Case Name: Coffman v. Niswander & als.
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1875-09
Citations: 26 Gratt. 737
Docket Number: 
Parties: *Coffman v. Niswander & als.
Judges: 
Reporter: Virginia Reports
Volume: 67
Pages: 245–248

Head Matter:
*Coffman v. Niswander & als.
September Term, 1875,
Staunton.
Sales of Land—Verbal—Conditions.—In 1857 0, by a verbal contract, sold to K a lot in D, and N took possession of tbe lot, built a bouse upon it and improved it, but did not pay tbe purchase money at the time agreed. G having become the security of N as the guardian of W and in a debt to K, in April 1861 they entered into a written agreement, whereby, reciting these facts, it was agreed that C should retain the legal and equitable title ti> the property until the purchase money for the lot and the debts for which G was bound as the surety of N were fully paid. This agreement was not recorded. After the war N became a bankrupt; and in 1868 C filed his bill against N and his assignee, to have the property sold and applied to the payment of the purchase money for the lot and the debts for which 0 was surety for N; and it was sold, not bringing enough to pay 0 for his purchase money and what he paid for N to W. Other judgment creditors of N intervene and claim the proceeds of the sale after payment of the purchase money. Held:
1. Same.—N had neither the legal nor equitable title to the property until the debts were paid.
2. Judgment Creditors —Rights.—The judgment creditors of Nhave only the equities of N against C; and as against them, the agreement between G and N is valid, though not recorded.
In September 1868 Hiram Coffman filed, bis bill in the Circuit court of Rockingham county, in which he stated, that in the year 1857 he sold to John Niswander a lot of ground in the town of Dayton, in said county, for the sum of two hundred and seventy-six dollars, to be paid on the 1st of April 1858. That it was a verbal contract never reduced to writing until the 1st of April 1861; but Niswander took possession *of the lot, and built a house upon it, enclosed and made other improvements thereon.
He further states that Niswander qualified as the guardian of his niece Miss I/ucy Jane Williams, and gave bond with plaintiff and two others as his sureties, and that as such guardian he received $1,700, for which his sureties are still liable, as plaintiff is advised that no part of said money has been paid to said I/ucy. That plaintiff is also Niswander’s security on a bond to Harvey Kyle for $298.83, with interest from the 21st of June 1859, which also remains unpaid, i He further states that in view of these facts and of the unsettled condition of the country in the spring of 1861, plaintiff required Niswander to pay these debts, and he being unable to pay up, they on the 1st qf April 1861, entered into a written contract, in which plaintiff’s vendor’s lien and his aforesaid liabilities are fully set out, and their payment stipulated for; and in which it is provided that the legal and equitable title to said house and lot should remain with the plaintiff until the lien and debts aforesaid were fully paid, and the plaintiff relieved from all liability as such surety.
_ He states that Niswander is insolvent and .has gone into bankruptcy. And he makes him and. his assignee parties defendants, and prays for a sale of the house and lot; that the purchase money due to himself be first paid out of the proceeds of sale, and that the balance be applied to the satisfaction’ of the debts for which plaintiff is süretv.
'The agreement of April 1st 1861, which 'is under seal, was filed with the bill. It recites the verbal agreement of ’ 1857, as '.Stated in the bill, and that if the money Was not paid on the 1st of April, 1858, the agreement was to be null and void; and that said Niswander had wholly failed to pay the purchase money, *but took possession of the lot and built a house thereon, and desires to be secured in the possession of said lot and buildings. It further recites the liabilities of Coffman as feecurity of Niswander; and then it is agreed that Coffman will make good the title to said house.and lot upon the following terms and conditions, which are ac-:c'epted by the said Niswander, viz: Nis-’'Wándér to pay the purchase money ■ and interest, - and to pay off his debts to Huey Williams and Kyle, so as to relieve and wholly discharge the said Coffman from all liability on said bonds; and then Coffman ’ binds himself to make a good and perfect title to said Niswander for said house and lot. But until Coffman is fully paid off and released from his liabilities as surety as aforesaid, he is to retain the legal and equitable title to said lot.
