Summary
In Mabee v. Mabee, 85 N.J.Eq. 353, 357, 96 A. 495, 497 (Ch. 1915), the court attributed the promulgation of the doctrine to Sir Francis Bacon in 1618, while he was Lord Keeper of the Great Seal.
Summary of this case from Chrysler Corp. v. Fedders Corp.Opinion
No. 39/159.
12-03-1915
MABEE v. MABEE et al.
Allen R. Shay, of Newton, for petitioner. Thomas M. Kays, of Newton, for attaching creditor. Henry C. Hunt, of Newark, for estate of John Mabee.
Bill between Carrie W. Mabee and John Mabee and others. On petition to distribute money in court Fund ordered paid to complainant.
Allen R. Shay, of Newton, for petitioner. Thomas M. Kays, of Newton, for attaching creditor. Henry C. Hunt, of Newark, for estate of John Mabee.
HOWELL, V. C. On December 4, 1914, Carrie W. Mabee, the complainant, brought suit in this court against John Mabee, her husband, and others, to recover a sum of money which she claimed was owing to her by him. His father, Edward Mabee, had recently died and left him a sum of money as a legacy, and the object of the bill was to reach that fund. The executor of Edward Mabee's will is a party to the suit.
On the filing of the bill an order was made requiring the defendant to show cause why an injunction should not be issued, according to the prayer of the bill, with an ad interim restraint, preventing the executor of the deceased parent from paying over the legacy due to the husband under the last will of his father, and also prohibiting the defendant John Mabee from selling, assigning, mortgaging, or transferring his legacy under his father's will. On the return day of this order there was a stipulation, signed by the solicitors of all the parties, whereby it was agreed that the restraining order theretofore issued in the cause should remain in full force until the final determination of the suit. The defendant John Mabee and Theodore E. Dennis, executor of Edward Mabee's will, answered. After the answers were filed, John Mabee died, and an order was made reviving the suit against Fred L. Mabee, administrator of his estate. The cause proceeded to a final hearing, was decided in favor of the complainant, and on June 1, 1915, a final decree was entered adjudging that the complainant recover from the defendant Fred L. Mabee, administrator of John Mabee, deceased, the sum of $5,735, with costs to be taxed, and that an execution issue according to the practice of the court, and that Theodore E. Dennis, executor of the will of Edward Mabee, upon passing his accounts through the orphans' court, and ascertaining the amount of money in his hands, pay that sum into this court to abide the further order of the court. In pursuance of that decree Mr. Dennis paid into this court the sum of $3,665.69.
On December 7, 1914, subpoena was issued on the original bill, service of which was acknowledged by Theodore E. Dennis, as executor of the will of Edward Mabee, deceased, as his solicitor pro se, and as to John Mabee the sheriff returned that he was not able to find him in his county, and that he was credibly informed and verily believed that the said John Mabee was out of this state, and that he resided in the city of Los Angeles in the state of California. On December 17, 1914, another subpoena was issued on the said bill, returnable on December 28, 1914, service of which was acknowledged on December 17, 1914, by Henry C. Hunt as solicitor for John Mabee. The answer of John Mabee was filed on February 5, 1915, on which day the clerk entered an appearance by John Mabee, by Henry C. Hunt, his solicitor. On January 13, 1915, after the filing of the bill and the issue of subpoena and the appearance by the defendant John Mabee, a writ of attachment was issued out of the Sussex county circuit court at the suit of Frank E. Coursen against John Mabee for $709.80, by virtue of which the sheriff of the county of Sussex on January 15, 1915, attached in the hands of the said Theodore E. Dennis, executor, etc., all the right and interest of John Mabee in the estate of the said Edward Mabee, deceased, given and bequeathed to him in and by the last will and testament of the said Edward Mabee, and caused the estate to be appraised and the writ and return thereof to be filed in the office of the clerk of the county of Sussex; but no further proceedings were ever taken thereon by the attaching creditor. The complainant now claims the whole of the fund in court, and Coursen, the attaching creditor, claims a sufficient portion of it to satisfy his attachment.
The question is raised in limine whether the court can distribute the fund in question on a petition filed in the original suit in view of the fact that the attaching creditor, Coursen, is not a party, and it is argued that on this account he has not had his day in court, and that any proceedings taken on the pending petition would be nugatory as to him. This contention, however, cannot prevail. The situation is this: This court has in its custody and possession a sum of money for distribution. If it is satisfied that all the necessary parties are before it, it may make such distribution among those whom it finds to be entitled to the fund, or portions of it, and I conceive that it makes no difference whether these parties are brought in by the bill and subpoena, or whether they come in in response to a petition.
