Dubois v. Hull

By the Court, Miller, J. The consideration money upon the sale of the land conveyed by the plaintiff to the Manhattan. Ice Company not having been paid, the law- attaches a lien upon the real estate for the amount, unless the circumstances surrounding the case show that the lien was waived. The principle of. equitable lien is founded upon the presumed intention of the parties; although it often happens that they — 29 — knew nothing about the rule, and did not expect any such security. It is claimed by. the counsel for the defendant that the lien was waived, and that the plaintiff intended to rely upon the personal credit of the company. There is evidence in this case to show that the negotiations were made and conducted by Henry Dubois, the father of the plaintiff, who was one of the trustees of the ice company, and who, the plaintiff claims, acted as his agent in making the sale. The proceedings of the trustees, which were introduced upon the trial, show that Henry Dubois proposed to sell the property to them and to receive in payment therefor stock of the company to the amount of $2000, and the report of a committee, recommending the acceptance of that proposition, was adopted. Ho further steps were taken to pay for the land in stock, nor was it ever issued to the plaintiff, or to any person for his benefit. The plaintiff testifies that no part of the consideration money was paid to him, and that the company were to pay him in cash, as he understood it. The treasurer of the company swears that the real estate was never paid for; that the company never issued and there never was any agreement to issue any stock to the plaintiff, at any time, or that he was to be paid for the land or any part of it, in stock. Ho stock having been issued, and the proposition to pay in stock never having been executed, if any such there was, the company had entirely failed to complete the arrangement alleged to have been made, and hence it can hardly claim the benefit of it in this case. Independent of this view of the matter, the evidence was certainly conflicting upon the question of fact whether any such arrangement was made; and the referee having found against the plaintiff, upon that point, his finding must be regarded as conclusive and binding. Even if the evidence had established a paroi agreement to take pay for the land in stock, I think as it never was enforced it would not have been sufficient to establish a waiver of the lien. It could only have been waived by taking col — 30 — lateral security, or by an express agreement to that effect. The party disputing the lien must show that the vendor agreed to rest on other security, and to discharge the lien. (Willard’s Eq. Jur. 124, 443. Fish v. Howland, 1 Paige, 24, 30. Garson v. Green, 1 John. Ch. 308.) In the case last above cited, by an agreement in writing a part of the consideration money was to be paid by the purchaser’s note at fifty-five days, and the lien was sustained. The circumstances showing that the lien was not intended to be reserved must, within the authorities cited, be circumstances constituting a part of the contract. The plaintiff is deemed not to have parted with the premises, to the extent of the lien; and as Chancellor Kent says in 4 Kent’s Com. 152: “The vendee becomes a trustee to the vendor for the purchase money.” In Hallock v. Smith, (3 Barb. S. C. Rep. 272,) Strong J. says: “If the vendor take a note or bond from the vendee, for the purchase money, that is no waiver of the lien, for such instruments are only the ordinary evidences of the debt.” The law presumes an intention to retain the lien, and imposes upon the vendee the burden of proving the contrary. (1 Hilliard on Mort. 483.) Even if it be doubtful under all the circumstances, whether the lien has been displaced or waived, the lien attaches. (Story’s Eq. J. § 1224.) Applying the principles established, to the case under consideration, I think that the circumstances of the case do not show a waiver of the lien, even if that question of fact, after the decision of the referee, was an open one. Nor does the fact that the plaintiff had put his demand into a judgment, before attempting to enforce the lien, evince an intention to waive it. It has never been held that obtaining a judgment for a portion of the purchase money of real estate waived the lien. This was a legal remedy, which the party had a right to pursue, and I see no good reason why it should interfere with the equitable remedy, or that by resorting to it the party evinced an intention to abandon his claim in equity. — 31 — A holder of a bond and mortgage may sue upon the bond, without waiving his equitable remedy by a