Vaughn v. Brue, 1 Div. 201.

• Decision Date: 16 December 1943
• Docket Number: 1 Div. 201.
• Citation: 245 Ala. 107,16 So.2d 17
• Parties: VAUGHN et al. v. BRUE et al.
• Court: Alabama Supreme Court

16 So.2d 17

245 Ala. 107

VAUGHN et al. v. BRUE et al.

1 Div. 201.

Supreme Court of Alabama

December 16, 1943

Wm G. Caffey and Lyons & Thomas, all of Mobile, for appellants.

Smith, Hand & Arendall, of Mobile, for appellees.

STAKELY Justice.

This is an appeal from a final decree of the equity court in which it is determined that the title of W. M. Seale and Frank Ladd Sr. (appellees) to the real estate involved in the suit is superior to any title or equity which Floyd S. Vaughn and Lillie B. Anderson (appellants) might have therein. The question is whether the appellees are bona fide purchasers for value without notice under the following circumstances.

On June 7, 1915, Mary Brue and husband conveyed to Floyd S. Vaughn (one of the appellants) and Charles Anderson the lands in controversy. On the same date Floyd S. Vaughn and Charles Anderson made a contract with Mary Brue and husband that they would "at any time before the expiration of two years from the date of this instrument, reconvey to the said Mary Brue all of the above described property upon the payment to them of the sum of $1874.48, with interest at 8% and the further payment of any additional indebtedness owing said Vaughn and Anderson," the agreement to be of no further force and effect if Mary Brue failed to make payment within the two-year period.

Claiming that Mary Brue had paid less than one-third of the indebtedness within the two-year period, Floyd S. Vaughn and Charles Anderson took possession of the lands, continued in possession and were in possession, claiming title thereto when Mary Brue on February 6, 1939, filed a bill praying a "decree that the said Floyd S. Vaughn and Lillie B. Anderson" (the other appellant and sole devisee of Charles Anderson, deceased) "are now holding title to said lands as Trustee for the complainant and that they be required to reconvey said lands to Mary Brue." The appellants filed demurrers to this bill which were sustained by the court on May 10, 1939. The bill was amended and demurrers were again sustained on October 29, 1939.

On October 30, 1939, Mary Brue again amended her bill so as to allege in substance in the alternative that she had either paid the entire indebtedness which she claimed to be secured by the instrument which was in the form of a deed or that if she was mistaken, she offered to pay such sum as the court might find to be due and do whatever the court might decree to be equitable. The appellants refiled their demurrers to the bill as thus amended, which the court overruled on November 14, 1939.

The appellants failed to file an answer to the bill as last amended and on February 7, 1940, a decree pro confesso was taken against appellants. On March 15, 1940, on the basis solely of the decree pro confesso a final decree was rendered to the effect that appellants held legal title to the lands in trust for Mary Brue, divesting this title out of appellants and vesting the title in Mary Brue. A certified copy of this decree was recorded in the probate court of Mobile County on April 1, 1940.

On June 25, 1940, Mary Brue executed and delivered to W. M. Seale (one of the appellees) a statutory warranty deed to the property. This deed was recorded in the probate court of Mobile County on June 26, 1940. On January 28, 1941, W. M. Seale conveyed a part of the land to Frank M. Ladd (the other appellee) for $300. This deed was recorded in the probate court of Mobile County on January 28, 1941.

On July 5, 1940, appellants filed a bill of review (this suit) to set aside and reverse the decree of March 15, 1940, in the suit brought by Mary Brue against appellants. The lower court held this bill of review good against demurrer and this ruling was affirmed on May 15, 1941, by the Supreme Court of Alabama in the case of Mary Brue v. Floyd S. Vaughn and Lillie B. Anderson, 241 Ala. 322, 2 So.2d 396, 398. This court held that the bill of review properly challenged the decree of March 15, 1940, for "error of law apparent on the record."

On November 17, 1941, Mary Brue filed an answer in which she alleged that after the rendition of the decree of March 15, 1940, and after recording a certified copy of that decree on April 1, 1940, on June 25, 1940, she conveyed the property involved in this suit by deed to W. M. Seale (appellee). Copy of the deed is attached to her answer. It is a statutory warranty deed and recites a consideration of $50 and other valuable considerations.

