A. B. Farquhar Co. Limited v. Myers , 194 Ga. 220 ( 1942 )

1. Where an execution issued upon a judgment was recorded on the general execution docket of the county in 1929 and was levied upon described lands in 1932, and the levy was not entered on the original record of the execution within seven years, and the execution was not rerecorded with all entries thereon after more than seven years, although in 1938 the sheriff's levy was entered on page 282 of the general execution docket in which the execution had been recorded on page 139, the judgment, in so far as complying with record of the execution and entries thereon is concerned, became dormant. The entry of the levy on the docket in 1938, giving in connection therewith only the names of the parties to the execution and a notation to "see" the page of the docket on which the original execution had been entered, was insufficient to satisfy the statute which requires "rerecording." This is done only by recording again the entire execution together with all entries thereon.

2. Where to the levy of such execution in 1932 the defendant filed an affidavit of illegality, which was returned to the court from which the execution issued and there properly docketed, but the record shows that the plaintiff in fi. fa. made no appearance, filed no pleadings, and took no action in opposition to the illegality until March 27, 1941, when it filed a general demurrer thereto, this conduct on the part of the plaintiff in execution did not amount to a bona fide public effort to enforce collection in the courts, which under the Code, § 110-1001, would toll the statute and prevent dormancy. A purchaser from the defendant after the illegality was filed was not affected by the final judgment sustaining the general demurrer of the plaintiff in fi. fa., to the illegality on May 16, 1941, the illegality proceedings not having been duly prosecuted as required by the Code, § 37-117.

No. 14185. JULY 14, 1942. On August 20, 1929, A. B. Farquhar Company Limited obtained a judgment against Mary Ann Waller on a promissory note containing a homestead waiver, for $188.50 principal, together with interest, attorney's fees, and costs. Execution was issued on this judgment, and was entered on the general execution docket on August 21, 1929. The sheriff levied the execution on a tract of land on January 6, 1932. Advertisements of the sale appeared in four weekly issues of the Athens Banner Herald during January, 1932. On January 15, 1932, the defendant in fi. fa. filed with the sheriff an affidavit of illegality, the ground of the affidavit being that there was outstanding a security deed on the property under levy, and hence the defendant had no legal title. The sheriff filed the illegality with the clerk on February 3, 1932, and the illegality case was docketed to the September term, 1932. The plaintiff in fi. fa. filed no answer, and no further docket entries appear until March 27, 1941, when the plaintiff filed a demurrer to the affidavit of illegality. On May 16, 1941, the defendant amended her illegality, and on the same day the plaintiff renewed its demurrer to the illegality as amended, and the demurrer was sustained. On January 15, 1932, the defendant in execution filed her voluntary petition in bankruptcy, and in her schedule listed the plaintiff in execution as a creditor. She claimed the property under levy as a homestead exemption, and on April 15, 1932, the bankruptcy court set aside the property levied upon as a homestead exemption, and no objection was filed to the allowance of the homestead. The bankrupt was granted a discharge on August 18, 1933. On September 12, 1938, Mary Ann Waller executed and delivered to Mrs. Nona S. Myers a deed to secure a debt of $350, representing money borrowed for the purpose of redeeming the property under levy from tax sales; and on the same date the defendant in execution executed and delivered to B. B. Myers, B. L. Adams, and J. L. Dawson, trading as Farmers Seed Hardware Company, a security deed conveying the property under levy, to secure a debt of $141.21, representing the cost of materials used in constructing a building on the property, the deed reciting that it was subject to the security deed held by Mrs. Nona S. Myers. On September 16, 1938, the levy made on January 6, 1932, was entered by the clerk on general execution docket No. 4, page 282, and on the same page appeared: "A. B. Farquhar Company Ltd. v. Mary Ann Waller (See fi. fa. recorded on page 139 in this book)."

