Court Opinion

ID: 5548554
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:23:31.108458+00
Date Added: 2024-06-11T08:34:59.580238
License: Public Domain

The Chancellor.
In the decision of this appeal Í lay but of view thé fact that the time for the completion of Rathbun’s contract to build had expired before his assignment for the benefit of his creditors in August, 1836 and it is doubtful whether a court of equity at that time" would have compelled a specific performance of the agreement to convey to him the leasehold premises. The interest which his assignees acquired in that contract under the assignment, and their supposed equitable claim to go on and finish the buildings so as to entitle them to the conveyance of the leasehold property under the contract, was unquestionably the foundation of their subsequent compromise with Wilkinson, by which they obtained the legal estate in. the premises. And their vendee having purchased with full notice of all the facts, cannot in equity set up the defence that Rathbun had no existing interest in the contract with Wilkinson at the time of his assignment, on the 3d of August, 1836, which could pass to the assignees under that assignment. The only question for consideration, *76therefore, is whether a judgment at law is an equitable lien upon the interest of the judgment debtor in lands, held under an executory agreement to purchase the same; whether such lands have or have not been fully paid for, so as to entitle the vendee to an immediate conveyance of the legal estate 1 And upon this question I think the vice chancellor has arrived at the correct conclusion, under the new provisions contained in the revised statutes on the subject.
Previous to the revised statutes the equitable interest of a judgment debtor in lands was, in equity, subject to the lien of the judgment, except as to bona fide purchasers without notice ; in analogy to the lien of the judgment at. law upon a legal estate in the lands. (Forth v. The Duke of Norfolk, 4 Mad. Rep. 504.) And by the statute 29th Charles 2d, ch. 3, § 10, and the statute of this state concerning uses, (1 R. L. of 1813, p. 74, § 4,) certain trust estates were also made liable to executions, at law. It was as to this last class of cases that the question arose, in England, whether a purchaser for valuable consideration of the legal estate, after notice of the judgment but before execution issued, was entitled to hold the estate discharged of the equitable lien of the judgment. (See Coote's Law of Mort. 71; 2 Powell on Mort. by Coventry, 607, and note B.; 1 Atk. on Conv. 517; 2 Sugden on Vend. 10th Land. ed. 385, § 7.) That question is put at rest in England, as to all future judgments, by the recent statute, (1 & 2 Vict. ch. 110, § 11, 13,) which makes the docketing of the judgment a charge upon the equitable as well as upon the legal interest of the judgment debtor in lands ¿ except as to purchasers for valuable consideration without notice. Under the provisions of that statute, the complainants’ claim to priority, by virtue of their judgment, over the voluntary assignees of the judgment debtor, and as against the conveyance to the vendee who had notice of such judgment at the time of his purchase, would undoubtedly be sustained.
Our revised statutes, however, have made a very different provision for such a case as this; by declaring that *77“ the interest of a person holding a contract for the purchase of lands, shall not be bound by the docketing of any judgment or decree ; nor shall it be sold by execution upon any such judgment or decree.” (1 R. S. 736, ^ 4.) The statute having declared that such an interest in land shall not be bound by the docketing of the judgment, this court cannot so far repeal the statute as to make the judgment a lien upon the land in equity ; and thus to defeat an assignment for the benefit of creditors, made before the judgment creditor has obtained an equitable lien upon the interest of his debtor in the premises, by the commencement of his suit in this court to reach that interest, in the manner directed by the statute. By referring to the revisers’ notes it will also be seen that the legislature rejected a provision, recommended by the revisers, making a judgment or decree a lien upon such an interest in land, and authorizing that interest to be sold on execution ; and they substituted this section, authorizing the interest of the debtor to be reached by a creditor’s bill, after the return of the execution upon the judgment or decree unsatisfied, I have no doubt, therefore, that the vice chancellor was right in supposing that the complainants had not obtained any equitable lien upon Rathbun’s interest in the premises in question at the time of his assignment for the benefit of his creditors, in August, 1836. If the asignees had notice of the existence of the judgment at that time, they also knew, if they understood the effect of this statutory provision, that the complainants had no lien either at law or in equity upon the asssigned property, which could entitle them to a preference over any other creditor of Rathbun.
The order appealed from must therefore be affirmed with, posts.