Sanders v. McAffee

Lochrane, C. J.

I. This case comes before the Court upon error assigned on the refusal of the Court below to charge the jury: “If claimants had actual notice of the judgment of the plaintiff, when they brought the land in controversy, then they were not such bona fide purchasers, in the sense of the law, as can be protected against the judgment by a four years’ possession prior to the levy.” This the Court refused, and charged the jury: “If claimants had, bona fide, and for a valuable consideration, bought said lauds and had been in possession thereof for four years before the levy of the fi. fa., the lien of the judgment was discharged, otherwife, not.” The jury found the property not subject.

Section 3525 of the Revised Code is in the words charged by the Court below, as applicable to this case, and the naked question before us is, whether a purchaser, for a valuable consideration and in possession of the property for four years, if he had actual notice of a judgment existing against the vendor at the time of the purchase, can lie be held, in law, to be a bona fide purchaser, and within the provisions and protection of the Code. In Chapman vs. Akin, 39 Georgia, 347, this Court held, in construing this section, that it ran in favor of a bona fide purchaser, and was not suspended by the Acts suspending the Statute of Limitations, and the right, whatever it may be, of the plaintiff in fi. fa. to enforce his liens on land sold by the defendant and held in possession by a bona fide purchaser, existed, with the condition annexed, that the levy be made within four years after the commencement of the possession; and, as the plaintiff made no such levy, he lost his lien by failure to enforce it, in accordance with the condition to which it was subject and with which he never complied.”

This decision disposes of the question in this case, except so far as the necessity invoked by the request involves the opinion of this Court on the meaning of the term bona fide, in the connection in which it stands in this section. It will be remarked that the judgment of this Court, in 39 Georgia Reports, places no qualifying words to the term bona fide, and Chief Justice Bbown, in delivering the opinion, does not interpolate with the law the words “actual notice” as definitive of the term. He simply states, by way of recital, that there was no pretense of actual notice of the judgments being had by the claimants in that case. We, therefore, proceed to adjudge the question as to whether the term bona fide in the Code, and used by this Court, without definition as stated, means such purchaser as had no actual notice of the judgment at the time of the purchase.

The request presented the theory of the law held and ably argued in this case by counsel for plaintiff in error. There is no admixture of terms and principles; the request is open and plain. “If claimants had actual notice of the judgment of the plaintiff when they bought, then they were not such bona fide purchasers, in the sense of the law, as can be protected against the judgment by a four years’ possession prior to the levy.” This is the plain proposition which was requested, and the refusal to charge which is assigned as error. We do not think the Court erred in refusing to give this request to the jury, under the facts of this case.

2. It is contended that all the property of the defendant is bound for the judgment. Such is the law, by the Judiciary Act of 1799, and by the Code. But how bound? Is it a property right in the plaintiff covering all the defendant’s estate, which makes any person purchasing a part guilty of committing fraud on his rights? "We think not. The lien of a judgment does not constitute a right of property, in the thing itself, but only a right to levy on it and sell it: 4 Florida, 126. And even this right is limited, and excessive levies are trespasses, in the law.

Lien of judgment is general and not specific, and gives no property in the thing: 27 Miss.; 5 Cush., 679. And the limitation upon their enforcement is governed by the amount of the lien. Again, this lien is not only limited as to how much it shall be levied on, but as to the class and kind of property — first, that in the possession of the defendant. Again, if the property has been sold by levy of the junior judgment, the older can only come in and claim the money: 8 Gratt., 179; 9 Georgia, 164. That a judgment creditor, having waived his right to subject the property first liable, cannot go on the next, is a proposition held in 8th Gratt, 179, above quoted; showing that the rule is too broadly stated, if intended to mean that all a man’s property is incumbered with the judgment lien against the owner, and that it is fraud for him to sell any of it, and fraud to buy any from him. This is not the meaning of the law; for neither law nor equity, even on a debt reduced to judgment and suspended from levy by appeal, will restrain a sale of a part where enough is left to meet the judgment. The meaning, “all the property is bound from the judgment” means all necessary to pay it, for the lien is only for so much, and can be levied on no more.

'.. This Court has laid down analogous doctrine in the case of Scott vs. Winship, 20th Georgia, 429, in holding: “The rule that the sale of the whole of one’s property is a badge of fraud, does not apply where a small part is sold ;” thus recognizing the principle that the purchase of a part of the property, of the defendant in fi.fa., where he has ample property left-to discharge the judgment lien is no fraud upon the judgment creditor, and is, therefore, bona fide upon the part of both the seller and buyer. In the enforcement of the judgment lien we have thus far shown the limitations of the law, not controverting the general principle that judgments bind all the property of the defendant, as laid down in 19th Georgia, 452.

3. But as to the reasonable construction of such a general rule, and to show that the lien has a right to be enforced by levy and sale on sufficiency of the property to satisfy it, and not an estate in the property of the defendant in fi.fa., that it is a right, the enforcement of which is upon condition that it shall be asserted within four years, upon any property aliened after its existence, if necessary to levy on such property to satisfy its demand. This is the opinion of the Court, and consequently notice of its existence does not change the rule. The purchaser, bona fide and for valuable consideration, from the hour he goes into possession, is holding adversely to the judgment creditor as to the property he has bought from the defendant in fi.fa., with notice to him that, at the expiration of the four years, his property ceases to be subject to levy for the satisfaction of his judgment; and if the creditor does not move within this time to collect from the defendant in fi.fa., he loses his lien upon the estate so held adversely to his right: provided that he is a bona fide purchaser for valuable consideration; and, in the opinion we entertain of the law, he may be a bona fide purchaser with notice of the judgment and except there be fraud in his purchase, he will be protected upon his four years’ possession.

