the view of the American courts, as stated in the case of Root v. French, 13 Wend. 570, a case decided in the Supreme Court of Judicature of the State of New York, according to which the preference thus given to the right of the innocent purchaser is treated as an exception to the general law, and is rested on the principle of equity that where one or two innocent parties must suffer from the fraud of a third, the loss should fall on him who enabled such third party to commit the fraud." But this was not a sale to Rohner in his own right. He made no proposition to buy in any other way than as agent. Hamet did not agree to sell to any other than Letcher & Co., who never agreed to buy of him, and he was induced to sell solely by reason of Rohner's representation that he was such agent, which representation was wholly false, as Kohner well knew. This, therefore, was not a contract voidable merely, but an agreement wholly void: and, under the circumstances, the property in the hogs never passed from Hamet. Hence, applying the maxim that no one can transfer a greater right or better title than he himself possesses (Roland v. Gundy, 5 Ohio, 202), it necessarily follows that Letcher & Co. are liable for a conversion. Moody v. Blake, 117 Mass. 23; Barker v. Dinsmore, 72 Pa. St. 427: Saltus v. Everett, 20 Wend. 267; Fawcett v. Osborn, 32 Ill. 411; Hardman v. Booth, 1 H. & C. 803; Higgons v. Burton, 26 L. J. Ex. (N. S.) 342; Kingsford v. Merry, 1 H. & N. 503; Hollins v. Fowler, L. R. 7 Q. B. 616; affirmed, L. R. 7 App. 757; In re Reed, 3 Ch. D. 123; Lickbarrow v. Mason, 1 Smith's L. C. 2 pt. 1195; Cundy v. Lindsay, supra. Perhaps the principle here involved was more fully considered in the latter case (Cundy v.Lindsay) than in any other. The facts briefly stated were as follows: Lindsay & Co. were manufacturers of linen goods at Belfast, Ireland. Alfred Blenkarn, who occupied a room in a house looking into Wood street, Cheapside, wrote to Lindsay & Co., proposing to purchase a certain quan tity of goods, and in his letter used this address, 37 Wood street, Cheapside," and signed the letter (without any initial for a Christian name) with a name so written that it appeared to be "Blenkiron & Co." There was a respectable firm known to Lindsay & Co. of the name of "W. Blenkiron & Co.," carrying on business at 123 Wood street. Lindsay & Co, sent letters, and afterwards supplied goods, being all addressed "Messrs. Blenkiron & Co., 37 Wood street," which they supposed was the address of the respectable firm above mentioned. The goods were received by Alfred Blenkarn at that place, of which goods he sold 250 dozen of Cambric handkerchiefs to the Messry Cundy, who had no knowledge of the fraud, and who resold them in the ordinary course of their trade. On the hearing of the case before the judges of the Queen's Bench (Lindsay v. Cundy, 1 Q. B. D. 348), in 1876. it was held that the property in the goods passed to Blenkarn, and eonsequently that Lindsay & Co. could not maintain an action against the Messrs. Cundy, innocent purchasers. But that decision was reversed the next year, in the court of appeals (Lindsay v. Cundy, 2 Q. B. D. 96), and the latter decision was affirmed in the House of Lords in 1878. Cundy v. Lindsay, supra. That was a stronger case for the innocent purchaser than this case. Indeed, on the latter hearing, Mr. Benjamin, who argued the case for Messrs. Cundy, admitted that under circumstances such as are presented in this case, the property would not pass to the fraudulent vendee. The circumstance that Hamet intended that Letcher and Co. should have the hogs is of no importance. He never intended they should acquire title from any other than himself, nor do they make any claim to such property under any purchase they made from him. The case would be in no material respect different if Rohner had represented to Hamet that he was agent of some firm other than Letcher & Co. Nor does the payment by Rohner of $55 on the agreed price have any other effect on the right to recover than to reduce the amount for which judgment should be rendered. Counsel for defendants in error rely on Stoddard v. Ham, 129 Mass. 383, the syllabus of which is as follows: "If A sells goods to B, who sells them to C, the fact that A supposed he was selling the goods to C through B as his agent, and would not have sold them to B on his sole credit, would not entitle A to maintain an action against C for a conversion of the goods." But the decision lends no support to the defendants in error. There it appeared that Stoddard & Co., the plaintiffs, had sold bricks to Leonard, believing that he was acting as agent for Ham, the defendant; but Leonard was acting for himself, and subsequently he sold the bricks to Ham. It was expressly found as a fact that "Leonard was not guilty of any false representations as to agency, and it was a case of error and mistake on the part of the