Marks v. Cowles

61 Ala. 299 | Ala. | 1878

BRICKELL, C. J.

Waiving all consideration of the mode of procedure in the court of chancery, adopted by order of the court, and of the regularity of which, no complaint is made, we direct our attention exclusively to the questions, on which the rights of the parties finally depend. The principle is, whether a purchaser from a party to a pending appeal, of lands, the party had acquired under a sale made in execution of the decree, having notice actual or constructive of the appeal, obtains a title which will not be defeated by the reversal of the decree.

The general principle, that a judgment or decree reversed by a competent jurisdiction, ceases to exist as between the parties — in the strong language of some authorities, becomes mere waste paper — and that every right and interest springing out of, and dependent upon it, acquired by the party in whose favor it wes rendered, shares its fate and falls with it, has been frequently asserted, and underlies numerous decisions of this court. — Judson v. Eslava, Minor, 71; Duncan v. Ware, 5 St. & P. 119; Dupuy v. Roebuck, 7 Ala. 484; Burdine v. Roper, ib. 466; Stewart v. Conner, 9 Ala. 803; Simmons v. Price, 18 Ala. 405 (S. C); 21 Ala. 337; Barringer v, Burke, 21 Ala. 765; Williams v. Simmons, 22 Ala. 425; Paulking v. Watson, 26 Ala. 205; Ewing v. Peck, ib, 413. The reversal deprives the judgment or decree of all force or benefit in favor of tbe party obtaining it, and of all capacity to injure the party against whom it was rendered. For acts, which would have been trespasses, without the authority of the judgment, done while it was of force, and for which it then afforded justification, it may continue after reversal to protect the party. Thus far, he may be permitted to use the judgment defensively, but he can not use it offensively, nor so as to make it a source of profit to himself, or of injury to his adversary.

Restitution of all advantages the party obtaining the judgment may have acquired by its enforcement, is a consequence of the reversal. The restoration of the parties to the plight and condition in which they were, at and prior to the rendition of the erroneous judgment, it is the spirit and policy of the law to promote and compel. — 3 Bac. Ab. Error (m. 3), 389; Freeman on Judgments, § 482. “ On the reversal of the judgment,” said the Supreme Court of the United States, “ the law raises an obligation on the party to the record, who has received the benefit of the erroneous judgment, to make restitution to the other party for what he has lost. And the mode of proceeding to effect this object must be regulated according to circumstances.” — Bank of U. S. v. Bank of Washington, 6 Pet. 17. The party executes the judgment of his own election, at his own peril, and must be presumed to intend assuming the duty and liability of restitution, if the judgment proves erroneous and is subsequently reversed.

The rule seems to be established in all the States where the question has been the subject of judicial decision, with perhaps one or two exceptions, that a party to an erroneous judgment or decree, purchasing at a judicial sale made under it, acquires only a defeasible title, which falls with the subsequent reversal of the judgment or decree. — Freeman on Judgments, § 482; Freeman on Executions, § 347, (the authorities being collected and referred to in the notes); Galpin v. Page, 18 Wall. 374; Jackson v. Caldwell, 1 Cowen, 644; Wanebaugh v. Gates, 4 Seld. (8 N. Y.) 138. In the case of Reynolds v. Harris, 14 Cal. 679, discussing the question, Baldwin, J., said: “ It is hard to see why a man buying in another’s property sold under a judgment rendered according to the forms of law, but against the principles of law, should obtain any advantage from his own judgment thus improperly obtained. It is true that as the error was the error of the judge, he should not lose by it; but it is not so clear that he should make a profit by it. It is equally clear, that the defendant should not suffer by any such improper judgment, if it can be avoided in consistency with a due respect to the rights of others. It would appear to be exact equity to set aside acts which have been illegally done, if this can be without injury to third persons; so that all parties whom the proceedings affect stand in the same position after as before the act so done.”