4. A purchaser who buys property from a party against whom there is an outstanding judgment is not, per se, committing fraud, if he pays full price. The Act of 1822 contained the words actual notice ; this section of the Code does not. It simply says a bona fide purchaser. What fraud can such purchaser be supposed to inflict on a judgment.creditor ? If the judgment is a lien, the purchase is not a fraud, for the creditor can levy on it any time within four years to make his money. Notice cannot in such case make it a fraud. The party buys, taking the risk of the enforcement of the lien, but that risk expires by law in four years. If the creditor permits the time to lapse, it is his own fault and ought not to be attributed to fraud in the purchaser; it abridges no right of the creditor; for if the defendant in fi. fa. has not sufficient property to meet the claim, the lien for four years extends to that which has been purchased. In Peck vs. Land, 2 Kelly 1st, it is held “ that a sale of property for full price with a view to hinder creditors, is fraudulent.” But the purchaser must have knowledge of, and participate in the design. Now, in cases where creditors have judgment on the real estate they are neither hindered nor delayed, and it can work no injury to them, except it may consist in the purpose that the purchaser prefers the defendant in fi. fa. to have four years opportunity to work his own property, and then at the end have to pay his debts; for the presumption of such fraud is in the limitation of the time from seven to four years. Can we presume fraud in a purchaser of a part of the estate for full price upon the presumption that the creditor will wait four years on the defendant in fi. fa., and then this fraud is to be perpetrated to his own injury?

5. We have just shown that the purchase of a part is not a badge of fraud. The case in 20th Georgia, 437, goes further, in holding the Judge erred in refusing to charge the jury that, if they believed claimant paid a valuable consideration for the negroes levied on, this rebuts the presumption of fraud,” not only arising from the purchase but even where the continued possession of the property remained in the party. “ Will it be pretended,” said the Chief Justice, Lumpkin, “ that if Mrs. S. paid to her son a valuable consideration for the property in dispute, her permitting it to remain with her son would subject it to antecedent and pre-existing debts? That her son may have attempted to run off the property, with a view to cheat either his mother’s creditors, or both, is quite possible; but unless his mother knew of it and connived at it, it cannot prejudice her title or cast suspicion upon the bonafides of the sale from her son to her.” This language is strong, and bears the impress of feeling in the enumeration of the principles it decides. There is neither doubt nor uncertainty in the conclusion; and a bona fide purchaser is presented, under the rule, as one who has paid valuable consideration for the thing purchased and, applied to this case, under the lapse of time, has acquired a perfect title, free from all incumbrance of lien.

6. And this very idea prevailing in Judge Lumpkin’s mind, in delivering this opinion, as a sentiment of justice, is drawn from the highest authorities of the law, and may be found in the decision of Lord Romilley, M. R., in the Law Reports, Equity Cases, volume 3d, and by Lord Chelmsford, L. C., in the case of Howard vs. the Earl of Shrewsbury. Where valuable consideration is paid for property, and there is no intent to defraud, the purchase is held bona fide. If we go up the stream of authorities to the fountain, we find in the thirteenth year of the reign of Queen Elizabeth, 1570, or over three hundred yeai’s ago, estates upon good consideration and bona fide, were held to be valid. See section VI. of the Act.

7. And the facts which negative the bona fides of the transaction are enumerated as notice or knowledge of “covin, fraud or collusion,” in the terms of the Act. The principles of this statute have crept into all the legislation and judicial expositions of the law since. Notice enters into the ingredients that may, in proper eases, apply to fraud, where the intrinsic unfairness of the transaction arising from inadequacy of price or misrepresentation, or suppression of facts known, or when.the evidence attending the sale is apparently inconsistent with honest purpose or fair dealing, or many other causes or cases that might be recited. Notice showing participation, connivance, covin, fraud or collusion, would properly go to the jury for their consideration — and this upon the settled and established principles of law found in all the books. But in all questions of good faith, adequacy of price, from first to last, is an unquestioned evidence of the bonafides. In some cases it is not sufficient, but in all cases it is regarded with the very highest consideration. When a party purchases and pays full price, it is not malus dolus as to creditors existing at the time, except the purchase is made to hinder or delay creditors, and the purchaser participates in the intent, or is in violation of some rule against preference to creditors, should the purchaser be also a creditor. And if inadequacy of consideration is not mala fides as to creditors generally, upon what principle does the fact that the debts are in judgment change the rule? The reason gathers strength applied to creditors who are divested of all rights to levy or collect their debts, but dwindles into evanescent diminution applied to those who are neither hindered nor delayed, and cannot be injured unless they voluntarily delay collecting their debts for over four years. All the reason and logic of the law illustrates the contrary.

To reverse the proposition. A party buys an estate from another who has large means to meet the judgment existing. He pays full price, goes into possession and improves it. The plaintiff in fi. fa. indulges the creditor by an entry every seven years. The lien continues. The creditor sees the defendant wasting his esta.te day by day; and, finally when it is all gone, he demands payment from the bona fide purchaser for valuable consideration. Would it not be fraud in the author of the proposition ? We have examined the various sections of the Code, the authorities, as far as we could in the short time allowed us, and after a full review and analysis of the principles applicable to this case, and with what seems conflicting in the opinion of my learned predecessor in 39th Georgia, I am clearly of opinion that the term bona fide in section 3525 of the Revised Code of this State, means one who, in the commission or participation of no fraud, pays a full price for property which he continuously and openly holds in possession for four years after the sale, and that his actual notice of an existing judgment against the vendor at the time of his purchase is not sufficient, per se, to charge him with fraud so as to render his title impotent for his protection, when he otherwise stands within the provisions of the law.

Judgment affirmed.