PAUL R. PICERNE, Rec. et al. vs. WILLIAM S. REDD et al..
SUPREME COURT OF RHODE ISLAND
JUNE 21, 1946
MOTION FOR REARGUMENT DENIED JULY 17, 1946
PRESENT: Flynn, C. J., Mоss, Capotosto, Baker and Condon, JJ.
The employee‘s appeal is sustained, the decree appealed from is reversed, and the cause is remanded to the superior court for further proceedings.
Fred Brosco, for petitioner.
Henry M. Boss, for respondent.
The grounds of the decree invalidating the sale and ordering the respondents to turn over the property to the receiver are that William S. Redd was not a bona fide purchaser for value without notice of the injunction and that, through his servants and agents, McIlhenny and Donahue, he had knowledge and notice of the injunction. In the trial justice‘s
Respondents contend that Redd purchased the property for a valuable and adequate consideration; that he had no knowledge of the pendency of the divorce petition; that he was not bound by the injunction issued solely against Israel Wiesel in that proceeding; and that, in any event, his right to purchase Wiesel‘s personal property was not affected by the pendency of the divorce petition against Wiesel, as the doctrine of lis pendens was not applicable in the circumstances.
It appears from the record that the circumstances, in so far as they are material here, were these: On February 24, 1944 Bessie Wiesel filed a petition for divorce from bed and board against Israel Wiesel. She filed a supplemental petition, on June 26, 1944, for a lien on his real estate in the town of East Providence and on his personal property situated at 232 Brоad street in Providence, which he held under the trade name of Ace Amusement Company. In that petition she also prayed that he be enjoined from conveying or encumbering such property and for the appointment of a receiver. On June 27, 1944 she filed a “Notice of Pendency of Supplemental Petition” in the office of the recorder of deeds in Providence.
After a hearing on that petition in the superior court on July 7, 1944 the following order was entered: “That said
On October 2, 1944 respondent Donahue, on behalf of Redd, took actual possession of the above-mentioned property in Providence. None of the respondents knew at that time that Wiesel had been sued by his wife for a divorce from bed and board and had been enjoined from conveying or encumbering his property. On October 6, 1944, on the petition of Bessie Wiesel in the divorce proceedings, complainant Picerne was appointed receiver of Israel Wiesel‘s personal property. He thereupon demanded that the respondents turn over to him, in his capacity as receiver, all of the assets of the Ace Amusement Company. This they declined to do on the ground that they had no property belonging to Israel Wiesel, since respondent Redd had bona fide and without notice of either thе divorce suit or the injunction purchased such property for a valuable consideration. Thereafter, on October 18, 1944, Bessie Wiesel and Picerne filed
On May 18, 1945 the superior court granted Bessie Wiesel‘s motion to amend the petition for divorce from bed and board to one for absolute divorce. On July 3, 1945 a final decree of divorce was entered in her favor in which she was awarded $75 a week “for the suрport of herself and minor child, said payments to be made as alimony.”
It further appears that the only evidence of the negotiations which took place between Redd and Israel Wiesel for the sale of the assets of the Ace Amusement Company comes from the respondents who were called as witnesses by the complainants. Their testimony concerning those negotiations is undisputed. In so far as proof of the lack of good faith of Redd in the sale of those assets to him and proof that he or his servants and agents, McIlhenny and Donahue, had knowledge of the divorce petition and the injunction is concerned, complainants are forced to rely solely on that testimony and inferences from certain checks, letters and other documents in evidence that come from respondent Redd‘s office files. Israel Wiesel was not a party to the equity suit and did not testify.
