Geanakapulas v. Zographos ( 1922 )

BEAN, J.

The trial court found that the $40 paid on the judgment, July 10, 1919, was paid and accepted as full payment of the judgment; that at the time of the execution sale on July 24, 1919, the judgment had been fully satisfied; that plaintiff had been informed that the judgment was paid in full and thought the record had been cleared, and did not learn of the sale until after the recording of the sheriff’s deed to defendant; that the defendant had notice that the judgment had been paid, and knowledge of facts sufficient to put him on inquiry concerning the judgment at the time of the sale; that the value of the premises sold was from $20,000 to $25,000, upon which there were certain encumbrances as follows:

“A mortgage of $9,000 upon all of the real estate owned by the partnership of Geanakapulas and Gunis, of which property plaintiff Geanakapulas owned two-thirds and Gunis owned one-third. A mortgage of $4,600, against the undivided two-third interest of the plaintiff; a. mortgage of $1,250, against certain town lots included in the property above described; that in addition to these encumbrances there was an acknowledged indebtedness of plaintiff to the partnership in a sum from $1,400 to $1,600; that there was ample personal property belonging to the partnership to discharge this indebtedness; that the exact value of plaintiff’s equity in the property sold under the execution is not shown by the testimony, but that the value thereof, considering all the circumstances of the case, was several thousand dollars, and that the amount paid by defendant at the execution sale was inadequate and the defendant was not a purchaser in good faith and for a valuable consideration in that the amount paid, viz.: $134.39, was not a fair valuable consideration for the property purchased.”

There was testimony to support the findings. There being some conflict, the findings of the circuit judge who saw and heard the witnesses upon the stand are entitled to great weight. The attorneys who attended the sale differ in memory as to what took place there. The defendant testified that at the time of the sale Mr. Ealey had a statement of the amount due on the judgment which he understood to be “the book from Mr. Bailey’s account,” but which appears to be from Alexander^ books. The defendant’s testimony indicates that there was some discussion over Mr. Bailey’s book, and that reliance was not placed solely on the record of the judgment. Mr. Bailey’s account-book shows all of the payments.. We agree with the findings of the trial court.

It is stated in 5 E. C. .L., page 659, Section 30:

“As a sale under a judgment in fact paid, though not satisfied of record, is void, and conveys no title, even though the purchaser has no knowledge that the judgment has been paid, it is held that the effect of an execution sale under a paid judgment is to cast a cloud on the title, and the remedy is by action to remove such cloud.”

The rule is stated in Herman on Executions, Section 255:

“An officer making the sale of property under the process of a court, acts under a naked statutory power, and if no power exists, no title passes to the purchaser. A purchaser under a power is hound to see that it exists. He who buys under a power buys at his peril, and acquires no title unless he can show a valid subsisting power. The mere fact that the purchaser pays a valuable consideration does not help him any more than it would if he purchased from a stranger to the title. The officer who sells under a judgment and execution exercises a statutory power by virtue of which alone his deed can operate upon the title to the land sold. When the judgment is satisfied the power to sell is gone. The debt being paid, the power to sell under the execution ceases, and as the process will not protect the officer, so no title can pass to the purchaser of property under it. The sheriff, in making sale of property under process of the court, acts under a power, and if the power does not exist no title passes, even to an innocent purchaser. ’ ’

In Hoxter v. Poppleton, 9 Or. 481, at page 484, Mr. Chief Justice Lord, speaking of a purchaser at an execution sale, said:

“He buys at his peril, because the law requires him to ascertain whether the officer has a valid writ issued upon a valid and subsisting judgment, and if these do not exist, the officer is without power to sell, and as a consequence, the purchaser can acquire no title to the property sold. (Herman on Executions, § 255, and authorities cited in the note.)”

Mr. Freeman observes that,

“so large a number of cases may be cited to show that even an innocent purchaser at an execution sale must lose his title by parol proof of the prior satisfaction of the judgment that we must look to the legislature rather than to the judiciary for means of escape from the hardship of this rule.” 1 Freeman on Executions (3 ed.), § 19.

The inadequacy of price paid by a purchaser at such a sale will be considered upon the question of the good faith of the purchaser: Shepperd v. Holmes, 89 Or. 626 (174 Pac. 530); Barnes v. Spencer, 79 Or. 205, 214 (153 Pac. 47); Coates v. Smith, 81 Or. 556 (160 Pac. 517).

In the present case the defendant was a purchaser at an execution sale under a judgment which had in fact been paid, of which fact the defendant had notice, though the judgment was not satisfied of record. Under these circumstances there can be no question that the defendant obtained no title to the land of plaintiff, and that the sheriff’s deed of the land issued to defendant is a cloud upon plaintiff’s title and should be set aside: 1 Freeman on Executions (3 ed.), § 19, p. 54; Shepperd v. Holmes, 89 Or. 626, 628 (174 Pac. 530); Schroeder v. Young, 161 U. S. 334 (40 L. Ed. 721, 16 Sup. Ct. Rep. 512, see, also, Rose’s U. S. Notes).

The plaintiff was not present at the sale. He ■thought it was sufficient to see that his former partner paid the judgment. There is no showing in the case that the defendant was induced to purchase the land by any act of plaintiff, or that plaintiff intended that defendant should act upon his conduct or representations. Plaintiff is not estopped to claim that the sale is void: Ewart on Estoppel, p. 26; Patterson v. Chambers Power Co., 81 Or. 328 (159 Pac. 568).

It is urged by defendant that Mr. Bailey, attorney for Alexander’s, had no authority to satisfy the judgment of Alexander’s v. Geanakapulas, except for payment in cash. It will be noticed that the judgment was for an account, and did not require defendant Geanakapulas to pay any attorney fee except the statutory fee. By allowing the payment in installments and requiring a note of $64.50 for costs and attorney’s fee, it relieved Alexander’s from such payment of attorney’s fee. Bailey had a right to accept a note for his fee and for expenses which he had advanced. Except for a small difference in figures, which would not be sufficient to authorize the sale on execution of a valuable farm, the judgment was paid in cash to the attorney who was authorized to receive it. The arrangement was favorable to Alexander’s, and it would doubtless have received all of its money in due time except for the sudden death of the attorney.

The decree of the Circuit Court was right, and is affirmed. Affirmed.