Burchfield v. Bevans, 5483.
| Decision Date | 04 March 1957 |
| Docket Number | No. 5483.,5483. |
| Citation | 242 F.2d 239 |
| Parties | Thomas Ellis BURCHFIELD, a minor, by his father and next friend, H. A. Burchfield; and Harold Harris, a minor, by his father and next friend, John Harris, Appellants. v. Walter BEVANS, Bardie L. Witham, Bobby Powers, Granville Powers and James Wood; and Employers Liability Assurance Corporation, Ltd., a corporation, Appellees. |
| Court | U.S. Court of Appeals — Tenth Circuit |
John Barksdale, Okmulgee, Okl. (Steele & Boatman and Rainey & Barksdale, Okmulgee, Okl., were with him on the brief), for appellants.
K. D. Bailey, Okmulgee, Okl. (Bailey & Pitchford, Okmulgee, Okl., were with him on the brief), for appellees.
Before HUXMAN, PICKETT and LEWIS, Circuit Judges.
This appeal involves the rights of separate judgment creditors of Charles Alonzo Johnson in the amount due from the Employers Liability Assurance Corporation by virtue of a liability policy it had issued to him on his automobile. The policy limited liability to $5,000 to any one person and to a total of $10,000 resulting from one accident. An accident occurred while Johnson was operating the insured car resulting in death to some and injury to a number of other persons. The injured persons and the personal representatives of those entitled to recover because of the death of some, all instituted separate actions against Johnson. In all, ten actions were filed. In seven the plaintiffs obtained judgment against Johnson. Three others are still pending. The total of all these judgments greatly exceeds the maximum liability of the Company under its policy. Johnson apparently was insolvent so the only recovery by the judgment creditors will be limited to the amount due from the Insurance Company under its policy of insurance.
All seven judgments were rendered by the Court on the same day, March 5, 1956. The judgments rendered were as follows:
Harold Harris $ 5,000.00
Thomas Ellis Burchfield 7,500.00
Walter Bevans 9,500.00
Bardie L. Witham 5,794.14
James Wood 2,835.00
Bobby Powers 5,000.00
Granville Powers 30,000.00
The judgment for Harold Harris was first entered in time. It was followed by the judgment of Thomas Ellis Burchfield. The order of entry of the remaining judgment becomes immaterial as will appear from a consideration of the legal questions presented.
Thereafter the Insurance Company instituted this interpleader action against all the judgment creditors, those who had suits pending and some claimants who had not yet filed suit. In its complaint it alleged that all these persons were asserting claims against the Company; that the total liability of the Company under its policy was limited to $10,000 for personal injury; and that there was also a liability for $1,100 for property damage. It tendered and paid into Court $11,100 and asked that the Court adjudicate and determine the rights of all of the defendants to the fund and prayed further for a declaratory judgment that it was under no further duty to defend any pending actions or to defend actions against claimants who had not yet instituted suits.
The Court entered a declaratory judgment declaring that the Company was under a continuing duty to defend pending suits; that those defendants who had not reduced their claims to judgment had no right of participation in the fund; and that the defendants whose claims had been reduced to judgment were entitled to participate in the distribution of the fund of $10,000 on an equitable basis, according to a percentage formula applied by the Court.
The only challenge to the judgment of the Court is by appellants Harris and Burchfield. Harris and Burchfield claim priority in right to the satisfaction of their judgments out of the $10,000 fund. Harris asserts that since his judgment is first in point of time he is entitled to full payment of his judgment. Burchfield is in agreement with the principle asserted by Harris and accordingly asserts that since his judgment is second in point of time he is entitled to have the total balance of $5,000 applied to his judgment. The acceptance of these contentions would leave nothing for the remaining creditors.
An action of interpleader is equitable in nature1 and is controlled by equitable principles. Of course, equity will follow the law and if by Oklahoma law these judgments when entered created a lien which attached to the fund due under the policy the judgment creditors were entitled to have their judgment enforced in order of their priority. Whether Harris by the entry of his judgment acquired a first lien either by law or equity must be determined by the law of Oklahoma.
We think appellees' contention that under Oklahoma law a docketed judgment attaches as a lien only to the real estate of the judgment debtor is well taken. Title 12, § 706 of the Oklahoma Statutes Annotated provides that "Judgments of courts of record of this State, except County Courts, and of the United States rendered within this State, shall be liens on the real estate of the judgment debtor within the county in which the judgment is rendered from and after the time such judgment is entered on the judgment docket * * *." That a judgment does not attach as a lien to personal property or choses in action in Oklahoma is established by the case of First National Bank of Healdton v. Dunlap, 122 Okl. 288, 254 P. 729, 52 A.L.R. 126, where the Oklahoma Court said: "Interest of lessee under oil and gas lease is not `real estate' on which judgment creditor has a lien * * *."2 The conclusion that a judgment does not attach as a lien to property other than real estate is fortified by Title 12, § 737, Oklahoma Statutes Annotated.3 Under this Section the proceeds of executions issued on the same day which are insufficient to satisfy several judgments are pro rated and distributed equally to the several creditors. This could not be done if a judgment prior in time attaches as a lien to personal property which was subsequently sold on execution.
It is also significant that under Oklahoma law an insurance company is not a party defendant to such actions as are involved in this case. The appellee Insurance Company was not a party to these actions brought against Johnson. No judgment was entered against it. No causes of action could be stated against it until a judgment had first been obtained against the insured. Only then could the appellants file suit against the Company and obtain judgments against it. It is axiomatic that a personal judgment against a defendant can operate only against him and can give the plaintiff a lien only against his property as provided for by law. Obviously a judgment against Johnson could not operate as a lien against property of the Insurance Company.
We accordingly conclude that appellants had no legal lien or prior legal claim to the funds in question under the laws of Oklahoma. In fact, appellants do not rest their case on a legal lien prior in time to these funds. In effect, they contend that they have priority by virtue of an equitable lien. In their brief they state that "All elements of the claim of appellants is likened in several respects to the claimant of an equitable lien." The question then is, what is equitable and fair where a fund in which a number of creditors have an interest...
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