Hardin v. Melton , 28 S.C. 38 ( 1888 )

The opinion of the court was delivered by

Mr. Chief Justice Simpson.

The facts necessary to be stated in this case are as follows: In October, 1867, one Mrs. Ann E. Wright, as executrix of Dr. SamT Wright, obtained a judgment from the Court of Common Pleas for Chester County against Mr. C. D. Melton for nineteen hundred and seventy-nine dollars and thirty cents ($1,979.30). At the time Mr. Melton was seized and possessed of a house and some one hundred acres of land surrounding it, at or near the village of Chester. Shortly after this judgment was obtained, to wit, during the month of November thereafter, Mr. Melton sold the said real estate to his brother, Gr. W. Melton, for eight thousand dollars, taking four notes, due at different times, for the purchase money, and a mortgage of the premises to secure them, G. W. Melton agreeing to pay off certain judgments against the said C. D. Melton, including the Wright judgment, which, when paid, was to be regarded as payment fro tanto of the purchase money of the real estate aforesaid. After this a statement of these transactions was made between these parties, when it appearing that G. W. Melton had paid off all of the said judgments except the Wright judgment, ivhich he then assumed, the notes for the purchase money were given up and the mortgage cancelled. The Wright judgment, however, was not paid then, nor has it since been paid.

After this, to wit, in 1875, G. W. Melton, by voluntary deed, conveyed the property to J. J. McLure, C. H. Alexander, and Washington A. Clark, in trust for the benefit of his wife and children. G. W. Melton took possession of the premises in 1867, at the time of his purchase, and remained in possession until his death in 1876, when he died, leaving his wife and children in possession under the trust deed aforesaid to McLure and others. C. D. Melton died in 1875, and W. A. Clark administered upon his estate. After this, Mrs. Wright had her judgment against Melton revived, with the force and effect of the original recovery, by regular process against the administrator, Clark, and in .1878 the sheriff of Chester County, under the direction of Mrs. Wright, levied upon the premises mentioned to satisfy said judgment, whereupon two of the trustees, McLure and Alexander, commenced action to restrain the sale of this property, upon the ground, among others, that the administrator of Melton, W. A. Clark, had assets sufficient to pay said judgment. In the progress of this case before his honor, Judge Pressley, upon an inspection of the record of the case of Ann E. Wright, executrix, v. C. D. Melton, certain defects were discovered which, in the opinion of his honor, prevented the alleged judgment obtained therein from having a lien upon the property of the said C. D. Melton, the judgment debtor. He, therefore, held that the plaintiffs had no valid ground for the relief asked in their complaint. The plaintiffs thereupon took a non suit upon their own motion. After this the said trustees instituted proceedings in the Court of Common Pleas for Chester County to sell the trust property and change the investment, to which proceeding Mrs. Wright was not made a party. Leave was granted, and shortly thereafter, in 1879, the trustees sold said property to one W. Holmes Hardin for five thousand dollars, one-third cash and the remainder in two notes, secured by a mortgage of the premises. Mr. Hardin, the purchaser, had information before his purchase of the existence of the Wright judgment, but he was advised by prominent attorneys that the trustees’ title would be good, and the trade was completed, the trustees conveying to him without warranty. He afterwards, in 1881, sold to the present plaintiff for $6,000, who bought with a knowledge of the Wright judgment.

After this Mr. Clark, administrator of estate of O. D. Melton, finding it necessary to have the instruction of the court in the administration of said estate, filed a complaint in 188 to that end, and upon a call for creditors to establish their demands, Mrs. Wright’s judgment, with other junior judgments more than sufficient to exhaust the assets, were presented. The validity of this judgment was contested by Mrs. Mary B. Melton, the assignee of all of the junior judgments, and by the administrator, on account of certain defects appearing upon the record — the defects being the absence of the date of the judgment on the margin of the formula lodged in the clerk’s office by the attorney of Mrs. Wright, and also the absence of the clerk’s official signature thereon. In every other respect the judgment was regular, including the entry in the book of “Abstract of Judgments.” The Circuit Judge held, however, that these defects were fatal, and, therefore, that said alleged judgment could not rank as a judgment in the settlement of the estate of C. D. Melton, taking priority according to its date. On appeal to this court, this holding was overruled, and the judgment of Mrs. Wright was sustained as a valid judgment, and declared entitled to take rank as a judgment against the assets of the deceased debtor.

