Smith v. Lytle

Salo of Lanl on Execution against a Purchaser having only an Equitable Interest. — A sale on execution of an estate in fee in real property, where the judgment debtor lias only an equitable interest therein, under a contract of purchase, and such interest only is authorized and directed to be sold by the process, is void as against the vendor in the contract, or his grantee, who holds the legal title, and has a prior lien upon the property for the unpaid purchase-money.

Plaintiff brought this action in the district court for Nobles county, praying that a sheriff’s certificate of sale, executed and delivered to defendant Lytle, of certain real estate in that county, and also a deed of the same real estate from Lytle to the other defendant, Thompson, be adjudged void and cancelled. The defendants answered, and the action was tried before Dickinson, J., whose findings of fact and conclusions of law were in substance as follows: - The land in question is a village lot in Worthington with a dwelling-house thereon, the property being worth $1,500. In August, 1S73, one Lackor entered into a written contract with the Sioux City & St. Paul Railroad Co., which then owned the lot, for the purchase of it. The lot was then vacant. Lackor paid part only of the purchase-money, went into possession, built the dwelling-house now standing on the lot, and in February, 1S74, moved into the house with his family, and thereafter occupied it as his homestead. In April, 1874, the plaintiff. Smith, lent Lackor a large sum of money, and, as security for its repayment, took from him an assignment in writing of his contract with the railroad company. Lackor’s wile did not join in the assignment. On December 16,1874, plaintiff, to protect his rights under the assignment, paid to the railroad company the unpaid balance of the purchase-money of the land required by the contract to be paid by Lackor, amounting to $142, and thereupon the company executed and delivered to plaintiff a ■deed of conveyance of the land. In August, 1875, plaintiff brought suit against Lackor to foreclose his interest in the property, and to enforce the security. Issue was joined, and the action tried by the court, and judgment ordered for the recovery by Smith from Lackor of $1,454.13, including the $142 paid by Smith to the railroad company, with interest :and costs; and that as to this sum of $142, with interest -and costs, the judgment be a specific lien on the property, “and that the same be sold in accordance with the statute in Huch case made and provided, to satisfy such lien; and that, defendant Lackor be decreed to be the equitable owner of the •said premises, discharged of any lien or title in favor of the plaintiff on account of such assignment, except as to the said ■sum of $142 and interest and costs; and that, upon satisfaction of such lien, either by payment or upon sale of the premises and redemption therefrom, the plaintiff be adjudged to reconvey the said premises to defendant Lackor, by proper deed of conveyance.” See Smith v. Lackor, 25 Minn. 454. On June 5, 1876, pursuant to this order, judgment was ■entered, directing that the premises “be sold in accordance ■with the statute in such' case made and provided, to satisfy ■such lien,” without specifying more particularly the manner in which it should be enforced or executed. The amount of the lien with interest and costs was $173.74. The judgment ■was docketed as an ordinary judgment for the recovery of the entire amount adjudged to Smith in the action, and on June •6,1876, execution was taken out, in the ordinary form, except that it referred to the judgment as a judgment “for the sum of $173.74, adjudged to be a specific lien upon lot 6, in block 34, in the village of Worthington, in said county and state, and that the same be sold to satisfy such lien.” In other respects the execution was in the form prescribed by Gen. St. 1878, c. 66, § 295, subd. 1. It recited that $173.74 was due on the judgment, and directed the sheriff to satisfy the same in the manner provided in the section and subdivision referred to. On the same day, by virtue of the execution. the sheriff levied on the property in question, and, after due notice, sold it at public auction to the plaintiff, Smith, for $201.54, and returned the execution fully satisfied. No report of the sale was made to the court, nor confirmation by the court sought. The ordinary sheriff’s certificate of sale on execution was made and delivered to Smith, and recorded. No redemption was ever made from the sale. On January 4,, 1877, Laekor and wife, for a valuable consideration, executed and delivered to Smith a deed of conveyance (without covenants) of all their right, title and interest, claim or demand, in and to the land. The defendant Lytle, having become entitled to a mechanic’s lien against Laekor, for labor in building the dwelling-house on the lot between August 11, 1873, and December 17, 1873, amounting to $146.80, and having filed the proper account in the registry of deeds, brought suit in May, 1875, to enforce such lien, making Laekor, Smith (the now plaintiff) and one Sheldon parties defendant, all of whom made default. On September 18, 1875, the court, on the evidence taken and reported to it, found the above facts entitling Lytle to a lien, and further found that Laekor was not the owner in fee of the land upon which the dwelling-house stood, but that he held a contract for the purchase of it, by the terms of which the land was to be conveyed to him on payment of the purchase price, a part only of which had then been paid by him. The court also found that Lytle was entitled to recover from Laekor the sum of $146.80, with interest from December 17, 1873, and that judgment should be entered therefor, “and the-same be decreed to be a specific charge and lien upon