
    The United States vs. Henry W. Howgate, Clara M. Houghton et al.
    Law. No. 23,081.
    5 Decided May 7, 1883.
    
      } The Oiiikf Justice and Justices Hagmek and Cox sitting.
    Notwithstanding the act of Congress of April 29, 1878, providing for the recording of deeds, &c., property in the possession of one who has in good faith purchased and paid for it but has failed to record the conveyance, is not liable to attachment in a suit by a creditor against the absconding vendor, when it appears that as between the vendor and vendee the entire equity in the property has passed to the latter; the statute regulating attachment proceedings permits the plaintiff to attach only the property of the defendant, not the property of some one else.
    STATEMENT OE THE CASE.
    Motion to quash au attachment.
    This suit (an action of assumpsit) was commenced August 24, 1881. With the declaration were filed affidavits to support an attachment. On the same day, the summons having been returned not to be found,” an attachment was issued and executed by the marshal upon certain pieces of real estate alleged to be the property of the defendant. Among other parcels so attached, was lot 203 in a subdivision of square 206. Whereupon Clara M. Houghton filed her petition, supported by affidavits, alleging in substance :
    That in the month of March, 1881, she, through her-agent, W. H. Houghton, entered into an agreement with the defendant Howgate, whereby the defendant contracted to sell, and the petitioner agreed and contracted to purchase the said lot; and that on the making of the said contract, petitioner, through her said agent, paid to the said Howgate one hundred dollars, as earnest money. That the consideration therefor was that a certain piece of property was to be conveyed to Howgate, and the sum of fifteen hundred dollars paid to him in money. That on the fourteenth of April, 1881, in pursuance of this contract, Howgate and his wife executed and acknowledged a deed of the property to the petitioner, she, at the same time, paying to Howgate the further sum of two hundred dollars, and at the same time the deed for the lot given to the said Howgate was executed and acknowledged, and the two deeds left at the office of Messrs. Fitch, Fox & Brown,.in this city, in escrow, until the balance of the money was paid by petitioner. That on Saturday, the 8th of August, 1881, petitioner took possession of the property wdiich had been conveyed to her, and on the 13th day of August, 1881, petitioner’s agent called at the office of Fitch, Fox & Brown, paid the balance of the money due to Howgate, and demanded and received the deed to the property ; that he was about to proceed with it to the record office to have it recorded, when he was informed by one of the firm that they would send some deeds to the recording office either on that day or the following Monday, and that if the deed to petitioner was left with them they would send it to the recording office ; that, in consequence of said statement the deed to the petitioner was left with said firm, but owing to an oversight was not recorded until the 30th of August, 1881. That on August 24th, 1881, this suit was brought against Howgate, and an attachment was issued and laid on the above-described property so conveyed to this petitioner ; that said attachment is still upon said property, and is a cloud upon petitioner’s title, interfering with her use and disposition of the property. That she is advised and believes that said attachment was wrongfully issued against and laid upon her said property.
    
      And she therefore prays :
    That she may be made a party defendant to this suit to the extent and for the purpose of protecting and defending her rights to and interest in the said described property, in all proceedings having reference to or involving or affecting the same.
    An order having been passed making her a defendant to the suit, a motion was thereafter made and granted quashing the attachment against the said lot 203. Whereupon the plaintiff appealed.
    George B. Corkhill and Randolph Coyle for plaintiff:
    The attachment having been levied August 24th, 1881, should have priority of the deed to Mrs. Houghton, which was not delivered for record until August 30th, 1881, and the relative rights of the parties are not affected by the facts that the deed was dated April 4th, acknowledged April 14th, and delivered by Howgate to Mrs. Houghton August 13th, 1881, and that Mrs. Houghton was in possession of the premises at the time the attachment was laid.
    The case is controlled by the act of April 29, 1878 (20 Stats., 40-41), which provides that:
    “ All deeds * * * entitled to be recorded in the office ■of the recorder of deeds, shall take effect and be valid, as to creditors and as to subsequent purchasers for valuable consideration without notice, from the time when such deed * * * after having been acknowledged, proved or certified, as the case may be, be delivered to the recorder of deeds for record, and from that time only.”
    Under this statute this court has recently held in two cases that an unrecorded deed is absolutely void as to creditors without notice. Bank vs. Hitz, 1 Mackey, 111; Nelson vs. Henry, ante, 259.
    
