Opinion ID: 1787089
Heading Depth: 2
Heading Rank: 1

Heading: whether o'neal steel failed to file suit to set aside an alleged fraudulent conveyance within the applicable limitation period?

Text: ¶ 9. The primary issue presented by this appeal is straight-forward: Which statute of limitations applies to an action to set aside an alleged fraudulent conveyance? O'Neal contends that the ten-year limitation period found in Miss.Code Ann. § 15-1-7 (1995) controls. The appellees assert that the three year limitation period found in Miss.Code Ann. § 15-1-49 (1995) controls in this action. Alternatively, they also argue that the three-year limitation period applicable to foreign judgments in Miss.Code Ann. § 15-1-45 (1995) bars O'Neal's action. ¶ 10. O'Neal asserts that Miss.Code Ann. § 15-1-7 [2] and its ten-year limitations period govern its claim in chancery court to set aside this alleged fraudulent conveyance. That section reads in pertinent part: A person may not make an entry or commence an action to recover land except within ten years next after the time at which the right to make the entry or to bring the action shall have first accrued to some person through whom he claims, or, if the right shall not have accrued to any person through whom he claims, then except within ten years next after the time at which the right to make the entry or bring the action shall have first accrued to the person making or bringing the same. Miss.Code Ann. § 15-1-7 (1995) (emphasis added). ¶ 11. An action to recover land under both § 15-1-7 and § 15-1-9 presumes that the O'Neal has some ownership or possessory interest in the land. This Court has written: It would be meaningless to talk about suits to recover the land and making an entry on the land, if the contemplation of the statute were not that possession of the land is an essential feature in the very nature of things. Kennedy v. Sanders, 90 Miss. 524, 542, 43 So. 913, 916 (1907). Indeed, in all the cases applying § 15-1-7, the contested issue always concerns ownership or possession of the property in question, such as adverse possession, a suit to remove a cloud on title, or confirmation of mineral rights. In fact, this Court has described § 15-1-7 as [o]ur statute on adverse possession.... Lowi v. David, 134 Miss. 296, 300, 98 So. 684, 685 (1924). This Court has also held that the only person who may claim the limitation defense of § 15-1-7 is one who has been in adverse possession of the land against the true owner. Continental Oil Co. v. Walker, 238 Miss. 21, 33, 117 So.2d 333, 337 (1960). ¶ 12. In the case at bar, O'Neal seeks to enforce a judgment lien. That judgment lien does not create in O'Neal a possessory interest in the real property. This Court described in detail the scope and effect of a judgment lien in First Nat'l Bank of Commerce v. Donald, 112 Miss. 681, 73 So. 723 (1917), stating [t]he lien may be said to be a recorded debt. Id. at 688, 73 So. at 724. More specifically, this Court wrote that a judgment lien is not a property in the thing itself, nor does it constitute a right of action for the thing; rather, it constitutes a charge upon the thing. Id. (quoting Dozier v. Lewis, 27 Miss. 679 (1854)). Important to the case sub judice, this Court has held: But a judgement creditor of the owner has no estate or proprietary interest in the land. He stands wholly upon the law, which gives him a remedy for he collection of his debt by a sale of the land under execution, in case sufficient personal property of the debtor should not be found. Donald, 112 Miss. at 689, 73 So. at 724 (quoting Gimbel v. Stolte, 59 Ind. 446) (emphasis added). Additionally, this Court has written: The lien, being a general lien, before levy of execution, is merely a charge upon the property; it is not a right in it nor to it; it is only a right of satisfaction to be had out of it. Donald, 112 Miss. at 689, 73 So. at 724 (emphasis added). ¶ 13. Although cases with similar facts are scarce, it is clear that absent any possessory interest in the subject property, O'Neal cannot claim that this litigation is an action to recover land.... This Court has clearly written in Donald that a judgment creditor does not have a possessory interest in the land. Id. at 689, 73 So. at 724. Therefore, the ten year limitations of § 15-1-7 cannot apply to O'Neal's claim of fraudulent conveyance. ¶ 14. O'Neal argues that § 15-1-7 applies to this action to set aside a fraudulent conveyance, based upon Gordon v. Anderson, 90 Miss. 677, 44 So: 67 (1907). However, Gordon is easily distinguishable. In Gordon, the plaintiff's claim was to remove a cloud upon his title to disputed real property. Id. at 682, 44 So. at 67. The Court's