Tilton v. Cofield

2 Colo. 392

• Court: Supreme Court of Colorado
• Decided: February 15, 1874
• Status: Published

Opinions

Hallett, C. J.

Appellants sued ont an attachment against Jndson H. Dudley and Thomas P. Ames for the sum of $2,620.80, which was levied upon property belonging to Dudley. Pending the suit Dudley conveyed two of the lots to John Alexander, who, subsequently, conveyed the same lots to the appellees, Erastus P. and Charles Hal-lack. Other lots upon which the writ was levied were conveyed to David H. Moffat, Jr., to secure a loan of $2,500, made by him to Dudley, and Moffat, with Dudley’s assent, subsequently sold and conveyed these lots to the appellees, Cofield, Witter and Whitsitt. The other appellees claim by assignment from the parties last named. In the affidavit for attachment the demand was alleged to be for goods sold and delivered, and the declaration contained the common counts. After the above-mentioned conveyances had been made, appellants amended the affidavit and declara-tion, and counted upon a promissory note for the sum of $2,592.80, dated September 17, 1864, bearing interest at the rate of two per cent per month from date until paid, and increased the damages laid in the declaration from $3,000 to $7,000. Upon the declaration as amended, Dudley confessed judgment for $5,652.80, which, it will be observed, is more than double the amount claimed in the original áffidavit. To satisfy this judgment, execution was awarded against the property upon which the attachment had been levied, and this bill was filed to set aside that portion of the judgment, and enjoin any sale of the property. By a supplemental bill, and the answer thereto, it appears that since this bill was filed, the property has been sold to appellants, under an execution issued on the judgment. The statute regulating attachments provides that the writ shall be issued upon affidavit filed by the creditor, stating the nature and amount of the indebtedness, and the officer is required to levy the writ upon the property of the debtor, of value sufficient to satisfy the sum sworn to be due. Rev. Stat. 52. When the writ is levied upon real estate, the officer is required to file a certificate of the fact in the office of the county recorder, as notice to other creditors and subsequent purchasers. Rev. Stat. 378. The purpose of the law is to enable the creditor to seize property, and hold it for the •satisfaction of the judgment to be obtained in the cause, and of course the lien of the attachment cannot be greater than the indebtedness stated in the affidavit and writ. Accordingly, it is held, that without service of process or appearance by the defendant, the judgment cannot exceed the sum stated in the affidavit with accruing interest. Hobson v. Emporium R. E. & M. Co., 42 Ill. 306; Drake’s Attachment, § 449, a. And it would seem that in cases commenced by attachment in which process is served upon the defendant, he may confine the plaintiff to the cause or causes of action stated in the affidavit, as well as the sum therein named. Tunnison v. Field, 21 Ill. 108. But when the defendant, without objection, pleads to matters not alleged in the affidavit, or confesses judgment for a greater sum than is therein demanded, he passes by the question of variance between the writ and declaration, and waives objection upon that ground. This is not, however, material to our present inquiry, which relates to the effect of the attachment proceedings upon the right of third parties who have acquired an interest in the property pending the suit.

