Ashmore v. McDonnell

[676] The opinion of the court .was delivered by Horton, C. J.: A reexamination of the record in this case and the opinion heretofore filed, convinces us that sufficient importance was not given in the decision rendered by this court to the conveyance of the premises in controversy, executed on December 2, 1872, by Samuel Ashmore to Conley H. Sweeney, and the conveyance by Sweeney on April 28, 1873, to A. H. Case and J. H. Putnam, who personally appeared and' answered in the action of McDonnell against Ash-more and others, as owners in fee of the premises, subject only to the lien of the mortgage executed by Ashmore and his wife on October 23, 1872, to McDonnell. After Ashmore made an absolute conveyance upon its face, on December 2, 1872, an examination of the records in the district court and in the office of the register of deeds would have shown that he had no interest in the premises. The Bernsteins certainly had no knowledge that the deeds were other than they appeared to be, and nowhere is it alleged that they had; therefore when they purchased, they had the right to rely upon the records as being truthful. At the time that the Bern-steins bought the premises, in 1879, the records showed that in 1872 Ashmore was the owner; that in October of that year he gave McDonnell a mortgage upon it; that in December, 1872, he conveyed it by general warranty deed to Sweeney; that in April, 1873, Sweeney conveyed it by general warranty deed to Case and Putnam; that in January, 1874, McDonnell commenced his action against Ashmore and Case and Putnam to foreclose the mortgage; that the court found McDonnell’s mortgage was a valid lien on the premises; that the premises — Case and Putnam’s premises, not Ashmore’s — should be sold to pay the lien and another claim; that under that decree it was sold to McDonnell; that Case and Putnam, the parties who were interested adversely to McDonnell, had never had the decree or judgment vacated or reversed. Of course the Bernsteins, being purchasers in good faith, were not bound to take notice of any secret equities existing between Ashmore [677] and Sweeney, or Ashmore and Case and Putnam. If the conveyance to Sweeney was not intended to be absolute, as stated upon its face, Ashmore is responsible — no one else. The judgments rendered against Ashmore in favor of McDonnell and upon the cross-petition of Shellabarger & Leidigh, were not only erroneous, but absolutely void. But the order of sale against the premises, which upon the face of the record were owned only by Case and Putnam, subject to the liens thereon, was not void, even if irregular; and as Case and Putnam never took any steps to set aside the judgment or the order of sale, they cannot now complain of the premises having been sold, even if the proceedings were irregular. In the action of McDonnell against Ashmore, the court found that there was due upon the note and mortgage executed by Ashmore and wife to McDonnell the sum of $379; that the mortgage was a lien upon the premises; that if the defendants (this included Case and Putnam) failed for ten days to pay the amount, with interest and costs, an order of sale should issue. This order of sale also embraced the judgment and lien of Shellabarger & Leidigh. But however irregular these judgments or orders were as to Ashmore, who was not a necessary party in that action, they were valid and binding upon Case and Putnam, because the decree and order of sale stand unreversed. Upon the face of the records in the offices of the district court and the register of deeds, no property of Ashmore was sold. The equities that Ashmore had therein were secret; therefore the foreclosure proceedings resulting in the sale of the premises; were legal and valid, as they have never been attacked by Case and Putnam as erroneous. The void judgments against Ash-more cannot affect or assist Case and Putnam; and therefore cannot affect the validity of the decree of foreclosure, nor the sale and proceedings had thereunder. In Jones v. Lapham, 15 Kas. 544, Mr. Justice Brewer, speaking for the court ? said: “It is insisted that no decree of foreclosure could be entered, because no legal service was made upon Hull, the mortgagor. Service was attempted by publication, but it is insisted [678] that it was fatally defective. Conceding this to be so, . . yet these plaintiffs in error are not in a position to take advantage of any such defect. The petition alleges the execution of the note and mortgage, and that so much remains due upon the note. These plaintiffs in error in their answer make no denial of this. As between Lapham and them, it is an admitted fact. It also appears that they are the present holders of the legal title. Hence, though the mortgagor was never in court, was never made a party to the action, the court might find the amount of the lien and direct the sale of the property to satisfy that lien. It often happens that the title to property subject to a lien passes through several parties subsequent to the date of the lien. Now if no personal judgment is sought, but only the subjection of the property to the payment of the incumbrance, it is enough to bring the present holders of the title into court, and, the amount of the lien being admitted or established, a valid decree of foreclosure may be entered, and the defendants cannot disturb the decree on the ground that the party who originally created the lien was not a defendant.” In the record in that case, a personal judgment was sought and obtained against Hull for the full amount claimed, and the court directed execution to issue against him for any unpaid balance that the sale of the mortgaged property failed to satisfy. Yet, upon the facts in that case, this court, upon the theory that the judgment was fatally defective and therefore void, decided that because the holders of the legal title at the time of the pendency of the action were in court, Hull was an unnecessary party, and the fact that the plaintiff in that action asked and obtained a void personal judgment against him in no way affected the decree for the sale of the property then belonging to the other defendants in that case. The lien of Shellabarger and Leidigh upon the mortgaged premises was prior to the conveyance from Ashmore to Sweeney; and therefore as valid a lien as the mortgage to McDonnell. The irregularity in attempting to foreclose that lien does not affect the order of sale, because Case and Putnam did not resist its enforcement, and have not attempted to set aside or reverse the judgment establishing anew that lien. It was decided in Lee v. Birmingham, 30 Kas. 312, that— “One who, being no party to the judgment, purchases at [679] sheriff's sale real estate, which by the record apparently belongs to the defendant, is protected against unrecorded deeds and mortgages and outstanding equities as fully as one who takes a voluntary conveyance from such defendant.” The purchaser of real estate upon the faith of a judicial decree from the party plaintiff* for a valuable consideration and in good faith, occupies as favorable a position as if he, instead of being an assignee or grantee, were the original purchaser at the judicial sale. (Howard v. Entreken, 24 Kas. 428.) As the Bernsteins purchased the premises upon a judicial decree — not void — for a valuable consideration and in good faith, they ought not now to be deprived of their property on account of the alleged fraud committed by Sweeney, or Case and Putnam, upon Ashmore. (See also Smith v. Burnes, 8 Kas. 202; Lewis v. Kirk, 28 id. 505; Pritchard v. Madren, 31 id. 47.) If the action of McDonnell to foreclose his mortgage had been instituted against Ashmore alone, or if a general judgment had been rendered against Ashmore alone, the decision of this court heretofore rendered would be correct; but on account of the matters stated and commented upon, that decision must be changed and modified in accordance with the views herein expressed. The judgment of the superior court will be affirmed. All the Justices concurring.