Redd categorically denied on thе witness stand that he knew that there was a petition for divorce pending against Wiesel or that Wiesel had been enjoined in that proceeding from conveying or encumbering his assets situated at 232 Broad street, Providence. McIlhenny and Donahue also testified that they had no knowledge of such legal proceedings against Wiesel. Complainants offered no counter testimony thereto but contended, from the evidence of the negotiations leading up to the sale, of the times they took place and the manner in which the sale was finally consummated, that an inference could be drawn that Redd knew of the litigious predicament of Wiesel when the sale was finally closed on September 28, 1944. They also relied on a provision in the printed sale agreement as raising an inference that Redd knew that there was an element of hazard in buying from
At the conclusion of the hearing in the superior court, the trial justice reserved decision and gave the parties leave to file briefs on certain points of law raised by complainants, namely, whether the sale violated the “Sales in Bulk Act“,
In order to determine the correctness of the trial justice‘s finding that Redd had knowledge and notice of the injunction we have carefully reаd the transcript and have scrutinized all of the exhibits. If there was a conflict in the evidence on that matter, his finding should not be disturbed unless clearly wrong. On the other hand, if the evidence is undisputed and his finding rests upon inferences drawn therefrom, we are in as good a position as the trial justice to draw such inferences. Matteson v. Sweet & Son, Inc., 58 R. I. 411. In our opinion the evidence is substantially undis-
We find no evidence that justifies such inferences. The most that the evidence shows is that in a few minor particulars the transaction with Wiesel did not follow the normal routine of Redd‘s business practice in such matters. Such irregularities, however, are a far cry from evidence of bad faith or guilty knowledge on Redd‘s part. Nor does the provision in the sale agreemеnt upon which the trial justice relied furnish any stronger foundation for an inference that Redd must have known of the injunction and the consequent hazard of taking title from Wiesel. Such a conclusion is, in our opinion, not a legal inference but mere conjecture.
For our part it is inconceivable that a reputable business man, as Redd appears to be from the record, would pay $23,500 for property which he knew the seller had no right, or at most a doubtful right, to convey, and thаt he would at the same time assure such seller that he, the buyer, would assume such risk. Only on the theory that the price was grossly inadequate or that the buyer was in conspiracy with the seller can it be reasonably supposed that such a transaction would take place. Here the uncontradicted evidence is that the price was adequate. Moreover, there is not a scintilla of evidence that Redd combined or confederated with Wiesel in any manner to hinder or defeat the orders of the superior court. Neither the cash transaction which was the final consummation of the sale nor the voluntary cancellation by Redd, at the request of Wiesel, of the first attempted sale of this property in August, which has been satisfactorily explained by respondents, furnishes the basis for a legal inference that Redd either had knowledge or was charged with notice of the litigation in which Wiesel was involved. We are, therefore, of the opinion that the trial justice erred in
In view of the above conclusion on our part we find that Redd was not bound by the injunction in his dealings with Wiesel. The law is clear that where one not a party, or not in privity with a party, to a cause in equity has neither knowledge nor notice of an injunction therein he is not bound by it. Southard v. Latham, 18 N. M. 503,
There remains, however, the question whether the decision of the trial justice can still be supported on the grоund of lis pendens. That doctrine has been summed up in these words: “that he who purchases property pending a suit in which the title to it is involved, takes it subject to the judgment or decree that may be passed in such suit against the person from whom he purchases.” Brightman v. Brightman, 1 R. I. 112. This court said in that case that the doctrine was based on motives of public policy and therefore lack of knowledge or notice of the pending suit was of no consequence since “The law infers that all persons have notice of the proceedings of courts of record.”
The doctrine is an ancient one but the courts are not in agreement as to its application to suits other than those involving title to real property. Murray v. Ballou, 1 Johns. Ch. 566. In England it has been held to be inapplicable to suits involving personal property other than chattel interests in land. Wigram v. Buckley, 3 Ch. Div. (L.R.) 483 (1894). In the light of the origin of the doctrine in the 12th rule of Lord Bacon and the analogy of that rule to the rule at common law in a real action, Winston v. Westfeldt, 22 Ala. 760, there is much to be said in favor of this view. However, the great weight of authority in the United States is to the effect that, excepting money and bank bills, negotiable paper transferred before maturity and articles of ordinary commerce sold in the normal way, the doctrine is applicable in the same way to personal property as it is to real property.
