Arkansas Bona Fide Purchaser: Occupants In Possession & The Duty To Inquire Into Their Unrecorded Rights & Equities - State Court Decisions

The following compilation of cases from the Arkansas Supreme Court address, either directly or tangentially, the issue of the effect of possession by an occupant of real property by one other than the seller/vendor on a prospective purchaser's status as a bona fide purchaser.

These cases are presented here to remind the reader of the importance of giving this issue the serious consideration it deserves when attempting to undo/unwind/void an abusive real estate transaction (ie. foreclosure rescue sale leasebacks, fraudulent inducement in the execution of a deed, forgeries, other real estate swindles) where, after scamming or otherwise abusively relieving an unwitting homeowner of his/her title, the scammer either sells the property to an unwitting third party, or encumbers the property with a loan from an unwitting mortgage lender, neither of whom participated in the abusive transaction with the homeowner, nor having any actual knowledge thereof, and who attempt to invoke the protection of the recording statutes by claiming bona fide purchaser status.

Voiding or setting aside the deeds and mortgages in these cases (in situations where the instruments are voidable, as opposed to being absolutely void - "void ab initio") will turn on whether the subsequent third party purchaser or encumbrancer, despite lacking in actual knowledge of the fraud or other abusive transaction, can otherwise be charged with notice of the fraud, thereby disqualifying the subsequent purchaser or encumbrancer from bona fide purchaser/encumbrancer status and, consequently, subjecting the deeds or mortgages to possibly being voided/rescinded/set aside.

This case law compilation represents raw research only, and certainly does not purport to be an exhaustive list of cases dealing with the issue of possession and the duty to inquire when attempting to establish (or attack) one's status as a bona fide purchaser.

I post it, however, with the view that some readers may find a part of the contents a helpful starting point for additional legal research in an effort to void certain abusive real estate transactions involving unwitting, financially strapped homeowners who have been screwed out of the equity in their homes by unscrupulous real estate operators.

For some case law from other states, generally, see Bona Fide Purchaser Doctrine, Possession Of Property By Occupants Other Than The Vendor & The Duty To Inquire.

See the National Consumer Law Center's Dreams Foreclosed: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams for an extensive review of one type of home equity ripoff to which the bona fide purchaser doctrine may apply.

See Foreclosure Rescue Scams (a chapter in a longer publication from the National Consumer Law Center) for a lawyer's guide to making a case on behalf of a victimized homeowner in attempting to void or set aside an abusive transaction.

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Arkansas Supreme Court Decisions

Walls v. Humphries, 2013 Ark. 286, 428 S.W.3d 517 (Ark. 2013):

• Generally, an instrument in writing that affects real property shall not be valid against a subsequent purchaser unless it is filed of record in the county where the real estate is located. Wetzel v. Mortg. Elec. Registration Sys., Inc., 2010 Ark. 242. However, in order to be a bona fide purchaser of land in Arkansas, one must take property in good faith, for valuable consideration, and without notice of a prior interest. Bill's Printing, Inc. v. Carder, 357 Ark. 242, 161 S.W.3d 803 (2004); Wilkins v. Jernigan, 195 Ark. 546, 113 S.W.2d 108 (1938).
  
  A subsequent purchaser will be deemed to have actual notice of a prior interest in the property if he is aware of such facts and circumstances as would put a person of ordinary intelligence and prudence on such inquiry that, if diligently pursued, would lead to knowledge of those prior interests. Killam v. Tex. Oil & Gas Corp., 303 Ark. 547, 798 S.W.2d 419 (1990); Bowen v. Perryman, 256 Ark. 174, 506 S.W.2d 543 (1974).
  
  Whatever is notice enough to excite attention, put a party on guard, and call for inquiry is notice of everything to which the inquiry might lead, and whenever one has sufficient information to lead him to a fact he shall be deemed conversant with it. Henderson v. Ozan Lumber Co., 216 Ark. 39, 224 S.W.2d 30 (1949); Millman Lumber Co. v. Bryant, 213 Ark. 277, 209 S.W.2d 878 (1948). Clearly, the "actual notice" exception to the protection afforded by section 14-15-404 was intended to cover situations in which a property interest does not appear in the records. Massey v. Wynne, 302 Ark. 589, 592, 791 S.W.2d 368, 370 (1990).
  
