Moss v. Hanson

The opinion of the court was delivered by Lewis, J. The rule in equity is to decree a specific execution of a contract for the sale of land, on the application of the vendor, if the latter is able to make a good title, at any time before the decree is pronounced: 1 Wheat. 179. This rule ha's its exceptions in cases where a contract is made in bad faith, by one who knows that he has neither title nor the legal or equitable means of acquiring one: 3 Watts 368. But where the vendee has accepted the conveyance, given bonds and mortgage for the purchase-money, and gone into possession, the vendor stands upon his legal remedies, and asks no aid from the equity powers of the court: 3 Watts 368. Where the contract is thus executed, it is true that in Pennsylvania a vendee may defend an action on the bond for the unpaid purchase-money by showing a defect of title. But this defence is founded upon the extreme hardship of enforcing payment where the consideration expected has failed. It is purely equitable in its nature; and is only available as a defence against the money remaining unpaid, and forms no ground for recovering [383] back the money already paid, unless there are covenants to cover the defect. The Chancellor will not be moved by such a defence to enjoin the vendor from proceeding at law upon his securities for the purchase-money, if he is prepared to make a good title at the time of bringing his action: 3 Watts 368; 7 Ser. $ R. 43. But in this case the assignee under the proceedings in insolvency, is the only one who possessed the power to invalidate the title under which the defendant received possession. That title was derived from individuals to whom R. & J. Phillips, the owners, voluntarily assigned the property, and it was indubitably good against R. & J. Phillips. None but their creditors, or those who represented them, could avoid it. The assignee under the insolvent proceedings, might, at his election, avoid the title for the purpose of protecting the interests of the creditors. But until he made his election to do so, the title of the defendant was good: 7 Barr 523. The only evidence tending to show an election to avoid the title so conveyed, is the action of ejectment. To that action the defendant pleaded not guilty; so that if the institution of the writ was an election by the plaintiff to claim under the title of the insolvent assignee, the plea was a denial of that title, and an affirmance of the title then held by the defendant, and-which he now seeks to invalidate. There is certainly quite as much in that proceeding to estop the defendant from denying the validity of the title under which he received the possession, as there is to estop the plaintiff from affirming it. If an estoppel exists at all, there is estoppel against estoppel, and-this leaves the whole matter open for investigation according to the truth and justice of the case. 4 If the defendant seriously intended to repudiate the title under which he received possession, he ought to have surrendered that possession to the rightful owner. If he intended to recognise the title of the insolvent assignees, he ought not to ask them to refund any part of the money paid to the voluntary assignees. But instead of adopting this course, we find that when the insolvent assignee brings ejectment, the defendant sets up as a good title the claim derived from the voluntary (assignees. And when the voluntary assignees seek to recover the purchase-money, the defendant alleges, in defence, that the insolvent assignees have the only valid title. We find also, that the question upon which the validity of these assignments depended, was one of law and not of fact; that it was doubtful in its nature, and that after a long course of litigation, the court, under its equity powers, made a decree on the 10th of November, 1848, in accordance with a previous adjudication at law against the title of the voluntary assignees, by which the securities, moneys, effects, and estate of the voluntary assignees were directed to be transferred, delivered, and paid over to a receiver, and the voluntary assignees were enjoined from further proceedings under their assignment, until otherwise decreed. [384] In pursuance of this decree, the receiver transferred to the insolvent assignee the securities upon which this action is brought. This suit is accompanied with an express offer to ratify the title which the defendant received from the voluntary assignees, and under which he has held possession for twelve years. This act of the insolvent assignee is a perfect ratification of the title of the defendant. He has, therefore, no ground of complaint founded upon a defect of title. Nor can he charge upon the insolvent assignee any want of good faith. It would be unjust to both parties to view their struggles in this long contest, as designed for any other purpose than to obtain a final decision upon the title, upon which each might confidently rely. That decision has been made, and upon the payment of the balance due on the mortgage, the defendant’s .title will be indefeasible. But he complains of the expense and the delay. This was incidental to his purchase. He cannot allege ignorance of the facts. And after accepting the deed and going into possession, without taking any covenants of warranty, he must be content with the advantages and disadvantages of his contract. He must be presumed to know the law of his case as well as his adversaries, and he cannot throw his own losses upon others. In order to secure the possession of the property, and the profits to be derived from an increase in its value, he necessarily encountered the disadvantages of which he complains. He has been in possession during this protracted litigation. He receives not only the title which he contracted to purchase, but has secured, in addition, a credit for all he has paid, and a perfect ratification from the only claimant who had the power to invalidate the purchase. It is ordered that the judgment of the court below be affirmed.