Sheasley v. Keens

Ragan, 0. On the 31st day of March, 1890, D. A. McElheney owned certain real estate in the city of Kearney, Nebraska, and on that date, for a valuable consideration, sold and conveyed it by deed to G. R. Sheasley. Sheasley ■did not record his deed until the 1st day of November, 1890. On the 19th day of May, 1890, Keens sued McEl-heney at law in the district court of Buffalo county to recover a sum of money which he alleged was due him from McElheney on a contract in writing; and at the time of filing his petition in that case Keens caused an attachment to be issued auxiliary to his law action and levied upon the property which McElheney had conveyed to Sheasley. At the time of filing his petition and suing ■out his attachment, Keens, in accordance with the provisions of section 85 of the Code of Civil Procedure, filed in the office of the register of deeds of said Buffalo county a notice of the pendency of such action, reciting, among other things, that the real estate in controversy had been attached to satisfy whatever judgment might be rendered therein. Keens duly prosecuted his action, and judgment was rendered finding the amount due him from McElheney and sustaining the attachment and ordering the real estate sold to pay the amount found due. The sale of the real estate' was duly made, Keens becoming the purchaser. This sale was confirmed and a deed ordered and issued to Keens for the property, which deed Keens put upon record after November 1, 1890. At the time Keens brought suit and filed notice under the statutes the property stood on the records of Buffalo county in the name of McElheney, and Keens had no knowledge — 59 — •or notice that Sheasley owned or claimed the property until about the time the order of sale was issued for the «ale of the property under the attachment. At that time, however, Keens was notified that Sheasley claimed the property by an unrecorded deed from McElheney dated the 31st of March, 1890. This action was brought by Sheasley in the district court of Buffalo county to cancel as a cloud upon his title the deed held by Keens based on the judicial sale above mentioned. Sheasley had a decree as prayed and Keens has appealed. The question presented by the record is this: Which has the better title to the real estate in controversy, Sheasley, who claims under the purchase and conveyance from McEl-heney, or Keens, who holds a conveyance for the property based on the judicial sale made thereof under the attachment proceedings had while Sheasley’s deed was unrecorded and while Keens was entirely ignorant that Sheasley had any claim or title to the property? 1. Section 16, chapter 73, Compiled Statutes, provides: “All deeds, mortgages, and other instruments of writing which are required to be recorded shall take effect and be in force from and after the time of delivering the same to the register of deeds for record, and not before, as to all creditors and subsequent purchasers in good faith without notice; and all such deeds, mortgages, and other instruments shall be adjudged void as to all such creditors and subsequent purchasers without notice whose deeds, mortgages, and other instruments shall be first recorded; Provided, That such deeds, mortgages, or instruments shall be valid between the parties.” This statute has been in force since 1857 and was re-enacted by the legislature of 1887. The statute just quoted was first construed by this court in Bennet v. Fooks, 1 Neb., 465. In that case Fooks made a mortgage on the 2d of October, 1857, upon certain real estate. This mortgage was not filed for record until April 6, 1858. One Moffit obtained a judgment against Fooks in December, 1857, on which an execution was issued and levied upon the mortgaged — 60 — real estate, and the -same was sold to him on the 30th of January, 1858, and on that date the sheriff issued to him a certificate of the sale. Up to this time Moffit had no knowledge of the existence of the mortgage. At that time the law did not require judicial sales to be confirmed by the court; and the certificate of sale issued by the sheriff to the purchaser at the judicial sale entitled the latter to a deed for the premises unless the execution debtor redeemed them within a certain time. In a suit to foreclose the mortgage, brought subsequent to the date it was filed for record, the court held that the purchaser of the real estate at the execution sale had acquired a title divested of the lien of the mortgage. The construction of the section of the statute quoted above was again before the court in Galway v. Malchow, 7 Neb., 285, and in that case the court overruled Bennet v. Fooks, supra, and held, in effect, that a title or lien to real estate based on an unrecorded conveyance thereof would prevail over a title thereto based on a judicial sale of said real estate, provided the unrecorded conveyance should be filed for record before the conveyance based on the judicial sale was recorded. To the same effect are Mansfield v. Gregory, 8 Neb., 432; Harral v. Gray, 10 Neb., 186; Mansfield v. Gregory, 11 Neb., 297; Hubbart v. Walker, 19 Neb., 94. Testate the effect of the cases quoted above by paraphrasing the language of Cobb, J., in Harral v. Gray, supra, a prior unrecorded deed, passing the legal title, made in good faith for a valuable