    In the case at bar it is not pretended that the creditor had ■express notice of the unrecorded deed. The only possible ■effect that can be claimed for the possession shown is that it raised a presumption of notice to the creditor that the party in possession claimed title ; but even though this be true in some cases, the possession of the purchaser in this case was not such “open, notorious and exclusive possession ” as alone raises a presumption of notice. See Wade on Notice, sec. 273, and cases cited.
    But it is submitted that the unrecorded deed is absolutely void as to creditors, whether with or without notice.
    The words “ without notice ” relate only to “ subsequent purchasers for valuable consideration,” and do not qualify the rights of creditors.”
    Similar statutes have been so construed in the following cases: Guerrant vs. Anderson, 4 Randolph, 208; Gray vs. Mosely, 2 Munford, 545; Edwards vs. Brinker, 9 Dana, 69; Campbell vs. Mosely, Litt. Sel. Cas., 358; King vs. Gray, 6 B. Mon., 368; Washington vs. Trousdale, Mart. & Yerg., 385; Douglas vs. Morford, 8 Yerg., 373; Lillard vs. Ruckers, 9 Yerg., 64; Hays vs. McGuire, 8 Yerg., 91.
    Henry Wise Garnett for petitioner -.
    The record shows that in March, 1881, the petitioner entered into a contract with Henry W. Howgate for the purchase of the property involved in this proceeding, and paid $100 as earnest money; that on April 14th, 1881, Henry W. Howgate executed a deed to the petitioner for the property, and received $200 more on account; that the said deed was left in escrow with Howgate’s agents until the balance of the purchase money was paid ; that on the 8th of August, 1881, the petitioner took possession of the property, and on August 13th, 1881, paid the balance.of the purchase money to How. gate’s agents, and received from them the deed from How-gate to her, which she left with said agents for record, at their suggestion.
    On August 13th, 1881, therefore, and from that date this petitioner occupies the position of a purchaser for value who has paid the full consideration of the purchase, and is in possession of the property, holding it adversely to the whole world, and has received a conveyance from the vendor therefor.
    On August 24th, 1881, the United States instituted the above-entitled suit, and issued and levied an attachment on this property, claiming it to be the property of Howgate.
    On August 30, 1881, the deed from Howgate to this petitioner was recorded.
    It is now claimed on the' part of the United States that the attachment in this case having been issued and levied before the recording of this deed, therefore the deed is inoperative and void as .against the attachment, and possibly prospective judgment and execution.
    The reply to this claim is, first, that it is not well founded' in law, and cannot be sustained, the law of attachments being that an attachment can operate only upon the right of the'defendant existing when it is made. Drake on Attachments, § 234; Cox vs. Milner, 23 Ill., 476; Savery vs. Browning, 18 Iowa, 246; Reed vs. Ownby, 44 Mo., 204.
    A dry legal title or a mere scintilla juris cannot be attached. Houston vs. Newland, 7 G. & J., 480.
    In the present case Howgate had no right, title, seisin or possession in this property ; he had sold it; given a deed for it ; and delivered possession of it; and it was held adversely to him as well as all other persons.
    Before any judgment is obtained in support of the attachment, the petitioner, who has seisin and possession of the property for full value paid, records the deed to her which had been previously delivered, thus showing the mere paper title to be also hers ; the attachment, to operate, must have found some right in Howgate to operate on, but here there was nothing.
    In the second place, however, if the claim of the Government that this deed is void and inoperative as to this attachment be admitted, it only goes to the extent of rendering the deed inoperative as to the United States, and leaves the petitioner in the position of a bona fide purchaser for value who has fully paid the purchase money, and has received and holds seisin and possession, and holds a deed for the property good as between her and the vendor.
    It is clear, and must be admitted by the appellant, that the attachment in this or any other case can create no higher or stronger lien than a judgment, and, in fact, that it does not create so good a lien, for that creates a lien without a levy, and the attachment only holds the property on which it is levied until a judgment can be obtained, and the property sold under execution.
    Now, granting for the sake of argument, the appellants’ claim, still their attachment is no lien on this property in this state of facts, nor would their judgment, if obtained, be a lien, nor could it be sold under execution issued on such a judgment.
    A judgment is a lien only upon the precise interest the debtor has in the property, and no other, the apparent interest of the debtor can neither extend or restrict the operation of the lien so that it. can encumber any greater or less interest than the debtor in fact possesses. Freeman on Judgments, sec. 356.
    The lien is confined to actual interest. Freeman on Judgments, sec. 357.
    And it is well settled that a judgment lien is subject to every equity against the debtor at the time the judgment was rendered. Id., sec. 363, and Baker vs. Morton, 12 Wall., 150.
    Where a party has entered into a contract to sell property a subsequent- judgment is not a lien. Moale vs. Buchanan, 11 G. & J., 314; Hampson vs. Edelin, 2 H. & J., 64; Richardson vs. Stillinger, 12 G. & J., 478.
    As against the grantor or vendor of land, a judgment is a lien thereon only to the extent of the unpaid purchase money. Moyer vs. Hunnau, 13 N. Y., 150; Manly vs. Hunt, 1 Ohio, 257; Hermann on Executions, sec. 195.
    • Lands held adversely to debtor are not subject to execution. Hermann on Executions, sec. 143.
    The following case is directly in point. In Cutting vs. Pike, 21 N. H., 347 (1 Foster), the defendant entered into the land of A under a verbal agreement for purchase. He afterwards paid for the land, and to prevent it from being attached for his debts, instead of a deed, took from A his written contract to convey on demand, and remained in possession. Held—
    