plaintiffs as to the principal with whom they were dealing." Of course, Stoddard & Co. failed in the action. Defendants in error also rely on a remark of McIlvaine, J., delivering the opinion in Dean v. Yates, 22 Ohio St. 388, as to the effect of delivery of possession to a fraudulent vendee. But nothing was determined in that case inconsistent with the conclusion stated in this case. On the contrary, Dean v. Yates is entirely consistent with our decision of this case, and supports it, as it is likewise supported by Sanders v. Keber, 28 Ohio St. 660, also cited by defendants in error. In the finding of facts in the Court of Common Pleas, it was ascertained that, if Hamet was entitled to recover, the amount then (June 11, 1877) due to him, deducting the sum paid by Rohner, was $117.28. The judgment of the district court and court of common pleas will be reversed, and judgment will be rendered in favor of Hamet and against the defendants in error for that sum, with interest from June 11, 1877, and costs. Judgment reversed. 1. Where a person holds the position of a bona fide purchaser of real estate for a valuable consideration without notice of the original owner's equities, he will not be deprived of his title by proof of fraud practiced by his grantee upon the person executing to such grantee the conveyance thereof. 2. Where a person who is the owner of, and in actual possession of real estate, desires to convey it to her mother, and employs an attorney at law to prepare a deed therefor, and after the deed is drafted by him she examines and finds it written out in accordance with her directions, and then, at the attorney's request. accompanies him to the office of a notary public to execute it, and at the office the attorney, without her knowledge, fraudulently produces in the place of the deed already examined another deed containing his own name as the grantee therein, and the owner, supposing the deed so produced to be the identical one she had previously looked over, without examination of its contents, affixes her signature thereto in the presence of the notary and acknowledges its execution, and then delivers it to the attorney to be deposited by him for record, and the deed is filed by him for record in the office of the registrar of deeds of the proper county, and thereafter the attorney conveys the premises to innocent per⚫ sons for value, the owner ef the premises so execuing the deed is estopped from denying its validity, so as to affect the rights ot the subsequent bona fide grantees. 3. While it is the general rule that open, notorious, unequivocal and exclusive possession of real estate under an apparent claim of ownership is notice to the world of whatever claim the possessor asserts, whether such claim be legal or equitable in its nature, yet this rule does not apply to a vendor remaining in possession, so as to require a purchaser from his grantee to inquire whether he has reserved an interest in the land conveyed. Such grantor, though in actual possession, is deemed to hold the same for a temporary purpose without claim of right, and merely as a tenant at sufferance of the grantee. 4. A grantor is not deemed in law to have adverse possession against his grantee or those deriving title from him. Error from Cowley County. Messrs. Hackney & McDonald, for plaintiffs in error; A. L. Williams, for defendant in error. Lena McNeil, the plaintiff in error and plaintiff below, about January 26, 1880, desiring to convey certain real estate situate in the City of Winfield, Cowley County, Kansas, to her mother, one Martha E. McNeil, went to the office of one Charles H. Payson, a lawyer at Winfield, Kansas, and requested him to draw up a deed for that purpose. She afterwards went to Payson's office, when he showed and read to her a deed ready for her signature and acknowledgment, drawn up in accordance with her directions. She stated that it was satisfactory, and, at the request of Payson, she accompanied him to the office of a notary public to sign and have it acknowledged. Upon reaching the office Payson, without her knowledge, substituted another deed for the one previously read to her, which conveyed the property to himself, and she, in ignorance of the substitution, and without examination of the deed, signed and acknowledged the same and left it in the possession of Payson for record, and it was by him duly deposited for record in the office of the register of deeds for Cowley County, Kansas, on the following day, and thereafter duly recorded. The next day Payson executed a mortgage on the property to James Jordan to secure a loan of $480, and on the 2nd day of February, 1880, deeded the property to George H. Buckman for $200, Buckman assuming the mortgage. On the 23d day of February, 1880, plaintiff in error discovered that the deed she had executed conveyed her real estate to Payson, the lawyer, instead of to Martha E. McNeil, her