When, however, a stranger to the judgment or decree, the execution of which has not been suspended in the mode prescribed by the statute, becomes a purchaser under it, either prior to, on pending an appeal from it, his title will not be impaired by a subsequent reversal, the court having jurisdiction to render the judgment or decree.— Wyman v. Campbell, 6 Port. 219; Perkins v. Winter, 7 Ala. 855; Evans v. Matthews, 8 Ala. 99; Hoard v. Hoard, (opinion of WALKER, C. J.), 41 Ala. 601; Freeman on Judgments, § 484; Freeman on Executions, § 345. The reasons for the distinction in favor of a stranger to the judgment or decree, and against a party to it, seem obvious. In Jackson v. Caldwell, supra, it was said : “ The same reasons of policy which secure to an innocent purchaser a valid title, do not exist when the judgment creditor becomes the purchaser; and it would be the height of injustice to allow the party, guilty of irregularity to take advantage of it.” The law permitting the execution of judgments or decrees which have not been superseded, pending an appeal, or before an appeal may have been taken to obtain a reversal, it would be inconsistent with its fixed policy to inspire confidence in judicial sales, to encourage biddings at them, and to secure innocent purchasers in all the advantages fairly derived from them, to suffer any error or irregularity which may have intervened to work injury to them. All purchasers must at their peril inquire into and ascertain the jurisdiction of the court. Scanning the record in search of errors, is not a duty, the law can with safety impose on those who are not parties to the record. If errors exist they are the errors of the court, which they had no agency in producing, and from which no benefit can accrue to them. They have a right to repose with confidence and security, on the judgment or decree, pronounced by a court of competent jurisdiction. If a contrary doctrine prevailed, there would be a want of confidence, uncertainty and insecurity in judicial sales. The sacrifice of property to the greed of speculation, or to the most adventurous bidder, Avould often be the result. And in a great measure, it would prevent such sales until the lapse of time barred an appeal, and invite a resort to appeals, as the means of obtaining the delay of a suspension of execution, without the security which the law exacts as a condition precedent to suspension. The protection of strangers in purchases at judicial sales, when protection will not be afforded the parties, or to those who may be cognizant of irregularities in the process under which they are made, is a very general doctrine in this State. An example is, a purchase of lands under an execution which has been satisfied, or in which the sheriff making the sale may have a latent interest. — Boren v. McGehee, 6 Port. 432. The party suing out the process, or the stranger cognizant of its irregularity and abuse, can not in good conscience claim any right or derive any benefit from it. If right or benefit was accorded them, it would be suffering them to take advantage of their own wrong, and extorting a benefit from him whom they had wronged. The stranger is cognizant of, intends no wrong, and is relying on the validity of process, which emanates from proper authority, and is fair and regular on its face. From the irregularity, he derives no benefit, and may suffer loss, if protection in the purchase was withheld from him.

It results from these principles that when a party becomes a purchaser of lands under an erroneous judgment or decree, rendered in his own favor, it is at the peril of having his title defeated by a subsequent reversal. The defeasible quality of his title is engrafted upon it by operation of law, of which ignorance can not be claimed by those who subsequently deal with him. If the words of his title papers expressed the defeasible quality, they would express no more than the law declares. The sound maxim of the common law is, nemo potest plus juris in alium transfierre quam ipse habet. When the owner of a determinable fee conveys in fee, the determinable quality of the estate follows the transfer. — 4 Kent, 10; Broom’s Legal Maxims, 303, top p. Practically, the principle which prevails in this State, is, that all conveyances pass the estate of the grantor, and no more— whatever are its incidents operating to defeat, or whatever contingencies may terminate it, attend it in the hands of the grantee. The legal estate may be subject to equities, which are not allowed to prevail against a bona fide purchaser — a purchaser for a valuable consideration, acquiring it without notice. The equity affecting the legal estate, may be older than the equity of the purchaser, but in no other respect, can it be of greater dignity, or more binding in conscience. Equity then following the maxim that when equities are equal, the law must prevail, will not disturb or displace the legal estate. But with this exception, and an exception of the protection afforded by statutes of registration, the general principle is, that derivative titles, can not rise above and superior to their original. They do not improve by mere transfer, whether the tranfer is the act of the law, or the act •of the parties.