      1st. That in equity the defendant was the owner of-the land.
    2nd. That possession was in law notice of his equitable estate.
    3rd. That a creditor of A, the former owner, could not hold the land against the defendant under the extent of an execution issued on a judgment against A and levied after the defendant had paid for the land, and taken the written agreement to convey.
    4th. That the intention to defeat the creditors of the defendant could not be taken advantage of by a creditor of A. See, also, Scoby vs. Blanchard, 3 N. H., 170; Hadduck vs. Wilmarth, 5 N. H., 181.
    Again, in the case of Money vs. Dorsey, 7 Smedes & Marshall (15 Miss.), it was held that the interest of the vendor in land, who has given a bond for title on payment of the purchase money from the vendee, is not subject to seizure and sale under execution at law, at the suit of a judgment creditor who has obtained his judgment since the date of the title bond, and the payment of such portion of the purchase money.
    Where a bond to make title on payment of the purchase money is given, the vendor has a lien on the land for the payment thereof; and when the vendee has paid the whole or any part thereof, he has a lien on the land for the title, which will prevail against the lien of a judgment creditor of the vendor whose judgment is subsequent to the agreement to convey, and the receipt of the consideration money, but not against a subsequent purchaser for value, without notice.
    The extent of the right of a judgment creditor of vendor under these circumstances is to subject the unpaid purchase money in the hands of the vendee to the satisfaction of his judgment.
    , The lien of a judgment operates only on the interest of the judgment debtor at the date of its rendition, and cannot,, therefore, prevail against the prior equitable lien of a vendee from such judgment debtor who has received from Ms vendor a bond for title, and paid part of the purchase money, although his bond for title has never been recorded. C. sold S. a lot of land, taking a negotiable promissory note for purchase money, giving S. his bond for title C. sold note for valuable consideration, without recourse after transfer of note, held that the land was not subject to-the lien of a judgment against C. McGregor vs. Matthis, 32 Ga., 414; see, also, Tompkins vs. Williams, 19 Ga., 569.
    An execution at law cannot be levied under a judgment against the vendor where property has been previously sold- and possession given with an agreement to give title on payment of money. Burton vs. Bush, 32 Ga., 669.
    In the ease now before the court, the possession being delivered to and held by the vendee, and the purchase money fully paid before attachment, it is clear, under the light of the authorities, that nothing was left in the vendor on which a judgment and execution could operate, and necessarily nothing which'an attachment could reach, and the action of the court below in quashing the attachment as to this property was correct.
   Mr. Chief Justice Cartter

delivered the opinion of the court.

