Case ID: fla_17/html/0079-01.html
Source: Caselaw Access Project
Author: {"author": "The ChieF Justice", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

LaFayette Wooten, Appellant, vs. William Bellinger, Appellee.
    1. Affirmative relief cannot be decreed In favor of a defendant, (except in matters of account,) upon the facts stated in the answer. And when It appears that the bill cannot prevail against a defendant on account of his superior right, it is the duty of the epurt to dismiss the bill as to him, unless he shall die a cross-bill setting forth his rights with a proper prayer for relief as against all other parties.
    2. A vendor of land has not by virtue of his lien for unpaid purchase-money a lien upon the’ rents and profits. The equitable right of a mortgagee to charge upon the rents and profits depends upon the peculiar circumstances of the case. Such equitable charge is subordinate to any lawful lien upon the products existing at the time they are sought to be charged.
    'Appeal from the Circuit Court for Jefferson county.
    The facts of the case are stated in the opinion of the court.
    
      Pasco & Palmer for Appellant.
    It is well settled that no affirmative relief can be afforded to a defendant upon an answer. If he desires such relief it can generally be obtained upon .an original or cross-bill. Sand's Suit in Eq., Secs. 451-4=54; Story's Eq. PI., Sec. 398, (a); McConnell vs. Smith, 23 Ill., 611; Armstrong vs. Pierson, 5 Clark, (Iowa,) SI?; Mitford's Eq. PI., 65.
    In this cause the defendant Bellinger can have no basis for a .decree against the cotton until he has established a claim against Davis. Davis, so far as the pleadings are concerned, may owe him nothing. He can make no charge against his co-defendant that can be answered by Davis, no issues can be joined or tried, and where the whole case rests upon a question of indebtedness between two defendants, the rights of third parties ought not to- be determined adversely until proper issues have been joined and tried. In this cause the court has decreed the payment of money to Bellinger out of the proceeds of a quantity of cotton in its control raised by Davis, and upon which Wooten is decreed to have a lien before Bellinger has reduced his claim to a judgment. As Bellinger’s claim stands it is simply an open account, and if anything is due thereon the amount is still unliquidated, either by an agreement between the parties, the report of a master, or by a finding of the court.
    But if the court can look beyond this matter of practice, we can proceed to the questions which must ultimately he settled before this litigation can be terminated.
    The contract of purchase went into effect January 1, 1877, when Davis went into possession, and the court has already decreed that Wooten should have relief under his mortgage, not only against the land but also against the crops raised thereon, under the rule laid down in the case ,of Pasco vs..Gamble, already cited.
    The other defendant has no claim against the land itself, but sets up a prior or superior lien upon the crops, and the court is called upon to settle the relative rights, and equities of Wooten and the defendant Bellinger. ....
    Wooten is the acutal owner of the land in equity, and the cotton, until its severance, was his as pars soli. 2 Story's . Eq. Jur., §1220.
    Viewing him as a mortgagee, his mortgage covered the land and its products. Pasco vs. Gamble, 15 Pin., 562-568.
    As an equitable mortgagee his claim is entitled to the very highest consideration, for the indebtedness represented the purchase-money. 2 Story's Eq. Jur., §1209; 1 Hilliard on M'tges, 66; Willard on Heal Est., 114; Warren vs. Penn, 28 Barb., 333-334.
    Davis was allowed to go into possession of the land to enable him to meet his first payment to Wooten. It was his first duty in connection with the land, and until the discharge of the duty he had no right or interest in the property that he could sell or pledge to a third party, and he could only make the sale or pledge subject to Wooten's prior-rights and property in the premises.
    An examination of the mortgage given by Davis to Bel-linger shows that he only attempted to mortgage his interest in the crops, and not the crops themselves.
    Bellinger’s claim to priority seems to be based upon one or all of the following grounds:
