Mckenzie Cnty. v. Casady

• Decision Date: 18 June 1927
• Docket Number: No. 5318.,5318.
• Citation: 214 N.W. 461,55 N.D. 475
• Parties: McKENZIE COUNTY v. CASADY et al. (FIRST NAT. BANK OF WILLISTON, Intervener).
• Court: North Dakota Supreme Court

55 N.D. 475

214 N.W. 461

McKENZIE COUNTY

v.CASADY et al. (FIRST NAT. BANK OF WILLISTON, Intervener).

No. 5318.

Supreme Court of North Dakota.

June 18, 1927.

Syllabus by the Court.

Evidence examined, and found to be inadequate to support the charge of fraud and conspiracy as between defendants Casady and Northern Town & Land Company, or as between Casady and intervener.

The lien of a judgment against the equitable interest of the judgment debtor in land acquired by him under a contract for deed, the record title to which is in the name of his vendor, is not superior to the equity, right, and interest of one holding a prior unrecorded assignment of the contract, given in good faith and for value, as security for the payment of a bona fide debt owing him by the judgment debtor.

The notice of lis pendens provided by section 7425, C. L. 1913, does not of itself create in the party recording it any lien against or interest in the real estate therein described.

The notice of lis pendens provided by section 7425, C. L. 1913, constitutes and gives constructive notice to the public of the pendency of the action and of its object and purpose, that a person not made a party to the action, holding an outstanding title or right thereto, may intervene, assert his claim, and have the superiority thereof adjudicated, and, failing to do so, he will be bound by all proceedings taken after the filing of such notice to the same extent as if he was a party to the action.

The issuance to the sheriff of the county in which the debtor resides and return nulla bona of an execution upon a judgment is sufficient foundation upon which to invoke the aid of the court of equity, to ascertain and determine the nature and extent of the interest of the judgment creditor in and to real estate alleged to be owned by him, the title to which appears of record in another.

In this case the plaintiff had the right, in aid of its judgment, to have the court determine the ownership of the real estate in question, and the extent and nature of the equity, right, and interest owned by the judgment debtor.

Appeal from District Court, McKenzie County; A. G. Burr, Judge.

Suit by McKenzie County against O. L. Casady and another, in which the First National Bank of Williston intervened. From a judgment of dismissal, plaintiff appeals. Modified and remanded, with directions.

William Lemke, Sp. Counsel, of Fargo, for appellant.

Frank E. Fisk and Thomas F. Craven, both of Williston, for intervener respondent.

PUGH, District Judge.

Plaintiff seeks to have the title to the real estate hereinafter described adjudged to be in defendant Casady, and to subject said real estate to execution on a judgment in its favor against said defendant. The facts necessary to a consideration of the controversy are, in the main, undisputed. May 1, 1924, plaintiff recovered judgment against defendant Casady in the sum of $13,395.54. Execution was issued March 31, 1925, received April 2, 1925, by the sheriff of McKenzie county, and by him returned nulla bona April 10, 1925. The defendant Northern Town & Land Company entered into a contract for deed with defendant Casady, which was dated December 12, 1916, whereby, as vendor it agreed to sell and convey to Casady all that part of lots 1 and 2 of the west half of the northwest quarter of section 19, township 150 north of Range 98, lying without the platted portion of the town of Watford, and also all that portion of the east half of the northeast quarter of section 24, township 150 north of range 99, lying north of the Great Northern Railway Company's right of way, and without the platted portion of the town of Watford, excepting also the right of way and station grounds of the Great Northern Railway Company, and also excepting the first addition to the town of Watford. On or about January 23, 1922, Casady was indebted to intervener bank in the sum of about $3,500, which was then increased by an advance to him by the bank of upwards of $2,000 additional money. As security for the payment of said sums of money, Casady executed and delivered to the bank an assignment of said contract for deed. Notes were given by Casady to the bank representing said indebtedness, and said notes were from year to year renewed; the last renewal being November 18, 1925, at which time there was unpaid on said indebtedness $6,466. Casady fully performed the contract for deed, and in the month of October, 1924, defendant Northern Town & Land Company, to perform on its part, executed 30 deeds, in blank as to the grantee, one for each separate lot, and also two quitclaim deeds, in blank as to the grantee, in which the property referred to in the contract for deed is described by metes and bounds, one deed for each parcel. These deeds were mailed to Casady, who delivered all of the deeds to intervener. The name of intervener was by it inserted in the two last-described deeds, and said deeds were recorded in the office of the register of deeds June 1, 1925. Plaintiff commenced this action the latter part of May, 1925. The summons and complaint were filed in the office of the clerk of court May 29, 1925, and, on the same day, a notice of lis pendens was filed in the office of the register of deeds. Defendant Northern Town & Land Company, by answer, admitted the making of the contract, alleged fulfillment of the terms and conditions thereof by defendant Casady, that it had parted with title to the property by making, executing, and delivering deeds to Casady, and that it had no further interest in the property. Defendant Casady did not answer. The intervener claims title to the premises through the assignment of the contract and the delivery to it of said deeds.

