Case Name: Claiborne vs. Crockett
Court: Tennessee Supreme Court
Jurisdiction: Tennessee
Decision Date: 1832-03
Citations: 3 Yer. 27
Docket Number: 
Parties: Claiborne vs. Crockett.
Judges: 
Reporter: Tennessee Reports
Volume: 11
Pages: 27–36

Head Matter:
Claiborne vs. Crockett.
The assignee of a note given by the vendee to the vendor, for part of the purchase money of a tract of land, is not entitled, by virtue of the assignment of the note, to the benefit of the lien which existed before the assignment, against the vendee.
v
John Brooks, one of the defendants,
sold a tract of land to 'James G. Hicks, and took his notes to secure the payment of the price, and gave a bond to convey the title to the land when the price should be paid. The last of the notes given by James G. Hicks for the price of the land being unpaid in part, John Brooks assigned it to Wm. Crockett, the plaintiff. Wm.' Crockett brought suit upon the note against Hicks, recovered a judgment for the balance due, which judgment was not satisfied on account of the insolvency of Hicks. Hicks being indebted to Claiborne, transferred to him Brooks’ bond for a title to the land. Brooks afterwards, by power of attorney to his son John S. Brooks, conveyed the land absolutely to Claiborne; having received from him (Claiborne) notes, money and other property, as a consideration for the absolute title. Crockett, the plaintiff, filed this bill to subject the land in the hands of Claiborne, to the payment of the note of James G. Hicks, which had been assigned to him, upon the ground, that when Brooks sold the land to Hicks, and gave bond for title, the bond provided that he was not to be bound to convey until the consideration was paid. The decree of the court below was in favor of the complainant.
Thompson, for the complainant,
contended, that the vendor had a lien on the lands sold for the unpaid purchase-money. Sugden on Yendors, 386. 15Vesey, 329. That the land was consequently bound for the payment of the debt in equity. That when the note executed for the purchase-money was assigned, the assignee stood ⅛ the place of the vendor; that the transfer of the note by operation of law, was a transfer of the lien; that the land sold was in fact retained and held’ in trust by the vendor, for the payment of the purchase-money, and that the assignees, like a surety, can reach it. 2 Call’s Rep. 125. 1 John. Ch. Cases, 119,120. ...⅝
He admitted this equitable lien would not he available against an innocent purchaser without notice; but this rule was only applicable to cases where the legal title was vested in the vendee, and not where he had a mere equitable title, as a bond: in the latter case, the oldest equity would prevail. Craig vs. Leiper, decided by this court.
Washington, for defendant,
Claiborne. 1st. The decree of the court below makes the land in the hands of a second purchaser liable to the assignee of one of the notes given by the first purchaser, for the payment of that note.
The lien of a vendor does not extend to an assignee of a personal chose in action, given to secure the payment of the price of the land sold; but is confined to the vendor himself, and to his representatives. No adjudged case to that effect is to be found; and, most certainly, such an assumption is not warranted by principle. I mean, where the lien is not expressly transferred to, or contracted for by such assignee. The bill does not even pretend.that such was the case in this instance. It merely alleges, that he (the assignee) would not have bought the note if he had not known that the vendor had reserved to himself a lien upon the bond.
The principle does not extend to a sub-vendee, unless he have notice that the purchase-money is unpaid; and then it is upon the ground that the sub-vendee, by purchasing with such notice, has acted against conscience in knowingly attempting to deprive the first vendor of his surety.
In this case the sub-vendee, by his purchase, did not „ , . , , , . . n interfere with any security which the assignee oí the note had. '
By the assignment, the assignee took a claim against the maker of the note, and also a claim against the assignor; hut both these were personal claims, not extending beyond the personal credit, or the personal liability, of the maker and of the assignor.
The assignor and the assignee do not stand in such a relation to each other as to entitle the latter to the benefit of whatever security, for the payment of the note, was held by the former. If, at the time of assigning the note, the assignee had contracted for the security, the assignor would have been his trustee of that security. Or if, after the assignment of the note, either of the parties liable to the assignee, had obtained a security expressly for the payment of the note, that would have been such a specific application of the security, in its inception, as would have prevented the diversion of it afterwards from that particular object, as between the parties liable to make payment, and standing subsequent to the one providing the security, and the holder would thus, consequentially, derive the benefit of the security. But the holder could not, in such case, avail himself of the security in the first instance, without a judgment against some one of the parties for whose benefit it was taken. If he could, it would follow, that where a subsequent endorser had taken security for his indemnity, and, of course, for the indemnity of those subsequent to him, the holder could make the security available for the protection of an in-dorser, standing prior to the one who had taken the security, and whose liability was absolute and unconnected with the security.
