Cascade Sec. Bank v. Butler

• Decision Date: 14 July 1977
• Docket Number: No. 43812,43812
• Citation: 88 Wn.2d 777,567 P.2d 631
• Parties: CASCADE SECURITY BANK, Appellant, v. Frederick M. BUTLER and Alvena Butler, his wife, Defendants, W. J. Ringwood and Helen M. Ringwood, his wife, Respondents.
• Court: Washington Supreme Court

Page 777

88 Wn.2d 777

567 P.2d 631

CASCADE SECURITY BANK, Appellant, v. Frederick M. BUTLER and Alvena Butler, his wife, Defendants W. J. Ringwood and Helen M. Ringwood, his wife, Respondents.

No. 43812.

Supreme Court of Washington, En Banc.

July 14, 1977.

Hawkins & Ingalls, Jack A. Hawkins, Donald G. Ryan, Jr., Auburn, for appellant.

Collins & Hansen, Clifton W. Collins, Ephrata, Skeel, McKelvy, Henke, Evenson & Betts, W. E. Evenson, Seattle, for respondents.

BRACHTENBACH, Associate Justice.

The issue here is whether the interest of a real estate contract purchaser constitutes "real estate" within the meaning of the judgment lien statutes, RCW 4.56.190 and 4.56.200. Those statutes provide:

RCW 4.56.190:

The real estate of any judgment debtor, and such as he may acquire, not exempt by law, shall be held and bound to satisfy any judgment of the district court of the United States rendered in this state, any judgment of the supreme court, court of appeals, or superior court of this state, and any judgment of any justice of the peace rendered in this state, and every such judgment shall be a lien thereupon to commence as hereinafter provided and to run for a period of not to exceed six years from the day on which such judgment was rendered: Provided, however, That any such judgment rendered upon a contract made prior to the ninth day of June, 1897, any judgment upon, or reviving or continuing such judgment, and any revival thereof, shall cease to be a lien upon the real estate of the judgment debtor at the end of five years from the rendition thereof, and in case of an appeal from any such judgment of the superior court, the date of the final judgment in the supreme court or court of appeals shall be the time from which said five years shall commence to run. Personal property of the judgment debtor shall be held only from the time it is actually levied upon.

(Italics ours.)

RCW 4.56.200:

The lien of judgments upon the real estate of the judgment debtor shall commence as follows:

(1) Judgments of the district court of the United States rendered in the county in which the real estate of the judgment debtor is situated, and judgments of the superior court for the county in which the real estate of the judgment debtor is situated, from the time of the entry thereof;

(2) Judgments of the district court of the United States rendered in any county in this state other than that in which the real estate of the judgment debtor to be affected is situated, judgments of the supreme court of this state, judgments of the court of appeals of this state and judgments of the superior court for any county other than that in which the real estate of the judgment debtor to be affected is situated, from the time of the filing of a duly certified abstract of such judgment with the county clerk of the county in which the real estate of the judgment debtor to be affected is situated, as provided in this act;

(3) Judgments of a justice of peace rendered in the county in which the real estate of the judgment debtor is situated, from the time of the filing of a duly certified transcript of the docket of the justice of the peace with the county clerk of the county in which such judgment was rendered, and upon such filing said judgment shall become to all intents and purposes a judgment of the superior court for said county; and

(4) Judgments of a justice of the peace rendered in any other county in this state than that in which the real estate of the judgment debtor to be affected is situated, a transcript of the docket of which has been filed with the county clerk of the county where such judgment was rendered, from the time of filing, with the county clerk of the county in which the real estate of the judgment debtor to be affected is situated, of a duly certified abstract of the record of said judgment in the office of the county clerk of the county in which the certified transcript of the docket of said judgment of said justice of the peace was originally filed.

(Italics ours.)

We hold, prospectively, that judgments are liens upon the interest of a real estate contract purchaser within the meaning of those statutes. This holding, at long last, constitutes the demise of Ashford v. Reese, 132 Wash. 649, 233 P. 29 (1925).

The facts are that in 1968 the judgment debtors (defendants) became contract vendees of real estate. In March of 1973 the plaintiff obtained a judgment against those vendees-defendants who were then in possession of the property with their contract in good standing. Ten days later, for good consideration, the vendees' interest was assigned to third parties who are not involved here. Some months later the then vendees-assignees assigned their interest to the respondent-intervenors, who are now the holders of the contract vendees' interest. Almost a year after the present contract vendees-respondent intervenors acquired all of the vendees' interest in the contract, the judgment creditor-plaintiff applied for a writ of execution on the judgment and against the vendees' interest. The sheriff executed and published notice of sale. The respondents intervened. The trial court granted their motion for summary judgment and enjoined the sale.

