Court Opinion

ID: 6541010
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:15:39.838862+00
Date Added: 2024-06-11T15:55:49.868200
License: Public Domain

Harrison, J.  title; UpoiL°u 4 A purchaser at the sale under the execu-i. tion, which the plaintiff by his complaint sought to enjoin, would as well as the plaintiff claim title from Panley ; and us the sheriff’s deed to him would contain such prima, facie evidence of title in him, that, to avoid it, proof of extraneous facts would be required, it would necessarily have the effect to cast a cloud upon the plaintiff’s title. McCullough v. Hollingsworth, 27 Ind., 115; Pixley v. Huggins, 15 Cal., 127; England v. Lewis, 25 Cal., 337; Downing v. Mann, 43 Ala,, 266; Key City Gas Light Co. v. Munsell, 19 Iowa, 305; Freeman on Executions, Sec. 438.  Test of. "The true test, as we conceive,” say the Supreme Court of California, in the case of Bixley v. Huggins, supra, “by which the question whether a deed would cast a cloud upon the title of plaintiff may be determined, is this ; Would the-owner of the property, in an action of ejectment brought by the adverse party, founded upon the deed, be required to-offer evidence to defeat a recovery? If such proof would be necessary, the cloud would exist; if the proof would be-unnecessary, no shade would be cast by the presence of the-deed.”  injunction.  And so as the court would, to remove the cloud it cast,. have set aside the deed which the sheriff might have made to the purchaser, it will interpose to prevent the sale from-which a conveyance creating such a cloud must result. Bixley v. Huggins, supra; Pettit v. Shepherd; 5 Paige 501; Bisp. Equity, Sec. 425. The sale was therefore very properly enjoined.  2. lien: Recital 3. against forced.011 But as toj the validity of the lien reserved in the deed Mrs. Comer to Panley, for the payment of the notes-given in the purchase of the land from her, there can be no question. It is well settled that a lien may, by the express of the owner, be created on real or personal estate, which equity will enforce, not only against him, but also against any one who afterwards takes the estate with notice of it. Such a lien is in the nature of a trust which equity will compel the holder of the legal title to perform. Pinch v. Anthony, 8 Allen, 536; Champion v. Brown, 6 John., Ch. 398; 2 Sto. Eq. Juris., See. 1231. And such a lien, according to the well settled doctrine of equity, passes by an assignment of the debt it was created to-secure. Section 564 of Gantt’s Digest, which was enacted since the execution of the notes, is but an affirmance of the doctrine. Ciiiee Justice Waite, in delivering the opinion of the Supreme Court of the United States in the case of Ober v. Gallagher, 3 Otto, 199, which went up to that court from the Circuit Court of the United States for the Eastern District of Arkansas, says: “It is undoubtedly true, that in many of the States, the implied lien which equity raises in favor of the vendor of real property to secure the payment of the purchase money, ■does not pass by an assignment of the debt; but here the lien was not left to implication; it was expressly reserved. In fact, it is more than a lien. In equity it is a mortgage, ■so made by express contract. The acceptance by Thompson of the deed, containing the reservation, amounts to an express agreement on his part that the land should be held ■as security for the payment of what he owed on account of the purchase money. This created an equitable mortgage; and such a security passes by assignment of the debt it ■secures.”  sneppm-a A’*-; and Jone» The cases of Sheppard v. Thomas, 26 Ark., 617, and Jones v. Doss, 27 Ark., 518, both decided by a *' •court, in which the assignability of such a lien was denied, were, in our opinion, not correctly decided, and were tually, if not directly and expressly, overruled in Campbell v. Rankin, 28 Ark., 401. As the plaintiff derived his title from Panley, he had, when he purchased, constructive notice at least of the lien ; but it was alleged in the answer that he had actual notice. Such facts were, therefore, stated in the answer as showed a right in the defendant, had all necessary parties been before the ■court, to the relief prayed against the plaintiff.  NecessaBut it is a general rule that all persons who are materially interested in the subject matter of the litigation should made parties, either plaintiffs or defendants. Mayes v. Hendry, 33 Ark., 240; Brodie v. Skelton, 11 Ark., 120; Porter v. Clements, 3 Ark., 364; Sto. Eq. Plead., 72. It was not shown that the other note given in the purchase of the land, and secured by the lien reserved, had been paid, and though overdue, we are not at liberty to> presume such to have been the case. If paid, the answer-should have so stated, or if still unpaid, the holder of it, who was equally with the defendant interested in the security, should have been made a party. Pauley, who was personally bound and primarily liable for the debt, and against whom, in ease a sale of the land was decreed, the defendant would also be entitled to a decree, would also have been a proper party for that purpose, though not a necessary or indispensable one, for the foreclosure. But the holder of the other note was a necessary party, without' whose presence before the court there could be no determination of the controversy between those who were before it, or a full and complete decree touching their rights, be rendered. As, however, a proper case was made in the answer for relief, and the want of parties was not one of the grounds of the demurrer to it, the demurrer should have been overruled ; but the answer should have been amended, and the proper parties brought in. The decree, so far as respects the complaint, and perpetually enjoins the sale of the land under defendant’s judgment, is affirmed. But as to the dismissal of the defendant’s counter-claim, it is reversed, and the cause is remanded to the court below, with instructions to overrule the demurrer to the answer, and to allow the defendants, if so advised,, to amend the same, and make proper parties thereto, as above indicated, and for further proceedings.