Bitzer v. Mercke

63 S.W. 771, 111 Ky. 299, 1901 Ky. LEXIS 208

• Court: Court of Appeals of Kentucky
• Decided: June 14, 1901
• Status: Published

Opinions

Opinion of the court by

JUDGE HOBSON

Affirming.

On September á, 1894, an apportionment warrant for $140.52 was issued by the city of Louisville in favor of John R. Gleason for the original construction of a portion of Locust street, in front of a 'lot then owned by Matilda Scfonell, now Matilda Meisger. The warrant was. on the same day assigned by Gleason to Peter Bitzer.. Mary M. Mercke had at the time a mortgage lieni on the property to secure a note of $300. On October 10, 1896,. she filed her petition in the Jefferson circuit court for the foreclosure of the mortgage, and made Gleason a party defendant, calling upon him to set up> his claim, if any he had, or be forever barred. Gleason failed to answer the petition, and in January, 1897, a judgment was entered in the action enforcing the mortgage of Mrs. Mercke, and barring Gleason of any. lien on the property. The property was sold under the judgment on February 15, 1897,. and was purchased by Mrs. Mercke at a little less than the amount of her debt. The sale was confirmed, and deed ordered to be made to her. Thereafter, on June 21, 1897, she sold and conveyed the property to John J. Davis. On August 24, 1899, and before Davis had paid for the property, Bitzer and Gleason brought this suit asking an enforcement of the lien, and for a sale of .the lot therefor. Mrs. Mercke and Davis pleaded in bar the judgment rendered in the first case, which1 had never been appealed from, vacated, or modified. The appellants, by way of reply, alleged that prior to the institution of that suit Mrs. Mercke had notice of the assignment of the apportionment warrant by Gleason to Bitzer, and that Bitzer was then the owner of it; also that he had1 not, until a few days before the institution of the last suit,’ any notice of the former puit, or that Gleason had been, summoned' therein. He alleged that Davis still owed an amount of the purchase money more than sufficient to pay his debt, and prayed that it be subjected thereto-. The proof shows conclusively that Mrs. Mercke had no notice of the assignment to Bitzer, or that he had any interest in the warrant until- the institution of this suit. Upon these facts, the circuit court dismissed Bitzer’s suit against Mrs. Mercke and Davis, holding that he was precluded from asserting his lien by reason of, the judgment in the suit foreclosing the mortgage.

The first question in the case is whether Gleason, if he had not assigned the claim to Bitzer, could himself have maintained this action, notwithstanding the judgment pleaded in bar. The record of’ tha.t case is not copied in the transcript. It is referred to as a part of the answer, and was evidently before the chancellor1 when he decided the case, as -shown by his opinion, which is as follows: “Gleason was unquestionably the record holder of the street warrant, and the evidence shows’ that Mrs. Mercke, the mortgagee, had no notice1 whatever that Bitzer had any interest in the warrant. She proceeded properly against Gleason. He was- served with process in case 12,213, read in -this case as evidence, and the judgment therein passed upon his rights. That judgment is still in force, and being voidable at most, and certainly not void, it must be heeded until it is reversed or set aside by the tribunal having jurisdiction to do so. Nor can the plaintiff’s claim that his lien be transferred to the unpaid purchase money owing by D'avis be sustained. His claim was not by contract with Mrs. Merche, but was given by statute against the land. He can not sue Mrs. Merche for a personal judgment, and can not, therefore, subject her personalty to the payments of her debts by attachment or otherwise. Neither can it be1 .said that the petition recognized his claim. It expressly called upon him to set it up or be barred for failure to do so. The judgment followed the prayer of the petition, and barred Gleason for failing to assert his claim, though duly notified. The judgment was entirely regular, and, the court having jurisdiction to render it, it can not now be annulled by this court, even though it were inclined to do so. Gleason or Bitzer had ample time to appeal from that judgment after it was discovered by Bitzer.”

It has been often held that where a record read in evidence is not copied in the transcript it will be presumed, on appeal, to support the finding of the trial court. The chancellor’s opinion shows that this record was read in evidence before bim. It also shows that he, having the record before Mm, came to the conclusion that the petition did not recognize Gleason’s claim, and that the judgment followed the prayer of the petition. This court, in the absence of the record, can not presume that the chancellor erred. Though the allegations of appellee’s answer were insufficient, still there was no demurrer to the answer. The case was submitted upon the pleadings and proof, and the defect in the answer was cured by the evidence and judgment. The chancellor’s judgment does not rest upon the allegations of the answer, but upon the 'contents of the record itself. On the facts found by the chancellor, the question presented is whether a judgmen! which is prayed in the petition and is within the subject-matter of the action is void, because not warranted by the -allegations of the petition.

