Title: Matter of Estate of Ventling

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Matter of Estate of Ventling1989 WY 84771 P.2d 388Case Number: 88-204Decided: 03/31/1989Supreme Court of Wyoming
IN THE MATTER OF THE 
ESTATE OF DAVID GARY VENTLING, DECEASED. INSURANCE COMPANY OF NORTH AMERICA, APPELLANT (RESPONDENT),

 
 
v.

 
 
WALTER W. VENTLING, 
PERSONAL REPRESENTATIVE OF THE ESTATE OF DAVID GARY VENTLING, DECEASED, APPELLEE 
(PETITIONER).

 
 
Appeal from the 
DistrictCourtofNatronaCounty, Harry E. Leimback, 
J.

 
 
John R. Perry, Goddard, 
Perry & Vogel, Buffalo, for appellant.

 
 
John C. Hoard, Casper, for appellee.

 
 
Before CARDINE, C.J., and THOMAS, URBIGKIT, MACY 
and GOLDEN, JJ.

 
 

THOMAS, 
Justice.

 
 

[¶1.]     The single issue for 
the court to resolve in this case is whether the equitable interest of a buyer 
under a contract for deed is subject to the statutory lien attaching by virtue 
of a judgment. The trial court ruled that the interest of a buyer in an 
executory installment contract for the sale of land is not described by the 
phrase "lands and tenements" adopted in § 1-17-302, W.S. 1977. The district 
court then held that the Insurance Company of North 
America (appellant) was not entitled to assert a judgment lien as a 
claim against the estate of the deceased buyer under the contract for deed. We 
agree with that decision of the district court and affirm the order declaring 
that the judgment under which appellant claims did not constitute a lien upon 
the interest of the decedent in the contract for deed.

 
 

[¶2.]     Appellant defines the 
issue presented for review in this way:

 
 
"Did the trial court err 
in ruling that decedent's interest as vendee under a contract for deed was not 
subject to a properly filed judgment lien?"

 
 
Walter W. Ventling, 
Personal Representative for the Estate of David Gary Ventling (appellee), adopts 
the same issue in his brief and defends the judgment of the district court in 
the light of the appellant's contention.

 
 

[¶3.]     In 1982, David Gary 
Ventling stole some cattle in Montana and 
disposed of them in JohnsonCounty. He was prosecuted and convicted 
for this cattle theft. Appellant had insured the cattle under policies which it 
had issued, and it was obligated to reimburse its insureds for their losses. 
Under standard doctrines of subrogation, it acquired the claim against Ventling 
and brought an action to recover the value of the cattle. Appellant obtained a 
judgment against Ventling on May 22, 1985 in the amount of $23,880. Interest 
accruing to the date on which this action was brought, when added to the 
judgment amount, resulted in a total indebtedness of 
$26,555.87.

 
 

[¶4.]     After settlement 
negotiations with Ventling, the appellant recorded its judgment in the office of 
the CountyClerk in JohnsonCounty on January 24, 1986, and it asserts 
a lien on Ventling's interest in real property identified as "New Dawn Trailer 
Court." Ventling was buying this property under a 
Contract for Deed which he had assumed from a prior purchaser. On June 26, 1986, 
Ventling was killed in a truck accident, and his estate was probated by the 
appellee, who is Ventling's father. After the initiation of the probate 
proceedings, appellant submitted a creditor's claim to appellee for satisfaction 
of the judgment. Appellee refused the claim and presented a motion in the 
probate proceedings for a declaratory judgment as to the validity of appellant's 
lien. That effort culminated in an order by the probate court ruling that 
appellant had no lien against the estate's interest in "New Dawn Trailer 
Court." This appeal is taken from that 
order.

 
 

[¶5.]     The statute pursuant to 
which the appellant seeks recognition of its lien provides in pertinent 
part:

 
 
"The lands and tenements 
within the county in which judgment is entered are bound for the satisfaction 
thereof * * *." Section 1-17-302, W.S. 1977.

