Opinion
No. 22073
Decided December 24, 1930.
Execution — Equitable interests in realty not subject to levy and sale — Section 11655, General Code.
Equitable interests in real estate are not subject to levy and sale upon execution under the provisions of Section 11655, General Code, as amended in 111 Ohio Laws, 366.
ERROR to the Court of Appeals of Stark county.
This action originated in the court of common pleas of Stark county as a suit in equity by judgment creditors to set aside a conveyance alleged to have been fraudulently made. It was submitted upon an agreed statement of facts, the pertinent portions of which are as follows:
Emma L. Lang, the owner in fee simple of the premises in question, executed a land contract for the sale thereof to Catherine E. Ross and Albert Ross, who, in turn, executed a land contract for the sale thereof to the defendant M. Jacobs, who was in possession of said premises on July 12, 1926, and thereafter. On that date the Fridley Company obtained a judgment against M. Jacobs in the sum of $204.45, issued an execution thereon, and caused a levy to be made on said promises on July 16, 1926. On October 20, 1926, Lang obtained a judgment against M. Jacobs in the sum of $405.60, and on November 12, 1926, caused an execution to be issued and levied on said real estate. On September 30, 1924, Catherine E. Ross and Albert Ross assigned to T.S. Culp their interest in the land contract from Emma L. Lang, and said Catherine E. Ross and Albert Ross also assigned to T.S. Culp their interest in the land contract theretofore made by them with M. Jacobs. On October 25, 1926, Lang executed and delivered a warranty deed to said premises to T.S. Culp, subject to the right of M. Jacobs under his land contract; and on November 20, 1926, said Culp executed and delivered a deed for said premises to Rae Jacobs, upon the request of her husband, M. Jacobs, and upon the same date Rae Jacobs and M. Jacobs executed and delivered to T.S. Culp their mortgage deed covering said premises in the sum of $4,398.27, which amount represented the balance due on the purchase price of said property, as evidenced by the land contract of sale of said property to M. Jacobs from Catherine and Albert Ross. Said mortgage was filed on December 30, 1926, and recorded January 18, 1927, in the record of mortgages of Stark county, Ohio.
The court found that at the time of the rendition of said judgments and the levies made thereon the defendant M. Jacobs was the owner of a vested legal interest in said real estate under and by virtue of said land contract, and that by reason thereof the judgments of Lang and the Fridley Company were valid liens upon the interest of M. Jacobs in said premises under and by virtue of said land contract; that T.S. Culp was the owner in fee simple of said premises subject to the land contract of M. Jacobs; that the subsequent conveyance of Culp to Rae Jacobs was fraudulent in so far as it attempted to and did convey the legal interest, and is subject to said judgment lien. The court further found that said liens were the first and best liens on the vested and legal interest of M. Jacobs in said premises in the proportion that the amount M. Jacobs had paid thereon bore to the amount he was obligated to pay under said contract as of November 20, 1926, and that the mortgage executed by Rae Jacobs to Culp is a first lien upon that portion of the premises and estate not covered by said judgment liens, and in no manner affected the interest of said judgment creditors. The entry in the court of common pleas further reads: "Upon computation and accounting had by and with the consent of the parties hereto, it is agreed, found and decreed that the vested legal estate of the said M. Jacobs, to which the liens of the judgment creditors attach, is 33 % of the net sale price of said premises, and the proportion thereof to which the mortgage lien of the said T.S. Culp and Mary A. Culp attach is 67% of the net sales price of said premises."
Upon proceeding in error the finding and judgment of the court of common pleas was affirmed. Thereafter, upon motion, the record was ordered certified to this court, and a petition in error was filed.
Mr. A.H. Elliott, for plaintiff in error.
Mr. Charles S. Weintraub and Mr. Harry Nusbaum, for defendants in error.
The issue of fraudulent transfer is not presented to this court, and as the case comes to us the questions of law involved are the same as they would have been had the conveyance of the legal title to the promises been made directly to the debtor instead of to his wife upon the debtor's request. The question thus presented is whether a judgment lien attaches to an equitable interest in the real estate of a judgment debtor. This involves the construction of Section 11655, General Code.
Prior to 1880, when the operation of an execution was by the terms of the statute (Swan Critchfield, page 1063, Section 420) limited to lands, tenements, goods, and chattels, it seemed entirely clear that only the legal title to property was subject to execution and levy, but subsequent to the change in the statute in 1880 (Section 3574, Revised Statutes of 1880) by the addition of the phrase, "including vested interests therein," following the words "lands and tenements," this court in the case of First National Bank of Cortland v. Logue, Trustee, 89 Ohio St. 288, 106 N.E. 21, L.R.A., 1915B, 340 held as follows: "The interest of a vendee in the possession of real estate under a contract of purchase, the legal title being in the vendor, is a vested interest within the meaning of that phrase as used in Section 11655, General Code."
Subsequent to the rendition of that decision the Legislature again amended Section 11655, General Code (111 Ohio Laws, 366), by insertion of the word "legal," so that the section now reads: "Lands and tenements, including vested legal interests therein, permanent leasehold estates renewable forever, and goods and chattels, not exempt by law, shall be subject to the payment of debts, and liable to be taken on execution and sold as hereinafter provided."
In view of this material alteration of the statute, the case Bank v. Logue, supra, can no longer be regarded as an authoritative decision upon the construction and effect of the provisions of the statute in question. We need not concern ourselves with the discussion of counsel wherein he questions the correctness of that decision.
The purpose of the legislative amendment enacted since that decision specifically to limit the interest in lands and tenements liable to be taken on execution to "vested legal interests therein" is clear and manifest. To hold that, notwithstanding that material amendment of the statute, equitable interests in lands and tenements were still liable to be taken on execution, would be to completely disregard the substantial amendment of the statute under consideration. That material change in the effect and operation of the law must be recognized. The Jacobs did not procure a legal title to the premises until satisfaction of the agreed consideration. That title was conveyed by deed, and simultaneously therewith a mortgage securing payment of the remainder of the debt was executed to Culp, which would be superior to the claim asserted by the judgment creditors. The method of reaching equitable interests and applying the same to the satisfaction of a judgment is provided by Section 11760 et seq., General Code.
Being of the opinion that under the provisions of Section 11655, General Code, as amended in 1925 (111 Ohio Laws, 366), and as it now exists, equitable interests in real estate cannot be levied upon and sold under execution, we hold that the Court of Appeals was in error in its judgment in that respect, and it is therefore reversed.
Judgment reversed.
MARSHALL, C.J., KINKADE, ROBINSON, JONES, DAY and ALLEN, JJ., concur.