36 Minn. 494 | Minn. | 1887
Under the statutes of this state, the holder of a junior judgment lien acquires no preference over a senior judgment lien upon the same real estate, by virtue of prior proceedings to execute his judgment; and, as to all persons claiming under a judgment debtor subsequent to the lien of the senior judgment creditor, the rights of the latter are superior, and cannot be divested by any proceedings of a junior lienholder, claiming under the same debtor, to which the senior creditor is not a party. The whole policy of the statutes, in respect to the preferences of prior judgment liens against real estate, would be subverted, if a junior judgment creditor
The judgment creditor may rest exclusively upon his rights and remedies at law, without invoking the aid of a court of equity. Tupper v. Thompson, 26 Minn. 385, (4 N. W. Rep. 621;) Campbell v. Jones, 25 Minn. 155; Kumler v. Ferguson, 22 Minn. 117. The procedure in this class of cases is very clearly and satisfactorily discussed by Comstock, J., in Chautauqua County Bank v. Risley, 19 N. Y. 369, 375, who says, after considering the equitable remedy as between creditors: “But no creditor having a statutory lien by judgment can be compelled to take the equitable remedy. He may, if he prefer, stand upon his lien, and the means which the law has given him of enforcing it. If his debtor has made a prior fraudulent conveyance, he may nevertheless sell upon his execution, and the purchaser will have the right, and will take the risk, of impeaching such conveyance. If his judgment has been recovered before other creditors have instituted proceedings in equity, nothing in the course or in the result of those proceedings can affect his rights. A Us pendens filed with the bill or actual notice of the suit may, perhaps, subject all judgments afterwards recovered to any decree which shall be made, and render them subordinate to a receiver’s sale.” S. C. 75 Am. Dec. 347, 360, and notes; and see White’s Bank v. Farthing, 101 N. Y. 344, (4 N. E. Rep. 734;) O'Brien v. Browning, 49 How. Pr. 109; Morss v. Purvis, 5 Thomp. & C. (N. Y. S. C.) 140, 141, note; Shand v. Hanley, 71 N. Y. 319, 324; Bergen v. Snedeker, 8 Abb. N. Cas. 50, 58; Union Nat. Bank v. Warner, 12 Hun, 306; Bergen v. Carman, 79 N. Y. 146, 153.
A judgment creditor seeking relief against prior fraudulent conveyances of land has the choice of three remedies. He may sell the debtor’s land upon execution issued on his judgment, and leave the
In the first two classes, the creditor enforces his judgment at law, and the sale upon execution must necessarily be subject to prior statutory liens. The purchaser in such cases succeeds to such title only as the debtor had, treating the debtor’s fraudulent transfer as void. Freeman on Executions, § 447. As to cases falling within the second class, the object of the equitable suit is to make the legal remedy more effective. In such case, no trust is created in respect to the property, but the creditor falls back upon his legal remedy, and, instead of bringing his equitable suit before the sale, he may, if necessary, maintain it after sale in the form of an action to remove a cloud from his title. Erickson v. Quinn, supra. And where assets are applied by the court in creditors’ suits, as respects real estate, the rule is, as in other cases, to prefer prior liens in the distribution. “When the law gives priority, equity will not destroy it; and especially where legal assets are created by statute, (as the judgment lien was here,) they remain so, though the creditors be obliged to go into equity for assistance. The legal priority will be protected and preserved in chancery.” Kent, C. J., Codwise v. Gelston, 10 John. 507, 522; Scouton v. Benders, 3 How. Pr. 185; Wiswall v. Sampson, 14 How. 52, 67.
In some states, by statute, while all judgments are liens upon the realty of the debtor, yet the creditor who first takes proceedings to execute his judgment thereby secures the priority, (Dunham v. Cox, 10 N. J. Eq. 437, 466; Nixon, N. J. Dig. 724;) and the same rule prevails in Alabama and several other, states.
In Lyon v. Robbins, 46 Ill. 276, the court treat the interest of the
The defendant acquired title under an execution sale of certain real estate, which she afterwards conveyed to the plaintiffs by deed of warranty, with covenants against incumbrances. Subsequently the same land was sold upon execution issued upon a judgment rendered and docketed against the same judgment debtor, and prior to the one under which the defendant acquired title, and the plaintiffs allege that they were obliged, in order to preserve the title to the premises, to redeem the same by paying the amount for which they were so sold. The judgments under which the defendant derived title were rendered in and subsequent to the month of August, 1875, and the judgments upon which the subsequent sale was made were recovered in the years 1874 and 3 875, prior to the first-mentioned date. The first execution sale took place in August, 3877, and the second on the 22d day of December, 1883, and the redemption referred to was made December 22, 1884. A prior conveyance of the premises, fraudulent as to creditors, was made by the debtor in the year 1873. Prior to the first execution sale, the judgment creditors first mentioned brought an action in equity to set aside such conveyance as an obstruction to the enforcement of their liens, and a judgment was duly rendered therein, declaring such conveyance fraudulent and void, and setting it aside as to such judgment creditors, and thereupon the execution sale upon their judgments was had as above stated.