The maker of a note is liable, at all events. If the security is provided by him, he is entitled to it as a resource in making payment. In the case under consideration, the security was not provided by the maker. The maker is James G. Hicks,rthe first purchaser of the land. The security referred to is theJand. The land belonged to John Brooks, the seller; and the security was the vendor’s lien, which he (Brooks) reserved upon the land. The security, therefore, was not provided by Hicks, the maker. Hicks’ was a naked obligation to pay the note, for which he had provided no collateral security. Brooks, the seller, who had provided the security, not for the payment of the note, but to protect himself against loss in the sale of the land, assigned the note to Crockett, the (complainant, and conveyed the land, with Hicks’ consent, to Claiborne, to whom Hicks had previously transferred Brooks’ bond for a title. When, therefore, Brooks assumed upon himself the responsibility of an endorser, without, at the same time, applying this resource, which certainly was his, and not Hicks’, for his own indemnity as such endorser, the inevitable consequence was, that his, and the maker’s personal liability, were all that Crockett took by the assignment. And Brooks’ subsequent conveyance of the land, absolutely, to Claiborne, leaving this note unpaid, is a demonstrative proof that he intended to hazard his personal responsibility in assigning the note, and not to guard it by the preservation of this resource.
Let us suppose that Hicks is insolvent, as he really is, and uthat Brooks, the endorser, is made liable on his endorsement, and that he has not wherewithal to pay? except this specific lien upon the land; and that that is-subjected to the satisfaction of Crockett’s judgment against Brooks. How does this comport with the rights of Brooks, as settled by his contract with Hicks, whereby he reserved to himself the title to the land until he was fully paid for it? It is clear, that if Hicks does not and cannot pay the note, and Brooks is compelled to pay it with his land, that Brooks is made to part from his land before he is paid for it; and thus it results, that by the very contract by which Brooks reserved to himself the land, until he was paid for it, he is forced to give it up & r before he is paid for it.
Let us suppose that this had been the first of three several notes, given for the price of the land, which fell due; that Hicks proved insolvent, and was wholly unable and never did pay the two latter: now, in the case supposed, Brooks could not he compelled to part from his land until all the notes were paid. If so, what becomes of Crockett’s pretence that the land is a security running with the note which he holds?
2d. Crockett obtained no judgment at law against Brooks, as indorser; but he comes into this court, in the first instance, for the purpose of reaching what he calls a security running with the note. He has only obtained a judgment at law against Hicks; and, if this were a security provided by Hicks, it would probably be competent for the plaintiff now to resort to the auxiliary aid of this court. But when the collateral security, if any, is provided by John Brooks, the endorser, the plaintiff cannot, upon a bare allegation of the insolvency of John Brooks, proceed in equity to subject that security. He must first establish his claim by a judgment at law. Now, for aught the court can tell, John Brooks might have been discharged at law for want of due demand and notice; and if the principal demand is discharged, the accessary one is"also.
There is, moreover, no proof in support of the allegation of the insolvency of John Brooks, nor is it admitted by his answer; and, by the bye, the allegation was false in point of fact.
Had Crockett proceeded to establish his claim by a judgment at law, this court would then have been furnished with a certain criterion of the amount with which the land ought to be charged, if, indeed,it is liable to be charged at all.
Crockett does not even state in his bill, what he gave for the note; nor does the answer of Brooks, nor is there any proof upon the subject. If he bought it at a large discount, or availed himself of the necessities of Brooks, and gave for it a very inconsiderable sum, his hands would not he entirely clean; and if entitled to be heard in this court at all, the land, even although liable, would not he charged in the hands of Claiborne, who gave full price for it, to a greater amount than would actually indemnify Crockett for what he really expended in the purchase of the note. Note the time'of his purchasing the note, as alleged in the bill, and as shewn by the indorsement as set out in the copy of the record of the suit against Hicks, and the time of its falling due, only a few days between; and the purchase made, too, of Brooks? whom Crockett alleges to have been insolvent at the time, of a note upon Hicks, who was also insolvent, in the credit of neither of whom had Crockett any confidence, according to his own allegation, and would not have purchased the note at all but for the security which he supposed he was getting in the land.
3. If it has been shewn, that the security consisting .of the land, does not run with the note into whosesoever hands it might- come, then it follows, that to subject the land to the use of an indorsee of the note, would be a palpable violation of the statute of frauds. It would be consistent with that statute, to subject the land to the use of the assignee of Brooks’ bond to convey, who, in this case, was Claiborne. Now, it cannot be that the land is only subject, by virtue of that bond, consistently with the statute, and that Crockett can have a valid claim to the land, and not be the holder of that bond. The principle of the plaintiff’s bill would render the bond for title unalienable, except to the assignee of the note. Now? Hicks was the holder of the bond tor title, and Brooks was the holder of the note; the latter was the security of the seller, the former was the security of the purchaser; and yet it seems;' according to what is assumed in the bill, that the seller cannot deal with his security at all, with out affecting and controlling the rights of the purchaser to his security.
