Dawley v. Brown , 65 Barb. 107 ( 1873 )

By the Court, Mtjllin, P. J.

The court of chancery in England has, by decree, directed the sale of land by its masters, and vested title in the purchaser by the master’s deed. (See cases cited by Mr. Noyes in the case of The Chautauqua Co. Bank v. White, 2 Seld. 236; Edmeston v. Lyde, 1 Paige, 637; The Bank of U. S. v. Hauseman, 6 Peters, 536.) These were actions by creditors, to set aside fraudulent conveyances by them debtors, and for a sale of the land fraudulently conveyed ; and the court held the conveyances fraudulent, and directed sales and conveyances by the master. It does not appear by the cases that there was any direction for the debtors to unite in the deeds.

It is probable that such.a provision was contained in the decree ; as the chancellor, in Jackson v. Edwards, (7 Paige, 404,) says the ordinary mode in which courts of equity transfer the legal title, upon sale under a decree, is by operating on the parties themselves, and compelling them to join in the conveyance to the purchaser, so as to transfer their legal titles in connection with the equitable interest of any of the other parties ; which equitable interest would be bound by the decree, by estoppel, and would pass by the master’s deed without any formal conveyance by the parties having an equitable interest only. * * *

Independent of any statutory provisions, the court was not wanting in power to make a decree which would protect the purchaser at the master’s sale, when all persons having a legal or equitable title to the land, that was capable of being released or transferred to the purchaser, were made parties, and when they were within the jurisdiction of the court, so that its process could be made effectual against them, although the parties having the legal title or interest in the lands were infants, or femes covert. He proceeds to say, that in the case of married women, the court would compel them to unite with their husbands in transferring the title, by levying a fine, or in some other way by which the same end could be attained, and in case of infants by directing them to convey when they came o'f age, and when necessary, by injunction, and by not permitting the infant, on coming of age, to question the purchaser’s title.

It cannot be supposed that the chancellor, in 7 Paige, ascertained for the first time the extent of the power of his court to sell and convey lands, and we must assume that the sales ordered in the cases in 1 and 6 Paige were directed to be made in conformity to the views contained in 7 Paige; and if so, those cases are not introductory of a new rule, but applications of the weE settled rules which govern courts of equity in selling real estate.

If these are cases in which a court of equity may decree a sale and conveyance by a master, of land, without requiring the owner of the legal estate to unite in the conveyance to the purchaser, or to convey to a receiver, the case of a sale-of land fraudulently conveyed by a judgment debtor, and which has been set aside by reason of the fraud, is not one of them. (The Chautauqua Co. Bank v. White, 2 Seld. 236. Same v. Risley, 19 N. Y. 369. Walker v. White, 36 Barb. 592.)

It was held in these cases, and in others which might he cited, that a creditor who has proceeded to judgment against his debtor, and who finds that the debtor, before judgment, has made a fraudulent conveyance of his land, has three modes in which to obtain satisfaction of-his judgment out of said land, viz:

First. To obtain a judgment of a court of equity declaring the conveyance fraudulent, and setting it aside, and then proceeding and selling the land by virtue of his first judgment.

Second. By obtaining in the equitable action, in addition to the provision in the judgment, that the convey-' anee of the debtor was void, a further provision that a referee be appointed, with authority to sell at public auction, and that he convey, and that the debtor unite in such conveyance; or that a receiver be appointed, and that the debtor assign his interest in the land to him, and that he sell and convey.

Third. He may sell the land on his execution, and the purchaser may then set up the fraud in the conveyance of the debtor, and if established, obtain a judgment entitling him to the possession of the land.

In these cases, the title is not transferred to the purchaser by the conveyance of the master, referee or receiver, but by the conveyance of the owner of the legal estate, either directly to the purchaser or to the receiver, under the order of the court.

The conveyance by the master is necessary to convey the interest of any parties to the action who may have equitable interests in the land which is the subject of the action. (Jackson v. Edwards, supra. Walker v. White, 36 Barb. 592.)