discussion shows that the crux of the dispute was which party had property title to certain real property. Id. at 683, 44 So. at 68. Therefore, unlike the case at bar where the issue is whether to set aside a fraudulent conveyance by the defendant so that a creditor's judgment lien could attach to it, the issue in Gordon was who would possess and own the property at issue. ¶ 15. Likewise, the other cases cite by O'Neal are also easily distinguishable from the case sub judice. In McMahon v. McMahon, 247 Miss. 822, 157 So.2d 494 (1963), the claimant sought to cancel a quitclaim deed and be decreed by the Court to be the lawful owner of a ¼ interest in certain real estate. Id. at 825-26, 157 So.2d at 494-96. In Lincoln v. Mills, 191 Miss. 512, 2 So.2d 809 (1941), the plaintiff sought to eject the current occupants of real property, which she had purchased at a foreclosure sale, while the defendants claimed that they had acquired title via adverse possession. Id. at 519, 2 So.2d at 810. As stated herein above, O'Neal seeks neither title nor possession of the property at issue; rather, O'Neal seeks to enforce a judgment lien. ¶ 16. At least one court has addressed the issue of which statute of frauds is applicable to an action to set aside a conveyance induced by fraud. In Suthoff v. Yazoo County Indus. Dev. Corp., 722 F.2d 133 (5th Cir.1983), the plaintiffs claimed a government entity and its attorneys conspired to deprive them of real property. They brought an action in federal court seeking damages, or alternatively, a recission of the deed that gave to the government entity. Id. at 135. ¶ 17. In dismissing the claim to rescind the plaintiff's deed of the property the Fifth Circuit, addressed the plaintiffs' argument that their claim was governed by § 15-1-7 and § 15-1-9, instead of the catch-all limitations period of § 15-1-49. [3] Although the Fifth Circuit determined that no Mississippi case had addressed the precise issue of whether an action to set aside a conveyance induced by fraud was governed by the statute of frauds or the statute relating to actions to recover land, the court held that § 15-1-49 applied and barred the plaintiffs' claim. Id. at 137. In so holding, the Fifth Circuit relied upon the following: This issue was the subject of an Annotation in 118 A.L.R. 196 (1939), which concluded that the majority of jurisdictions deciding the issue have held that a suit brought by one not in possession of land to obtain a decree setting a side a deed thereof as having been procured by fraud is one for relief on the ground of fraud, rather than action for the recovery of real property. Id. at 137. ¶ 18. From a careful reading of Suthoff, it is clear that the ten-year statute of limitations relating to actions to recover land does not apply to the facts of the present case. The relief sought in this action to set aside this alleged fraudulent conveyance is to return possession of the subject property to Ted Millette, so that O'Neal's judgment lien may attach thereto in order to execute upon it. Therefore, we agree with the reasoning in Suthoff and employ the catch-all statute of limitations provision in the case at bar. ¶ 19. Although the chancellor granted summary judgment since the O'Neal's claims were alternatively barred by the three-year statute of limitations found in § 15-1-45, such a limitation period applicable to foreign judgments is not pertinent in the case at bar. It is undeniable that a judgment was issued in Alabama against Mississippi residents. The issue, however, is not whether O'Neal timely and properly filed its Alabama judgment in a Mississippi court; rather, the issue is whether O'Neal timely filed its complaint against the Millettes concerning the allegation of concealed fraud. Therefore, since no other statute is pertinent, § 15-1-49 is applicable in this case. ¶ 20. Accordingly, under Miss. Code Ann. § 15-1-49, O'Neal's claim is barred. Section 15-1-49 states, in pertinent, the following: All actions for which no other period of limitation is prescribed shall be commenced within three (3) years next after the cause of such action accrued, and not after. Miss.Code Ann. § 15-1-49 (1995). The general rule is that statutes of limitation begin to run as soon as there is a cause of action. Aultman v. Kelly, 236 Miss. 1, 5, 109 So.2d 344, 346 (1959). According to Aultman, the statute of limitation begins to run on the date the deed in question was filed. Id. at 7, 109 So.2d at 347. Therefore, the deed in question in the case at bar was filed on May 18, 1994. O'Neal did not file suit until May 29, 1998, some four (4) years after it was placed on constructive notice of the filing. In short, O'Neal's suit is now time barred.