The trial court based its decision in favor of the contract vendees upon Ashford v. Reese, supra, wherein we said at page 650, 233 P. at page 29:

(A)n executory contract of sale in this state conveys no title or interest, either legal or equitable, to the vendee . . .

If the holding of Ashford v. Reese, supra, were still the law, the contract vendee did not hold a real estate interest within the scope of the judgment lien statute. It would follow that the judgment debtor's interest was not subjected to the automatic lien when the judgment was entered and, because the debtor's interest had been assigned to another before execution, that interest was free from the lien. We overrule Ashford v. Reese, supra, but only prospectively, and therefore affirm.

From its inception the doctrine of Ashford v. Reese, supra, has been criticized. Schweppe, Rights of a Vendee Under an Executory Forfeitable Contract for the Purchase of Real Estate: A Further Word on the Washington Law, 2 Wash.L.Rev. 1 (1926); Oles, The Vendor-Purchaser Relationship in Washington, 22 Wash.L.Rev. 110 (1947). Despite our failure to specifically overrule Ashford, we have distinguished it in so many ways that its sweeping language has become virtually meaningless.

We have identified the vendee's interest as "substantial rights", as a "valid and subsisting interest in property", as a "claim or lien" on the land and as rights "annexed to and are exercisable with reference to the land." Oliver v. McEachran, 149 Wash. 433, 438, 271 P. 93 (1928); Griffith v. Whittier, 37 Wash.2d 351, 353, 223 P.2d 1062 (1950); Daniels v. Fossas, 152 Wash. 516, 518, 278 P. 412 (1929); State ex rel. Oatey Orchard Co. v. Superior Court, 154 Wash. 10, 12, 280 P. 350 (1929).

These characterizations are patently at odds with the Ashford language. Additionally, we have held the vendee to have certain rights totally inconsistent with the concept that a vendee has no title or interest, legal or equitable. For example, we have held that: a vendee may contest a suit to quiet title, Turpen v. Johnson, 26 Wash.2d 716, 175 P.2d 495 (1946); under the traditional land sale contract, the vendee has the right to possession of the land, the right to control the land, and the right to grow and harvest crops thereon, State ex rel. Oatey Orchard Co. v. Superior Court, supra; a vendee has the right to sue for trespass, Lawson v. Helmich, 20 Wash.2d 167, 146 P.2d 537 (1944); a vendee has the right to sue to enjoin construction of a fence, Kateiva v. Snyder, 143 Wash. 172, 254 P. 857 (1927); a vendee's interest constitutes a mortgagable interest, Kendrick v. Davis, 75 Wash.2d 456, 452 P.2d 222 (1969); a vendee is a necessary and proper party for purposes of a condemnation proceeding, Pierce County v. King, 47 Wash.2d 328, 287 P.2d 316 (1955); a vendor's interest for inheritance tax purposes is personal property, In re Estate of Eilermann, 179 Wash. 15, 35 P.2d 763 (1934); a vendor's interest for purposes of succession and administration is personal property, In re Estate of Fields, 141 Wash. 526, 252 P. 534 (1927); a vendee may claim a homestead in real property, Desmond v. Shotwell, 142 Wash. 187, 252 P. 692 (1927); a vendee is a real property owner for attachment purposes, State ex rel. Oatey Orchard Co. v. Superior Court, supra, 154 Wash. at 11-12, 280 P. 350.

Specifically we here hold that a real estate contract vendee's interest is "real estate" within the meaning of the judgment lien statute. Other jurisdictions have so held, for example, Mutual Bldg. & Loan Ass'n v. Collins, 85 N.M. 706, 516 P.2d 677 (1973), and Fridley v. Munson, 46 S.D. 532, 194 N.W. 840 (1923).

We are urged to embrace the doctrine of equitable conversion as the proper characterization of the respective interests of the vendor and vendee. That is a theory by which the vendee's interest is at once converted into real property and the vendor's interest is strictly personal property. It is premised upon the maxim that equity regards that as done which ought to be done. 2 S. Spencer, Pomeroy's Equity Jurisprudence §§ 370-372, pages 31-33 (5th ed. 1941). To adopt that doctrine would merely substitute a new set of uncertainty for the confusion which has followed Ashford.

It is true that many jurisdictions have adopted it. It cuts a wide swath for it is deemed applicable to contracts, devolution, wills and trusts. 27 Am.Jur.2d Equitable Conversion § 3 (1966). It is the uncertainty of the doctrine which is of concern to us. Its application theoretically depends upon the intent of the parties. Parr-Richmond Indus. Corp. v. Boyd, 43 Cal.2d 157, 272 P.2d 16 (1954); Atkinson v. VanEchaute, 236 Ark. 423, 366 S.W.2d 273 (1963). Some states do not favor it. In re Shareff's Estate, 143...