Burke v. Johnson

37 Kan. 337 | Kan. | 1887

Opinion by

Clogston, C.:

Legal and equitable title; lien for purchase money.

But one question is presented : that is, are the conclusions of law sustained by the findings of fact? This question must be determined by an examination of the title to the property at the time the attachment was levied; and if Armstrong at that time had a leviable interest in the property, then the judgment should be reversed. The facts as found by the court show that the legal title to the property remained in Armstrong, subject to the interest and rights of Johnson under his contract Qf pechase. This contract transferred to Johnson the equitable right to the property, subject alone to Armstrong’s lien for the remaining unpaid purchase-money. This lien amounted to a security only, and when this purchase-money was paid he could be compelled to convey the legal title to the equitable owner of the property. (Jones v. Lapham, 15 Kas. 544; Stevens v. Chadwick, 10 id. 407; Orrick v. Durham, 79 Mo. 177; Woodward v. Dean, 46 Iowa, 499.) This doctrine has been fully settled by this court. In Holden v. Garrett, 23 Kas. 98, this question is discussed. In that case the question was, is a judgment a lien on property, where the legal title is held by the judgment debtor, and the equitable title or interest is held by the mortgagee, so as to defeat the mortgagee’s interest in the property ? It was held in that case that the judgment was not a lieu upon the bare, naked legal title, the equitable title being held by another. The statute provides that judgments shall be liens upon the real estate of a debtor within the county. It was said:

“ This evidently contemplates actual and not apparent ownership. The judgment is a lien upon that which is his, and not that which simply appeared to be his. How often the legal title is placed in one party when the equitable title, the real ownership, is in others. Now if the judgment is a lien upon all that appears, it will cut off all the undisclosed equitable rights and interests. To extend the lien to that which is not, but appeal’s of record to be the defendant’s, is to do violence to the language. ‘Real estate of the debtor,’ plainly means that which is in fact of or belonging to the debtor.” (See English v. Law, 27 Kas. 242; Ransom v. Sargent, 22 id. 516; Harrison v. Andrews, 18 id. 541; Forwarding Co. v. Mahaffey, 36 id. 152.)

In this case the attachment binds the property of the debtor from and after the levy. The writ directs the officer to attach “the lands, tenements, goods and chattels, stock, rights and credits, moneys and effects of defendant in his county, not exempt by law; ” and when so attached a lien is created. Now is this lien, under this order of attachment, greater than that created by a judgment? Surely not. A judgment is a lien upon all the property of the debtor subject'to the payment of his debts, and so is the attachment a lien upon the property of the debtor for the same purpose.

Plaintiff insists, however, that at the time of the levy of the attachment, he had no notice, actual or constructive, of the purchase by Johnson of the property. We think no notice was necessary. The plaintiff in error lost nothing by want of such notice. He had parted with nothing; was not a purchaser in good faith, relying upon the constructive notice that persons without actual notice may rely upon; he was trying to enforce a claim, and, with notice or without, it left him in the same condition. If he had been a purchaser in good faith, relying upon a legal title to the property, he would be protected.

Plaintiff again insists that his attachment at least bound the property and the defendant in error to the extent of the unpaid residue of the purchase-money, and that because Johnson, the defendant, paid the remaining purchase-money after the levy of the attachment, and after he had constructive knowledge of such levy, the plaintiff is entitled to a lien and judgment against the property to the extent of that unpaid purchase-money at the time of the levy. The court found that at the time of the payment of this purchase-money the defendant had no actual knowledge of the levy of the attachment ; that he paid the money in good faith upon his contract, and accepted the title. Under such circumstances the attachment could not bind the purchase-money; the land was not subject to attachment as the property of Armstrong, and consequently did not impart such constructive notice as would bind Johnson in the payment of this money. (French v. Debow, 38 Mich. 708.) If he had actual notice of the levy of the attachment upon the property, and of Armstrong’s fraud, and with this knowledge paid the purchase-money, he would not be protected. (See Bush, Sheriff, v. Collins, 35 Kas. 535; McDonald v. Gaunt, 30 id. 693; Gollober v. Martin, Sheriff, 33 id. 252.)

Attachment, no lien on property.

Counsel ask what remedy they are to pursue in case the attachment will not bind the property or the purchase-money, and the money cannot be reached by garnishment ? In answer we can only say, that all we have to deal with is the facts here presented. What the remedy would be under a given statement of facts, will not be determined in advance. All we do say, and all we are called upon to say in this matter, is, that the attachment created no lien upon the property, and could not operate to restrain and hold the unpaid purchase-money in the hands of the defendant. Good faith on the part of Johnson in the completion of the contract is fully shown by the findings of the court. Counsel, however, insist that the conclusions drawn from these findings are uot correct; that the fact of the hurried manner of the purchase, the manner of its sale in bulk, including the farm and personal property, the haste of the transaction, and the consideration paid, were sufficient to place Johnson upon his guard and give notice of Armstrong’s fraudulent intent. If these things are badges of fraud and of such a character as to set aside this transaction, we think it would unsettle the real-estate transactions, or many of them, in Kansas. This property was regularly left in the hands of a real-estate agent for sale; had remained in his hands for some days; he had offered it for sale; it had become known in the neighborhood; Johnson’s attention was called to it by a neighbor; he went and found the agent and owner, visited the land, examined the records to see that the title was good, made an offer for the premises, including the stock and farming implements thereon, and this offer was accepted and the contract drawn on the same day; part of the consideration was paid, and the transaction completed on the next day. We see no evidence of fraud in this. Apparent good faith characterized every transaction connected with it, so far as the defendant was concerned. The evidence fully shows this, and further, that the property had been purchased by Armstrong from the plaintiff in bulk, and purchased as an entire transaction, and by Armstrong sold in the same way. And now, because of the fraudulent transaction on the part of Armstrong in the purchase of this property from the plaintiff, and perhaps the sale of it for that reason to Johnson, we are asked to set aside the sale, notwithstanding the fact that good faith is shown on the part of the defendant, and that there are no circumstances connected with the transaction calculated to excite the suspicions of a prudent' man, or warn him of the fraudulent intent connected therewith.

It is recommended that the judgment of the court below be affirmed.

By the Court: It is so ordered.

All the Justices concurring.