If the suit beforе us raised only the question whether such personal property as is herein involved was subject to the doctrine of lis pendens we should perhaps be compelled to decide it; but, anterior to such question, there is another question raised here which, in our view, makes it unnecessary to so decide. That question is whether or not the doctrine of lis pendens is applicable to a petition for divorce from bed and board and allowance for separate maintenance wherein a supplemental petition was filed describing specifically respondent‘s personal estate and praying that a lien be charged thereon. As far as counsel have advised us and as far as we have been able to find, there have been brought to this court for determination only two divorce cases in which it was sought to apply the doctrine of lis pendens and in each case this court refused to apply the doctrine. Brightman v. Brightman, supra; Spencer v. Spencer, 9 R. I. 150.
In the latter case the court did not reach the precise question which we have here, because the rights of prior attaching creditors, before service of the petition, were involved and, in any event, the petition was for absolute divorce and alimony and not a mere bed and board petition. The Brightman case also involved a petition for absolute divorce and alimony but otherwise the situation therein presented to the court was analogous to that here, except that there was no supplemental petition specifically dеscribing the husband‘s property and seeking to have it charged with a lien.
Does the filing of the supplemental petition specifically describing the personalty of the husband and praying for a lien thereon make any difference in the instant case? We think not. In the first place there is no statutory authority for charging such a lien in a bed and board petition; and furthermore it does not appear from the record before us that the superior court granted that prayer of the petition on July 7, 1944 when it enjoined the respondent Wiesel from conveying or encumbering such personal property; and even if it did, and it had the authority so to do, it would not, in our opinion, be equivalent to the assignment of an allowance for maintenance out of this particular property. The prayer of the supplemental petition was not to that effect, and therefore it does not meet the supposed instance given in the Brightman case where the court said: “Had the prayer in this case been for alimony to be assigned her out of this particular farm, the case would have somewhat resembled some of the cases in the books, where the rule has been applied.”
In the instant case the amendment of the divorce petition to one for absolute divorce, which has been brought to our attention by counsel in their briefs, occurred after the superior court had entered its final decree herein and of course is of no avail to the complainants. We must consider on this appeal only what was before the superior court when it entered its final decree. When, if ever, the rule of lis pendens can be made to apply to a divorce proceeding is a matter of serious doubt. This is apparent in the manner in which
Whatever may be the law which would govern such a special instance as the one supposed in the Brightman case, we are of the opinion that the instant case does not fall in that class and therefore is not within the rule of lis pendens. We may add that in a case such as the divorce case which is involved here, there is a way to protect the interests of the wife and children, if there is serious danger of the husband dissipating his property or conveying or concealing it pending the divorce proceedings, and that is by injunction and the appointment of a receiver, as was expressly approved in Warren v. Warren, 36 R. I. 167. It is true that the complainant Bessie Wiesel sought to do that in her divorce case and her first application for a receiver was denied. As events proved, that was unfortunate for her but that, of course, is no reason why a bona fide purchaser for value of her husband‘s property should be made to suffer.
It is significant to note that the facts in the Warren case furnished an even stronger basis than those in the instant case for the application of the doctrine of lis pendens, if complainants’ theory here is correct; and yet the question was not raised in that case notwithstanding that able and experienced counsel appeared for the petitioner and that respondent was possessed of real and personal estate of great value. It is of further interest to note that this court, in rejecting the respondent New England Land Company‘s contention that it was improperly made a party in that di-
There are only two other points that we must mention before we conclude this opinion. We agree with the findings of the trial justice that neither
The respondents’ appeal is sustained, the decree appealed from is reversed, and the cause is remanded to the superior court for the entry of a decree denying and dismissing the bill of complaint.
ON REARGUMENT
PER CURIAM. After our opinion was filed in the above-entitled cause, complainants requested permission to file a motion for reargument, and such permission was duly granted. The reasons advanced in support of such motion, when analyzed, disclose that the opinion of complainants’ counsel differs from that of the court as to the proper effect to be given certain evidence and as to the law applicable thereto, particularly as to lis pendens in a divorce case of this kind. These questions were fully argued by counsel and were considered by us in reaching our opinion. We are of the opinion therefore that no ground is shown for granting the motion.
Motion denied.
McKiernan, McElroy & Going, Peter W. McKiernan, John C. Going, for complainants.
Joseph Mainelli, for respondents.