Case ID: ala_117/html/0538-01.html
Source: Caselaw Access Project
Author: {"author": "BBICKELL, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Fields v. Clayton.
    
      Bill in Equity for the Rescission of Contract for the Purchase ■ of Land.
    
    1. Rescission of contract on account of defect in title; when equity will not intervene. — Where a purchaser of land enters into possession under a contract executed by the conveyance to him with covenants of warranty, if fraud be not imputed to the vendor and he is not insolvent, or there is not some other independent equity, such purchaser is protected by the covenants of warranty, and a court of equity will not intervene and decree a rescission of the contract of purchase, even though the vendor may not have title.
    2. Vendor and, purchaser; failure of vendor to correct misdescription in deed a breach of covenants of warrantxj. — Where, upon the sale of land, the vendor executes a conveyance to the purchaser containing covenants of warranty, and the purchaser goes into possesison, but the parcel of land purchased was incorrectly described in the conveyance, the refusal or neglect of vendor, on request of the purchaser, to correct the imperfect description of the land, constitutes a breach of the covenants of warranty, entitling the purchaser to resort to a court of equity for a reformation of the conveyance; but being protected by the covenants of warranty, the purchaser can not maintain a bill of equity to have the contract of purchase rescinded on account of the delinquency of the vendor; the mere breach of the covenants of warranty not being a ground for rescission.
    3. Same ; mortgage to secure deferred payment-, conveyance by mortgagee after default does not operate as a rescission of contract of purchase. Where, upon the sale of land the vendor executes a conveyance containing covenants of waxvanty, and the purchaser contempox-aneously executes a mortgage on said land to secure the payment of the several promissory notes given for the purchase price, if, after default being made in the payment of the notes, as they, severally mature, the mortgagee vendor sells and conveys the land to a third person, the conveyance reciting “This land is subject to redemption by” the mortgagor, and the latter surrenders possession to the grantee, such conveyance does not operate as a rescission o’f the contract, nor can it be regarded as an election by the vendor to accept the proposition of the mortgagor, who was the original purchaser, to surrender possession and rescind the contract upon the delivery and cancellation of the mortgage and notes; the acceptance of such proposition being negatived by the recital in the conveyance to the subsequent vendee, that the land was subject to redemption by the mortgagor; and such subsequent sale does not give the original purchaser an independent equity to have his contract oí purchase rescinded.
    Appeal from the Chancery Court of Blount.
    Heard before the Hon. Thomas Cobbs.
    The facts in the case are sufficiently stated in the opinion.
    Emery C. Hall, for appellants.
    The bill presents no case for the interference of a court of equity. Before a court of equity will decree a rescission on account of error or mistake, that error or mistake must be of such character as to go to the very foundation and merits of the agreement — it must not only exist upon paper, as in this case, but it must exist in fact. Where a sale of lands has been executed by a conveyance with covenants of warranty, a court of chancery will not rescined the contract on account of the mere defect of title, except in a case of fraud, but will leave the purchaser to his remedy at law upon the covenants in his deed. — Wood-ruff v. Bunco, 9 Paige 443 ; Lanier v. Hill, 25 Ala. 554; Tobin v. Bell, 61 Ala. 125 ; Griel v. Lomax, 86 Ala. 132 ; Outturn v. Bank, 4 Ala. 24.
    ' When land is sold and conveyed with express covenants of warranty as to title, as in this case, equity is without power to grant relief on account of a defect in title, unless the vendor is insovent. — Parker v'. Parker, 93 Ala. 80 ; Meeks v. Garner, 93 Ala. 17 ; Spratt v. Wilson, 94 Ala. 608-. It is the duty of the purchaser of land in this State, to prepare and tender to the vendor the conveyance to be executed to the vendee. — Chapman v. Lee, 55 Ala. 616.
    Inzer & Ward, contra.
    
   BBICKELL, C. J.

The bill was filed by the appellee, and the material allegations are, that on the 17th day of November, 1894, he purchased of the appellant, a described parcel of land, at and for the price of two hundred and fifty dollars, payable in four instalments of sixty-two and 50-100 dollars each, for which he gave several promissoi’y notes maturing at different times. The appellant executed a conveyance to the appellee, having and containing covenants of warranty, and the appellee, contemporaneously executed a mortgage to secure the payment of said promissory notes as they severally and respeptively became due and payable. The appellee under the conveyance entered into possession and made valuable improvements, continuing in possession until some time in October, 1896. The parcel of land was incorrectly described in the conveyance and in the mortgage, and while in possession, the appellee often requested the appellant to make a conveyance of said land by a proper description, with which request he failed and refused to comply. That the appellee óffered to surrender the land to the appellant, if he would surrender the notes and mortgage. On the 16th November, 1896, the appellant sold and conveyed the land (excepting a small part thereof) to one Mann, to whom the appellee surrendered possession, and who was in possession at the filing of the bill, the conveyance reciting, ‘ ‘This land is subject to redemption by A. J. Clayton.” The appellant purchased the land of one Mary A. Tidmore, and at the time of the sale and conveyance to the appellee, he had not obtained a conveyance from her. On the 6th December, 1895, the appellant accepted a conveyance from said Mary A. which did not include the small part excepted from the conveyance to Mann, and some time in 1895, she made a conveyance thereof to a person whose name is .not stated, and who is averred to have been in the actual possession at the filing of the bill. The appellant had obtained judgments on two of the promissory notes falling due before the filing of the'bill. The prayer is for a rescission of the contract of purchase, an account of the value of the improvements made on the land, and of the rents while appellee was in possession, the cancellation of the mortgage and of the- outstanding notes given for the purchase money, the vacation of the judgments obtained on two of the notes, and for general relief. The' appellant moved a dismissal of the bill for want of equity, and demurred assigning several causes. The motion and demurrer were overruled, and from the decree overruling them the appeal is taken.

