Bogaert v. Avery

In the continuing warfare between creditor and debtor this latest battle might be entitled the Case of the Botched-Up Execution Sale.

In 1959 the creditors, the Averys, obtained judgment against the debtors, Everett and Lucille Van Bogaert, for $7,800. Unable to collect their judgment, the Averys sought to reach the excess value of the Van Bogaerts’ homestead on Mary Ellen Avenue by levy of execution on the homestead and petition for court order of sale. (Civ. Code. §§ 1245-1256.) After appraisers had fixed the value of the homestead at $25,000, the superior court in July 1960 ordered the property sold under the execution at a minimum bid of $15,000. But because of an absence of qualified bidders the sheriff could not sell the property, and in October 1960 the execution sale went off calendar.

In December 1963 the Averys assigned their judgment to Robert Cardella, a collection agent who did business under the military nomenclature of Mark IV Agency. In a blitzkrieg of activity Mark IV Agency obtained a writ of execution in its own name, levied on the Mary Ellen Avenue homestead, and brought about an execution sale of the property in March 1964 to one William Lawson for $25. The property was not redeemed within one year, and in March 1965 the marshal deeded the property to Lawson. Six months later Lawson, through an intermediary, deeded the property to plaintiff Jeffrey Van Bogaert, son of Everett and Lucille Van Bogaert, the judgment debtors. In December 1965 Jeffrey recorded a grant deed to the property from Ms parents, and in the following month he filed the present suit against the Averys and others to quiet title to the property, basing Ms claim to title on the marshal’s deed.

Meanwhile the Averys had retrieved their judgment, still undiminished by collection, from Mark IV Agency. During

In January 1967 the trial court quieted title to the property in plaintiff Jeffrey, and all parties appear content with the decree except the Averys, the still unpaid judgment creditors, who have appealed.

The source of the Averys’ predicament lies in the fact that the collection performance of Mark IV Agency in no way lived up to the military precision implicitly promised in its name. The original blunder of Mark IV Agency appears to have been its failure to instruct the marshal to accept no bid for the property under $15,000, a blunder compounded by ■inactivity in response to a sale for $25, and further compounded by continuing inactivity during the year following the sale. The Van Bogaerts, or perhaps their new lawyer, John Guerin (whose alter ego corporation, after unsuccessfully trying to buy the Avery judgment for $500, acquired the property from Lawson for $1,000 and later conveyed to Jeffrey for a $6,000 trust deed), observing the creditor forces operating with inadequate communications and exposed flanks, quietly infiltrated the rear, and, after allowing suffi- • cient time to build up their strength, launched a counterattack in force against the creditor battalions. The Averys, having been caught in ambush, now ask the court to extricate them from their plight and rule that the battle did not rise to the dignity of real warfare but merely amounted to a tactical exercise in the course of military maneuvers. They argue that .the marshal’s sale was void and in contemplation of law never took place; that, consequently, their lien on the homestead resulting from the original levy of execution and court order of sale remains a valid lien on the property above the amount of the homestead exemption.

In quieting title in favor of Jeffrey the trial court relied on three propositions. First, the execution lien of the Averys under the homestead sections of the Civil Code expired in one year. Second, the execution sale was merely voidable and not void, or, if void, not void on its face. Third, the Averys were estopped from attacking the validity of an execution sale

The Averys’ claim is founded on the continuing validity of their execution lien, and for purposes of this case we will assume that their execution lien remained in effect to the time of the execution sale. (Lean v. Givens, 146 Cal. 739 [ 81 P. 128 , 106 Am.St.Rep. 79 ].) Necessarily, the court order authorizing a sale under the execution likewise remained in .effect. Under this assumption the real questions become whether the execution sale extinguished the Averys’ lien, and, if it did, whether the sale can be vacated in a collateral proceeding in order to reinstate the lien.

If the execution sale were wholly void, as the Averys claim, then Lawson acquired no title to the property, and the entry of a decree quieting title in Jeffrey was erroneous. But the cases which state that execution sales of homestead property are wholly void and convey no title to the purchaser involve execution sales conducted under general law and not sales ordered by the court under the homestead law. (Kendall v. Clark, 10 Cal. 17 [ 70 Am.Dec. 691 ]; Ackley v. Chamberlain 16 Cal. 181 [ 76 Am.Dec. 516 ]; Deffeliz v. Pico, 46 Cal. 289 .) The fact that a court will declare void an execution sale of ,a homestead conducted under general law does not require the court to make the same declaration about án execution sale of a homestead conducted under the homestead law, even one which has been conducted irregularly.

