Abington v. Townsend

WHITE, C. This suit was brought under section 2535, Revised Statutes 1909, to determine title to forty acres of land in Butler County; the petition also contains a count in ejectment. The common source of title, it is admitted, was in I. M. Davidson who died in 1895, leaving a will. In 1901 a partition proceeding was instituted in the Butler Circuit Court by the widow and heirs of I. M. Davidson, the purpose of which was to partition this and other lands left by him. That suit proceeded to judgment, an interlocutory decree of partition was rendered in June, 1903, in which the court found the lands could not be partitioned in kind and ordered them sold. In pursuance of the order, in October of that year, the lands were sold and the I. M. Davidson Real Estate & Investment Company, a corporation, became the purchaser of the land in suit and of other lands belonging to the estate. The report of sale was duly made by the sheriff, who was a special commissioner appointed to sell the land, the sale was approved in due form, and a deed was made to the corporation purchaser. On August 3, 1905, the I. M. Davidson Real Estate & Investment Company conveyed the land to the defendant Townsend for a consideration of $500, and Townsend afterwards conveyed a half-interest to the other defendants. This is the title under which defendants claim. - In May, 1906, Laura Carter Davidson, one of' the heirs of I. M. Davidson, deceased, filed suit in the circuit court of Butler Co'unty to set aside the judgment in partition, the sale, and deed to the corporation in pursuance of it. The defendants here were not made parties to that suit. On the trial of the cause in 1908, the sale, order approving same, and deed to the corporation were set aside on the ground of fraud, but the interlocutory decree of partition was not set aside. The case was appealed to this court, and will be found reported in 226 Mo. 1. The judgment of the circuit court was affirmed. The matters decided and their effect will be considered later. — 609 — After that decision the original partition suit, on an amended petition, proceeded to a renewal of the decree and order of sale in May, 1913. That case also was appealed to this court and is reported in 249 Mo. 474, where it will he found that the interlocutory decree of partition was ordered to he modified. Afterwards, judgment of the circuit court was entered accordingly, and sale made in pursuance of it, by special commissioner, and the plaintiff herein became the purchaser in July, 1914. Thus it will be seen that the defendants- claim under a decree in partition and sale duly approved, and the plaintiff claims under a subsequent decree of sale in the same case, duly approved, the first sale having been set aside after the defendant’s purchase. The answer of defendants sets up the proceedings mentioned under which they claim. The replication of plaintiff, after a general denial, presents several objections to the defendant’s claim of title which, for convenience, we arrange as follows: First: The commissioner’s deed under the interlocutory decree of 1903, and the judgment approving the sale were canceled and for naught held on the 11th day of April, 1908, in the suit referred to of Labra Carter Davidson against the corporation. Second: The interlocutory decree under which the defendants claimed, rendered in 1903, was superseded and set aside and canceled by a subsequent interlocutory decree rendered in the same partition suit on the 8th day of February, 1911, and under this last decree the property was sold, the plaintiff became the purchaser, the sale was duly approved and deed made. This last decree and judgment approving the sale is pleaded as res adjudicata and a bar to the plaintiff’s claim in the premises. Third: At the time of the alleged sale under the interlocutory decree of partition rendered, in 1903, the I. M. Davidson Real Estate & Investment -Company was not a corporation nor an entity which could take title, — 610 — and therefore no sneh title passed by snch sale, a fact which the defendant knew or by the exercise of reasonable diligence could have known. Fourth: The Supreme Court of Missouri, in the case reported in Volume 226 at page 1, held that the I. M. Davidson Real Estate & Investment Company acquired no title by the purchase and deed made in 1903, and that decision having announced that doctrine as a rule of property the plaintiff herein relied upon it in his subsequent purchase in 1913. In the latter case the corporation set up that it had sold the very land in question here and prayed to have it excluded from the operation of the judgments, and the court refused that prayer. Fifth: When the land was sold by the special commissioner in 1913, at the time the plaintiff bought, the defendant herein was present through his agent and attorney and bid on the land and for that reason is es-topped to question the title acquired by the purchaser at that sale. The facts in connection with the several issues thus tendered will be noticed in the opinion. There was a judgment for plaintiff and defendant appealed. Privies in Judgment. I. The first question presented is whether the pleadings and decree in the ease of Laura Carter Davidson v. Davidson Real Estate & Investment Company, and other proceedings therein, were competent evidence, all of which proceedings were begun after the defendant acquired his title. This evidence was offered by plaintiff after defendants had exhibited their title in defense, for the purpose of showing that the sale and judgment approving same, under which defendants claim, were set aside. The defendant