 
 
The resolution of this 
case depends very simply upon whether the phrase "lands and tenements" is broad 
enough to include the interest of a purchaser under what is alternatively 
denominated as a contract for deed or an installment land contract. Under such 
an arrangement for the conveyance of real property, the seller agrees to accept 
payments from the buyer, usually over a period of time, until the price set by 
the contract has been paid. When that condition is satisfied, the seller is 
bound to deliver a deed to the buyer. At all times prior to the final payment 
and the delivery of the deed, even though the buyer usually has possession, 
legal title remains vested in the seller. In re Freeborn, 94 Wn.2d 336, 617 P.2d 424 (1980). The interest of the buyer is equitable, not legal. In prior cases 
involving different issues, we have adopted the premise that the legal interest 
remains with the seller and the buyer's interest is an equitable interest 
although we have recognized that the parties could manifest an intention 
otherwise. Marple v. Wyoming Production Credit 
Association, 750 P.2d 1315 (Wyo. 1988); Angus 
Hunt Ranch v. REB, Inc., 577 P.2d 645 (Wyo. 
1978); Baldwin v. McDonald, 24 Wyo. 108, 156 P. 27 (1916). See G. Rudolph, 
The Wyoming 
Law of Real Mortgages, 147 (1969).

 
 

[¶6.]     Appellant acknowledges 
the rule at common law that judgment liens do not attach to the equitable 
interest of a purchaser of land under a contract for deed or an installment land 
contract. Warren 
v. Rodgers, 82 N.M. 78, 475 P.2d 775 (1970). See Mutual Building & Loan 
Association v. Collins, 85 N.M. 706, 516 P.2d 677 (1973); cases cited in 46 
Am.Jur.2d Judgments § 260 (1969). A justification advanced frequently is that 
the buyer, until legal title is transferred, holds nothing of substance and, 
consequently, has nothing upon which a lien or attachment can be levied. See 
e.g., Arnold v. Hatch, 177 U.S. 276, 20 S. Ct. 625, 44 L. Ed. 769 (1900); cases cited in 6 Am.Jur.2d Attachment and 
Garnishment § 142 (1963). The appellant also recognizes the possible, or perhaps 
likely, application of this rule in Wyoming in the absence of a different clear 
statutory direction.

 
 

[¶7.]     Appellant contends, 
however, that this rule is outmoded and urges upon the court, as the better 
reasoned view, the rule adopted by those jurisdictions which allow the 
attachment of such a lien. Appellant cites a number of cases and emphasizes 
those from sister states in the RockyMountain area that have reconsidered the 
common law and permitted the attachment of such liens. E.g., Fulton v. Duro, 107 
Idaho 240, 687 P.2d 1367 (Idaho App. 1984), aff'd 108 Idaho 392, 700 P.2d 14 
(1985); Collins; Bank of Santa Fe v. Garcia, 102 N.M. 588, 698 P.2d 458 
(N.M.App. 1985), cert. denied sub nom. Espinoza v. Bank of Santa Fe, 102 N.M. 
613, 698 P.2d 886 (1985); Butler v. Wilkinson, 740 P.2d 1244 (Utah 1987). The 
appellant also points out that the equitable interest of the purchaser 
frequently has significant economic value as the obligation is reduced or the 
land perhaps increases in value. Several jurisdictions have acknowledged a 
tangible worth attaching to the equitable interest which justifies such an 
interest to be readily used for security or easily assignable. O'Neill 
Production Credit Association v. Mitchell, 209 Neb. 206, 307 N.W.2d 115 (1981); Shindledecker v. Savage, 
96 N.M. 42, 627 P.2d 1241 (1981); Bill Nay and Sons Excavating v. Neeley 
Construction Company, 677 P.2d 1120 (Utah 1984).

