Haley v. Bennett , 5 Port. 452 ( 1837 )

GOLDTHWAITE, J.

The case which is presented on the record, is one of some novelty, and not entirely divested of difficulty.

The complainant sought, in the Court below, to subject a lot, in the town of Tuscumbia, in the same manner as if he had conveyed it by deed to Browder, one of the defendants below, and it by him, had been reconveyed, in mortgage, to secure the payment of the notes given for the purchase money. In point of fact, no deed or conveyance, of any description, was ever made by the complainant, but the legal title remains the same as before the sale, he only declaring, in writing, that he had sold, and binding himself to convey a title in fee, when full payment should be made of the notes given for the purchase of the lot. ,

From the bill and the title bond, which is set out as an exhibit to the answer of one of the plaintiffs in error, it appears that the complainant parted with the possession of the lot, and only retained the title as a mere security, for the payment of the consideration money. There is nothing in the contract stated, or in the papers exhibited, from which the conclusion can be drawn, that time of payment was intended or considered by either party, as essential to the continuance of the contract. If the money due to the complainant by the notes, should not be paid at maturity, the right to have back ,the lot, ■with its increased value, by reason of the improvements made on it, does not appear to have been contemplated, nor that the notes should become void, by a surrender of ihe lot to the complainant. The particular form of the contract can not be considered as material. It is, to all intents and purposes, in the nature of a mortgage, and all the equitable incidents of one, must attach to the com tract.

In Maryland, it has been held, that the vendor of real estate, without deed, has an equitable lien on the landsold for the payment of thepurchasemoney, into whatsoever hands it might pass, with notice that the contract of sale has not been complied with.—Ghislin vs Ferguson, 4 Harr. & Johns. 522. So, in South Carolina, an imperfect agreement, intended as a security has been supported in equity.—Menude vs Delaire, 2 Desaus. 564; Watson vs Wells, 5 Con. Rep. 472; Wadsworth vs Wendell, 5 Johns. Ch. R. 224 ; Daniels vs Davison, 17 Ves. jr. 433.

So also, in the case of a sale and .conveyance, the vendor has an implied lien on the estate sold, even against bona fide purchasers, with notice of the non-payment.—Mackreth vs Symmons, 15 Ves. 337; Walker vs Preswick, 2 ib. 622.

It is without doubt, that the complainant could have maintained ejectment for the lot sold, and his right to a recovery at law, could not have been prevented, but by the purchaser filing his bill to redeem the premises; but if possession had been recovered, the contract would not thereby have been disannulled. The 'complainant could only have held it until the rents and profits had discharged the incumbrance, after which equity would have compelled a conveyance to the purchaser or his assignees.

There is no rule of equity known to us, which will prevent the complainant from subjecting the lot to the payment of the purchase money, nor is he, (as has been supposed by the counsel for the plaintiffs in error,) bound to proceed against Brow-der, before he seeks satisfaction out of the mortgaged property — for so we must consider it.

In the case of Dunkley vs Van Buren, 3 Johns. Ch. Rep. 431, it was held, by Chancellor Kent, as the settled rule, that the mortgagee may proceed at law, on his bond or covenant, at the same time that he is prosecuting on his mortgage, in Chancery, and after a foreclosure, may collect the deficiency at law,—Perry vs Barker, 13 Ves. jr, 198; Newhall vs Wright, 3 Mass. R. 154; Hatch vs White, 2 Gall. 152.

The plaintiff in error, Haley, in his answer, sets up as a defence, that he entered into a new and distinct contract with the complainant, by which the mortgage, as he insists, was discharged; but the only evidence in the cause, to support the answer, is of declarations made by the respondent himself. This branch of the case may, therefore, be dismissed without further consideration.

The other principal reasons, for which it is said that the decree rendered should be reversed, are, because Charles A. Stokes, who is made a party defendant, by an amended bill, was not properly brought into Court.; and because no process in the amended bill was sought against the respondent, Haley, and defendant, Browder.

In reply to both these positions, it may be observed, that the original bill was sufficient, both as to allegations and parties, to authorise the decree rendered. Stokes can he considered as a material party, alone on the supposition, that a decree was necessary to he had, to divest him of an outstanding legal title to the lot. This was wholly unnecessary, as would have been the case, if the title to the lot had passed by deed, and the complainant had had no title, or a defective title to the premises.

It is a well settled rule of law, that the mortgagor can not dispute the title of the mortgagee — and as. the decree does not attempt to divest the title from Stokes, there was no error in omitting to have him before the Court.

So, likewise, it was wholly unnecessary to have Norris, who sold the premises to one of the plaintiffs in error, before the Court; he had no interest whatever in the suit, and it would be exceedingly incon-envient, to require that all the mesne conveyancees, should be brought before the Court, for no other purpose, than to disclaim and recover costs of a complainant. The general rule as to parties, was well and properly laid down by Chancellor Kent, in the case of Haimes et al. vs Beach, et al. (3 John. Ch. Rep. 459,) and it is, that all incumbrancers or persons, having an interest, at the commencement of the suit, subsequent as well as prior in date to the plaintiff’s mortgage, must be made parties, otherwise, they will not be bound by the decree.

It was also insisted, in the argument of the case, that the facts of the bill are not admitted by the answer of one of plaintiffs in error, and as Browder was only before the Court, on a decree pro confesso, all the facts in the bill should have been proved. The only material facts which were necessary to establish, were the sales, and the bond which is made an exhibit in the, answer of Haley, and these are not only admitted, but established by proof.

If Browder had brought the case to this Court, the decree, so far as it renders a judgment against him, for the deficiency which may exist in the sale of the lot, would have been reversed in this Court, as not warranted by equity practice.—(Dunkley vs Van Buren, 3 Johns. Ch. Rep. 331. Globe Insurance Company vs Lansing, 5 Cowen, 380.) But as the case is removed to this Court, by Haley alone, and as the decree in this particular, does not affect him, he can have no advantage of this error.

The decree must be affirmed.

ORMOND, J. not sitting.