Bennett v. Murphy

Spring, J.: The legal principles applicable to this situation seem to be well settled. Tiie vendor, as a rule, has an equitable lien upon the land conveyed for the unpaid purchase price, even though there is no-agreement to that effect. (Hubbell v. Henrickson, 175 N. Y. 175; Sprague v. Cochran, 144 id. 104, 112; Mc Whorter v. Stewart, 39 App. Div. 212; Bach v. Kidansky, 186 N. Y. 368; Pom. Eq. Juris. [3d ed.] § 1249 et seq.) Knapp accepted the mortgage knowing that the purchase price had not been paid in ,fnil; so, of course, if any lien was permissible it was superior to his mortgage. (Seymour v. McKinstry, 106 N. Y. 230.) There is, however, an exception to the rule equally well established. If the vendor accepts the note of a third person he waives his right to enforce the lien upon the premises, unless its retention is reserved, or unless the facts overcome the .inference. (Maroney v. Boyle, 141 N. Y. 462; Vail v. Foster, 4 id. 312; Fish v. Howland, 1 Paige, 20; 2 Washb. Real Prop. [3d ed.] 91.) The appellants rely upon this exception or departure from the general principle. They claim that by the acceptance of the due bill the vendor relinquished his .equitable lien and elected to rely exclusively upon the responsibility of Knapp for the large balance of the purchase price unpaid. The principle and the exception are presumptions, and which., shall prevail depends upon the facts in a given case denoting the intention of the parties. ", Pomeroy in his Equity Jurisprudence (3d ed. § 1259) states the rule as follows: “The grantor may of course waive-, his lien; [105] whether he does so is a matter of intention, which must appear either expressly or by acts directly inconsistent with its existence and indicating a clear intent to waive.” In this case it is important to keep in mind that Knapp was the agent or representative of the appellants. He furnished the money for them, and the plaintiff understood he was acting in their behalf. All the parties appreciated that the purchase price for the farm was to be paid in cash. "When they came together to consummate the sale and conveyance there was no intention to depart from the cash payment. Knapp had his money deposited in a bank not accessible that afternoon.’ He intended to go to Albany for a day or two, and the plaintiff was willing to wait until his return for the balance of the purchase price. He did this for the accommodation of the . appellants and Knapp. The vendees depended upon Knapp for the money and they were, therefore, unable-to pay on that day. All the parties comprehended the reason for the delay and it was not in any respect at the solicitation or for the convenience of the plaintiff. The due bill given did not extend the time of payment. It was not an obligation, in the circumstances disclosed, which abrogated the plaintiff’s equitable lien on the premises he had conveyed. It was intended by all the parties as a mere memorandum indicating the sum unpaid. It was signed by Knapp because he was to furnish .the money, as the plaintiff knew, but it was signed by him while' representing the appellants. It has no greater effect than if signed by Knapp and the vendees for they all participated in the transaction and it was for their common benefit. If the grantor had taken a promissory note from the vendees his equitable lien would not have been waived thereby. (Maroney v. Boyle, supra.) The due bill signed by Knapp has no different effect for it was given for his benefit. He is not the third person whose obligation may operate as a waiver. - He is a party interested in the principal transaction. Much is made of the plaintiff’s statement that he accepted the due bill. He did receive it, but the purpose of it as explained by the undisputed evidence countervails tire claim that it was intended to nullify the provision in the agreement that he was to be paid in cash. Whe.n confronted with the first memorandum providing for the adjustment of the partnership dealings in connection with the [106] payment of the purchase price of the land he was swift to repudiate any such plan and contended distinctly that lie was to be paid in cash for his farm,, and all acquiesced in this understanding. Knapp and Murphy were represented by attorneys in the transaction and plaintiff was alone and probably knew nothing whatever about a vendor’s lien. He did comprehend, however, that he was to be paid in cash and he never swerved or abated from that purpose. Beyond the costs which are imposed upon them the appellants are not grievotisly injured by the' decision in this case. They are only liable on the mortgage to Knapp to the extent of the moneys advanced by him for their benefit. When demand was made of them to pay the purchase price théy were called upon to perform their contract about which there.was no misunderstanding, but apparently they preferred to be controlled by their codefendant. The litigation is unfortunate for the man responsible for the con* troversy is not burdened with any of the costs. The facts found by the trial court in its decision are in accordance with the plaintiff’s position and are fairly sustained by the evidence. The judgment should be affirmed, with costs. All concurred. Judgment affirmed, with costs.