I have referred to some of the cases in which it would seem that the court of chancery had held a different doctrine, and I have given what seemed to me the explanation why those cases appeared to upset the power of a court of equity to transfer the title to real estate by virtue of its own inherent power, and not by virtue of any conveyance of the party whose land is sold.

There are several other cases, which it may be proper to notice, which seem to proceed upon the same view of the law as the appellant’s counsel supposes were intended to be put forward in 1 and 6 Paige, (supra.)

In Sands v. Codwise, (4 John. 536,) the bill was.filed by creditors at large to set aside fraudulent conveyances, and for a sale of the land and satisfaction of the judgment out of the proceeds. The chancellor held the conveyance fraudulent, and ordered the debtors to ' convey to the master, and the master to sell. The court of errors reversed so much of the decree as directed a sale by the master, so that the decree as finally entered, left the creditors to proceed on his execution.

This ■ is in conformity to the views of the Court of Appeals in 2 Selden and 19 N. Y. (supra,) and is no authority in support of the proposition that the court has power to convey, proprio vigore.

In Reade v. Livingston, (3 John. Ch. 481,) the decree directed the fraudulent debtor to unite in the deed to the purchaser.

In Scouton v. Bender, (3 How. Pr. 185,) the plaintiff having recovered judgment for a debt against the defendant, filed a creditor’s bill, charging, among other things, that a conveyance by the debtor of real estate was fraudulent, praying that it be set aside, the land sold, and the judgment be paid out of the proceeds. The court adjudged the conveyance by the debtor fraud-lent, ordered the debtor to assign to the receiver, and the receiver was ordered to sell and appropriate the proceeds among the parties entitled. In that case there was no deed of the land ; if it passed to the receiver at all it was by virtue of the ordinary assignment of the real and personal property of the debtor. It was held that the real estate passed under the assignment, and the receiver could convey the legal title to the purchaser at his sale.

The case of The Chautauqua Co. Bank v. White, presents substantially the same state of facts, and the conveyance of the referee was held valid for the same reason.

It being held that the court has not power, in an action by a judgment creditor, to set aside a transfer of his debtor’s real estate, to order .a sale by a referee or receiver, and to vest the legal title in the purchaser at such sale, by virtue of the deed from such referee, or receiver, it becomes unnecessary to ascertain in what cases, if any, the legal title may be sold and conveyed by an officer of the court by virtue of its judgment; except it be to enable us to determine what effect is to be given to a conveyance by an officer, under a judgment in a cred-. itor’s suit in which the owner of the legal estate is not required to join, and does not convey to such officer.

If the court can, in any case, by virtue of its common law powers, sell and convey the legal estate of a party to an action, without the owner of such estate uniting in such conveyance, or conveying to the officer making the sale, and there is no statute limiting such common law power, it would seem to follow that the omission in a judgment, in such a case, to require the owner to join'in the conveyance or to convey to the officer, is an irregularity, and does not render void the sale; on appeal, the court would reverse the judgment.

It was held at an early day that a judgment creditor who had taken out an elegit and extended it on a moiety of the debtor’s land, might come into equity and have the lands sold by the court, in order to hasten the payment of his debt. (Stileman v. Ashdown, 2 Atk. 608. Burton v. Smith, 13 Peters, 464. O' Gorman v. Comyn, 2 Sch. & Lef. 137,150. Tenant's Heirs v. Patton, 6 Leigh, 196. Couts v. Walker, 2 id. 268. 2 Story's Eq. § 1216, a, b.)

The elegit was the appropriate execution against real estate, and by it the sheriff was required to deliver to the plaintiff one-half of all houses, lands, &c., wherein the defendant had any sole estate in fee or for life, at the rendition of the judgment, and the plaintiff was authorized to keep possession of said lands until the income thereof paid his judgment. This remedy was, in many cases, of no practical benefit to the creditor, and therefore it was that equity assumed to sell the moiety on which the elegit had been levied, and out of its proceeds to pay the creditor his debt. I do not find that in this class of cases a conveyance by the debtor was required. The court, by its decree, directed the master to sell the moiety seized by virtue of the elegit, and his conveyance transferred the title. Chancery was carrying into effect the lien acquired at law by the judgment. The court did not limit itself to enforcing the creditor’s lien by judgment, but compelled the debtor to appropriate to his creditor all such property as was not liable to be sold on execution. As to such property the creditor had no legal lien, and acquired none in equity until he had not only recovered judgment at law, but had issued an execution and had it returned nulla bona.