    1st. That Wooten had no written and recorded lien upon the ero'ps themselves.
    2d. That Bellinger is prior in time.
    3d. That he has a preference under the statute on account of the nature, of his debt.
    Wooten's mortgage is equitable and needs no record. It depends upon the fact that he sold the land and retained the title, as a security. No money was paid by Davis and no notes were given. Bellinger virtually admits notice in his answer and testimony before making advances. Bradford vs. Marvin, 2 Pla., 463; Woods vs. Bailey, 3 Pla., 41; State of Florida vs. Anderson, 1 Otto, 676; Perry on Trusts, §231, et seq.
    This equitable mortgage dates back to the time of the contract of sale in January, 1877. Bellinger did not take the instrument he attempts to claim under till the following May, and did not attempt to record it till September 28, so that Wooten is prior in time, and therefore stronger in law unless other equities intervene. Unless, then, Bel-linger has a higher equity because of the nature of Davis' debt to him, Wooten's claim must be preferred.
    Let us examine the nature of Bellinger’s claim:
    1st. The consideration is ten dollars in hand paid to Davis.
    2d. Davis mortgages “all of his ' right, title, interest, claim and demand in his entire crop of cotton” on .the Mill place.
    3d. It is to secure the payment of all lawful claims held against Davis by Bellinger, whether as advances or otherwise.
    4. Bellinger does not promise any further advances.
    5. So far as anything appears in the instrument it is for a pre-existing debt.
    . 6v Bellinger has other security for a portion of his debt. Bellinger does not set up the statute as a defense, nor can he do so, the statute (Laws of Pla., Chapter 1739,) requires, before the creation of the lien, (1) “an instrument of writing consenting to said lien, (2) the recording of the same in the records of the Circuit Court of the county where given.” This instrument does not afford any internal evidence that it'is such a lien as the statute contemplated; $113.91 of the ■account bears date before the instrument was signed, May 5th, 1877, and $508.38 before it was recorded, September ■ 28, 1877. The latter date is the date of completion of the lien, and only $101.24 of the account was made after that date and the payment made by Davis of $326.34' is of a larger amount. Davis has also paid from the toll corn derived from Wooten's mill a considerable sum to Bellinger which should have been placed upon this account, and not upon Bellinger's medical account of a previous year, nor upon the indebtedness for the mule upon which Bellinger had a particular lien or mortgage for money advanced to pay ior it. The statute provides for a lien upon the products grotvn through the assistance of .the loan or advance and there is no proof here nor even an allegation in Bellinger's answer that the cotton in litigation was so grown. But it is in evidence that Davis had an, income all through the year from the toll com from the mill on the place to the extent 'of over six hundred bushels a year, surely enough to furnish a seven mule farm with meat.
    If Bellinger claims under a statutory lien, he must show that he has in all respects complied with the statute. Sanders vs. Pepoon, 4 Fla., 465; Weed vs. Stanley, 12 Fla., 166.
    In conclusion the appellant submits the following propositions as pertinent to this issue and deems them supported' and established by the authorities cited. Bellinger’s mortgage was in part at least given to secure an antecedent in-•debtedncss and to that extent he was affected by equities of Wooten even without notice of them. Perry on Trusts, sec. 239; Story on Sales, sec. 313'; Wells vs. Morrow, 38 Ala., 325*; Donald vs. Hewett, 33 Ala., 549; Gafford vs. Steans, 51 Ala., 434-443; Hallock vs. Smith, 3 Barb., m.
    
    Bellinger took his mortgage with full notice of Wooten’s equities, and therefore took subject to them. Jones vs. Zapham, 15 Kan., 540.
    The course marked out by the statute must be complied with and completed before the lien is created. Bain vs. Brooks, 46 Miss., 537; Stewart vs. Hollins, 47 Miss., 708; Curston vs. Gilmore, 3 (Richardson,) S. C., 46; Kelly vs. B’k of State of S. C., McMullan, 431; Dawson vs. Higgins, 50 Ala., 49; Bottomly vs. Grace Church, 2 Cal., 90 ; McLester vs. Somerville, 54 Ala. 670; Boswell vs. Carlisle, 55 Ala., 554-567.
    