mother, and immediately brought suit setting forth the foregoing facts, and alleging actual, open and exclusive possession of the premises all the time, and asking that the deed from her to Payson, and also the deed from Payson to Buckman, and the mortgage from Payson to Jordau be cancelled and declared null and void. To this petition, Jordan and Buckman made answer, alleging innocence of any knowledge of the fraud of Payson; that they had made careful examinations of the records before consummating their transactions with Payson; that their transactions with Payson were in good faith and for sufficient consideration, and setting forth the details thereof. Upon the trial, judgment was rendered against the plaintiff in error, and in favor of the defendants in error, and the plaintiff brings the case to this court. HORTON, C.J.,delivered the opinion of the court: The principal questions involved in this controversy are, Was the deed obtained by Charles H. SecPayson from Lena McNeil absolutely void? ond, if not void, but voidable only, was the actual possession of the premises by Lena McNeil notice to the defendants of the fraudulent title of their grantors? If the deed to Jordan was absolutely void, then it was and is an absolute nullity, and nothing can be founded upon it. It can not be made the basis of any title. On the other hand, if voidable only, it passed an estate of which Payson became legally seized, defeasible in his hands, but not in the hands of innocent, bona fide purchasers under him. On the part of the plaintiff, it is contended that the deed was, and is, absolutely void, because, in fact, it was a deed to another grantee than the person intended, and, therefore, that there was no assent of the mind of the grantor to the creation of the instrument to which her signature was fraudulently obtained, and hence that the writing was not her act. To sustain this position counsel cite the fraudulent procurement of a deed deposited as an escrow from the depositary by the grantee. Evarts v. Agnes, 4 Wis. 343, and 6 Wis. 453; the furtively purloining, without the knowledge or consent of the maker, of a note and mortgage deposited in escrow (Andrews v. Thayer, 30 Wis. 228); and the cases of deeds obtained by larceny and like means. Bishop on Contracts, secs. 190, 191; Tisher v. Beckwith, 30 Wis. 55; Burton v. Boyd, 7 Kan. 31, and Ayer v. Probasco, 14 Kan. 196, are also referred to. The principle announced in the various decisions presented to us by the counsel for the plaintiff is not applicable here. The question of the assent of the grantor need not be considered now. In this case, it appears from the findings of the court that, on the 26th day of January, 1880, Lena McNeil, at the request of Payson, accompanied him to the office of a notary public, and, upon reaching the office, sigued her name to the deed in the presence of the notary without any examination, and then acknowledged its execution and delivered it to Payson to be filed for record. He deposited the deed for record on the next day at 11:30 o'clock A. M., and it was thereupon recorded in the book of deeds in the office of the register. The conduct of the grantor of this deed was such as to forbid her to deny its validity so as to affect the rights of persons holding the position of bona fide purchasers of the premises for value. Where parties are inattentive and careless in the execution of conveyances of real estate, the law estops them from setting up title as against a bona fide purchaser for value under such conveyance. As was said in Somes v. Brewer, 2 Pick. 184, cited upon the former hearing of this case (Jordan v. McNeil, 25 Kan. 459): "It is a general and just rule, that when a loss had happened which must fall on one of two innocent persons, it shall be orne by him who is the occasion of the loss, even without any positive fault committed by him, but more especially if there has been any carelessness on his part which caused or contributed to the misfortune. A man can scarcely be cheated out of his property, especially of real estate, in such manner as to give an innocent purchaser a right to hold according to the principles which have been mentioned, without a degree of negligence on his part which should remove all ground of complaint. Suppose him to be prevailed upon by fraudulent representations to execute a deed without asking advice of triends or counsel, he has locus penitentiæ when he goes before a magistrate to acknowledge it." Counsel claim that as the grantor employed a lawyer to draft for her the deed which she intended to execute, and as she examined the contents of it on its first presentation to her, and found it drafted according to her wishes, she had the right to rely implicitly upon the integrity of the lawyer, and sign the conveyance produced in the office of the notary by him, without question or examination; and that she exercised due caution in examining