Johnson v. Irwin

The opinion of the court was delivered by

Dunbar, J.

On the 12th day of November, 1894, six actions at law were commenced in the superior court of Pierce county by the appellants against one Erasmus Bennett et al. to recover different amounts aggregating $20,970.35. On the same day a writ of attachment was issued in each of said actions on the ground of non-residence of the defendants, and the same were, on the following day, November 13, 1894, levied upon the same property described in the mortgage sought to be foreclosed in the case at bar, as property of Erasmus Bennett. Upon the same day, the sheriff gave notice of his said levy and filed said notice and attachment with the auditor of Pierce county, and the several plaintiffs each filed with the auditor of Pierce county his notice of the pendency of the action, containing the names of the parties to the action, a description of the property affected thereby, and of the cause of action and the demands therein. These actions were prosecuted to judgment some time in March, 1895. On the 9th day of January, 1895, Charles Irwin and Louise H. Irwin, his wife (who were the mortgagors of the plaintiff herein), appeared in each of said actions by intervention and set up by way of answer and cross-complaint that they were the owners of said attached premises by deed of conveyance from Erasmus Bennett to them, of date September 1, 1893, and that said attachment constituted a cloud upon their title to said premises, which they prayed to have removed. Upon this intervention issues were made up, contesting the good faith of the Irwins’ title, and upon the trial it was in each of said causes adjudged and decreed by the court that the said deed of Erasmus Bennett to said Irwin was fraudulent and void, having been executed without consideration, and for the purpose of hindering, delaying and defrauding the creditors of said Erasmus Bennett, and the same was decreed to be vacated, canceled and held for naught, and said mortgaged premises were held to be the property of Erasmus Bennett, and the lien of said writs of attachment was adjudged to be a first lien upon said premises and superior to any claim of the intervenors, Irwin, or any one claiming under them. Execution was issued upon this judgment and the property was sold to Marshall K. Snell and Charles B. France, for themselves and the other appellants in the actions above mentioned, which sale was in due course confirmed by the court. Certificate of purchase issued, and the purchasers have ever since that date been in possession of the premises. On the first day of January, 1895, Irwin and wife and E. B. Bennett executed to the respondent Johnson their promissory note in the sum of $10,368, and gave a mortgage upon the same lands, which were sold under execution, to secure the same. The mortgage was recorded in the office of the auditor of Pierce county, January 21, 1895. Upon default in some of the conditions prescribed in the mortgage, Johnson commenced his action to foreclose the same on October 25, 1895—which is the suit now under consideration.

The complaint set up the execution of the note and mortgage, the non-performance of conditions imposed, with the allegation that the defendants, the appellants herein, claimed an interest in the lands sought to be subjected, by virtue of the execution sale under certain judgments obtained by them since the making and recording of plaintiff’s mortgage, but on obligations existing prior thereto, and which judgments, the complaint alleged, the defendants claimed to be a lien upon the property described in the mortgage. The appellants denied the main allegations of the complaint for want of information or belief, and as an affirmative defense pleaded the proceedings in the suits above mentioned. A reply was interposed to the affirmative allegations in the answer, and upon these issues the case proceeded to trial and a judgment was rendered by the court sustaining the complaint of the respondent and decreeing that said plaintiff John P. Johnson had a first mortgage lien upon the premises described. From this judgment the appeal is taken.

The first contention of the appellant is that the complaint did not state facts sufficient to constitute a cause of action, the suit having been brought before the mortgage became regularly due. The allegation is:

“That it was provided in and by said mortgage that if the taxes which were then or might thereafter be assessed and levied against the mortgaged premises, or any part thereof, were not paid when the same were by law due and payable, then the whole of the sum and sums mentioned in said mortgage with interest thereon should become due and payable and the plaintiff should be entitled to the possession of said premises.

“That the defendants and each and all of them have failed to comply with the terms and conditions of said mortgage in that the taxes on said premises for the years 1893 and 1894 levied and assessed by the county of Pierce for state, county and municipal purposes and amounting to more than $100 for each of said years have by law long since become due and payable and no part of such taxes have been paid by defendants or at all.”

Then follows what is really a conclusion of law:

“That the sums secured by said mortgage has thereby become due and payable and plaintiff is now entitled to and does hereby consider and treat said principal sum as due and payable and brings this suit to collect the same by foreclosure and sale in the manner provided by law.”