      T. L. Clarice for Appellee.
    Complainant had only a vendor’s lien or equitable mortgage on the land. The cotton crop was gathered and removed from the premises before the bill was filed. The lien, if it ever existed, was lost when the crop was severed from the realty and removed. Though somewhat informal, Bellinger’s mortgage has all the essentials of a mortgage on personal property, and a statutory lien. It is certainly “an instrument of writing, signed, by Davis consenting to a lien upon the crops for the supplies furnished, and was duly recorded in the records of the Circüit Court, of the county where given.” The act of February 16, 1870, gives to the party making advances a statutory lien of .prior dignity to all other incumbrances saving and excepting a lien for labor upon all the products grown, &c. Whether viewed as a chattel mortgage or statutory lien, this paper certainly gave the appellee such a lien on the cotton crop as would attach to and follow it after it was removed from the premises.
    Á subsequent purchaser or incumbrancer for value without notice of a vendor’s lien is not affected by it. The testimony shows that appellant knew that appellee was ¡braking advances to Davis, and yet gave him -no notice of any lien or intention to claim a lien on the crop till late in the fall when the crop was about finished; that appellee searched the records of the county before agreeing to furnish the supplies and found no lien recorded.
    It further appears that Davis was unable to make the crop without the supplies furnished him by appellee; that Davis’ means and ability were known to appellant before he contracted to sell the land to Davis; that through the instrumentality of the supplies furnished by appellee Davis was enabled to make the crop and pay off the laborers employed by him, and thereby secured the entire cotton crop, as well his share as that of the laborers who made it, and even without any express lien. Appellee had an equity in this cotton crop removed from the premises superior to any equity or lien of appellant. There was no error in the court’s ruling that appellee’s lien was superior in dignity to any lien or, equity of appellant on the cotton in question.
    The Ibí, 2d, and 3d errors complained of may be considered together, they being simply to the effect “that the court erred in finding a definite amount due to appellee and giving him affirmative relief.”
    The court having all the parties before it could pass upon the rights of each in the property in question and do complete justice. (Story’s Bq. Jur., Yol. Yol. 1, sec. 457; lb., sec. 65; lb., sec. 71; Fonb. Eq. b. 6, Oh. 3, sec. 6.) Ap-pellee was brought into court by appellant. In his answer to appellant’s bill he shows his lien, gives an itemized statement of his account for supplies furnished, showing the balance still due him and prays that the cotton which was then in the custody of the court might be sold and the balance due him paid out of'the proceedings of such sale. The balance due him was not controverted or denied, but fully proven by the testimony., It was nowhere denied that the balance of the proceeds of the cotton after payment of appellee’s claim for supplies should in equity go to the appellant on his- claim. Now, after the court was satisfied of the superiority of appellee’s lien, what other decree could be rendered? How could the balance be ascertained but by finding the amount due to appellee , and decreeing a sale of the cotton and the payment of ap-f pellee’ claim first out of the proceeds? (Story’s Bq., Jur., Yol. 1, sec. 457.) This settled the rights of all parties and prevents a multiplicity of suits. There is no error in the decree appealed from.
   The ChieF Justice

delivered the opinion of the court.

The appellant, complainant, brought his bill as against defendant Davis, to foreclose a “lien” for unpaid purchase money of certain land sold by. him to Davis, and also’ to hold a crop of cotton raised on the land as subject to the same “lien” or charge, upon which cotton the defendant, Bellinger, holds a mortgage duly recorded to secure advances and supplies furnished by him to Davis to enable him to make the crop.

"Complainant 'was the owner of an equitable estate in the land and contracted to sell to Davis a legal title for three thousand dollars in three equal annual payments, dating from January 1, 1877, under which contract, (not reduced to 'writing until late in that year,)- Davis went into possession, made repairs and improvements and raised a crop of cotton.. He failed to make the first payment when due, and was proceeding to pay „ Bellinger from the avails of the cotton the money secured by the mortgage thereon when complainant filed his bill and liad a receiver appointed to take charge of the cotton and hold it until final order.

Tfie bill charges that Bellinger took his mortgage from Davis to secure advances, supplies and general indebtedness, “with full knowledge of complainant’s lien for purchase-money.”

