Lowery v. Peterson

BRICKELL, O. J. When, as in the present case, a vendor of lands retains in himself the legal title, covenanting or agreeing to convey it at a future day, upon condition that the vendee makes payment of the purchase-money, lie carves out his own security, which is in the nature of a mortgage, and to which all the essential incidents of a mortgage attach. The relation of the parties is analogous to, if not precisely, that which would have been created, if the vendor had made a conveyance of the legal estate, and, contemporaneously, the vendee had executed a mortgage to secure the payment of the purchase-money. For, as has been justly observed, there can not be a sensible distinction drawn between the case of a legal title conveyed to secure the payment of a debt, and a legal title retained to secure payment.—Bankhead v. Owen, 60 Ala. 457. [112] The land being a security for the debt, it follows that any transfer or assignment, not limited or qualified in exclusion of a transfer of the security, which passes the debt and the right to its payment, is in equity a transfer of the security. This has never been doubted in the case of a mortgage, and there is no room for doubting it in the analogous case of a vendor retaining the legal estate as security for the payment of the purchase-money.—Bankhead v. Owen, supra. The reason that a transfer of the debt in equity passes the mortgage, is, that a mortgage, in the contemplation of a court of equity, is a charge upon the land ; and whatever will give the money, will carry the estate in the land along with it to every purpose. The estate in the land is the same thing as the money due upon it. Martin v. Mowlin, 2 Burrows, 979. The debt may be assigned wholly or partially; and if there is an assignment of but part of the debt, an equitable interest vests in the assignee, which a court of equity will protect and enforce.—2 Sto. Eq. § 1044. In such case, the security for the debt passes pm tambo by the assignment.—Pattison v. Hull, 9 Cowen, 747 ; Thomas v. Wyatt, 5 B. Munroe, 132. It results from these propositions, that the contention between the parties resolves itself chiefly iuto a question of fact. That question is, whether there was an assignment to Peterson of a part of the debt for the purchase-money of the lands ; or whether he made a partial payment of the debt, trusting for reimbursement to the personal responsibility of the vendees. There is a serious and irreconcilable conflict in the testimony ; but after a careful consideration of it, we concur in the conclusion of the chancellor, that there is a preponderance in support of the claim, that there was a partial assignment, and not a partial payment of the debt. No particular form of assignment is essential in a court- of equity ; it may be in writing or by parol. It is sufficient, if there is an intentional transfer or making over of the subject-matter, conferring a complete and present right on the assignee. — 1 Wait’s Actions and Defenses, 363-08. A transfer by delivery of a bond, bill or promissory note, given by the vendee for the purchase-money of lands, would not, prior to the present statute, carry the equitable lien of the vendor. But that is not tliis case; there was and is a plain and recognized distinction between the equitable lien and the security the vendor carves out for himself when he retains the legal title, covenanting to part with it only upon payment of the purchase-money.—Bankhead v. Owen, supra. A transfer by delivery of a note or bond for the payment of money passes as fully as a trasfer or indorsement in writing the beneficial interest, entitling the assignee or transferee to demand and receive the money, and to discharge or forgive the debt. Of necessity, it [113] passes the security for the debt, which the vendor retained, or which may have been created by a mortgage. For in the contemplation of a court of equity, the debt is the principal thing, the security an incident. Whether the wife of the vendor may not have a resulting trust in the lands, which, if enforced, will .operate a destruction of the legal estate, could not have become a relevant, material inquiry, unless the purchasers had intervened for a rescission of the contract of purchase. The vendor, to defeat the rights of the assignee, to disappoint the assignment, can not be heard to dispute his own title, or to aver that he has not an estate in the premises co-extensive with that he has covenanted to convey.—Stewart v. Anderson, 10 Ala. 504. The condition in the contract or agreement of the parties, that, in the event the vendee failed to pay the purchase-money, as it became due and payable, the contract should he forfeited, and the purchaser bound to pay rent, was reserved for the benefit of the vendor, and, at discretion, he could dispense with or waive it. And it was dispensed with or waived by any act on his part, clearly evincing an intention to treat the contract as a valid, subsisting contract of purchase. — Dumpods ease, 1 Smith’s Lead. Cases (7th Am. Ed.), 93-136. The vendor received part payment of the first installment of the purchase-money before it was due, and then transferred a part of the installment in consideration of the payment of a debt of his own. There could not have been by conduct more plainly manifested an election to treat the contract of purchase as subsisting, freed from the condition of iorfeiture. There was not owing to him, if advantage was to be taken of the condition, one-half of the sum in payment of which he assigned the first installment. Indeed, if the forfeiture was to be claimed, the assignment was wanting in-subject-matter. This view is decisive of the qnéstion raised as to the effect of the failure of the purchasers to pay in full the first installment of the purchase-money. ¥e find no error in the record prejudicial to the appellants, and the decree must be affirmed.