Manly v. Slason , 21 Vt. 271 ( 1849 )

The opinion of the court was delivered by

Redfield, J.

The principal question discussed in the present case is, how far the vendor of real estate has a lien for the purchase money. It was said, in argument, indeed, that the bill, in this case, was not appropriate to any such redress. But all the facts, necessary to the creating such a right, being alleged in the bill, and the prayer of the bill being consistent with such relief, we do not think the fact, that redress was primarily sought upon another ground, any obstacle to the relief now asked. And as the only ground of relief, upon which the plaintiff could prevail, is that of the vendor’s lien for the purchase money, we come at once to its consideration.

There can be no doubt, that the existence of such a lien is among the settled doctrines of the English chancery. That has long been a conceded point. And it seems now to be equally well'settled in the English courts of chancery, that the vendee of real estate, after paying the purchase money, acquires a lien upon the estate, before its conveyance, as against all but bona fide purchasers, without notice. This limitation attaches to the lien of the vendor for the purchase money also. 2 Story’s Eq. Jur, §§ 788, 789, 1217, and following sections and notes. The subject will also be found fully and thoroughly diseussed and digested by Judge Metcalf, in his edition of Yelverton, in a very elaborate and valuable note to the case of an hostler, p. 66. It will hardly be necessary to advert, in detail, to the numerous decided cases upon this subject, in the English books. There has been constant discussion there, as to what shall amount to a waiver of such lien. Indeed, that has been a difficult subject, in the English courts, as to all liens. The note of Judge Metcalf is addressed principally to the elucidation of that point. It is there shown very clearly, that the English cases, which attempted to make out that a waiver of the lien occurred in every case, where any special contract as to the price was made between the parties, even as to the time of payment, was untenable and subversive of the very basis of all liens, that is, security to the creditor. It is undoubtedly true, that in order to have a special contract amount to a waiver of a lien, it must be to some extent inconsistent with the continued existence of such lien, and thus show a virtual understanding between the parties, that the lien shall be waived. We should not be prepared to say, that this lien depended upon the contract, or the probable expectation of the parties, in the outset. For if that rule were to be adopted, there would remain few cases, to which the rule would apply, as said by Walworth, Ch., in Fish v. Howland, 1 Paige 20. For if the vendor supposed there would be any necessity to resort to such lien, he would ordinarily take a formal mortgage. And it is no doubt true, that many of our citizens are wholly uninformed of any such lien; and the same is no doubt true of many other rights, which nevertheless exist, by way of lien, — as the right to refuse to deliver goods sold, until the price is paid, and the right to stop them in transitu.

The doctrine of lien does not depend at all upon any supposed express contract of the parties, or upon any implied understanding, unless it is in regard to the waiver of such liens, but upon custom, usage, and general Jaw- And when it exists, it is not essential, that it should have been in the contemplation of the parties; for if so, each case must be decided upon its own circumstances, and the right of a taverner, or manufacturer, to thg security of a lien, would depend upon his knowledge of the law and his want of confidence in his customers. These liens, as a general thing, are intended for the better security and encouragement of particular classes of trade and business, and are in fact most important, ip those very cases, where the creditor finds his debtor unworthy of that full confidence, which had been incautiously, perhaps, extended to him, and also to prevent the necessity of constant inquiry into personal responsibility in small matters. Liens in general are important for thg epcoup= agement of business, and, to answer that epd, must depend upon general law, and not upon each particular case. So of the lien in this particular class of cases, its foundation exists in the genera} principles of equity and moral justice, by which thg seller is entitled to hold on upon the estate, until he gets the price ; and to answer its main purpose, it must be general and uniform, unless waived, These principles are distinctly recognized in 2 Story Eq. Jur., p. 465, 466, § 1220 et seq.; Gilman v. Brown, 1 Mason 212; Hughes v. Kearney, 1 Sch. & Lefr. 132. Lord Redesdale, chancellor, says, an attempt to hold the estate without the payment of the purchase money is “prima facie a fraud; it would lie on him to show it was not a fraud. So it lies on the purchaser to show, that the vendor agreed to rest on the collateral security; prima facie the purchase money is a lien on the lands,”

In Mackreth v. Simmons, 15 Ves. 349, Lord Chancellor Eldon says, after an elaborate review of the authorities from the case of Hearn v. Botelers, Carey 25, downwards, in regard to this subject: !! From all these authorities the inference is, that, generally speaking, there is such a lien.” In Garson v. Green, 1 Johns. Ch. R. 308, Chancellor Kent says, “ .Prima facie the purchase money is a lien on the land, and it rests on the purchaser to show, that the ven- - dor agreed to rest on other security.” The lien of partners, and through them of the partnership creditors, depends in no sense upon the knowledge or the expectation of the parties, and so of almost all constructive or implied trusts, or liens.