the deed when first presented; that any further examination was unnecessary. The lawyer who prepared the deed for her was acting as her agent, and she confided in him. If she chose to rely upon his statements and thereby received injury, she must suffer the consequences of her misplaced confidence rather than an innocent third person. Where a person not illiterate or of feeble mind, possessed of legal capacity to make a contract, executes and acknowledges a deed without ascertaining its character and extent, upon the representations of another, he puts confidence in that person, and if injury ensues to an innocent third person by reason of that confidence, his act is the means of that injury and he ought to answer to it. Chapman v. Rose, 56 N. Y. 137. Here, it appears that the grantor unwittingly fell into the hands of a dishonorable and dishonest lawyer (In re Payson, 23 Kan. 757), and trusted to his integrity. But he betrayed that trust and wrongfully obtained the signature and acknowledgment of the grantor to the deed conveying the property to himself. This deed was afterwards recorded, and the consequences thereof must fall upon the grantor of the fraudulent deed, rather than upon those who have paid their money upon the faith of the conveyance. The deed, therefore, in our opinion, was not and is not a nullity. It was effectual to pass the estate so that the deed and the mortgage from the fraudulent grantee to defendants, if they may be regarded as bona fide purchaser, were valid. Bloomer v. Henderson, 8 Mich. 405; Burson v. Huntington, 21 Mich. 415; Douglas v. Matting, 29 Ia. 498; Putnam v. Sullivan, 3 Mass. 45; Bishop on Contracts, sec. 169; Cook v. Moore, 39 Tex. 255; Deputy v. Stapleford, 19 Cal. 302. This brings us to the consideration of the possession of the premises by Lena McNeil at the dates of the execution of the mortgage and subsequent conveyance. Were the defendants notified by such possession of the fraud of their grantor? Were the defendants bound to inquire of Lena McNeil what interest she claimed or represented? We have time and again stated that open, notorious, unequivocal and exclusive possession of real estate under an apparent claim of ownership is notice to the world of whatever claim the possessor asserts, whether such claim be legal or equitable in its nature. Johnson v. Clark, 18 Kan. 164; School District v. Taylor, 19 Kan. 292; Tucker v. Vandermark, 21 Kan. 263. This rule, however, does not, in the nature of things, apply to a vendor remaining in possession. A purchaser from the grantee of the party in possession need not inquire whether such party has reserved any interest in the land conveyed. So far as the purchaser is concerned, the actual occupant's deed is conclusive upon that point. The object of the law in holding possession constructive notice, is to protect the possessor from the acts of others who do not derive their title from him, not to protect him against his own acts; not to protect him against his own deed. Therefore, where a grantor executes and delivers a deed of conveyance and directs the deed to go upon record, he says to the world, "Though I am yet in the possession of the premises conveyed, it is for a temporary purpose without claim of right, and merely as a tenant at sufferance of my grantee." The great weight of the authorities supports this conclusion. Thus Wade on Notice says: "So the possessor may by his own act, in putting upon the record an instrument inconsistent with title in himself, or by executing and delivering such a recordable instrument, be estopped from relying upon his possession as evidence to subsequent purchasers, that he claims title to the premises. In the case cited, defendant had conveyed the land in question to one in whom he placed confidence, subject to a secret trust. The deed of conveyance was absolute on its face, and was duly recorded. Relying upon the record, plaintiff purchased the premises from the apparent grantee for value, who, in making the sale, was guilty of a breach of trust. But the plaintiff took without knowledge or notice of the trust, although the defendant, after making the conveyance, remained in possession and openly exercised acts of ownership over the property." Sec. 299. Bigelow on Fraud states: "The rule of notice by possession does not apply in favor of a vendor remaining in possession, so as to require a purchaser from his grantee to inquire whether he has reserved any interest in the land conveyed. So far as the purchaser is concerned, the vendor's deed is conclusive. Having declared by his deed that he makes no reservation, he can not afterwards set up any secret arrangement by which his grant is impaired." Page 295-6. Washburn on Real Property, also says: "Nor will the continued possession by the grantor of land, after the making of his deed, be notice of a defeasance held by him, which is not recorded." Page 66, vol. 2, 3d ed. |