Tobey v. McAllister

By the Court, Cole, J. In several cases decided by this court, but which perhaps have not found their way into the [467] reports, we have held that a vendor of real estate has a lien, under certain circumstances, on the estate sold, for the purchase money. The principle upon which courts of equity have proceeded in establishing this lien is that a person who has gotten the estate of another, ought not, in conscience, as between them, to be allowed to keep it, and not pay the full consideration money. 2 Story’s Eq. Jur., § 1219. This doctrine is founded in natural justice and equity, and although the lien is not enforced in all the states of the Union, yet it is in most of them, as well as the courts of England. See Macreath vs. Symmons, 15 Ves., 329, and cases cited by Lord Eldon in his opinion in that case. 4 Kent’s Com., Lecture 58, page 155, (8th Ed.); 2 Story’s Eq. Jur., § 1217, et seq., and notes. Assuming then that in this state, the courts should recognize and enforce the vendor’s lien, under certain circumstances, and we have to inquire whether it appears from the allegations in the complaint that, the respondent has lost or waived his right to insist upon it in this case. If he has not, the demurrer to the complaint was properly overruled. It is contended by the counsel for the appellants, that it clearly appears, from the statements in the complaint, that by an express agreement between the parties at the time of sale, the respondent relinquished and abandoned his right to insist upon a vendor’s lien, having received a portion of the purchase money by the cancellation of his own note, and taking in payment for the remainder of the purchase money, notes and mortgages given by third parties. The complaint sets forth, with great fullness and particularity, the circumstances under which the sale was made, but its allegations upon that point are too long to be quoted. It apears, however, from the complaint that the respondent sold his land to Rosier and McAllister for thirty-one hundred dollars; that a promissory note which he had given them, for over seven hundred dol [468] lars was delivered up and cancelled as a part consideration for the bond; and that for the balance McAllister, who made the purchase for himself and Rosier, turned out certain notes and mortgages given by third parties, falsely and fraudulently representing them to be good, when in fact they were almost worthless. Now, conceding that the complaint shows that the parties agreed, at the time of sale that’ these securities should be taken by the respondent in full discharge of the consideration money unpaid, still it is very apparent that the fraud and imposition practiced upon the respondent, by Mc-Allister, were so gross and outrageous as to vitiate this contract. For in every view, McAllister’s turning over those notes and mortgages, representing them to be good, when he knew them to be worthless, was a fraud of the grossest character, and would vitiate any bargain. This is too obvious to need argument or comment. But it was further insisted by the counsel for the appellant, that the respondent lost his right to a lien upon the land; because, after discovering the fraud which had been practiced upon'him, he affirmed the contract by receiving other securities. It appears from the complaint that the sale was made in April, 1859, and that in June following the respondent having became acquainted with the fraud practiced upon him by McAllister, employed an attorney to look after the matter. This attorney went to McAllister and charged him with the fraud, and then McAllister turned out other securities, repre-presenting them to be against good and responsible persons, who were abundantly able to pay them, &c., and verbally agreed that the respondent might remain in possession of the premises until he could realize' from the use of them, and from those securities, the purchase money of the farm. These additional securities proved to be worthless likewise, and the complaint alleges they were known to be so by McAllister when he turned them out. [469] Now it is evident that the question as to how far the taking of distinct and independent securities for the purchase money can effect the vendor’s right to his lien cannot arise upon the demurrer to this complaint. For if we were of the opinion that the respondent, by taking such securities, and trusting to the responsibility of third persons, thereby lost the implied lien upon the property which the law would otherwise have given him, (Naim vs. Prowse, 6 Ves., 752; Cole vs. Scott, 2 Wash. R., 141; Gilman vs. Brown, 1 Mason, 191), yet that certainly cannot be the case if there was fraud in the transaction. And according to the allegations in the complaint, McAllis-ter not only perpetrated a gross fraud when he turned out the notes and mortgages in the first instance, representing them to be good, when he knew them to be worthless, but he made equally false and fraudulent statements as to the value of the additional securities delivered over to the attorney. If McAllister knew these latter securities were worthless, when he represented them to be good and against parties abundantly able to pay them; and if the respondent relied upon these false stateménts and had a right to rely upon them, when he received such securities; then we cannot very well understand how McAllister and Rosier can possibly be in a better position, or the respondent in a worse one, on account of the second fraud. It would really be a strange principle of equity and justice which would enable a party to escape or avoid the consequences of one fraud by perpetrating another upon the injured party. We know of no such doctrine in the law or in morals, and we therefore do not think that the respondent, by taking the securities turned out in June, should be deemed to have waived his lien. It was suggested that the respondent, by’retaining that portion of the consideration money received, while he proceeds to confine his right to a vendor’s lien for the remainder, was [470] seeking to affirm a contract in part, and disaffirm it in part, which, it was insisted he could not do; and in support of this position we were referred to the case of Weed, et al., vs. Page, impleaded, fyc., decided at the last term of this court, 7 Wis., 503, and other cases to the same effect cited upon the brief of the counsel for the appellant. We do not think the principle of those cases is in conflict with anything decided in the one under consideration. In those cases a party sought to rescind a contract on the ground of fraud and recover the property sold, without restoring, or offering to restore, what he had received upon the sale; in the present case, the respondent by proceeding to enforce his lien affirms» the original contract. All he asks is the consideration agreed to be paid for the land. He is wilting the appellants should keep the land, if they will only pay the purchase money. Having got a conveyance to the estate, and never having paid the full consideration money, the court will enforce the implied lien for the amount unpaid. We have seen that from the allegations in the complaint, it did not appear that the respondent had waived or lost his lien; that the circumstance that he had taken independent and distinct securities for the purchase money did not affect his right to insist upon it, since he took those securities, relying upon the false and fraudulent statements of the appellants as to their value, and the responsibility of the persons giving them. We are of the opinion the order of the circuit court overruling the demurrer to the complaint, was correct and must be affirmed, with costs. Dixon, C. J., took no part in the decision of this case, as the same was tried before him at the circuit court.