The principle governing a court of equity in decreeing rescission of contracts relating to the sale and conveyance of land, are well defined and settled. If, as in this case, the purchaser enters into possession, under a contract executed by a 'conveyance with covenants of warranty, though the vendor may not have title, if fraud be not imputable to him, and he is not insolvent, or there is not some other independent equity, the purchaser is protected by the covenants of warranty, and the court Avill not intervene and decree a rescission of the contract of purchase. — Burkett v. Munford, 70 Ala. 423 ; Meeks v. Garner, 93 Ala. 17; Parker v. Parker, Ib. 80, and authorities cited.

• ■ Construing the allegations of the bill most favorably for the pleader (as they must be construed in the determination of a motion to dismiss for want of equity), there was no fraud, or misrepresentation, in whatever of negotiation may have preceded, or was coincident with the execution of the conveyance. Nor can the bill be taken as averring a want of title in the vendor. All that is averred is imperfection, error, or mistake in the description of the land as conveyed, the like .imperfection' or error existing in the conveyance through . which the vendor deducted title. Such imperfections ai'e not of infrequent occurrence in the conveyances of land— they do not impair or destroy title. They affect the conveyance, and may render it imperfect, inconclusive as a muninient or evidence of title, upon which legal remedies for the recovery of possession may be supported. — 2 Devlin on Deeds, § 1010. A court of equity, at the instance" of a proper party, will intervene and reform the conveyance, making it evidence of the title by a correct description of the land, if the parties will not voluntarily cure the imperfection. It was the duty of the appellant, on the request of the appellee, to have cured the imperfect description of the land. The imperfection embarrassed alienation, and was calculated to produce in the mind of the appellee, a sense of uneasiness and insecurity. The neglect o.f the appellant, was a breach of the covenants of warranty, entitling the appellee to resort to a court of equity for a reformation of the conveyance ; and whatever of reasonable expenses he^ may have incurred in perfecting the title, would have been recoverable of the appellant, upon the same principle, that a grantor is bound to. reimburse the grantee for removing a paramount title or incumbrance. — 3 Sedgwick on Damages, (8th ed.), § 979. Protected by the covenants of warranty, the appellee has no equity to insist that the delinquency of the appellant is cause of rescission ; a mere breach of the covenants of warranty is not cause of rescission .

The theory of a mortgage prevailing in this State, is, that as between mortgagor and mortgagee,it passes to the mortgagee the estate in the land. It is more than amere security for a debt; it passes the title, under which the mortgagee may take immediate possession, unless it appears by express stipulation, or necessary implication, that the mortgagor may remain in possession until default. After the law day, the legal estate is absolutely vested in the mortgagee, and the mortgagor has nothing left but an equity of redemption. A conveyance by the mortgagee will pass the legal title, though the debt be not assigned. But as against all the world, except the mortgagee and his assigns, the mortgagor is regarded as the owner, entitled to the possession. — 2 Jones Mort., § 18; Paulling v. Barron, 32 Ala. 9 ; Barker v. Bell, 37 Ala. 354 ; Knox v. Easton, 38 Ala. 345 ; Welsh v. Phillips, 54 Ala. 309 ; Toomer v. Randolph, 60 Ala. 357. At the time of the conveyance to Mann, the condition of the mortgage had been broken; it was broken by the default of the appellee in paying either of the promissory notes, payment of which the mortgage was intended to secure, two of which were past due, and had been reduced to judgments at law. It is, perhaps, a necessary implication that it was contemplated, the mortgagor should remain in undisturbed possession until there was default in the payment of the notes as they severally matured. But the default had occurred,' the right of the mortgagee had accrued, and without affecting the equity of redemption, all that remained to the mortgagor, the mortgagee could rightfully, sell and convey the legal estate, passing his right of entry.— Welsh v. Phillips, 54 Ala. 309, supra; 2 Wash. Real Prop., § 4, c. 16 ; 2 Jones on Mort., § 808. The conveyance to Mann recites on its face “This land is subject to redemption by A. J. Clayton.” And if it had not, as against the .appellee, it would have passed only the legal estate, not embarrassing the equity of redemption. The grantee, entering into possession under it, stands in the relation in which the grantor would have stood, if he had entered — a mortgagee in possession before foreclosure, holding possession as a trustee for the mortgagor, bound to preserve the premises from waste, and to apply the rents and profits to the payment of the mortgage debt. The conveyance was not intended, and can not operate, as a rescission of the contract of purchase — it was not in hostility to the equity of redemption, but in recognition of it. Nor can it be regarded as an election to accept the proposition of the appellee, to surrender possession and rescind upon the delivery and cancellation of the mortgage and notes. Acceptance of that proposition is negatived by the recital of the conveyance that the land was subject to redemption by the appellee — it would not have been subject to redemption, if there had been acceptance of the proposition.

In any view of the bill, construing the allegations most favorably to the appellee, we can not declare that it presents a case of equitable cognizance, and are constrained to the conclusion that the motion to dismiss should have been sustained.

The decree of the chancellor must be reversed, and' a decree rendered dismissing the bill for want of equity.

Reversed and rendered..