Townsend, not having been a party to.that suit, could not be bound by any proceeding therein, unless he was in privity with a party to it. It is said by Freeman, in his work on Judgments, section 162, in a passage often cited: — 611 — “It is well understood, though not usually stated in express terms in works upon the subject, that no one is privy to a judgment whose succession to the rights of property thereby affected occurred previously to the institution of the suit. ... No grantee'can be bound by any judgment in an action commenced against his grantor subsequent to the grant.” The principle is elementary, of general application, and has been applied in this State. [Schmidt v. Niemeyer, 100 Mo. 207; Powers v. Heath’s Admr., 20 Mo. 319; Githens v. Barnhill, 184 S. W. 145; Calculagraph Co. v. Automatic Time Stamp Co., 154 Fed. 166; Northwestern State Bank v. Silberman, 154 Fed. 809, l. c. 814; Schuler v. Ford, 109 Am. St. (Idaho) 233, l. c. 237; Heffernan v. Ragsdale, 199 Mo. 375, l. c. 384; Colburn v. Yantis, 176 Mo. 670, l. c. 682; Gott v. Powell, 41 Mo. 417.] It was error, therefore, to admit the pleadings, judgment and other proceedings in that case in evidence. Rule of Property. EL Eespondent, however, asserts that the decision of this court in the Laura Carter Davidson case, 226 Mo. 1, establishes a rule of property; that is, it determines the force and effect of the judgment and the sale under which the defendants acquired title, that plaintiff bought in reliance upon that rule of property, and, therefore, is protected in the title which he acquired. The doctrine of stare decisis protects only those who obtain title in reliance upon the decision announced. [Reed v. Ownby, 44 Mo. 204; Dunklin County v. Chouteau, 120 Mo. l. c. 593.] The decision mentioned was rendered in 1910. If it be claimed that it announced a rule of law as applied to a given state of facts and a given record, then, before that rule was announced as applicable to a state of facts, the defendant Townsend had acquired his title and paid his money. He could not be affected by a doctrine enunciated afterwards, if it changed the law already recognized as applicable to such a case. When the plaintiff, relying upon the doctrine of that decision, if it was new doctrine, and upon the judg — 612 — ment which it affirmed, went to purchase he was hound, in looking up the title which he sought to acquire, to find out whether a prior purchaser had acquired an interest before the rule was announced. But that ’decision did not in any manner change or modify any rule of law. The suit was an attack upon a judgment for fraud. The finding of the court turned upon facts dehors the record showing fraud in the conduct of the partition sale and order approving the same. All that evidence of fraud was before this court when it affirmed the judgment of the circuit court and pronounced the law as applied to the facts. In the present case we have none of those facts, we have only the naked record which, on its face, is entirely regular; and hence, the doctrine of law announced in the Laura Carter Davidson case, as applied to the facts there presented, is not necessarily applicable here. The decision has the same weight as any other decisions of this court which may be in point upon the questions presented. It will be considered later. Subsequent Proceedings After Partition Sale. III. Plaintiff offered in evidence the proceedings in the partition, suit which occurred after defendant’s purchase. These subsequent proceedings, as stated above, included a modification of the interlocutory decree of partition, a renewal of the order of sale in 1913, the sale to plaintiff and approval same-' This’ evidence was introduced by plaintiff in making out his case before defendant’s title was in evidence. It was competent for that purpose; then, it was for defendant to overthrow the prima-facie ease of title thus made by showing an earlier title in himself. That the defendant did. He showed he obtained title under a judgment, regular on its face, rendered by a court having jurisdiction of the subject-matter and the parties. His title could not be impaired by a subsequent modification or annulment of that judgment in an action to which he was not a party. He is in the same position as a purchaser under a judgment which afterwards is reversed — 613 — on appeal or set aside on motion. [Colburn v. Yantis, 176 Mo. 670, l. c. 682; Grott v. Powell, 41 Mo. 417; Jones v. Driskill, 94 Mo. 190; Schmidt v. Niemeyer, 100 Mo. 207.] Plaintiff’s prima-facie title is good only if defendant acquired none by his earlier purchase. So that it only remains to consider questions presented by the record and proceedings in the partition proceeding under which defendant claims up to the time of the sale and approval. The consideration of the matter is unembarrassed by any other records or later proceedings in that or the other case. If defendant’s title was good at the time he received his conveyance it is still good. Record in Partition Proceedings. IV. We come now to a consideration of the record on its merits. The interlocutory decree of partition and order of sale where formal and regular, the report of sale by the sheriff as commissioner was also regular and was approved by the circuit court in a ^ual judgment and a deed made in pursuanee of it in due form. This was the record which presented itself to.the defendant Townsend when he purchased the land in 1905. He had no notice of any infirmity, irregularity or fraud. He bought, paid his money for the land, and received a deed in due form. Plaintiff asserts that the sale, the order approving it, and deed in