Dorsey v. Hall

' Maxwell, Ch. J. On the first day of May, 1877j the plaintiff commenced an action in the district court of Cuming county to foreclose a certain mortgage executed by Robert Hall, Kate H. Hall, his wife, and David H. Winyall and Lina D. Winyall, his wife, to Thomas Wilson, on the fourth day of October, 1875, upon the north-west quarter of section fourteen, in township twenty-three, range five east; and also upon parts of lots 13, 14, 15, 16, and 17, in block thirty, in the city of West Point, to secure the payment of the sum of $1,950, according to the tenor of three promissory notes accompanying said mortgage, the last of which notes, calling for the sum of $1,200, was due and payable on the first day of April, 1877, which note was duly assigned by the said Wilson to the plaintiff, who brought this action thereon. The petition alleges that in the year 1873 John D. Neligh sold to Thomas Wilson lots 13, 14, 15, 16, and 17, in block 30, in the city of West Point, and that in pursuance of said contract of purchase said Wilson on or j about the first day of September, 1873, took possession ’ of said lots and erected thereon a large livery and feed stable; that under the contract Neligh was to hold the legal title to said premises in trust for said Wilson, until said Wilson or his assigns should request a deed for said premises. It is also alleged that on the first day of October, 1875, Wilson sold the premises in question to Robert Hall and David H. Winyall, and took the mort [463] gage in question from said parties, said Neligh still continuing to hold the legal title to said lots. On the twenty-sixth day of August, 1876, Hall sold his interest in said premises to James Gallen, who had actual notice of the existence of the mortgage; and on the same day Neligh and wife, vn f'wrsucmce of the eontraet with Wilson, executed and delivered to Winy all and Gallen a warranty déed for said premises. The petition further alleges that on the sixteenth day of December, 1876, Gallen and wife conveyed the undivided half of said premises to one George Gallen, with a view to defraud Hall and Wilson out of their just rights, and that on the nineteenth day of February, 1877, the said George Gallen conveyed by deed the undivided half of said, premises to the wife of James Gallen. It is also alleged that certain defendants recovered judgments against Neligh after the first day of September, 1873. The tenth paragraph of the petition was stricken out on motion of the defendants as being redundant and irrelevant. The paragraph is as follows: “That said Eobert T. Hall and David H. Winyall were the owners' of said lots 13, 14, 15, 16, and 17, in the city of West Point, on the fourth day of October, 1876, as fully as if the legal title thereto had been in their names. And as such owners had the right to and were legally entitled-to convey the same to the said Thomas Wilson by mortgage deed at that time and incumber the same in all respects as if they held the legal title in their names; and that the said James Gallen and his assigns, the said George • Gallen - and Katie Gallen, have and hold the same subject to and with full knowledge of said mortgage.” It is difficult to perceive upon what grounds the motion was sustained. If it is urged that the averments are mere conclusions of law, still where a legal deduction [464] or conclusion of law contains a fact constituting a cause of action, or one which is essential to enable the plaintiff to maintain his action, the proper motion is to make definite and certain and not to strike out. As the defendants deny the validity of the mortgage, the plaintiff properly sets forth in his petition the authority of the mortgagors to execute the same. The court therefore erred in sustaining the motion. After the motion, striking out the tenth paragraph of the petition, had been sustained, the defendants demurred to the petition upon the ground that it stated no cause of action. The demurrer was sustained and the cause dismissed. The case is brought into this court by appeal. In support of the judgment of the court below it was urged by defendant’s counsel on the argument of the case that the trust created by the contract between Wilson and Neligh was absolutely void, and that therefore the plaintiff acquired no lien by his mortgage, and therefore the petition stated no cause of action. The petition, however, includes the north-west quarter of section fourteen, township twenty-three north, of range five east, which is not in dispute, and upon which, if the facts stated in the petition are true, the plaintiff is entitled to a decree of foreclosure. This disposes of the case, but inasmuch as the question of the validity of the mortgage upon the lots heretofore described will again come before the district court, we have thought it best to review that branch of the case. It is a well established principle of equity that where a contract is made for the sale of real estate, it considers the vendor as a trustee of the purchaser for the estate sold, and the purchaser as a trustee of the purchase money for the vendor. Malin v. Malin, 1 Wend., 625. Champion v. Brown, 6 Johns., Ch. 402. Watson v. Le Row, 6 Barb., 484. Willard’s Eq., 610. And the trust in [465] sucb case attaches to the land and binds the heirs of the vendor. Seton v. Slade, 7 Vesey, 264. Swartwout v. Burr, 1 Barb., 495. Sutphen v. Fowler, 9 Paige, 280. And a subsequent purchaser from either the vendor or vendee, with notice, becomes subject to the same equities as the party would be from whom he purchased. Trinnere v. Bayne, 9 Ves., 209. Mackreth v. Symmons, 15 Ves., 329. Pollenfax v. Moore, 1 Atk., 573. Green v. Smith, 1 Atk., 572. Davie v. Beardsham, 1 Ch. Cas., 38. Champion v. Brown, 6 Johns., Ch. 403. Seaman v. Van Rensselaer, 10 Barb., 83. Story’s Eq., 789. In the absence of a contract, therefore, if the allegations of the petition are true, Neligh became a trustee for Wilson, or his assigns, of the lots in question. He has admitted the validity of the trust by carrying the same into effect, and it may be questionable if any of these defendants are in a position to deny its validity. The conveyance to James Gallen was made in pursuance of the terms of the agreement, and after the execution and recording of the mortgage. As to the judgment creditors, it is well settled in this court that the lien of a judgment upon real estate is subject to all prior liens, either legal or equitable. Metz v. State Bank, ante p. 165. Colt v. DuBois, ante p. 391. If, therefore, there was an actual sale of the lots in question to Wilson, although the legal title remained in Neligh at the time the judgments were recovered, yet the lien attached only to the unpaid purchase money, if any. Filley & Hopkins v. Duncan, 1 Neb., 134. Uhl v. May, 5 Neb., 157. As to the authority to mortgage the property in question, it is sufficient to say that all kinds of property, real or personal, which are capable of absolute sale, may be mortgaged. 2 Story’s Eq. Jur., Sec. 1021. 4 Kent’s Com., 144. 1 Powell on Mortgages, 17-23. 2 Bouvier’s Diet., 198. [466] As Hall and Winyall were in possession of the lots in question as owners thereof, at the time of the execution of the mortgage, they had unquestionable authority to execute the same, and if there is a defect in the description of the lots it may be corrected to conform to the actual intention of the parties. Galway, Semple & Co. v. Malchow, ante p. 285. For the errors herein referred to the judgment of the district court is reversed and the cause remanded for further proceedings. Reversed and remanded.