consideration, will take precedence of a title based on a judicial sale made under an attachment or execution if such deed be recorded befoi’e the evidence of the title based on the judicial sale is recorded. Applying the doctrine of these cases last cited to the facts of the case at bar, it is clear that if Keens7 title depends upon the construction of the statute quoted above it must fail, for two reasons: (1) The deed which he obtained to the real estate in pursuance of the judicial sale made thereof was not filed for record in the office of the register of deeds until after the deed made by McEl61 heney to Sheasley was recorded; and (2) before the judicial sale was confirmed on which Keens’ title was based he had actual knowledge that Sheasley clamed title to the real estate by virtue of the McElheney deed. 2. Section 85 of the Code of Civil Procedure, so far as the same is material here, is as follows: “When the summons has been served or publication made the action is pending so as to charge third persons with notice of pendency, and while pending, no interest can be acquired by third persons in the subject-matter thereof as against the plaintiff’s title. Provided, however, That in all actions brought to effect the title to real property the plaintiff may, either at the time of filing his petition or after-wards, file, or in case any defendant sets up an affirmative cause of action and demands relief which shall affect the title to real estate, may at the time of filing such answer, or any time afterwards, file with the clerk or register of deeds of each county in which the said real estate thus to be affected, or any part thereof, may be situated, a notice of the pendency of such action, containing the names of the parties, the object of the action, and a description of the property in such county sought to be affected thereby. * * * Prom the time of filing such notice shall the pendency of such action be constructive notice to any purchaser or incumbrancer to be affected thereby, and every person whose conveyance or incum-brance is subsequently executed or subsequently recorded shall be deemed to be a subsequent purchaser or incum-brancer, and shall be bound by all proceedings taken in said action, after the filing of such notice, to the same extent as if he were made a party to the action.” That part of section 85 of the Code of Civil Procedure quoted .above preceding the words “provded, however,” has existed in this state for many years as section 85 of the Code of Civil Procedure. In the year 1887 (see Session Laws, 1887, p. 648) the legislature amended said section .85 by adding to it the words “provided, however,” and all the language which follows those words. Counsel for — 62 — the appellant now contends that Ms client’s title to the real estate in controversy does not depend upon said section 16, chapter 73, Compiled Statutes, quoted above, and the construction' placed on said section by the decisions of this court above cited, as said decisions were all rendered prior to the said amendment of said section 85. Counsel’s contention is that by reason of the Us pendens ■filed by Keens at the time he brought his suit against McElheney, and caused the real estate in controversy to-be attached, that Sheasley was in effect made a party to-thát action; that the lis pendens operated as constructive service upon Sheasley and bound him by the judgment rendered in the suit of Keens against McElheney in the-same manner and to the same effect as he would have been bound had he been in fact a party defendant to that action and served with constructive service; and that as-Sheasley made no defense to that suit, did not appear therein and set up his claim of title, that he cannot now in this, a collateral proceeding, question appellant’s title. This is doubtless a correct construction of said section 85-of the Code of Civil Procedure as it now exists; and this-brings us to a consideration of the provisions of the amendment to said section made by the legislature in 1887. The section as it stood prior to the amendment was as-follows: “When the summons has been served or publication made the action is pending so as to charge third persons with notice of pendency, and while pending no-interest can be acquired by third persons in the subject-matter thereof as against the plaintiff’s title.” The Roman or civil law provided: “A thing concerning which there is a controversy is prohibited during the suit from being alienated.” (Bennett, Lis Pendens, 63.) And one of the rules adopted by Lord Bacon when chancellor of England was in this language: “No decree bindeth any that cometh in Iona 'fide by conveyance from the defendant before the bill exhibited and is made no party neither by bill nor order, but where he comes in pendente lite, and — 63 — while tbe suit is in full prosecution, and without any color or allowance or privity of tbe court, there regularly tbe decree bindeth.” (Bennett, Lis Pendens, 57.) It will thus be seen that this section of tbe Code, as it existed prior to its amendment in 1887, was a legislative adoption of tbe equity rule of lis pendens that bad existed from time immemorial. Doubtless tbe rule owed its. origin to considerations of public policy and was designed to give force and effect to decrees affecting property