The principal contention, however, is that which relates to the priorities of these two claims; the complainant claiming by virtue of her bill, subpoena, and appearance thereto as constituting a lis pendens, subject to which the attaching creditor must take, if he has obtained any right whatever. I pass by the point that no judgment has yet been entered in the attachment suit, and that therefore the rights of the parties have not been fixed at common law, and I likewise omit any discussion of the point whether the fund was liable to garnishment as a fund in custodia legis, and take up the question of priorities.
The decision of the question at issue depends upon the principles which govern the pendency of suits. If the complainant, by virtue of what took place at and immediately after the filing of her bill, created a lis pendens, it must be quite clear that the attaching creditor took subject thereto. The rule is laid down by Mr. Justice Depue in Haughwout v. Murphy, 22 N. J. Eq. 531, as follows:
"A suit in chancery, duly prosecuted in good faith, and followed by a decree, is constructive notice to every person who acquires from a defendant, pendente lite, an interest in the subject-matter of the litigation, of the legal and equitable rights of the complainant as charged in the bill and established by the decree. This effect of a successful litigation in subordinating the title of a purchaser pending a litigation to the rights of the complainant as established in the suit is not derived from legislation. It is the doctrine of courts of equity, of ancient origin, and rests, not upon the principles of thecourt with regard to notice, but on the ground that it is necessary to the administration of justice that the decision of the court in a suit should be binding, not only on the litigant parties, but also upon those who acquire title from them during the pendency of the suit. Such a purchaser need not be made a party, and will be bound by the decree which shall be made."
The rule has been followed in this court in Gray v. Case, 51 N. J. Eq. 426, 26 Atl. 805, in Turner v. Houpt, 53 N. J. Eq. at page 553, 33 Atl. 28, and reaffirmed by the Court of Errors and Appeals in the case of Wood v. Price, 79 N. J. Eq. 620, 81 Atl. 983, 38 L. R. A. (N. S.) 772, Ann. Cas. 1913a, 1210. It is also the doctrine of the courts of common law (Allen v. Morris, 34 N. J. Law, 159); and it is a rule of almost universal acceptance (Murray v. Ballou, 1 Johns. Ch. [N. Y.] 566; Murray v. Lylburn, 2 Johns. Ch. [N. X.] 441). It appears to have been promulgated by Sir Francis Bacon in 1618, while he was Lord Keeper of the Great Seal. His order is as follows:
"12. No decree bindeth any that cometh in bona fide, by conveyance from the defendant before the bill exhibited, and is made no party, neither by bill, nor order, but where he comes in pendente lite, and, while the suit is in full prosecution, and without any color of allowance or privity of the court, there regularly the decree bindeth; but, if there were any intermission of suit, or the court made acquainted with the conveyance, the court is to give order upon the special matter according to justice."
The attaching creditor is not in the position of a purchaser for value without notice. He derives all his rights, if any he has obtained, through John Mabee, and he stands exactly in John Mabee's shoes. His position is the same as if John Mabee had by some voluntary act of his own attempted to create a lien on this fund in favor of the attaching creditor, or had made or attempted to make an assignment of the fund, or some portion thereof. And if he had attempted any such step as that he could not, in the face of the authorities above cited, drive the complainant from her position or obtain a lien superior to hers.
It must be remembered that the complainant, not only created a lis pendens by her initial proceeding, but before the levy of the attachment obtained from the court an injunction order whose effect was to impound the whole fund in the hands and custody of Mr. Dennis, the administrator of Edward Mabee's estate, and that it remained so impounded pending the suit and down to the final decree. By the final decree Mr. Dennis was directed to pay the money into court, which he did, where it now is, so that months before the attaching creditor took his proceedings the fund in question was either under the control or in the actual possession of the court. The effect of this action is to create an equitable lien in favor of the complainant to the extent of the sum found due by the decree in her favor, and inasmuch as the decree is for a larger sum than the amount of the fund her lien must prevail over that attempted to be obtained by the attaching creditor, to the full extent of the fund.
It may be said that the doctrine of lis pendens does not apply to the case in hand, for the reason that the proceeding is brought solely for the recovery of a money judgment, and does not directly affect the title to or possession of property. Mr. Justice Lindley said in Wigram v. Buckley, [1894] C. A. 3 Ch. 494:
"Upon principle and authority, I am of opinion that the doctrine in question is inapplicable to personal property, other than chattel interests in land. The inconvenience of extending the rule to ordinary personal property is so extremely serious that it would, in my opinion, be very wrong to so extend it now for the first time, even if such extension could be justified by reasoning from well-established general propositions which might serve as premises for arriving at such a conclusion."
This, however strongly held in England, is probably not the rule in the United States. Neither can the remark apply to a case like the present, where there was an actual seizure of the property and a holding of it to answer the demands of the complainant.
I conclude, therefore, that the fund must be paid to the complainant.