The plaintiff's theory is that title to the property is in Northern Town & Land Company, with the equitable title in Casady; that Casady is entitled to a conveyance to him; that plaintiff has a lien by and through its judgment upon the premises prior and superior to the claim of right and interest therein by intervener. The district court rendered judgment in favor of intervener for the dismissal of the action, from which judgment plaintiff prosecutes this appeal.

[1] The first question presented by the record relates to fraud and conspiracy. Plaintiff alleges:

“That the defendant O. L. Casady, conspired with the defendant the Northern Town & Land Company to dispose of its said lands in fraud of said Casady's creditors, and to conceal and cover up the same, so that his creditors could not reach it; that in pursuance of this scheme, and with intent to delay and defraud said Casady's creditors, it was mutually arranged and agreed by and between the defendants that the transfer of said lands to Casady should not be made, and that the defendant the Northern Town & Land Company should retain the record title, under the fraudulent pretense that they were owners thereof, and that the said lands should be sold and disposed of by the Northern Town & Land Company as their own lands, and the sums realized from the sales of said lands should be secretly turned and paid over to the defendant O. L. Casady. That the defendant, O. L. Casady, is also trying to sell and dispose of said land under the fraudulent pretense that he is the agent of the Northern Town & Land Company, when in truth and in fact he is the owner of said lands. That, in pursuance of said conspiracy, fraudulent arrangement, and agreement, said land was not transferred by deed or otherwise by the Northern Town & Land Company to the defendant O. L. Casady or any one else, and that the Northern Town & Land Company is offering for sale the said lands as their own.”

September 30, 1925, the First National Bank, as intervener, served its answer upon counsel for the plaintiff; on the 7th of June, 1926, an amended answer in behalf of intervener was served on counsel; and again September 13, 1926, intervener made its second amended answer, setting forth in detail the transactions between it and Casady, and served the same on counsel. Neither by amended or supplemental complaint nor reply has plaintiff challenged the good faith of Casady or the bank or either of them relative to said transactions. The only fraud alleged by plaintiff to have been committed are the charges of fraud and conspiracy between Casady and the Northern Town & Land Company, although upon the trial of the action, the conflict seems to have centered about the assignment by Casady to the bank. The court found “that no fraud nor conspiracy as alleged in the complaint or otherwise has been proven.” Upon careful consideration of all the evidence in the case, we are satisfied it is inadequate to prove fraud or conspiracy. To prove the allegations of the complaint, plaintiff introduced in evidence abstracts of the title to the premises, to show the absence from the record of the contract for deed and the assignment and that the title remained in the land company, although Casady had performed the contract on his part. It is insisted this is a part of the plan and scheme of the conspiracy. Neither Casady nor the intervener owed a duty to plaintiff to record these instruments (Moulton v. Kolodzik, 97 Minn. 423, 107 N. W. 154, 7 Ann. Cas. 1090), and it certainly was not to the interest of the vendor so to do. The evidence also developed that deeds to parcels of the land had been executed in blank as to the name of the grantee by the land company and in this form delivered to Casady; and it is argued that this also was done according to the design existing between Casady and the land company to secrete the property from the creditors of Casady. The testimony, however, shows that Casady sold parcels of the land; that as sales were made he requested deeds therefor, which were sent him, executed in blank, with authority to fill in the names of the grantees. Plaintiff could not have been disadvantageously affected thereby. The execution in blank of the final deeds, some thirty-two in...