Ware v. Curry , 67 Ala. 274 ( 1880 )

BBICKELL, C. J.

— The original bill is filed by the appellee to enforce a lien on lands for the payment of the purchase-money. There are numerous causes of demurrer assigned, but they are reducible really to five, which may be stated, as follows, viz :

. 1. That Glidden is without interest in the subject-matter of the suit, and is, therefore, improperly joined as a defendant.

2. That the bill is multifarious, seeking an account and settlement of the partnership which had existed between the complainant, Curry, and the respondent, Clabaugh, and the enforcement of a lien on the lands for the payment of the individual notes given by Clabaugh to Curry for the purchase-money thereof.

3. That it is shown by the bill that the contract between Curry and Clabaugh, by which the former conveyed the lands to the latter, was illegal and void.

1. That the remedy to enforce the lien for the purchase-money of the lands is barred, because an action at law for the recovery of the purchase-money, as well as an action of ejectment for the recovery of the lands, is barred.

5. That the bill does not seek to subject the lands to the payment of the purchase-money, but the shares of the capital stock of the Alabama Iron Company, which the company had contracted to give Ware in the purchase of the lauds.

We shall notice the causes of demurrer, in the order in which they have been stated.

1. It is unnecessary to consider whether Glidden is not so connected with the contract between Ware and the Alabama Iron Company, for the purchase-money of the lands, that he stands in something more than the relation of a mere agent, contracting for a disclosed principal, and would be consequently a proper,-if not a necessary party to the bill. Eor, if he stands in the relation of a mere agent, who, within the scope of his authority, has contracted for, and has so contracted as to bind the principal,' and is improperly joined as a defendant, the misjoinder is matter available to himself only for his dismissal from the suit, and is not matter of concern to his co-defendants, who can sustain no injury from it. No rule of equity pleading and practice is better settled, than that misjoinder of defendants, is an objection available only to the defendant improperly joined. — 1 Brick. Dig. 753, § 1689. Glidden not having appeared or demurred, there is no merit in the demurrer of the appellants, his co-defendants, resting upon this ground.

2. The demurrer for multifariousness is founded in a misconception of the objects, averments, and prayer of the bill. These are all to be considered in determining whether a bill is multifarious. — Carpenter v. Hall, 18 Ala. 193. The bill has a single object, and to that alone is its prayer directed. The object is the enforcement, of the lien on the lands for the purchase-money unpaid. The averments in reference to the partnership and the partnership transactions, were introduced, doubtless, for no other purpose than to show the relations existing between the complainant and Olabaugh, and to negative the anticipated defense, that payments on the purchase-money had been made by the shipments of lumber Eichey made to Gurry. Be this as it may, the prayer of the bill is only for the enforcement of the lien claimed on the lands, and these averments in reference to the partnership may be impertinent, but they do not render the bill multifarious.

3. Nor is there any merit in the objection, that the agreement under which Curry made the conveyance of the legal estate in the lands to Olabaugh, was illegal. The deed was made to enable Olabaugh to enter into an arrangement with the agents of the government of the Confederate States for the manufacture of iron, the parties expecting that thereby Olabaugh would be enabled to realize funds to pay the purchase-money. That arrangement was never perfected, and if it had been, it would not have affected the liability of Olabaugh to pay the purchase-money, nor lessened Curry’s rights or remedies to enforce its payment. It is not from the agreement, purely voluntary on the part of Curry, by which the deed was executed, that Olabaugh became liable to pay the purchase-money, or that Curry became entitled to receive and demand it. The liability, and the right sprung from the contract of sale made some time prior to the execution of the deed, and not from the subsequent agreement when the deed was executed, Gurry claims, and can derive no aid from this subsequent agreement in enforcing the lien a court of equity raises for the payment of the purchase-money. The test by which to ascertain whether a contract impeached as illegal, is capable of enforcement, is whether the plaintiff requires the aid of an illegal transaction to support his case. If he does not — if he has rights originating in a transaction, not offensive to law, and has a right of recovery independent of an illegal transaction, such transaction, though he may have participated in it, can not be employed to defeat him.— McGehee v. Lindsay, 6 Ala. 16; Gunter v. Leckey, 30 Ala. 591; Walker v. Gregory, 36 Ala. 180. This cause of demurrer was properly overruled..