  As part of this exception, this court has long recognized that possession of property by someone other than the record owner is the equivalent of actual notice of the title, rights, or equities of the possessor. Midland Sav. & Loan Co. v. Brooks, 177 Ark. 470, 6 S.W.2d 828 (1928); Naill v. Kirby, 162 Ark. 140, 257 S.W. 735 (1924); Barrett v. Durbin, 106 Ark. 332, 153 S.W. 265 (1913); Atkinson v. Ward, 47 Ark. 533, 2 S.W. 77 (1886); Sisk v. Almon, 34 Ark. 391 (1879); Hamilton v. Fowlkes, 16 Ark. 340 (1855).
  
  In American Building & Loan Association v. Warren, 101 Ark. 163, 169, 141 S.W. 765, 767 (1911), we observed,
  
  Ordinarily, possession by a person under a contract of purchase, although unrecorded, is notice of his equitable rights and interests in the property. Actual possession is evidence of some title in the possessor, and puts the subsequent purchaser or mortgagee on notice as to the title which the occupant holds or claims in the property.
  
  Generally, actual, visible, and exclusive possession is notice to the world of the title and interest of the possessor in the property, and it is incumbent upon the subsequent purchaser or mortgagee to make diligent inquiry to learn the nature of the interest and claim of such possessor, and if he does not do so, notice thereof will be imputed to him. Hamilton v. Fowlkes, 16 Ark. 340; Shinn v. Taylor, 28 Ark. 523; Rockafellow v. Oliver, 41 Ark. 169; Atkinson v. Ward, 47 Ark. 533, 2 S.W. 77; Strauss v. White, 66 Ark. 167, 51 S.W. 64; Thalheimer v. Lockard, 76 Ark. 25, 88 S.W. 591; Sproull v. Miles, 82 Ark. 455, 102 S.W. 204; Hughes Bros. v. Redus, 90 Ark. 149, 118 S.W. 414; 1 Jones on Mortgages (6th Ed.) § 589.
  
  See also Clinton Special Sch. Dist. No. 1 of Van Buren Cnty. v. Henley, 212 Ark. 643, 645, 207 S.W.2d 713, 714 (1948) (stating that "actual possession of real estate is notice to the world of the claim or interest of the one in possession, regardless of whether such claimant has on record a written interest creating an interest or title"). This court has even commented that possession of property provides sufficient notice as to relieve the possessor of the necessity for filing under the recording statute in order to protect against a subsequent purchaser. Strauss v. White, 66 Ark. 167, 51 S.W. 64 (1899).
  
  This doctrine rests on the premise that possession of a third person is said to put a subsequent purchaser upon an inquiry, and such a purchaser is charged with notice of all that he might have learned by a due and reasonable inquiry of the occupant with respect to every ground, source, and right of his possession. First Nat'l Bank v. Gray, 168 Ark. 12, 268 S.W. 616 (1925). By 1931, we considered this rule of law to be so well settled that there was hardly a need for citation to authority. Scott v. Carnes, 183 Ark. 650, 37 S.W.2d 876 (1931).
  
  Even so, appellees contend that the rule does not apply unless the subsequent purchaser has actual knowledge that a third person is in possession of the property. Thus, they assert that the rule does not inure to appellants' benefit here because they did not inspect the property, and thus, did not actually know of Hernandez's possession.
  