On November 28, 1941, W. M. Seale filed a motion for leave to file a petition of intervention and attached to that motion his petition of intervention. In this petition W. M. Seale alleged that duly certified copy of the decree of March 15, 1940, was filed for record in the probate court of Mobile County on April 1, 1940, and that on June 25, 1940, he had purchased the property described in the decree of March 15, 1940, and therein declared to be vested in Mary Brue, and that he bought the same without notice of any defect in the proceedings in said cause which would render the decree of March 15, 1940, subject to be reviewed, revised or set aside on a bill of review. W. M. Seale further averred that his interest in the property might be prejudiced by a successful prosecution of the bill of review by Vaughn and Anderson and that representation of his interest by Mary Brue was inadequate.

The court granted the motion and allowed the parties ten days in which to demur to or answer the petition. Thereafter, W. M. Seale amended his petition of intervention to show that a portion of the property conveyed to him by Mary Brue and bought by him in reliance on the decree of March 15, 1940, had been conveyed by him to Frank M. Ladd. Thereupon Frank M. Ladd filed a motion for leave to file a petition of intervention, which the court granted. The appellants filed an answer denying substantially the allegations of the petitions to intervene and putting in issue the right of intervention.

In view of our ideas about the case, we think it unnecessary to set forth any further details about the intervention proceedings except to say that after hearing a good deal of evidence presented by deposition on the issues made by the petitions and the answers thereto, the court granted the petitions to intervene, and in the same decree found that W. M. Seale purchased the property from Mary Brue by deed, dated June 25, 1940, prior to the filing of the bill of review and that said purchase was made in good faith without knowledge or notice of any defect in the proceedings leading to the rendition of the decree on March 15, 1940, and without knowledge or notice of any title or equity in Floyd S. Vaughn and Lillie B. Anderson. The court further found that Frank M. Ladd, Sr., paid a valuable consideration, in good faith, for the property conveyed to him by W. M. Seale, without notice of any defect in the title of W. M. Seale or of any defect in said proceedings.

The court decreed that the title of W. M. Seale and Frank Ladd, Sr. (appellees), respectively was superior to any title or equity of Floyd S. Vaughn and Lillie B. Anderson (appellants).

As stated, a good deal of evidence was introduced by both sides to show or deny respectively that W. M. Seale had actual notice of defects in the proceedings upon which the decree of March 15, 1940, was based. As we view the case, however, it will not be necessary for us to sift that evidence, because we think that W. M. Seale and Frank Ladd, Sr., had notice as a matter of law sufficient to preclude them from being purchasers without notice.

At the time W. M. Seale received his deed on June 25, 1940, there was no pending bill of review, since the bill of review was not filed until July 5, 1940. It is the theory of appellees that there could be no notice until the bill of review was filed and accordingly, it is the insistence of appellees that where a final decree is rendered in a cause wherein the court has jurisdiction of the persons and the subject matter, a purchaser who buys in reliance on that decree, without actual knowledge or notice of any defect in the proceedings, is protected as against any rights thereafter sought to be asserted in a bill of review. There is substantial authority to support this position. Cases which well illustrate this view are Rector v. Fitzgerald, 1894, 8 Cir., 59 F. 808; Lee County v. Rogers, 7 Wall. 181, 19 L.Ed. 160; Perkins v. Pfalzgraff, 60 W.Va. 121, 53 S.E. 913; Vyverberg v. Vyverberg, 310 Ill. 599, 142 N.E. 191; Dunfee v. Childs, 59 W.Va. 225, 53 S.E. 209; and Teel v. Dunnihoo, 221 Ill. 471, 77 N.E. 906, 112 Am.St.Rep. 192. Some of these cases involved bills of review for errors apparent on the face of the record.

However, careful consideration of these cases shows that the conclusion reached is based on the doctrine of lis pendens. They hold that since a bill of review is regarded as a new suit and not a continuation of the original suit, there is no lis pendens and therefore no notice until the bill of review is filed. There are cases which assert a contrary doctrine, for example Madeira's Heirs v. Hopkins, Ky., 12 B.Mon. 595; Clarey v. Marshall's Heirs, 4 Dana, Ky., 95; Cook v. French, 96 Mich. 525, 56 N.W. 101; McLean v. Stith, 50 Tex.Civ.App. 323, 112 S.W. 355; Debell v. Foxworthy's Heirs, 9 B.Mon., Ky., 228.

We think, however, that this case should be determined on principles which are established in this state and which are not based on the doctrine of lis pendens. Accordingly, it is immaterial that the bill of review was not filed until after W. M. Seale received his deed from Mary Brue on June 25, 1940. If these principles take no account of the pendency vel non of a bill of review at that time, it may be added that it is equally immaterial that no lis pendens notice...