Bray v. Germain Inv. Co.

• Decision Date: 29 January 1940
• Docket Number: 14494.
• Citation: 105 Colo. 403,98 P.2d 993
• Parties: BRAY et al. v. GERMAIN INV. CO.
• Court: Colorado Supreme Court

98 P.2d 993

105 Colo. 403

BRAY et al. v. GERMAIN INV. CO.

No. 14494.

Supreme Court of Colorado

January 29, 1940

In Department.

Error to District Court, City and County of Denver; Otto Bock Judge.

Petition by Ross Bray, executor of the estate of Minnie Gelhausen deceased, and John R. Walker against the Germain Investment Company, a corporation, to set aside a default decree in suit to quiet title. To review a judgment refusing to set aside judgment and decree in quiet title action, petitioners bring error.

Reversed and remanded.

Clarence L. Bartholic, of Denver, for plaintiffs in error.

Frank L. Hays and Joseph H. Ross, both of Denver, for defendant in error.

YOUNG, Justice.

The Germain Investment Company, a Colorado corporation, defendant in error, instituted an action in the district court of the City and County of Denver to quiet the title to certain lots in the City and County of Denver and filed a notice of lis pendens. The suit was brought against certain named defendants and unknown defendants. In 1920 the property had been conveyed by trust deed to a private trustee to secure payment of an indebtedness of the then owner of $11,000, represented by eleven $1,000 notes. This deed of trust was unreleased and apparently the indebtedness secured by it was unpaid. The payee of the notes and certain persons alleged to be his heirs, the private trustee, and the public trustee, as successor in trust, were named as defendants and served. The noteholder beneficiaries of the deed of trust were not named personally as defendants and at the time the suit was instituted were unknown to the plaintiff and its attorneys. They were described in the complaint as unknown persons interested in the subject matter of the action 'as owners of one or more of the notes secured by trust deed on said premises.' Plaintiffs complied with the requisite conditions to secure an order of publication of summons as to the unknown defendants, which included the noteholder beneficiaries under the trust deed and an order for publication was entered and publication made in the manner provided by law. After service by such publication was complete the default of all the defendants was entered. It appears from the testimony that plaintiff was in possession and claimed title by virtue of a treasurer's deed issued to it prior to the commencement of the suit and duly recorded Before the complaint was filed. The court entered a decree quieting title in the plaintiff on June 8, 1937, and cancelled and ordered the deed of trust released.

Plaintiff in error John R. Walker on or about the first day of August, 1937, nearly two months after the decree was entered, purchased two of the $1,000 notes secured by the aforesaid trust deed. At the time of the institution of the suit, the filing of the lis pendens, and the entry of a decree and the recording thereof, John R. Walker had no interest whatsoever in the property or in any of the notes secured by said trust deed. On September 2, 1937, Walker filed a petition to vacate the judgment and decree. This petition on motion of the Germain Investment Company was stricken and Walker was granted permission to file an amended petition, which he did November 3, 1937. In this petition he set forth the execution of the afore-mentioned notes and trust deeds and the names of the present holders of the notes secured thereby. He alleged that he himself was the holder of two of these notes which he acquired on or about August 1 1937, and that none of the note holders was ever served with summons or complaint and had no notice of the suit either directly or indirectly. He further alleged that the holders of the notes secured by the deed of trust were known to plaintiff prior to the first publication of summons and prior to the entry of said decree and notwithstanding such knowledge it failed to serve said noteholders with summons or complaint; that by reason of lack of valid service the court had no jurisdiction to enter a decree. He further alleged that he had a good, valid, and sufficient defense to the action, but neither in his petition nor in the affidavits in support thereof did he state what was the nature of his so-called 'good, valid, and sufficient defense.' In support of his petition he filed affidavits of the former owners of the two notes which he had purchased, and of their attorney, to the effect that they had no knowledge or notice of the commencement of pendency of said suit and that they had never been served with summons or complaint.

Ross Bray, as executor of the estate of Minnie Gelhausen, deceased, filed a separate but similar petition supported by similar affidavits, reciting that petitioner had a good, valid, and sufficient defense and was entitled to plead the same, but not disclosing what the defense was. It was further alleged that the decree entered herein is void on its face, but it was not alleged what was contained...