Pettit v. Shepherd

The Chancellor. The defendant was probably too late in making her objection for the first time at the hearing, that if the lien of the judgment no longer existed, the complaim .ant could not be injured by the sheriff’s sale because he would have a perfect defence at law against the purchaser at such sale. And as the defendant persisted in her intention of selling the farm upon the execution, notwithstanding the ■ remonstrances of the complainant, I think the objection to" the jurisdiction of this court could not have been sustained, even if it had been made in time, The jurisdiction of this court to set aside deeds and other legal instruments, which are a cloud upon the title to real estate, and to order them to" be delivered up and cancelled, appears to be now fully established. (See Ward v. Ward, 2 Hayw. Rep. 226; Leigh v. Everhart's Ex'rs, 4 Monro's Rep. 380 ; Hamilton v. Cummins, 1 John. Ch. Rep. 517; Apthorp v. Comstock, 2 Paige's Rep. 482; and Grover v. Hugell, 3 Russ. Ch. Rep. 432.) And if a court of chancery would have jurisdiction to set aside the sheriff’s deed which might be given on a sale, and to order the same to be delivered up and cancelled, as forming an irm proper cloud upon the complainant’s title to his farm, it seems to follow, as a necessary consequence, that the court may im terpose its aid to prevent such a shade from being cast upon the title, when the defendant evinces a fixed determination to proceed with the sale. It therefore becomes necessary that [502] I should inquire, whether the present complainant presented a-case to the vice chancellor which entitled him to the interposition of the court to stay the sale, or to a decree declaring his farm discharged of the lien of the judgment. The counsel for the defendant insists that the notice to the complainant of the existence of the judgment, and that it was still due at the time of his purchase, was sufficient to deprive him of the character of a bona fide purchaser, and to continue the lien as against him, although the ten years had expired at the time of his purchase. If such is to be considered the correct construction of the statute, limiting the lien of judgments to ten years as against purchasers in good faith and subsequent encumbrancers, there can be no doubt as to the correctness of the decision which is appealed from. For although the complainant has been so reckless of consequences, as to swear positively in his bill that he had no knowledge or notice of the existence of the Shepherd judgment, at the time he made the purchase of the farm, it is established by the testimony of four witnesses that he not only had actual notice of the existence of that judgment, but that he also knew that it was still due and unsatisfied. I concur, however, in the opinion incidentally expressed by Mr. Justice Sutherland, in delivering the opinion of the supreme court in the case of Little v. Haney, (9 Wend. Rep. 157,) that mere notice of the existence of a judgment, which is of more than ten years standing, will not render a purchase mala fide, within the intent and meaning of the statutory provision on this subject ; and that the legislature did not use the term bona fide purchaser in the ordinary sense in which it is used by courts of equity, in the statutory provision limiting the lien of judgments to ten years. A judgment is not a specific lien upon the lands of the defendant. It is merely a general lien, which gives the plaintiff no particular equitable claim upon the lands for the satisfaction of the debt, except so far as is necessary to prevent an unconscientious attempt on the part of the debt- or to deprive him of the benefit of his judgment. If the creditor, therefore, neglects to enforce his general lien against the defendant’s property for more than ten years, he has na equitable claim to a preference over subsequent encumbran [503] feis. In other words, he loses the benefit of his legal priority ; and having no better equity, the legal right of the subsequent encumbrancers will prevail, although they had notice of the existence of his judgment. Neither has the holder of the dormant judgment any particular equity, by reason of the' general lien, entitling him to special pzotection against a pur-' chaser of the real estate of the debtor, who purchases the same fairly and in good faith without any wish or intention' of depriving the owner of the judgment of the means of col-» lecting his debt. And where the debtor has other sufficient means of payment, or if he sells the land for the purpose of paying the debt, so far as the proceeds of the sale will go, or under circumstances which afford no reasonable grounds of suspicion to the purchaser that there is any intention on- the part of the debtor to deprive the creditor of the power of collecting his judgment out of his property, it is to be considered a purchase in good faith, within the meaning and intent of this statutory provision. But, on the other hand, if the purchaser colludes with the debtoi-, for the purpose of defrauding the creditor,- or if the purchaser, with full knowledge of the existence of the judgment, and that it is still unpaid,buys the land upon which it is a lien, under circumstances which ought to satisfy a reasonable mind that the necessary effect of such purchase will be to deprive the creditor of the-means of obtaining satisfaction of the debt and that the yen», dor intends to evade the collection of the judgment, he cannot be considered a purchaser in good faith, so as to defeat the judgment creditor’s lien upon the land, although he actually pays the full vaíue of the property. It is conclusively established by the testimony in the pres^ ent case, notwithstanding the positive oath of the complain-ant to the contraiy, that the Shepherd judgment was frequently talked of between him and Parks, during the negotiation for the sale, as a valid and subsisting debt, and that sounsel was consulted as to the continuance of the lien of the judgment upon the farm. It also appeal's from the testimony that Parks was poor, that the farm was the principal, if not the only visible property which he had, and that he was preparing to leave the countzy. The negotiation for the504 sale commenced some time before the ten years from the docketing of the judgment had elapsed; and the counsel who was consulted at that time as to' the lien, says his attention was particularly called to the Shepherd judgment as an existing debt, from the circumstance of his having previously received a letter from a third person, inquiring in what way that judg-ment could be avoided. And shortly after the expiration of the ten years, the parties again went to the office of Wood' and completed their bargain. It was at this time,- as I understand T. Wood’s testimony, that the complainant said he had agreed to take the land, and to save what he'could for Parks to leave the' country with. And it appears that Parks did move-to Upper Canada shortly afterwards, where he still resides. Prom the whole of the testimony in this case, I find it impossible to resist the conclusion at which I have arrived, that there was an intention on the part of J. Parks to avoid the payment of Shepherd’s judgment, and to' deprive him,- if possible, of the means of collecting it otit his property; and that the complainant was aware of such intention of Parks, and made his purchase of the farm iñ stich a manner as to aid him in carrying that intention into effect. That the complainant finding he could not safely purchase the property and pay for the same within the ten years, leaving Shepherd’s judgment unpaid, the negotiation was suspended until the expiration of that time, and the bargain was then com-pleted; when, as they supposed, Shepherd would be without remedy as against the land. If such was the fact, of which I have no doubt,-from the testimony-in the case, the complain-ant is not a bona fide purchaser of the premises, according to the intent and meaning of the statute, so as to discharge the lien of the judgment as to him. He will therefore be obliged to pay the' amount due on that judgment, and seek his remedy against Parks, either upon the covenants in his deed or otherwise. In this view of the case, the decree of the vice chancellor was right; and it must be affirmed, with costs.