Whatever the rule may be as to the defendant, it is clear that purchasers of the attached property take it subject to the lien of the plaintiff for the sum stated in the affidavit and writ, with accruing interest, if he shall obtain judgment in that action for so much. To this extent, the record which is made for that purpose advises them of the incumbrance upon the property, and, therefore, they may be presumed to have knowledge of the fact. But it is said that the right to amend attachment proceedings is conferred by statute and liberally indulged by courts under which new causes of action may be added or the sum stated in the affidavit and writ increased and the property held liable for the whole amount. It will be observed that the eighth section of the attachment act, which confers the right to amend, relates only to insufficiencies in the affidavit, writ and bond, and not to causes of action altogether omitted therefrom. But, conceding that a mistake as to the amount of the indebtedness may be corrected, and even that a cause of action omitted from the affidavit by mistake may be inserted under the authority of that section without prejudice to the proceedings upon which the defendant may rely, it is obvious that third parties cannot be affected by an amendment of that kind. Purchasers and creditors who acquire an interest in the property during the pendency of the suit are entitled to stand upon the record as it existed at the time such interest was acquired, and, of course, they cannot be supposed to have knowledge of any matter of which the record does not advise them. That the plaintiff, by an imperfect statement of his case, may give such notice of his right as will affect purchasers and creditors as well as the defendant in the cause, there is every reason to believe. If, for instance, the creditor should state the facts upon information and belief instead of upon his own knowledge, or if he should claim several distinct sums of money and then state the aggregate amount of them incorrectly, he would probably give to all full notice of his right, although not in the precise manner prescribed by the act. But the present case cannot be brought within any rule, however liberal, upon which amendments may be allowed in attachment proceedings to affect the right of strangers to the suit. In the original affidavit appellants claimed an indebtedness of $2,620.80 for goods, wares and merchandise, sold and delivered, and there was nothing whatever to advise the defendant, or any other person, of any additional claim for interest or upon any other account. The writ followed the affidavit, and the declaration contained the common counts with a general statement attached corresponding with the several counts, and denominated a copy of the account sued on. The damages were laid at $3,000, exceeding somewhat the amount stated in the affidavit according to the usual practice by which the pleader may state any sum which will cover his demand. Nowhere in these papers was there any thing to indicate, even remotely, that appellants had any other demand than that which was set forth in the affidavit, and so the record remained until after the attached property was sold to appellees. It is claimed that the promissory note, which was afterward brought in by amendment, might have been given in evidence under the common counts in the original declaration, but this will not impair the rule which must control the decision of the question. If we suppose that appellees were by the declaration notified of every cause of action which might have been proved under the common counts, the lien of the attachment could not attach for more than was expressed in the writ and affidavit, with accruing interest, and the interest here referred to is that which might have been recovered upon the case made in the original affidavit, of which only appellees had notice. The promissory note which was subsequently brought into the proceedings by amendment, although given for the consideration stated in the original affidavit, contained a stipulation for interest at a much higher rate than could have been obtained without its aid, and this was, in substance if not in fact, a new cause of action. By it the amount of the judgment was greatly increased, and if the property should be held liable for its payment, appellees would become responsible for a demand of which they had no notice, actual or constructive, at the time they purchased. Ho argument is required to prove that the right to amend cannot be exercised in that manner to the prejudice of strangers to the suit. Several cases are reported which illustrate the principle. A writ of attachment was levied in March, 1827, and the officer’s return was dated June 6 of that year. On the 22d May, in the saipe year, a mortgagee of the premises attached, recorded his mortgage, and thus obtained a preference over the creditor, notwithstanding the return to the writ was afterward amended so as to show the true date of the levy. It was said arguendo that a purchaser for a valuable consideration, ignorant of any attachment at the time of his purchase, would unquestionably have held against a creditor claiming under that attachment, and no amendment of the officer’s return would defeat his title. Emerson v. Upton, 9 Pick. 167. Upon an execution against Wm. Kroger, the goods of Benjamin were seized, .and the amendment of the judgment and execution, by which the latter’s name was inserted, was not allowed to defeat the title of an intervening purchaser. Shirley v. Phillips, 17 Ill. 471. The principle is also affirmed in McCormick v. Wheeler, 36 Ill. 114, and doubtless other cases may be found to the same point. We have, therefore, no hesitancy in saying that the amendment of the affidavit, writ and declaration did not affect the rights of appellees in the property attached, or authorize the entering of a judgment against the property in their hands for more than could have been claimed upon the record as it stood prior to that time. Assuming that appellees acquired an interest in the property attached before the writ and declaration was amended, a matter which will be considered more at length hereafter, we will endeavor to ascertain the effect of the amendment and the judgment taken in pursuance thereof, upon the lien of the attachment. As we have seen, appellants had a lien upon the property attached at the time of the sale to appellees, for the sum of $2,620.80, for which they might have taken judgment. The most that can be claimed now is, that this lien still subsists, and that the judgment against the property maybe enforced for that amount. In a proceeding by attachment the lien of the writ merges in the judgment taken in the cause, and the latter takes effect upon the attached property as of the date of the levy. Bagley v. Ward, 37 Cal. 121. When, as in this case, the judgment is for more than the plaintiff may rightfully demand against the attached property, there would appear to be some difficulty in giving effect to it, contrary to its tenor. If, for instance, appellants had sought and obtained a special execution against the property for the $2,620.80, specified in the affidavit before the amendment, the judgment being for a larger sum, there would be some question as to the power of the court thus to limit the effect of the judgment.

