Case ID: miss_18/html/0184-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Thachek.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John Parker vs. Robert Kelly et al.
    The vendor of land has a lien for the purchase-money, whether he makes a deed or gives bond for title; in the latter case the retention of title by the vendor is, in effect, the same thing with conveying the title and taking a security for the purchase-money by mortgage; and any assignment by the vendor, who has merely given bond to make title on payment of the purchase-money, of the notes given by the vendee for that purchase-money, will pass.to the, assignee all the rights of the vendor.
    And when the vendor, who has given a bond to make title on payment of the purchase-money, and' has received notes from his vendee for that purchase-money, payable at stipulated periods, assigns one of those notes, and sub- ' sequent to such assignment, makes an absolute deed to his vendee of the land, the lien of the assignee on the land, for the satisfaction of the notes he holds, will not be thereby lost; he may still, in equity, subject the land to the payment of the note.
    And where, after a vendor who had given a bond for title, and assigned one of the notes for the purchase-money, has also subsequently given his vendee a deed for the land, a judgment-creditor of the vendee, who has recovered his judgment since the deed was made to the vendee, will be postponed in his right to satisfaction of his judgment out of the land, to the equitable right of the assignee of the note for the purchase-money; the judgment will be a lien on the legal title of the vendee, subject to the equitable lien of the assignee, and when the latter is satisfied, the judgment will hold.
    A release by an assignor of his assignee’s claim, is a nullity.
    A court of equity has jurisdiction to enjoin a sale under execution at law, on the application of an equitable incumbrancer, who has a prior equitable lien, to the lien of the judgment; and when the court has taken cognizance of the matter, it will adjust all the rights of the parties.
    Where, therefore, a vendor had given a bond for title, and assigned one of the vendee’s notes for the purchase-money, and then made the vendee a deed; and afterwards a judgment had been rendered against the vendee, and the land was about to be sold under execution thereon; it was held, that a court of equity had jurisdiction at the suit of the assignee to enjoin the sale under the execution, and to adjust all the rights of the parties, by decreeing satisfaction out of the land; first to the assignee, and afterwards to the judgment creditor.
    A lien cannot be displaced but by some act of the party holding it, which shall postpone him to a subsequent claimant.
    On appeal from the decree of the superior court of chancery; Hon. Robert H. Buckner, chancellor.
    On the 20th day of February, 1840, James Kelly, William Kelly and Robert Kelly, partners under the firm of J. & W. Kelly1 & Co., and Needham Stevens and John Stevens filed their hill, in -which they allege that Needham Stevens, in 1836, sold to Robert E. Beatty about sixteen hundred acres ojf land lying in Panola county, for $25,000, and the lattem -without’security, for the payment of the purcl the 21st of August, 1838, all the purchase-mo^ but $7,000, Needham Stevens conveyed th^ -warranty in fee simple to Beatty, to enable! in the Union Bank to take stock; when this Beatty gave no new or other security for the puftSss^e-monet
    That one of the notes for the purchase-money for1p>00t),"'be-longed to Kelly & Co.; one for $5000 to John Stevens, and one for $3000 to Needham Stevens; Beatty was insolvent, and the land the complainants’ only security for the debt.
    That on the 23d of April, 1839, John Parker obtained a judgment against Beatty for the sum of $13,983.45, and had levied on the land.
    The bill prayed for an injunction against the sale under the execution, that it might be perpetuated and the land be subjected to sale to pay the claims held by complainants.