It is admitted on the part of the United States that this property was honestly bought and paid for by the defendant, Mrs. Houghton, and that after the purchase she took -possession and resided upon the property. The deed of conveyance, however, through some oversight of her agent, was not recorded until the week following the attachment laid upon the property by the plaintiff. It is, therefore, insisted that this neglect to record the deed, affords priority to the attaching creditor, and that the relative rights of the parties are not affected by the fact that the deed was executed, acknowledged and delivered, and possession of the property taken, prior to the levying of the attachment.

In support of this assumption, the plaintiff cites the act; of Congress, April-29,1878, which reads as follows.:, • ,

“All deeds, deeds of trust, mortgages, conveyances, covenants, agreements, or any other instrument of writing, which by law is entitled to be -recorded in the office of the recorder of deeds, shall take effect and be valid as to creditors, and as to subsequent purchasers for valuable consideration without notice, from the time of the receipt of the deed for record.”

We do not think that this statute applies to such a case as this. Mrs. Houghton, at the time of the levying of this attachment, and the commencement of suit against the defendant Howgate, had bought this property from him, and paid him for it. And in pursuance of the purchase, had taken possession, and was living upon the property, which latter fact was notice to his creditors and to all the world. She had an equity perfect and complete, therefore, in this property, that- could be enforced against Howgate and the court would declare that he had no title to it. The entire equity has passed out of him and is in Mrs. Houghton aud the plaintiff is only entitled under the law regulating attachment proceedings to attach and levy upon the property of Howgate and not upon the property of some one else. The attachment is therefore quashed.

Mr. Justice Cox

said :

I do not regret the conclusion announced by the court in this case, because of the obvious hardship in depriving this lady of the property after, she has paid for it. But I have some difficulty in concurring in the law just announced. I have no doubt, if I sell my real estate, and receive the purchase money for it, I pass all my beneficial interest, and a judgment creditor of mine cannot levy upon it as my property. A number of cases have been cited in support of that position ; but none of them turn upon the effect of statutes, such as we have here. It seems to me, the object of this statute is to meet that very state of things, and protect creditors from appearances of title which are not real. Our Btatute is very comprehensive. We had first, the old act of assembly, of Maryland, 1766, which declared that no estate above seven years may pass, except by deed acknowledged and recorded within six months, &c. Then our act of Congress provided that all agreements and instruments of writing, all bonds, &c., should be acknowledged and recorded ; and in the act as, now amended, it says that “ all deeds, ■deeds of trust, mortgages, conveyances, covenants, agreements or any other instrument of writing, which, by law, is entitled to be recorded in the office of the Recorder of Deeds, shall take effect and be valid,” &c., only from the time the same are recorded: In other words, it substantially enacts, -that no instrument of any description or form, shall, take effect and be valid as to creditors and subsequent purchasers, for valuable consideration, without notice, except from the time of record.

In a number of cases which were cited in argument, it has been held that under statutes similar to this, an unrecorded, deed is postponed to a judgment creditor; and if a judgment •creditor could levy upon property which had b.een conveyed by an unrecorded deed in this way, I take it that a creditor may levy an attachment, because the attachment would give him a lien, and the judgment when recovered would relate back to the date of the attachment and have the same effect as if the judgment had been rendered at the time of the attachment; so that it seems to me the general object of. these recording acts, is to enable both creditors and subsequent purchasers for value without notice, to deal with the title as it appears on the record — to treat the appearance as the reality of the title. That may operate with great hardship in some cases, as I admit it would in this case if the law was enforced.

