M'Cutchen v. Miller

31 Miss. 65 | Miss. | 1856

Lead Opinion

Fisher, J.,

delivered the opinion of the court.

The appellee filed this bill in the Superior Court of Chancery, for the purpose of enjoining the appellants from enforcing a decree which they had obtained against Thomas M. Green and others, on the 18th day of January, 1850, in the said court, so far as the said decree embraced certain slaves in the possession of, and claimed by the appellee. The chancellor, upon final hearing, pronounced a decree for the complainant, from which this appeal has been prosecuted.

The counsel of the respective parties appear to agree as to the main facts, and we will, therefore, in stating the case, be governed by the abstract of appellants’ counsel, and; then determine upon such statement, whether they are entitled to a reversal of the decree of the chancellor.

“In 1839, Mr. Robinson obtained judgment against T. M. Green, for $14,844, which was never enrolled in Warren county, where Green resided, and where the property in controversy was, under the Act of 1844. Other persons had, previous to 1839, obtained *81judgments in Warren Circuit Court, which were duly enrolled, under the Enrolment Act. Executions having issued upon all of said judgments, were returned nulla bona. Robinson, on the 6th of October, 1848, filed his bill in the Superior Court of Chancery, to which the other judgment creditors became parties, alleging that William Laughlin had become the fraudulent purchaser of Green’s large estate, and seeking to set aside the sheriff’s bill of sale to Laughlin, for the negroes in controversy, and to subject the property to the aforesaid judgments. On the 10th of January, 1850, an interlocutory decree was made, appointing a receiver; and the defendants to the bill, as well as all persons claiming under them by purchase since the bill was filed, were required to deliver the slaves to the said receiver. On the 18th of January, 1850, a final decree was made, directing the commissioner to take possession of, and sell all the property so fraudulently conveyed, and decreeing that the sheriff’s bill of sale to Laughlin was void as to said creditors, and perpetually enjoining him from setting up or asserting any title or claim to said slaves, under said bill of sale.

“Pending this suit between Robinson and Green and others, Burke, Watt & Co., of Louisiana, obtained a judgment against Mrs. Green, wife of the defendant, Thomas M. Green, and purchased the slaves now in controversy in payment of said judgment; the terms of the trade were agreed on at Yicksburg, between the agent of Burke, Watt & Co. and Thomas M. Green and wife, but the title being in Laughlin, who then resided in New Orleans, the slaves were sent thither, and he conveyed them to Burke, Watt & Co., who soon thereafter sold them to the appellee, Miller, for a full and fair consideration. Miller was, at the time of his purchase at the date of the decree, and at the filing of this bill, a resident and citizen of Washington county, in this State. It is alleged, and may be treated as a fact established, that neither Burke, Watt & Co., nor Miller, their vendee, had any actual notice of the pendency of the suit of Robinson against Green and others, in the Superior Court of Chancery. The slaves, after Miller’s purchase, having been brought back by him to this State, and placed upon his plantation in Washington county, were seized by the commissioner, under the decree in the case of Robinson v. *82Green and others; and the object of the present litigation is, to perpetually enjoin the parties claiming the benefit of that decree, from enforcing it as to the slaves in controversy in the present suit.

Upon this state of case, the counsel for the appellants has presented the following questions for our consideration:

1. That the equities of the parties, stating the case in the most favorable light for the appellee, are equal; and the appellants having both the legal advantage and the prior equity, must succeed.

2. That it is wholly immaterial whether the appellee, or the persons from whom he purchased had, in fact, actual notice of the pendency of the suit or not; the suit itself was notice, or at least all the notice the law required; and the purchasers are as much bound by the decree as if they had been parties to the controversy.

The general correctness of each of these positions may, to the fullest extent, be admitted. The question is not so much as to what the rule is, as to the state of facts necessary to bring the case within its operation. If Miller, by his purchase from Burke, Watt & Co., acquired but an equity, and if the appellants have an equal though prior equity, or have a legal right, unaffected by any superior equity of the appellee, his bill must of course be dismissed. We may, therefore, with these general remarks, pass from the first to the consideration of the second proposition argued by counsel; as the complainant must recover upon the strength of his title, or, more properly speaking, must show a title superior to the rights of the appellants under the decree, to satisfy which, they claim the right to subject the slaves in controversy.

