De Forest v. Holum

Ryan, C. J. The contract between the appellant ¡and the respondent’s devisor distinguishes throughout between the positive, liquidated purchase money and the contingent purchase money of the premises. The purchaser agrees to pay $50 an acre for the land, and to convey other land at a fixed price “ in part payment of said purchase money,” referring immediately to the $50 an acre, and on terms stated to pay “ the balance of said purchase money amounting to about ” a sum plainly representing the residue of the $50 an acre and excluding the $500 ; a phrase again repeated with the same significance; and later in the contract, by an independent covenant, agrees to pay, upon a contingency apparently likely to increase the value of the land, “ the additional sum of $500, to be paid in one year after the last paj^ment of the purchase money above stated becomes due.” He then agrees to give notes and a mortgage on the premises “for the balance of the purchase money unpaid,” clearly repeating the same words in the same sense, and excluding the $500. The notes and mortgage were to be given on conveyance, when a survey should determine the exact amount, within two months. The contingency on which the $500 was to become payable might occur for nearly ^hree years. And it is quite apparent, on the face of the contract, not only that the $500 was not to be included in the mortgage, but that it was not to be included because it was not considered to be then part of the purchase money; the parties providing for the $50 an acre as the full purchase money in pre-sentí, and separately for another sum which might or might not become in futuro additional purchase money, dependent on a contingency, Failing the contingency, the whole purchase money was satisfied by the notes and mortgage; happening the [523] contingency, another sum would then become purchase money, which before had formed no part of the purchase money. This is plainly the construction of the parties, and it would be unsafe to question it. We cannot undertake to say that, pending the transaction which began'in the contract and ended in the conveyance and mortgage, the $500 could properly be considered purchase money. The contingency might not happen. An estate dependent on such a contingency would not vest until the occurrence of the contingency (Fearne, 5-9; Borastons Case, 3 Rep., 19 a); nor would a legacy so contingent sooner vest. 1 Roper, 501; Atkinson v. Turner, 2 Atkyns, 41. And we hold the effect of the contract to be, that the $500 was not purchase money before the railroad was built; the appellant having in the meantime no vested interest in it, neither jus in re nor jus ad rem, but only the conditional covenant to pay upon the contingency; but that upon the building of the railroad, the $500 became additional purchase money of the premises, vesting a right of recovery in the appellant, and attaching a vendor’s lien for it on the land, unless the lien had been waived before. It is true that the covenant might have been repeated in the mortgage, and secured by it. But we cannot think the omission to have been intended to waive the vendor’s lien for the $500, if and when such lien should accrue; but rather to have rested on the understanding that such lien had not then accrued and might never accrue. The parties apparently intended to secure certainties, not possibilities. Upon the delivery of the deed, the right to the purchase money proper became a perfect and vested right; the right to the $500, purchase money only in posse, could not well be said to be even inchoate. It rested in possibility only. If the appellant had taken no security, his vendor’s lien for the actual purchase money would have instantly attached; but by the terms of the contract, his lien for the $500 would be dependent on the contingency, and could not attach before its occurrence. If there [524] bad been foreclosure of the vendor’s lien before the building of the railroad, we cannot see how any provision could have been made for the $500. It might never ripen into a lien. There was only a contingent right of lien for the contingent purchase money, both waiting on the contingency. And so, in harmony with the whole tenor of the contract, it appears to have been the intention of the parties to cover by the mortgage only the lien which would presently attach without it for present purchase money; leaving the contingent purchase money to take care of itself in the future. It seems very certain that the covenant did not merge in the mortgage, because the mortgage and the covenant relate to different things; and the covenant is in terms to survive the mortgage. And it is difficult to perceive on what principle taking security for the existing lien could operate to waive a possible right of future lien for a distinct sum contingent upon an uncertainty. “ The authorities quite uniformly say that the vendor has in all cases, upon the sale of real estate, an equitable lien upon the estate sold, for the unpaid purchase money, as between him and the vendee, unless there is either an express or implied agreement to waive such lien.” Willard v. Reas, 26 Wis., 540. The English and American authorities on waiver of vendor’s lien, are not wholly in accord. Walworth, C., states the general rule to be in this country, “ to consider the lien as waived whenever any security is taken on the land,. for the whole or any part of the purchase money, unless there is an express agreement that the equitable lien on the land shall be retained.” Fish v. Howland, 1 Paige, 20. And the reason of the rule is stated bjr Marshall, C. J., to be that “the express contract that the lien shall be retained to a specified extent, is equivalent to a waiver of that lien to any greater extent.” Brown v. Gilman, 4 Wheat., 255. It is apparent that this principle has little application to a case like this. Eor here it is not a part of the same lien, for [525] the same purchase money, which was retained by the mortgage, but a different lien, for a different sum, accruing upon different conditions, and attaching at a different time. In cases of the character spoken of by Walworth, 0., as ■ far as we are acquainted with them, the purchase money is one entire thing, payable sometimes by instalments, but accruing as one liquidated whole by specific agreement, not dependent on contingencies: the subject, in the absence of security, of one single lien. And in such cases, talcing an express lien for a part is well held to be a waiver of the implied lien for the whole, unless the contract expressly divides the implied lien and preserves it for the unsecured purchase money. But when the purchase money does not consist of one entire liability, but of several distinct liabilities, accruing severally, at several times, and upon several conditions, and the corresponding liens are not divisible merely, but are essentially divided and distinct, ,we confess ourselves unable to appreciate bow taking security for one lien when it accrued, to its full extent, should operate to waive another lien, then resting in possibility onljq when it should happen to accrue long after. We cannot think that the parties here so intended, or that the rule should operate to force such an effect upon them. And the rule is not so rigid as to disregard the intention of the parties. “Taking a security has been deemed, at most, no more than a presumption, under some circumstances, of an intentional waiver of the lien, and not as conclusive of the waiver.” 2 Story’s Eq., § 1226. Looking to the contract for the meaning of the parties, we understand them not to have intended the mortgage for the liquidated purchase mone}r to be a waiver of the vendor’s lien for the contingent purchase money, but to leave it to the security of that lien if it should accrue: running the intermediate risks of all vendor’s liens. Of course the lien remains good against the purchaser’s de-visee. “In natural justice and-equity” she “who has gotten the estate of another ought not in conscience, as between them, [526] to be allowed to keep it and not pay the fall consideration money.” Tobey v. McAllister, 9 Wis., 463. Eor these reasons the demurrer to the appellant’s complaint 'was not well taken, and the order of the court below sustaining it must be reversed. By the Court. — Order reversed.