  However, we rejected this precise argument in 1855 with our decision in Hamilton v. Fowlkes, supra. After surveying a number of cases from other jurisdictions, we quoted with approval the following passage from the Supreme Court of Alabama's opinion in Scroggins v. McDougald, 8 Ala. 382 (1845):
  
  The admissions of the counsel for McDougald, as well as the evidence, &c., establish that the complainant and Bagly, under whom she claims, had the actual possession of the lot at the time when McLean assigned the certificate of the commissioners to McDougald, by means of which he subsequently obtained the title. The only question, therefore, in this aspect of the case, is whether the possession so held was a sufficient matter to put the defendant, McDougald, on inquiry as to the title of the occupants, and thus affect him with notice, although in point of fact, he had no information that the possession was thus held. It is laid down very generally in the books, that whatever is sufficient to put the purchaser upon inquiry, is good constructive notice. Atk. on Mark. Titles, 573; 2 Sug. on Vend. 290. It is difficult to conceive what circumstance can be more strong to induce inquiry, than the fact that the vendor is out of possession and another is in. Accordingly it has been held, that information to a purchaser, that a tenant was in possession, is also notice of his interest. 13 Vesey 120. And if any part of the estate purchased is in the occupation of a tenant, it is considered full notice of the nature and extent of his interest. Atk. on Mark. Titles, 574. In the American courts, the rule is very generally recognized, that if a vendee is in possession of lands, a subsequent purchaser or mortgagee has constructive notice of his equitable right. 1 Monroe 201; 4 Litt. 317; 5 John. Chan. 29; 2 Paige 300; 3 ib. 421. As the complainant in this case was in the occupancy of the land at the time when McDougald acquired it by purchase or transfer from McLean, it is immaterial whether knowledge of the occupancy can be traced to him, because the law casts on him the duty of ascertaining how that fact is. If a different rule is admitted, a purchaser residing at a distance from the land, would rarely be charged with notice on this account.
  
  Hamilton, 16 Ark. at 374-75 (emphasis supplied).
  
  In Hamilton, this court concluded that it is not unreasonable to expect a purchaser to inquire whether his vendor or another person is in possession of land that he is about to purchase, and because a third person was in actual possession of the property, we held that the subsequent purchaser was not an innocent purchaser for value.
  
  In Moore v. Oates, 143 Ark. 328, 220 S.W. 657 (1920), we also noted that a subsequent purchaser is bound to take notice of another's possession whether or not he actually knows of the occupancy. Thus, our law is clear that a subsequent purchaser is charged with notice when the land is in possession of someone other than the record owner, even though the subsequent purchaser may not be aware of the third person's possession. Accordingly, appellees' contention based on their lack of actual knowledge of Hernandez's possession is without merit.
  
  Alternatively, appellees argue that Hernandez's possession of the property was not exclusive and thus did not impute notice of his interest. They point out that Hernandez did not reside on the property and that Humphries retained the right to enter the property to use the equipment.
  
  It is true that the possession of land that will impart notice of title must be adverse, exclusive, unequivocal, and inconsistent with the claim of any other person. Scott, supra.
  
  Where possession is not exclusive but is in connection with the occupancy of another who sustains the relation of parent or who is the owner of the record title, the possession of others will be referable to the possession of the parent or owner of record title and is not such as would require the purchaser to make inquiry as to the nature of their possession or any hidden equities that might exist in their favor. Story v. Grayson, 208 Ark. 1029, 185 S.W.2d 287 (1945); Rubel v. Parker, 107 Ark. 314, 155 S.W. 114 (1913). However, this court has said that actual occupancy is not necessary in all cases for possession to be considered exclusive. Story, supra. When the evidence is viewed in the light most favorable to appellants, we are not convinced that appellees are entitled to judgment as a matter of law.
  
  Through the deposition testimony of Mr. Hernandez, appellants presented evidence tending to demonstrate Hernandez's actual and exclusive possession of the property. Summary judgment is not proper where the evidence reveals aspects from which inconsistent hypotheses might reasonably be drawn and reasonable minds might differ. Koch v. Adams, 2010 Ark. 131, 361 S.W.3d 817. Also, the object of summary-judgment proceedings is not to try the issues, but to determine if there are any issues to be tried, and if there is any doubt whatsoever, the motion should be denied. Bomar v. Moser, 369 Ark. 123, 251 S.W.3d 234 (2007).
  
  On this record, we hold that a question of fact remains as to whether Hernandez was in exclusive possession of the property. Therefore, we reverse the order of summary judgment and remand for proceedings consistent with this opinion.