4c. The fourth ground of demurrer has been of frequent consideration in this court, and ought to be regarded as settled finally and conclusively, if repeated judicial decisions can put to rest any vexed question, giving peace and security to the community, which ought not to be moved or disturbed. As to liens operating as a security for the payment of the purchase-money of lands, this court has decided that the lien is preserved, though the statute of limitations has operated a bar to the recovery of the purchase-money as a debt, whether the contract of purchase was executed by a conveyance of the legal estate to the vendee, or was as to á conveyance of the legal estate executory, dependent upon the payment of the purchase-money. Between the two classes of cases, in the operation of this principle, that the lien or security remains, and can be enforced, though remedies for the recovery of the debt may be barred by statutes of limitation, there has been no distinction made, and there is no room or reason for a distinction, though the relation of the parties, and their rights and remedies, are essentially different. Driver v. Hudspeth, 16 Ala. 348; Relfe v. Relfe, 34 Ala. 500; Bizzell v. Nix, 60 Ala. 281; Shorter v. Frazier, MSS.; Chapman v. Lee, 64 Ala. 483. The difference between these two classes of cases we endeavored to point out and clearly define in Bizzell v. Nix, supra, and in Bankhead v. Owen, 60 Ala. 457. When the vendor retains in himself the title as a security for the payment of the purchase-money, as was the case in Driver v. Hudspeth, supra, Relfe v. Relfe, supra, and in legal effect, though contrary to the intention of the parties in Shorter v. Frazier, supra, he has an estate in the lands, and there is no substantial difference in relation, and in rights and remedies, between him and a vendor of lands who conveys to the vendee, and takes a eotemporaneous mortgage to secure the payment of the purchase-money. While a vendor who conveys the legal estate to the vendee, has no interest or estate in the lands, nothing but the lien for the security of the purchase-money, which a court of equity will raise and enforce so long as the debt for the purchase-money remains unpaid. When the reason of the principle now to be applied, is considered, it is obvious that there can not bé the slightest difference in its application in these two classes of cases, nor in any case of a lien, a charge upon property for the security of a debt, whether it is express, created by the contract of the parties, or arising by implication of law.

There was formerly much discussion as to the nature, effect, and operation of statutes of limitation upon contracts falling within their influence; whether these statutes -were, as in those statutes, borrowed from the statute of 21 James 1, ch. 16, in terms directed more particularly to the forms of action, which must have been pursued to enforce performance of the contract, or, as under our present statute, directed particularly to the character and evidence of the contract. It is now the received doctrine that the contract is not extinguished, though statutes of limitation operate a bar to remedies for its enforcement. It remains, and of itself, will furnish a sufficient consideration for a new promise to perform it. The new promise is not regarded as a new contract; it operates merely to remove the bar created by the statute; and suits are instituted, not upon the promise, but upon the original contract.— Childress v. Childress, 1 Ala. 482; Jones v. Jones, 18 Ala. 248. Upon this principle, that statutes of limitation do not annul or extinguish contracts, but relate only to the remedy, rests the doctrine generally prevailing in the absence of a statute otherwise providing, that if the statute of the State in which suit is brought does not operate a bar, the statute of the State in which the contract was made, though it may have perfected a bar while the party sought to be charged was within its jurisdiction, cannot be invoked as a defense. — Childress v. Childress, supra; Jones v. Jones, supra. The statutes do not relate to the obligation of the contract, which has its inception in the origin of the contract, but to the remedies which may be pursued when the obligation has been broken. There may be several remedies, to either of which a party can resort when he is damnified by the breach of the contract. The statute may operate to bar the one, without affecting the right to pursue another. All liens for the payment of a debt, are in the nature of collateral securities. Such securities may be given without affecting the right of the debtor to rely on the statute of limitations as a bar to the action on the debt against him personally, in which a personal judgment would be rendered, operating on all his property, whether presently owned or the subject of future acquisition. A common example is, when a mortgage under seal is given as security for the payment of a promissory note, or other simple contract, the note is not taken without the statute — it remains a simple contract, and remedies for its enforcement must be pursued within six years. — Ang. on Lim. § 92; Scott v. Ware, 64 Ala. 174. A pawnor giving a pledge for the security of a debt, is not deprived of the benefit of the statute as a protection against an action on the debt. — Ang. on Lim. § 73.

The principle which preserves liens, notwithstanding statutes of limitation operate to bar remedies on the debt, corresponds precisely to' the principle that the creation of such liens does not arrest or prevent the operation of the statute as to remedies upon the debt. That principle prevails alike in courts of law and equity. It is quite a mistake to suppose, as is insisted in the argument of appellant’s counsel, that it is peculiar to courts of equity. Statutes of limitations operating only on remedies, not on the obligation of contracts, not working their extinguishment, proceeding on considerations of public policy, independent of the merits of particular cases, for no other remedies than such as are expressed in them. The remedy for a debt may be barred, but there may be no bar to a remedy for the enforcement of a. security or lien, created either by the contract of the parties or by the act of the law. And when there is no such bar, courts of law, as well as courts of equity, enforce the lien or security, when enforcement lies within their jurisdiction, though the remedy for the debt is barred. The lien or security is an incident to the debt, and remains, accompanying the debt, so long as it is not paid.