We have found but few authorities in which the question presented, has been considered. The first of these is, Bickerstaff v. Dellinger, 1 Murph. 272, in which the principle is asserted broadly, that upon the reversal of a judgment, the plaintiff in error is not entitled to restitution from the defendant in error, or from his assignee, of lands sold under an execution issuing on the judgment. The case is distinguishable from the present, in which the decree ordered and was the authority for the sale of the particular lands. The court admit that at common law, if there had been an extent, the plaintiff in error would have been restored to the lands upon which the levy was made, though the judgment creditor had parted with them to a purchaser. The reason of which is, that the title of the creditor depended upon the validity of the judgment, and fails upon a reversal. All who purchase from him must take this risk, and there is no greater hardship in this than in any other ease of failure of title. lie may take care to be secured by the covenants in his deed; and, if he distrusts the ability of the grantor, he need not purchase. — Bryant v. Fairfield, 51 Maine, 154; Delano v. Wilde, 11 Gray, 17; Cummings v. Foyer, 10 Mass. 434; Little v. Bunce, 7 N. H. 485; Goodyere v. Ince, Cro. Jac. 246. In this last case ALL THE COURT held, there is a difference between a sale and delivery upon an elegit to the party himself, and a sale upon & fieri facias to a stranger. It seems to us rather a shadowy than a substantial difference, so far as this question is concerned, between the extent of a debtor’s lands by a writ of elegit, and a sale upon writs of fieri facias, now that lands are subjected to sale for the satisfaction of judgments, and such writs are framed so as to confer authority to levy and sell alike goods and chattels, and lands and tenements. When lands were extended by elegit, the judgment was of the essence of the title — an indispensable muniment, and so it remains to-day when there is a sale and conveyance upon a writ offieri facias. It must be shown to support an action by the purchaser for the recovery of the lands, or to maintain his possession, if that is assailed by the party to whose title he claims by operation of the judgment to have succeeded. It is upon a distinction between an extent, and a sale, the court proceeded, and it seems this distinction would, have preserved the title of the party as well as that of his alienee. As to the party, the case is in conflict with the current of authority. The same remarks are applicable to the case of McAusland v. Pundt, 1 Neb. 211, in which the same doctrine is held, the court declining to recognize any distinction between a purchase by a party, and a purchase by a stranger. In Gentian v. Wisely, 47 Ill. 433, the court protected the title of an innocent assignee of a party, purchasing at sheriff’s sale under a judgment at law, though recognizing the distinction between a purchase at a judicial sale, by a party, and a purchase by a stranger. In McCormick v. McClure, 6 Black. 466; Taylor v. Boyd, 3 Ohio, 353; Ludlow v. Kidd, ib. 541, the purchases were made by a stranger, from the party purchasing under decrees of sale, before citation in error was served, and his title was protected against a subsequent reversal. If the principle is admitted, and it is admitted in the courts of Illinois and Ohio, and seems to be in the courts of Indiana, that a party purchasing under his own judgment or decree, acquires but a defeasible title, while a stranger will acquire an indefeasible title, it is difficult to understand how there can be an innocent purchaser from the party, entitled to protection which would not be extended to the party himself. We mean a purchaser without notice, actual or constructive, of the defeasible quality of the title. There can be no principle touching so nearly men’s estates, more firmly established, than that a purchaser has notice of everything appearing clearly on the face of the deeds or instruments which constitute his title, forming an integral part of it. The law conclusively imputes the notice, and neither averment or proof to the contrary, can be heard. His ignorance of all that certainly appears on the face of the title papers, affecting the quality or duration of the estate, •can be superinduced only by his negligence, and of that negligence, it would be unwise and unjust to suffer him to take advantage.— Witter v. Dudley, 46 Ala. 664; Johnson v. Thweatt, 18 Ala. 741, (American note to Le Neve v. Le Neve, 4th ed.) 2 Lead. Eq. Cases, 189, top p. The judgment or decree, must be shown necessarily as an indispensable element of the title of the party, on the face of the title papers. And when it is shown, the defeasible quality of the title appears, of which the vendee is bound to take notice. Now, in this case, the deed to Singer, discloses on its face, as the source of the title of his vendors, the decree of the Chancery Court of Montgomery, in the case of Cowles v. Marks, under which said land was purchased by Laura S. Cowles, as her separate estate. His attention was drawn directly to the decree, and a very casual examination of the record would have disclosed to him the duration and quality of the estate Mrs. Cowles had acquired, and the fact that an appeal was then pending from the decree, which might result in a reversal annulling her title. If he did not make the inqury,— if he relied on the assertions of the vendors, on the opinions of others, as to the character of the title, he must abide the consequences. The right of a party aggrieved by an erroneous judgment, to a restoration to the condition in which he was, when it was rendered, — the prohibition against the use of such judgment by his adversary, so as to derive advantages .he can not restore, would be of little avail, if through the mechanism of an alienation to a party bound to know that the right and prohibition exists, it could be defeated.