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Modern Am. Mortg. Corp. v. Nelson, 250 Ark. 928, 469 S.W.2d 124 (Ark. 1971):

***** (Editor's Note: In this case, the court voided a mortgage lien given by a home builder ("Jones") to a lender ("appellant") in connection with the construction of a new home for builder's customer, a couple (the "Nelsons") inexperienced in the home building process; the couple already owned and resided on the land upon which the new home was to be constructed, and unwittingly signed over the title to the premises to the builder in the course of signing unfamiliar paperwork relating to the construction; the premises was then used by the builder as security for the mortgage loan obtained from the lender with the couple remaining in possession of the premises throughout; before home was completed, builder went bankrupt):

• POINT I. Appellant argues that this was a normal business transaction and that the circumstances of the execution of the warranty deed as related by the Nelsons cannot be construed as an attempt on the part of the builder to deceive. We disagree. It appears from the testimony that the Nelsons were ignorant of the papers necessary to secure the FHA commitments required to comply with the contract and that these details were gratuitously undertaken by the builder who apparently had had some experience in the matter. The representation that the execution of the papers was necessary to get on with the building was a misrepresentation, for by the express terms of the bargained contract a conveyance of the premises to the builder was not necessary to get on with the building.
  
  POINT II. In arguing that the Nelsons are estopped to deny the conveyance to Jones, appellant relies upon Upton v. Tribilcock, 91 U.S. 45, 23 L.Ed. 203 (1875) and Stewart v. Fleming, 105 Ark. 37, 150 S.W. 128 (1912).
  
  In Upton it was pointed out that "a contractor must stand by the words of his contract, and, if he will not read what he signs, he alone is responsible for his omission." The same rule was applied in Stewart v. Fleming, supra, but in doing so the court pointed out that there was no misrepresentation as to any matter of inducement to the making of the lease, which, from the relative position of the parties, the one could be presumed to contract upon the faith and trust reposed in the other party.
  
  However, in the first appeal of Stewart v. Fleming, 96 Ark. 371, 131 S.W. 955 (1910), the applicable law was stated in this manner :
  
          "`It is true that when the means of information are open to both parties alike, so that with ordinary prudence and vigilance each may be informed of the facts and rely upon his own judgment in regard to the thing to be performed or the subject-matter of the contract, if either fails to avail himself of his opportunities, he will not be heard to say he has been deceived. * * * But when the representation is made of a fact that has nothing to do with opinion, and is peculiarly within the knowledge of the person making it, the one receiving it has the absolute right to rely upon its truthfulness, though the means of ascertaining its falsity were fully open to him. It does not lie in the mouth of the declarant to say it was folly in the other party to believe him.'"
  .
• Thus it can be seen from the record that Jones was an experienced builder. The Nelsons who were building their first house had no knowledge of the papers necessary to be signed to get on with the construction. While it may have been folly for the Nelsons to sign without reading whatever Jones or his agent stuck in front of them, we cannot agree that as between them and Jones, Jones is in a position to argue that the Nelsons are estopped to say that they believed the representations made by Jones' agent. Of course appellant as assignee of Jones stands in no better position than Jones, unless it stands in the position of a bona fide purchaser for value without notice.
  
  POINT III. The question of whether a subsequent purchaser or mortgagee can be a purchaser for value and without notice as against a grantor continuing in possession after the execution of a conveyance has been before us a number of times. See Turman v. Bell, 54 Ark. 273, 15 S.W. 886 (1891); Morgan v. McCuin, 96 Ark. 512, 132 S.W. 459 (1910); American Bldg. & Loan Assn. v. Warren, 101 Ark. 163, 141 S.W. 765 (1911); and Temple v. Tobias, 186 Ark. 851, 56 S.W.2d 585 (1933).
  