The case of Higgins v. Scott, 2 Barn. & Ad. 413, was the case of a lien of an attorney, enforced by the court of King’s Bench, though the debt was barred by the statute of limitations. The case of Spears v. Hartly, 3 Esp. 81, before Lord Eldon, while Chief Justice of the Court of Common Pleas, was referred to by counsel. It was an action of trover, brought in 1800, to recover certain merchandise, upon which the defendant, a wharfinger, claimed a lien for a balance of general account due in 1790. As actions for the recovery of this balance was limited to six years, it was contended he could not retain possession of the merchandise for its payment. But Lord Eldon held that as statutes of limitation related only to the remedy, not creating any presumption of the payment of the debt, the wharfinger, by virtue of his lien, could retain the goods until the debt was paid. In Edwards on Factors, § 76, speaking of the lien of factors, which is essentially a legal, as distinguishable from an equitable lien, the principle, as it prevails in reference to either lien, and in courts of law or of equity, is tersely stated : “The lien remains good, notwithstanding the debt has been barred by the statute of limitations. This is because the statute does not discharge the debt, but only bars the remedy by an action. The rule must be different where the statute is construed as simply raising a presumption of payment from the lapse of time.”

The case of Bank of Metropolis v. Guttschlisk, 14 Peters, 19, is another instance of the application of the principle in courts of law. Without the knowledge of the bank, a principal debtor had conveyed real estate in trust for the protection and indemnity of his indorser, against whom the bank obtained judgment, but suffered the statute of limitations to bar all remedies for its enforcement. Then being informed of the deed of trust, the bank procured a sale to be made by the trustee, became the purchaser, made a sale of the lands, and the action was against the purchaser for the recovery of tbe price. Of other grounds of defense, it, was insisted the bank did not, under the sale by the trustee, acquire any title, because the statute of limitations having barred it of remedies against the indorser, the trusts of the deed for his protection bad expired. The court answered, that though the statute had operated a bar, the claim was of full force, and protected by the trusts of the deed until it was paid. In the case of Waltermire v. Westover, 4 Kern. (14 N. Y.) 16, the question was very carefully considered in a court of law, and the opinion of Selden, J., is a very clear, full, and precise statement of the principle, and the reasons upon which it is founded. By the statute of New York, the judgment of a justice of the peace, if a transcript thereof is filed and docketed in the county clerk’s office, becomes a lien on the real estate of the defendant. The statute of limitations bars an action on such judgment in six years from its rendition. It was held, that though an action on the judgment was barred under the latter statute, the lien created by the former statute was preserved and could be enforced until the lapse of time raised a presumption of payment. The distinction between a statute which discharges the debt, and one affecting only the remedy, is very clearly drawn. It was said : “If statutes of limitation do not discharge the debt, but act exclusively upon the remedy, upon what principle of interpretation is it to be held, that this statute, which, is in terms confined to the remedy by action, operates to annihilate the remedy by execution ? The statute is in derogation of a clear common law right. It does not operate according to the recent cases by producing any presumption of payment, but is a mere statutory bar, founded in principles of public policy. It would be contrary, therefore, to all just rules of construction to extend its operation beyond the fair and reasonable interpretation of its language. The reasoning which has so fully established that statutes of this -sort act upon the remedy only and not upon the debt, equally proves that the operation of the statute in question here is confined to the particular remedy by action. Indeed, the statute could only be held to reach and subvert the remedy by execution, by holding that' the debt itself is discharged, or by interpolating language not expressly or by any fair implication contained in the statute.” — -See, also, Thayer v. Mann, 19 Pick. 535; Crain v. Pain, 4 Cush. (Mass.) 483.

It is not insisted that the bill shows there has been any discharge, any payment of the purchase-money of the lands. The whole argument is, that as it is shown the purchase-money was due by simple contract for more than sit years, during which there was no legal impediment to a suit at law for its recovery, the lien cannot be enforced. In other words, that as the statute of limitations operates a bar to an action for the recovery of the purchase-money, the right and remedy to enforce the equitable lien for its payment is also barred. It has not been, and cannot be insisted there is any provision of the statute prescribing the time within which remedies for the enforcement of liens must be pursued in courts of law, or of equity. To apply the statutes to such remedies would require more than an unwarranted interpretation of their terms; there must be an importation into them of causes of action, and of remedies, in reference to which the law-maker was silent. As to remedies for the enforcement of liens for the security of debts, whether the liens are created by the contract of parties, or like the lien of a vendor of lands, who has parted with the legal title, taking no independent security for the payment of the purchase-money, arising by implication of law, there is no statute of limitations. Remedies to enforce them are not barred until twenty years has elapsed, creating a presumption of payment.

