Case ID: h-j_4/html/0522-01.html
Source: Caselaw Access Project
Author: {"author": "Martin, J, Chase, Ch. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Ghiselin & Worthington vs. Fergusson.
    w w atratee com-t^f chancery i0-l’e o" a'c'’sofi! thaat pái-tof it tó'ok his'bon’dfc? the payment of the his'surety! and it that the land5 wa? not to be conveyed money was paid, itoSunG,fforihe sum he had con-trustee for it; and m aocommodan-j fu’u unowiedge itad not been Say’JWA the"um fe-6tíeBim«tan5 received from Mm his ^m“a^imt at firs t «cd to be greatly more than sufficient to discharge all the purchases J A had made of the1 trustee. Upon the final-settle" ment of the affairs of A Ó, his estate proved insolvent, and the creditors being; put to a dividend, the sunv to be received by R G-on J A’s assignment, was not adequate to the payment of the purchase money due the trustee, who withheld, the conveyance from R G to whom he was ordered bv the chan-cellov to convey B on the whole purchase money being paid and sued R F as surety of J A on the bond before mentioned. A judgment was obtained against R F for a balance of the purchase money, which on his filing his bill he brought into chancery, and claimed to have the amount paid bj R G -who had purchased of J A with notice — Decreed, that the amount, so recovered against R F should be brought into court by R G by a limited time, to be paid to R F, or that the tract of land called B, oc as much as was necessary, snould'be sold to raise the said sum and the interest.
    The vendor of a real estate, without deed, has an equitable lieu on the land sold, for the payment of the purchase money, into whatever hands it may pass, with notice that the contract of sale has nor. been complied with by the vendee; and the purchaser of an equitab.e estate with notice, is liable to the same equity «md-is bound to do thatwhich the person he represents would be bound to do.
    When a purchaser of a trustee sells to another, he cannot place him in a more eligible situation, thau-he has himself. He cannot, by any act of his, plarce his surety tor the purchase money in a worse situation than he would have been in, if the purchaser had not so sold.
    A surety paying the debt of his principal, shall be considered to stand in the place of the créditos for any purpose to answer the ends of justice; and he is entitled to an assignment uf the bond of hist .principal that he may pursue his remedy against the principal. And'if the equitable estate in the land purchased oí the principal, and tot which the surety became answerable for the purchase money* ■was about to be sold for the payment of debts, the surety would so far represent the trustee who soul the land, »•. to have a decided preference over all the other creditors of the principal.. He would also-repr < cut him so as to obtain a reimbursement of a person purchasing from his principal, tor the money the surety has paid the trastee
    Appeal from the Court of Chancery. The bill states that *7. and C. Mistan, with other creditors of Jt. Conlee, deceased, filed their bill against his heirs for a sale of his estate for payment of his debts, and that a decree passed for such sale. That Worthington, one of the def¿ndants, (now one of the appellants;) was appointed trus-teeto make the sale. That the trustee sold the wholeof the real estate amounting to §7005. That J. and C. Mistan, ke¡nsr creditors of Cantee, J. Mistan purchased a large part of sard estate, viz. Brookfield, containing 400 acres, for the sum of §5,100. That Fergusson, the complainant, /now aDnellee,) became Mlstan’s security to the trustee, That soon after the sale, Mistan assigned to G/nselm (tjie ot|ier defendant and appellant.) his contract of pur-c|iase 0p Brookfield. That Mistan being in want of prevailed on Gmseun to advance him money on account of his purchase, and to take an assignment of his claim against tontee, to be applied, as far as it would go,' in payment for said land, which Ohiselin assented to, took the assignment of said claim, advanced money to Alistan. That it appeared by the a.uüitor’s report that Conten’s estate was insolvent, and that JlUstan was only entitled to a dividend, much less than the amount of his claim proved before the auditor. That Ghiselin paid to Mistan a considerable sum more than his-dividend, who lias retained the same in his hands, and has not paid the same to the trustee. That suit has been brought against complainant, as Allstan’s security, and judgment has been recovered for the balance of the purchase money due upon said sale. That if said balance is recovered from him, and the land conveyed to Ghiselin, he Ghiselin will have received credit for a considerable sum paid to Mistan in his own money, which ought to have been paid to the trustee, and which is a lieu on the land purchased. The bill prays that Ghiselin be decreed to pay such sum as may be due, after deducting ¿¡Hsian’s dividend, and such other dividends as he may have been au-thorised to receive, and such sums as he may have paid to the trustee, or that the land be sold to indemnify complainant as Jlllslan’s security. On petition of complainant, the money recovered against him was ordered to be paid into court, and an injunction issued to stay execution on the judgn ent recovered against him by the trustee. The answer of Ghiselin admits the decree for the sale ot the land; that he purchased from Alistan, and took an assignment of his claim; that he made sundry payment's to Alistan and that when he made the last payment» Allstan’s dividend was not finally ascertained. That when it was finally adjusted, the amount, added to the payments that had been made to the trustee, left a balance due forth c land he purchased from Alistan of 8448 22, with interest, as is set forth in the answer of the trustee, which sum of money, although paid by Ghiselin to Alistan, still ¡remains due to the trustee, as he informed Ghiselin,
    
    Kilty, Chancellor, (July Term 1816,) Decreed, that unless the defendant, Ghiselin, shall before the 23d of October next bring into court, to be paid to the complainant,, the sum of 8448 22, with interest from the Ifth of June 1811, and costs, the land in the proceedings mentioned shall be sold, &c. From this decree the defendants appealed to this court.
    The cause was argued before Chase, Ch., J. and Earle and Martin, J.
    
