Flournoy v. Harper

STONE, C. J. — In the final decree in this cause, Flournoy was treated as a party, and his rights were so far passed upon, as to hold that he and Harper were each lienees, with equal equities, entitled to share pro rata in the proceeds of the lands described in the pleadings. In this the chancellor erred, as we shall hereafter show. Under the proof in this record, we hold the facts may be summarized as follows: By the terms of the contract of sale from Hawrkins to LaBoche, the former became trustee of the title of the lands for LaBoche’s benefit, when the latter should pay the purchase-money, -and only when such payment should be made. When Hawkins, for value,traded the notes to Flournoy, he took upon himself a second trust, namely: to hold the title for the latter’s security and benefit, until the LaBoche notes should be paid to Flournoy. This was the status of the parties and their rights, when Crosby appeared in the arena. The contractual change then agreed upon did not bind or conclude the parties alike, and to the same extent. The agreement between LaBoche and Crosby was, that the latter would take the former’s purchase off his hands, assume to pay the two purchase-money notes held by Flournoy, and, in consideration of the cash payment and certain improvements made by LaBoche under his purchase, would relinquish to him forty acres of the land, and execute to him a note for one hundred and twenty-five dollars. If this contract had been closed between LaBoche and Crosby without participation on the part of Flournoy, there would be no difficulty in declaring the relation the parties would have sustained to each other. Flournoy would have held a lien on the -whole three hundred acres of land' — a first lien —-and Crosby would have been bound, as between him and LaBoche, to pay Flournoy’s claim. Subject, and subordinate to that first lien in favor of Flournoy, LaBoche would have been equitably entitled to the forty acres reserved from sale to Crosby, and to a vendor’s lien on the remainder to [498] secure the payment of the note for one hundred and twenty-five dollars. The negotiation did not end with this agreement. Flournoy was brought into it, consented in part, and the modified contract was then consummated by executing written evidence of its terms. Flournoy surrendered to LaRoche all claim to forty acres, and had conveyance made from Hawkins directly to him. The bond for title Hawkins had made was surrendered up, and at Flournoy’s instance, title to the residue — two hundred-and sixty acres — was conveyed to Crosby by deed from Hawkins, reciting the renewal notes given by Crosby, as the unpaid purchase-money due from the latter to Flournoy. And Flournoy refused to make further concession or release, claiming that he had and should retain a first lien on the two hundred and sixty acres for the payment of the purchase-money due him. Now, whether we treat this as a simple modification of the original contract of sale by Hawkins to LaRoche, or, as a rescission of that contract, lay LaRoche’s surrender of its evidence, and of all claim on the two hundred and sixty acres made in Flournoy’s favor, that the latter might secure himself by a re-sale to Crosby, (it must have been one or the other), in either event Flournoy’s lien on the two hundred and sixty acres is paramount to that of LaRoche, and of any other person who might become the owner, of the note. Flournoy’s claim rests on LaRoche’s promise, assumed by Crosby, and is at least the paramount equity which Hawkins had held and transferred to him. Harper’s equity is but the residuum left in LaRoche, after satisfying Hawkins, or Flournoy, his transferree: Harper can assert no greater equity, than LaRoche could himself have asserted. It results that the chancellor erred in holding that Harper’s equity is equal to that of Flournoy.— Young v. Hawkins, 74 Ala. 370. The alleged payment of the La Roche note, we think, can not be maintained. Interpreting the testimony of Crosby and Dr. Rushing in connection — they do not materially differ ■ — the real transaction was an exchange by Rushing and Harper of their judgments against La Roche for Crosby’s note, effected through Crosby, acting as their agent. The defense of payment by Crosby to Harper’s claim, is not made good. As this case must return to the Chancery Court for further proceedings, we feel it our duty to point out certain irregularities, which have been fallen into in its preparation. The chancellor held the two liens to be of equal dignity. Had he been correct in this, then, as a vendor’s lien is a unit, and can not be twice enforced, Flournoy would have [499] been a necessary party. — Sims v. Sampey, 64 Ala. 230 ; s. c., 68 Ala. 588. This principle does not apply in this case. We have shown above that Flournoy has a primary, and Harper a secondary lien. Harper’s claim is simply a lien on Crosby’s equity — his right to redeem, or to acquire the property, by paying Flournoy the purchase-money due him. Harper was the junior incumbrancer, and as such had the right to enforce his lien against the interest which remained in Crosby, without making the senior incumbrancer a party. And, enforcing his lien in such form, he would have left Flournoy’s lien in all respects unimpaired and unchanged. Fenno v. Sayre, 3 Ala. 458; Glidden v. Andrews, 10 Ala. 166; Hall v. Huggings, 19 Ala. 200; Hunt v. Acre, 28 Ala. 580. If this case had been as the chancellor supposed it was- — ■ one of equal equities — there was no method of forcing complainant, Harper, to make Flournoy a party, or of having him made a party against Harper’s consent. The most that could have been done would have been to dismiss his bill, if he refused to bring in a necessary party. — Renfro v. Goetter, Weil & Co., 78 Ala. 311; Cowles v. Andrews, 39 Ala. 125. And if a party succeeds on petition in having himself made a party, his petition is not pleading, and is no step towards putting the case at issue. When a party is made a defendant on his own motion or petition, his first step is to answer; and then he may file a cross-bill, if he wishes affirmative relief. — Lehman v. Dozier, 78 Ala. 235. Harper, however, being a junior incumbrancer, it is not clear that he can force Flournoy to come in and foreclose, his lien. — Kelly v. Longshore, 78 Ala. 203. This is a small case, and protracted litigation will rapidly consume what there is in it. Would it not be better that, by consent, the case be tried and the equities settled without reference to the present pleadings, as if proper pleadings had been filed, and proper issues joined? If improper steps have been taken, justice can be done by decreeing the costs of such erroneous proceedings against the party committing the error. Reversed and remanded.