It is urged that a different principle ought now to be adopted in courts of equity, as it is expressly declared by statute, that the statutes of limitation shall apply to suits in equity. But the mandate of the statute is fully satisfied, when statutes of limitation have in courts of equity, and in reference to suits in equity, precisely the same operation and' effect they have in courts of law in reference to legal remedies. When, if the right was legal, capable of enforcement by a legal remedy, that remedy would not be barred ; a corresponding remedy in equity, for the enforcement of a right cognizable only in equity, cannot be barred. We have considered this question much more fully than we would have deemed necessary or proper in view of the former decisions of this court, if it was not so apparent the principle and reason of those decisions was misapprehended and misunderstood. The principle and reason is, that remedies for the enforcement of liens or securities for the payment of a debt, are distinct from and independent of remedies at law or in equity founded on the debt. only. The one may be barred by the statute of limitations directed against it, without affecting the remedy for the other, as to which the statute is silent. It is not material whether the right or lien is legal or equitable, express or implied. Numerous examples will readily suggest themselves to the professional mind. A mortgagee has three remedies which he may pursue concurrently, or at such intervals as he may elect. The debt may be by simple contract and barred within six years. It would not be supposed, if he suffered this bar to be created, that he was barred of an action of ejectment limited to ten years ; or, if lie suffered that bar to be created, that he was barred of a bill to .foreclose, which all authorities agree may be prosecuted until twenty years has raised a presumption of payment of the mortgage debt. An attorney having a lien, has the right to an action at law for the recovery of the debt to which the lien is attached, at any time within three, or within six years, depending on whether the debt is or not an open account. It is matter of choice with him whether he will resort to the action, or rely on the lien ; or he may, if diligent, pursue both. But that he suffers the action barred by the statute of limitations cannot in reason, or in justice, preclude an enforcement of the lien to which the statute does not apply. The equitable lien of a vendor for the payment of the purchase-money of lands, is frailer than that of a mortgagee. The vendor has no estate in the lands, and of course can resort to no remedy for their recovery. He has, however, two remedies; one by action for the recovery of the purchase-money, another by bill in equity to enforce the lien. Suppose he suffers the action barred by the statute of limitations, the debt is not paid, nor is there a presumption of payment. There is a mere loss, a mere relinquishment of one remedy, which is not an exoneration of the lien, not a discharge of the debt, for without payment of the debt, it is not discharged, nor is the lien exonerated. Pursuit of the lien only, when the debt is barred by the statute, cannot confer a right to a personal judgment if the statute is pleaded. The only judgment or decree which can be rendered is one fixing, establishing and declaring the lien.

It is shown by the bill that the Alabama Iron Company, though purchasing without notice of the lien asserted by Curry, had not paid the purchase-money or received a conveyance of the legal estate. In England, the rule seems to be inflexible, that a purchaser will not be protected against outstanding equities, until be has fully paid the purchase-money and received a conveyance of the legal estate. So long as in either of these particulars the traosaction is incomplete, notice of the equity will not only preclude him from proceeding further, but will deprive him of all right to protection for whatever may have been done without notice. The rule generally adopted in the courts of this country is less stringent. The party seeking to fasten a trust, or other equity on the legal estate, is compelled to do equity. If in good faith, without notice of the trust or equity, the purchaser has made partial payments of the purchase-money, or has made improvements enhancing the value .of the lands, compensation, indemnity to him, must be approved by the party seeking to charge the lands, though a conveyance of the legal estate is not executed, nor the purchase-money fully paid. In the case of Dufphey v. Frenaye, 5 St. & Port. 215, this question was very fully considered, and the conclusion was, that in such cases exact justice would be done by fastening a lien on so much of the pure!) ase-money as was unpaid, charging the lands with its payment. The Alabama Iron Company, though it had not delivered to Ware, the shares of its capital stock, contracted to be delivered as the consideration of the sale and conveyance of the lands, and bad not received a conveyance of the legal estate, yet had in good faith, without notice of the lien asserted by the complainant, entered into- possession and made very extensive and valuable improvements. The purposes of equity and good conscience are met when the rule declare^ in Dufphey v. Frenaye, supra, is applied, and the company is compelled to answer to the complainant for So much of the stock as will correspond to the extent of his lien on the lands. This the bill is framed to accomplish, and its special prayer is addressed to that end.

We have considered the several causes of demurrer, and do not find any one of them well taken. The decree of the Ohancellor must of consequence be affirmed.