Applegarth v. Russell

• Decision Date: 29 June 1866
• Parties: JOHN A. APPLEGARTH ET AL. v. GEORGE W. RUSSELL.
• Court: Maryland Court of Appeals

25 Md. 317

JOHN A. APPLEGARTH ET AL. v. GEORGE W. RUSSELL.

Court of Appeals of Maryland

June 29, 1866

Where a purchaser at a sale made in an action to set aside a deed as in fraud of creditors has fully complied with the terms of the sale, he is entitled to judicial process to place him in possession of the property sold as against one purchasing from a party to the suit subsequent to its commencement.

APPEAL from the Circuit Court of Baltimore city:

This case grows out of a petition filed by the appellee in the case of Jackson, et al. vs. Hodges, et al., reported in 24 Md. Rep., 468. In that case, Hodges and others, on the 28th of September, 1860, filed their bill in the Circuit Court of Baltimore city, alleging that George Jackson was indebted to them, and that he had fraudulently conveyed, through the instrumentality of other parties therein named, certain lots of ground, with the improvements thereon, to Elizabeth, his wife; and praying that the deeds whereby the said lots, &c., had been conveyed, might be declared void, and that the said property might be sold, and the proceeds applied to the payment of the debts of the said Jackson. The proceedings under the said bill resulted in the passage of a decree by said Court declaring the said deeds void, and appointing a trustee to sell the said lots; which decree on appeal to this Court was affirmed in 24 Md Rep., 468. At the trustee's sale, George W. Russell the appellee became the purchaser of one of the said lots and having complied with the terms of sale, the sale was reported and finally ratified and confirmed. Failing to obtain possession of the property purchased, the appellee on the 20th of May, 1863, filed a petition in said case of Hodges, et al. vs. Jackson, et al., setting forth the sale and purchase and ratification of the sale as above stated, and describing the property sold as certain leasehold property, "which is described in a deed dated the 30th day of June, 1852, and recorded among the land records of Baltimore city, in liber E. D., No. 26, folio 48, made by James Mullen to the defendant, George Jackson."

The petition then alleges that the petitioner afterwards demanded possession of the property so purchased by him, and that John A. Applegarth refused to deliver to him possession of the said property, but claimed to hold it by virtue of a deed dated October the 23d, 1860, from George Jackson and wife that the bill in the case of Hodges et. al. vs. Jackson et. al., was filed on the 28th day of September, 1860, and subpoena served on Jackson and wife on the same day, twenty-five days before the date of the deed; and that Jackson and wife filed their answer to the bill of complaint fourteen days before the execution of the deed. The petition concludes with a prayer that an order may be passed requiring the said John A. Applegarth, and James Bailey Orem, his tenant, to deliver to the petitioner possession of the property so as aforesaid purchased by him.

The appellant, Applegarth, in his answer to the petition disclaims all knowledge of the report of sale or its ratification, and submits to the Court the report of the trustee and order of ratification as filed in the cause for its true construction and legal effect; he admits that application was made to him by the petitioner to deliver to him possession of the property claimed by him, and his refusal to deliver the same, and alleges that he holds title to the property in question by virtue of a deed of Jackson and wife, dated October the 23rd, 1860; that the property at that date was owned by the said wife, and was purchased from her without knowledge on his part that any suit had been brought in relation thereto, although a few days before the purchase he had made every search in reference to the title, and that the purchase was bona fide, and for a valuable consideration; that the respondent attended the trustee's sale and gave notice of his claim to all intending to purchase, and that the trustee answered that no one would be required to comply with the terms of sale unless the title was good; and, "that the said property is included in the description of the first lot described in said advertisement, but is not identical therewith."