Mrs. Mercke wished to foreclose her mortgage. The record showed a lien in favor of Gleason on the property for an apportionment warrant of $140.52. In order to foreclose her mortgage, she was required, under section 692 of the Civil Code, to make all other lienholders parties defendant to the action. The purpose of this section is to sell the entire title to the property, so that purchasers will be encouraged to bid at such sales, and sacrifice of the property avoided. Mrs. Mercke, therefore, made Gleason a defendant to her petition, and prayed that he be barred of all claim if he failed to set up his lien. He was duly served, and, failing to plead, judgment was entered in bar of his lien, and for a sale of the property ' under the mortgage. This judgment is now attacked collaterally, and the only question is, is it void? In Yanfieet, Coll. Attack, section 17, the rule is thus stated: “The doctrine of collateral attack denies any validity whatever to the former adjudication, while that of res judicata admits its entire validity, and simply denies the scope ■claimed for it. There is littl-e similarity between the two doctrines. Collateral attack involves the jurisdiction •of the court, and denies its power to act at all, while res judicata merely involves the question concerning what was actually contested and decided in the trial. The doctrine of collateral attack has nothing to do with the issue or the matters contested on the trial. A judgment on default, without any issue joined or contest made, is just as invulnerable against a collateral attack as one rendered on issue joined after a contest. . . . Right here, on the question of issues, is wlmre many decisions have gone astray in deciding cases of collateral attack, holding the defendant not concluded on some matter because no issue or direct allegation, was made about it, and' failing to notice that the absence of an allegation, or a defective one merely, made the plaintiff’s complaint or petition bad on demurrer, and that the defendant was called upon to bring forward any and all defenses he might have, either of law or fact, and that a. judgment necessarily barred all his rights in the subject-matter then in suit.” The subject-matter in suit, in the action brought by Mrs. Mercke, was the sale .of the property for the .satisfaction of the liens on it. To order the sale, the court had to determine the existence or non-existence of the liens, and, if he erred, it was error of law merely, so far as he kept within the subject-matter of1 the suit. The judgment which was rendered being prayed in the petition, however erroneous it may have been, was not void. It is insisted for appellant that the allegations of the petition in that case showed that Gleason had a valid claim against the property, and it is maintained that, therefore, the judgment of the court holding otherwise was void. The conclusion does not follow from the premises.

Section 763 of the Civil Code of Practice provides that neither a void' judgment nor one that may be corrected by the court rendering it on motion may be .reversed by this court until a motion to set it aside has been made in the inferior court. Under this section, the question has often .arisen whether an appeal could' be taken from a judgment before a motion to correct it was made in the lower court, and in a number of these cases, precisely the question made in this case arose. Thus, in Bunger v. Hart, 3 Kentucky Law Rep., 518, a judgment had been entered upon a note for more than.the allegations of the petition warranted, but the judgment followed the prayer of the petition. It was held an error of the court, and thle judgment was reversed, without a motion in the lower ■court to set it aside. According to the rule relied on for appellant, the judgment in that case for money that the petition showed no right to recover' was void. In Beard v. McKay, Id., 379, where the same thing occurred, except that the prayer of the petition did not include the sum adjudged, it was held a clerical error.. But even in that case it was not held that the judgment was- void. In Tong v. Eifort, 80 Ky., 152 (3 R., 647) a judgment was entered against heirs without an allegation that they had .received assets, and it also included a credit pleaded in the answer and not denied. Yet this judgment was held to be merely erroneous, and was reversed. In Pepper v. Thomas, 85 Ky., 589 (4 S. W., 297) judgment was rendered allotting dower in an entire tract of land described in the petition when plaintiff was entitled to dower in only one-third of it, yet it was held that the judgment was not void, and, after the expiration of the term, the court had no power to set it aside. In Kimbrough v. Harbett 110 Ky., 94 (22 R., 1578), (60 S. W., 830) judgment had been entered on a petition in equity adjudging plaintiff a lien on a tract of land', and directing a* sale of the land for the payment of his debt. The defendant then undertook to attack the judgment collaterally, in a separate action, on the ground that the allegations of the petition showed that the plaintiff had no lien on the land. The court said: “We need not determine whether the petition was sufficient to- entitle appellant to relief in equity. The court had jurisdiction of the parties and of the subject-matter, and, if he erred in determining the relief to be awarded appellant, this did not render the judgment void. The question what relief, if any, the appellant was entitled to under the allegations of the petition, which were confessed by appellee’s failure to answer, was necessarily presented' to the court when the case was then submitted, .and, if he erred in his decision, the only way to correct it was by appeal. Hardin v. Hardin, 6 Ky Law Rep., 662; Bridgford v. Fogg 12 R., 570 (14 S. W., 600); Cheatham v. Whitman, 86 Ky., 614, 9 R., 761, 6 S. W., 595. No appeal has been taken from that judgment. It remains in full force. The court below, after the expiration of the term at which it was rendered, had no power to vacate or modify it, except upon the grounds set out in section 518 of the Civil Code of Practice, none of which are alleged.” To same effect see Blackburn v. Mann, 3 Ky. Law Rep., 757; Christy v. Garrity (14 R., 910) (22 S. W., 158); Peyton v. Moore, 12 Ky. Law Rep., 121; Blackwell v. McBride, 14 Ky. Law Rep., 760; Moss v. Wolf, 16 Ky Law Rep., 398; Freem. Judgm., sections 135-135a.

