Rector v. Fitzgerald

• Decision Date: 29 January 1894
• Docket Number: 287.
• Citation: 59 F. 808
• Parties: RECTOR v. FITZGERALD.
• Court: U.S. Court of Appeals — Eighth Circuit

59 F. 808

RECTOR v. FITZGERALD.

No. 287.

United States Court of Appeals, Eighth Circuit.

January 29, 1894

U. M Rose, W. E. Hemingway, and G. B. Rose, for appellant.

Sam. W Williams, for appellee.

Before SANBORN, Circuit Judge, and THAYER, District Judge.

THAYER District Judge.

This case comes before us on appeal from the decree of the circuit court of the United States for the eastern district of Arkansas dismissing a bill of review, so termed. The chief question to be considered is one of lis pendens, and the controlling facts on which the decision depends are as follows: Prior to December 16, 1880, there were pending in the United States circuit court for the eastern district of Arkansas, on the chancery docket, nine distinct and independent suits by Henry M. Rector, the present appellant against several different defendants, in which suits Rector sought to enforce an alleged equitable title to certain lands situated in the city of Hot Springs, Ark., which were at the time held and occupied in severalty by the last-mentioned defendants. One of these suits was entitled Henry M. Rector v. E. Q. Gibbon et al.; another was entitled Henry M Rector v. Thaddeus Taylor and William Gray. On December 16, 1880, the following stipulation, signed by counsel for the respective parties, was filed and spread of record in each of said cases.

'It is hereby stipulated and agreed that the answer shall be withdrawn in the case of H. M. Rector v. E. Q. Gibbon et al., and a demurrer shall be interposed, raising the question of the sufficiency of the bill upon the ground of jurisdiction, and to the finality of the decision of the Hot Springs commissioners, which shall be argued at the next April term with like effect as though filed and argued on the proper rule day, and affidavit and certificate to the demurrer is waived. And it is further agreed that the cases of Rector v. West Steele et al., Rector v. Henry P. Smith et al., Rector v. Henry Smith, Rector v. Lipscomb, Rector v. J. W. Parker et al., Rector v. Elihu Smith, Rector v. T. W. Beattie, and Rector v. Thad. Taylor, and other cases pending in this court involving the same question, shall await and abide the decision on the said demurrer; and if said demurrer is sustained, the same entry shall be made in each of said causes, and demurrer to be formally entered after such decision; and if said demurrer shall be overruled, the parties shall have time to take depositions with like effect as though their answers had been filed and depositions taken under regular rules.'

At the April term, 1881, the demurrer which had been filed, pursuant to the above stipulation, in the case of E. Q. Gibbon et al., was sustained by the circuit court, and a final decree was entered dismissing the bill, from which decree an appeal was prosecuted to the supreme court of the United States. The decision on that appeal, reversing the decree of the circuit court, was rendered on March 19, 1884. Vide 111 U.S. 276, 4 S.Ct. 605. At the April term of the circuit court, and on May 2, 1881, the circuit court also entered an order sustaining a demurrer to the bill in the suit of Rector v. Taylor and Gray, and at the same time granted a decree dismissing the bill in that case. Afterwards Rector filed a motion to vacate the last-mentioned decree, on the ground that it had been entered prematurely, in violation of the foregoing stipulation, but the court denied the motion on October 22, 1881. From the last-mentioned decree, dismissing the bill of complaint against Taylor et al., an appeal appears to have been allowed to the supreme court of the United States; but the same was not prosecuted diligently, and the appeal was dismissed by the supreme court on December 6, 1881. The land to which the litigation related was conveyed by Taylor and wife to Orlando A. Hobson on August 9, 1881, and on February 29, 1884, Hobson and wife executed a trust deed in the nature of a mortgage on the same property, to secure a loan of $5,000 made to Hobson by Edward Fitzgerald, the present appellee. At a foreclosure sale under said deed of trust or mortgage, Fitzgerald became the purchaser of the premises on March 4, 1887, and received a deed for the premises in due form. After the announcement of the decision of the supreme court in the case of Rector v. Gibbon, 111 U.S. 276, 4 S.Ct. 605, and on April 29, 1884, a bill, which on its face professed to be an 'original bill in the nature of a bill of review,' was filed by Rector against Taylor, Gray, and Hobson. This was followed by a bill of revivor, filed on January 20, 1887, to bring in the heirs of Hobson, who had died in the mean time. On March 6, 1888, a supplemental bill was filed by Rector to make Fitzgerald a party to the litigation. The bill of review and supplemental bill, last referred to, contained substantially the same allegations that are found in the original bill of complaint against Taylor and Gray, and the same prayer for relief. They also contained a brief statement of the terms of the stipulation that had been spread of record in the case on December 16, 1880; but the so-called bill of review did not refer to the decree that had been entered on May 2, 1881, dismissing the original bill of complaint, neither did it nor the supplemental bill contain any prayer that that decree might be reviewed and reversed.

In his answer to the several pleadings above mentioned, Fitzgerald the appellee, based his defense to the relief sought on the ground that the alleged bill of review was not filed within the time limited by law and the rules of procedure in equity for filing such a bill; also on the ground that, at the inception of his title, on February 29, 1884, there was no pending suit which could affect him with constructive notice of Rector's alleged equity, and that, in any event, he was a purchaser for value in good faith under circumstances which would have satisfied any prudent person that the litigation affecting the property in question had been finally terminated. It is a familiar rule of law that a stranger who purchases property at a judicial sale under a judgment or decree that is erroneous or voidable, but not absolutely void, will be protected in his purchase, even if the judgment or decree is subsequently reversed on appeal or writ of error. Gray v. Brignardello, 1 Wall. 627, 634; Voorhees v. Bank, 10 Pet. 449, 469; Gilman v. Hamilton, 16 Ill. 225, 232, and citations; Clarey v. Marshall's Heirs, 4 Dana, 96, 99. But the same protection which is afforded to a stranger to the record, who purchases property at a judicial sale under an erroneous judgment or decree, will not be extended under all circumstances to a person who purchases property that is in litigation from a party to the litigation, even though he purchases after a final judgment or decree has been rendered at nisi prius in favor of the vendor. If the purchase is made after the rendition of a judgment in favor of the vendor, but within the time limited by law for an appeal or writ of error, it seems to be a debatable question how far the purchaser is affected by subsequent proceedings in the case, if an appeal or writ of error is prosecuted with effect by the losing party. In some, and in perhaps the majority, of the states it is held that one who thus purchases after a final...