Dunson v. Lewis , 156 Ga. 692 ( 1923 )

Hines, J.

(After stating the foregoing facts.)

When land is sold and a portion of the purchase-money is paid bv the vendee, and when the vendor delivers to the vendee a bond for title conditioned to make title upon the payment of the balance of the purchase-money, both the vendor and the vendee have a beneficial interest in the land which either may sell or assign. Georgia State B. & L. Asso. v. Faison, 114 Ga. 655 (40 S. E. 760). When the purchaser transfers his bond for title, he parts with his beneficial interest in the land, although he is still bound to pay to the vendor the balance of the purchase-money due him. The vendor, after such transfer, retains his beneficial interest in the land and the legal title thereto, subject to the right of the transferee of the vendee, or any subsequnt. transferee claiming under the original assignment of the bond for title, to pay the balance of the purchase-money and to have a conveyance made to him'.. The vendor can sell .his interest in the land and convey the title thereto to the purchaser, subject to the rights of such transferee. The vendor sells the land subject'to his outstanding bond for title. We see no reason why-he can not sell his beneficial interest in the land to his original vendee, subject to the same rights. The purchaser from him will hold the title to the land in trust for such assignee of the vendor’s bond for title, and such purchaser would have to make title to the latter on payment of the balance of the' purchase-money clue the vendor. AVhen the original vendee parts with his interest in the land by the transfer and assignment of his bond for title, and afterwards has to pay the balance of the purchase-money due his vendor, the ultimate transferee failing and refusing to pay the same, and takes a deed of conveyance from his vendor to himself, he stands in the shoes of such vendor; and he is entitled to any rights which such vendor might liave against such transferee. The contention that the payment by the obligee in the bond for title to the obligor therein of the full purchase-money creates a perfect equity in favor of such assignee, and entitles him to a conveyance by the obligor in the bond for title, is not sound either in law or morals. Such payment creates a perfect equity in such obligee, but not in such transferee who does not pay the balance of the purchase-money due the vendor. AVhen the obligee takes such" conveyance from the obligor, he takes it subject to the rights of the ultimate transferee, and will be compelled to convey to the latter the land upon payment by him of the amount of the purchase-money which he had to pay to his vendor. To entitle the ultimate transferee of the bond for title, under these circumstances, to a conveyance of the land, he must pay to the vendee such purchase-money. Under such circumstances the vendee tabes the place of the vendor, and is entitled to enforce all the rights which the vendor may have against such transferee. The payment by the vendee of the purchase-money in full does not inure to the benefit of such transferee. Such transferee must pay the balance of the purchase-money, to acquire a perfect equity and to entitle him to a conveyance. Georgia Mills &c. Co. v. Clarke, 112 Ga. 253 (37 S. E. 414). This would clearly be true if the vendor had conveyed to one other than the obligee in his bond for title; but we see no good reason why, under the circumstances of this case, he could not convey this land, with the same result, to the obligee in the bond for'title, in order that the latter might be protected in the payment by him of the balance of the purchase-money of the land.

