Yancey v. Blakemore

Harrison, J.,

delivered the opinion of the court.

The record shows that Noah Wine and wife conveyed to W. H. and Charles H. Blakemore a tract of 137 acres of land, part of the consideration being paid in cash, and a vendor’s lien being’ retained on the face of the deed for the deferred instalments of purchase money, represented by three bonds for $1,000 each, two of which bonds were subsequently paid off in the hands of Wine, the vendor, while the third and last was by him assigned for value to one Sarah Cline. The Blake-mores afterwards sold and conveyed to L. P. Coyner 19 acres, 2 roods, and 13 poles of said land; Coyner paying part of the purchase money in cash, and executing his bond to the Blake-mores for $1,000, the residue of said purchase money. In this deed no lien was retainéd. Afterwards Coyner and wife, by deed of September 13, 1894, conveyed, together with other land, 10 acres of this 19-acre tract to W. L. Yancey, trustee, to secure a loan made by the Baltimore Building and Loan Association, he having previously conveyed portions of the tract to other parties.

The Blakemores having failed to pay their bond for $1,000 in the hands of Sarah Cline, assignee, the question presented is which land must he subjected first to its payment, that still owned and held by the Blakemores, or that which the Blake-mores conveyed to Coyner. The appellant relies upon the rule which requires land subject to a vendor’s lien or other encumbrance, which is sold in parcels to different persons by successive alienations, to be subjected in the inverse order of such alienations, the land retained by the debtor being subject first of all. The appellant, therefore, contends that the portion of the 137 acres still unaliened and held by the Blakemores must first be subjected to the satisfaction of the vendor’s lien before that portion of said land sold to Coyner, and by him conveyed to Yancey, trustee, can be so applied. On the other hand, the appellees insist that while no lien was expressly reserved in the conveyance from the Blakemores to Coyner to secure the $1,000 of purchase money due on the 19-acre tract, yet it was expressly agreed that it should be retained, and was omitted by mistake, and that, in pursuance of said agreement, the Coyner bond was turned over to Mrs. Cline, and that Coyner then and there undertook the payment of the Blakemore bond held by Mrs. Cline for a like amount, the payment of which should ■operate as an extinguishment of the Oovner bond to the Blake-mores; of all of which they insist the appellant had notice.

The Circuit Ooru’t adopted the view of the appellees, and decreed that the land conveyed by the Blakemores to Coyner must be first subjected to the payment of the bond held by Sarah Cline, assignee, before subjecting that retained by the Blakemores at the date of their conveyance to Coyner.

In this we think the Circuit Court erred. Conceding that an equity constituting a vendor’s lien could, as between the Blakemores and Coyner, be created by parol, about which we express no opinion, such an agreement could not affect the rights of the Baltimore Building & Loan Association, which is a subsequent purchaser for value, unless it had notice. The records do not disclose any equity in favor of the Blakemores, and the proof is not sufficient to charge the Loan Association with notice of their claim. The only witness by whom it is thus sought to affect the rights of the association is Coyner himself. He says on this point:

“I told Mr. Yancey I owed Mrs. Cline $1,000. I think she liad my bond to tbe Blakemores at this time. She also held Blakemore’s bond for $1,000, secured by a vendor’s lien on this same property. I think Mr. Yancey knew the Wine bond was a lien on this property. He knew that I owed Mrs. Cline $1,000. I told him I had given my note for it.”

And on cross-examination he says:

“Q. 1. In your printed applications to the Baltimore Building and Loan Association for the loan of $2,500, seemed by deed of trust, a copy of which is filed with these papers, didn’t you state that there were no liens upon this property, except the lien to K. P. Harnsberger, receiver of the Campbell & Pence stock of goods?”

“Ans. Ho, I don’t think I did. If I did, it was at the time I told Mr. Yancey of the Cline lien. Then Mr. Yancey remarked that I had a clear deed.”

“Q. 2. Isn’t this what you told Mr. Yancey: that the Blakemores had turned over your bond to them for .$1,000 to Mrs. Sarah Cline, and that you had arranged it all with her?” “Ans. Yes, that was the time I gave Mrs. Cline the $1,000 bond, my bond. I expect that was the time, and expected to get Blakemore’s bond from Mrs. Cline.”

All this occurred in connection with another and wholly different transaction, one year before the loan of the Building-Association was made.

On the other'hand, W. L. Yancey denies that he had notice of the equity set up by the Blakemores, saying on this point that he “was not told at the time, and did not know then, that the bond which Sarah Cline held against the Blakemores was the bond of the Blakemores to Hoah Wine, and that the same had been assigned to Sarah Cline by the said Hoah Wine, but merely supposed that the bond which Sarah Cline held was some personal obligation of the Blakemores, and did not know, and was not told by L. P. Coyner, or any one else, that it was for the balance due on the land.”

This evidence is not sufficient to charge the Building Association with notice of the equity claimed by the Blakemores. Before it can be affected by any latent equity between the Blakemores and Coyner, the proof of notice of such claim must be clear and strong.

The appellant or its agent, Yancey, should have been clearly informed that the Cline bond was one of the Blakemore bonds seemed by the vendor’s lien; that Coyner had undertaken to pay it; and that it was intended to claim a lien for its payment by parol in favor of the Blakemores on the land conveyed by them to Coyner. These facts were never communicated in any wray to Yancey. The most that can be said is that he was told that the Blakemores owed Mrs. Cline $1,000, which Coyner had agreed to pay, but nothing was said to disclose any connection between Mrs. Cline and the vendor’s lien resting on the land, and nothing to suggest the equity now asserted by the Blake-mores.

The court is further of opinion that the recorded vendor’s lien, did not impose on the appellants the duty to inquire for evidence of any latent or secret equity which the record did not disclose. . They had full knowledge when they made the loan to Coyner that there was an unsatisfied outstanding vendor’s lien for $3,000 on the whole tract, including the 19 acres aliened by Blakemore to Coyner, and it was not material in whose hands the bonds representing that debt might be. There was nothing in the record to put the appellants on enquiry, or to suggest the existence of secret or unknown liens to their prejudice which might be disclosed by enquiry outside the record. They chose to take the risk of the security as the records disclosed its status, and the law does not impose any further risk upon them. Cox v. Romine, 9 Gratt. 27.

The decree of the Circuit Court must therefore be reversed, and the cause remanded for further proceedings to be had therein in accordance with the views expressed in this opinion.

Reversed.