It has been urged in argument, and the view seems to be entertained by the coui’t, that the only effect of this law is to make the deed, the muniment of title, void, but to leave the parties as if no deed were passed to give effect to the verbal negotiation for the sale which preceded the deed. All deeds are supposed to be preceded by a verbal negotiation arid contract out of which they grow. But it seems to me that if the mere deed is to be void, as against purchasers and creditors, and the antecedent negotiation not void, the statute is deprived of all virtue whatever ; the object of the statute is defeated. Evidently the object of the statute isr that when a deed is not recorded, the status remains the same as if no agreement existed between the parties.

Some stress was laid on the fact of change of possession as notice to creditors. I do not believe there was any actual' notice to judgment creditors before the levy, but there was a change of possession, and we all know that possession is constructive notice to the purchaser of the rights of the-party in possession. But I do not think that figures in the-question between a creditor and debtor. A purchaser is supposed to inspect the property before he buys it, and if he see it adversely occupied he is put on inquiry. But the-creditor does not necessarily see the property at all. Hé takes it from the land records, and 'gives it to the marshal with directions to levy on the property, and the marshal goes there and proceeds to levy. He is not supposed to know who is in possession, and if the fact is brought to his notice, it is no notice to the creditor, for the marshal is not his-agent, but the agent of the law. Possession is not, therefore, constructive notice to him, in my judgment; and, in fact, under our statute, that question does not figure at all as respects creditors. In- six cases quoted in the argument it has been explicitly decided that the question of notice is immaterial ; that the creditor may levy upon any property the legal title in which he finds in his debtor, although he may know there has been an equitable transfer of it. These-are the reasons why I find it difficult to concur in the conclusions of the court, while I am very'glad that the court has reached that conclusion in this particular case.

Mr. Justice Hagner

said :

I agree that this question does involve, in one view, very-great difficulties ; but I am. clearly of the opinion that the judgment announced by the Chief Justice is correct. It seems to me, the strength of the defendant’s position lies in the peculiar character of the proceedings in attachment. Ordinarily when a man institutes a suit against another, it matters not how meritorious his case may be, as long as the suit is being litigated he cannot put his hand on a single dollars’ worth of the defendant’s property. But if an exceptional condition of things is brought to the attention of the court, as, for instance, that the defendant is making away with his property, or has absconded, or done any of the things named in the statute providing for attachment, then this common law immunity is destroyed, and the officer of the law, on proper affidavit made by the creditor, and proper bond to indemnify the defendant from any harm he may sustain by reason of the attachment, can seize the defendant’s-property and hold it until the judgment is rendered. But suppose the marshal, in levying the attachment, takes the property of another person who owes the plaintiff nothing. Because the defendant once owned the property, and still continues to hold the legal title, should the present owner be taken through the courts, and be subjected to all this litigation, and his property in the meantime be held under the attachment, to await the inquiry whether the defendant owes money to the plaintiff? It seems to me the court ought to intervene, in a case involving such hardship; for there is no indemnity secured to the real owner of the property for the inconvenience and loss sustained in holding his-property during a litigation which may last for years. The bond is to protect the defendant in the suit, and not a stranger whose property has been wrongfully attached. After the purchase money had been fully paid, Howgate could have no interest in the land attached, except the dry legal title, a scintilla juris, which he would have held in trust for the purchaser. And such an interest not being a beneficial one, in my opinion was not the subject of an attachment. Such was the decision in Newland vs. Houston, 7 Gill & John., 480. In that case a resident of Delaware had sold his lands in Maryland, received part of the purchase money, and given the vendee a bond of conveyance. An attachment was laid upon- the lands as the property of the vendor, in whose name the record title still stood. The court held that this was but a dry legal title in the defendant; that it was not the intention of the law to ignore the rights of the real owner of the property ; and that the statute allowed an attachment to be levied only on the property of the defendant, and not on the pi’operty of others. And they held that it was not such a case as came within the attachment laws.

These are my reasons for concurring in the conclusion of the court, which I believe is by no means at variance with ■the previous decisions of this court.  