' In October 1868 the court made a decree, directing a commissioner named, after giv■ing notice as directed in the decree, to sell the house and lot mentioned in the bill at public auction, upon a credit of six, twelve, eighteen and twenty-four months, the purchaser to give bonds with security, bearing interest from the date of sale, and the title to be retained. And in pursuance of this decree the commissioner reported that he had’sold’the house and lot at public auction, when the plaintiff Coffman became the purchaser at the price of eleven hundred dollars, and had executed his bonds with security.
• At the April term 1869 of the court, David Blosser, administrator of Anna Blosser deceased, Jacob Dinkel, administrator of Harriet S. Dinkel deceased, and two others, filed their petition in the cause, in which they set out that they were judgment creditors of John Niswander, and that their judgments had been docketed. They charge that their judgments are liens *upon the land of Niswander; and at the time their judgments were obtained Niswander was the owner of a house and lot in the town of Dayton, which lot he had purchased of Hiram Coffman in 1857, and had built on it a brick dwelling at a cost of several thousand dollars. That he had gone into bankruptcy, and had no personal estate. They refer to the bill of Coffman, and his pretensions under the agreement of April 1st, 1861. They insist that if that agreement was made on the 1st of April 1861, as it purports to have been, it is no.t valid against them as creditors of Niswander, it never having been recorded, and they having no knowledge of it, and Niswander having been put in possession of the lot long before said pretended contract. They do not believe that said contract was made at the time it bears date; and they insist that their judgments are liens upon the said land, at least after the payment of the $276 and interest for purchase money, to which they ask that Coffman may be required to prove he is entitled. They make Coffman, Niswander and his assignee defendants to their petition, ask that the two first may be required to answer, and that their judgment liens may be enforced and their debts paid out of the proceeds of the sale of the house and lot.
Coffman answered the petition, and averred the agreement referred to. was executed on the day it bears date, and was designed to secure him in the payment of the debts therein referred to, as well as the payment of the purchase money of the lot. He did not consider it necessary to record the contract, in as much as Niswander had not even a shadow of title to said house and lot until he had complied with the terms and conditions of said contract, and held no writing of any kind to show that he had even a right *to the property under any circumstances. And he says that the debts and purchase money mentioned in said contract are not yet paid.
In October 1869 the court confirmed the report of the sale, and directed the commissioner to collect enough of the purchase money to pay the expenses of sale and his own fee and commission, and to permit Coffman to retain in his hands the balance of the purchase money until the further order of the court. Subsequently a commissioner, to whom the cause was referred, made a statement of the liens upon the land. From this statement it appeared, the purchase money, principal and interest, to January 1st, 1875, was $554.07; that the judgment in favor of Anna Blosser’s adm’or was rendered in August 1866, and, with interest up to January 1st, 1875, amounted to $1,055.56; that in favor of Harriet Dinkel’s adm’or was rendered in February 1867, and after allowing a credit upon it paid in 1874, there remained due $175.74; and that Miller’s judgment was rendered in May 1867, and there was due on that $255.86. It was admitted that in August 1870 Coffman paid, as surety for Niswander on his guardianship $1,100.
The cause came on to be finally heard on the 8th of February 1875, when the court held that the aforesaid judgment liens were superior to the unrecorded contract; and confirming the report of these liens, it was decreed that the commissioner who made the sale of the house and lot should proceed to collect the purchase money, and after paying the costs of the suit, that he should pay first to the plaintiff Coffman $554.07, with interest on $276 from the 1st of January 1875 till paid; and second, that he should pay the residue of said purchase money to Anna Blosser’s administrator, in satisfaction of his judgment for *$1,055.66, with like interest on $527.19 part thereof; and if any balance remained in his hand, that he should apply the same to the satisfaction of the other judgments mentioned in the commissioner’s report in the order of their priority; and make report to the court. And thereupon Coffman obtained an appeal to this court.
Berlin, for the appellant.
Compton, for the appellee.

Opinion:
Staples J.
delivered the opinion of the court.
It is very clear that the contract of 1st April 1861 was not a sale by Niswander to the appellant Coffman; it was not even a surrender by the former to the latter of any interest in the land, for he had none, legal or equitable. It was the mere substitution of a new contract for the old one, which by its own terms was ended, and which the parties did not choose to renew. It was a new sale to the same purchaser upon terms acceptable to each. The arrangement interfered with no liens or incumbrances treated by the a.Gt of Niswander the purchaser, because none such were in existence. It did not divert the debtor's property from the just claims of creditors, because the vendor only retained the title as a security for what was justly due him, and for other debts of the purchaser for which he was bound as surety. These debts were as valid and meritorious as those due the appellees, and it was eminently just and proper to provide for their payment to the relief of the appellant as surety.