    The notes, and the record of the judgment obtained in February, 1840, in favor of Kelly & Co., on the note held by them, were filed with the bill. So, also, were the title-bond and deed to Beatty. The condition of the former was, (after reciting the sale of the land,) as follows: “When said Needham Stevens makes or causes to be madé a warrantee deed unto the said R. E. Beatty for said land, this bond will be null and void, otherwise to remain in full force and virtue.”
    On the 21st of April, 1841, William B. Pollard was ordered to be made a party complainant, and filed a supplemental bill, claiming to be a holder of one of the notes for the purchase-money, and insisting on his right to satisfaction of it out of the land.
    At the same time, Kelly & Co. filed an amended bill, setting up, that in May, 1839, they had obtained a judgment against Stevens on his indorsement of Beatty’s bond; that Beatty on the 4th of March, 1840, conveyed by deed the land in controversy to them, from a sense of justice to them; this deed, they insist, united with their equity, and the fact that their note has been reduced to judgment, gives them a prior lien to Parker. They state, also, that Parker’s judgment was founded on an indorsement of Beatty, made anterior to the deed from Stevens to Beatty.
    Parker’s answer admits, in substance, most of the allegations of the complainants, but denies that Needham Stevens owns any of the bonds of Beatty, and insists, that by his transfer of these bonds, and the execution of the deed to Beatty, he lost, and so have his assignees, all lien on the land, and is thus subject to his judgment.
    Kelly & Co., in July, 1842, on leave, filed an amended bill, in which they allege, that in December, 1837, the bond of Beatty was assigned to them by Stevens, who designed, by the assignment, to pass to them his equitable lien. That the deed to Beatty was given without their knowledge or subsequent sanction. That when Stevens made this deed, he had no intention to waive his vendor’s lien, but, on the contrary, expressly reserved it. The object of the deed was to enable Beatty to put the land in the Union Bank, raise money on it by mortgage, and thus pay off the notes for the purchase-money; and that Beatty wholly failed to get the stock, or raise the money, and they insist the lien was never relinquished.
    To this amendment, Parker replied, in substance, that he admitted none of its allegations, and called for proof; denied that the note assigned to Kelly & Co. was assigned in consideration of the lien on the land, or with a view to it, but alone on the credit of Beatty, who was then reputed wealthy; insists, that by the transfer to Kelly & Go. the vendor’s lien was lost, and was also extinguished by the deed to Beatty.
    Beatty’s deposition was taken. He proved that it was agreed between Stevens and himself, when the former gave him the deed to the land, that he should retain his lien for the purchase-money ; and the deed was executed upon the understanding, that this lien should continue until either personal security was given, or the money obtained from the bank; and was made to render Stevens’s claim more secure, not to weaken it; he did know Kelly & Go. when the deed was made.
    .He also testified, that the draft on which Parker’s debt was founded, was a forgery of his name by the drawer, and that he had no knowledge of, or part in its execution.
    J. T. Trezivant testified, that in December, 1837, Stevens, being in debt to Kelly & Co., transferred to the witness for them the note of Beatty, assuring him it would certainly be paid at maturity, as the land for which it was given was bound by it; the title was yet in him, and Beatty could get no deed until he had paid the purchase-money, and was besides rich.
    J. 0. Armstrong proved the same facts in substance.
    The depositions of other witnesses were taken, to prove that Stevens stated, after he made the deed to Beatty, that he regarded Beatty as perfectly good for the money, and looked. to him personally, and not to the land.
    On this state of pleading and proof, Parker moved to dissolve the injunction; the chancellor overruled the motion, and he appealed to this court.
    The cause was argued in this court at a former term, when the court delivered an opinion, affirming the decree of the chancellor. A reargument was applied for, and ordered at the present term of the court.
    