AVhat are the rights of the vendor to which his vendee is subrogated? The assignee of the vendee is not subject to the obligation of the contract of sale, except upon his option to enforce it by specific performance. Couch v. Crane, 142 Ga. 22 (82 S. E. 459), Gafford v. Twitty, 154 Ga. 682 (115 S. E. 105). It is optional with the assignee, in the absence of ah agreement to assume and pay the balance of the purchase-money, as to whether he is to complete the contract. 36 Cyc. 760. If he does not assume and agree to pay the balance of the purchase-money, the vendor can not proceed against him either at law or in equity to recover the same; but if he does agree to assume and pay the balance of the purchase-money, the vendor can proceed in equity against his vendee and such assignee to recover any balance of the purchase-money due. Morgan v. Argard, 148 Ga. 123 (95 S. E. 986). The vendor may sue for the land upon the failure of the purchaser or transferee to pay the purchase-money (McHan v. Stansell, 39 Ga. 197; Alston v. Wingfield, 53 Ga. 18; Couch v. Crane, supra); or upon failure of the purchaser or transferee to pay the purchase-money, the vendor may sue the purchaser upon the notes given for such purchase-money, reduce them to judgment, file a deed and have it recorded, and have the land levied upon and sold to pay such purchase money (Civil Code (1910), § 6037); or, as the land remains liable for the purchase-money, the vendor may call upon such assignee to pay the balance of the purchase-money, or surrender the land, or have it sold, to satisfy the debt." 39 Cyc. 167; Champion v. Brown, 6 Johns. Ch. (N. Y.) 398 (10 Am. D. 343). This remedy is in the nature of a proceeding in rem, and does not seek a personal judgment against, the assignee. Its scope is to subject the land to the payment of the purchase money. In Champion v. Brown, supra, Chancellor Kent said that the vendor could proceed thus “by virtue of his lien on the land.” But it is said that the vendor’s equitable lien in Georgia is abolished (Civil Code (1910), § 3373), and that for this reason this remedy does not lie. While the vendor’s equitable lien does not now exist in this State, where the vendor sells land, and gives a bond for title conditioned to make title when the purchase-money is paid, the equitable title passes to the vendee charged with the payment of the purchase-money. In such a case the retention of title by the vendor is security for the purchase-money, and in equity is tantamount to a lien. This being so, the original vendor or a substituted vendor can proceed against the subassignee of the former’s bond for title to subject the land embraced therein to the payment of the purchase-money. Of course, the vendor can not pursue all of these remedies concurrently in the same action. .The first and last of these remedies extends to the vendee’s assignee in possession, or any subsequent assignee claiming under the vendee’s original assignment. Couch v. Crane, supra. The conveyance by the vendor to the vendee of this land put the legal title in the latter, and he stands in the shoes of the vendor. He thus became entitled to enforce at least the first or the last of the above named remedies.

The original petition was a complaint for land brought by the original vendee against the ultimate assignees of the bond for title and their tenant in possession. The plaintiff filed an amendment to his petition, containing allegations fully set out in the statement of facts. Under this amendment the plaintiff sought to have the land sold to satisfy the debt due him growing out of the payment of the balance of the purchase-money due on this land. The defendants objected to the allowance of this amendment, on the ground, among others, that it set up no cause of action, and that, if it set up any cause of action, it was a new cause of action. The court overruled these objections and allowed said amendment, and error is assigned upon this ruling. We have already seen that this amendment set up a cause of action. Was the amendment objectionable on the ground that it set up a new cause of action?' In other words, can the plaintiff’s complaint for land be so amended as to enforce equitable rights against the defendants therein? The defendants had filed an equitable defense. They undertook to set up against plaintiff’s action a complete equity. While such defense is available at law, it is nevertheless an equitable defense. When the defendants filed this equitable defense, this ipso facto converted the suit from an action at law into an action in equity, and the plaintiff could assert any counter-equities by an amendment to his petition. Powell on Actions for Land, § 127; Rust v. Woolbright, 54 Ga. 310. It may be that, without such plea, the plaintiff could make this amendment, it being subject to the objection that it set up a new cause -of action, and proceed to have this land subjected to the payment of the purchase money due him therefor. In Oellrich v. Georgia Railroad, 73 Ga. 389, the same-being a complaint for land, this court held that “the declaration could be amended by alleging that the plaintiff claimed title as security for the indebtedness set up in the deed, and by praying that the verdict should be so moulded as to subject the premises described in the deed attached to the declaration to the payment of the note set out therein. Such an amendment, if necessary, was merely explanatory, and made, clearer the cause of action. It added neither a new cause of action nor a new party.” See also Polhill v. Brown, 84 Ga. 338 (10 S. E. 921). In his amendment the plaintiff does not pray for any judgment against the defendants. He simply seeks to have.the land sold, to have the purchase-money paid, and the balance, after paying the costs and expenses of the proceeding, paid to the defendants. He undertakes to give to the defendants their equitable rights on easier terms than they could assert them themselves. So we do not think that the court erred in allowing this amendment upon the grounds urged. The amendment set up a cause of action, but not such a new one as would render the amendment illegal.

Applying the above principles, the court did not err in admitting evidence, in directing a verdict for the plaintiff, and in rendering the decree in favor of the plaintiff, under the facts of this case. Judgment affirm,ed.

All the Justices concur.