 
 

[¶8.]     In those jurisdictions 
in which the attachment of the lien is recognized, the result is justified 
either by applying the theory of equitable conversion or by interpretation of 
statutory language. The equitable conversion theory treats the interest of the 
purchaser to be tangible real estate from the time the installment land contract 
or contract for deed is executed and considers the purpose of the retention of 
title by the vendor to be a security interest, with the contractual right to the 
balance of the purchase price treated as personalty. Marks v. City of Tucumcari, 93 N.M. 4, 595 P.2d 1199 (1979); Cascade 
Security Bank v. Butler, 88 Wn.2d 777, 567 P.2d 631 (1977); 
Meltzer v. Wendell-West, 7 Wn. App. 90, 497 P.2d 1348 (1972). See cases cited in 
27 Am.Jur.2d Equitable Conversion § 8 (1966). The net result is that the seller 
holds the legal title in trust for the buyer. Jennisons v. Leonard, 88 
U.S. (21 Wall.) 302, 22 L. Ed. 539 
(1874); Dolton v. Cain, 81 U.S. (14 Wall.) 472, 20 L. Ed. 830 
(1871); Larson v. Metcalf, 201 Iowa 1208, 207 N.W. 382, 45 A.L.R. 344 (1926); Bank of Santa Fe; Marks. The doctrine of equitable 
conversion flows from the maxim that "equity regards and treats as done what, in 
good conscience, ought to be done." Cooper v. Polayes, 19 Conn. Sup. 353, 113 A.2d 599 (1955); Cascade.

 
 

[¶9.]     Problems do arise in 
those jurisdictions espousing the theory of equitable conversion if the judgment 
is obtained against the seller, and a lien is sought against his interest rather 
than the interest of the buyer. In such a case, the seller's interest no longer 
being considered realty, and because his retention of legal title is limited to 
that of a trustee, some of the same concerns applicable with respect to a buyer 
under the common law rule now become pertinent with respect to the seller. See 
Heider v. Dietz, 234 Or. 105, 380 P.2d 619 (1963). In addition, the adoption of 
the equitable conversion theory implicates other areas of substantive law, such 
as wills and trusts, in a way that creates potential collateral problems. 
Cascade. Consequently, a number of courts eschew the equitable conversion 
doctrine. Cascade; Security Bank; Heider; In re Shareff's Estate, 143 Pa. Super. 465, 17 A.2d 623 (1941).

 
 

[¶10.]  Even though refusing to espouse the 
doctrine of equitable conversion, the same result is reached by several states 
that have held that their legislatures intended the interest of the buyer to be 
treated as real estate for the purpose of the attachment of a judgment lien. 
Hammond v. Johnson, 142 U.S. 73, 12 S. Ct. 141, 35 L. Ed. 941 (1891); Cascade; Bank of Santa Fe; Collins, 516 P.2d 677. This approach 
assumes an appropriate statutory justification.

 
 

[¶11.]  Confronted with what essentially is a 
policy decision, we can agree with the result of those cases which find 
statutory justification for permitting the lien to attach, but perceive them to 
be distinguishable from this case either because of their facts or because of 
the difference in statutory language. We acknowledge a division of authority 
with respect to the question presented, Warren, 475 P.2d 775, but we reject the 
appellant's arguments and affirm the decision of the district court. Adoption of 
the rule urged by the appellant is within the province and domain of the 
legislature, and we should not make that decision for the legislative department 
of government.

 
 

[¶12.]  Cascade, 567 P.2d 631, is one such case 
which refers specifically to particular Washington statutes and a legislative intent 
not attributable to our legislature. We commend the sound rejection by that 
court of the doctrine of equitable conversion and recognize the rationale the 
court followed although we do not adopt it. See Guild Trust v. Union Pacific 
Land Resources Corp., 682 F.2d 208 (10th Cir. 1982). Similarly, the Utah cases, Lockhart Company v. Anderson, 646 P.2d 678 (Utah 1982), and Bill Nay, 677 P.2d 1120, are 
not on point. In the first case, the equitable interest was voluntarily assigned 
as security for a loan. A subsequent assignee of the seller, following an 
apparent default on the part of the buyer, made up some payments due to a senior 
lien holder and then attempted to foreclose the buyer's equitable interest, 
similar to the foreclosure of a mortgage. The Utah court permitted the foreclosure of the 
equitable interest under those circumstances. The subject of an involuntary lien 
was not involved. In Bill Nay, the date for payment of the obligations of the 
contract had expired, and the issue was whether the trial court's determination 
that an interest remained was supported by the facts of that particular case. 
The question was whether an equitable interest still existed, not whether a lien 
could attach to such an interest.