As the choses in action of the debtor were thus appropriated by the court for the benefit of the creditors, the right to enforce them by action could only be acquired through ‘ an assignment, by the debtor, the appointment of, or assignment to, a receiver became indispensable, as a master in chancery was not designed to discharge such duties. When the real estate of the debtor had been transferred by him, so that he had no interest therein, on which the judgment became a lien, no reason is perceived why a conveyance from the debtor should be required. It could not give to the grantee a better title than the grantor had ; whether the grantee was an officer of the court or a stranger.

Whether the court assumed to appropriate the land fraudulently conveyed by the. debtor, or permitted its officer or other person to intervene in procuring its application to the payment of. the owner’s debts, the fraudulent transfer must be first set aside, and when it is set aside, it is a matter of no moment whether it is sold by the order of the court with or without the concurrence of the debtor. In analogy to the case of the seizure on the elegit, the court sells.by its own inherent authority, to satisfy the judgment, because it is equitable and just that it should do so. It could not be doubted but that a judgment ordering a referee to sell lands that had been fraudulently conveyed, to satisfy the judgment of a creditor and to convey the same, would have been authorized by the cases of Stileman v. Ashdown, and other cases above cited.

Now because the courts of this State hold that these authorities do not apply to cases of judgment creditors, but.that in such cases the parties holding the legal estate must convey, and would make it proper to reverse a decree authorizing a conveyance by the master, or referee only, is the decree so utterly void, that a purchaser acquires nothing by his purchase under it ?

When it is said that equity has not jurisdiction to grant a particular species of relief, it is not strictly true to say that if the relief sought was granted, the judgment would be void, in the same sense that a judgment of a court is void in a case over which it is forbidden by statute to entertain jurisdiction.

The jurisdiction of the court of chancery has never been defined by statute. In every case presented to it, the question is whether relief has been granted in the courts of England or in this country in cases involving the same or analogous principles. If there has, the case furnishes authority for the court to proceed

It would be an alarming proposition that a judgment or decree in equity was without jurisdiction and void, because a judge had found what he supposed was a precedent authorizing it, but which, some other court thought did not justify the assumption of jurisdiction.

It may be true that the judgment of a court of equity would be void for want of jurisdiction, as well as that of a court of law, and perhaps it would be so, should it assume to try and determine an action of slander or assault and battery. But when the case is one in which it is doubtful whether jurisdiction can be entertained, and yet it is entertained, the judgment is voidable merely, not void.

When it is said by the courts that a purchaser at a sale by a master or referee, of land sought to be applied by a judgment creditor, in a court of equity, does not obtain the title through the master’s deed, but through that of the owner of the legal estate, and that equity never assumes to transfer the title to real estate by a deed from its master, no more is intended than that no precedent is found for it, or the precedents are against it. Should a court assert and act upon the opposite doctrine, it would, or rather might, become a precedent, which would overturn the cases which hold the title could not pass, except by virtue of the deed of the legal owner. If a court of law should hold that a sheriff’s deed does not convey the title of the judgment debtor to the purchaser, at a sale on execution, would the judgment be without jurisdiction and void, so that it could be assailed in a collateral action ? I apprehend not; and yet that is just the proposition that must be established in order to sustain the position of the respondent’s counsel.

While these are my views of the law, they cannot be acted upon so long as the case of Walker v. White, supra, stands unreversed, supported as it is, to some extent, by the cases of The Chautauqua Co. Bank vWhite, and The same v. Risley, supra. In Walker v. White, it was held that the deed of a referee, in a case almost identical with this, did not pass the title to the purchaser, notwithstanding there had been no appeal from the judgment directing the sale.

