Tigue v. Banta

Opinion by Mr. Justice Green, The prayer of the petition filed by the appellants is that the sheriff’s sale of Banta’s interest in the lot No. 1 should be set aside. The ground upon winch this relief was claimed was that enough money was realized by the sale of the two other Banta lots, Nos. 2 and 3, to pay off all the valid liens against Banta’s title, and therefore there was no necessity for the sale of the lot No. 1. There was no impeachment of the right of the plaintiff in the executions to levy and sell the other lots, nor were any irregularities in the sale alleged. The money realized at the sale of the lots Nos. 2 and 3 was not enough to extinguish all the liens against the Banta title, except upon the allegation that one of the judgments, to wit, C. R. Green v. Henry Banta, No. 162, June term 1893, for $1,100, was a void judgment because it was given without consideration, and for the purpose of hindering, delaying and defrauding the creditors of Banta. If that judgment was not a fraudulent and void judgment, the appellants have no case, because, in that event, all the proceeds of the sales, including the lot No. 1, would be [419] necessary to discharge the liens of record against Banta, and therefore the judgment creditor of Banta prior to the sale of the lot No. 1 to Matichack, would have the lawful right to sell that lot to satisfy his judgment. Now these appellants were not judgment creditors of Banta, but of Matichack, who purchased the lot No. 1 from Banta. As mere judgment creditors of Matichack, they would have no standing to contest the validity of the judgment of Green v. Banta. But they were judgment creditors of Matichack, who purchased lot No. 1 from Banta, and that lot was one of three lots owned by Banta at the time of the sale to Matichack. Banta remained the owner of the other two lots, and after the sale to Matichack other judgments were entered against Banta, and these became liens against lots No. 2 and 3, but not against No. 1. Now it is very clear that Matichack had the right to insist, at the time of the sheriff’s sale, that the lots Nos. 2 and 3 should be first sold, and if the proceeds were enough to pay all the liens against Banta, he had the further right to insist that there should be no sale of the lot No. 1. Upon the appellants’ application for an order of court to that effect, counsel for the judgment and execution creditor who was selling the land agreed that lots Nos. 2 and 3 should be first sold, and the sale was conducted in that way. The proceeds of the sale of lots Nos. 2 and 3 were enough to pay all the liens against Banta except the Green judgment, but they were not enough to pay that judgment also, but as that judgment was open and unsatisfied of record, the sheriff proceeded to sell the lot No. 1 also, and it required the proceeds of the sale of all three of the lots to pay all the liens against Banta. This being so, the sale of the lot No. 1 could not be impeached, and therefore would not be set aside, unless the allegations that the Green judgment was fraudulent and void were correct in fact, and duly established in an adversary proceeding. Now these appellants had become judgment creditors of Matichack and thereby had acquired a lien against the land purchased from Banta by Matichack, being the lot No. 1 before mentioned. If the Green judgment was fraudulent, the sale of that lot was unnecessary to pay the judgments against Banta, and the title to the lot would then remain in Matichack and therefore subject to the lien of the petitioners’ judgment against [420] him. This being so the petitioners had a direct interest in the Matichack lot, and this we think gave them a right to be heard on the question of the validity of the Green judgment. Matichack undoubtedly had the right, and as.it was a question-of lien upon property of which he held the title, Ms judgment creditors were necessarily directly interested in the question of preserving the title as a means of satisfaction of their judgment. It must be confessed that the averments of the petition against the validity of the Green judgment are meager and unsatisfactory in character and without detail or specific statement. But there is a distinct and positive allegation that it was given without consideration, and for the purpose of hindering, delaying and defrauding creditors. The denial of the charge of fraud in the answer is much more specific, definite and positive. It is supported by the affidavits both of Banta, the borrower, and Green, the lender, that the full amount of 11,000 was loaned by Green to Banta, and that the whole of the sum was actually paid in cash at the time the judgment note was given. • As against this distinct and absolute averment in the answer and supporting affidavits, the mere general averment in the petition goes for nothing more than the basis of an application for a hearing. As a matter of course it furnishes no ground for a decree setting aside the sheriff’s sale. Such a decree could only be made after a judicial finding of the disputed fact of fraud, either by the verdict of a jury, the report of an auditor or master, or by the court upon a hearing of testimony upon both sides taken directly before the court. We are disposed to think that such a hearing should be had, and as the appellants declare their willingness to have the matter heard in open court, we think it would be well that such an order should be made. We will not however interfere with the discretion of the court below on that subject, further than to direct that a hearing shall be had on the question of the validity of the Green judgment. The order of the court below is reversed and the rule to show cause why the sheriff’s sale should not be set aside is reinstated and continued until final adjudication is made as to the validity of the Green judgment, all proceedings to stay in the meantime, all costs to abide the event, record remitted.