Case ID: miss_15/html/0015-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Clayton", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

James Money vs. Washington Dorsey et al.
    The interest of the vendor in land who has given a bond for title, on payment of the purchase-money, and who has received a portion of the purchase-money from the vendee, is not subject to seizure and sale under execution at law, at the suit of a judgment-creditor, who has obtained his judgment since the date of the title bond and the payment of such portion of the purchase-money.
    Where a bond to make title on payment of the purchase-money is given, the vendor has a lien on the land for the payment thereof; and when the vendee has paid the whole, or any part thereof, he has a lien on the land- for the title, which will prevail against the lien of a judgment-creditor of the vendor, whose judgment is subsequent to the agreement to convey and the receipt of the consideration-money ; it seems, however, that the lien of such vendee will not prevail against a bona fide purchaser from the vendor subsequent to the date of the title bond and payment of portion of the purchase-money, for a valuable consideration and without notice.
    The extent of the right of a judgment-creditor of the vendor of real estate, who has given a bond for title on payment of the purchase-money, and received a portion thereof, is to subject the unpaid purchase-money in the hands of the vendee to the satisfaction of his judgment.
    The lien of a judgment operates only on the interest of the judgment-debtor at the date of its rendition ; and cannot, therefore, prevail against the prior equitable lien of a vendee from such judgment-debtor who has received from his vendor a bond for title, and paid part of the purchase-money; though his bond for title has never been recorded.
    M. bought a piece of land from P. and paid part of the price in cash, and received a bond for title on payment of the residue ; P. afterwards sold the same land to C., who resold it to M.; subsequent to the sale by P. to M., but before the sale by P. to C., a judgment was recovered by D. against P., and levied on the same land ; held, that M. was entitled to an injunction against the sale ; that P. had not an interest capable of sale under execution; and was a mere trustee of the title for M., whose interest was not affected by the sale to C.; though it might have been otherwise if C. had set up that he was a bona fide purchaser, for a valuable consideration, without notice of the previous sale to M.
    