The case having been set down for hearing on the petition, answer and exhibits, the Court below, (KREBS, J.,) on the 23rd of November, 1863, filed the following opinion:

The practice is settled in this State, that when a purchaser at a sale under a decree has fully complied with the terms of sale, and possession of the premises purchased is withheld by a party to the suit, or by a person claiming under a party by title subsequent to the commencement of the suit, the purchaser may obtain an order under which possession will be delivered to him by proper process. Tongue vs. Morton, 6 H. & J., 21. Oliver vs. Caton. 2 Md. Chan. Dec., 301. Inloes vs. Harvey, 11 Md. Rep., 519. In this last case, the Court of Appeals sustained the writ of possession as having been properly issued to dispossess a party who had purchased certain property from a person during the pendency of proceedings in equity against him, to set aside a conveyance by him of the property which it was alleged in the proceeding was fraudulently made. A decree was passed in that case setting aside the conveyance and securing the property to the complainant, who was put in possession under the decree. The Court says, the Superior Court in fact decided, "that the appellant being a purchaser, pendente lite, was concluded by a decree in the equity proceedings; and we are of opinion decided correctly." Amongst other references made by the Court is, Story's Eq. Jur., sec. 400, from which it quotes as follows: "Ordinarily, it is true, that the decree of a Court binds only the parties and their privies in representation or estate, but he who purchases during the pendency of a suit is held bound by the decree made against the person from whom he derives title, the litigating parties are exempted from taking notice of the title so acquired, and such purchaser need not be made a party to the suit where there is a real and bona fide purchase; the rule may operate hardly, but it is a rule founded upon a great public policy, for otherwise, alienation made during a suit might defeat its whole purpose, and there would be no end to litigation."

In the decision above referred to, this rule, in regard to the effect of the """ lis pendens," is stated by the Court without any qualification, and in such terms as to signify that it applies in all cases without exception where a purchase is made during the pendency of the proceedings. The decision, however, of the same Court in Teigley vs. Teigley, 7 Md. Rep., 563 shews, that "the doctrine of ' lis pendens' has no application except where there is a proceeding directly relating to the thing or property in question." This language, then, furnishes the test by which can be ascertained, in any case, whether the rule of lis pendens applies. The Court in the above case refused to apply the doctrine of lis pendens so as to effect a purchase during the proceedings from the defendant, but only because it did not consider the rule applicable to such a case. It was a proceeding by a wife against her husband for alimony, and he, during the pendency of the suit, made a bona fide sale for value of a part of his property which the Court would not disturb; the Court said, "as well might a pending action at law to recover an ordinary debt be a lis pendens, as to the property of a debtor, as a proceeding like present, the purpose of each being to subject the property of the debtor to the payment of debts," but not "being a proceeding directly relating to the property in question." The authority of the above case, and of that of Elliott vs. The United States Insurance Company, 7 Gill, 319, is relied upon by the respondent to show that he ought not to be dispossessed of the premises in question. He is a purchaser pendente lite under circumstances precisely the same as those in the case of Inloes vs. Harvey, where the Court sustained the writ, except that the proceedings, during the pendency of which he purchased, were instituted by creditors to set aside a deed conveying the property as fraudulent under the statute of Elizabeth, and for a sale of it to satisfy their claims. In the above case in 7 Gill, the Court decided that a creditor who had obtained a judgment in a Court of Law during the pendency of proceedings in equity, in which a receiver had been appointed, acquired thereby a lien upon property and effects in the hands of the receiver, but the opinion of the Court shews that the reason for so deciding was, that the proceedings did not so directly relate to the property in question, and their """ulterior intent" was not such as to impose restrictions upon creditors in ""the prosecution of their claims upon the company either in a Court of Law or of Equity." "The only object of the Court below in the appointment of receiver was to provide for the safe keeping of the property and effects of the company." The facts and circumstances, and the reasons given by the Court for its decision in these cases, shew clearly that they furnish no authority for refusing a writ of possession against the respondent. There is no principle or rule to be deduced from them which would require this Court to refuse; so far from this, the rule which these cases establish is this, namely: where the proceeding directly relates to the property which has been conveyed to the purchaser, pendente lite, by a party to the cause, or where the "ulterior intent and object" of the proceeding is to subject the property in question to the disposal of a decree of the Court, there such purchaser is as much bound by the decree in the...