Fulton v. Duro

• Decision Date: 31 August 1984
• Docket Number: No. 14704,14704
• Citation: 107 Idaho 240,687 P.2d 1367
• Parties: Verdean D. FULTON, Plaintiff-Appellant, v. Loyd R. DURO, Defendant, and Leroy Samuelson and Delores Samuelson, Intervenors-Respondents.
• Court: Idaho Court of Appeals

Page 1367

687 P.2d 1367

107 Idaho 240

Verdean D. FULTON, Plaintiff-Appellant, v. Loyd R. DURO, Defendant and Leroy Samuelson and Delores Samuelson, Intervenors-Respondents.

No. 14704.

Court of Appeals of Idaho.

Aug. 31, 1984.

Review Granted Nov. 16, 1984.

Thomas A. Miller and Eugene A. Ritti, of Hawley, Troxell, Ennis & Hawley, Boise, for plaintiff-appellant.

Richard B. Eismann (argued) and Daniel T. Eismann, of Eismann Law Offices, Homedale, for intervenors-respondents.

ON DENIAL OF PETITION FOR REHEARING

WALTERS, Chief Judge.

In this case we are asked to decide whether recording a judgment imposes a lien on a judgment debtor's interest in land which he is purchasing under an executory contract. We must also determine whether the failure to record a writ of execution is a fatal defect in the levy on real property, invalidating a subsequent execution sale.

Verdean Fulton, holder of a judgment against Loyd Duro, challenges an order which set aside a sheriff's execution sale of real property in which Duro formerly had a vendee's interest. The district court below held that, because the writ of execution had not been recorded, the sheriff's levy on the real property was invalid. The court also held that a judgment lien does not attach to a vendee's interest in land being purchased under an executory contract. Fulton argues that, contrary to the district court's determination, a vendee's interest under a land sale contract constitutes ownership of real property against which a recorded judgment imposes a judgment lien, as provided by I.C. § 10-1110. As an alternative basis for holding that a judgment imposes a lien against a vendee's interest in a contract to purchase real property, Fulton suggests we apply the doctrine of equitable conversion. Finally, Fulton contends that even if we determine that Fulton did not have a judgment lien on the property, failure to record the writ of execution and notice of sheriff's sale should not affect the sheriff's sale because all interested parties, including Leroy and Delores Samuelson--the respondents here and assignees of the vendee, Duro--had actual notice of the sale.

We hold that a vendee's interest in a contract is an interest in real property, within the meaning of I.C. § 10-1110, against which a recorded judgment does impose a lien if the contract has been duly recorded or where, as here, a "notice" of the contract--containing the names of the contracting parties and a legal description of the property--has been recorded. We also hold that I.C. § 8-506 provides a mandatory procedure for levying on real property pursuant to a writ of execution as well as a writ of attachment. Therefore, we affirm the order setting aside the sheriff's sale, but reverse the district court's ruling that the recorded judgment did not impose a lien on Duro's interest under the land sale contract.

I

Verdean Fulton had obtained a stipulated judgment against Loyd R. Duro. An abstract of that judgment was filed and recorded in the Valley County Recorder's office. Fulton requested a writ of execution, which was issued. The sheriff issued a notice of sheriff's sale stating that he had levied on the right, title and interest of Duro in certain real property, which Duro was purchasing under a land sale contract. Neither the writ of execution nor the notice of sheriff's levy was recorded prior to the sale. The sheriff's sale was held and Fulton purchased the property at the sale. After the sale, the sheriff filed a return on the writ of execution, stating that the real property had been sold to Fulton and his wife.

One week later, Samuelson filed a motion to vacate the sheriff's sale. He alleged that Duro had assigned his interest in the real property to Samuelson before the sheriff's sale and that the sheriff had not made a valid levy of execution on the property. Also, Samuelson alleged that a vendee's interest in a land sale contract does not constitute the ownership of real property, within the meaning of I.C. § 10-1110; therefore, the recording of Fulton's judgment against Duro did not give Fulton a lien on the real property before Duro assigned his interest to Samuelson.