      If the answer of a defendant to a bill in chancery he made a cross-bill, the answers of the complainant to the interrogatories propounded on the cross-bill are good evidence in favor of the complainant.
    Appeal from the vice-chancery court at Carrollton, Hon. Henry Dickinson, vice-chancellor.
    James Money filed his bill in the vice-chancery court at Car-rollton, charging that, in December, 1837, he purchased of Marcus Pierce the east half of the north-west quarter of Section No. 18, Township No. 19, of Range 4, east, except about four acres, which had been previously sold off of the south-east and southwest corners thereof, lying and being in the county of Carroll; for which he agreed to pay the sum of three thousand dollars; that he took from Pierce a bond for title when the purchase-money should be paid. Early in the spring of the year 1838, complainant took possession of the land and resided on it for several years. The bill states that the title-bond was not recorded, though the purchase of complainant was a matter of general public notoriety, known not only to the citizens of the neighborhood, but also to the person seeking to subject the land to the payment of an execution then in the hands of the sheriff, which was issued on a judgment obtained against Pierce in Carroll county, long after the date of complainant’s purchase. The bill further states, that complainant paid to Pierce the whole of the purchase-money, agreeably to his contract; and the complainant was requested by said Pierce, for some reason unknown to him, to accept a deed to the land through William C. Clark, which he, in good faith, agreed to; consequently Pierce did, on the 4th day of May, 1839, convey the same to Clark, and Clark, on the 14th day of November, 1839, conveyed it to complainant. Both deeds are made exhibits to the bill. The bill further charges that, in October, 1838, long after complainant was in possession of said land, Washington Dorsey obtained a judgment in the circuit court of Carroll county against said Pierce, and one C. P. Newell. Upon which an execution was issued and levied on said land, and the same would be sold unless the sale should be enjoined. Pierce and Clark are both charged to be insolvent. Marcus Pierce and Washington Dorsey are made defendants. Prayer for an injunction, &c. The answer of Pierce admits all the material allegations of' the bill. Dorsey answers, and admits that he obtained judgment in the circuit court of Carroll county, in 1838, against Pierce and Newell, for five thousand dollars, and that an execution had been issued thereon, and levied on said land, as charged in the bill. Respondent denies, however, that he had notice of complainant’s purchase before the recovery of said judgment; and avers his belief that the purchase was not in fact made until long after the rendition of the judgment. He avers that the judgment was a lien upon the land at the time complainant purchased, of which complainant had at least constructive notice; and the actings and doings of the complainant are therefore calculated to deprive and defraud respondent of his just rights. By leave of the court, Dorsey afterwards filed an amended and supplemental .answer, which is also made a cross-bill, charging that the said deed, executed by Marcus Pierce to William C. Clark, on the 5th day of May, 1839, was made by Pierce for the purpose of hindering and delaying his creditors, and to anticipate a sale under execution upon cases then pending against him; that Clark paid no consideration whatever for the land, and received none from the complainant; and the whole transaction was therefore fraudulent and void ; and if not done at the instance of complainant, he possessed full knowledge of the intention and design of it. The cross-bill further charges, that at the time the judgment in favor of Dorsey was rendered, Money had paid, if any, a very inconsiderable portion of the purchase-money he had contracted? to pay Pierce; and that most, or all of the money he has paid, has been paid with a full knowledge of the legal and equitable rights of Dorsey. The complainant is called on to answer the several allegations of the cross-bill, and especially to state whether he did not know, or believe, from circumstances within his knowledge, that the conveyance from Pierce to Clark was made to hinder, delay, and defraud creditors, and whether he did not learn from Pierce or Clark that such was the intention; and to state what portion of the purchase-money he paid Pierce was paid before the 3d day of October, 1838, what subsequently, and at what times the payments were made. The complainant answered the cross-bill, denying that he had any knowledge of the intention or design which Pierce and Clark, or either of them, entertained, when Pierce executed said deed to Clark, or that he ever heard them, or either of them, say, or that he believed from circumstances within his knowledge, that said deed was designed to hinder, delay and defraud creditors, or that it was without consideration. It is true Pierce inquired of him whether, as he had not had the title-bond recorded, it would not be best, to save him trouble, to have the conveyance made through Clark. And he replied to Pierce, that inasmuch as he had bought the property, paid a high price for it, and was in possession, he had no fears on the subject, and cared nothing about the manner in which the conveyance should be made to him. He denies that he was in any way privy to the intentions of either Pierce or Clark in the i transaction, further than Pierce’s declaration, that it would save him trouble. He denies that he knew, or believed, when he made said purchase, that said Dorsey had any legal or equitable right to said land, or any lien upon it, either by judgment or otherwise. In answer to the special interrogatories contained in the cross-bill he says, that before the 3d day of October, 1838, he had paid Pierce upwards of two thousand dollars • one thousand of which was paid when he made the purchase and took possession of the land. The precise amount paid prior to the 3d day of October, 1838, he could not state. The balance of the purchase-money Vas paid in small amounts, in money and property; but he could not give the dates and amounts of the several payments, in consequence of his books having been destroyed by fire at the time his house was burnt, in the summer of 1S43. He denies all fraud or combination in the premises. No depositions were taken, or other evidence offered on either side than such as was contained in the pleadings and exhibits. The court dissolved the injunction, dismissed the bill, and ordered the complainant to pay the costs; whereupon the complainant prayed an appeal to this court.
    