It necessarily results, from the propositions previously laid down in this opinion, that, if the prior judgments were valid liens, the rights of purchasers at the execution sale thereon were not and could not be subordinated to the rights of purchasers under the latter judgments. Neither party claims under the fraudulent grantee, but both claim in opposition thereto. As to every one except bona fide pur
The safer practice in equity, however, in that class of cases, is for all the judgment creditors to unite in the action, or it may be brought in behalf of plaintiffs and all other creditors, or such as consent to come in and be bound by the decree. Hammond v. Hudson, etc., Machine Co., 20 Barb. 378; 5 Wait, Pr. 644; 2 Van Sant. Eq. Pr. 134; Scouton v. Benders, supra.
In Wiswall v. Sampson, supra, it was held that, where a court of equity laid hold of the property through the appointment of a receiver, a trust was thereby created for the benefit of the creditors, to be paid in the order of their priority, and that all lienholders were obliged to come into that court, and seek their remedy there; yet that it was the duty of the court, in a suit by a junior judgment creditor, to take care that the prior liens and incumbrances should be provided for, and to adopt proper measures, by reference to a master or otherwise, to ascertain them. In that case the record of the prior liens, as well as that of the plaintiff in the suit, had been anticipated by a fraudulent conveyance, and the court held that a sale upon execution by the prior judgment creditors, pending the equity suit,
Doubtless some confusion in the authorities has arisen from a failure to observe the distinction between creditors’ bills proper, filed to reach equitable assets, upon which no liens exist till suit brought, and actions to set aside fraudulent conveyances of real estate, where there may be valid statutory liens, unaffected by a prior void conveyance. As before intimated, the purchaser at the first execution sale acquired only the rights of the debtor at the time of the docketing of the judgments, (assuming the debtor’s conveyance to be fraudulent,) and caveat emptor would apply to such purchaser and his grantees, as respects the rights of prior lienholders whose judgments have been duly rendered and docketed against the same debtor. Frost v. Yonkers Savings Bank, 70 N. Y. 553, 560; Benedict v. Jones, 18 Hun, 527; Stafford v. Williams, 12 Barb. 240; Freeman on Executions, § 447; 6 Wait, Act. & Def. 746, and cases; Barron v. Mullin, 21 Minn. 374; Johnson v. Robinson, 20 Minn. 153, (189, 193;) Butman v. James, 34 Minn. 547, (27 N. W. Rep. 66.)
The case is not within the registration laws. The sale upon a junior judgment is necessarily subject to all such prior judgments as-are in fact liens at law upon the land sold, and the purchaser labors under the disadvantage of uncertainty as to the existence, nature, and amount of such liens, unless particularly ascertained before the sale. The fact that a conveyance under which the title appears to be in a third person is fraudulent, and of no effect, may be established by a suit in equity, or it may be proved in an action at law by any competent evidence. Campbell v. Jones and Tupper v. Thompson, supra.
If, therefore, the purchaser under the second sale in question had brought ejectment against this defendant, being in possession claiming under the first sale, he would have been entitled to recover if he belongs to the class of creditors against whom the transfer was void, which might have been shown by evidence similar to that offered in
We suppose the evidence should be. substantially the same as was required under the chancery practice, upon an examination pro interesse suo, where a judgment creditor applies to be let in, and to share in the distribution of the assets of the debtor. Wiswall v. Sampson, 14 How. 52, 65, 66, and cases cited; Bergen v. Carman, 79 N. Y. 146, 152.
We see no objection to the evidence offered on behalf of the plaintiffs, and think its rejection was error.
A judgment duly recorded is a lien, under our statute, on real estate for ten years, and may be enforced at any time within that period, subject to the rights of bona fide purchasers claiming under the debt- or’s grantee, of which the creditor would take the risk in case of delay.' In this case, if any priority was acquired under the junior judgments, it was because they were first executed, and we are unable to see how the defendant was prejudiced by the subsequent de
Order reversed.