The case is binding upon us, and we must therefore hold that Johnson did not acquire, by his purchase at the referee’s sale, a title to the real estate; but it remained in Culver and passed to the plaintiff by the deed from Culver.

The respondent’s counsel set up, by his answer, the pendency of the suit brought by the plaintiff against Brown and Fox, for the recovery of the possession of the same premises, in abatement of the present action. That the former action is still pending, is conceded.

In order that the pendency of an action may be pleaded in abatement, two things must concur: 1st,' the two actions must be between the same parties; and, 2d, be for the same subject matter.

The first action is against both Brown and Fox; the second, against each for a part of the lands covered by the first. But in the first action it was not alleged that the defendants Fox and Brown had any joint interest in the same piece of land. Each owned a part of a large tract, in which, the other defendants had, at a prior date, an interest.

There could not have been, in the former action, a recovery against both Fox and Brown. The plaintiff would have been compelled to take judgment against one, and discontinue as to the other. So that in fact, the former suit was, so far as relief was concerned, against but one of the defendants.

It was held in Reeve v. Dolby, (2 Sim. & Stu. 464,) that the pendency of an action by husband and wife against her trustees, could not be pleaded in abatement of a suit by the wife, by her guardian, against her trustees, for the same cause of action. The reason assigned is, that the first action was the husband’s alone, and a decree of dismissal, in it, would be no bar to the second.

This reason cannot operate in this case. If the suit against Fox and Brown, for the same identical parcels of land for which they are separately sued in the second suit, is not to all intents and purposes between the same parties, as to each parcel of land, it would follow that a plaintiff might bring an action against six or any other number of defendants for assault and battery, or other tort, and separate suits against each of the same parties for the same wrong, and the pendency of the former could not be pleaded in abatement of either of the latter.

It is said in Garthew, 96, 97, that in trespass against two, each in a separate suit for the same tort, pleaded the pendency of the action against both, and the plea was allowed. (Bacon’s Abr. title, Abatement, m.) Why may not this plea be pleaded when the first action is against both, and then a separate action against each ? The action in which both the defendants are parties, is, in fact, a separate action against each, and it would work great injustice to allow a plaintiff to multiply suits when he can in no event recover against more than one.

I am of the opinion that the defence is good, and that the present action must be held to be abated.

If the provision in the judgment, that the referee sell the debtor’s real estate and convey the same, instead of directing an assignment, by the debtor, of the lands, or that he join with the referee in the deed, was a mere irregularity, the omission of Culver or his grantee to take advantage of it, would be fatal to an attempt now to do so. But following, as we must, the case of Walker v. White, we must hold that there was a total want of power in the court to authorize the referee to sell, and hence the title of the debtor was never divested.

The appellant’s counsel is mistaken in supposing that the case was before the General Term for the purpose of reviewing the original judgment under which the sale was made. The appeal was in an action brought to set aside the 'referee’s deed in. the first action, as wholly inoperative to convey the title.

[Pourth Department, General Term, at Syracuse, January 7, 1873.

Mullin, Talcott and M. D. Smith, Justices.]

The case of Hogan v. Hoyt, (37 N. Y. 300,) would be decidedly in favor of the appellant’s position were it not that the sale in that case was in an action for the foreclosure of a mortgage, and in that class of cases the court is authorized, by 'statute, by its master or referee, to convey the title of the mortgagor.

I am at a loss to determine whether the case of Maloney v. Hagan, has any application to this case. In that case the fraudulent -deed was set aside in an action by the judgment creditor, and the court ordered its receiver to sell, who did sell and convey the same. Mrs. Maloney was the wife of the judgment debtor and united with him in the deed, and after that deed was declared void, she brought an action to have her dower set off to her. It does not appear that the debtor assigned to •the receiver. If not, then the conveyance was inoperative,- as it is in this case. That point was not suggested either by counsel or the judge who gave the opinion of the court, and we should assume, I think, that there was an assignment by the debtor to the receiver; and if so, the case has no application to this.

I am for reversing the judgment, on the ground that the action was abated by reason of the pendency of the action against both Fox and Brown.

Judgment reversed and new trial ordered, costs to abide the event.