The authorities relied on for appellants do not conflict with the foregoing. As has been said by the United States supreme court, if in an action for money the court should sentence the defendant to imprisonment in t’he penitentiary, or in an action for. the possession of real estate, the court should adjudge the probate of a. will, the judgment would undoubtedly be void. Windsor v. McVeigh, 93 U. S., 274 (23 L. Ed.. 914). But the line must be drawn ■somewhere between error of the court and want of jurisdiction. All the cases concede this, and there seems to be no real authority for the proposition that a judgment may be attacked collaterally for a defect in the pleadings. The case of Strobe v. Downer, 13 Wis., 10, 80 Am. Dec., 709, involved a common-law foreclosure, which is entirely a different proceeding from that established by our Civil Code of “Practice. In the subsequent case of Allie v. Schmitz, 17 Wis., 169, the same court emphatically repudiated the dpctrine relied on for the appellant. ' In that case a bill in equity for partition was filed against a husband and wife, in which it was alleged! that, the wife owned an undivided one-third of the land. Without answer, a decree was rendered that the husband and wife owned the undivided one-third, and it was set off to them jointly. Afterwards the wife sought to recover the land on the idea that -the decree was void so far as the husband was concerned, but the court held it was not void, and could not be attacked collaterally.- We therefore conclude that the judgment in question was not void1, however erroneous it may have been, and was conclusive on Gleason if he had remained the owner of the apportionment warrant.

It remains to determine whether it is also conclusive upon his assignee Bitzer. Under section 19 of the Code of Practice, “in the case of *an assignment of a thing in action the' action'by the assignee is without prejudice to any discount, set-off or defense now allowed,” and by section 474 of the Kentucky Statutes, bonds, bills, or notes are assignable so as to vest the right of action in the assignee, but not to impair the right to any defense, discount, or offset that the defendant had before notice of the assignment. WThile this section only applies to bonds, bills, or notes for money or property, the rule it announces is followed, under section 19 of the Code- of Practice, in the case of an assignment of a thing in action, where the assignment is not authorized by -statute'1, and the action by the assignee is without prejudice to any defense acquired by the defendant without notice of the assigninent. 2 Pom. Eq. Jur., sections 702, 703. By reason of her mortgage, Mrs. Mercke was in equity the owner of an interest in the lot to the extent of her debt. On this pro'perty the apportionment warrant was also a lien. It was a lien on the entire title, including the equitable title of Mrs. Mercke. If she had paid off the lien to Gleason while he was the record holder of it, without notice • of the assignment to Bitzer, she would clearly have been protected. Any other defense which she acquired' against Gleason in good faith, and without notice of the assignment, is as fully within the rule as a payment by her would have been. The purpose of the rule is to protect the defendant in all defenses acquired in good faith before notice of the assignment. If the judgment barring Gleason did not protect her against Bitzer when she had no notice of the assignment, then the purpose of the statute, in requiring all lien holders to be made defendants to the action, would be defeated, and a purchaser at such sales would never know when he was safe in buying the property; for no amount of diligence could protect him from secret assignments, which might be asserted against him, although all the holders of liens, so far as the record showed, were properly before the court. By reason of the judgment in the foreclosure case, and her purchase of the property under it, Mrs. Mercke acquired all the title of the parties to the action in the property, and Gleason was estopped to assert any title as1 against her. This defense acquired by her against Gleason, without notice of the assignment to Bitzer, is equally available against Bitzer; for otherwise there would be no security in titles obtained at judicial sales. The judgment of the chancellor, being in accord with these views; is affirmed.