After this Mrs. Mary B. Melton, who had bought the junior judgments against the estate of her deceased husband, with the view, no doubt, to protect herself, then bought the Wright judgment from Watson, administrator de bonis non of Dr. Wright, Mrs. Wright, executrix, having-in the meantime departed this life. After this purchase, Mrs. Mary B. Melton, assignee, directed that the Chester property be levied upon, which, being done, the plaintiff, James C. Hardin, purchaser from W. Holmes Hardin, commenced the action below, asking an injunction, with other relief, upon the grounds, among others, that the Wright judgment never had lien on the premises, and that the plaintiff was a bona fide purchaser without notice.

Judge Norton, Avho heard the case, made the temporary injunction, which had been granted at the institution of action, perpetual as to Mrs. Mary B. Melton, with costs, and dismissed the complaint as to the other parties, McLure, Alexander, Clark, trustees, and the beneficiaries under the trust deed. His honor, however, in his decree held the Wright judgment to be valid and with a lien on the land. He also found as matter of fact that W. Holmes Hardin bought with notice of said judgment, though he was misled as to its validity by the advice and opinion of others; he did not have notice of the agreement of Gr. W. Melton to pay this judgment. He found, too, that the plaintiff bought with notice of the judgment. But inasmuch as W. Holmes Hardin bought without warranty, and wa's, therefore, compelled to pay the purchase money whether the title was good or not, his honor held that in law these facts made the said Hardin occupy, in substance. the position of a bona fide purchaser without notice, and the plaintiff' having bought from him, though with notice himself, yet that he was entitled to the protection which W. Holmes Hardin would have been entitled to as a bona fide purchaser without notice. Hence the order that the temporary injunction be made perpetual.

Mrs. Mary B. Melton and Clark, administrator, have appealed, raising substantially but one question, to wit, whether his honor erred in holding as matter of law, under the facts found by him, that W. Holmes Hardin was a bona fide purchaser without notice, and therefore entitled to protection against said judgment, which< extended to his vendee, the present plaintiff. The respondent seeks to sustain the decree upon other grounds than that upon which it is based by his honor, if that should prove insufficient, which grounds will be noticed at the proper place herein.

First, as to the question raised by the appellants. For the defence of bona fide purchaser to be effective, two things must appear : 1st. The purchaser must be without notice; and 2nd. He must have paid the purchase money. Now, it might be possible in this case to consider the purchase money as paid, in view of the fact that W. Holmes Hardin had purchased without warranty, and was, therefore, bound beyond hope. But admitting, for the present, that such a condition amounted to payment, yet what becomes of the other necessary element in the plea, i. e., absence of notice, and which, perhaps, is the most important element in such plea ? Could this irresistible obligation of W. Holmes Hardin to pay the purchase money voluntarily assumed by himself, in face of the fact that he knew of the judgment, wipe out that knowledge, and enable him to say that he had no such information? We cannot understand this. As matter of fact, his honor found that Hardin had the knowledge, and from this finding there has been no appeal, and we can see no reason whatever why this knowledge would not have its legitimate effect of defeating the plea of bona fide purchaser without notice.