If, however, this is a difficulty which equity will disregard, the form of the judgment being immaterial, if in good conscience, appellants are entitled to a lien upon the property for any sum, it will not be profitable to discuss this point further.

As between attaching creditors, it appears to be well settled that a prior attachment will be dissolved if the creditor take judgment for more than he is entitled to under his writ, or upon a cause of action not specified therein. Drake on Attachment, § 282.

The suggestion that this rule cannot prevail in this territory because of the peculiarity of our statute, which admits creditors whose writs are returnable to the same term of court to share pro rata in the proceeds of the attached property, is not supported by the reason upon which the rule is said to be founded. In Willis v. Crocker, 1 Pick. 204, it was said that the subsequently attaching creditor had a vested right to the excess beyond the amount of the judgment to be rendered upon the writ of the first attaching creditor as it was when served, and the same reason for the rule is assigned in other cases. The proposition affirmed is, that he whose writ is first levied shall not be allowed to appropriate more of the common fund than he has demanded in his writ, and thus diminish the sum to which others are entitled, and it is just as applicable to the case in which the creditors share pro rata as to the case in which one holds a preference over the other. In either case what is taken by one creditor cannot be awarded to another, and although the effect of the rule may be different, its applicability in both classes of cases cannot be doubted. Whether changing the cause of action or adding to the demand, without actual knowledge on the part of the creditor of the existence of other liens upon the attached property, will work a dissolution of the attachment is not entirely clear upon authority. The cases are reviewed in Page v. Jewett, 46 N. H. 441, and the language of the court, although not directly to the point, appears to support the notion that the attachment will, in such case, be dissolved.