foreclosure of the mortgage. It was held in Cripped v. Heermance, (9 Paige, 211,) that where a bond and mortgage was void for usury, the original debt due on the contract for a sale of the premises was not merged therein, but remained an equitable lien on the land, as a part of the purchase money due upon such contract. The obtaining of a judgment was not taking an additional security of the purchaser, as the Manhattan Ice Company had no personal property out of which the amount could be realized, nor any real property except the land in question. The taking of a bond or note does not discharge the lien, and there is no good reason why the prosecution of a bond or note of itself should have that effect. According to the authorities before cited there must be an express agreement to waive the lien, or the vendor must receive some substantial equivalent or security in the place of it; so as to show an intention to waive it. At most, the obtaining of a judgment for the consideration money can only be regarded as a circumstance to show the intention of the party to waive the lien, bearing upon the question of fact submitted to the referee, whether there was a waiver. It is said that by the statute, (3 R. S. 5th ed. 273, § 6,) no proceedings can be had in an action to enforce the lien until an execution on the plaintiff’s judgment is returned unsatisfied in whole or in part. I think that this provision has no application to proceedings to enforce an equitable lien. The article containing this section is entitled “Of the powers and proceedings of the court upon bills for the foreclosure and satisfaction of mortgages.” Although an equitable lien has some of the characteristics of a mortgage, yet a proceeding to enforce it is a common law remedy, which is not governed by the statutory provisions referred to, and many of them would be entirely inapplicable. It is therefore no defense to the action that no execution was issued upon the judgment. — 32 — It is further objected that the Manhattan Ice Company had no power to create this equitable lien. That under the statute it could hold real estate, but it had no power “to mortgage the same, or to give any lien thereon.” (2 R. S. 5th ed. 658, § 20.) I think the answer to this position is that the company did not execute any mortgage, or give any lien on the real estate. The lien was created' by operation of law. The conveyance by the plaintiff to the company created the lien, and the company held the real estate as trustee for the vendor, for the purchase money which was unpaid. (4 Kent’s Com. 154.) The statute could have no effect upon it in any way. At the time of the conveyance the plaintiff retained an interest in the land, to the amount of his lien. It could not therefore have been assumed by the plaintiff that the statute had any application, or that he contracted with knowledge that it in any way affected his rights. The offer to prove that Henry Dubois, the father of the plaintiff, paid the whole consideration money of the farm of which the premises in question were a portion, and that they were conveyed to the son- to protect them from his father’s creditors, and for his benefit, was properly overruled. (1.) Ho such issue was made by the pleadings in the case. (2.) The answer admitted that the plaintiff was the owner of the premises, at the time of the conveyance. (3.) The Manhattan Ice Company, by accepting a conveyance from the plaintiff, admitted his ownership, and I think it is thereby estopped from interposing any such defense. (4.) The evidence could have no bearing upon the questions litigated, and was not admissible. I think no error was committed by the referee, in allowing thé amendment to the complaint proposed by the plaintiff. All the parties were represented, and there was no such variance as could not be supplied under the liberal provisions of the code, §§ 169, 170. There is no pretense that the defendant was misled, and the complaint may be consideredi — 33 — as amended so as to conform to the proof. (Code, § 173. Wright v. Whiting, 40 Barb. 235. Denman v. Prince, Id. 213.) Even on appeal the court may treat the pleadings as amended in conformity with the evidence, in any respect in which the court ought clearly to allow an amendment at special term. (Rowdoin v. Coleman, 3 Abb. Pr. Rep. 431. Harrower v. Heath, 19 Barb. 331. Bate v. Graham, 1 Kern. 237. Pratt v. Hudson River Rail Road Co., 21 N. Y. Rep. 305.) [Albany General Term, December 7, 1863. The referee properly exercised- his discretion in allowing the amendment. For the reasons given, the judgment entered on the report of the referee must he affirmed with costs. Mogeboom, Peelcham and Miller, Justices.]