      George S. Merger, for appellant,
    insisted,
    1. That the law was settled, that a vendor’s lien should not prevail against his judgment creditors, or creditors by mortgage. Gann v. Chester, 5 Yerg. R. 205; Semple v. Bard, 7 Serg. & Rawle, 286; Bayley v. Greenleaf, 7 Wheat. 46 ; 4 Kent’s Comm. 151.
    2. Even if the trust passed with the note, the parol lien was not recorded, and is void as to creditors or purchasers without notice. How. & Hutch. 343, § 3, 5; 5 Yerg. 205; 7 Serg. & Rawle, 293; '4 Kent’s Comm. 162.
    3. A mere equitable-lien cannot be assigned; but even if the lien of Stevens were more, were a trust, it was yet but a mere security, a secret trust — giving no notice in itself, unrecorded; not capable of being discovered by the most diligent search; and therefore not operative as against those having no notice of it. Roberts v. ¡Salisbury, 3 Gill & John. 425 ; Johnson v. Caw-thorn^ 1 Dev. & Bat. Eq. Ca. 35; Harper v. Williams, lb. 379.
    
      Shelton, on same side.
    1. The vendor’s lien is lost when he makes a conveyance of the land, inconsistent with the retention of the lien ; a mortgage for bank stock was of that nature. 1 Mason, 218; 15 Yesey, 350 ; 7 Serg. & Rawle, 84; 4 Wheat. Rep. 285; Clowes v. Raw-lings, 9 S. & M. 127.
    2. On the facts in this case, Kelly & Co. had no lien. Mr. Shelton elaborated this point, and cited 6 How. (Mi.) Rep, 362; 4 S. &M. 294; 2 J. R. 272 ; 5 lb. 78; 5 How. (Mi.) Rep. 465 — 467 ; 3 lb. 321; 20 J. R. 16; 1 Saund. Rep. 320, n. 4, 320, n. a.; 1 Meigs’s Rep. 52 ; 5 Yerg. R. 205; lb. 295; 3 lb. 27.
    3. Admitting, Kelly & Co. had a vendor’s lien, it is postponed to the lien of Parker’s judgment; the latter is an express lien of record, the former implied, and will be postponed to the latter. 7 Wheat. R. 46; 7 Serg. & Rawle, 82; 1 Dev. & Bait. 35; lb. 379; H. & H. 343; 1 S. & M. 206.
    4. The injunction should, at least, be dissolved as to the excess of the value of the land above the amount of the judgment.
    
      William and William G. Thompson, and D. C. Glenn,, on the same side.
    
      
      William Yerger, for Stevens,
    made the following points, and discussed them at length.
    1. That Stevens had the right to enforce the vendor’s lien upon the land against Beatty. On this point he cited 2 Story’s Eq. 463, et seq.; Clower v. Rawlings, 9 S. & M. 127; 2 Story’s Eq. 470; 1 Bland, 523; 1 Paige, 30.
    2. That Parker occupied no better position than Beatty. He cited 9 Yesey, 96 - 99; 2 Yesey & Beames, 308; 1 Paige, 128; 1 Peere Wms. 278; 1 Paige, 129; 2 lb. 217; 4 lb. 9; 2 Story’s Eq. 481.
    
      L. Lea,
      
       for Kelly & Co., insisted on their right to subject the land to the payment of the note of Beatty held by them. He cited and commented on Mackreth v. Symmons, 15 Yes. 329; 1 Paige, 30; 4 Kent, 153; 1 Story’s Eq. 481; 5 Humph. 569; Tanner v. Hicks, 4 S. & M. 358 ; Sug. on Yen. 392 ; 9 Cow. 318; Upshaw v. Hargrove, 6 S. & M. 286; Burnett v. Dunlap, Op. Book, 29; S. C. 5 S. & M. 702; Prec. in Ch. 478; 1 Peere Wms. 278; 4 Hen. & M. 143; Moretón v. Harrison, 1 Bland, 498; Briggs v. Hill, 6 How. (Mi.) R. 362; Graham v. Me Campbell, Meigs, 52; 5 Humph. 489; Terry v. Woods, 6 S. & M. 139; Keirsted v. Avery, 4 Paige, 9; Duval v. Bibb, 4 Hen. & Mun. 113; Goodwin v. Anderson, 5 S. & M. 730 ; Conrad v. Atlantic Insurance Company, 1 Peters, 441; 2 Story’s Eq. 487 ; Sanford v. McLean, 3 Paige, 123; Hildreth v. Sands, 2 Johns. Ch. 50; 10 Peters, 175; Coutts v. Walker, 2 Leigh. 268; 2 Story’s Eq. 481, 596; 5 Humph. 26; Baird v. Kirttand, 8 Ohio, 22; Riddle v. Bryan, 5 Ohio, 55; Rutherford v. Green, 2 Iredell’s Eq. 121; Tomlinson v. Blackburn, lb. 509; Sanford v. McLean, 3 Paige, 123; 4 lb. 9; Sweat v. Henson, 5 Humph. 49.
    
      
      Watson and Walter, on the same side,
    replied to the arguments for appellant, and cited and commented on Dollahite v. Orne, 2 S. & M. 590; Terry v. Woods, 6 lb. 139; Money v. Dorsey, 7 lb. 15; Goodwin v. Anderson, 5 lb. 730; Walker v. Gilbert, 7 lb. 456; lb. 630-650; 8 Ib.742; English v. Foote, lb. 451; Glower v. Rawlings, 9 lb. 127; Duval v. Bibb, 4 Hen. 6 Mun. 113; Dunlap v. Burnett, 5 S. & M. 702; Upshaw v. Hargrove, 6 lb. 292; Dixon and Starkie v. Lacoste, 1 lb. 70; 7 lb. 586; 7 How. (Mi.) R. 375; Walk. 389; Gillespie v. Bradford, 7 Yerg. 170, and the other authorities cited by appellant.
    
