Katz v. Obenchain

85 P. 617 | Or. | 1906

Mr. Chief Justice Bean

delivered the opinion.

The important questions on this appeal are (1) whether the attachment lien in the action of Meyer v. Brooks was waived or lost by the failure to make a proper entry of the judgment in the judgment lien docket; and, if not, (2) whether the plaintiff’s rights under his mortgage were, as against the subsequent lien of Meyer’s attachment, merged in the legal title acquired by him through E. C. Brooks.

1. The statute provides that the sheriff’s certificate of the attachment of real property shall be by such officer delivered to the county clerk of the county in which the attached property is situate (B. & C. Comp. § 301), and that such clerk shall immediately file the same in his office and record it in a book to be kept for that purpose, and thereupon “the lien in favor of the plaintiff shall immediately attach to such real property” described therein (B. & C. Comp. § 303), and that if judgment be recovered by the plaintiff, the court shall order and adjudge the attached property to be sold to satisfy plaintiff’s demand: B. & C. Comp. § 309. The proceeding by attachment is, therefore, in the nature of a proceeding in rem. It is against the particular property. The attaching creditor thereby acquires a specific lien upon the attached property which ripens into a judgment against the res when the order of sale is made. Such a proceeding is in effect a finding that the property attached is an indebted thing, and a virtual condemnation of it to pay the owner’s debt. The statute does not provide the length of time an attachment lien shall continue after the rendition of the judgment, and it must therefore necessarily continue until the debt is paid, or sale is had under execution issued on the judgment, or until the judgment is satisfied, or the attachment discharged or vacated in some manner provided by law. The validity or continuation of an attachment lien is not made dependent upon the entry of the judgment in the judgment lien docket.

2. A levy and sale under an execution issued on a judgment may be made without the judgment being docketed at all.

3. A judgment itself, however, is no lien upon real property until docketed, but the lien acquired by an attachment remains and may be enforced, and the sheriff’s certificate filed with the county clerk and recorded by him informs parties dealing with the debtor of the attaching creditor’s claim upon the property as effectually as does the docketing of a judgment in the lien docket. It is optional with the creditor whether a judgment is docketed at all. If it is not properly entered in the judgment lien docket the creditor has no general lien on the real property of the defendant and the rights of bona fide purchasers and lien creditors subsequent to the judgment and prior to the seizure of property under execution issued thereon are in no way affected by the judgment. But the failure to docket the judgment does not waive or suspend the lien acquired by the previous attachment and order of sale.

4. In the case under consideration, there could have been no benefit to Meyer in entering the judgment in the judgment lien docket. The action brought by him was against a nonresident. There was, therefore, no personal judgment against the defendants, and it would not have become a general lien if it had been docketed. The only remedy of Meyer was against the specific property. His lien thereon was acquired by the attachment, and, in the absence of a statute to the contrary, continued during the period an execution could issue on the judgment: Bank of California v. Cowan (C. C.), 61 Fed. 871; Emery v. Yount, 7 Colo. 107 (1 Pac. 686); Floyd v. Sellers, 7 Colo. App. 498 (44 Pac. 373); s. c., affirmed, 24 Colo. 484 (52 Pac. 674).

5. But, it is argued that Meyer waived and abandoned his specific lien upon the property in controversy because his attorney directed the sheriff not to sell it under a previous execution. The plaintiff had no knowledge of this fact at the time he purchased the property and therefore could not invoke the doctrine of estoppel as against Meyer. Besides, there is no proof that the attorney had authority to waive the lien, or that he intended to do so. The evidence is that he directed the property not to be sold at that time because in his opinion it was not then worth as much as the amount of plaintiff’s mortgage, and the costs and expenses of the sale could not have been realized out of it. We think, therefore, that Meyer’s attachment and judgment are still a valid and subsisting lien upon the property and may be enforced by execution.

6. The remaining question is whether such attachment and judgment take precedence over the prior mortgage of plaintiff or rather whether such mortgage was merged in the legal title acquired by him from E. C. Brooks, and was thereby satisfied. Mergers are not favored in equity. When a lesser and a higher estate meet and coincide in the same person they will be kept separate when equity and justice require it, unless there is an expressed intention to the contrary. “It is only in those eases,” says Mr. Justice Lord, in Watson v. Dundee Mtg. & T. I. Co., 12 Or. 474, 483 (8 Pac. 548, 553), “where it is perfectly indifferent to the party in whom the interests had united whether the charge or term should or should not subsist, that in equity the term is merged. But if the owner has an interest in keeping them distinct, or there is an intervening right, there will be no merger. * * In the absence then of an express intention to the contrary, the intention to keep the two estates separate will be implied and presumed, when it is for the interest of the party that they should be kept separate. It will not do, then, as was said by Elliott, J., to assume, as a matter of course, that there was a merger, for there are many cases in which, in order to prevent injustice, courts will not allow merger to take place, although all the essential elements of a technical merger combine in .the particular case.” It is consequently said by Mr. Pomeroy that “where a mortgagee takes a conveyance of the land from the mortgagor or from the grantee of the mortgagor, if the transaction is fair, the presumption of an intention to keep the security alive is very strong. It is generally for the interests of the party in this position that the mortgage should not merge, but should be preserved to retain a priority over other encumbrances. As the mortgagee acquiring the land is not the debtor party bound to pay off either the mortgage or the other encumbrances on the land, there is nothing to prevent equity from carrying out' his presumed intent, by decreeing against a merger”: 2 Pomeroy, Equity (3 ed.), §793.

Now, the mortgage of the plaintiff was prior in time and right to the lien of Meyer’s attachment, and it was therefore manifestly to the interest of the plaintiff that it should not be extinguished as against any subsequent lien by the conveyance to him of the legal title to the mortgaged property, and as there was no express intention of a merger, a court of equity will, in order to prevent an injury to him, keep the two estates separate and distinct: Watson v. Dundee Mtg. & T. I. Co., 12 Or. 474 (8 Pac. 548), and Floyd v. Sellers, 7 Colo. App. 498 (44 Pac. 373); s. c. 24 Colo. 424 (52 Pac. 674).

7. But, it is said the mortgage is now barred by the statute of limitation and cannot. be foreclosed. This, however, is not strictly a proceeding to foreclose a mortgage, but rather a suit by the owner in fee of real property, who is in possession thereof, against one who is claiming or asserting some adverse claim or lien thereon, to have such right or claim determined, and is therefore not barred by the statute of limitation: Meier v. Kelly, 22 Or. 136 (29 Pac. 265).

8. Again, it is said that the plaintiff does not by the prayer of his complaint ask to have his mortgage restored as against the Meyer judgment. The complaint sets np the facts out of which the equities in favor of the plaintiff arise and contains a general prayer for relief. This is sufficient to enable the court to award such a decree as the law and the facts afford: Rutenic v. Hamaker, 40 Or. 444 (67 Pac. 196).

The decree of the court below will, therefore, be reversed, and one entered here directing the sale of the property in controversy and the distribution of the proceeds among the several parties interested therein according to their rights as set out in this opinion. Reversed.