It is then incumbent upon the defendant, in a case like the present, to show either an express or implied waiver of this lien, What shall amount to such waiver is not fully settled, perhaps. In the Roman law, from which the chancery courts, no doubt, derived this notion of giving the vendor a lien for the purchase money of rea] estate, the mere taking of a security of the vendee, for the purchase money, is a waiver of the lien ; but in equity, such security, even by way of a bill endorsed by a third person, is not, of necessity, a waiver, even although secured to be paid at a future day, or not un= til after the death of the purchaser. And this lien is good against all subsequent purchasers and incumbrancers, with notice that the purchase money remains unpaid. 2 Story’s Eq. Jur. 473, 474, 476, f>§ 1225-1228, and notes and numerous cases there cited, both English and American. But, perhaps, it may be considered as novy settled, that the taking of security, beyond that of the vendee, whether personal, or by way of mortgage upon the same or othep yeal estate, or by pledge or mortgage of personal estafe, either foj= the whole or part of the purchase money, will ordinarily be esteemed sufficient evidence of a waiver of the lien, although by no means conclusive. One of the strongest cases to be found in the books, iq favor of maintaining this lien, is that of Winter v. Lord Anson, 3 Russell 488, before Lord Lyndhursf, ip 1827, reversing the des cisión of the Vice Chancellor. S, C., 1 Simons & Stewart 434. The rule laid down by Lord Lyndhtjrst is, that although the purchase money was secured by the bond of the purchaser, and to remain so during the life of the vendor; and although the conveyance expressed, that the purchase money had leen paid, and the vcwlaf s receipt, to that effect, was endorsed on the conveyance, still that the lien upon the land continued until the bond was paid. If I were to form an opinion of the probable intention of the parties, in regard to the waiver of the lien, from the facts in the case, which, indeed, should govern, I should certainly quite as much incline to the opinion of the vice chancellor, Sir John Leach, as to that of the chancellor. But we are not aware, that the decision of the chancellor has been seriously questioned, although'it is, no doubt, carrying the doctrine to its utmost verge. There is nothing in the present case, which we could in any sense consider a waiver of the lien. And no question can be made, that the defendant Ormsbee must be affected with constructive notice of the non-payment of the purchase money. The deed of the premises contained an express provision, that Ormsbee shall pay to Slason the amount then due to the orator for the purchase money, which would be sufficient to put Ormsbee on inquiry how much. Indeed, Ormsbee admits, in his answer, that he expected some portion of the purchase money remained unpaid,-but how much, and how it was secured, he did not know. This is just that kind of notice, which should have put him upon inquiry.

But the defendants have made a chief reliance, in the argument, upon the proposition, that the doctrine of equitable liens, in favor of the vendor of real estate, was not applicable to our laws, and should not be here enforced. It is true, no doubt, that the existence of any such lien has not very generally been regarded by the parties to contracts of that kind, in this state. It has not before, to our knowledge, been brought before this court. But there can be no doubt, we apprehend, that it is a highly equitable doctrine, and eminently consistent with the most perfect notions of moral justice. It has existed in the English equity courts for centuries. It has been adopted in most of the American states, whose equity systems may be regarded as at all settled, and in the national courts. Ross v. Whitson, 6 Yerg. 50. Outlaw v. Mitchell, 4 Bibb 239. Ewbank v. Reston, 5 Munro 287. White v. Casanave, 1 Har. & John. 106. Ghiselin v. Ferguson, 4 Ib. 522. Graves v. M’Call, 1 Call 414. Galloway v. Hamilton, 1 Dana 576. Handley v. Lyons, 1 Munf. 342. Wynne v. Allstan, Dev. Eq. 163. Henderson v. Stuart, 4 Hawkes 256. Watson v. Wells, 5 Conn. 468. Greenup v. Strong, 1 Bibb 590. Meek’s Heirs v. Ealy, 2 J. J. Marsh. 330. Voorhies v. Instone, 4 Bibb 354. Garson v. Green, supra; Bailey v. Greenleaf, 7 Wheat. 46, 50. And the same principle is again'recognized by. Mr. Justice McLean, in McLearn v. McLellan, 10 Pet. R. 625; —and numerous other cases might be cited.

That the existence of these liens is inconsistent with our registry or attachment laws is an objection no more formidable, than exists from the same source against most constructive or implied trusts and liens, existing in or growing out of the numerous equitable rights, peculiar to real estate, and which have nevertheless been regarded and enforced, in this state, upon the settled principles of the English chancery. An absolute deed of land, with a parol defeasance, for the security of a debt, is of this character. So are all resulting trusts, in favor of the person paying the consideration money for a deed of land, executed to some third person. And this right has been enforced in favor of a married woman even; Pinney v. Fellows, 15 Vt. 525; where the whole subject of resulting trusts is very elaborately and satisfactorily discussed, and the authorities, bearing upon that point, learnedly digested by Bennett, J.

Any argument, which is attempted to he drawn from the státute of frauds, is equally applicable to the English statute. But many cases, coming, in terms, within that statute, have been saved from its operation by courts of equity. Such 'are cases of part performance of the contract, the deposit of title deeds, to secure a debt, &c. The payment of the price of land, before the execution! of the conveyance, and the execution of the conveyance, without the payment of the price, as well as the execution of an absolute deed, for the security of a debt, and all resulting trusts, and many others, are of this character. It has been urged, that the existence of such a lien will unreasonably clog the free circulation of property, and that it is otherwise inconsistent with.our habits of business, and modes of conveyance. But such an objection, if, indeed, it be properly comprehended by the court, seems far too uncertain and indefinite to form any just ground of decision in a court of justice. We, however, apprehend no serious embarrassment will result to the community from the determination here made. This lien can only be enforced in a court of equity, where all equitable considerations will be open to both parties. The cases will be few, and to entitle the--plaintiff to redress, he must show.a case of manifest equity, in proof, and in principle. In my judgment, such a rule is far less in danger of being abused to the public detriment, than afe stringent rules of law, enforced with an iron hand, through fear of relaxation. But I am not specially fearful of the abuse of the law, from rigid adherence to principle) as evolved from the decided cases. There is in our day, perhaps, more danger of too great and sudden departure From the ancient landmarks of the sages of the law, which have been long tried, and become easy and comfortable, in pursuit of the ignes fatui of modern progress and innovation. We should not have felt Called upon to say any thing upon this portion of the case, had it not been for the great ¡¿seal and evident sincerity with which these considerations were pressed Upon the court.