and to inspire confidence in titles based on .such decrees. By tbe provisions of said section 85, as it existed prior to this amendment, third persons acquiring an interest in property in litigation were only bound by tbe judgment rendered in such action if they acquired their interest in tbe property after such action was pending; and tbe action was declared to be pending after tbe summons bad been served or publication made on tbe defendants to tbe action. An analysis of tbe amendment made by tbe legislature shows that two things were attempted: (1.) To make a Us pendens, filed at tbe time an action or cross-action was brought affecting tbe title to real estate, constructive notice to persons, not parties to tbe suit, acquiring any interest in the subject-matter thereof, from tbe time of the filing of such Ms pendens, instead of from tbe time when tbe suit pended as to tbe defendants therein. We know of no provisions of tbe constitution which this part of the amendment violates. It is not amendatory of, nor does it conflict with, any other statute prescribing tbe time in which a suit shall be deemed pending as to persons not made parties thereto. It is not in conflict with section 19 of tbe Code of Civil Procedure, because that section prescribes tbe time in which an action shall be deemed pending as to tbe defendants thereto. (2.) But tbe amendment under consideration also attempts to make a Us pendens filed at tbe commencement of am action or cross-action affecting tbe title to real estate, or a Us pendens filed any time after tbe commencement of such action or cross-action, constructive notice — 64 — to the holders of unrecorded conveyances or incum-brances of such real estate, though executed prior to the time of the filing of such lis penclens. The holder of an unrecorded deed or mortgage affecting the real estate involved in the litigation in which the Us pendens is filed, though such mortgage or deed was executed long prior to the time of the filing of the Us pendens, is, by the amendment, in effect, made a party to the suit in which the Us pendens is filed, and declared to be bound by the judgment rendered in that action, in the same manner as if he was in fact made a party to the suit and served with notice by publication. Section 77 of the Code of Civil Procedure, in force when the amendment under consideration was enacted and in force long prior to that time, defines in what cases constructive service may be had and upon what persons; and by this section constructive service is limited to non-residents of the state and foreign corporations, except where the defendant, being a resident of the state, has departed therefrom or from the county of his residence with intent to delay or defraud his creditors or to avoid the service of summons or keeps himself concealed therein with a like intent. It will thus be seen that the legislature, by enacting the amendment to said section 85, has amended section 77 of the Code of Civil Procedure providing for constructive service. The title to the act by which the section was amended is as follows: “An act to amend section 85 of the Code of Civil Procedure in regard to lis pendens, and to repeal said original section.” Nowhere in the title of this act is any reference whatever made to constructive service or to the statutes upon that subject. The title of the act does not purport to deal with the subject of constructive service, nor amend section 77 of the Code of Civil Procedure. In other words, the legislation embraced in the amendment is entirely foreign to the object of the act as expressed in its title. It therefore violates section 11, article 3, of the constitution, which declares: “No bill shall contain more than one subject, and the same shall be — 65 — clearly expressed in its title. And no law shall be amended unless the new act contain the said section or sections so amended, and the section or sections so amended shall be repealed.” (See, also, Smails v. White, 4 Neb., 353; City of Tecumseh v. Phillips, 5 Neb., 305; Sovereign v. State, 7 Neb., 409; State v. Board of County Commissioners, 10 Neb., 476; State v. Board of County Commissioners, 17 Neb., 85; State v. Corner, 22 Neb., 265.) We reach the conclusion, therefore, (1) that so much of the amendment to section 85 of the Code of Civil Procedure, passed and approved March 31,1887, as makes a lis pendens, filed at the commencement of an action or cross-action affecting the title to real estate, constructive notice of the suit to all persons not parties thereto and thereafter dealing with the subject-matter thereof is valid; and persons who acquire an interest in the subject-matter of a suit affecting the title to real estate will hold such interest subject to the disposition made of the real estate by the judgment finally pronounced in the action; (2) that so much of said amendment as makes a lis pendens, filed at the commencement of an action or cross-action, affecting the title to real estate, or a lis pendens filed at any time after the commencement of such action or cross-action, constructive notice of such action to the holders of liens, incumbrances, or conveyances of said real estate, executed prior to the filing of such lis pendens, is unconstitutional and void. The decree of the district court is right and is AFFIRMED.