Court Opinion

ID: 3837150
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:06:05.634231+00
Date Added: 2024-06-11T12:47:47.950036
License: Public Domain

Petition for rehearing denied September 26, 1933                        ON PETITION FOR REHEARING                              (25 P.2d 146)
The petition for a rehearing presents new argument and many additional citations in support of plaintiff's (appellant's) contention that the circuit court erred when it dismissed her complaint.
Plaintiff seems to doubt the circuit court's authority to grant her any relief whatever in the law action. Apparently she believes that the circuit court has lost control over the judgment, and hence cannot vacate it. It will be recalled that the judgment was rendered December 18, 1928, and that her motion to vacate it was filed November 18, 1930. The record does not disclose the specific day upon which the plaintiff (the defendant in the law action) claims that she, for the first time, acquired knowledge of the existence of the judgment against her. As stated in our previous decision, her motion was predicated upon the contention that the efforts of the plaintiff in the law action to obtain service of summons by publication were fatally defective. If these contentions are true, the aforementioned judgment is void, and it was the duty of the circuit court to vacate it, even though the term in which it was rendered had expired, and even though more than a year passed after the entry of the judgment and before she filed her motion. Section 2-1507, Oregon Code 1930; Finch v. Pacific Reduction Etc. Co., 113 Or. 670
(234 P. 296). We also call attention to the fact that, by virtue of section 1-907, Oregon Code 1930, which confers a discretionary power upon courts to relieve parties from judgments taken against them through their mistake, inadvertence, surprise or excusable neglect, the one-year period of time within *Page 460 
which the court may grant relief starts at the time when the judgment-debtor discovers the judgment, and not at the time of its entry. Chapman v. Multnomah County, 63 Or. 180
(126 P. 996); Evans v. Evans, 60 Or. 195 (118 P. 177); Fildew v.Milner, 57 Or. 16 (109 P. 1092). In our previous decision we affirmed the conclusion of the circuit court in which it held that the plaintiff's appearance was not a special one, but a general one. We took the view that if the substituted service was a nullity, the action was still pending in the circuit court when the plaintiff filed her motion, and that, her appearance being general, she conferred upon the court jurisdiction to proceed with the disposition of the cause. We are of the opinion that the circuit court had jurisdiction to entertain the plaintiff's motion.
Next, the plaintiff argues that section 6-1001, Oregon Code 1930, which authorizes the maintenance of a suit to remove a cloud from a title, permits the owner of real property to maintain such a suit even though he has a plain, speedy and adequate remedy at law. In support of this contention, she states that this section of our laws was enacted at the same time that section 6-101, Oregon Code 1930, was enacted, which makes provision that the rights therein mentioned may be enforced by a suit in equity if the party has no plain, adequate and complete remedy at law. She argues that section 6-1001 is specific, that section 6-101 is general, and that, therefore, the former is not controlled by the latter. Section 6-101 was section 376, General Laws of Oregon, 1862. Section 6-1001 came into our laws as 1899 Session Laws, page 277. The essence of plaintiff's argument was before this court in State of Oregon v. Warner Valley StockCo., 56 Or. 283 *Page 461 
(106 P. 780, 108 P. 861), and we there held that relief in suits of this character "is a subject of general equity powers of the court which existed prior to and independent of section 516, B.  C. Comp. [now section 6-1001, Oregon Code 1930], authorizing suits to quiet title". Continuing, the decision pointed out that suits of this character can be maintained only where the remedy at law is not adequate. We dismiss this contention as lacking merit.
Plaintiff next contends that in the law action mentioned in our previous decision the court lacks authority to set aside the sheriff's deed to the defendant, and that, therefore, the maintenance of this suit is necessary if the plaintiff is to have an adequate remedy. The certificate of sale was issued to the defendant, Daniel Guenther, and, according to the pleadings, the title is now vested in him and Sophia Guenther, his wife. The answer does not allege that Sophia Guenther parted with any value for her interest, nor does it aver that whatever interest she may have was acquired without knowledge of all attendant circumstances. As we have seen, the circuit court possesses authority in the law action to vacate the present judgment, if it should be satisfied that a judgment for the plaintiff is not warranted, and enter one for the defendant. If such is done, the foundation for the sheriff's deed has been removed, and, as is held in the numerous decisions cited in 29 A.L.R. 1078, the defendant's title to the property in controversy is ended. We quote the following from the decision of the Circuit Court of Appeals for the ninth circuit in Hays v. Sound Timber Co., 261 Fed. 571 (29 A.L.R. 1067):
"* * * One of the appellee's affirmative defenses was the vacation of the judgment and sales in the state superior court under which the appellant *Page 462 
claims title. It is the general rule, and it has been so held in the state of Washington, that, where the execution plaintiff is purchaser, the vacation or reversal of the judgment operates to vacate the sale as between the parties. 17 Cyc. 1310; Benney v. Clein, 15 Wash. 581, 46 P. 1037."