      Martin, (Attorney General,) and Stephen, for the Appellants,
    contended, 1. That the surety of Alistan cannot avail himself, on payment of the balance of the purchase money, of the equitable lien existing between vendor and vendee. 2. That ¿1listan ought to have been made a party, unless stated by the complainant to have been insolvent, because if he was able to reimburse his surety, there was no occasion to resort to the land in the hands of Ghisf^ l in.
    
    
      On the first point they referred to Duvall vs. Bibb, 4 Sen. & Munf, 113. Pollexfin vs. Moore, 3 Atk. 272; and Sugd. 358.
    
      Brewer, and Brewer, Jr. for the Appellee,
    cited 2 Madch. Chan. 105, 507. Taylor vs. Stibbert, 2 Ves. jr. 437. Freeland vs. Gantt and Childs, in the court of chancery. Ex parte Turner, 3 Ves, 243; and Latouche vs. Duns arty, 1 Sch. fy Lef. 162.
   Martin, J,

delivered the opinion' of the court. . The court has considered the arguments of the counsel in this case, and examined the record carefully. The case appears to be this, — W. G. D. Worthington, the trustee for selling the real estate of Alexander Conlee, deceased, sold that part of it called Brookfield to James Alistan for g5,100, and took the bond of the purchaser for the payment of the purchase money, with Bobert Fergusson his security; and it was understood that the land was not to be conveyed .•until the purchase money was paid. James Alistan soon after sold Brookfield to Doctor Beverdy Ghiselin for the sum he had contracted to pay the trustee for it; and to accommodate Alistan, Ghiselin, with a full knowledge that th<* trustee had not been satisfied, went on to pay James Alistan the sum he engaged to pay for the land, and received from him an assignment of his claim against Alexander Cantee's estate, which at first was supposed to be greatly more than sufficient to discharge all the purchases James Alistan had made of the trustee. When Ghtsclin made-the last payment to .James Alistan, whose circumstances were on the decline, he took from him a bond with security to indemnify him in the payment. Upon the final settlement of the affairs of Alexander Conlee, his estate proved insolvent, and the creditors being put to a dividend, the sum to be received by Doctor Ghiselin on James Alistaos assignment, was not adequate to the payment of the purchase money due the trustee, who withheld the conveyance from Ghiselin, to whom he was ordered by the chancellor to convey. Brookfield on the whole purchase fnoney being paid, and sued Bobert Fergusson, as security of James Alistan in the bond passed as aforesaid. A judgment wás obtained against Bobert Fergusson for a balance of the purchase money, which he brought into chancery, and claimed to have the amount paid by Doctor Ghiselin, who had purchased of James Alistan with notice. The chancellor decreed that the balance, (the sum of g448 2,2,} should be brought into court by Ghiselin, by a limited time, or that the tract called Brookfield, or as much as was -necessary, should be sold to raise this sum, and the interest; and whether the-chancellor was correct in this adjudication is the question for this court now to decide.

The vendor of a real estate, without deed, has unquestionably an equitable lien on the land sold, for the payment of the purchase money, into whatever hands it may pass, with notice that the contract of sale has not been complied with by the vendee; and the purchaser of an equitable estate with notice, is liable to the same equity, stands in place of and is bound to do, that which the person he represents would be bound to do. 2 Ves. Jun. 439. In the case under consideration Worthington, the trustee, has an equitable lien on Biookfield which is in the possession of Doctor Ghiselin by purchase of Alistan, and Ghiselin who represents Alistan is liable to the same equity, and is bound to do, at least as far as the vendor is concerned, whatever Alistan would have been bound to do if he had not sold to Ghiselin. But it is contended that Robert Fergusson is not to be considered in the place of Worthington, the trustee, to obtain redress of Doctor Ghiselin; and it is asserted that no authority can be produced.to support the position, that a person claiming under a vendee shall have the benefit of an equitable lien on the lands, in the hands of a purchaser from the vendee, although such purchaser be a purchaser with notice. Supposing that no express authority can be found to maintain this position, the inquiry may be made, is not Fergusson’s case within the reason of those cases that have been cited on the argument and acknowledged to be the law? If Doctor Ghiselin stands in the place of Alistan, and is liable to the same equity, he is bound to do whatever Alistan would have been bound to do, if he had retained the tract called Brookfield. As far as the trustee is concerned, Brookfield is incontrovertibly so bound; and it is not perceived that any additional hardship would be imposed on him, by subjecting him to payment of the claims of Fergusson, who by his payment to the trustee has placed himself in his situation. Doctor Ghiselin purchased with a full knowledge that the purchase money on Brookfield would be exacted of him by the trustee, and it was his folly to part from it to Alistan, and his indiscretion ought not to prejudice others.