      
      William R. Saunders, for complainant.
    The first question to be determined is, whether a purchase was made and possession taken of the land in controversy, by complainant, Money, before the rendition of the judgment, or before levy made and sale advertised. For if a purchase was made, and possession taken under the purchase, prior to the rendition of the judgment, the possession is notice to all creditors and subsequent purchasers, and is equivalent to recording the title-papers to the land. Dixon & Starkey v. Lacoste, 1 S. & M. 70. Complainant Money, in his bill, which is sworn to and made proof in the cause, alleges the fact that he did purchase said tract of land, and took possession, in January, 1838, some ten months prior to the rendition of Dorsey’s judgment, it being in October of that year, which is confirmed by the answer of Pierce, and also by thé answer of Money to the cross-bill of defendant, Dorsey, as set forth in Dorsey’s answer, by way of cross-bill. When a complainant is required to answer matter set up in respondent’s answer, in shape of a cross-bill, it will have the same effect, in this state, as an answer to an original bill. How. & Hutch. Dig. 625, sect. 37; Oakey v. Robb's Executors, 1 Freem. Ch. R. 546. The answer to allegations in complainant’s bill, when required to be answered, will always stand as evidence in the cause. 1 Freem. Ch. R. 547, above cited; Rose v. Mynett, 7 Yerg. Ten. R. £0. The general rule in chancery is, that an answer, responsive to the allegations and charges made in bill, and containing clear and positive denials thereof must prevail, unless disproved by two witnesses, or a witness and attendant circumstances. Daniell v. Mitchell, 1 Story’s R. 172; .4 Equity Digest, 417; Manchester v. Day, 6 Paige’s Ch. R. 295; Smith v. Brush et al. 1 John. Ch. R. 457 ; 2 Maddock’s Chancery, 442, and the authorities there cited. If any other rule were to prevail it would be productive of the greatest injustice to the responsor.
    The respondent, Dorsey, calling upon the complainant, Money, to answer specially, in the shape of cross-bill, makes him his witness; and it would be a hard rule, that the statements of a witness should be evidence for one party, and not for the other. Such a rule would be fraught with the most glaring injustice to the litigants. The purchase and possession of Money, being anterior to the judgment, must therefore prevail. Again, if the above position be not correct, this view of the case is submitted to the consideration of the court: That, as respondent, Dorsey, charges that no sale was made, or money paid, and calls specially upon Money to state the facts, he thereby makes Money’s answer evidence, by the rules of pleadings as above laid down. Money, in his answer, states that he purchased in good faith ; that he paid two thousand dollars before the rendition of the judgment, and, on account of his papers being burnt by accident, with his buildings, he cannot state the exact dates of the other payments • but, that he paid the balance of one thousand dollars in a short time after the rendition of the same. Such a statement of facts gives him unquestionable title to the land; and at all events is a lien upon the same for two thousand dollars, the amount proven to be paid at the rendition of the judgment; as there is no proof showing his knowledge of the debt from Pierce to Dorsey, or outstanding title creating a lien on said land. Moss v. Davidson, 1 S. & M. 112.
    
      William and W. G. Thompson, on the same side.
    
      Q. D. jOribbs, for appellant.
    Complainant charges, he was in possession of the land at the time of the rendition of the judgment, under a memorandum of purchase from the judgment-debtor, Pierce.
    These charges are denied by the answer, and there is no proof whatever sustaining them. In complainant’s answer to amend anew, and cross-bill of Dorsey, there is an equivocal statement to that effect, but it is in no way responsive to the cross-bill, and is no evidence in this cause. The principles settled in the case of Dixon Sp Starkey v. Lacoste, cannot so much as apply to the case at bar; there is no analogy between them. No memorandum in writing is shown to have existed at the rendition of the judgments; no contract of purchase, in fact, which could, under the statute of frauds, be enforced. And even if such did exist, by the case disclosed by complainant himself, it was abandoned, and a new contract of title made and executed by Clark to Pierce, aft.er the judgment was rendered. By accepting that deed, in lieu of the contract of sale, which he says was previously made, he is estopped from setting up the conveyance from Pierce to him, or the agreement to convey. Comyns’s Dig. Estoppel R. 1, 2, sec. 156; 12 Johns. R. 357; 1 Nott & McCord, 373.
   Mr. Justice Clayton

delivered the opinion of the court.

This is an appeal from the vice-chancery court at Carrollton. The bill states that complainant, the now appellant, purchased of one Marcus Pierce a lot of ground for three thousand dollars, in December, 1837, and took his bond for title when the purchase-money should be paid; that he took possession of the premises at the time, and paid a considerable portion of the purchase-money. That in October, 1838, the defendant Dorsey obtained a judgment against Pierce; that in May, 1839, Pierce, who is likewise made a party, conveyed the premises, with other land, to .one Clark, who, in November, 1839, conveyed to the complainant. That the title-bond was never recorded, and that the defendant Dorsey, had his execution, under his judgment, levied upon the lot, to enjoin the sale of which is the object of the bill. Other extraneous matters are introduced, which can have no influence upon the decision.