But, again, even upon the supposition that his honor was correct, could such a plea avail against a judgment legally valid and having lien on the property, as his honor found as matter of law this judgment to be? In response to this, we need only cite Blake v. Heyward, Bail. Eq., 220, in which the following language is used: “The decree having a legal lien on the whole of the testator’s real estate, it is unnecessary to consider the question made in the defence set up, of purchaser for a valuable consideration without notice. The purchaser took subject to a legal lien, and is liable to be divested by a sale under the decree. The complainant has a legal title to enforce his decree, and the defendants have but an equity to oppose it, and he must, of course, fail. The plea of purchaser for a valuable consideration without notice can never prevail against a legal title to which there is no obstacle to a recovery at. law. It is only a protection against an equity.” This was said in a case in which a decree in equity for the payment of money was claimed to be enforced against a bona fide purchaser without notice. Here a judgment at law, with a valid lien, as held by his honor, is attempted to be enforced as against one who makes the same defence as above. We think Blake v. Heyward, supra, is conclusive, even upon the assumption that the defence claimed is made out. See, also, Lowndes v. Pinckney, 2 Strob. Eq., 47.

This brings us to the respondent’s grounds. He contends, 1st, that the Wright judgment never had lien on the Chester property on account of the defects mentioned, and that the decree perpetuating the injunction may be sustained on that ground. In the case of Ann E. Wright, executrix, v. Clark (19 S. C., 498), the question involved was whether the Wright judgment was a judgment against the estate of the deceased debtor and entitled to priority from its date in the administration of the assets by the administrator, and the question raised here, it is true, was not directly and distinctly presented, nor was it so decided. But in discussing the subject of the defects, the court to some extent considered the general effect of the omission of the clerk to date and sign the formula which had been lodged, and intimated, at least, that in view of the fact that said judgment had been entered in the “Book of Abstracts of Judgments” with the date, the amount, the names of the parties, &c., &c.. also enrolled — in fact, everything complete except the omissions stated — that it was a valid judgment, even as to third parties. On this subject the court said: “And even as to third parties, while the date and the official signature of the clerk would best authenticate the judgment and put it beyond dispute, yet as to its effect as notice, the filing is the main matter; when entered and filed in the proper office, its existence could be as well ascertained without the date and signature as with them. The entering and filing are the essential facts, and whether this had taken place at a particular time could be discovered by an examination of the office as certainly where the formula had not been dated and signed as if these things had been done.” And again: “The act of 1839 does not declare that judgments not dated and signed shall be void; it simply directs the clerk to date and sign. * * * It would be a most stringent construction to hold that because of such omission the whole proceeding was void.” And especially so, we would add, when all other requirements had been complied with, to wit, entry in the book of Abstracts of Judgments, enrolment, &c., &c. “This we cannot suppose was the object of the act. On the contrary, we are of opinion that the omission here was a mere irregularity in a matter not vital to the judgment, but simply directory to the clerk, and may be corrected at any time” — citing Farrar’s Administrator v. Carmichael, 1 Brev., 392; and Harrison v. Manufacturing Company, 10 S. C., 290.

But because of the fact that this question was not directly involved in this previous case, we have listened to and considered the argument made here on it as upon a new proposition. We, however, see no reason to change our opinion as then intimated. The object of the act in requiring the formulated judgment to go into the clerk’s office ivas to give notice to the world of the lien which had been established, so that third parties might deal with it without peril, and also to enable the judgment creditor to make his money by fi. fa. We cannot see how these objects Avould be interfered Avith by the omission on the part of the clerk to date and sign this formula when it was lodged, enrolled, and entered in the Abstracts of Judgments Avith date, amount, and all other requisites. As Avas said in the other case, it could have been as easily found upon an examination of the office without the date and signature as Avith them. The act of 1712, or statute of frauds, Ave do not think has any application to this case. That Avas intended to prevent judgments from dating back to the term as to intermediate purchasers when entered afterwards. This case, Ave think, turns upon the act of 1839 as to the duties of the clerk. '

The respondent contends, secondly, that if the judgment ever had lien, it was lost when it Avas established against the estate of the deceased debtor under the call for creditors by the doctrine of merger. It may be true that Avhen a judgment creditor comes in under such a call, that his lien on the assets being administered, the proceeds of property over Avhich he may have a lien or otherwise may be regarded as abandoned, but he is compensated by being entitled to be paid according to the date of his judgment, and, therefore, is no Avay injured. But to say that his lien over all of the property of the debtor, real and personal, whether the subject of administration or not, is also lost, is a startling proposition, and one which we think is without support in the decided cases. The cases of Manigault v. Deas, Bail. Eq., 297, and Boyce v. Boyce, 5 Rich. Eq., 263, relied on by respondent, do not go to this extent.