On June 26, 1941, the present suit in equity was filed by B. B. Myers, J. L. Dawson, and B. L. Adams, trading as Farmers Seed Hardware Company, setting out in substance the foregoing facts, and alleging, that the property levied upon was sold on April 6, 1937, by the City of Athens for city taxes for the years 1931 to 1936, inclusive; that when petitioners took the security deed in 1938 they had no knowledge of the existence of the judgment and execution; that A. B. Farquhar Company Ltd. had been guilty of negligence and laches in failing to have any entry whatever made on the general execution docket of the county as required by law, and in failing to file any pleadings or to prosecute its rights, if any it had, in the illegality proceedings for a period of more than seven years; that as a result of such negligence and non-action on the part of the plaintiff in execution Mrs. Myers was induced to loan the money with which the property was redeemed from the tax sale, and the petitioners were induced to furnish material for the erection of a dwelling on the land under levy, and take notes and a security deed on the land therefor; that the judgment has become dormant and was unenforceable, because no entry thereof was made on the general execution docket as required by law within seven years after the issuance and record of the execution, and because there had been no bona fide public effort to collect the execution in the courts at such times and periods that seven years did not elapse between such attempts, or between such an attempt and a proper entry; that the petitioners' secured note is past due and unpaid, and it is necessary to sell the property to satisfy the indebtedness; that, due to the manner in which the title to the property is involved, it is impossible to secure fire-insurance coverage on the property; that no income is being derived from the property, and it is depreciating in value; that because of the fact that title under the first security deed is in Mrs. Nona S. Myers the rights of the parties can not be fully determined by filing a statutory claim; and that the sheriff is threatening to sell the property under the execution in favor of A. B. Farquhar Company, and to avoid a multiplicity of suits equity should take jurisdiction. The prayer was for injunction against W. E. Jackson, the sheriff, A. B. Farquhar Company Ltd., and its attorney O. J. Tolnas, restraining them from advertising and selling the property described in the petition; that the levy made in 1932 be dismissed, and the judgment be declared dormant; for the appointment of a receiver to take charge of the property and sell the same and pay the liens according to their priority; that the petitioners' security deed be declared a lien on the property, subject only to taxes and the security deed of Mrs. Nona S. Myers; and for general relief.

A. B. Farquhar Company Ltd. filed a general demurrer to the petition, and an answer. The demurrer was overruled, and upon the trial the evidence showed the foregoing facts. It was agreed that the claim of Mrs. Nona S. Myers was superior to the claims of all other parties and should be paid first. A special verdict was directed, and a decree conforming to the verdict was entered, directing that the two security deeds were superior to the judgment and execution in favor of A. B. Farquhar Company Ltd. against Mary Ann Waller, dated August 21, 1929; that as between the plaintiff and defendant in the judgment the same is enforceable, subject to the two security deeds and the debts which they secured; and appointing a commissioner and directing him to sell the land, distribute the proceeds according to the priorities set up in the judgment, and to execute a deed to the purchaser. A motion by A. B. Farquhar Company Ltd. for a new trial was overruled. The movant excepted, assigning error on exceptions pendente lite to the judgment overruling its general demurrer, on the overruling of the motion for new trial, and on the decree, contending that the error in directing the verdict resulted in the erroneous decree. 1. A judgment will become dormant and unenforceable unless entry is made on the execution by an officer authorized to levy and return the same, and such entry and the date thereof are entered by the clerk on the general execution docket within seven years after the issuance of the execution and its record. Code, § 110-1001 (2). The judgment under attack in the present action was rendered in 1929, and the execution issued thereon was recorded in 1929. To avoid dormancy under the above statute it was necessary that an entry by a proper officer be made on the execution and such entry be entered by the clerk on the general execution docket within seven years from the time the execution was recorded. This would have required such entry by the officer before or during the year 1936. Both the petition and the evidence show conclusively that no such entry was made. But an attempt to satisfy this requirement was made by having the clerk in September, 1938, enter the levy made in 1932 on page 282 of the general execution docket, wherein the execution had been recorded on page 139. It is further provided in the above Code section, that, "when an entry is filed for record more than seven years from the date of the execution, the execution shall be rerecorded with all entries thereon; but if filed within seven years, the entry shall be recorded on the original record of the execution." Thus it appears that entries made within seven years must be recorded on the original record of the execution. This requirement is not satisfied by an entry in the same execution docket but on a page far removed from the page on which the execution is recorded. The provision of the statute in this respect is met only when such entry is recorded on the original record of the execution, which means on the same page and at the same place in the execution docket where the original record appears. But the record of the levy in the present case was not made within seven years from the date of the execution. Therefore such record must be such as will satisfy the terms of the statute stated as follows: "the execution shall be rerecorded with all entries thereon." Nothing done in the present case satisfies this portion of the statute. Hence it is held that the execution in the present case was not saved from dormancy by a compliance with the law as relates to entries and records on the execution docket.