It seems to the court it would be a correct position to state, that a man cannot sell more than he has, and that when Alistan sold to Doctor Ghiselin, with notice, he could not place him in a more eligible situation than he occupied himself. Besides it would be strange if Alistan, by any act of his, could place his own security in a worse situation than he would have been-in if the act had not been done.

. It has been admitted by the counsel for the appellants, that, if Brookfield had remained undisposed of in the hands of Alistan, and Fergusson had been compelled to pay the purchase money to the trustee, Fergusson would have a lien on the property to reimburse him the sum he had paid as security for Alistan. But it has been contended, the moment Alistan parted with his equitable interest to Ghi-selin, that this lien ceased, and Fergusson was without a remedy. If this doctrine is correct, Ghiselin might retain the possession of the land without paying one cent of the purchase money, (unless that payment had been enforced by Alistan,) and Fergusson, the security of Alistan, be compelled to pay the whole sum to the trustee, without in-But again, suppose Ghiselin, with a knowledge t'le transaction, and that' the purchase money had not been paid to the trustee, had thought proper to pay the w|10]e purchase money §5,100, to Alistan-, that Mistan had fraudulently applied it to his own purposes, and did not pay it over to the trustee, 'and'the trustee, by a suit on the bond, compelled Fergusson to pay the money to him, Ghise-lin would then remain the undisturbed possessor of the land, Mistan would retain the' §5100 paid to him by Ghiselin, and Fergusson, the innocent security, have to sustain the whole loss. Thus by the fraud of Mistan, and the indiscretion or connivance of Ghiselin, Fergusson would lose the benefit of that lien or' security on the land given to him by law, as an inducement to enter into the bond, ánd Mistan retain the §5100 as the fruits of his fraud and Injustice. A case too glaring to be countenanced by a ■court of equity.

It is admitted too, that for many purposes the security paying the debt of his principal shall be considered to stand in the place of the creditor, and if he.can be so placed for any one purpose to answer the ends of justice, the court cannot understand why he may not be so considered for every purpose where the same ends are in view. Robert Fergusson is entitled to ah assignment of the bond of his-pid ncipal at the hands of Worthington, the trustee, that he may pursue his remedy against Alistan and his estate. If the equitable estate in Brookfield yet remained in Mi-stan, and his heirs, and it was about to be sold for the payment of debts,it is conceded that Robert Fergusson would so far represent Worthington, the trustee, as to have a decided preference over all the other creditors of Mistan. ‘ Why then should he not represent him in the case before us to obtain a reimbursement óf Doctor Ghiselin for the money he has paid the trustee? It appears to the court to-be equitable and just that he should j and we do therefore entirely concur in the judgment of the chancellor, and are of opinion that his decree in this case be affirmed.

Chase, Ch. J.

I am satisfied, on considering all the circumstances attendant on this case, that Robert Fergusson the security for James Alistan, who purchased of Wor-thington, has no lien on the land called Brookfield purchased by Doctor Ghiselin. In general the lien is confined to the vendor and vendee, and those claiming under them, and cannot be extended in equity to a third person. James Mistan, the first purchaser of Brookfield from the trustee, could not obtain a conveyance from the trustee until the whole purchase money was paid, nor could Doctor Ghise-lin, his assignee. Doctor Ghiselin, on complying with bis contract with James Alistan, (and it is admitted he has paid the whole purchase money.) had a right to call on James Alistan, and his security, Robert Fergusson, to pay the trustee pursuant to their engagement. James Alistan lias transferred all his interest in Brookfield to Doctor Ghiselin, and has no lien on it. James Mistan, and his security, were bound to pay the trustee, and have done so. The security, by paying part of the money to the trustee, cannot stand ia the shoes or place of the trustee, nor could he acquire any lien on Brookfield by making such payment. The right of the security cannot be preferable to that of his principal. James Mlstun and his security entered into the bond to the trustee to secure the payment of the purchase money, and prior to the assignment made by James Mistan to Doctor Ghiselin, who knew there was sufficient security given to the trustee for payment of the purchase money before he took the assignment. Robert Fengusson, the security of Jumes Mistan, never had any interest in Brook-field, whereby a lien on it coukl be created. By becoming security he made himself responsible for the purchase mo- ■ ney, and for what he paid he has a claim on James Mistan, and his estate, for indemnification, but no lien on Brook-field.

f am of opinion, that the decree of the chancellor ought to be reversed, and a decree passed directing the trustee to execute a deed of conveyance to Doctor Ghiselin for Brookfield.

DECREE AFFIRMED.