 
 

[¶13.]  Appellant urges the applicability of the 
rule which has evolved in New 
Mexico. Appellant notes that in Warren, 475 P.2d 775, the 
court ruled that the purchaser under an executory contract for the sale of real 
estate did not have an interest to which a judgment lien could attach. The 
rationale of that holding was a strict adherence to the common law. Appellant 
then points to Collins, 516 P.2d 677, in which the New 
Mexico court re-examined the issue and overruled the holding in 
Warren. The 
rationale adopted was that the New 
Mexico statutes were broad enough to encompass equitable 
interests. The reliance upon specific statutory construction results in Collins 
not being persuasive authority in this case. See Guild Trust, 682 F.2d 208. 
Other cases which appellant urges have much the same tone and tenor and do not 
afford additional substance to what we have said above.

 
 

[¶14.]  We conclude that it is our obligation to 
determine the reach of the Wyoming statute based upon our perception of 
legislative intent. See Cascade, 567 P.2d 631, and Collins. We understand the 
Wyoming 
statute to be different from others, and each state independently determines the 
disposition of property within its boundaries. Guild Trust. Our inquiry is 
whether the language adopted by our legislature serves to abrogate the common 
law and provide an appropriate statutory justification permitting the attachment 
of a judgment lien to the equitable interest of a buyer arising under contract 
for deed. We have found no prior case from our court which construes the term 
"land and tenements." The statutory language is to be strictly construed in the 
light of appellant's argument that it should be interpreted to abridge, or 
preempt, the common law. Reliance Insurance Company v. Chevron 
U.S.A., Inc., 713 P.2d 766 
(Wyo. 1986); Mahaney v. Hunter Enterprises, 
Inc., 426 P.2d 442 (Wyo. 1967). The intention of our legislature 
must be discerned from the language of the statute, and we cannot read into the 
language what is not set forth. Department of Revenue & Taxation of State of 
Wyoming v. Hamilton, 743 P.2d 877 (Wyo. 1987); McArtor v. State, 699 P.2d 288 (Wyo. 1985); Hurst v. State, 
698 P.2d 1130 (Wyo. 1985).

 
 

[¶15.]  The term "land" has been defined, in a 
general way, as encompassing "any ground, soil, or earth whatsoever; including 
fields, meadows, pastures, woods, moors, waters, marshes, and rock." Black's Law 
Dictionary, 789 (5th ed. 1979); Reynard v. City of Caldwell, 55 Idaho 342, 42 P.2d 292 (1935). It does connote 
a solid, tangible element. In re West Great Falls Flood Control & Drain 
District, 159 Mont. 277, 496 P.2d 1143 (1971). In a more 
limited sense, "land may denote the character and quality of the interest that 
an owner may have." Holmes v. United States, 53 F.2d 960, 963 (10th 
Cir. 1931). It "may include any estate or interest in lands, either legal or 
equitable, as well as easements and incorporeal hereditaments." Black's; 
Reynard, Cuff v. Koslosky, 165 Okla. 135, 25 P.2d 290 (1933). Black's Law 
Dictionary, at 789, further reveals that "the land is one thing, and the estate 
in land is another thing, * * *." "Ordinarily, however, the term is used as 
descriptive of the subject of ownership and not the ownership." Southern Pacific 
Company v. RiversideCounty, 35 Cal. App. 2d 380, 95 P.2d 688, 
692 (1939). Despite some ambiguity, the composite of such definitions is that 
the term "land," in the context of our Wyoming statute, encompasses only tangible 
real property. That definition is compatible with legal title and not with an 
incorporeal executory interest.