Bellinger’s answer denies any notice or knowledge of any such lien, but says that in February, 1877, he was informed by Davis that there was no lien or incumbrance on the crops to be raised on the premises, and Davis proposed to give him a lien upon the crop to secure payment for ' advances and family and plantation supplies to be made by him during the year to enable Davis to carry on the place and make a crop, and Bellinger agreeing thereto commenced to make such advances and furnish supplies and continued to do so during the year. In May, Datfis executed to him a mortgage upon the crop, which mortgage was duly recorded in September sometime before the contract between complainant and Davis was reduced to writing, and was conditioned to secure Bellinger for advances and plantation supplies and any other indebtedness that might .be due him from Davis. That complainant knew- in the meantime that he, Bellinger, was furnishing Davis with the means of carrying on the place and of making and -gathering the crop, and yet never intimated that he liad or claimed any lien or incumbrance upon it. Bellinger sets out his account in detail against Davis for supplies, &c.,- and claims that there is due him over three hundred dollars which he claims is a superior lien by virtue of his mortgage and prays that the cotton be sold and he be paid, and for general relief, and that he be dismissed, &c.

The prayer of complainant’s bill is that his equitable lien upon the land for unpaid purchase money be enforced; that Davis be foreclosed of his equity of redemption «there-' -in; that the land hot being of sufficient value to pay the amount of purchase money, interest and taxes due and to become due, and Davis being alleged to be insolvent, com•plainant will not be able to realize enough by .a sale of the land, therefore prays that the crops and products of the land, and particularly the cotton, be subjected to its payment. A receiver and an injunction were also prayed to prevent the application of the cotton or its proceeds to the satisfaction of Bellinger’s mortgage.

Testimony was taken and on Oct. 5,1878, the court decreed that Davis pay the first installment of $1000 and interest from January 1, 1877, on or before October 15, 1878; that Davis and others claiming under him be foreclosed of all equity of redemption in the “mortgaged premises,” and in case of default in such payment the land be sold and the proceeds applied to the payment of the “indebtedness;” that the master take into his charge all the crops of every description raised on the land and hold the same subject to the order of the court; that the cotton raised on the place during 1877 be taken charge of by the receiver and sold, and out of the proceeds pay the defendant Bellinger the balanece of his claim against Davis amounting to $324.78, and if a balance of the proceeds remains, it be paid over to complainant upon his claim.

"From this decree complainant-, appeals and seeks a reversal thereof so far as it decrees that Bellinger has a lien upon the cotton, by virtue of his mortgage, for supplies and advances to Davis, superior to 1 complainant’s lien thereon on account of the unpaid purchase moiiey for the land sold; that no judgment should have been given’in favor of Beb* linger upon his answer except a dismissal as to'him; and that the decree should have been in favor of complainant and against Bellinger as to the crop of cotton.

Two questions are presented here*

First, Whether this decree in favor of one of the defend}ants against his co-defendant and against the complainant, upon a simple answer (setting up a mortgage lien upon the .cotton in controversy, which he claims is superior to the lien of the complainant for purchase money,.) can be sustained; and, second, whether the complainant.is entitled, upon the whole case, to a decree against the defendant Bel1 linger, deferring the lien of th$ mortgage of .the latter to .the lien claimed by complainant upon the crops, growing .out of his lien upon the land for the purchase money.

I. As to the -first of these propositions, it seems to be the settled practice that affirmative relief must be sought by.a defendant either by a cross bill or by an independent suit, and can never (except in case of bills for an account when both parties are deemed actors,) be granted upon the facts • stated in the answer. Story’s Eq. Pl. 8th Ed., section 398, a, 522; McConnel vs. Smith, 23 Ill., 611; Armstrong vs. Pierson, 5 Clarke (Iowa,) 317; Wiseman vs. Smith, 6 Jones Eq., 124; Adams Eq. 6 Am. Ed., 402-403 and notes.