the said dwelling-house standing upon said lot, and upon all the right, title and interest of the said Laekor in and to the said lot of land upon which the same is situated; and that execution be issued upon such judgment, and thereupon the said property upon which such judgment shall be declared to be a lien shall be sold or leased as provided by law, to satisfy such judgment.” In accordance with the findings and order, judgment was entered on September 23,1875, adjudging a recovery of $146.80, with interest, etc., and that the same be “a specific charge and lien upon the said building, dwelling-house, situated on said land, and upon all the right, title and interest of the said Laekor in and to the said lot of land upon which the same is situated; and that said lien shall remain and be enforced by sale or lease of said premises, dwelling-house and appurtenances, by virtue of an execution therefor or therein.” This judgment having been docketed, an execution thereon was issued, in the ordinary form of executions against property prescribed in Gen. St. 1878, c. 66, § 295, subd. 1, except that, after the command to the officer to satisfy such judgment, etc., out of the personal property, etc., and, if sufficient personal property could not be found, then out of the real property belonging to said judgment debtor, there was added, “or out of the property on which said judgment was adjudged and declared to be a lien.” Lytle’s attorney, by indorsement on the execution, directed the sheriff to “levy upon the dwelling-house and appurtenances ■ upon said lot, and all the right, title, and interest of said H. L. Laekor in and to said lot of land.” The sheriff, by virtue of the execution, levied on the lot of land and the dwelling-house thereon, and, after due notice, sold the whole property at public auction on November 17,1875, to Lytle, for the sum of $225.50, and executed and delivered to him the usual sheriff’s certificate of sale on execution, which was recorded. No redemption was made -from this sale by any one. Laekor was desirous that the property should be sold rather than leased by the sheriff, in order that he might retain possession during the year for redemption, but the sale was made, not because Laekor desired it, but voluntarily by those acting for Lytle under the judgment. After this sale to Lytle and before the expiration of the time for redemption, the plaintiff, Smith, negotiated -with Lytle for a purchase of Lytle’s interest acquired under the sale, intending to procure an assignment of- sucb interest, or, if he failed in that, to redeem from the sale. Before he acquired such interest, the negotiations were interrupted by the expiration of the time for redemption. Smith, for his guidance in respect to the matter of redemption, made inquiry of the clerk of the court, who had acted as Lytle’s attorney in foreclosing the mechanic’s lien, as to the time when the right to redeem would expire, who, by mistake, misinformed him, so that the time for redemption expired before Smith was aware of the true date of its expiration. In this way he failed to made redemption. After the time for redemption had expired, the defendant Thompson purposing to buy from Lytle, Smith requested him to forbear for a certain time from negotiating with Lytle, to enable Smith himself to buy from Lytle, and thus protect his own lien on the property, with' which request Thompson complied. Thompson had the same knowledge Smith had of all the facts affecting the title. Smith did not assert any title in himself superior to Lytle’s, nor did he question the validity of Lytle’s title, but supposed that Lytle had acquired a title which extinguished his own interest, and so spoke of it in his conversation with Thompson; but his statements to Thompson were not intended by him as an act of relinquishment of any claim on his part, nor were they so understood by Thompson. Smith; failing to effect a purchase within the time agreed, was informed by Thompson that unless he effected a purchase within a further time named, Thompson himself would purchase. Smith failed to do so within such time, and afterwards, and on December 13,1876, Thompson purchased the premises from Lytle for $600, besides some taxes assumed, and paid by Thompson, and received from Lytle a warranty deed with the usual covenants. Thompson paid $300 down, and afterwards paid $225, of the purchase price. After Thompson’s purchase, Smith attempted to repurchase from him. ' On November 21,1876, after the time for redemption from the sale to Lytle had expired, Smith brought suit against Lytle for specific performance of an alleged contract for the assignment to him by Lytle of the sheriff’s certificate given to Lytle, and of all the latter’s right, title, interest, claim and demand in or to the property. Lytle joined issue, and Thompson, after his purchase, was allowed to and did intervene. The action was dismissed, after a trial, the court finding that there had been a mutual mistake of fact by the contracting parties which avoided the agreement. Judgment of dismissal was entered ón October 30, 1877. Among other conclusions of law, the court found that the sale to Lytle under execution, though irregular, was merely irregular and voidable, and was not void; and that plaintiff, having taken no steps to impeach its validity until more than a year after the sale, when the purchaser’s title became absolute, though he had actual notice of the sale and negotiated with the persons holding under it for a purchase from them, should be deemed to have waived the defects in the sale, and ought not now to be heard to question the title thus derived, especially after a transfer of the title to a purchaser for a valuable consideration. Judgment was accordingly ordered and entered, dismissing the complaint, and the plaintiff appealed.