We think a reasonable construction of this provision entitles the respondent to treat the note and mortgage as matured. The appellant, referring to the clause in the mortgage which is to the effect:

“But if said sum ... is not paid when the same is due, and if the taxes and assessments . . . are not paid, . . . then said party of the second part shall be entitled to the possession of said premises,”

insists that these are eonjuctive provisions and that both of the events must concur before there is any right in the mortgagee to move in any way. Such a construction as this would destroy the effect of the provision in relation to the taxes altogether, for the mortgage would become due in any event upon its maturity, and upon such maturity the respondent would have the remedy of foreclosure under the law, whether stipulated in the contract or not. We also ■think that the mortgage was sufficiently acknowledged to entitle it to record.

The next contention of the appellant is that under the ruling of this court in the case of California Safe Deposit and Trust Co. v. Cheney Electric Light, etc., Co., 12 Wash. 138 (40 Pac. 732), appellants having pleaded .an adverse title which they claimed superior to that of the plaintiff’s mortgagor, such title could not be litigated in the foreclosure proceeding, and that it was the duty of the court to dismiss appellants from the case. We do not think this case falls within the rule announced in the case above cited. The complaint here seeks to try the priority of these respective liens, sets out the nature of the liens and asks that plaintiff’s lien he established and quieted; and even if technically objectionable, in a case where the objections were seasonably raised, the issue tendered by the answers in this case raise the question of priorities, and the objection raised by the appellant here was not raised until after the trial of the case below. It is insisted by the appellant that this matter was called to the attention of the court by objection to the testimony in an early stage of the proceedings. “ This course,” says the appellant in his brief, “ was pressed upon the court from the beginning of the case, and was first'brought to its attention by appellants’ objections to the reception of plaintiff’s note, mortgage and lis pendens (St. p. 4). The objections made were that these papers were immaterial and irrelevant, as they were as against appellants, the first question to be determined in the case being whether appellants’ title was or was not ‘adverse.’” A reference to the statement cited, namely, p. 4 of the Statement of Facts, shows, however, that upon the. introduction of the mortgage by the attorney for the respondent the objection was, “We object to the introduction of them as immaterial and irrelevant.” The grounds of the alleged immateriality or irrelevancy were not made known. The further objection raised on the same page was based on altogether different ground, and no objection whatever was raised to the trying of these issues until after the announcement of the findings of fact and conclusions of law when appellants proposed their third request which was as follows:

“That as to the claims of the defendants, Snell, Keyes, Ames and the State National Bank of St. Joseph, mentioned and set forth in the respective answers herein touching said property, this court, in this cause, takes no jurisdiction nor makes no order or decree¿ save and except that it orders and decrees that the last above named defendants, and each of them, go hence without day and recover their costs of the plaintiff.”

But as we have before stated, the cause was tried on the theory of ascertaining the priorities, and the answer directly put in issue this question. Paragraph seven of the answer is as follows:

“ As to the allegation contained in the seventh paragraph of said complaint, defendants admit that they have a right, title and interest in and to said premises, by virtue of attachments, judgment and decree •of court, execution and sale as hereinafter in their affirmative answer and defense is fully set forth, and •defendants allege that such right, title, claim, interest •and lien is prior and paramount to plaintiff’s alleged mortgage; and deny that it is subsequent, subject, or inferior to plaintiff’s said mortgage.”

And the prayer of the answer is as follows:

“That plaintiff’s action may be dismissed and that they have and recover their costs and disbursements;

“That plaintiff may be declared to have no lien upon said premises;

“ That the title of said land and premises may be vested and quieted in the answering defendants, Marshall K. Snell and the State National Bank of St. Joseph, Missouri;

“And that they have such other and further judgment, order and relief as may be just and equitable.”

Having tendered these issues and tried them out, it would not be just or equitable to allow the appellants do raise this technical objection at this time. But even conceding that the objection had been seasonably made, the action was properly tried under the rule announced by this court in the Pennsylvania Mortgage Investment Co. v. Gilbert, 33 Wash. 684, (43 Pac. 941), where it was held that in a suit for foreclosure of a mortgage, plaintiff was entitled to the trial of an issue Taised as to whether the title to the premises asserted by defendant other than the mortgagor was acquired prior or subsequent to the execution of the mortgage, and this is exactly what was tried in this case. The-whole case depends upon the determination of the fact whether the title to the premises asserted by the appellants was acquired prior or subsequent to the execution of respondent’s mortgage; and this brings us to the discussion of that question.

