Reid v. Gorman
| Decision Date | 27 June 1916 |
| Docket Number | 3820 |
| Citation | 158 N.W. 780,37 S.D. 314 |
| Parties | FRANK J. REID, Plaintiff and respondent, v. J. K. GORMAN, Defendant and appellant. and E. J. Dunn, Sheriff in and for Hamlin County, and W. S. Madden, et al. Defendants |
| Court | South Dakota Supreme Court |
Appeal from Circuit Court, Hamlin County, SD
#3820--Reversed
M. J. Russell, George H. Marquis
Attorneys for appellant.
Hall, Alexander & Purdy, W. N. Skinner
Attorneys for Respondent.
Opinion filed June 27, 1916; Rehearing denied August 31, 1916
Plaintiff, the assignee of a certificate of sale upon foreclosure of real estate mortgage, brought this action seeking a decree requiring the defendant Dunn, as sheriff, to issue to him a sheriff's deed on such foreclosure, and seeking to quiet his title to the land described in his certificate as against the claims of any of the defendants and especially against those of the defendant Gorman. Gorman claims an interest in and to said land as a redemptioner from the above-mentioned foreclosure sale; he claims that, as an attachment lienor claiming to hold an attachment lien upon said land, he tendered to the plaintiff the amount necessary to redeem from the foreclosure sale and, after the refusal of plaintiff to accept the same, did, within the period provided by law for redemption, pay the amount necessary for such redemption to the defendant Dunn as sheriff. This appeal is from an order of the circuit court overruling Gorman's demurrer to the plaintiff's reply.
The facts as presented by the demurrer are in brief as follows: One M., being the owner of the land in question subject to the mortgage upon which the above-mentioned foreclosure was afterwards made, entered into an executory contract with one L., whereby M. contracted to sell the said land to L. subject to the said mortgage, and to convey the same by warranty deed upon payment of the agreed consideration, a part of which consideration was paid upon the execution and delivery of such contract; the balance to be thereafter paid. L. entered upon said land but afterwards abandoned it, and without making any further payments, brought an action against M. for the rescission of the contract. At the time of instituting such action, L. filed in the proper office a notice of lis pendens. M., answering L.'s. complaint and by way of counterclaim, alleged the full performance by him of the covenants of said contract, among other things alleging that under date of said contract he had made a warranty deed conveying said land to L., and that, subsequent to the commencement of that action, he had tendered the said deed to L., and, after such tender and refusal, had deposited it in a depository theretofore agreed upon by the parties. M. prayed a money judgment for the balance due him under such contract and for a foreclosure sale of the said land to pay such judgment. In such action, a judgment was rendered wherein it was found that L. had been the "owner" of the said land ever since the date of the contract and wherein a foreclosure sale was decreed. Besides confessing the action between L. and M., the facts therein pleaded, and the judgment therein rendered, the demurrer confesses the existence of the facts pleaded in the action of L. against M.; such facts being separately pleaded. After the commencement of the action of L. against M. and the filing of the notice of lis pendens therein and the interposing of M.'s counterclaim but before judgment therein, Gorman brought an action against M. and another, wherein a money judgment was demanded and wherein an attachment was issued on behalf of Gorman and levied upon the land involved herein. In that action Gorman obtained a judgment against the defendants therein. The mortgage above mentioned not having been paid, it was foreclosed, and, upon the foreclosure sale, plaintiff's assignor became the purchaser; and thereafter, as above noted, Gorman, claiming to be a redemptioner under and by virtue of his attachment lien, made the offer of redemption to plaintiff and the payment to the sheriff.
Respondent contends that the appellant was bound by the notice of lis pendens, and that by reason thereof he is bound by the decree in the action of L. against M. the same as though he had been a party thereto. If this were true and we should give to the word "owner" as used in such decree its common acceptation, such decree would be an adjudication, binding upon appellant, adjudging that M. had, at the time of the levy of appellant's attachment, no interest in said land subject to attachment. Inasmuch as the facts pleaded in this action--in so far as they relate to the rights of L. and M. under the contract between them--are the same as the facts that were pleaded in the counterclaim of M. in the action of L. against M., the bringing of such action of L. against M., the filing of the notice of lis pendens, and the entry of judgment therein, became of little moment because the judgment therein could not and did not deprive appellant of any rights which he otherwise would have had against this land. It is not necessary for us to determine whether or not the judgment rendered in the action of L. against M. was warranted by the facts pleaded. The relief demanded in such action was only such relief as the defendant therein was entitled to under the facts alleged in his counterclaim. It follows that, if such judgment--in decreeing that L. became the "owner" of the land on the day the contract was entered into--went further than the facts pleaded and the relief demanded warranted, the judgment to such extent was invalid as against appellant and he could not be bound thereby even though a notice of lis pendens was filed. Section 634, Pomeroy's Eq. Juris.; 25 Cyc. § 1476. We may therefore entirely disregard the fact that there ever was an action between L. and, M., and consider only the question of whether or not, under the facts confessed, M., at the time of the levy of the attachment, had an interest in said land that could be and was reached through the attachment levy. If he had then appellant through such levy became a redemptioner entitled to redeem such land from the foreclosure sale.
If the deed made by M. and tendered to and refused by L. had the effect of transferring to L. the legal title to this land, there was left in M. nothing but a personal claim against L. which could not in any manner be reached through this attachment levy. But it is certainly recognized by all authorities that, before title can pass through a deed, there must be a delivery of such deed, and that an essential element in delivery is the acceptance of the deed by or on behalf of the grantee. Devlin, § 285; 3 Washburn, Real Property (5th Ed.) 310. It is therefore clear that the legal title to this land was held by M. at the time of the levy of appellant's attachment.
Inasmuch as the deed tendered by M. was not accepted, the relations of M. to L.--the rights and obligations of each of them under the contract--were in no manner altered by such tender, except that it had the effect of putting L. in default. Such tender of deed in no 'manner changed M.'s rights or his interest in and to the said land. What the rights of M. and L. were under the contract is well settled under all the authorities. It certainly has become settled in this state under the line of decisions ending with that in the case of Phillis v. Gross, 32 S.D. 438, 143 N.W. 373. Immediately upon entering into such contract, L. became possessed of an equitable interest or estate in said land. M., while continuing to be vested with the legal title of said land, held such title in trust for the benefit of L. and under an obligation to transfer the same to L. whenever L. should have acquired the right to be vested with such title; but M. also held such legal title as security for the payment to him of the balance remaining unpaid under such contract. As stated by Pomeroy, at section 1260 of his Equity Jurisprudence:
This interest which L. had in said land, by virtue of such contract, is sometimes spoken of as an equitable title. We think this term inaccurate, and that there never can, strictly speaking, be any "equitable title" except where there is a present right in the person to be vested with the "legal title"; in other words, there can be no equitable title until, by fulfillment of the covenants of the contract, the vendee has become equitably entitled to the legal title, has become entitled to a decree of specific performance. As stated by Warvelle, at section 176:
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