Jackson v. Stanley , 87 Ala. 270 ( 1888 )

CLOPTON, J.

The lien which equity, on principles of natural justice, creates as security for the purchase price of land sold and conveyed, is the subject of waiver, express, or implied from the acts of the parties. Generally, the lien will be regarded as waived, if the grantor accepts any distinct and independent security. The authorities vary in the application of the rule to particular facts; and it would be difficult to formulate a general definition, specific, and yet comprehensive enough to include all acts which will operate to displace the lien. Ordinarily, this result is produced by the acceptance of the note or bond of a stranger, or of the grantee with personal security, or with a mortgage on other land, or a pledge of stock, or other personal property. There are cases, in which no one of several acts is, of itself, sufficient. In such cases, all the facts and circumstances should be considered, and if it appears that the vendor did not intend to look to the land, but to rely on a substituted, independent security, or on the personal responsibility of the vendee, the presumption is rebutted, and the retention of the lien repelled. —Walker v. Struve, 70 Ala. 167; Carroll v. Shapard, 78 Ala. 358; Stringfellow v. Ivie, 73 Ala. 214; Tedder v. Steele, 70 Ala. 349.

The -undisputed facts are: Appellant, who seeks by the bill to assert and enforce the equitable lien, sold and conveyed the lands in controversy, in 1882, to I). H. Mullens, for the sum of nine hundred dollars. Mullens gave his five notes for the purchase-money, the last maturing November 15, 1886, and executed a mortgage on the lands to secure the same. On April 7, 1884, complainant conveyed the lands to Mrs. Stanley, a married woman, on the expressed consideration of seven hundred and fifty dollars. Eor this sum, her husband gave his four notes, payable at long intervals of time, and Mrs. Stanley and her husband deposited with complainant two shares of the capital stock of the Pratt-ville Manufacturing Company No. 1, of the par value of one thousand dollars each, as collateral security for the notes given by her husband, with power to sell the same on default in payment of the notes. Contemporaneously, and as part of the same transaction, complainant transferred to Mrs. Stanley, by instrument in writing, the notes and mortgage of Mullens. ■

The first inquiry is the sufficiency of the uncontroverted facts to show, prima facie, an intention to look to other independent security, instead of to the laud, for the purchase-money. It satisfactorily appears, that the negotiations were conducted by Mrs. Stanley through her husband as agent, who bought the lands in her name, and for her benefit. It is unnecessary, for the purpose of this case, that we should go so far as to decide, as some respectable authorities hold, that where a married woman purchases land, taking a conveyance in her own name, and the husband gives his notes for the purchase-money, in whole or in part, he is regarded, in legal contemplation, a third person, and that the acceptance of his notes is, presumptively, a waiver of the equitable lien. The contrary is the logical tendency of our own decisions; which rather regard taking the husband’s notes, in such case, as a mode of effecting a sale not voidable by the husband during coverture, and not as authorizing the wife to hold the lands without paying the purchase-money. Carter v. Eads, 65 Ala. 190; Marks v. Cowles, 53 Ala. 499. Though the acceptance of the husband’s notes does not, of itself, rebut the presumption of a reservation of the vendor’s lien, it is a fact or circumstance of more or less import and significance, dependent on its connection with, and the nature of the other facts and circumstances of the transaction.

Accepting the husband’s notes, secured by a mortgage or pledge of other property, has the same operation and effect as if the notes of the grantee were taken, secured in like manner. The shares of the capital stock of the manufacturing company, which were deposited as collateral security for the notes of the husband, were the statutory separate estate of Mrs. Stanley. The evidence shows that there was in fact only one subscribing witness to the signatures of herself and her husband to the instrument in writing by which the stock was pledged, though, on its face, there purports to be two. On this ground, and because of her incapacity to pledge the stock for her husband’s debts, it is contended that it .should not be allowed the effect of a waiver of the lien. Whether or not the lien has been waived, is wholly a question of intention, and does not involve, in the absence of fraud, the sufficiency or invalidity of the independent security taken and accepted. At the time of its acceptance, the complainant considered the stock as ample security; it was the security for which he stipulated, and both parties believed the pledge to be valid and binding. The case does not come within that class of cases, in which an invalid mortgage on the land sold and conveyed is taken. Such mortgage evinces an intention to look to the land as security. There is no pretense that any fraud was practiced. It is simply a case of taking an invalid security, supposed to be good, under a mistake of law. Under such circumstances, taking the stock as collateral security for the notes of the husband has the same effect as evidence of intention, as if the pledge were unexceptionable. Its invalidity does not necessarily operate to prevent a waiver. To whatever other rights and remedies complainant, under the circumstances, may have been entitled, equity can not relieve from the consequences of an election and waiver once made, by restoring and re-establishing the vendor’s lien, the transaction being free from fraud. —Partridge v. Logan, 3 Mo. App. 509; 2 Wash. Real Prop. 96.

The lands had been previously sold and conveyed by complainant to Mullens, and a mortgage taken back to secure the purchase-money notes. At the time of the sale and conveyance to Mrs. Stanley, these notes were outstanding and unpaid, and the mortgage in full force. Complainant, by virtue of the mortgage, had, at law, only a defeasible legal title, and in equity a security for the mortgage debt. The notes and mortgage were transferred to Mrs. Stanley, which, armed her with powers, by foreclosure of the mortgage, to destroy the vendor’s lien, if any had been retained. The equitable lien would have been insecure. In this condition of facts, it was natural and reasonable that the vendor should require other independent security. Considering the whole transaction, all the undisputed facts, which consist of the writings, conspire to show an intention not to look to the lands as security for the purchase-money.

It is, however, further insisted, that a vendor’s lien was retained by express agreement, which presents the next inquiry. It is well settled in this State, that the presumption of a waiver of the lien, arising from the acts of the parties, may be rebutted and overcome by proof of an oral understanding or agreement that it should be retained. — Woodall v. Kelly, 85 Ala. 368. The burden of proof is, in the first instance, on the party asserting a waiver of the lien; but, when it is shown that a distinct or independent security, sufficient to operate as a waiver, has been taken and accepted, the onus is shifted on the vendor, to prove an understanding or agreement for its reservation. On this question of fact, we can not consider the evidence of Bivings. Had the proper predicate been laid, the admissions or declarations of Stanley, as proved by him, would have been receivable for the purpose of impeachment; but, having been made long after the consummation of the purchase, are not receivable to affect otherwise the rights of Mrs. Stanley. —Carver v. Eads, supra. The other parol evidence consists of the testimony of the complainant and Morris, who was interested in the land, on the one side, and of Stanley and Maxwell on the other. True, Stanley’s character for veracity was impeached by several witnesses; sustained, however, by a much larger number. A partial impeachment may possibly impair his credibility more or less; but he is corroborated by Maxwell, who is a disinterested and unimpeached witness, and also by all the written instruments, and by the letter of Stanley, written by complainant pending the negotiations, in which he accepted the former’s proposition to give his notes, their payment secured by a deposit of factory stock, without any allusion to the retention of the equitable lien. The complainant retained the shares of stock without an offer to return them, until the filing of the bill, which were regarded as ample security until the destruction of the factory by flood. On this state .of the proof, the burden being on complainant, we can not say that tbe evidence is sufficient to overcome a presumption of tbe waiver of tbe lien.

Affirmed.