Court Opinion

ID: 5151670
Source: CourtListenerOpinion
Date Created: 2022-01-02 01:58:28.804873+00
Date Added: 2024-06-11T08:25:05.381086
License: Public Domain

BOOCHEVER, Justice
(dissenting).
I dissent in this case because I believe that the judgment of the superior court in favor of United Building Supply, Inc. (United) should be affirmed. The case decided by the superior court was an equitable one to quiet title to certain real property. Both from the standpoint of legal rights and equitable rights, United should prevail.
On February 21, 1967, one week prior to Muller commencing his action against Withers, the original owner of the property, a conveyance from Withers to Briggs had been recorded placing Muller on notice that title had been conveyed to Briggs. Moreover, prior to securing a judgment against Withers, Muller had actual knowledge that the property had been conveyed by Withers to Briggs. Nevertheless, Muller did not include Briggs as a defendant in his suit. When Muller bid in on the property at execution sale based on the judgment he obtained against Withers, he obtained no title to the property in question for it was not owned by Withers at that time, and Muller was aware of that circumstance. A deed resulting from a judicial sale “is sufficient to convey all the title of the judgment debtor or other person affected by the order or decrees in the premises sold to the purchaser at the sale”.1 Withers, the judgment debtor, had no title to the property so that Muller obtained no title as a result of the execution sale. Briggs was not affected by the order or decree since he was not made a party to the litigation although Muller had knowledge of his interest in the property. Ac*1251cordingly, Gransbury and Stephan took nothing by their quitclaim deed from Muller.
Looking to the other party to the litigation, United, its examination of the records would only reveal that Briggs was the titleholder of record to the property when United obtained a quitclaim deed for the lots at its execution sale. Moreover, prior to proceeding with the execution sale, United’s attorney, Hammond, had a conference with Mr. Gransbury, the plaintiff below. Gransbury endeavored to purchase United’s interest in the property contending that the land could not be conveyed by Withers to Briggs by means of a document designated as a bill of sale. At that time, however, Gransbury made no claim that he thought the transfer was a fraud against creditors or that there had been anything fraudulent about the transaction. United first became aware of the claim pertaining to a fraudulent transfer when complaint was served upon it in the quiet title suit filed on June 24, 1971. The contention that real property cannot be conveyed by a document entitled, Bill of Sale, has now been abandoned.2 The quiet title suit was filed by Gransbury on August 28, 1973, almost three years after United had purchased the property at execution sale and ten months after United had obtained the deed from the Department of Public Safety based upon that sale.
Under these circumstances, Gransbury is estopped from raising the issue of fraudulent transfer from Withers to Briggs. If such a claim were to be maintained, it should first have been raised by Gransbu-ry’s predecessor in title, Muller, when he. had notice of the Withers to Briggs deed prior to his purchase of the property at execution sale on his judgment obtained against Withers. It should have been raised a second time when Gransbury became aware of United’s intention to levy execution against the property. Gransbury made no effort to intervene in that litigation and affirmatively misled United as to the nature of his contention pertaining to a cloud on the title. Since both Muller and Gransbury had adequate notice in time to prevent the subsequent events whereby United acquired title to the property, they are barred from overthrowing that recorded title at this late date by the doctrines of laches and estoppel.3
I, therefore, would not reach the issue of whether the transfer from Withers to Briggs was in fraud of creditors.4

. The fact that Muller could have contended that the conveyance from Withers to Briggs was void cannot affect the rights of innocent third parties like United who acquired rights prior to Muller’s placing them on notice of his claim of fraud. AS 34.40.016 provides that a “conveyance or assignment . . of an estate or interest in lands . . . made with the intent to hinder, delay, or defraud creditors or other persons ... as against the persons so hindered, delayed, or defrauded is void.” However, it is not self-executing. There must be action taken to set aside such a conveyance and a determination made by a court before the conveyance is voided. Despite the use of the word “void” in the statute then, it must be construed as voidable. Any other interpretation would render AS 34.40.100 a nullity in the fraudulent conveyance context. That statute provides that the title of a “purchaser for a valuable consideration” will be unaffected “unless it appears that the purchaser had previous notice of the fraudulent intent of his immediate grantor, or of the fraud rendering void the title of the grantor.” Thus, even if the grantor conveyed with the intent to defraud his creditors, the conveyance would be effective — not void — to a “purchaser for a valuable consideration” taking without notice. See Royal Indemn. Co. v. McClendon, 64 N.M. 46, 323 P.2d 1090 (1958).

. The title of a conveyance is not properly speaking a part of the instrument [see Miller v. Brugier, 176 La. 106, 145 So. 282 (1932)] and therefore if the effect of the instrument, regardless of what it is called, is to convey an estate in land to another, it is a deed. See Terrill v. Kentucky Block Cannel Coal Co., 290 Ky. 35, 160 S.W.2d 326 (1942) ; Duncan v. Mason, 239 Ky. 570, 39 S.W.2d 1006 (1931) ; 26 C.J.S. Deeds § 1, at 582 (1956).

. With reference to these equitable defenses, we can take judicial notice that United incurred attorney’s fees and costs involved in the execution sale and this litigation. It further relinquished its debt against Briggs. Thus, it substantially altered its position as a result of the inaction of Muller and Grans-bury and the latter’s erroneous representation of his claim. See Decker v. Hendricks, 97 Ariz. 36, 396 P.2d 609, 611 (1964) (discussion of laches and estoppel) ; California Cigarette Concessions, Inc. v. City of Los Angeles, 53 Cal.2d 865, 350 P.2d 715, 718 (1960) (estoppel) ; Harvey v. Whyte, 158 Cal.App.2d 685, 323 P.2d 162, 164 (1958) (laches) ; Kirkpatrick v. Tapo Oil Co., 144 Cal.App.2d 404, 301 P.2d 274, 280 (1956) (laches) ; Western Motor Rebuilders, Inc. v. Carlson, 138 Colo. 404, 335 P.2d 272, 280 (1959) (laches) ; Smith v. Krutar, 153 Mont. 325, 457 P.2d 459 (1969) (estoppel).

. In determining whether Briggs was a purchaser for “valuable consideration” under the provisions of AS 34.40.100 which insulates such a purchaser from claims of transfers made with intent to defraud, I agree that the term “valuable consideration” should be construed in the same manner as the term “fair consideration” used in § 3 of the Uniform Fraudulent Conveyance Act, although that act has not been adopted in Alaska. See Blumenstein v. Phillips Insurance Center, Inc., 490 P.2d 1213, 1220 n. 8 (Alaska 1971), and language quoted from White v. NollMeyer, 151 Mont. 387, 443 P.2d 873, 883 (1968). However, I do not reach the issue of whether the trial court erred in finding that there was not “valuable consideration” in the Withers-Briggs’ transaction.