Moses Bros. v. Johnson

STONE, C. J. Tbe appellants, who were tbe complainants, sold one hundred and sixty acres of land to tbe defendant, at tbe agreed price of fourteen hundred and forty dollars — nine dollars per acre. Only five dollars of tbe purchase-money was paid. Tbe balance, including interest, was agreed to be paid in annual installments, running through about five years from the date of tbe purchase, January 5, 1889. Complainants retained tbe title, giving to Johnson, tbe purchaser, their obligation to make him title on payment by him' of tbe purchase-money, and accruing taxes. Tbe [520] agreement stipulated further, that if Johnson failed “to pay any of said installments when due,” then Moses Brothers “have the right to annul this agreement, and take possession of the premises, and to retain out of the moneys paid under this agreement [by Johnson] sixty dollars per annum as rent of the premises, said amount being hereby agreed and declared by said parties to be the annual rental value of the premises; returning the surplus, if any, to” Johnson. What -we have copied contains every stipulation in the agreement, which sheds any light on Johnson’s rights acquired under the purchase. Nothing is said about felling timber, or clearing lands, or of Johnson’s right to take and hold possession, farther than is implied in the language copied above. Johnson did take possession immediately after the agreement was executed, and was in possession when this bill was filed, August 26, 1889. No part of the debt for the purchase-money had then matured, and there then remained unpaid about fourteen hundred dollars. Under our interpretation of the agreement, Johnson had the clear right to enter into possession of the land, and to remain in possession until he made default in the payment of some installment of the purchase-money. On such default, Moses Brothers had the option, secured by the contract, to put an end to the agreement, so far as it evidenced a sale, to convert Johnson’s holding into a tenancy ab initio, and to retake possession of the land. This is a right of election reserved for their benefit, and they alone can exercise it. Collins v. Whigham, 58 Ala. 438; Wilkinson v. Roper, 74 Ala. 140. When a vendor of real estate enters into an executory agreement to convey title on the payment of the purehasemoney,' he sustains, in substance, the same relation to the vendee, as a mortgagee does to a mortgagor. Each has a legal title, which, in the absence of stipulations for possession, will maintain an action of ejectment. Each can retain his legal title against the other party, until the purchase-money, or mortgage debt, is paid, unless he permits the other to remain in undisturbed possession for twenty years. And yet each is at last but a trustee of the legal title for the mortgagee or vendee, if the purchase-money, or mortgage debt, as the case may be, is paid, or seasonably tendered. The same mutual rights and remedies, legal and equitable, and the same' limitation to the right of recovery, obtain in the one relation and in the other.-Relfe v. Relfe, 34 Ala. [521] 500; Bizzell v. Nix, 60 Ala. 281; Chapman v. Lee, 64 Ala. 483; Sweeney v. Bixler, 69 Ala. 539. We have found' but -a single case precisely like the present one in its facts. In Scott v. Wharton, 2 Hen. & Munf. 25, a sale of land had been made on a credit, and title retained by the vendor. The vendee went into possession, and a bill was filed by the vendor, charging him with committing waste by cutting timber, and praying for an injunction. The court treated the case precisely as if it had been a bill by mortgagee against mortgagor, to restrain him from lessening the security by felling and removing the timber.—Fairbank v. Cudworth, 33 Wis. 358. We feel safe in holding, that a vendor who sells on credit, retaining the title as security for the purchase-money, sustains the same relation to the vendee, so far as the question of security is concerned, as does the mortgagee to the mortgagor. In King v. Smith, 2 Hare, 239—24 Eng. Ch. Rep. — it was said to be an established rule, “that if the security of the mortgagee is insufficient, and the court is satisfied of that fact, the mortgagor will not be allowed to do that which would directly impair the security — cut timber upon the mortgaged premises. . . . The cases decide, that a mortgagee out of possession is not, of course, entitled to an injunction to restrain the mortgagor from cutting timber on the mortgaged property. If the security is sufficient, the court will not grant an injunction merely because the mortgagor cuts, or threatens to cut timber. There must be a special case made out before the court will interfere. The difficulty is in determining what is meant by a ‘sufficient áecurity.’ Suppose the mortgage debt, with all the expenses, to be £1,000, and the property to be worth £1,000, that is. in one sense, a sufficient security; but no mortgagee, who is well advised, would lend his money,’ unless the mortgaged property was worth one-third more than the amount lent at the time of the mortgage.” This was considered the rule, and the only safe rule, under English values. In that country, land values were, in a measure, stationary. In this, they are fluctuating. To be a “sufficient security,” with us, there should be a much broader margin between the amount of the debt and the estimated value of the property mortgaged for its security, than is considered sufficient in that older country. This court is fully committed to the same doctrine. In [522] Coker v. Whitlock, 64 Ala. 180, this court ruled, that when the mortgagor is commiting waste which impairs the security, or renders it insufficient, chancery, at the suit.of the mortgagee, will restrain him by injunction.]—Coleman v. Smith, 55 Ala. 368; Hammond v. Winchester, 82 Ala. 470; Sullivan v. Rabb, 86 Ala. 433; also, 2 Dan. Ch. Prac. *1629, n. 3; Usborne v. Usborne, 1 Dickens, 75; Brady v. Waldron, 2 John Ch. 148; Robinson v. Preswick, 3 Ed. Ch. 246; Murdock's Case, 2 Bland, 461; Downing v. Palmeteer, 1 Mon. 64. The bill charges, and the answer admits, that the land, which is the subject of this suit, is in value not exceeding the sum of the purchase-money that remains unpaid. The bill also charges that the defendant is insolvent. To this charge the answer interposes a general denial, but accompanies it with a statement, as follows: “This defendant denies that he is insolvent, and avers that he is solvent; that, except the debt he owes for this land, his liabilities are small, and that he owns real estate in his own name^not subject to exemption as a homestead, in Montgomery county, Alabama, that is worth much more than any liabilities or debts he owes, excepting his debt for this land.” "We understand this language to mean, that defendant’s other property will pay his other debts; but we can not interpret it as affirming that it will pay any certain sum above his other debts. This leaves the land in controversy as the sole security for -its promised purchase-money. The bill also charges, that the land lies near the city of Montgomery, where fire-wood is in demand, and commands ready sale; and that to denude the land of its timber, would greatly diminish its value as a security. The answer admits the truth of each of these averments, except the last, which it denies. It sets up that the land is fertile, and would be made more valuable, if cleared of its timber, and brought under cultivation. This last averment must be treated as affirmative, defensive matter, the proof of which rests with defendant. Such averment, until proved, furnishes no ground for dissolving the injunction. 1 Brick. Dig. 678, §§ 567-8. It may be, as contended, that the right to clear the land, sell the timber, and put the land in cultivation, were inducements — controlling inducements — to enter into the purchase. They were not expressed as terms of the contract, and defendant failed to stipulate for any such privilege. Considering the proximity of the land to a market for the fire [523] wood — an averment not denied, but admitted — we feel forced to presume, as charged in the bill, that the land is more valuable with the timber on it, than if cleared and put in cultivation. Hence, we hold, that the averment to the effect that the value of the land would be enhanced by clearing it, is affirmative matter, the burden of proving which is on the defendant. We may state here, that injunction is the only relief prayed, and is the only proper relief in a case like the present one. However it may be made to appear by proof, the pleadings do not make a case for a dissolution of the injunction; and the decretal order dissolving the injunction must be reversed, and the injunction reinstated. Reversed and rendered.