A third ground of respondent is, that the payment of $500 by the clerk of the court to Mrs. Wright for his omission of duty estops the claim that the judgment had lien. We cannot agree to this. If the judgment had lien notwithstanding the default of the clerk, we do not understand how the payment of the $500 by the clerk could vacate it. The clerk seems to have'paid this voluntarily and without suit, and it may be that he Avas not responsible. At all events, this Avas a matter betAveen himself and Mrs. Wright, and tvith Avhich the Hardins had no concern. They had bought before this.

Fourth. Respondent contends “that if any lien existed under the Wright-Melton judgment, the conduct of Mrs. Wright and her attorney, Maj. Hart, Avould estop her, and does estop M. B. Melton, her assignee, from enforcing the same.” And the facts are detailed in the argument of counsel upon which this position is based. Among these facts Av,e find: That shortly after G. W. Melton had conveyed the property to trustees for his Avife and children, Mrs. Wright caused a levy to be made to the end of enforcing the lien of her judgment. A bill was filed by the trustees to restrain this sale. The plaintiff took a non-suit on his motion upon the Circuit Judge expressing the opinion that they had no cause of action, for the reason that, in his opinion, Mrs. Wright could not sell the land. To this the attorney of Mrs. Wright protested. After this the trustees sold to W. Holmes Hardin Avithout warranty, Mr. Hardin being informed by Mr. McLure of the cloud of the judgment. But Mrs. Wright in no Avay contributed to this sale. Shortly after, Holmes Hardin sold to the plaintiff'without any agency of Mrs. Wright. Mrs. Wright had her judgment revived tAvice after the above purchases, and when the creditors of the estate of Melton were called in under the action instituted by his administrator long after said purchases, the judgment Avas presented and payment claimed. In the meantime, the opinion being entertained by many that the judgment was not a valid judgment so as to bind this property, Mrs. Wright, through her attorney, claimed damages from the clerk, and was paid $500.

Now, what is there in these facts to constitute an estoppel, for the protection of a purchaser who purchased before most of them occurred and without any consultation with Mrs. Wright? An estoppel by conduct is some act which the party estopped ought not to have done, or some omission to act when he ought to have acted, misleading the party claiming the protection, and which induced him to his injury to take the step attempted to be vacated. Wherein did Mrs. Wright or her attorney mislead W. Holmes Hardin or the plaintiff in their purchases ? She seems to have been persistent, from the beginning to the end, in trying to enforce the collection of her judgment. First, she levied on the land, and protested through her attorney that the plaintiff in the bill which they filed to restrain her sale thereunder should take a non-suit on the ground stated; then she had the judgment renewed twice; then she presented it at the proposed settlement of the estate; then an effort was made to compel her to follow' the trust fund, the proceeds of the land, which was decided could not be done. In what way have the Hardins been injured by anything done by her? What act of hers, or what omission to act, induced either of them to buy the land ? None whatever. W. Holmes Hardin bought, relying entirely upon the opinion of othei-s than Mrs. Wright. He inquired as to the title, and being advised that it would be good notwithstanding the cloud over it, he purchased, and that, too, without warranty. He has been unfortunate, but we do not see that he has any cause to complain of Mrs. Wright. We think that Mrs. Mary B. Melton, her assignee, stands in her shoes, and has all of her rights.

It is the judgment of this court, that the judgment below be reversed.