The main reliance of the appellees, however, is upon the failure to record the contract of April 1861. This view is based upon an entire misconception of the *respective position of the parties-. There would be great force in it if Niswander the purchaser was asserting title against Coffman's creditors under a contract never recorded. But in this case it is the creditors of the purchaser who are attempting to enforce their liens against the property. They may stand in the purchaser's shoes, and subject his interest, whatever it may be, to their debts; but they have no further claim.
The common law courts, indeed, do not regard the owner of an equitable title as having any estate whatever. They treat a contract to convey merely as a personal covenant, the breach of which is only to be compensated in damages. Courts of equity, on the other hand, consider the purchaser, though without the legal title, as the owner of the land; but this is only where he has fully complied with all the terms of the sale, and is entitled to call for the conveyance without any conditions imposed. This right is in subordination to the legal title. A court of equity will never compel the vendor to part with that title until the conditions are fully performed upon which he agreed to make the conveyance. If the purchaser himself cannot compel a conveyance, neither can his creditors. The failure to record the contract can therefore neither enlarge their remedies, nor diminish the rights of the vendor.
It is improper to say that parties may be misled by the apparent ownership of the purchaser. Persons who deal with one in possession of real estate are required to look to the records. If upon examination they find no evidence of title, they trust the occupant at their peril. Had the appellees searched the registry they would have learned that he had neither a legal nor an equitable title, and that Coffman appeared as the sole owner. Had they applied to Coffman himself *they would have ascertained the nature of ISTiswander's interest, and the terms upon which he was entitled to a conveyance. If indeed they have been misled, it is the result of their own negligence in failing to make such enquiry as would have placed them in possession of the necessary information.
Occupying no higher ground than their debtor, these creditors can only require the appellant to convey the property when his purchase money is paid and he is indemnified as surety for the debts specified in the article of agreement.
It is recited in the decree, that upon the admission of the parties, the appellant has already paid, since the institution of the suit, the sum of eleven hundred dollars, as the surety of Niswander. And as the property brought only that sum at the sale under the decree, the proceeds of sale in the appellant's hands, as purchaser at that sale, will be more than absorbed by the amount of his claims. It would seem, therefore, that a decree might at once be entered in his favor. Under the circumstances, however, it is deemed most advisable to reverse the decree of the Circuit court, and to remand the case for further proceedings in accordance with the views herein expressed.
The decree was as follows:
This day came again the parties by counsel; and the court having maturely considered the transcript of the record of the de cree aforesaid and the arguments of counsel, is of opinion, for reasons stated in writing and filed with the record, that the Circuit court erred in holding that the appellees are entitled to priority over the appellant in the distribution of the proceeds of the sale of the house and lot sold by the appellant to John Niswander. It is therefore adjudged, ordered *and decreed, that so much of the decree of 8th day of February 1875 as directs the payment of the balance of said proceeds to Abraham Blosser, Jr., administrator de bonis non of Anna Blosser deceased, after paying and satisfying the lien of the appellant, be reversed and annulled, and that the appellees do pay to the appellant his costs by him expended in the prosecution of his appeal aforesaid here. And this court, proceeding to render such decree as the said Circuit court ought to have rendered, is of opinion, that the appellant Coffman, out of the proceeds of sale of the house and lot aforesaid, is entitled in preference to the appellees, to be satisfied, first the amount of the purchase money due him, to-wit, the sum of $554.10 cents, with interest on $276, part thereof, from the 15th day of January 1875; second, he is entitled to be repaid whatever sum or sums he may have heretofore paid, or may hereafter pay, or may be justly liable for, as the surety of John Niswander upon the debts of the latter to I/ucy Jane Williams and to Harvey Kyle, as set forth in the article of agreement of the 1st day of April 1861; and the residue of said proceeds, if any, to be paid to the administrator of Anna Blosser deceased. And the cause is remanded to the said Circuit court for further proceedings to be had therein in conformity with this decree: which is ordered to be certified to the said Circuit court of Rockingham county.'
Decree reversed.