Messersmith v. Smith

● Rule ○ The recording of a title instrument that does not meet the recording act’s statutory requirements does not provide constructive notice of the transfer to subsequent buyers. ● Facts ○ Caroline Messersmith and her nephew, Frederick Messersmith (plaintiff), each owned a one-half interest in land. On May 7, 1946, Caroline executed a quitclaim deed to Frederick, granting him her half-interest in the land. This deed was not recorded until July 9, 1951. On May 7, 1951, Caroline granted Herbert Smith, Jr. (defendant), a one-half interest in the oil and minerals located on the same land. The deed for this transaction was executed on the same date. However, when Smith noticed there was a minor error in the deed, Smith returned to Caroline’s home, tore up the deed, and prepared a second deed. The second deed was then brought to a notary public, who acknowledged Caroline’s signature by telephone. On May 9, 1951, Smith, in turn, conveyed the one-half interest in the mineral rights on the property to E.B. Seale (defendant). Both the second deed and the conveyance to Seale were recorded on May 26, 1951. Frederick sued to quiet title, claiming the deed to Smith was void. Smith defaulted. Seale argued that he was a good-faith purchaser without notice and therefore protected under the recording statute. The trial court concluded that there had been no fraud in the transfer between Caroline and Smith and ultimately found for Seale. Frederick appealed to the Supreme Court of North Dakota. ● Issue ○ Does a title instrument that was not recorded according to statutory requirements provide constructive notice of the transfer to a subsequent purchaser? ● Holding & Reasoning ○ No. Smith’s recordation of his deed did not provide constructive notice to Frederick, because Smith’s deed was not properly acknowledged. North Dakota is a race-notice jurisdiction. Thus, an unrecorded transfer of title to real property is void against a subsequent, good-faith purchaser. Proper recording serves as constructive notice of the transfer to all subsequent buyers. Further, a deed is not entitled to be recorded unless duly acknowledged. The recording of an instrument that does not meet all of the statutory requirements of recordation does not provide constructive notice. Here, the second deed granting Smith a one-half interest in the oil and minerals located on the land was not properly acknowledged by Caroline before a notary public. Due to this latent defect, the execution of the deed between Caroline and Smith was not sufficient for purposes of the recording statute. Caroline had already conveyed her interest to Frederick and had no rights to transfer to Smith. Thus, Smith did not have title to convey to Seale. Seale’s only claim to the rights is that he was an innocent purchaser protected by the recording act, which fails because the formalities of the statute were not complied with. Since Smith recorded his deed before Frederick, Seale would have had a right to the one-half interest in the oil and minerals had the statutory requirements for recordation been fulfilled. However, since the deed was not entitled to be recorded because the statutory requirements were not met, Frederick did not have constructive notice of the deed between Caroline and Smith. Because Smith’s deed was void and Frederick properly recorded his title, Frederick’s rights are superior to Seale’s. The judgment of the trial court is reversed.