Court Opinion

ID: 6238121
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:37:32.569262+00
Date Added: 2024-06-11T08:58:06.759333
License: Public Domain

Mr. Justice Sterrett
delivered the opinion of the court, May 25th, 1885.
*129We gather from the Auditor’s report, that in February 1881, appellant sold and assigned to Victor C. Wright, appellee’s intestate, a mining lease, known, in business circles, as an “ oil lease,” together with machinery, fixtures, engines, tools &c., on the premises; and, for part of the purchase money received from Wright six promissory notes, aggregating over $4,500, secured by a leasehold mortgage of the mining lease, machinery, &c., vested in him by virtue of the assignment. In other words, Wolfe sold and transferred his interest in certain real estate and took from his vendee a mortgage thereof for residue of purchase money. In the absence of any evidence to the contrary, it must be assumed that Wolfe transferred all the interest he had in the land, machinery, &c., embraced in the lease, and that the only security he had for the consideration money was the notes and mortgage of the lease, etc. There is not a particle of testimony tending to show anything else than that the contract was an executed and not an executory one. The case differs widely from the ordinary sale on articles of agreement in which the vendee acquires merely an equitable' interest in the laud — a right to a conveyance of the legal title upon paying or securing, as may be agreed upon, the residue of purchase money. In the meantime the vendor retains the legal title as security for the unpaid purchase money; and, if on a lien therefor, he sells and purchases the equitable interest of his vendee, the contract is thereby rescinded and he is precluded from recourse to the vendee personally for the balance of purchase money that may not be paid by the proceeds of sale. This principle, applicable to executory contracts for the sale of lands is recognized in many of our cases, as far back at least as Purviance v. Lemmon, 16 S. & R., 292, among which are, Love v. Jones, 4 Watts, 465; Horbach v. Reiley, 7 Barr, 81; Vierheller's Appeal, 12 Harris, 105; Bradley v. O’Donnell et al., 8 Casey, 279; P. & S. Railroad Co. v. Jones, 9 P. F. S., 433; Zeigler, Baker & Co.’s Appeal, 19 P. F. S., 471. In McCay v. Orr, 11 W. N. C., 524, the same principle was applied to an executory contract for sale of personal property. The authorities above cited,- and others that might be added, firmly establish the principle, that while the legal estate of the vendor and the equitable estate of the vendee may each be the subject of levy and sale by their respective creditors without affecting the other, a sale by the vendor for unpaid purchase money passes the whole estate; and, as was said in Bradley v. O’Donnell, supra, the “ re-union of the equitable with the legal estate is virtually a rescission of the contract.” This is always the case when the vendor himself becomes purchaser.
In this case, as has been heretofore observed, the assign*130ment was not an executory but an executed contract. An absolute transfer of the lease was made by appellant. He reserved to himself no interest therein. The mortgage he took was his only security. Having exhausted that without realizing the full amount of his claim, he has a right of recourse against the estate of his debtor for the residue. The learned Auditor and court below, failing to note the distinction that has always been observed between executed and executory contracts, refused to let him participate in the distribution.
In this we think-there was error. The failure to realize his entire claim by sale of the mortgaged premises, did not extin guish his right to collect, if he could, the unpaid residue. As to that, he has a right to pursue the estate of his deceased debtor.
Decree reversed at costs of appellees and record remitted with instructions to distribute the fund among the parties entitled thereto, including appellant.