  In American Bldg. & Loan Assn. v. Warren, supra, the applicable rule was stated:
  
           "Ordinarily, possession by a person under a contract of purchase, though unrecorded, is notice of his equitable rights and interests in the property. Actual possession is evidence of some title in the possessor, and puts the subsequent purchaser or mortgagee on notice as to the title which the occupant holds or claims in the property. Generally, actual, visible and exclusive possession is notice to the world of the title and interest of the possessor in the property, and it is incumbent upon the subsequent purchaser or mortgagee to make diligent inquiry to learn the nature of the interest and claim of such possessor; and if he does not do so, notice thereof will be imputed to him. (Citing cases.) "But it is urged that this rule does not obtain in cases where the grantor continues in possession of the property at the time of the grant and after the execution of the conveyance. It is urged that in such cases the law presumes that the grantor holds in subordination to the title which he has conveyed, and not in opposition to it; and that third persons dealing with property may presume that the possession of the grantor is only by sufferance of the grantee."
  .
• Here appellant had obtained an FHA commitment insuring a loan to be made by appellant to the Nelsons upon completion of the building. Appellant, as a prerequisite to making the construction loan, required not only the FHA commitment but also a copy of the builder's contract with the Nelsons. The contract showed that the Nelsons owned the lot upon which the house was to be built. Furthermore appellant relied upon the FHA inspections on the commitment to the Nelsons to advance the construction money to Jones. It would be illogical to say that appellant under the circumstances could presume that the possession of the Nelsons was at the sufferance of Jones.
  
  Since appellant cannot come within the exception to the rule that possession is notice to the world, it follows that appellant was not a purchaser for value without notice as against the Nelsons.
  
  For the reasons herein stated, the decree is affirmed.

Editor's Note:

Apparently, in Modern Am. Mortg. Corp. v. Nelson, in addition to the grantor's retained possession of the conveyed premises, the Arkansas Supreme Court saw fit to look to additional factors to support the position that the subsequent third-party encumbrancer (ie. the lender) was on notice sufficient to impose a duty upon it to inquire into any unrecorded legal or equitable rights of the occupant in possession (ie. the grantor - the Nelsons).

But see Turman v. Bell, 54 Ark. 273, 15 S.W. 886 (1891), below, in which the Arkansas high court concluded that a grantor's retained possession, standing alone, was sufficient to impose a duty upon a downstream, or third party purchaser, to make inquiry as to the grantor/occupant's unrecorded rights and equities.

Note that if a court is unwilling to find that a grantor's retained possession of conveyed property, standing alone, is enough to impose upon a "downstream" purchaser a duty to inquire into the rights of the occupant/party in possession, it may be helpful to examine the circumstances surrounding the conveyance and determine if other factors that courts typically consider badges or indicia of fraud (ie. any facts tending to throw suspicion on a questioned transaction) are present in the transaction to support an assertion that the "downstream" purchaser had a duty to make inquiry of the parties to the questionable conveyance (ie. the grantor in possession and his/her/its grantee) as to the nature of the transaction.

For some examples of those badges or indicia of fraud, see Harris v. Shaw, 224 Ark. 150, 272 S.W.2d 53 (Ark. 1954):

• insolvency or indebtedness of the grantor,
• inadequate or fictitious consideration,
• retention by the grantor of the property,
• the pendency or threat of litigation,
• secrecy or concealment, and
• the fact that the disputed transactions were conducted in a manner differing from the usual business practice.

See, generally, Fraudulent Conveyance/Badges of Fraud (note that there is no all-inclusive list of every badge of fraud as the circumstances surrounding each case must be examined individually for facts that tend to throw suspicion on a questioned transaction; at least one court has observed: "The possible indicia of fraud are so numerous that no court could pretend to anticipate or catalog them." Payne v. Gilmore, 382 P.2d 140 (Okl. 1963)).

Note that in the typical foreclosure rescue home equity ripoff, the scammer idenifies potential homeowner/victims by searching for notices recorded in the public record (ie. notice of pendency/lis pendens, notice of default, and the like) against property on which the foreclosure process has been initiated.