pursuance of it, were declared void by this court in the Laura Carter Davidson case and, being void and not merely voidable, it can be attacked collaterally as it was attacked in this case. In ascertaining just what was decided in that ease we must look at the facts before the court there. In the first place, the court in that opinion calls attention several times to the fact that the attack was not collateral, hut direct. The court said, on page 29: “It should 'be borne in mind that in this case the plaintiff charges the falsity of this record. This is a direct proceeding attacking the court proceedings, so far as they relate to — 614 — this case from the interlocutory judgment in partition down to the making of the deed.” The italics are ours. It will be remembered that the original interlocutory decree was not set aside, but was held to be valid; it was only the sale in pursuance of it that was set aside. The order approving the sale was obtained by fraud, there was proof of “falsity of the record.” This court then points out several important particulars in which the record did not speak the truth, so that the court was deceived into rendering the judgment approving the sale. The court in that connection uses this language: “That judgments can be attacked in an equitable action to set them aside on the ground of fraud in the procurement thereof, there can be no question.” In the present case, that same record imports absolute verity and stands without an attempt to impeach it. The plaintiff offered no evidence to show fraud in procuring the judgment; he onlv offered the pleadings and judgment in another case, which we have held above to have been inadmissible; the facts there found are in no sense res adjudicata here. In addition to fraud, there were some irregularities in the conduct of that sale. The court mentions, among other things, the report of sale by the sheriff which, by the record in that case, did not show he was acting as commissioner appointed to make the sale. That irregularity does not appear here. The report is made and signed by the sheriff as commissioner.' In short, the evidence of fraud and irregularities which was before the court in that proceeding.is not before the court in this. So that case, being entirely different from this case in the record presented, was not authority for the judgment here. — 615 — Attack on Fraudulent Judgment. — 614 — V. It becomes necessary, however, to determine whether the judgment under which defendant claims — 615 — may be attacked for fraud in this collateral proceeding. That is, can the plaintiff in this case impeach the order approving the sale under which the defendant claims by offering evidence to show it was procured by fraud? If not, it will be unnecessary to remand the case in order to give plaintiff an opportunity to make such proof. The rule is that a judgment obtained by fraud may be impeached by the parties to it or those in privity with them in a direct proceeding for that purpose, as indicated in a passage quoted above from the decision in the Laura Carter Davidson case. But parties to an action and parties in privity with them cannot collaterally impeach a judgment on the ground of fraud. [2 Freeman on Judgments, sec. 336; DeGraw v. DeGraw, 7 Mo. App. 121; State ex rel. v. Ross, 118 Mo. l. c. 45-6; Hart v. Hunter, 144 S. W. (Tex.) l. c. 884; Morris v. Sadler, 88 Pac. (Kan.) 69; Reed Brothers v. Nicholson, 158 Mo. 624; Johnson v. Realty Co., 167 Mo. 325, l. c. 341.] If the plaintiff in this case is in privity with the parties to that judgment then he cannot attack it collaterally for fraud. Privity is defined as mutual or successive relationship to the same rights of property as grantor and grantee. There are cases which indicate that plaintiff is privy to the judgment, having bought after its rendition. [Crispen v. Hannavan, 50 Mo. 415, l. c. 418; Womach v. St. Joseph, 201 Mo. 467, l. c. 478; Summet v. Realty Co., 208 Mo. 501, l. c. 510; Cooley v. Warren, 53 Mo. 166, l. c. 169; Withers v. Railroad, 122 Mo. App. 282, l. c. 292; State ex rel. Subway Co. v. St. Louis, 145 Mo. 551, l. c. 567. But it is not necessary to decide that plaintiff is in privity with parties to the judgment. He is precluded from a collateral attack if he is regarded as a stranger. It has been held that a judgment may be impeached in a collateral attack on the ground of fraud in its procurement by a stranger to it. However, that is an exception to the general rule that a judgment regular on its face cannot be attacked' collaterally, and applies to cases where the stranger attacking the judgment is — 616 — prejudiced by. i-t in respect to some preexisting right. The doctrine usually is applied where there is a case of collusive judgment in fraud of creditors. A stranger, whose right accrues to him after the rendition of the judgment obtained by fraud, cannot attack it on that ground in a collateral proceeding. ■ [Stoutimore v. Clark, 70 Mo. 471, l. c. 478; Hogg v. Link, 90 Ind. 346; Johns v. Pattee, 55 Iowa, 665; 2 Freeman on Judgments, sec. 335; Githens v. Barnhill, 184 S. W. (Springfield Court of Appeals) 145.] The case of Hogg v. Link is directly in point and reviews many authorities where the ruling is as stated. The court in that case said on page 352: “Fraud in the procurement of the judgment is an extrinsic and collateral fact, and constitutes ground for a direct attack upon the judgment by a party thereto, by an application corresponding to an original bill in equity. ’ ’ The court then quotes from an early Iowa case, as follows (p. 357): “If a judgment was fraudulent by collusion between the parties to it, on purpose to defraud a subsequent purchaser, the case would present a very different question. But if the judgment was fraudulent only as between the parties, it is for the injured party alone to apply the remedy.’ ’ And further, at page 357, the court said: “It is stated to have been a principle of the common law, that a fraud could only be avoided by him, who had a prior interest in the estate affected by the fraud, and not by him who, subsequently to the fraud, acquired an interest in the estate.” The case of Githens v. Barnhill, 184 S. W. 145, was an action on covenants of seizin, contained in a deed where the covenantor conveyed a title acquired under the same partition sale as that under which the defendant claims here. The covenantee afterwards purchased the alleged outstanding title which was acquired through the same proceeding and sale as that under which the plaintiff here claims. The Springfield Court of Appeals — 617 — held the plaintiff already had a good title and was under no necessity to buy thé alleged outstanding title, and that the proceeding under which the I. M. Davidson Real Estate & Investment Company acquired title, being regular on its face, was not subject to collateral attack. The exception to the general rule regarding a collateral attack upon a judgment can avail only one whose rights have been affected by it, and not one who acquires an interest in the subject-matter of the judgment after its fraudulent procurement. The plaintiff had no right which was affected by the judgment, having acquired his claim long afterwards. He is in the same position as the parties to it themselves in his inability to attack it collaterally. If he had offered evidence to show fraud in procuring the order approving the sale under which defendant claims similar to that shown by the record in the Laura Carter Davidson case, the evidence would have been inadmissible, and would not avail the plaintiff if the cause were remanded for another trial. Non-Existent Purchaser. VL. Another reason advanced to show that the conveyance to the corporation, the I. M. Davidson Real Estate & Investment Company in 1903, was void, is because it is said there was no such corporation in existence at the time. The sale was made on October 12, 1913, by the commissioner. The corporate articles of association were filed on that day, but the certificate of incorporation was issued by the Secretary of State on October 14th. The report of sale by the sheriff as commissioner was approved on the 22nd day of October, and the deed to the corporation executed on that day, so that on the day of the sale the corporation had no legal existence, but was duly in being at the time the deed was made to it, and had been for eight days. Respondent cites many authorities to show that a conveyance made to a non-existent person or corporation is void, a proposition which we may concede to be correct. — 618 — It is a common occurrence for the promoters of a corporation t.o make contracts which afterwards are assumed, and the benefits of the same accepted, by the corporation when formed. There are numerous instances of that kind and in such case the right and liability of the corporation relates back to the time the contract ’was made. [Waterman’s Appeal, 26 Conn. 96; Stanton v. N. Y. & E. Railway, 59 Conn. 272, 21 Am. St. 110; Reichwald v. Commercial Hotel Co., 106 Ill. 439; McArthur v. Times Printing Co., 48 Minn. 319; Rogers v. N. Y. & T. Land Co., 134 N. Y. 197; Bank of South Carolina v. Campbell, 2 Rich. Eq. 179.] This court recognized that rule in the Davidson case. At page 34 (226 Mo.), this language with respect to the sale was used: “Of course, the promoters of defendant might have had someone bid the property in, and after-wards transfer the bid to the corporation when it came into existence, and had the deed made to the corporation, but this was not done.” From this passage it appears that there was evidence before the court as to the manner in which the sale took place, a matter which is not before the court in this case. The judgment of the circuit court, regular on its face, approving the report of sale by the sheriff as special commissioner, was duly entered in October 22nd. This judgment cannot be attacked by plaintiff in this collateral proceeding by showing it was procured by fraud, that it does not speak the truth, or that there was any irregularity in the sale which is there reported and approved. Estoppel. VII. Finally, it is claimed by respondent that the defendant Townsend was present at the time of the sale to the plaintiff in 1913, and bid on the property, and is therefore estopped to assert a different title ke ka(j previously acquired. The facts, as shown by the evidence in relation to that, are these: The plaintiff had attempted to compromise his claim with the heirs of I. M. Davidson who brought the suit — 619 — and procured the last order of sale; failing in that he offered five hundred dollars, as he said, to buy his peace, and requested David W. Hill to bid that much for him at the sale. Hill represented the heirs of Davidson, the parties who were having the sale made, and in this case he represents the plaintiff. The defendant did not conceal the claim or title which he already had. On the contrary, he asserted it and attempted to buy the adverse claim which was sold at the time of the sale in order to prevent future trouble. Under these circumstances he is not estopped to assert a title which he had previously acquired. The judgment is reversed. Roy, C., concurs. PER CURIAM: The foregoing opinion by White, 0., is adopted as the opinion of the court. All of the judges concur.