President of the Farmers' Bank v. Thomas

Robinson J., delivered the opinion of the Court. A scire facias was issued against the appellees, as ierre tenants to revive a judgment recovered by the appellants against Henry W. Thomas. The appellees severed, but pleaded substantially the following pleas: 1st.- Nul tiel record. 2nd. That before the issuing of the scire facias, the defendant, Elizabeth Thomas, filed a bill in Equity to sell the land of Henry W. Thomas, to enforce a vendor’s lien, which she held against all the real estate of the said Henry ; that said lien had existed and attached — 254 — long before the rendition of the plaintiffs’ judgment, that said Henry appeared to said suit, and a decree was passed for the sale of said real estate, that the same was sold by a trustee appointed by the court, and bought, paid for, and conveyed to the defendants. 3rd Plea. That the plaintiffs had notice of the suit in Equity, and after the decree and sale thereunder, became parties by appearing and filing their claim as "creditors of the said Henry W. Thomas, upon the judgment recited in the scire facias, and 'seeking payment thereof, out of the proceeds of sale, &c. To this third plea of the defendant Miles, .and which is the fourth plea of the other defendants,' the plaintiffs demurred, and the Court sustained the demurrer. To the second plea of the defendant Miles, and to the second and third pleas of the other defendants, the plaintiffs filed a replication, in which they admit the proceedings in Equity to sell the real estate of H. W. Thomas, as stated in said pleas, but say they were not made parties to said proceedings; they deny that the complainant in said Equity suit, had a vendor’s lien.on all the real estate of the said Henry, and aver that their judgment recited in the scire facias, was and is a lien ■ upon his real estate situate in St. Mary’s County, and which was sold under said proceedings, and purchased by the defendants. To this replication, the defendants demurrred, and it is from the judgment of the Court sustaining the demurrer, and the-general judgment entered for the defendants, that this appeal is taken. It thus appears by the pleadings, that the judgment recited in the scire facias was recovered against the said Henry W. Thomas, prior to the filing of the bill to enforce the vendor’s lien ; that'the plaintiffs were not made parties to said proceeding, and that the said vendor’s lien did not attach to all the real estate of the said Thomas, sold under the decree, and — 255 — purchased by the defendants. The question then is, whether the defendants can plead the decree of the Court passed in said cause, and the sale thereunder, as a bar to a scire facias on said judgment, brought by the plaintiffs against them as terre tenants of the said Henry W. Thomas? The well settled rule of law, that a judgment of a Court of competent jurisdiction, coming incidentally in question, or offered as evidence of title, cannot be impeached on the ground of informality in the proceedings, or mistake of the Court in the matter decided, relied on by the counsel for the appellees, we do not understand as being questioned by the other side, But there is a wide distinction between offering a judgment in evidence, as a muniment, or link in the chain of title, and pleading it as a bar or an estoppel to the right of a party to maintain his action. When offered in evidence, say the Court, in Barney vs. Patterson, 6 H. & J., 182, the judgment is not binding per se, it is merely evidence of title or the right to maintain the suit, but when pleaded in bar, or relied on as an estoppel, the party whom it affects, is not permitted to aver against it, or offer evidence to controvert it. In the latter case, the effect and operation of the judgment does not come incidentally in question, nor is it offered as evidence of title, but it is set up and relied upon as conclusive per se of the matter in controversy. No one questions the well settled rule, that when a case has once been fairly tried and determined, the judgment rendered therein is final and conclusive, as between the parties and their privies touching the matter in controversy, but it is equally true also, that such a judgment cannot bind or affect the rights of third parties, strangers to the record. It can hardly be necessary to say, that every man is entitled to his day in Court, and that only such persons, who in some manner recognized by the forms of law, become parties thereto, are bound by its proceedings. — 256 — That sales of land under decrees in Equity, are not exempt from the operation of this rule, must be considered as settled in Brooks vs. Brooke, et al., 12 G. & J., 306, Cockey vs. Milne’s Lessee, 16 Md., 207, and other cases in this Court. We are unable to distinguish in principle the case of Cockey vs. Milne’s Lessee, from the one before us. There the appellant offered in evidence a decree of a Corirt of Equity, on a bill to foreclose a mortgage, and sale- thereunder, prior in point of time to the proceedings in attachment, and judgment and sale under which