2. The plaintiff in execution contends that the levy and return of the affidavit of illegality constituted a bona fide effort on its part to enforce collection in the courts, and thereby prevented the judgment from becoming dormant. The first act upon the part of the plaintiff in execution in connection with the illegality case shown by this record is the filing of its general demurrer on March 27, 1941, more than nine years after the illegality had been filed in court. In Conley v.Buck, 100 Ga. 187 (28 S.E. 97), the plaintiff in execution instituted the proceedings in equity which this court held constituted a bona fide effort to enforce collection of the judgment, which tolled the running of the dormancy statute during the pendency of the proceeding. That suit was the action of the plaintiff and was an effort on his part to collect the judgment. Nothing there appears to show that the equity suit was abandoned, or that the plaintiff ceased to prosecute the effort to enforce collection of his judgment. As pointed out by this court inGeneral Discount Corporation v. Chunn, 188 Ga. 128 (2) (3 S.E.2d 65), a suit filed and never formally dismissed may nevertheless not constitute a pending suit amounting to a bona fide public effort to enforce collection, sufficient to prevent dormancy. While the filing of pleadings designed to enforce collection of the judgment may constitute a new starting point for the seven-year period, if nothing further appears of record and no attempt is made to prosecute the action for a period of more than seven years, and no sufficient legal justification for the inaction appears, the dormancy statute will not be tolled by the mere existence of such pleadings. In Fulcher v. Mandell,83 Ga. 715 (10 S.E. 582), it was held that where the execution was levied upon land and a claim was interposed, the prosecution of the claim in the courts for over six years was such a public act on the part of the plaintiff as would prevent the statute of limitations from running pending the litigation. That ruling does not mean that the mere existence of a claim would toll the statute, but, as there stated, "the prosecution of this claim in the courts" constituted such public effort on the part of the plaintiff as would toll the statute. The decision in Ryals v.Widencamp, 184 Ga. 190 (190 S.E. 353). concurred in by only four Justices, two dissenting, held that, the levy there having been arrested by the filing of a claim, the claimant would not be heard to assert that pending such levy and the trial of such claim the statute of limitations continued to run against the fi. fa. It does not appear that the plaintiff in fi. fa. was inactive during the pendency of the claim, or that such plaintiff failed to take every opportunity to have the claim disposed of. That decision recognizes the construction placed upon the dormancy statute in a claim case by this court in Beck v. Hamilton, 113 Ga. 273 (38 S.E. 754). In the latter case the claimant died during the pendency of the claim, and it was held that because the plaintiff in execution thereafter allowed more than seven years to elapse before taking steps to make parties or to have an entry made upon the execution, the execution became dormant. It appears that the earlier decisions wherein it was stated that the act of the plaintiff in execution in prosecuting a claim case constituted a public effort to enforce collection which would toll the statute have been misconstrued to mean that the mere pendency of the claim without any action on the part of the plaintiff in execution was of itself sufficient to toll the statute. Speaking of this question, this court in Beck v. Hamilton, supra, said: "It is true that the decisions of this court have shown considerable liberality in holding that any effort on the part of a plaintiff in execution to prosecute his fi. fa. will relieve it from the operation of the dormant-judgment act. We are not, however, aware of any case which goes to the length of holding that where, as in the present case, the conduct of the plaintiff in execution is characterized by absolute and voluntary inaction for more than seven years, dormancy of the judgment will be prevented by the mere fact that a claim has been interposed." The opinion goes on to analyze some of the earlier opinions, and then says: "We think that this court has gone quite far enough in ruling that litigations under certain circumstances suspend the operation of the dormant-judgment act, especially in view of the plain letter of the law embodied in section 3761 of the Civil Code [now § 110-1001]." It is there pointed out that the pendency of a claim to property levied on does not prevent the plaintiff from obtaining an order of court to have his levy withdrawn and the execution levied on other property; to which we might add that in the present case no reason appears why the plaintiff in execution could not have had the execution with the entry of levy thereon recorded in conformity with the statute. Indeed the record shows that the execution was made available to the plaintiff, and that instead of making a valid record an insufficient record was made. Therefore the execution became dormant, because there was neither a recording of the same nor a bona fide public effort to enforce its collection in the courts, as required by statute to prevent its becoming dormant.

But the plaintiff in error contends that since the defendants in error acquired their lien after the levy and during the pendency of the illegality, they were charged with notice and were bound by the judgment sustaining the general demurrer to the affidavit of illegality. It is provided in the Code, § 37-117, that a pending suit shall be notice of an equity or claim to all the world from the time it is filed and docketed, and that "if the same shall be duly prosecuted . . one who purchases pending the suit shall be affected by the decree rendered therein." While the quoted provision of the section provides that if the suit is duly prosecuted a purchaser during the pendency of that suit will be affected by the judgment therein, it means more, — if the suit is not prosecuted, one who purchases after its filing will not be affected by any judgment rendered therein. Tinsley v. Rice,105 Ga. 285 (31 S.E. 174); Bridger v. Exchange Bank,126 Ga. 821 (5, 6, 8, 10) (56 S.E. 97, 8 L.R.A. (N.S.) 463, 115 Am. St. R. 118); General Discount Cor. v. Chunn, supra. The record in the present case showing that for a period of more than nine years after the illegality proceeding was filed in court the plaintiff in fi. fa. made no effort whatever to prosecute or dispose of the same, it must be held that the illegality proceeding was not "duly prosecuted," and hence the defendants in error, purchasers during the pendency thereof, are not affected by the judgment rendered therein. For the reasons above stated, the petition was not subject to general demurrer, and the evidence demanded the verdict rendered. There is no merit in any of the grounds of exception.

Judgment affirmed. All the Justices concur.