Inasmuch as these recorded notices reflect the existence of pending litigation or some other non-judicial legal process, and may well reflect upon the grantor's insolvency/financial distress at the time of a questionable conveyance, it may be wise to assert in the grantor/scam victim's defense that these recorded notices (in addition to the grantor's retained possession of the conveyed premises, as well as any other badge of fraud that may be apparent) are enough notice to "excite attention" and "put on guard" a downstream purchaser, "calling for inquiry" into the circumstances surrounding the conveyance of the premises by the grantor in possession.

While these badges or indicia of fraud are typically considered in cases where the grantor is suspected of defrauding creditors (ie. fraudulent conveyances), as opposed to cases where the grantor is being defrauded, it can be said that:

• the fundamental principles of notice implicated by these factors are nevertheless at the core of the case. (See, for example, Perimeter Development Corp. v. Haynes, 234 Ga. 437, 216 SE2d 581 (Ga. 1975), a case in which the Georgia Supreme Court speaks of a badge of fraud in the context of a grantor who retains possession of conveyed property ("While this case does not involve the question of defrauding creditors, yet the fundamental principles of notice implied from possession is at the core.")), and
  .
• "Whatever is notice enough to excite attention, put a party on guard, and call for inquiry is notice of everything to which the inquiry might lead, and whenever one has sufficient information to lead him to a fact he shall be deemed conversant with it." Walls v. Humphries, 2013 Ark. 286, 428 S.W.3d 517 (Ark. 2013), among other Arkansas cases, as well as cases elsewhere.

(End of Editor's Note.)

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Dean v. Freeze, 213 Ark. 264, 209 S.W.2d 876 (1948):

• The testimony is conflicting as to whether Mrs. Dean had actual knowledge of the existing lease when she purchased. The decree indicates the finding that she had this knowledge.
  
  However, she had knowledge of the fact that an occupant was in possession and it was her duty to inquire of the occupant by what right he was in possession and she is charged with the knowledge of the facts which the inquiry would have developed. Hughes Bros. v. Redus, 90 Ark. 149, 118 S. W. 414; Cupp v. Cady, 190 Ark. 700, 81 S. W. 2d 417. It was expressly held in the Hughes Bros. case, supra, to quote a headnote that "One's actual possession of land is notice to the world of the title under which he claims." Here Mrs. Dean bought the tract of land of which Freeze had actual possession, and she was not therefore an innocent purchaser.

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Story v. Grayson, 208 Ark. 1029, 185 S.W.2d 287 (1945) :

• In Ellis v. Nickle, 193 Ark. 657, 101 S. W. 2d 958, the late Judge Butler, speaking for the court, said: "Where possession is not exclusive, however, but in connection with the occupancy of another who sustains the relation of parent or who is the owner of the record title, the possession of others will be referable to the possession of the parent or the owner of the record title and is not such as would require the purchaser to make inquiry as to the nature of their possession or any hidden equities which might exist in their favor." Citing Rubel v. Parker, 107 Ark. 314, 155 S. W. 114, and cases there cited; Chaddick v. Morris, 137 Ark. 467, 208 S. W. 589; Scott v. Carnes, 183 Ark. 650, 37 S. W. 2d 876.

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Turman v. Bell, 54 Ark. 273, 15 S.W. 886 (1891):

(Editor's Note: The Arkansas Supreme Court conducted a careful analysis of the rulings of a number of sister states in connection with the application of the rule that possession is notice of the rights of the occupant in the case of a grantor who continued in possession of property at the time of the grant and after the execution of the conveyance, pursuant to some unrecorded right or equity.

After careful analysis of the precedent from the courts of its sister states, it reached the conclusion that a grantor's continued possession will give rise to notice --- but only that notice that imposes a duty upon the subsequent purchaser to make inquiry as to the rights of the occupant, the grantor. The court's analysis and conclusion, follows below.)

• Possession of grantor is notice of equities reserved when.
  
  Turman continued in the possession of the lands from the date of his deed to Gilbreath in August, 1884, until the execution of the mortgage to the bank in February, 1885--in fact, until the trial of this cause in the court below; and it is contended that this gave notice of all his rights. As a general rule the possession of land gives notice to all the world of the rights of the occupant, when there is no record evidence of his right of possession; but to this rule there are well-established exceptions. Whether the continuing possession of a grantor, after he has executed a deed of general warranty, comes within the rule or its exceptions, was suggested but not decided by this court in the case of Gill v. Hardin, 48 Ark. 409, 3 S.W. 519.
  
