Vaughn v. Schmalsle

• Decision Date: 22 October 1890
• Citation: 25 P. 102,10 Mont. 186
• Parties: VAUGHN v. SCHMALSLE et al.
• Court: Montana Supreme Court

25 P. 102

10 Mont. 186

VAUGHN v. SCHMALSLE et al.

Supreme Court of Montana

October 22, 1890

Appeal from district court, Custer county; GEORGE R. MILBURN, Judge.

M. J Liddell and W. A. Burleigh, for appellant.

Strevell & Porter, for respondents.

HARWOOD J.

In this appeal two questions of law are to be determined First. A question of priority and relative legal effect of a judgment lien on real estate, and title acquired at execution sale thereunder, as against a mortgage executed and delivered prior to docketing of the judgment, but not recorded until after the judgment was docketed and levy made under execution. Second. A question as to the sufficiency of description of a portion of the real estate mentioned in the mortgage. These questions will be considered in the order stated.

This appeal is from the judgment of the trial court, and we find in the judgment roll and exception to the conclusions of law found by the court, on the ground that the same are not supported by the facts, as found by the court. The facts bearing upon the first point of controversy, as found by the court, are as follows: March 1, 1886, plaintiff loaned to J F. Schmalsle $700, payable 12 months after date, with interest at the rate of 24 per cent. per annum, for which said J. F. Schmalsle made and delivered to plaintiff a promissory note and a mortgage, to secure the same, principal and interest, and $25 attorney's fees, on certain described lots of land situate in Miles City, county of Custer, which mortgage was filed for record in the office of the county clerk and recorder of said county, April 5, 1886. On the 11th day of March, 1886, judgment was rendered and docketed against said mortgagor, in the district court in and for said county, for the recovery of the sum of $1,500 in favor of William F. Schmalsle, one of the defendants in this action; that execution was duly issued on said judgment on March 19, 1886, under which execution the sheriff levied on the same real estate mentioned in said mortgage, and thereafter, on the 9th day of April, 1886, sold said real estate under said levy to William F. Schmalsle, for $1,100 that when such purchase was made the purchaser, William F. Schmalsle, had actual notice of the existence of the plaintiff's mortgage as well as constructive notice by the record thereof; that on the 9th day of October, 1886, the sheriff executed to William F. Schmalsle a deed conveying to him said property as sold under said execution, which deed was filed for record October 20, 1886. Upon this state of facts the court found as a conclusion of law that the judgment lien was paramount to the mortgage, and that the mortgage could not be "enforced against said property so levied upon to the exclusion of the said judgment or in priority thereto." So holding, the court denied the plaintiff a decree of foreclosure of her mortgage on said premises, and rendered judgment against her in favor of defendants William F. Schmalsle and Nelson A. Miles, from which judgment plaintiff appealed.

The question involved herein as to the relative force of a judgment lien, and a mortgage made and delivered prior to docketing of the judgment, but not recorded until after such docketing and levy of execution, must be solved by a consideration of the statute relating to the judgment lien and execution, and the statute providing for the conveyance of real estate or interest therein, and the effect of recording such conveyances or withholding the same from record. The statute fixing the judgment lien is found in section 307, Code Civil Proc., which provides: "Immediately after filing a judgment roll the clerk shall make proper entries of the judgment, under appropriate heads, or in the docket kept by him; and from the time the judgment is docketed it shall become a lien upon the real property of the judgment debtor, not exempt from execution, in the county, owned by him at the time, or which he may afterwards acquire, until said lien expires. The lien shall continue for six years unless the judgment be previously satisfied." The judgment lien here established by statute takes effect upon "the real property of the judgment debtor, not exempt from execution, in the county, owned by him at the time," or thereafter acquired. So, in section 313, Code Civil Proc., where the execution is provided for, the sheriff is required first to satisfy the judgment out of the personal property of the debtor, or, "if sufficient personal property cannot be found, then out of his real property; or, if the judgment be a lien upon real property, then out of the real property belonging to him, on the day when judgment was docketed or at any time thereafter." In Rodgers v. Bonner, 45 N.Y. 379, the court says: "A judgment is not a specific lien on any particular real estate of the judgment debtor, but a general lien upon all his real estate, subject to all prior liens, either legal or equitable, irrespective of any knowledge of the judgment creditor as to the existence of such liens." See, also, School-District v. Werner, 43 Iowa, 643. In the case of Conard v. Insurance Co., 1 Pet. 442, Mr. Justice STORY, announcing the decision of the court, says: "Now it is not understood that a general lien by judgment on land constitutes, per se, a property or right in the land itself. It only confers a right to levy on the same, to the exclusion of other adverse interest, subsequent to the judgment; and when the levy is actually made on the same, the title of the creditor, for this purpose, relates back to the time of his judgment, so as to cut out intermediate incumbrances." In Brown v. Pierce, 7 Wall. 205, Mr. Justice CLIFFORD, speaking for the court, declares the extent and effect of a judgment lien as follows: "Judgments were not liens at common law. *** Different regulations, however, prevailed in different states, and in some neither a judgment nor a decree for the payment of money, except in cases of attachment or mesne process, created any preference in favor of the creditor, until the execution was issued and had been levied on the land. Where the lien is recognized, it confers a right to levy on the land to the exclusion of other adverse interests acquired subsequently to the judgment; but the lien constitutes no property or right in the land itself. *** Express decision of this court is that the lien of a judgment constitutes no property in the land; that it is merely a general lien securing a preference over subsequently acquired interests in the property; but the settled rule in chancery is that a general rule is controlled in such courts so as to protect the rights of those who were previously entitled to an equitable interest in the lands, or in the proceeds thereof. Specific liens stand on a different footing, but it is well settled that a judgment creates only a general lien, and that the judgment creditor acquires thereby no higher or better right to the property or assets of the debtor, than the debtor himself had when the judgment was rendered, unless he can show some fraud or collusion to impair his rights. Correct statement of the rule is that the lien of a judgment creates a preference over subsequently acquired rights, but in equity it does not attach to the mere legal title to the land, as existing in the defendant at its rendition, to the exclusion of a prior equitable title in a third person. Guided by these considerations, the court of chancery will protect the equitable right of third persons against the legal lien, and will limit that lien to the actual interest which the judgment debtor had in the estate at the time the judgment was rendered." In re Howe, 1 Paige, 125; Ells v. Tousley, Id.280; Keirsted v. Avery, 4 Paige, 15; Lounsbury v. Purdy, 11 Barb. 490; Averill v. Loucks, 6 Barb. 20. These eminent authorities are cited and quoted from as forcibly expressing the legal effect of a judgment lien generally. The correctness of the views expressed is not questioned, so far as we are aware, throughout the whole range of authorities on this subject.

Notwithstanding these doctrines, if there is any provision in our statutes which changes the relative force of the judgment lien in the case at bar, as against the prior acquired mortgage, then the latter must be postponed to the former, as held by the trial court. It is insisted by counsel for respondent that a mortgage executed upon land in this state should not be regarded as a conveyance in the sense that applied to a mortgage at common law; that a mortgage on land, as...