Rhodes v. McGarry

Thayer, C. J., delivered the opinion of the court. I have read the depositions of the witnesses taken herein and the exhibits submitted in proof, and am of the opinion that they fully sustain the referee in his findings regarding the mistake in the execution of the deed by John McGarry to the appellant. The testimony shows beyond question that the parties had in view the sale and purchase of block 285 in the Reserve addition to the town of Pendleton, Umatilla [228] county, Oregon, and that in filling out the said deed the said block was by mistake described as block 258. Said findings, as to tbe conveyance of said block 285 by appellant to George W. Mathews, his conveyance to Elizabeth Hardwick, and the taking possession of, and occupying the said block by the said parties, respectively, are also fully sustained by the testimony and exhibits. There can be no doubt but that the appellant, as against the said McGarry, is entitled to a decree to compel the reformation of the said deed in the particular referred to. Nor can there be any question but that the appellant, as a matter of justice, should be entitled to a decree against the respondents Houser, Flack and Dawson, enjoining them from proceeding to sell said block upon the judgments and executions referred to in said findings. Said Flack and Dawson are engaged in an attempt to enforce satisfaction of their respective debts against McGarry out of the property of the appellant through a mere technicality of law. They are endeavoring to profit out of an unfortunate mistake, and rely upon the language of the statute governing attachment proceedings to enable them to succeed in their efforts. Section 150, Civil Code, provides that “from the date of the attachment until it be discharged or the writ executed, the plaintiff as against third persons shall be deemed a purchaser in good faith and for a valuable consideration of the property, real or personal, attached, subject to the conditions prescribed in the next section as to real property.” Under this provision of thé statute it is claimed upon the part of said Houser, Flack, and Dawson, that they occupy the same position with reference to said block as a purchaser thereof in good faith; and in conseqence of its language,.the said referee and circuit court found and determined that the appellant was entitled to no relief in the suit as against said parties. This decision left the appellant no alternative but to acquiesce in the saU of the block for the purpose mentioned, and be ren jred liable upon her covenant of warranty contained in her deed to Mathews. [229] The respondents did not allege in their answer that the attachment proceedings against said block were taken in good faith, nor attempt to prove it as a fact by any testimony whatever. The only ground upon which they claim to be deemed purchasers in good faith and for a valuable consideration of the property, is, that the said proceedings were duly .instituted. If they had purchased the block from McGarry for a valuable consideration, and claimed by virtue of such purchase a right to it, to the exclusion of the equitable title which the appellant had therein, they would have been compelled to allege and prove that they had no notice whatever down to the time of the actual payment of the consideration of any such title, nor of the circumstances alleged in the complaint from which such notice could be inferred; and then they would only have established an equity in themselves equal to that in favor of the appellant, though their having the legal title would give them a superior advantage. ' The legal title, however, without being coupled with an equal equity, will not prevail over the equitable title. It seems to me that notwithstanding the language of the Code above set out, an attaching creditor, in order to be deemed a purchaser in good faith of the property as against one having an outstanding equity, must allege and prove all the facts necessary to establish that character of ownership in favor of a purchaser of such property as against such an equity. It can hardly be supposed that the legislature intended, by the provision of the Code referred to, to place an attaching creditor upon any more favorable grounds, with reference to his rights in the property attached, than those occupied by a purchaser of the property; nor to deem the former a purchaser in good faith except under the same circum stances in which the latter would be deemed such a purchaser. Any other view would lead to absurd consequences and occasion injustice. It would enable a party to cut off an outstanding equity by resorting to an attachment when he would not be able to accomplish it by a direct p chase of the property. Such a result was obviously not contem [230] plated by the adoption of the said provision of the Code. If this view be correct, it follows that the answer of the said respondents to the complaint in the suit was not sufficient to show that they were entitled to the standing of purchasers of the block in good faith. The answer filed by them does not' contain any such defense, but confines itself strictly to a traverse of the appellant’s allegations. If the respondents had desired to claim that they be deemed purchasers in good faith of the property, they should have averred the facts which, under the statute, would have constituted them such, in avoidance of the matters alleged in the complaint regarding the appellant’s equity, and not have attempted to avail themselves of such defense by merely controverting those allegations. Such pleas were very common under the former equity practice. The defendant’s statement therein was to the effect that the complainant may have had an outstanding equity in the property, but that the former had purchased it in good faith without notice of such equity, and that therefore the latter was not entitled to assert or claim the equity. The plea did not deny the fact that the complainant did not have the equity, but it barred his enforcement of it by alleging the new matter; and the same principle in pleading such matters exists now as formerly, although the system of pleading has materially changed. The respondents in this case should have alleged the facts showing that the attachment proceedings were duly commenced upon a valid debt; that the block in question was duly levied upon by the sheriff under the said proceedings; that he made a certificate containing the title of the cause, the names of the parties, a¡ description of the real property, a statement that the same had been attached at the suit of the plaintiffs therein, the date therof, and that he had delivered such certificate to the county clerk of the county of Umatilla, and that the latter had duly filed and recorded it as provided in section 151, Civil Code, and that they had no notice or knowledge of the mistake in the deed from McGarry to appellant at the time such proceedings [231] were taken and bad. These facts, properly set forth in the answer, wonld doubtless have entitled the attaching creditors to claim, as against the appellant, that they were entitled to “be deemed purchasers in good faith and for a valuable consideration of the property attached. ” Instead, however, of pursuing that course, the respondents chose to stand upon a strict denial that such mistake was made. Nor do the proofs submitted at the hearing show facts sufficient to entitle the respondents to claim that they or either of them, under said provision of the Code, should be deemed purchasers of the said block in good faith. The attachment proceedings were not introduced in evidence, and there is nothing to show that any such certificate by the sheriff was delivered to the county clerk, or was filed or recorded by him as provided in said section 151, Code; which, according to said section 150, Code, is a condition to the plaintiff, in an attachment proceeding, being deemed a purchaser in good faith. The language of the latter section, as will be observed by reference to it, is: “The plaintiff, etc., shall be deemed, etc., of the property, real or personal, attached, subject to the conditions prescribed in the next section as to real property.” According to this view, the respondents Houser, Flack, and Dawson acquired no rights in the said block under the said attachment proceedings that were not subject to the equity of the appellant therein, whether the possession thereof by the appellant and her grantees was sufficient or not to impart notice to them of such equity. Their attempt, therefore, to sell the block under the said proceedings was a clear violation of the appellant’s rights in the premises and contrary to equity and good conscience. The decree appealed from will be reversed and a decree entered in this court in accordance with the prayer of the appellant’s complaint^ and the case be remanded to the said circuit court with directions to enter such decree as the decree of that court, and for such further proceedings as may be necessary to carry the same into effect.