Gardner v. Jaques

Beck, J. It will be observed that the deed to the Majors, under- whom defendants claim, was executed after the sale of the land by the sheriff upon the judgment against Charles F. Harrow, and prior to the commencement of the proceedings in the United States District Court, wherein it was adjudged the title of Francis M. Harrow was fraudulent, and that he held the land as trustee for Charles F. Harrow. To this suit the Majors were not made parties. The questions presented for our determination are these: 1. Were the Majors bound by the decree subjecting the lands to the judgment against Charles F. Harrow? 2. Were the Majors charged with notice of the judgment, sheriff’s sale and deed, under which the land was adjudged by the decree in the United States Court to vest in Wilson and Hall? This case is almost identical in facts with Hultz et al. v. Zollers et al., 39 Iowa, 589, the only difference being in the time of the execution of the respective deeds by Francis M. Harrow. In that case the deed was executed after the sheriff’s sale, but before the deed by the sheriff was made; in this the conveyance was made subsequently thereto. It will be ob [580] served that the lands in each case were conveyed to Francis M. Harrow, and were sought to be held subject to the judgment against Charles F. Harrow. I. In the case just named, we hold that the purchasers under Francis M. Harrow, not having been made parties to the action in the United States Court, are not affected by the decree therein. Of the correctness of this conclusion there can be no doubt. II. We also hold that the judgment against Charles F. Harrow was not a lien upon his equitable interest in the lands conveyed to Francis M. Harrow, so as to affect subsequent bona fide purchasers, without notice. This ruling is founded upon a settled doctrine recognized by this court. III. We further hold, in the same case, -that the purchaser from Francis M. Harrow was not charged with constructive notice of the sheriff’s sale, the conveyance to him having been made before the execution of the sheriff’s deed. The statute in force at that time, Code 1851, § 1917, provided that within a prescribed time the judgment and proceeding thereon, under which the sale was had, imparted “constructive notice’'’ of the rights of the purchaser. The deed from Francis M. Harrow was within that time. We hold that the grantee was not chargeable with constructive notice of the rights of the purchaser at the sheriff’s sale; that the statute referred to applied only to those deriving title or claiming interest under the judgment debt, and these only were chargeable with constructive notice. The case of a purchaser after the sheriff’s deed is executed is not different. The sheriff’s deed, after the expiration of the time prescribed in § 1917, of the Code of 1851, above referred to, would impart no notice unless it were filed for record under the registry law then in force, which provided that after such filing and proper entries in the records, they imparted “constructive notice to all the world of the rights of the grantee conferred by such instrument.” The notice imparted under this statute was no other or different than that given by the judgment and proceedings thereon, upon which the purchaser at sheriff’s sale based his rights. This con [581] structive notice, we have held, affected only those holding or claiming under the defendant in the judgment, and did not reach strangers to that proceeding. No reason can be given why constructive notice of a deed should reach farther and affect parties not chargeable with such notice of a judgment and proceedings thereunder. The constructive notice, in the case of the recorded sheriff’s deed, is imparted to those claiming, under the defendant in the judgment, the title which was divested by the sale, and cannot extend to. those claiming under an independent and hostile title. If the title of the judgment defendant was an equitable or trust interest not appearing of record, no notice would be imparted to those claiming adversely thereto. If this were not so, and “all the world,” in the broad sense of the expression as it is used by plaintiff’s counsel, must take notice of the transfer of this title by the sheriff’s deed, that instrument would, as against the world, convey the title of the land to the purchaser. If such be the result, the purchaser’s title would be perfect, and proceedings in equity against the holder of the legal title to subject it to the equity acquired by the purchaser at the sheriff’s sale, would be unnecessary, for that sale under this doctrine would defeat the legal title resting in another and vest it in such purchaser; a result that cannot be admitted. The prosecution of an action in chancery to subject the legal title to a judgment against-the holder of the equity, is rendered necessary by the doctrine everywhere recognized that purchasers of such legal title are not, in cases of the kind before us, chargeable with constructive notice of the equity set up against them. Plaintiff’s grantees, recognizing this principle of law, prosecuted the chancery action in the United States Court in order to subject the legal title to the judgment against the holder of the equity. The judgment of the Circuit Court is Affirmed.