      
       Mr. Lea submitted with his argument a brief of the Hon. A. M. Clayton, filed before the chancellor, in behalf of Kelly & Co. It is, in the opinion of the reporter, of such ability and research, on the subject of the vendor’s lien, as to entitle it to preservation, in its original shape. He is unwilling to abridge or compress it; and has accordingly published it entire, in an Appendix to this volume, where it will be found. H. *
    
   Mr. Justice Thachek.

delivered the opinion of the court.

This is an appeal from a decree of the superior court of chancery, disallowing a motion to dissolve an injunction to stay an execution at law.

In 1836, Stevens sold to Beatly 1600 acres of land for $25,000. Upon this contract of sale, Beatty paid, in cash, $7000, and gave his four notes for the remainder of the purchase-money, and Stevens executed to Beatty a bond to make title, in a penalty of $50,000. The title was not to be made until the payment of the purchase-money. In 1837, Stevens assigned to Kelly & Co. one. of the above four notes, amounting to $5000. In 1838, Stevens conveyed the land absolutely to Beatty. In 1839, Parker recovered a judgment against Beatty for $13,983, and levied his execution upon the land in question, and the bill in this case was filed by Kelly & Co. to enjoin Parker from selling the land under his execution. A supplemental bill was likewise filed by Pollard, claiming to be an assignee of another of the notes, but it does not appear in evidence that this assignment was made anterior to the conveyance from Stevens to Beatty. It is shown, also, that in 1840, Beatty executed a conveyance of the land to Kelly & Co.

The questions to be decided are, whether Stevens had a lien upon the land for the purchase-money, and one prior to the lien of Parker, the judgment creditor of Beatty; and, whether the assignment of the note by Stevens to Kelly & Co., before his execution of the deed of conveyance to Beatty, was a transfer of the lien to them, and thereby prevented the sale of the land by Parker, under his execution.

The leading principle governing a vendor’s lien has been recognized in the court in accordance with the settled doctrine upon that subject: The general rule is, that the vendor has a lien for the purchase-money. 15 Ves. 329; 5 Monr. 299; 7 Wheat. 49; 5 Humph. 569; 2 Green. Ch. (N. J.) 397. In Tanner v. Hicks et al. 4 S. & M. 300, it is laid down that the retention of title by the vendor upon a sale, is in effect the same thing with conveying the title and taking a security by mortgage; and, that the assignment of the debt due for the purchase-money invests the assignee with all the rights of the vendor. The same principle was reiterated in Terry et al. v. Woods et al. 6 S. & M. 149. Under these decisions, therefore, there can be no question either as to the efficacy or priority of Stevens’s lien upon the land, or of his right to transfer his lien in its full force by an assignment of the debt due for the purchase-money, or any portion of it, at any period before the date of his conveyance in fee to Beatty.

The remaining, and indeed real inquiry in the case is, whether the fact that Stevens made the conveyance of the lands to Beatty, but after his assignment of Beatty’s note to Kelly & Co., affected the lien already there vested by law in Kelly & Co.

It is a universal rule that a lien cannot be displaced but by some act of the party holding it, which shall postpone him, in a court of law or equity, to a subsequent claimant. It is clearly settled that any release by an assignor of his assignee’s claims, is a nullity. 9 Cow. 34; 3 Johns. 426. As has been seen, Kelly & Co., substituted for and holding the original attitude of Stevens, were, in point of law, mortgagees of the land, and it inevitably follows that their interests were no longer in the power of Stevens, nor could they become affected by any act of his. The conveyance by Stevens to Beatty passed an estate incumbered already by Beatty himself, and it was not within the capacity of Stevens to both receive the amount of Beatty’s obligation to him upon the contract, and subsequently release Beatty from that obligation to him, at a time 'when the power to control it had passed out of his hands. Kelly & Co. had a prior equity, which must be protected on the authority of the case of Tanner v. Hicks, 4 S. & M. 294. But Parker recovered a judgment against Beatty, whilst the legal title was in Beatty. Parker’s judgment is therefore a lien on the legal estate, subject to Kelly & Co.’s equity, and he is of course entitled to the residue in preference to Stevens, if any interest remains in him, after Kelly & Co. are satisfied in the amount of their equity. As the matter is in equity, the rights of the parties can there be adjusted.

The decree of the chancellor is therefore affirmed, and the cause remanded for further proceedings.

Mr. Justice Clayton having been of counsel below, gave no opinion.