28 P.2d 1013 | Colo. | 1933
ON December 29, 1930, Grant McFerson, as state bank commissioner, was in possession of the property and assets of the Farmers State Bank of Brighton, for the purpose of liquidation on behalf of the creditors, and Wellington J. Campbell was the owner of 13 shares of the bank stock. At that time the record title to three parcels of land, referred to as parcels 1, 2 and 3, stood in Campbell, but the purchase price had been paid by Calvin Fleming, who caused title to vest in Campbell for convenience only. It is stipulated that a resulting trust *3 arose in favor of Fleming. There was nothing of record showing that he had any interest in the property. Acting pursuant to section 2696, Compiled Laws, as amended by Session Laws of 1923, c. 67, sec. 1, p. 185, McFerson, on the date given above, without any knowledge or notice of Fleming's secret equity, filed in the office of the clerk and recorder of Denver a statement claiming a lien on account of Campbell's liability as stockholder. Thereafter Campbell conveyed the property to Fleming.
On May 28, 1931, Fleming sued McFerson to remove from the former's title to the property the cloud created by the filing of that statement. McFerson filed an answer, and in a counterclaim sought a foreclosure of the lien. By agreement, a bond was substituted for the property, which was thereupon released from the lien. It was stipulated that in case the lien should finally be adjudged to be valid and enforceable against the property, or any part thereof, judgment for the amount thereof should be rendered against the principal, Fleming, and the surety, Union Indemnity Company of New Orleans.
The court found the issues in favor of Fleming as to parcel 3, and decreed that the cloud upon his title there to be removed. As to parcels 1 and 2, the court found the issues in favor of McFerson, and rendered judgment for $2,808 against Fleming and the Union Company, who are here seeking a reversal of the judgment against them.
[1, 2] 1. It is said that as the act of 1923, supra, gives the lien upon real estate "of" the stockholder, the property in question was not subject to the lien because it did not belong to, was not the property of, the stockholder, Campbell, for he held merely the naked legal title in trust for Fleming, who alone was the beneficial owner.
A contention somewhat similar to that has been made in cases of execution and judgment liens. Section 5898, Compiled Laws, provides that "the judgment shall become a lien upon all the real property of such judgment debtor," and that "all and singular the * * * real *4
estate of every person against whom any judgment shall be obtained in any court of record" may be sold on execution. Where a judgment debtor having the record title to real property conveys it to another he parts with his title and thereafter does not have even a naked legal title; and yet if before the recording of the deed the judgment creditor, without notice of the conveyance, files a transcript of the judgment, the lien of his judgment is superior to the rights of the grantee in the deed. InWedman v. Carpenter,
2. As we have seen, when he filed the statement, thereby acquiring a lien, McFerson had no knowledge or notice of Fleming's secret equity. It is said, however, that at the time of the filing of the lien statement Fleming was in possession of parcel 2, and that his possession was notice of his interest therein. But at the time of the filing of the lien statement, parcel 2 was vacant and unoccupied unless, as contended by Fleming, he caused material to be delivered there thirteen days before such filing, preparatory to the erection of a house. There is some uncertainty whether or not that contention is supported by the stipulation. Be that as it may, no such contention is made as to parcel 1. As the lien was adjudged to be valid and enforceable as against that parcel, if we sustained the present contention as to parcel 2, it would not affect the result, for the stipulation provides that judgment should be rendered against the principal and the surety on the bond if a lien should finally be adjudged valid and enforceable against any part of the property.
[3] 3. Another point urged by counsel for Fleming is that the act of 1923, supra, as we construe it, deprives their client of his property without the due process of law guaranteed by the federal and state Constitutions, and for that reason is void. The specific objections are that the act attempts to create a lien upon the mere filing of the lien statement without any preliminary notice or *6 hearing, and that the act provides no steps for foreclosure of the lien or for any judicial determination of the rights of the parties.
We cannot sustain the contention. Of course, no judgment foreclosing the lien could be rendered without notice to the owner and affording him an opportunity to be heard; but the due process clause does not require notice or hearing prior to the attaching of the lien. Section 115, Code of Civil Procedure, provides for the levy of an attachment upon the real estate of the debtor without any preliminary notice or hearing. Chapter 5, Id., relating to replevin, provides for the seizure of personal property before judgment and without any preliminary hearing. A principal contractor may file a notice of lien upon the property of the owner without any preliminary notice or hearing. C. L. § 6450. An attorney's lien attaches without any preliminary hearing. C. L. §§ 6010, 6011. It never has been supposed that those provisions contravene the due process clause of the Constitution. In 8 Rawle C. L. pp. 451 and 452, the law is stated in these words: "Although * * * it is the general rule that everyone is entitled to a hearing as an essential part of due process of law, a statute is not unconstitutional merely because it authorizes a ministerial act by which possession of property is taken before the right to it has been judicially determined. This is done in cases of attachment and replevin, without objection and is a matter in the discretion of the legislative power in creating remedies. A party must not be deprived of his property without a judicial hearing, but the stage of proceedings at which that hearing shall take place, and the manner in which the cause of a party shall be brought before the judicial tribunal, provided it is not an unreasonably inconvenient and embarrassing one, are with the legislative power. Due process of law is afforded litigants if they have an opportunity to be heard at any time before final judgment is entered, but a hearing, or an opportunity to be heard, *7
prior to judgment, is absolutely essential." In Wilsonv. Standefer,
[4] The fact that the act does not expressly provide for foreclosure or other judicial proceeding does not render it void. The district court has jurisdiction in all suits to foreclose liens, including the lien involved in this proceeding. The act does not attempt to give the bank commissioner power to enforce the lien by selling the property, or make his act conclusive of the ownership of the stock or of the real estate; nor does it attempt to forbid resort to a court, which alone has jurisdiction to determine such matters after notice to the stockholder and after he has been afforded an opportunity to be heard. Our Public Utilities Act (C. L. § 2961) purports to give to the person aggrieved by a decision of the public utilities commission the right to apply directly to this court for a writ of review, and provides that no other court shall have jurisdiction to review any order or decision of the commission. In Clark v. Public Utilities Commission,
We conclude that the judgment of the district court is right.
It is affirmed.
MR. JUSTICE HILLIARD and MR. JUSTICE BOUCK dissent. *10