This rule is founded -upon sound principles, for a defendant or each of several defendants is called upon by the complainant to answer the allegations of the bill only, and if, under the guise of an answer, he may set up not only matters of defense to the bill, but also affirmative demands of relief as against the complainant, and, in addition, affirma- fcive claims against other defendants which they háve no means or opportunity to defend against under the issues possible to be made upon the bill, it would often result in . the confiscation of rights and property without due process of law and involve parties and suits in confusion. The affirmative relief given by the decree in this case could not possibly have been granted under any issue upon the facts stated in the bill. The priority of liens may well have been involved,' but the extent of the claim of the defendant Bellinger as against his co-defendant was not pertinent to any legitimate issue in the case under the complainant’s bill.

In Mitford’s Eq. Pl., 6th A. Ed., 100/it is said: “Upon hearing a cause it sometimes appears that the suit already instituted is insufficient to bring before the court all matters necessary to enable it to decide upon the rights of all the parties. This most commonly happens where persons in opposite interests are co-defendants, so that the court cannot determine their opposite interests upon the bill already filed, and the determination of their interests is yet necessary to a complete decree upon the subject matter of the suit. In such a case, if upon hearing the cause the difficulty appears, and a cross bill has not been exhibited to remove the difficulty, the court will direct a bill to be filed, in order to bring all the rights of all the parties fully and properly for its decision, and will reserve the directions or declarations which it may be necessary to give or make touching the matters not fully in litigation by the former bill, until this new bill is brought to a hearing.” 3 Oh. Eep., 19.

If herefore it was found by the court that, upon the 'pleadings and proofs in the case, the complainant was entitled to relief as against the defendant Davis, and that Bel-linger had a lien superior to that of the complainant, so that the latter was not entitled to a decree as against-the rights of Bellinger, the court should have dismissed the bill as to Bellinger unless within a proper time he filed his cross bill with a prayer of such relief as he might be enti-i tied to, and to the end that hfs claims might be fully ascertained and enforced as against all other parties.

II. Has the complainant such an equitable lien or “charge” upon the crops by yirtue of his equitable right to charge the land for the purchase money due upon the land as to give him a preference over a subsequent bona fide mortgage creditor with or without notice of the lien upon the land?

The rule of the civil law that a vendor of land has an equitable “lien” or a right which he may erect into a lien for the unpaid -purchase money, has been recognised by the court of chancery in England from a very early day. It ha* been .adopted also in a large majority of the States, though in some of them with considerable qualifications; and in some of ■ them it is repudiated, generally on the ground that it is founded in a secret trust, not entitled to favor in equity and contrary to the policy of the registration acts. •

The “vendor’s lien” for purchase money has, however, been expressly recognized in this State in Bradford vs. Marvin, (2 Fla., 463,) and in Woods vs. Bailey, (3 Fla., 41.) In the present case, however, the complainant does not rely solely upon the vendor’s lien as an equitable charge, because he has not conveyed the title to defendant Davis. Indeed neither party has the legal title, the complainant having only an equitable estate which he asserts could be readily, converted into a legal title. The absence of a legal title," however, is not an objection to the enforcement of the rem~. edy sought by this bill. In one of the early leading cases, Mackreth vs. Symmons, 15 Vesey, 329, Lord Eldon sustained a" bill’ where neither party had the legal estate. Here is an unexecuted contract of sale and the vendor may file a bill for a specific performance and then have the land sold for the satisfaction of the purchase money. (Clark vs. Hall, 7 Paige, 382; Brush et al. vs. Kinsley, 14 Ohio, 20.) This is the purpose of the present bill so far as the land is concerned.

The vendor’s lien is regarded by some of the courts as in the nature of an equitable mortgage, inherent in the contract of sale and qualifying the ownership of the vendee, (2 Rob. Va., 404,) and by others it has been treated as a trust, incident, uniformly and necessarily, in equity, to all conveyances where the purchase-money is not paid. (3 Maryland Ch., 488; 1 Bland, 491-525.) In many States it is denied that this lien is either an equitable mortgage or a trust, and the editor of leading cases in equity in notes to Mackreth vs. Symmons, remarks that it seems to be an original- and natural equity that the creditor whose debt was the consideration of the land should, by virtue of that consideration, be allowed to charge upon the land upon failure of the personal assets. It is not regarded as a lien until a bill has been filed to assert it, when it becomes a specific lien, but this equity, though prevailing against the vendee and all claiming through him, is subordinate to the rights of subsequent lien creditors with or without notice. (L. C. in Eq., 4 Am. Ed., 600-502.) This doctrine is sustained by Mr. Justice Story in Gilman vs. Brown, 1 Mason, 192.