It may at least admit of doubt, whether Burke, Watt & Co. .purchased, through their agent, the slaves at Vicksburg, in the county of Warren, or whether the purchase was consummated at New Orleans. But let it be conceded that the purchase was completed at Vicksburg; the question is, whether the doctrine of Us pendens can be made to apply to the purchasers, even under that state of case. This doctrine is at this day so well understood, that it is not deemed even necessary to cite authorities to illustrate it. *83The general rule is, no doubt, as contended for by counsel, that a purchaser pendente lite, takes the property, subject to the rights of the complainant or plaintiff, as settled by the final decree or judgment of the court; for otherwise there could never be an end to litigation. But to hold that the rule has no exceptions, or is not varied by the nature of the litigation, would be almost, if not quite as unreasonable, as to deny its existence altogether. As already remarked, the inquiry is not what the rule is, but whether this case falls within its operation. The rule had its origin in con-» troversies touching real estate; but it may be conceded that at this) day it applies with equal force to controversies in regard to per-i sonal property; and it is only by analogy to the law, that it is ap-> plicable to proceedings in courts of equity. Where the suit is ; brought to recover property, and the party is successful, the rule is one of almost universal application; the purchaser pendente lite ^ takes, subject to the rights of the plaintiff, as settled by the judg- < ment of the court. Nor can the purchaser in such case complain of the harshness of the rule, since the plaintiff, even if driven to an original action, could recover upon the strength of his title to the property, as settled by the judgment. The purchaser from the defendant pending the suit, acquires only such title as the defendant can convey; and the judgment against the defendant is, by operation of law, a judgment, so far as it relates to the recovery of the property, against all who acquire his title or possession of the thing pending the litigation. This rule, whether it operates harshly in some cases or not, is nevertheless one of necessity, and, as such, must be applied in all cases where a party is adjudged to be the rightful owner of property, and where another, pending the controversy, comes into possession of it under the defendant to the suit. It is not necessary even to cite authority to support this doctrine.

But, as already remarked, the question in this case is not what the rule is, but whether the facts bring the case within its operation. Robinson, who obtained the decree in the Superior Court of Chancery, under which the appellants claimed, asserted no title to the slaves in controversy, but only that Laughlin’s title, so far as Green’s creditors were concerned, was null and void, and ought, *84as to them, to constitute no impediment to the enforcement of their judgments, although such title was, by the express provisions of the Statute of Frauds, valid as between the parties to the fraudulent agreement. It must be borne in mind that this judgment was never enrolled, and hence it ceased to operate as a lien upon Green’s property after the first of July, 1844. Applying the rule, then, with the utmost rigor to Burke, Watt & Co., who purchased in 1845, and from whom the appellee claims — what is the extent of the notice conveyed by the pendency of Robinson’s bill *n the Superior Court of Chancery ? Only that he had a judgment | for a certain sum against Green, and that the property which * they were about to purchase, must be treated as Green’s, so far as he, Robinson, or other judgment creditors were concerned. The judgment not being a lien upon the property, Green was not restrained from selling, nor Burke, Watt & Co. from purchas- \ ing the property. The pendency of the suit was only notice, if " notice at all, of the title asserted; and we have already seen what this title was at the date of the purchase by Burke, Watt & Co. —a mere right to have the property sold to satisfy a judgment which had lost its lien. It is not deemed necessary to cite authority to prove that where a man’s property is unincumbered by lien or otherwise, he has full power to sell it to a bona fide purchaser for a valuable consideration. If Green, then, had full power to sell, and Burke, Watt & Co. to purchase, what possible objection can be urged against their title ? But it is said that Robinson’s suit was then pending, and having commenced his suit, he had acquired certain rights in consequence thereof. A suit is commenced and prosecuted to obtain an existing right, and not for the purpose of creating a right. The process provided by the law to enforce the judgment having been rendered nugatory in consequence of the fraudulent combination between Green and Laughlin, the aid of a court of equity was invoked, to enable Robinson to obtain the benefit of his judgment, as it might exist, and according to its legal operation at the date of the decree, and not to give to the judgment any new vitality or operation other than such as the law gave to it. The decree could no more affect the title of Miller, which had been acquired by fair purchase many years previously, *85than it could affect the title of strangers to the controversy, unless it appeared that Miller took the property incumbered by the lien of Robinson’s judgment, or that his pretended title was in fact Robinson’s title — supposing that to have been the subject of controversy. This is the true test of the rule. The purchaser pen-~] dente lite is bound by the decree, when the title to the thing is adjudged to be in the complainant, or when, in consequence of a subsisting lien, whether created by contract or by operation of law, he had a right, at the date of such decree, to subject the property to satisfy the debt, to secure which the lien then existed. In' the one case the complainant but follows his title, by requiring the purchaser to surrender the property; and in the other he is but pursuing his lien upon the property. But it is believed that no case can be found, where the complainant had neither title to the property, or a lien upon it at the time of the purchase by an innocent, party, that such party is bound by the decree. It is the com-' plainant’s right to the thing, or lien upon it, that affects the purchaser pending the suit.

This doctrine is, however, fully settled by authority. Take, for example, an unregistered mortgage, which, as between the parties and all who have notice, is binding. A bill to foreclose is filed, and pending the suit the mortgagor sells to an innocent purchaser without notice for a valuable consideration. Here is a purchase pendente lite. But it is now well settled, that the doctrine of Us pendens does not apply in such a case, for the plain reason that the law only required the purchaser to examine the register’s office to ascertain incumbrances upon the estate, or conveyances to other persons; and finding none there, he had a right to presume that none in fact existed. Newman v. Chapman, 2 Raw. 93; 19 Ves. 439. So in this case Burke, Watt & Co. were only required at the date of their purchase to examine the judgment roll in the proper office, to ascertain what judgments bound Green’s property. The judgment not being enrolled, they were not required to take notice of proceedings in other courts to enforce it. It was only required of them to know that it did not bind the property which they were about to purchase. It served their purpose, whether they in fact knew of the judgment or not, to know *86its legal operation — and this they knew by not finding it on the roll; for, unless it appeared there, it neither restrained the debtor from selling his property in good faith, or another in like good faith from purchasing.

