Wood v. Fisk , 45 Or. 276 ( 1904 )

Mr. Justice Bean

delivered the opinion of the court.

The allegations of the cross-bill, in substance, are that in 1896, one S. A. Miles recovered a judgment against the defendant M. Fisk in the circuit court for Gilliam County for the sum of $1,322.02, besides attorney’s fees and costs ; that the judgment was entered in the judgment lien docket of that county, but the time “when docketed” was not stated therein; that a transcript of the lien docket was filed with the county clerk of Wallowa County on July 2,-1900, and at that time the defendant M. Fisk was the owner of the real property in controversy; that on the 9th of July, 1900, after the entry of the. same in the lien docket of Wallowa County, Fisk, without consideration, and for the purpose of hindering, delaying, and defrauding creditors, particularly Miles, the judgment creditor, transferred and conveyed the property in controversy to his son, the defendant Richard M. Fisk; that thereafter an execution was issued on the judgment recovered by Miles against Fisk in Gilliam County, directed to the sheriff of Wallowa County, who by virtue thereof levied upon and sold the real property in controversy to the plaintiff’s ancestor, S. G. Wood, for the sum of $600,- he being the highest and best bidder' therefor; that the sale was confirmed, and a sheriff’s deed issued and delivered to the purchaser,'who entered into possession of the premises, and so continued until the 20th of July, 1901, when he died, leaving as his heirs the plaintiffs herein, who have ever since been in possession thereof. The argument in support of the decree of the court below is that it appears from the cross-bill that the plaintiffs had .a complete defense to the action of ejectment brought against them by the defendant Richard M. Fisk, and therefore were not entitled to the interposition of a court of equity.

1. The judgment recovered by Miles against Fisk in Gilliam County was never docketed so as to become a lien upon real property, because the time “when docketed” was not stated in the judgment lien docket, as required by statute: Hutchinson v. Gorham, 37 Or. 347 (61 Pac. 431); Western Sav. Co. v. Currey, 39 Or. 407 (65 Pac. 360, 87 Am. St. Rep. 660). The filing of a transcript of such lien docket in Wallowa County was therefore ineffectual to create a lien upon the property in controversy, and hence the title acquired by the plaintiffs’ ancestor at the sale under the execution issued on the judgment did not relate back to the filing of the transcript, and was not prior in time to the. alleged fraudulent deed from the defendant M. Fisk to his codefendant, so that plaintiffs did not have the prior record title. The case, therefore, turns upon the question as to whether-the allegation that the conveyance from the defendant .M. Fisk to his son, after the rendition of the judgment and- prior to the seizure of the property under the execution thereon, was for the purpose of hindering and delaying creditors, constitutes such a defense to the action of ejectment brought by the fraudulent grantee against the successors in interest of the purchaser at the execution sale as will prevent plaintiffs from resorting to equity.

2. Where a debtor has conveyed his property for the purpose of defrauding creditors, it may subsequently be taken on execution against him, because as to the creditors the deed is void and the legal title remains in the grantor. The creditor in such case is not required to resort to equity to have the deed canceled, but may levy upon and sell the property under execution, and the purchaser will obtain a legal title (Wait, Fraud. Convey. 3 ed., § 59 ; 1 Freeman, Executions, § 136 ; Judson v. Lyford, 84 Cal. 505, 24 Pac. 286; Potter v. Adams, 125 Mo. 118, 28 S. W. 490, 46 Am. St. Rep. 468; Thompson v. Baker, 141 U. S. 648, 12 Sup. Ct. 89), and many of the authorities hold he may maintain an action of ejectment thereon against the fraudulent grantee : 14 Am. & Eng. Enc. Law, (2 ed.) 312.

3. It would seem, therefore, that the law action of Fisk v. Wood could probably have been defeated by proof that the conveyance to the plaintiff therein was made and accepted for the purpose of hindering, delaying, and defrauding creditors; but the defense would not have been as complete as in equity. It would have resulted in a defeat of the particular action; but the fraudulent deed would still have remained a matter of record, apparently valid, and a cloud upon the title of the plaintiffs. A purchaser at an execution sale of property fraudulently conveyed may not be required to resort to equity to have the fraudulent conveyance canceled and annulled, yet such is a common and well-recognized head of equity jurisdiction. Equity acts in personam, and fraud is one of the grounds of its interposition. Tlie existence .of a remedy at law does not interfere with the right of a purchaser at an execution sale to apply to equity to annul or cancel a fraudulent conveyance made by the execution debtor, thereby removing a cloud from his title: Wait, Fraud. Convey. (3 ed.), § 60; Eaton v. Trowbridge, 38 Mich. 456. Indeed, equity alone can disentangle the title .from the doubt and embarrassments which would otherwise interfere with the full enjoyment of the property and the free disposition thereof. The remedy given a defendant in a law action by Section 391, B. & C. Comp., of filing a complaint in equity in the nature of a cross-bill, when he is entitled to relief arising out of facts requiring the interposition of a court of. equity, is as broad as that which he might invoke by an original bill, if it is germane to the matter involved in the action at law and material to his defense, and, unless the remedy at law is “as practical and efficient to the ends of justice and its prompt administration as the remedy in equity,” he may file his cross-bill, notwithstanding he may' have a defense at law: South Port. Land Co. v. Munger, 36 Or. 457, 473 (54 Pac. 815, 60 Pac. 5); Fire Association v. Allesina, 45 Or. 154 (77 Pac. 123).

4. The appeal in this case was perfected September 29, 1903. The brief was filed October 28th, but was not served until three days thereafter. The delay in filing and serving the brief was insignificant, and no doubt due to excusable neglect, and is therefore no ground for an affirmance of the decree.

As the court was in error in sustaining the demurrer to the cross-bill, the decree will be reversed, and the cause remanded for such further proceedings as may be proper, not inconsistent with this opinion. Reversed.

Decided 1 August, l!)0i.