the appellee claimed. . As against the appellee, the purchaser of the land at sheriff’s sale, the mortgage was not binding, because it was defectively acknowledged. The appellant however claimed that the appellee was concluded by the decree in Equity, and sale thereunder, but the Court say : “The title of the appellee acquired under the proceedings in attachment was good against any title asserted under the mortgage, and was in no. manner affected by the proceedings in chancery under which the appellants’ title was acquired. The appellee was not a party to those proceedings, and his right was not in any manner bound or affected thereby.” . In Sugden on Vendors and Purchasers, 111, it is said : “Where the Court sells, it will protect the purchaser against the parties to the suit, and all persons coming in under the decree. But a person having a legal lien as a judgment creditor, not coming in under the decree, would not he bound by it, and might proceed against the purchaser.” .As to the hardship resulting from the application of this principle to the purchasers under the decree, it may be replied that the plaintiffs’ judgment was a matter of record, and notice to the world. It was a lien upon the real estate of the debtor, which could be enforced by execution and sale of the property. If the proceedings in equity were intended to affect this lien, and to sell a — 257 — disencumbered title, the judgment creditors ought to have been parties thereto. They had a direct interest in the real estate to be sold under the proceedings, and the right to know the extent of the vendor’s lien and the amount due thereon. If, however, they were not made parties, it is very clear that the purchasers under the decree .acquired only the right, title and interest of the parties to the suit. Bolgiano vs. Cook, 19 Md., 375; Farmers’ Bank vs. Martin, 7 Md., 342; Sugden on Vendors and Purchasers, 521, (Ed. 14th.) We are of opinion, therefore, that the decree relied on in this case does not operate as a tar to the scire facias issued by the plaintiffs, and made known to the defendants as terre tenants of Thomas, and that the Court erred in sustaining the demurrer to the replication. The third and fourth pleas of the defendants, however, say that the plaintiffs had notice of the proceedings in Equity under which the land was sold, and became parties, by appearing therein and filing their claim, as creditors of the said Thomas, upon the judgment recited in the scire facias, and by seeking payment of the same out of the proceeds of sale. The question raised by these pleas is whether the facts therein stated are sufficient to constitute the plaintiffs parties to the proceedings in Equity under which the land was sold and the proceeds arising therefrom distributed. Ordinarily, where a person interested in a suit in Equity desires to become a party thereto, the proper course would be to file a petition setting forth the grounds upon which his claim is based. This, however, is not absolutely necessary, and it will be sufficient, if it appears from the record that he has appeared to the suit, and filed his claim, and had an opportunity of offering evidence in support of the same, and of appealing from the order of the Court in regard thereto. A party who comes into Court seeking payment of his claim out of — 258 — the proceeds arising from the sale of land sold under a decree-, will not be allowed to impeach the validity of the decree in a subsequent proceeding, nor will he be permitted to enforce the payment of the same claim against the land in the hands of a purchaser. In Lanahan, et al. vs. Latrobe, 7 Md., 268, it was held that a creditor who participates in a proceeding in Equity for the distribution of the proceeds of property sold under a deed of trust, so far makes himself a party as to waive his right after-wards to object to the validity of the deed. As we have heretofore said, the appellants were not bound by the decree under which the land was sold, because they were not made parties to the suit. They could have stood out and have enforced the payment of their judgment as against the land in the hands of the purchasers, provided their lien was superior to that under which the property was sold. But if, instead of doing this, they voluntarily became parties to the proceedings under which the land was sold, and sought payment of their claim out of the purchase money paid by these appellees, every principle of Equity and good faith. requires that they should be estopped from afterwards enforcing payment of the same as against the land. If the Court erred in rejecting their claim, the remedy was by an appeal. (Decided 29th January, 1873.) From the judgment of the Court below, sustaining the plaintiffs’ demurrer to these pleas, no appeal was taken, but inasmuch as the defendants have been deprived of the right of making the defence therein set forth, we shall, in reversing the judgment on the demurrer to the plaintiffs’ replication, order a new trial in conformity with sec. 16, Art. 5, of the Code. Judgment reversed and new trial awarded.