Responding, therefore, in conclusion, to the position of counsel, we are compelled to hold that the appellee has, to say the least, equal equity with the appellants, besides a legal title to the slaves in controversy.

Decree affirmed.





Dissenting Opinion

Handy, J.,

delivered the following dissenting opinion:— ( .

I will very briefly state the reasons why I cannot agree with the opinion of the majority of the court.

The original bill, which- is the subject of consideration in this case, was filed by the present appellants, as judgment creditors of Thomas M. Green, for the purpose of setting aside certain fraudulent conveyances made by Green, and seeking to have the property thus fraudulently conveyed, subjected and sold by the aid of a Court of Equity, in satisfaction of their executions. These judgments were valid and unsatisfied when the bill was filed, and executions -upon them had been obstructed, and been returned “ nulla bona,” by reason of the alleged fraudulent conveyances. Of course, if the conveyances were fraudulent, the creditors had the right to go into equity to have them set aside, and to seek its aid in having the property, fraudulently conveyed, appropriated in satisfaction of them.

When the bill was filed for that purpose, and subpoena served, it was notice to all persons, at least in this State, claiming title under the parties to the suit, by purchase after that time; and such purchasers would stand in no better situation than the parties from whom they acquired their titles. This is the universal doctrine in relation to the effect of a lis pendens.

It is undoubtedly true, that a defendant, against whom there is a judgment which is not a lien upon his property, may sell that property, and the purchaser may obtain a good title ;' and upon the same principle of the jus disponendi, a party indebted may make a bona fide sale of his property. But after bill filed and *87subpoena served, for the purpose of subjecting specific property to the claim or demand of the complainant, and if the claim be of such a nature as that the property ought to be subjected to it, under the rules prevailing in a court of equity, the power of unrestricted disposition in the defendant is suspended or lost, and a purchaser from him pendente lite, takes the property subject to the lien which attached upon it by the institution of the suit. And it is immaterial, though the judgment was not a lien, when the suit was commenced; for, in this case, it is not pretended but that the execution was in full force, and capable of enforcement against .the property, but for the obstacles created by the fraudulent conveyances, and which the bill was filed to remove.

The proper distinction is stated by Lord Hardwicke, in Edgell v. Haywood, 3 Atkins, 357, thus: “ If, therefore, after the judgment, or even after the fieri facias, the debtor had assigned the property bona fide, and for a valuable consideration, and without notice, it would .be good, and prevail against the creditor. But after a bill brought, and a Us pendens created as to this thing, such assignment could not prevail.”

The filing of the bill under consideration being for the purpose, not only of setting aside the fraudulent conveyances, but to have the property sold and applied to the complainants’ claims, by the aid'of a court of equity, is tantamount to a seizure of the pro-" perty for the purposes of the suit, and so far as the interests of *88the defendant and of supervening purchasers, after the commencement of the suit, are concerned. ,

An exception to the operation of the general rule, with respect to the effect of a Us pendens, prevails in the case of a bill filed to establish an unregistered mortgage against a bona fide purchaser, who had become such since the filing of the bill. And it is held, that the Us pendens is not notice to such purchaser, because the law has appointed the place where mortgages must be registered, in order to be notice to purchasers, and if there be no registry there, the purchaser is not held to constructive notice by any other means. The registration in such a case is the only thing that can operate as constructive notice. But in the present case, not only would the lien of the judgment, if it had existed at the time of the purchase be notice, but the commencement of the suit to subject the property to the complainant’s claim, independent of the lien of the judgment, is notice in law to all persons who might thereafter purchase from the defendants, pending the suit. If this be not true, the very principle upon which the whole doctrine of Us pen-dens is founded must be subverted, and the jurisdiction of the Court of Chancery, which has attached upon the property in controversy, affo.rds not the least impediment to the free alienation of the property, by the defendant to the action. The consequence would be, that all that a party, who had conveyed his property in fraud of his creditors, and against whom a suit in equity was pending, to set it aside and have the property applied by that court to the payment of the debt, would have to do, would be to prolong the litigation until the lien of the judgment had expired, and the jurisdiction of the court over the subject-matter, which had properly vested, would be utterly frustrated. And if the bill was filed to subject equitable assets, upon which a judgment at law is not a lien, the suit in chancery would afford not the least impediment to the defendant’s right of disposition.

It appears to me, with all deference, that such a doctrine is at war with the settled principles of the law of Us pendens, and is anomalous and dangerous in the extreme to the proper administration of justice, and that the effect of it would be, that a bill in equity, filed in order to subject property, fraudulently conveyed, *89to the payment of the party’s just debts, would be but little more than a judicial notice to the party to make other fraudulent conveyances to defeat the jurisdiction of the court.