The Supreme Court of California, the case of Reynolds v. Harris, supra, hold that the assignee of the party, stands in the position and succeeds only to the rights of the party. The same principle is asserted in Twogood v. Franklin, 27 Iowa, 239, under a statute declaring that the property acquired by a bona fide purchaser under a judgment subsequently reversed shall not be affected by such reversal. We can not perceive that a subsequent purchaser from the party, can in right or on any principle of policy, claim the protection which is extended to a stranger purchasing at a judicial sale. The prevention of the sacrifices of property at such sales, the security of titles acquired at them, does not require it. The sale is an accomplished fact, and the sacrifice, as it has been said, is realized or avoided. The partv would simply be authorized to transfer a better and higher title than he acquired. Collusive transfers, defeating right and justice, would be stimulated and encouraged. And the conservative principle, intended for the protection of parties aggrieved by , erroneous judgments or decrees, from sustaining irreparable loss, would be practically nullified. It is no answer to say, Ltbat he may recover of his adversary the proceeds of sale. The adversary may, as in this case, be unable to respond, and he loses his property without fault on his part. The stranger who purchases may say, you ought to have superseded the judgment, and thus prevented the sale, and saved me from parting with money, which may not be reclaimed. The adversary, can say only, by the use of an unjust judgment rendered at my instance against you, in invitum, I have obtained an advantage, which I will secure by a sale to another, and the other though he derives it from me, will obtain a better title than I had. We can not declare this to be the law of the land.

There is another point of view, in which the claim of Singer to protection must fail. The allegation on which his right to protection is rested — its very foundation and corner stone, is, that he is a bona fide purchaser, for a valuable consideration, without notice. His answer averring these facts is not responsive to the bill — the matter is rather in confession and avoidance of that which is averred by the complainant. It is scarcely necessary to say, the burden of proof was upon him to establish the allegation. — 2 Lead. Eq. Cases, 101. No proof in support of it was given; and though the cause was heard on bill and answer without testimony, the complainant having waived a verified answer, the answer is mere pleading, even so far as it is responsive. — Code of 1876, § 3786.

The result is the decree of the chancellor must be reversed, and the proper decree will be here rendered. It is therefore ordered, adjudged and decreed that the sale of the lands to the appellee, Laura S. Cowles, made by the register under the decree in this cause, which was reversed in this court, at the December term, 1875, be and the same is hereby vacated and annulled, and the said Laura S. Cowles, and her husband, Thomas W. Cowles, are required within ten days after service of notice of this decree, and a demand therefor, to surrender to the register of the Court of Chancery, the conveyance made to her on the aforesaid sale by said register, and the register will cancel the same, and file it with the papers in this cause.

It is further ordered, adjudged and decreed that the complainant be let into possession of the lands described in the original bill, and for this purpose, if the parties in possession refuse to surrender the same, the register will on the application of the complainant issue a writ of possession against such parties, directed to any sheriff of the State of Alabama, commanding him to place the complainant in possession.

It is further ordered, adjudged and decreed, that the next friend of the appellee, Laura ¡3. Cowles, pay the costs of the cross-bill to be taxed by the register, and that the appellee, Thomas TV. Cowles, pay the costs of the original bill, and the appellee, J. E. Singer, will pay the costs of the supplemental bill, and the costs of this appeal.