But in Felton v. Wadsworth, 7 Cush. 587, the mistake of the plaintiff’s attorney, in taking judgment for too much, was not regarded as sufficient to dissolve the attachment, and the idea advanced is, that there must be an intention to do wrong, or fraud, in fact, on the part of the plaintiff, before such a consequence can be visited upon him. The conclusion of the court was, that there must be fraud to bring a case within the principle of the adjudged cases, and this could hardly subsist without a consciousness of wrong on the part of the creditors. To apply this principle to a case in which judgment has been taken with the assent of the debtor, for a sum that was clearly due, and without actual knowledge of the existence of any other lien upon the property attached, it would seem that the creditor, not being chargeable with any intention to do wrong, should not, in equity at least, be deprived of his right. But this distinction, if it exists, does not arise in the case at bar, inasmuch as it is shown by the record, that appellants had knowledge of the sale to appellees before they took judgment and sued out execution against the property. Whatever rule is applied when the creditor has only constructive notice of the existence of other liens upon the property, if with actual knowledge of such liens he attempts to enlarge his own demand against the property, he is clearly guilty of fraud in fact as well as in law. In such case the creditor, with full knowledge of the rights of the others, attempts to appropriate their property to his own use, through and by means of the forms of law, and he is therefore justly amenable to the charge of fraud. In the bill of complaint filed by appellees, it was alleged that appellants had notice of the sale to appellees at the time it was made, and although the charge is denied in the answer, it is, I think, sustained by the copy of the judgment in the attachment suit which was attached to the bill, and was put in evidence by the stipulation of the parties. By the transcript of the judgment, it appears that the appellees, Cofield, Witter, Whitsitt and Steck, appeared in the attachment suit before judgment was rendered and asked to be made parties and for leave to contest appellants’ claim, but they were not allowed to do so. It is not shown upon what ground appellees proposed to contest appellants’ claim, but the fact that they appeared in the case and demanded a hearing was sufficient to put appellants upon inquiry, and if they did not ascertain the facts in regard to appellees’ title, the fault was their own. In this feature the case is like that of Hale v. Chandler, 3 Mich. 532, in which the like circumstance was held to be sufficient to charge the plaintiffs in attachment with notice. That was a bill by an attaching creditor to postpone a judgment obtained by another creditor upon a writ levied prior to the complainant’s, and the principles upon which such relief may be granted are very fully discussed. In addition to the circumstance that appellees attempted to interfere in the attachment suit, a special execution was obtained against the property attached for the whole amount of the judgment, and we learn from the supplemental bill and answer that since this suit was begun, the property has been sold under such execution, and that appellants have become the purchasers. It is obvious that appellants knew before they took judgment that appellees had, or claimed to have, some interest in the property, and by proceeding to judgment and execution against the property, they have manifested a disposition to appropriate the property to their own use without regard to the right of appellees, and this brings the case within the principle of all the authorities that I have examined. The circumstance that appellees are purchasers of the property cannot be relied upon to distinguish this case from those cited. A purchaser is entitled to the same protection as an attaching creditor, and he may as confidently appeal to a court of equity for such protection. The appellees, Erastus F. and Charles Hallack, holding two of the lots by an unquestioned title from Dudley, are fully in the attitude of purchasers. The other appellees have an equitable right, only having failed to obtain a legal title by reason of the want of a seal on the power of attorney from Dudley to Chever. The deed to Moffat was for that reason insufficient to pass the legal title. Mans v. Worthington, 3 Scam. 26; Peabody v. Hoard, 46 Ill. 242; and parol ratification of the deed did not cure the defect. Story on Agency, §§ 242, 252. But the instrument was a sufficient memorandum under the statute of frauds, and has every element of a perfect contract which will be enforced in equity. It is a doctrine of the court that things agreed to be done shall be regarded as actually performed, and the appellees other than the Hallecks are for the purposes of this suit, equally with the latter, to be regarded as purchasers. The circumstance that they have not obtained the conveyance which a court of equity will award, cannot defeat their right. I understand that one who holds under an executory contract cannot defeat a prior equity, as perhaps he may who holds by legal title. Villa v. Rodriguez, 12 Wall. 323. But this principle has no application to the case at bar, in which appellants are visited with the consequences of their own wrong. By doubling the amount of their judgment, and seeking to charge the property attached with an amount to which in the hands of appellees, it was not subject, they abandoned the lien of their attachment, and lost their right to enforce it, and this must be true in support of an equitable as well as legal title. The allegations of the bill as to the title of Cofield, Witter, Whitsitt, Boche and Steck, are not, strictly speaking, according to the fact, inasmuch as those parties have an equitable title only. To have complete relief these appellees should have brought their bill for specific performance of the contract with Dudley, making appellants parties thereto. Probably, Dudley might, if he were here, object that the controversy is not determined by the decree of the court below, but he has not appealed, and we must presume that he is satisfied with the decree. Williams v. Starr, 5 Wis. 534. The evidence establishes an equitable title in the appellees’ excepting the Hallecks, who, as we have seen, have a legal title, and thus falls short of the allegations of the bill, but does not vary therefrom. So far as it goes the evidence is in support of the bill, but it does not come up to the point of establishing a legal title in those who claim under the deed to Moffat. The deed to Moffat, as we have for convenience called it, which is relied upon in the bill to establish the legal title of those claiming under it, is the evidence of the equitable title which the court by its decree sought to protect, and, therefore, there was no surprise to any one. We do not say that the bill is sufficient to maintain a decree for specific performance, but at the time it was filed, no sale had been made to appellants, and we think that the court might protect appellees’ rights in the property attached against the unwarranted assault of appellants. Notwithstanding the fact that the bill claimed more than the parties complainant were entitled to, such was the relief given by the court below, and we find no error in the decree of which the appellants may complain. The decree of the district court is affirmed with costs.