The answer of Pierce admits all the charges of the bill. The first answer of Dorsey denies that complainant purchased before his judgment was rendered ; or, if he did, insists that the failure to record the title-bond let in his judgment. He afterwards filed another answer, which is made to operate as a cross-bill. He then states that he believes that, at the time of the judgment, the complainant had paid, if any, a very inconsiderable portion of the purchase-money, which he had agreed to pay Pierce, and asks him to state, in answer to the cross-bill, “ what portion of the purchase-money he had paid Pierce before the 3d of October, 1838, what subsequently, and at what times.” The answer to this interrogatory states that he paid, in cash, one thousand dollars at the time he made the purchase, at which time, also, he took possession; and more than another thousand, prior to the 3d of October, 1838.

The answer of Dorsey insists that the conveyance from Pierce to Clark was fraudulent and void. The title-bond is not filed as an exhibit, nor was any deposition taken in the case.

The doctrine is well established that, from the time of a sale of land, the vendor becomes a trustee of the title for the vendee, as the latter is a trustee of the purchase-money for the former. In each instance a lien is created upon the estate for the money. This lien will prevail against a judgment-creditor of the vendor, intervening between the tiine of the agreement to convey and receipt of the consideration-money, and the actual conveyance. Finch v. Earl of Winchelsea, 1 P. Wms. 177; 4 Kent, 153; 2 Story’s Eq. 481. The lien of the judgment could only operate upon the interest which Pierce had at the time of its rendition. The judgment-creditor takes the place of the judgment-debtor. He can occupy no higher ground, unless in cases of fraud. 2 Johns. Ch. 50; Coutts v. Walker, 2 Leigh ; 8 Ohio, 22; 2 Ire. Eq. 121, 509; 3 Paige, 123; 4 Ibid. 9.

If any portion of the purchase-money be paid before the judgment, the land can no longer be the subject of execution-sale, as the property of the vendor, whatever might be the rule, upon a naked contract of sale, without any payment.

These principles being ascertained, the only difficulty is in determining the true state of facts. It would seem probable that they might have been placed in a much clearer point of view, but we can only look at them as presented in the record.

If Dorsey had filed no cross-bill, there would have been no proof in support of the original bill, and it must have been dismissed. But' the answer to the cross-bill is in direct response to its interrogatories, and must'be regarded as evidence.

That proves the purchase and the payment of a large part of the purchase-money, before the judgment; the vendor then had no interest upon which the judgment lien could attach. The vendee has a lien upon the estate purchased for the money he has paid; the judgment-creditor has but a lien, subsequent in point of time, and inferior in point of equity. 2 Story’s Eq. 481. It might be different in regard to an intervening mortgagee, or purchaser for valuable consideration, and without notice. 4 Kent, 154.

In this state of case Pierce was a mere trustee of the legal title for another, without any beneficial interest which could be sold under execution at law. The creditor, by proper proceedings, might have reached the unpaid purchase-money in the hands of the complainant, but that was the extent of his right.

The conveyance to Clark does not benefit Dorsey, or affect the right of Money. No fraud is shown, nor the slightest suspicion of fraud, so far as the complainant is concerned. The deed operated a transmission of the legal title of Pierce to Clark, but that does not prejudice the right of Money. If, indeed, Clark had insisted that he was a purchaser for valuable consideration, without notice, and bona fide, then his title might have prevailed over the equity of the complainant. But he asserted no such right, and conveyed to the complainant; this had the same effect as if done by Pierce himself. His purchase had been made long before that of Clark, and if a fraud were intended by Pierce upon Dorsey, in the transaction with Clark, that would not vitiate a previous valid agreement with Money. There is no proof of fraud upon his part. If he had acquired his title through the fraud of Pierce and Clark, that title could not be permitted to stand in equity. Huguenin v. Basley, 14 Ves. 289. But the strength of his case is in the purchase and payment before the judgment, and he is entitled to relief independent of the deed of Clark, and without reference to it. His contest now is with Dorsey. Pierce does not deny his right, and Clark is not before the court. As against Dorsey, we think he has superior equity.

The decree must be reversed, and the injunction made perpetual.