Frazier v. Crafts

Day, J. Section 3541 of tbe Revision is as follows: “Property acquired by a bona fide purchaser, under a judgment subsequently reversed, shall not be affected by such reversal.”' If the property in question had, under the former judgment, been sold to a third party purchasing in good faith, his title would under this section be protected, even if the reversal had been upon such ground as to render the recovery of a second judgment, by the plaintiff impossible. In that case the judgment defendant would be compelled to look to the judgment plaintiff, for compensation for the lands sold. Nothing is shown to affect the bonafides of the purchase by Crafts in this case, further than the fact that the purchaser was the judgment plaintiff. The case presents this question: May a judgment creditor, who purchases real estate at sheriff’s sale, before notice of appeal, upon which the judgment under which the sale occurred is afterward reversed, but who, when the cause is remanded, recovers another judgment for the whole amount of the first and interest, under any circumstances be considered a bona fide purchaser, and be entitled as such to the protection of the provisions of Section 3541 of the Revision? Or, in other words, can a judgment debtor whose real estate has been sold to the judgment plaintiff in satisfaction of the judgment, before notice of appeal, after the judgment under which the sale occurred has been reversed, and the cause has been remanded for new trial, and after the sheriff’s deed to the judgment plaintiff has been recorded, sell the real estate to a third -party and convey a valid title thereto, notwithstanding judgment is again rendered on. a new trial-for the full amount of the former judgment? These questions have not hitherto been answered by the adjudications of this court. The case of Twogood v. Franklin, 27 Iowa, 239, upon which appellant seems to rely, differs from the present one in two material respects: 1. The purchase was -made after notice of the appeal. 2. The party under whose judgment the sale occurred failed,' after the reversal, to recover another judgment. The language upon which appellant relies, “ that to constitute a bona fide purchaser of land, [113] one must have purchased without knowledge, at least actual knowledge, of an appeal, and must have parted with his money or altered his situation on the strength of such purchase,” expresses merely the views of the writer of the opinion. The only point determined in that case is: “ That a purchase of land at a sheriff’s sale by the plaintiff in execution, or his attorney, with actual knowledge of a depending appeal, is at the peril of the purchaser, and the party or his attorney thus buying is not, within the meaning of the statute, a bona fide purchaser.” The question now involved may fairly be regarded as res nova. No good reason is apparent why, under the circumstances of this case, a judgment plaintiff should not be protected. If, upon the re-trial, he had failed to recover judgment, he would stand in an attitude altogether different. Under such circumstances he would be bound to make restitution to the judgment defendant. And, so long as the title to the land remained in him, equity would require that he restore the land itself the very thing improperly received in satisfaction of a judgment which ought never to have been rendered. And if he could thus be required to restore the land to the judgment defendant, he might be compelled to restore it to the vendee of such defendant. But in this case the recovery of a second judgment for the full amount of the first judgment and interest, has definitively settled the question that Crafts is under no obligation to make restitution to Clark. If Clark had brought an action to recover the value of the land, it is clear that Crafts might have off-set the claim by the second judgment. And if Clark had sought to recover the land itself, and had even sticceeded, it would have been, in his hands, subject to the lien of such judgment. The true principle upon which bona fide purchasers at a judicial sale are protected in the rights acquired, we apprehend to be that they have a right to rely upon the validity of the judgment, and to invoke its protection for acts done under it whilst it is in force. If this be the principle, then there is no reason why a party, acting in every respect in good faith, and before notice of appeal, should not be protected to the [114] same extent as strangers. In Gower v. Doheny, 33 Iowa, 39, (not cited by either party to .this appeal) are reviewed all the' previous decisions of this court, cited by thé appellee, upon: the questioh of thé protection to be afforded to a judgment* creditor, purchasing at- a judicial sale, against outstanding' equities, and we. held that he was entitled to protection against* such equities of which 'he had no notice at the time of his: purchase. This decision is put upon the. ground that thé; judgment plaintiff stands upon the same footing as any other purchaser. The principle determined in that case' is decisive of this. The doctrine here -maintained does- not enable a party to retain property acquired'under an unjust judgment. If the* judgment is ultimately reversed, he must restore the property itself or its value. Resides, the judgment defendant has it-always in lxis power, by promptly taking an appeal, to prevent* the judgment plaintiff from becoming a bona fide purchaser.’. See Woodcock v. Bennett, 1 Cowen, 711 (734). The court did not- err in dissolving the injunction, nor in quieting defendant’s title.- Affirmed.