The district court granted Samuelson's motion to set aside the sale. The district court noted that I.C. § 11-301 provides that the "sheriff must execute the writ [of execution] ... by levying on a sufficient amount of property" to satisfy the judgment. However, it concluded that only section 11-201 provided instruction on how to "levy" execution. That section provides that "all other property both real and personal ... may be attached on execution in like manner as upon writs of attachment .... Until a levy, property is not affected by the execution." Under section 8-506, in order to attach real property belonging to the defendant, the title to which is recorded in the name of another, a writ must be recorded in the names of both the defendant and the record owner. The district court concluded that, because Fulton's writ of execution had not been recorded, there was no valid levy of execution.

The district court then turned to the question whether Fulton might still have a judgment lien under I.C. § 10-1110. That section provides that "[a] ... judgment ... recorded with the recorder of any county ... becomes a lien upon all real property of the judgment debtor in the county ... owned by him at the time." The judge noted that this statute was similar to a California statute which had been interpreted as defining "ownership" to exclude an equitable interest in real estate, citing Oaks v. Kendall, 23 Cal.App.2d 715, 73 P.2d 1255 (1937) and Belieu v. Power, 54 Cal.App. 244, 201 P. 620 (1921). The judge concluded that "ownership" means legal title, not an equitable interest. Because Duro, a contract vendee, had only an equitable interest in the real property at issue here, and legal title was recorded in the name of the vendor, the district court decided that the recording of a judgment against Duro did not create a judgment lien against that property.

II

We turn first to the question whether recording a judgment imposes a judgment lien, pursuant to I.C. § 10-1110, against the interest in land which a judgment debtor holds as purchaser under a land sale contract. Here, the contract provided that title would remain in the vendor until the purchase price was paid in full, but the vendee would have the right to the possession of the property. The contract further provided that it would not be recorded, but "that a Notice of Real Estate Purchase Agreement shall be recorded to give notice of Buyer's interest." Accordingly, such a notice--containing the names of the contracting parties, the legal description of the property and the name and location of the escrow holder--was recorded in the county where the land was situated.

Samuelson argues that I.C. § 10-1110 was taken from a California statute and that the interpretation of that statute by California courts should control our interpretation of I.C. § 10-1110. While we acknowledge that the California statute has been interpreted as Samuelson suggests, we conclude that the reasoning underlying that interpretation is not persuasive. Those decisions interpreted statutes which defined real property as lands, tenements and hereditaments. Idaho statutes do not define real property so narrowly. In Idaho, real property includes land, possessory rights to land, and that which is appurtenant to land, see I.C. § 55-101, and is "coextensive with lands, tenements and hereditaments, possessory rights and claims." I.C. § 73-114.

Samuelson also contends that the Idaho Supreme Court has previously held that a vendee under a contract of sale is not an owner of property, citing Parker v. Northwestern Investment Co., 44 Idaho 68, 255 P. 307 (1927) and Gem State Lumber Co. v. Cameron, 44 Idaho 595, 258 P. 539 (1927). However, a close examination reveals that this issue was not decided in Gem State Lumber Co.

The court in Parker considered whether Parker and others were entitled to liens against land arising from improvements requested by Northwestern, a vendee under an installment land sale contract, which would be superior to the interest of, and enforceable against, the contract vendor. The court stated that Northwestern "was not the owner of the land, no payments except the initial payment having been made." Id. at 73, 255 P. at 308. The court did not explain this statement, nor did it cite authority for this position. We are reluctant to accept it at face value without some supporting rationale.

The Parker court also stated that even had Northwestern "been the reputed owner, that would not avail [it], because the reputed owner, as such, would have no right to do anything which would give a lien upon the premises." Id. The court cited Santa Cruz Rock Pavement Co. v. Lyons, 117 Cal. 212, 48 P. 1097 (Cal.1897), in support of this statement. That case stands for the proposition that a real owner "cannot be deprived of his title to the land, nor can a lien be imposed thereon, against his will, by virtue of any agreement or contract on the part of one who is merely reputed to be the owner of such land, unless he has in some way held such person out as the reputed owner, with authority to do the act or make the agreement by which it is sought to create the lien." Id. In light of Santa Cruz, and the facts of Parker, we read Parker as stating that a reputed owner, who is a vendee under a land sale contract, can not give a lien upon property which would be superior to the rights and interests of the contract vendor. We are not faced with that issue here. We conclude that Parker is not controlling.

At common law, a vendee's equitable interest under an executory contract for the purchase of real property was not subject to execution or judgment liens. See Annot., 1 A.L.R.2d 727 (1948); Sloan v. Loftis, 157 Ga. 93, 120 S.E. 781 (1923). In many states, the common law has been...