To evaluate the effect of noncompliance with the minimum bid provision of a homestead execution we first consider the extent in other respects to which the homestead execution procedure was followed. In the case at bench each of the required procedural steps in the statutory procedure for execution against a homestead had been taken. The judgment, the writ of execution, the levy of execution, the petition, for appointment of appraisers, and for execution against the homestead, the appointment of appraisers, the service of notice on the homestead claimant, the report of appraisers, and the court order directing sale under the execution, had all been accomplished. The irregularity occurred at the sale itself and consisted of the failure of the marshal to secure the minimum bid ordered by the court. Did the failure to obtain the proper bid in an otherwise fully authorized execution sale amount to

A sale under court order is sometimes referred to as a judicial sale and as such carries greater authority than a sale under final process. “A judicial sale under a valid, though erroneous, judgment, or a sale irregularly made, is not void, but is merely voidable, and is good until regularly set aside.” (29 Cal.Jur.2d, § 18, p. 465.) The distinction between an unauthorized sale, which is wholly void because the officer had no authority to sell, and an authorized but irregular sale, which is voidable because the selling officer did not conform to his authority, may be seen in Vigoureux v. Murphy, 54 Cal. 346 . In that case a judgment creditor levied execution against the defendant debtor’s homestead. The homestead consisted of four lots, and at the execution sale all of them were sold in one mass to the judgment creditor, who later sold them to plaintiff purchaser. When the purchaser sued for possession, defendant cross-complained that the sheriff who conducted the sale had not complied with his statutory duty to sell in separate parcels property which consisted of several known lots. The Supreme Court ruled in favor of the purchaser, declaring the sale not void but voidable and holding that the judgment debtor had not applied in sufficient time to vacate the sale. Similarly, in the present ease we find the execution sale not void, but merely voidable at the instance of an aggrieved party.

This brings us to our second question: may judgment creditors who instigated the execution sale qualify as aggrieved parties for the purpose of setting aside the sale in a collateral proceeding in order to revive their execution lien?

Here, the judgment creditors, having initiated the execution sale, were estopped to attack it after the period of redemption had passed. To allow a judgment creditor who

This is not to say that the judgment creditors in the present case could not have made a direct and timely attack on the validity of the execution sale. But they did nothing during the one-year period of redemption, and only attempted to assert their interests in a collateral proceeding after the interests of third parties had come into play. As the court said in Vigoureux v. Murphy, 54 Cal. 346 , 352, with respect to the judgment debtor’s cross-complaint to vacate the sale: “The sale then should be set aside if the application was made by the defendant to set it aside in a reasonable time after it was made. If the application had been made immediately on the return by the Sheriff, it should have been vacated, and perhaps such should have been the decision of the Court had an application been made by the judgment debtor within the period of redemption. But in the case under consideration, such application was not made until more than three years after the sale.’’ Under certain circumstances it might be possible for judgment creditors to vacate an execution sale'in-the

We conclude that a judgment creditor at whose behest an execution sale of homestead property has been held may not collaterally attack a completed sale on the ground that the officer conducting the sale failed to obtain the minimum bid specified in the court order. We express no opinion what the result would be of a collateral attack on the execution sale by a judgment creditor with an execution lien who bore no responsibility for the sale.

But while the Averys have lost the battle, they have not necessarily lost the war. Judgments may periodically be renewed. Who knows, Everett Van Bogaert may weary of his -leisure in Agua Purita and re-enter the produce business. Lucille Van Bogaert will begin to collect $25 a month from her son, starting in 1976. Finally, the Averys can change the target of their assault and train their guns on their erstwhile ally, Mark IV Agency. Under expanding concepts of action-ability the Averys may have a valid claim for damages for breach of implied contract, negligence, and malpractice against the collection agency which brought about the execution sale. (Merrill v. Buck, 58 Cal.2d 552 , 561-562 [ 25 Cal. Rptr. 456 , 375 P.2d 304 ]; Biakanja v. Irving, 49 Cal.2d 647 , 650 [ 320 P.2d 16 , 65 A.L.R.2d 1358 ]; Lucas v. Hamm, 56 Cal.2d 583 , 588 [ 15 Cal.Rptr. 821 , 364 P.2d 685 ]; Connor v. Great Western Sav. & Loan Assn., 69 Cal.2d 850 [ 73 Cal. Rptr. 369 , 447 P.2d 609 ].)

Judgment affirmed.

Roth, P. J., and Herndon, J., concurred.