Davis v. Allen

• Court: Kentucky Court of Appeals
• Writing for the Court: TILFORD, Justice.
• Citation: Davis v. Allen, 280 Ky. 798, 134 S.W. 2d 617 (Ky. Ct. App. 1939)
• Decision Date: 03 November 1939
• Parties: DAVIS et al. v. ALLEN et al.

134 S.W.2d 617

280 Ky. 798

DAVIS et al. v. ALLEN et al.

Court of Appeals of Kentucky

November 3, 1939

Rehearing Denied Jan. 12, 1940.

Appeal from Circuit Court, Fayette County; King Swope, Judge.

Action by Ellie Davis and others against James D. Allen and others wherein the plaintiffs alleged judgment against James D Allen and another, the levy of execution, the filing of a lis pendens notice, and the assertion of title to the property by J. W. Spaulding and Mary Bell Spaulding, and called on J. W Spaulding and Mary Bell Spaulding to assert their claim. From a judgment in favor of the defendants, the plaintiffs appeal.

Judgment reversed.

Nolan Carter and R. P. Moloney, both of Lexington, for appellants.

Fowler & Fowler, of Lexington, for appellees.

TILFORD Justice.

The appellants obtained a judgment against the appellees James D. Allen and his wife, Debbie D. Allen, for $800 and costs, and on April 23, 1937, caused an execution which had been issued on March 31, 1937, to be levied on a ten-acre tract of land in Fayette County standing in James D. Allen's name. The tract was improved by a residence in which Allen resided with his wife and his wife's parents, the appellees J. W. Spaulding and Mary Bell Spaulding. Sometime prior to April 20, 1937, according to the testimony of Spaulding, Nolan Carter, appellants' attorney, called upon him to inquire about Allen's ownership as shown by the records, and was informed by the witness that Allen did not own the property, that it belonged to the witness who had paid for it and had received a deed. Mr. Carter, testifying for appellants, stated that on April 23, 1937, he notified Allen by letter of the levy of the execution and that it was about a week later when he called upon Spaulding.

On May 24, 1937, appellants instituted the present action in which the foregoing testimony was given, alleging the judgment, the levy of the execution, the filing of a lis pendens notice, and the assertion of title by Spaulding. The petition called upon Spaulding to assert his claim. This Spaulding did by answer on behalf of himself and wife, alleging that on January 2, 1928, they had purchased the property from Allen, that it had been conveyed to them on that date, and that this conveyance was known to the appellants and their agent at the time of the levy of the execution. In an amended answer the Spauldings stated that they had taken possession of the property immediately upon its purchase and had resided upon it ever since.

If the indebtedness out of which the judgment in favor of the appellants arose was incurred subsequent to the date of the unrecorded conveyance, it would be immaterial whether appellants had notice thereof at the time the execution was levied. In such case the sole question would be whether appellants had such knowledge at the time they extended the credit. Since the amendment of 1916 to Section 496, Kentucky Statutes, it is only an antecedent creditor who must, in order to come within the protection of the Statute, acquire a lien on the property prior to the recording of the instrument transferring or encumbering it. A discussion of this Statute and the interpretations placed upon it both prior and subsequent to the amendment of 1916 will be found in the following cases: Huff et al. v. Russell et al., 267 Ky. 515, 102 S.W.2d 984; Kerrick v. West et al., 211 Ky. 807, 278 S.W. 128; Larimore et al. v. Perkinson et ux., 208 Ky. 382, 271 S.W. 69; Mason & Moody v. Scruggs, 207 Ky. 66, 268 S.W. 833; First National Bank of Williamson, W. Virginia v. Williamson et al., 273 Ky. 116, 115 S.W.2d 565. The record before us discloses the date on which the execution was issued and the date on which it was levied but does not disclose when the indebtedness of the Allens to appellants arose. Hence, it is necessary that we assume that it arose prior to the execution of the unrecorded deed. The issues thus presented for decision are whether appellants at the time they caused the execution to be levied had notice of the title vested in the Spauldings by the unrecorded deed, either from information imparted by Spaulding when Carter called upon him or from the fact that the Spauldings were residing in the property. The proof showed without contradiction that the Spauldings in 1927 had purchased the land for $1000 from their son-in-law, Allen, and on January 2, 1928, had received a valid deed which had never been recorded and that with their own means they had erected the residence. However, the proof showed without contradiction that Allen and his wife had also continuously resided in the property.

The Chancellor, without deciding whether appellants' attorney prior to the levy of the execution had received from Spaulding actual notice of the unrecorded deed, dismissed the petition, holding that under the principles announced in Stone v. Keith, 218 Ky. 11, 290 S.W. 1042, Chrisman v. Greer, 239 Ky. 373, 39 S.W.2d 676, and Powell's Trustee v. Powell, 232 Ky. 27, 22 S.W.2d 293, the fact that the unrecorded title holders occupied the property was sufficient to put creditors of the grantor upon notice, and, accordingly, that the unrecorded deed was not invalid as to creditors under the provisions of Section 496, Kentucky Statutes.

Counsel...