It is conceded that respondent’s mortgage was obtained after the filing of the writ of attachment and of the Us pendens in the auditor’s office in Pierce-county. But those actions were actions against Bennett and Company, and while it is true that Irwin and wife, respondent’s mortgagors, intervened in those actions and became parties thereto, this intervention was-subsequent to the filing of the writs of attachment, and of the Us pendens and subsequent to the execution of the mortgage to the respondent, so that respondent’s rights are in no way affected by the-appearance of his mortgagors in the suits against. Bennett and Company. The question, then, is: did the filing of the writ of attachment and Us pendens,. or either of them, constitute constructive notice to the-respondent? We held in Clerf v. Montgomery, 15 Wash. 483 (46 Pac. 1028), that where a debtor conveyed land to his wife in fraud of his creditors, and afterwards a creditor sued the husband, and the sheriff' levied on the interest of the husband in the land by filing a copy of the writ and notice of attachment in the county auditor’s office, a subsequent purchaser from the wife for value without actual notice of the-levy was a bona fide purchaser without notice' of any incumbrance. We are satisfied with this holding, and it settles the proposition in this case so far as the effect of the filing of the writ of attachment is concerned, but it is contended by the appellant that a. distinction can be drawn between the effect of the writ. of attachment and the lis pendens provided for in the laws of 1893. The language of § 17, page 412 of the laws of 1893, is exceedingly broad, and after providing for the filing of the lis pendens, announces that every person whose conveyance or incumbrance is subsequently executed or subsequently recorded shall be deemed a subsequent purchaser or incumbrancer and shall be bound by all proceedings taken after the filing of such notice to the same extent as if he were a party to the action. A literal construction of this law would of course sustain the appellants’ contention, but we think it must be construed to apply to persons whose conveyance or incumbrance is taken from the parties to the suit, and not from strangers to the record. The object of the registry laws is to enable a person to determine the condition of lands with reference to conveyances or liens, and a literal construction of this statute, instead of furnishing information which could be safely relied upon by the purchaser or incumbrancer, would constitute a trap for the investigator. Under our system of recording, it is the grantors and grantees of land, and not the description of particular pieces of land, that can be followed by a searcher of the records. In this case it would become the duty of the respondent in purchasing this land to investigate the title so far as the mortgagor Irwin was concerned up to the time that the mortgage was executed, and see that no judgments were of record against his mortgagor at that time which would become a lien upon his real estate, no writs or liens of any kind. It would then further become his duty to investigate the title in his mortgagor’s grantor, Bennett, back to the time when such grantor was divested of his title by the execution of his deed to Irwin. And if there were no liens upon the land at that time, and no judgments against Bennett which would constitute a lien against his real estate, surely he might then be dropped from further consideration, and it would not become the duty of the purchaser to further investigate Bennett’s legal responsibility or transactions. In other words, he would not be interested in any suits which might be brought against him after the title had passed from him by deed. The title, then, having been uncontradicted in Bennett at the time of the transfer of the execution of the deed by him to Irwin, and there being no judgments against Irwin which would constitute a lien on his real estate at the time that the mortgage was executed from Irwin to the respondent, and Irwin not having been a party to the actions in which the Us pendens were filed until after the mortgage was executed to the respondent, and respondent not having been made a party to the actions against Bennett, we think that, the court rightfully concluded that the respondent was not bound in any way by the actions brought by these appellants against Bennett or by the writ of attachment or Us pendens which was filed in that case.

It is next contended by the appellant that the respondent had actual notice of the pendency of the actions against Bennett, and the contention that the transfer from Bennett to Irwin was fraudulent and that he was therefore hound, even conceding that there was no constructive notice given. We have carefully examined the testimony on this point, but we scarcely think there is sufficient to warrant the conclusion that the respondent had actual notice of the scope of the suits against Bennett. Mr. Snell testifies that when he saw Johnson, the respondent, in February, and told him of these suits, Johnson said he knew of them, the November before. It does not follow from this that he knew of the attachments or the filing of the lis pendens which described this particular property. He may have known that these appellants had sued Bennett for a debt due, and that is the extent to which his admissions go, so far as the testimony of Mr. Snell is concerned.

The other objections raised by the appellants in regard to the proof of the amount due we think are not well sustained by the record, outside of the fact that the finding of fact in that respect was not excepted to.

The judgment will be affirmed.

Scott, C. J., and Anders, Reavis and Gordon, JJ., concur.