The following excerpt taken from Webb v. Webb's Guardian,178 Ky. 152 (198 S.W. 736), further illustrates the power of the court when it vacates a judgment pursuant to which an execution sale has occurred:
"* * * The hard and inflexible rule, above stated, has been changed, to the extent, that, if the purchaser at a judicial sale, either under execution or a decree, is a party to the record, who procured the erroneous judgment, or his attorney, or assignee before the sale, when it is reversed upon appeal, if the property sold is in the hands of such party, he may be required to make restitution of the property, and if not, he can be made liable for its value or at least all, which he received from the sale. Cavanaugh v. Wilson, 108 Ky. 759; Hess v. Deppin, 101 S.W. 362. The modification of this rule, also, permits an infant, when his land has been sold under an erroneous judgment, and upon appeal by him, the judgment, under which the property was sold, is reversed, if the purchaser of the land was the plaintiff, or a party to the action, or an attorney engaged in it, or an assignee of the judgment, the order confirming the sale will, also, be reversed, and a restitution of the property, if desired by the infants, or they may elect to let the sale stand and receive the proceeds of the sale. * * *"
It is true that the Kentucky court spoke of a reversed judgment, but we believe that the same results follow a vacated executed judgment as a reversed one. Benney v. Clein, 15 Wash. 581, and Freeman on Judgments (5th Ed.), § 297. *Page 463 
It will be observed that the orders vacating the judgment, the sale, and the confirmation of sale will appear in the same record as the one out of which the sheriff's deed emanated. This court, in harmony with the general rule (Pomeroy's Equity Jurisprudence (2d Ed.), § 2155; Story's Equity Jurisprudence (14th Ed.), § 948), has declared that equity will not grant relief in a suit of this character where the invalidity of the questioned instrument appears upon its face, or is conclusively established by matters of record; in other words, our decisions have regarded as a cloud upon title a document which is apparently valid, but in fact, without foundation and is, therefore, capable of injuring the marketability of the title.Crim v. Thompson, 98 Or. 599 (193 P. 448); Richards v. Mohr,73 Or. 57 (143 P. 1102); Deckenbach v. Deckenbach, 65 Or. 160
(130 P. 729). Appellant cites Lockett v. Hurt, 57 Ala. 198, in support of her contention that a court of equity will remove as a cloud upon title a sheriff's deed, even though the judgment which supported it has been set aside. In that case the court pointed out that the evidence of the invalidity of the deed was not a part of the record in the law action out of which the deed has its inception. We quote from the decision the following:
"The judgment vacating the sale is not a part of the record of the judgment under which the lands were sold. It is a new, distinct, independent judgment rendered in a new proceeding, having different parties, a different subject-matter, operating differently, and the subject of an appeal which would not open an inquiry into the judgment under which the lands were sold."
If an instrument, in the possession of another, injures a title, depreciates the market value of the property, *Page 464 
and is of such mischievous character that a prospective purchaser would hesitate to purchase, we believe that business sense compels the conclusion that the instrument is a cloud upon the title and that equity ought to decree relief. Such a view was, in fact, expressed in Mount v. McAuley, 47 Or. 447 (83 P. 529). See, also, Pomeroy's Equity Jurisprudence (2d Ed.), § 2156. However, we cannot perceive how the sheriff's deed could any longer embarrass this plaintiff, in the event that the circuit court, in the law action, vacates the present judgment, enters one in favor of the plaintiff, vacates its order confirming the sale, and grants such further relief as is within its power.
The power of the circuit court, when it vacates an erroneous judgment, is not limited to orders which merely expunge records. The power to vacate an erroneous judgment is only a part of the power to restore the parties litigant to the same condition in which they were prior to the abuse of the process of the law. To restore that condition is primarily the duty of the court which entered the erroneous judgment and issued the writ of execution. Justice is not administered piecemeal, and in this day, when the distinction between the law and equity powers of our courts has been virtually eliminated, there can exist but slight occasion for passing a litigant from court to court before he has secured complete relief. We are of the opinion that if the circuit court which granted judgment in the law action should conclude that the judgment was erroneous, it can so administer relief under a writ of restitution as to make it clear that the sheriff's deed is void. Coker  Bellamy v. Richey, 108 Or. 479
(217 P. 638). It is true that, in the case just cited, we were concerned with restitution after an executed judgment *Page 465 
of the circuit court was reversed, but, as we have already indicated, we know of no reason why a distinction should be made between the developments which follow the reversal of a judgment and those that follow the vacation of one. The manner in which a law court may exercise its power of restitution is stated in Freeman on Judgments (5th Ed.), § 1177. The writer cites numerous decisions wherein the power of restoration was exercised in instances involving real property sold upon a writ of execution. See, also, the authorities collected in 10 R.C.L., Execution, p. 1233, and 29 A.L.R., p. 1078. We know of no reason why the circuit court, in the event that it should vacate or reverse its present judgment, cannot exercise this and its other powers in a manner which will be as effective as if the plaintiff maintained her present suit and eventually obtained a decree.
It follows from the above that we remain satisfied with our previous decision, and hence the petition for a rehearing is denied.
BELT and KELLY, JJ., concur.
RAND, C.J., did not participate. *Page 466