  We know of no other case in which the question has been alluded to by this court. Between the appellate courts of other States there is an irreconcilable conflict of ruling, and upon either side are to be found courts of the highest authority.
  
  Those that sustain the application of the rule say that, by the terms of the deed, the grantor has not the right of possession, and that his continuing possession gives notice that he has rights reserved not expressed in the deed; that, inasmuch as the records disclose no right of possession, it is but reasonable to conclude that the continuing possession rests upon some right not disclosed by the records, and that the reasonableness of such conclusion imposes upon persons about to deal with the land the duty to make inquiry. Illinois Central R. Co. v. McCullough, 59 Ill. 166; Daubenspeck v. Platt, 22 Cal. 330; New v. Wheaton, 24 Minn. 406; Hopkins v. Garrard, 46 Ky. 312, 7 B. Mon. 312; Webster v. Maddox, 6 Me. 256; Seymour v. McKinstry, 106 N.Y. 230, 12 N.E. 348; Wright v. Bates, 13 Vt. 341.
  
  On the other side it is said that the execution of a warranty deed without reservation is a most solemn declaration by the grantor that he has parted with all his rights in the property, and directly negatives the reservation of any right. That those who see the deed are warranted in relying upon such declaration as much as if it had been made to them orally upon an inquiry, and that if they acquire interests in faith of such reliance, the grantor in possession will be estopped to assert any right secretly reserved from the grant. That as the grantor has declared that he parted with his entire estate, strangers about to deal with the property would reasonably refer his continuous possession to the sufferance of the grantee, and would not reasonably think to refer it to a reserved right. Eylar v. Eylar, 60 Tex. 315; Van Keuren v. Central R. Co., 38 N.J.L. 165; Scott v. Gallagher, 14 S. & R. 333; Jaques v. Weeks, 7 Watts 261; Koon v. Tramel, 71 Iowa 132, 32 N.W. 243; Bloomer v. Henderson, 8 Mich. 395.
  
  If the possession has continued after the making of the deed but a short time, it might be reasonably referred to the sufferance of the grantee; but where it was long continued, it would much more strongly imply a right in the occupant, and the implication would be sufficient to cast upon strangers the duty of inquiry. Where the lands were used for agriculture and sold during a crop season, it would not be reasonable to presume that the grantee would permit the grantor to hold by sufferance after the time when lands were usually entered upon for the purpose of the next year's cultivation; and possession continued after that time could not be explained upon the presumption of sufferance.
  
  We think, with all deference to those who deny the application of the rule in such cases, that the controlling fact upon which their argument proceeds is assumed.
  
  Ordinarily the terms of a general warranty deed import a declaration that the grantor has reserved no rights in the subject of the grant, and by themselves may always bear such implication. But possession is ordinarily notice of a claim of right; and where a grantor continues in possession at the time of the grant and for a considerable time thereafter, should not the fact of possession be construed as an assertion of reserved rights, and as a limitation upon the provisions of the deed? True, the deed alone denies the reservation of equities, but it denies equally the right to continue in possession. If the grantor then holds open possession against the terms of his deed, is it not a reasonable implication that he has rights not expressed in it? If possession thus qualifies the terms of the deed, and it is open and continued, then the doctrine of estoppel cannot apply, for the grantor may as well expect persons to take notice of his possession as of his deed.
  
  We conclude that open and notorious possession of the lands by Turman from the date of his deed till the date of the bank's mortgage would give notice to the bank. But such notice only imposes a duty to make inquiry as to the rights of the occupant; and if he explain his possession in consonance with the right of his grantee to convey, he cannot attack the conveyances of the latter. If Turman held out Gilbreath as authorized to convey the land, either expressly or by a recognized course of dealing, then the bank would have been warranted in treating Turman's possession as in subordination to Gilbreath's right to convey, and would not be prejudiced by the notice.