 
 

[¶16.]  We note that, at common law, a 
conveyancing litany developed of "lands, tenements and hereditaments." 
Apparently, that concept was intended to define, and was perceived as 
describing, the entire fee interest. It may not be without significance that our 
Wyoming 
statute refers only to "lands and tenements" and does not include the third term 
of "hereditaments." The legislature well may have diminished the phrase by 
design to exclude incorporeal interests.

 
 

[¶17.]  We conclude that, despite the possibility 
of some equitable interest, the term "land" must contemplate the legal title and 
not encompass an equitable interest. In common acceptance, the term "tenement" 
pertains only to houses and buildings. In its original, proper, and legal sense, 
however, it signified anything that might be held, provided it was of a 
permanent nature. An equitable interest under a contract for deed, while it may 
be held, is inherently not of a permanent nature. The logic to be applied is 
that the rights of a buyer under a contract for deed are not included within the 
word "tenements." According to Black's Law Dictionary, 1316 (5th ed. 1979), at 
common law the term "tenements" was a synonym of "lands." Thus, it appears that 
the word "tenements" does not afford any particular basis to support the 
appellant's arguments.

 
 

[¶18.]  It is our conclusion that, applying 
common definitions to a construction of the statutory phrase "lands and 
tenements" as it appears in § 1-17-302, W.S. 1977, it is not broad enough to 
encompass the equitable interest of the buyer under a contract for deed. That is 
what the district court ruled, and we are in accord with that interpretation. We 
are unable to identify the appropriate justification to permit us to conclude 
that the legislature intended that the judgment lien attaching to "lands and 
tenements" would reach the equitable interest of the purchaser under an 
installment contract for the sale of land. We adhere to the historic common law 
approach and do not adopt the appellant's earnestly presented arguments. The 
decision of the district court is affirmed.

 
 

URBIGKIT, J., filed a special 
concurrence.

 
 

URBIGKIT, Justice, specially 
concurring.

 
 

[¶19.]  Although I concur with the decision of 
the majority on the basis presented by the litigants, this decision does not 
predetermine for me whether the same conclusion would result if a notice 
document had been recorded and that different status developed for appeal. Cf. 
Willmschen v. Meeker, 750 P.2d 669 (Wyo. 1988), where the notice document was 
recorded. See Low v. Sanger, 478 P.2d 60 (Wyo. 1970).1

 
 

[¶20.]  The recognized purpose of the recorded 
document is to protect the installment contract buyers from loss of their 
purchase equity, Dame v. Mileski, 80 Wyo. 156, 340 P.2d 205 (1959), by 
evisceration from tax or judgment liens assessed against or a bona fide 
purchaser from the contract vendor as the recorded owner. See recording effect, 
Condos v. Trapp, 739 P.2d 749 (Wyo. 1987); 
Crozier v. Malone, 366 P.2d 125 (Wyo. 1961); 
and Torgeson v. Connelly, 348 P.2d 63 (Wyo. 1959). Unquestionably, a different 
character of protected interest is created for the purchaser by the recorded 
notice of sale. See W.S. 34-1-121 and 34-1-122. Cf. Low, 478 P.2d 60. With 
recordation of a properly executed document, a judgment against the vendor can 
no longer over-lien the buyer's purchase interest. Consequently, with that 
changed status, it does not necessarily follow that this different character of 
recorded property interest is not also differently impacted by a judgment lien 
impressed on the buyer.

 
 

[¶21.]  In this case, it is unnecessary to make 
that judgment since the subject is not presented here by the record or briefs as 
a stated basis for reversal. Consequently, we are left with that issue for 
another day in other cases.

 
 

[¶22.]  Consequently, I specially concur in the 
opinion and decision of the majority.

 
 
FOOTNOTES

 
 

1 It is a general 
Wyoming real 
estate practice to either record a notice document or a copy of the installment 
contract itself.