111 So. 913 | Ala. | 1927
Appellant, Sallie M. Wise, by her bill in this cause, an original bill in the nature of a bill of review, seeks to set aside a decree rendered in a cause entitled David J. Davis v. Sallie M. Wise and Others, whereby the interest of appellant in certain corporate stock was condemned to the payment of the debt of Charles H. Merritt on the ground that the same had been transferred to her by Merritt in fraud of his creditors. In the *662 present bill it is averred with sufficient particularity and certainty that complainant, appellant, had no notice of the suit against her by service of summons or otherwise, that she took no part in the conduct of the cause, and that she had and has a meritorious defense. Merritt, Davis, N. L. Miller, and the Birmingham Trust Savings Company are made parties defendant. The interests of Merritt and Davis have already appeared. The trust company is made a party defendant because, it is alleged, at the time of the litigation in the original cause, to which also it was a party defendant, it held the shares of stock in controversy under a trust agreement to be noticed hereafter. As for N. L. Miller, it is averred that he became the purchaser of the stock at a sale had under and in pursuance of the decree rendered in the original cause. The bill in the present cause avers that summons in the original cause was returned by the sheriff as executed upon the defendants therein named, but there is no averment imputing to Miller knowledge or notice at any time prior to his purchase of the equity now asserted by complainant, appellant. His demurrer, setting up in various forms the defense that he was a purchaser without notice, was sustained, and from the decree to that effect this appeal is taken.
We have been led through various channels to consult many authorities supposed to bear upon the question at issue, but have found few cases precisely in point. The complaint in Dunklin v. Wilson,
"A party sought to be concluded by a judgment or decree, must be shown to have had notice or knowledge of the suit, actual, or, in some cases, constructive; and if this notice or knowledge be wanting, the record of recovery has no binding effect. This rests on the plain principle of right, that no man shall be deprived of his goods, until an opportunity has been afforded him of making defense."
As between the parties to a decree or judgment the foregoing statement of law and justice cannot be questioned. But we have here definitely presented the case of an innocent stranger to the decree, who purchased at the sale in pursuance thereof, and now contends that, since the record of the cause in which the decree was rendered was in all respects regular on its face, showing jurisdiction of the subject-matter and of the parties, he should be protected in his purchase. Marks v. Cowles,
"All purchasers must at their peril inquire into and ascertain the jurisdiction of the court."
In that case the purchaser, a party, claimed title through an erroneous decree which was reversed on appeal after his purchase. The court gave its approval to the proposition. 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 [citing authorities.]"
Strong language, condemning judgments without notice, is quoted from Hudson v. Wright,
The principal reliance for appellee is found in Reeve v. Kennedy,
"As between the parties to the action, a judgment fraudulently obtained will be set aside and held for naught when the fraud is made to appear. But there would be no security in titles acquired at judicial sales if the rights of a bona fide purchaser, without notice, could be overthrown by subsequent proof that the judgment was obtained by fraud, or that the record, which showed a due service on the defendant, was in fact false. * * * No prudent person would purchase at a judicial sale, if he incurred the hazard of losing his money, in case it afterwards should be made to appear that the judgment was obtained by perjury or other fraudulent practices, or that the record on which he relied, as proving a service on the defendant, was in fact false."
These conclusions, it was said, were demanded by the repose of titles and indeed every consideration of public policy. Furthermore they were said to be too familiar to require the citation of authorities in their support — and none were cited. But in the text of the same edition it is said, "If the judgment is not void on its face, even though there may in fact have been no service of process, a bona fide purchaser under it is protected" — citing Smoot v. Judd,
The policy which would protect innocent purchasers at judicial sales must be observed in its proper applications, of course, and our cases hold that it protects innocent purchasers under judgments within the jurisdiction of the courts against errors and irregularities in the exercise of that jurisdiction. Cowles v. Marks,
"When by an unauthorized act of an officer of court, a judgment is improperly rendered against one, without his knowledge or consent, he may be relieved in chancery, though the plaintiff in the judgment was not privy to the act of the officer."
And our opinion now is that complainant in this cause, one of the defendants in the decree under review, upon clear and convincing proof of the facts averred in the bill, will be entitled to relief for the reason that she cannot be deprived of her property without an opportunity to defend against the bill which sought to subject it to a lien for the payment of the debt of her vendor. It is the policy of the law that there should be an end of litigation and, to that end, private hardship must in some situations give way to public convenience. But that policy assumes that the party has had an opportunity to be heard, for otherwise there has been no litigation which would invoke the policy. Moreover, the policy underlying our conclusion in this case is paramount and is founded on the fundamental law which guarantees due process. The general considerations of justice and equity which conduce to this conclusion are not far to seek and are convincingly stated in 1 Black on Judgments (2d Ed.) § 276. The section referred to is found in the chapter dealing with the collateral impeachment of judgments, but the considerations which go to sustain judgments and decrees of courts of competent jurisdiction are the same whether the attack be direct or collateral. There is, however, this difference in the method of application, a difference arising out of considerations of convenience in the administration of the law: A judgment regular on its face is beyond question on collateral attack, whereas —
"The rule that a record is conclusive evidence of its own verity is not applicable in a direct proceeding instituted for the purpose of showing its falsity as to a matter which, if false, shows that the court pronouncing it as a judgment had no jurisdiction of the person of the defendant, and, consequently, that what purports to be a record is in fact no record at all." 1 Black, § 288.
A judgment without due process, a judgment against which the defendant had no opportunity to defend, though clothed with all the forms of a judicial proceeding, is not the result of a judicial proceeding. To use the language of Judge Story in Bradstreet v. Neptune Insurance Co., 3 Sumn. 601, Fed. Cas. No. 1793, reproduced in Windsor v. McVeigh,
Harshey v. Blackmarr,
In Shelton v. Tiffin, 6 How. 163,
A few of the cases in other jurisdictions suggest that the injured party in cases of this sort, meaning the owner whose property has been sold, should seek his remedy against the officer making the false return. It occurs to us, as being more in consonance with principles of justice, that rather the purchaser who has been misled by such return should be remitted to his action against the officer. Again, we find it suggested that as between equal equities the legal title — that is, the title of the purchaser — should prevail. But that title in a case of these facts is nothing more than a "solemn fraud." The hypothesis of our opinion is that the true title, to be declared by the court, remains in the defendant, who has done nothing to justify a forfeiture of his property right.
It is suggested that the legal title of the property in question was in the trust company. Complainant owned a part interest in the shares of stock the subject of this litigation. She and the other owners in common had transferred the stock to the trust company in trust that, for five years, it might be voted as a unit. Under this arrangement, thus briefly described, the trust company had only such title as was necessary to support the trust, nothing more. The beneficial ownership and the ultimate title, if the evidence sustains the averments of the bill in this cause, were in complainant, and, whether such averments shall be sustained or no, the legal title, for the purposes of this bill, was in her at and before the date of the decree brought into review.
It results that, in our opinion, the court erred in sustaining the demurrer to appellant's bill.
Reversed and remanded.
ANDERSON, C. J., and GARDNER and MILLER, JJ., concur.