The rule in this State, however, has been announced to this effect, that a vendor has a lien for unpaid purchase-money of roal estate, (somewhat like unto that of an unrecorded mortgage,) “subject to be defeated by the intervention of creditors or purchasers without notice,” or is waived by taking other security. (2 Fla., 473; 3 Fla., 41.)

The extent and effect of a vendor’s lien, however, is not necessarily involved in the present case, except so far as to sustain the decree against the land and to determine whether this lien attaches to the products. The complainant insists that his position is that of a mortgagee, and he assumes in his argument that this is a proceeding to foreclose a mortgage, and that as a mortgagee he has a lien not only upon the land but upon the rents, issues and profits. He cites an opinion of this court (Pasco vs. Gamble and Poole, 15 Fla., 562,) and claims that it establishes the doctrine jbhat a mortgage is in equity a charge upon the products of the land as well as upon the land itself, and his deduction is that a mortgage upon the land is a mortgage upon the products. This is an erroneous view of the rule. A mortgage is a legal and equitable lien upon the land, but it is neither a legal nor equitable lien upon the profiits of the land.

This charge upon the produce springs out of the peculiar circumstances of the case and is not per se an incumbrance upon the crops, but the enforcement by the court of conscience of an equitable principle. As was said in Pasco vs. Gamble, “equity makes the mortgage, as between mortgagor and mortgagee a charge upon the rents and profits whenever the mortgagee is insolvent and the security is inadequate and especially is it the duty of the purchaser in possession to keep down the interest.” In this aspect, it is said by some of the authorities, “the land with all its. produce” is regarded as a security for~the mortgage debt, as between the mortgagor and the mortgagee, and where the security of the land is hazardous or clearly insufficient, a receiver may be appointed for the purpose of subjecting the rents and profits of the mortgaged land, thus charging the produce with an equity, though up to the time of the order of sequestration there was no lien upon it.

It will thus be seen that the rule indicated in Pasco vs. Gamble was not -that a mortgage upon the land covered also the crops and produce, but that under peculiar circumstances equity would charge the crops,and profits. Yet, • .though the products may be subjected, or charged in equity . with unpaid interest, taxes, &c., they cannot be &c., to be encumbered so as to give a preference to the mortgagee or vendor claiming a lien upon the land as against another creditor who may obtain an express lien upon the crops/ under the statute, or by chattel mortgage or execution. (Gilman vs. Brown, 1 Mason, 221; 1 Leading Cases in Equity, 4 Am. from 4th London Ed., Tit. “Vendor’s Lien,” 496-502.)

The question here is confined to the status of the crops grown upon the land. We have cited and alluded to some authorities upon the question of the effect of a mortgagee’s -and of a vendor’s lien, only to illustrate the character of the claim and its effect upon the rents and profits.

The mortgage given by the defendant Davis to Bellinger covered the crop of cotton in question and was executed, acknowledged and recorded long before the filing of complainant’s bill. Whether viewed as an ordinary mortgage to secure supplies and advances and to secure other indebtedness, or as a statutory lien created under the act of 1870, (Ch. 1739,) to secure advances, can make no difference here. If the defendant Bellinger acquired the first lien upon the crop, he may enforce it, by appropriate proceedings, as a prior incumbrance. The fact that some portion of the advances were made by Bellinger after the filing of the bill is not important, so far as such advances and supplies were furnished in pursuance of the terms of the mortgage and therefore secured by it.

The result of our view of this case is that the decree, so far as it affects the defendant Bellinger, must be reversed and set aside and the cause remanded with directions that the bill be dismissed as to Bellinger, unless within a certain time to be named by the order of the Circuit Court, he shall file his cross-bill setting up his rights as against the complainant and his co-defendant Davis, with the proper prayer for relief, and it is further ordered that the defend- . ant Bellinger pay the costs incurred by the complainant in this court, including the costs of the appeal.