Court Opinion

ID: 6232644
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:25:26.652599+00
Date Added: 2024-06-11T08:57:55.709866
License: Public Domain

The opinion of the court was delivered, by
Agnew, J.
The question upon this record is, whether a judgment or a deed of assignment for the benefit of creditors shall take preference in the distribution of a fund arising from real estate. The conceded facts are, that on the same day the judgment was entered the deed was delivered between the hours of ten and one o’clock; but there is no evidence as to the time of the entry of the judgment — it might have been before or aftgr the delivery of the deed.
There is no case to be found in the books precisely like it, yet doubtless there are familiar principles contained in many decisions, which rule this case. Were it a. question between lien-creditors only it might be readily solved, by letting them share *437in the fund pro rata, on the ground that a day has no fractions in legal proceedings. But here the claims of the parties conflict not only in time but nature, and are so irreconcilable one must give way to the other ; and the question is, what principle must govern the precedence ? A lien is but a encumbrance on title, but a conveyance passes the title away. If, therefore, the judgment be prior, the conveyance is subject to it; if posterior it has no lien, because the title is gone. In principle the case falls clearly within the decision in Mechanics’ Bank v. Gorman, 8 W. & S. 304, Claason’s Appeal, 10 Harris 363, and like cases, admitting proof of the hour at which each transaction took place. But no proof was excluded, and the difficulty arises not from a denial of the right to give it, but from the inability to furnish it. We are then driven to the necessity of determining the rights of the parties upon the presumption which the law must afford us. In point of fact the judgment may have been prior, it would therefore be unjust to postpone it from mere considerations of equality in the distribution. It may have been subsequent, and it would be improper to give it undue precedence. It must, therefore, be determined upon just legal principles, and those reasons which best promote the general interests.
The rule that, in the entry of judgments and liens of like character, rejects fractions of the day, is not a legal fiction, but a measure of policy to prevent litigation, and serve as a guide to the public. It is firmly established, and is not to yield, unless to the certain demands of justice. Starting with this principle the lien of the judgment, which begins with the day itself, necessarily antedates the conveyance. In this respect there is no distinction between judgments by confession, and those actually pronounced by the courts. It is easily to be seen, that in the case of adversary judgments they might be often defeated by the fraud of defendants, who on the same day could place assignments for creditors on record, unless the legal presumption be maintained. Indeed, at common law the judgment related back to the first day of the term, and it required the passage of the Act of 1772 to confine its operation to the day on which it was signed, in favour of bond fide purchasers for a valuable consideration.
Besides these motives of public policy, reasons are to be derived' from the comparative ability each party has to protect himself. The judgment-creditor it is manifest has no power to protect himself against the conveyance, which has thirty days for its transit to the public record. When he enters his judgment he may inquire for conveyances, but is answered there are none in the office, and yet one may have existed hours beforehand.
He may ask the officer to note the hour of entering his judgment, but this is no protection and only insures his defeat when the earlier deed appears; and added to this no legal duty rests on *438the officer who, under the law, is obliged to enter the day only. Rut it is different with the grantee in the conveyance ; he can be certain of all liens which stand before him. They are on the record, and the officer is bound to inform him, and if necessary to certify the fact under his official responsibility. He can protect himself, therefore, by other means, or, if it be a purchase, decline the title and withhold his money.
The grantor in a voluntary assignment stands in the same position, and if he finds judgments unexpectedly entered against him, may resort to other means to protect his creditors if within his power.
In all these inquiries truth is the object sought for, but having no means of determining the facts, we must adopt that legal inference which best promotes the public interest, protects the rights of individuals, and preserves the community from schemes of fraud and useless litigation. In this case, having no means of ascertaining the actual priority of either judgment or deed, we must allow the legal rule to operate, which, rejecting fractions of the day, carries back the judgment and postpones the assignment.
The decree of the court below is therefore reversed, and the record ordered to be remitted to -the court below, with instructions to allow the judgments of the appellants to be first paid out of the fund, and the balance to be distributed in the manner heretofore decreed by the court below, or if the fund should be insufficient to pay the judgments of the-appellants in full, then to be paid pro rata; and it is ordered that the costs be paid out of the fund in the first place.
Strong, J., dissented.