Parker v. McCauley
| Decision Date | 07 April 1964 |
| Docket Number | No. 40389,40389 |
| Citation | 1964 OK 86,393 P.2d 527 |
| Parties | Alva Eugene PARKER, a minor, by his next friends, Annie Potes, his guardian and grandmother, and D. L. Potes, his stepgrandfather, and Annie Potes and D. L. Potes, individually, Plaintiffs in Error, v. J. I. McCAULEY and C. P. Callaway, Defendants in Error. |
| Court | Oklahoma Supreme Court |
Syllabus by the Court
1. Where real estate is lawfully mortgaged by the owner, a judgment lien against the owner subsequently acquired thereon is subordinate to said mortgage.
2. Where the owner of a judgment lien seeks to set aside a subsequent conveyance of real estate from the judgment debtor to the holder of a prior mortgage on such
realty, it is incumbent on such judgment lienholder to show that the value of such real estate exceeded the indebtedness secured by the mortgage, as equity will not require the doing of a vain and useless thing.
3. A bona fide pre-existing mortgage indebtedness owing by one who is in failing or insolvent circumstances is sufficient consideration for the conveyance by said mortgagor of such real estate to his mortgagee in preference to other creditors, where the amount of such mortgage indebtedness exceeds the value of such real estate.
Appeal from the District Court of Pontotoc County; John Boyce McKeel, Judge.
Plaintiffs sued to cancel conveyance made to mortgaggee by mortgagor, who was their judgment debtor of lands in which he had equity of redemption, on the ground that such conveyance was in fraud of creditors. From judgment for defendants and order overruling their motion for new trial, plaintiffs appeal. Affirmed.
King & Wadlington, by Carloss Wadlington, Ada, for plaintiffs in error.
Busby, Stanfield & Orton, by W. V. Stanfield, Ada, for defendant in error.
The action for cancellation of a deed and to establish a judgment lien on certain real estate from which the present appeal arose was initiated by plaintiffs in error, hereinafter referred to as plaintiffs, in the District Court of Pontotoc County, against defendants in error, hereinafter referred to by name.
The facts are not disputed. In 1946 Mr. Callaway acquired the real estate here involved. In 1955 he executed a mortgage thereon to Mr. McCauley. In January, 1961, plaintiffs (in an action other than that from which this appeal arose) had previously, as plaintiffs, filed an action against Mr. Callaway for damages arising out of a collision of motor vehicles. In that cause on April 13, 1962, verdicts in favor of the plaintiffs there were returned against Mr. Callaway. There is no evidence that at the time the verdicts were returned the trial court directed that rendition of judgment be withheld or reserved. On April 17, 1962, Mr. Callaway deeded the subject real estate to Mr. McCauley. On April 23, 1962, a judgment based upon such verdicts was entered on the judgment docket of the District Court of Pontotoc County. On April 25, 1962, the journal entry of judgment pursuant to those verdicts was filed.
The record further reveals that on April 17, 1962, Mr. Callaway owed Mr. McCauley the sum of $10,165.00, principal and interest, all of which was secured by the aforesaid real estate mortgage; that at the time Mr. McCauley took the deed to which reference hereinabove was made he knew of the verdicts against Mr. Callaway; that after the property was deeded to him, Mr. McCauley advised the attorney for plaintiffs that he would execute a deed to plaintiffs if they would reimburse him for the money that he had invested in it; that 'plaintiffs did not attempt to prove that the recited consideration of the amount allegedly unpaid on the mortgage as stated in the deed was less than the fair and reasonable cash market value of the real estate at that time'.
After a trial to the court below, in the subsequent action, from which this appeal arose, judgment was rendered in favor of Mr. Callaway and Mr. McCauley, and plaintiffs appeal from the overruling of their motion for a new trial.
For reversal plaintiffs advance two propositions. The first is as follows: 'The Judgment is contrary to the law and the evidence, and Plaintiffs have judgment lien on real estate involved.'
Assuming, as plaintiffs contend in their first proposition, that by reason of the rendition of the verdicts on April 13, 1962, plaintiffs acquired a judgment lien on the property involved, but without so deciding, nevertheless such a lien, if it in fact existed, would be subject to the prior mortgage of Mr. McCauley.
In the case of Oklahoma State Bank of Wapanucka v. Burnett et al., 65 Okl. 74, 162 P. 1124, 1126, 1127, 4 A.L.R. 430, we said:
'In short the filing of the judgment only created a lien upon the interest in the real estate owned by the judgment debtor at the time of the filing of the lien, and if prior to the filing of such judgment lien the judgment debtor had mortgaged said real estate, the lien created by filing such judgment was subordinate to such mortgages. * * *'
Plaintiffs failed to show that the value of the real estate here involved exceeded the amount due and owing by Mr. Callaway to Mr. McCauley and secured by the mortgage on said realty. Their evidence failed to demonstrate that they would benefit if the deed should be set aside.
In the case of Grady v. Marshall, Okl., 288 P.2d 1101, 1104, we said:
'Equity will not require the doing of a useless act'.
We find no merit in plaintiffs' first proposition.
Plaintiffs' second proposition is that 'The judgment is contrary to the law and the evidence and the deed was a fraudulent conveyance as to the plaintiffs and plaintiffs are entitled to judgment for relief prayed by...
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