The reservation of a lien upon the land by Brooks, the seller, in writing, is no more than the lien that he would have had without the writing. For no court of equity would have compelled him to convey the land until the whole of the consideration had been paid: and even iff he had conveyed, he would still have had a lien upon the land for the purchase money, so long as it remained the property of the vendee. Now, let us suppose,, that if instead of the express reservation of a lien, there had been no other than the legal hen which attaches' to every sale of land, and that Brooks, the seller, had transferred one of the notes given for the purchase to Crockett; could it in such case he pretended, that by the hare transfer of the note, without any control upon the subject of the lien, that the lien would have passed by implication? It is believed not. These hens are personal to the seller and his heirs; and if they are to subject the land to the use of a third person, who holds no writing of the seller, agreeing to sell would undoubtedly be in contravention of the statute of frauds. In fact, these are a kind of hens that are not transferrable either in law or equity, either expressly or impliedly. They are ahowed upon a principle of abstract justice, as between vendor and vendee, that the 'thing sold should be answerable for its price; and when the vendor feels himself at hberty to renounce his hen, it is at an end; and it would be inconsistent with the policy of society fur. ther to embarrass the transmutation of property by the secret operation of these latent hens.
4th. The bill does not charge, that Claiborne had notice at the time of his purchase, either that Hicks had not paid for the land, or that Crocitett liad contracted for the benefit of the hen, which was reserved by the first seller. The decree is founded upon the ground, that he had such notice, and much of the testimony is taken to that effect; so that the cause was decided helow upon , Í, a point not m issue, and upon evidence not embraced by the pleadings. ’
5th. The deposition of a defendant, and a principal defendant too, was received upon the trial below, without any order of court for that purpose, and without the complainant’s waiving a decree against that defendant, and when that defendant, if there was any fraud against the complainant, or against Claiborne, was the most active perpetrator of it.
6th. John Brooks, the first seller of the land, besides executing a- deed for it to Claiborne, by his attorney in fact, John S. Brooks, waived his lien as seller; 1st, by being present at the survey of the land after Claiborne had, with his knowledge, received a transfer of his bond for title, which survey was superintended by Brooks himself, and which was known by him to be made with the view of a deed’s being executed to Claiborne: 2d, by his (Brooks) receiving from Claiborne part of the consideration which Hicks was to have paid, and taking back his bond for a title, in consequence of said payment and the execution of a deed.

Opinion:
Peck, Judge,
delivered the opinion of the court.
The only question material to be considered in the record before us is, whether the assignee of a note given as part consideration for a tract of land, gets by virtue of the assignment the lien which it is agreed existed before such assignment, in the assignor, against his vendee. There is no express agreement between these parties that the lien shall pass by virtue of the assignment.'— The lien itself is given by implication to the vendor in most cases; in this, however, it is said, the stipulation was at the time of sale of the land, that the purchase money should remain a lien.
That fact admitted, it would be going further than we have any authority to give by implication, with the assignment, a transfer of the lien. Taking an assignment is proof where the paper is negotiable, that no such transfer was intended, because the assignment is in law considered a security or contract to pay the money if the maker failed. The stipulation ends here, and puts a negative upon the supposition that it was intended to pass any lien the assignor might have; for we cannot suppose that more is intended than the parties have expressed in their written contract.
It has, in our opinion, been well said, that establish the doctrine contended for, and much inconvenience will result. Many securities might be taken on the same sale; these may be negotiated through many hands; if the right passes to one it would to all: how under such circumstances could the case be presented? Must each bring his suit successively, as the right arises at different times, on a failure to coerce payment at law? Will the party have his election to go upon his assignment or upon his lien at pleasure? The lien if right at all in the hands of the assignee, is an equitable one, and we can clearly see, that the doctrine would lead to the most pernicious consequences to such as might take titles to lands; for the holder however remote from the vendee, who created the lien, might at a moment he least expected it, he subjected to pay a second time for his estate. To remove as far as possible obstacles from the transfer of estates unencumbered, and to quiet the bom fide holder, has been, and still is the policy of our law. On the subject of lien, therefore, we will apply no new principle, not being willing to hazard the consequences of extending it.
Aside from authority, these are the impressions of the court. But we have adjudications in accordance with this opinion. The very point arose and was settled in the case of White vs. Williams, (Paige's N. Y. Rep. 506. Lien being a personal equitable right, it is not to be presumed it has been parted with; it properly lies between vendor and vendee. See Mont, on Lien, 210, appendix.
In this view of the case, it is useless to consider whether or no Claiborne has a good title to the land; whether the agent exceeded his authority; or if there be fraud in the sale and transfer to Claiborne: these are all immaterial, when we consider that this complainant cannot sustain himself in the aspect he assumes before us. He has no grounds of equity. The decree must be reversed, and the bill dismissed.
Bill dismissed.