Ringgold v. Bryan

The Chancellor : Upon carefully reading and considering the pleadings and proofs in this case, I am of opinion that the equitable lien of the vendor, for the unpaid purchase-money, attaches to the land sold and conveyed by the complainant to William A. H. Hobbs, on the 2d of February, 1832, and subsequently mortgaged by Hobbs to the defendant, Valentine Bryan. The answer of this defendant admits that prior to the sale to him by the sheriff, in September, 1844, he was informed by the complainant that the purchase-money remained unpaid, and that afterward, and as it appears also, prior to his purchase from the sheriff, he learned that the complainant claimed that she was entitled to other considerations besides the money consideration to be paid her by Hobbs. [493] The answer, however, denies, though not in very precise and explicit terms, that the defendant knew that the purchase-money had not been paid by Hobbs at the date of the mortgage by the latter to him. But this denial, assuming it to be positive, is, I think, overcome by the evidence, which shows very clearly that Mr. Bryan did know of such non-payment, and was fully aware that his mortgages were subordinate to tlio claim of the vendor for the purchase-money. The depositions of Grason and Hobbs are conclusive upon this point, and though the competency of the latter has been excepted to upon the ground of interest, I do not see upon what principle Ms deposition can he excluded. The ground of the objection is that the tendency of Ms testimony is to make the defendant, Bryan, primarily responsible to the complainant and himself only in a secondary degree. But the object of this proceeding is not to make Bryan personally responsible at all, and as against Mm personally the complainant can have no decree. The object of the hill is to charge the land with the lien of the vendor, and though this might relievo the witness from the claim of the complainant for the purchase-money, it would leave him exposed to the prosecution of Bryan for the moneys due him, to secure the payment of which the land was mortgaged. But, conceding the objection to the competency of the witness is well taken, there is surely enough left to subject the defendant Bryan to the consequences of notice. That there were awakening circumstances in the case, sufficient to put him upon an inquiry, is undeniable, and as remarked by the Court of Appeals in Magruder vs. Peter, 11 G. & J., 243, “ whatever is sufficient to put a party upon inquiry, is good notice in equity.” In this case, a possession of a part of the premises was in the complainant, and that was a circumstance to put the purchaser upon the inquiry, and if he neglected to inform himself of the nature of her rights, he must take the consequences of his neglect. Baynard vs. Norris et al., 5 Gill, 468, which authority also proves that the answer in this case omits an averment, indispensably necessary to the validity of [494] a plea, that the defendant is a bona fide purchaser without notice, to wit, “ that the grantor was, at the time of the execution of the mortgage by him to the defendant, seized, or pretended to be seized, and was possessed of the premises conveyed.” But, so far as regards the purchase-money of this property, it cannot be material to determine whether, but for the defendant’s offer, it would not be liable, since the answer itself contains an expression of the defendant’s willingness to pay it, in precise accordance with the terms of the contract, as set out in the complainant’s Exhibit B. The language of this part of the answer, is, “ that notwithstanding his total ignorance of any such agreement between the said Hobbs and the complainant, up to the time stated above, yet that the defendant, regarding the said land to be worth more money than the aggregate of all the liens created by said Hobbs, which bind the said land, has been always willing and ready to secure to the complainant (since his said purchase) an annuity for life, equal to the interest upon the price of the whole land, at the rate of eight dollars per acre, and the principal to her children after her death, except the part which would belong to the said Hobbs, provided he has made to him, the said defendant, a good, quiet, and sufficient title to the said land and premises.” The real controversy, therefore, in this case is not with regard to the purchase-money, but has respect to certain privileges which, by the contract between the complainant and Hobbs, executed on the same day with her deed to him, were secured to her during her life. These privileges consisted of her right to the use of the dwelling-house, &c., on the land, and certain other rights in said contract expressed. How the circumstance which has been mentioned as sufficient to put the defendant on the inquiry, with regard to the payment of the purchase-money, made it equally obligatory upon him to inquire into all the terms and conditions of the contract, and he must be considered as affected with notice of them all. Hay, the answer itself shows conclusively that rumors were in circulation, and had reached the ears of the [495] defendant, that the moneyed consideration mentioned in the deed from the complainant to Hobbs was not the only ono, and no sufficient reason has been assigned for the defendant’s omission to make inquiry in a quarter from whence correct information could have been obtained. I should, therefore, strongly incline to think that all the consequences of notice of these additional considerations would attach to the defendant, even if the proof of actual notice was less direct and positive. But when the evidence of Grason and Hobbs is examined, by which it is shown that the defendant personally knew all the terms of the contract between the latter and the complainant, it is, as it seems to me, impossible that the defendant can free himself, or the property purchased by him, from all the consequences resulting from such knowledge. The defence relied upon in the argument, founded upon the purchase by the defendant from the sheriff under Key’s judgment, cannot be allowed to prevail. At that time, and for some short time before, according to the distinct admission of the answer, the defendant knew of these additional considerations, and therefore he cannot complain that he bought the property in ignorance of their existence, nor does he do so, the defence set up by him being that the suppression of them was a fraud upon the creditors of Hobbs, and particularly upon the defendant, who was acting as his friend, and becoming involved for him for largo amounts, and making him considerable advances in money. The imputation that fraud in fact was perpetrated or contemplated by the complainant, in not expressing the full terms of her contract with Hobbs upon the face of her deed to him, is fully repelled by the evidence of Grason, who shows why these terms were omitted, and that it certainly was not with any design to defraud any one. In the hands of Hobbs, the purchaser from the complainant, the land was unquestionably bound for the purchase-money, notwithstanding the execution of her deed to him. The purchase-money attached to the property in the hands of the vendee as a trust, and the heirs of the vendee and all other persons claiming under him or them [496] with notice, are treated as in the same predicament. 2 Story’s Eq., sec. 1217, 1218, 1219. And where the vendee has sold the estate to a bona fide purchaser without notice, if the purchase-money has not been paid, the original vendor may proceed against the estate for his lien, or against the purchase-money, in the hands of such purchaser, for satisfaction; for in such a case the latter, not having paid the purchase-money, takes the land cum onere. 2 Story’s Eq., sec. 1232. McLean and Otho Scott, for Complainants. Vm. A. Spencer, for Respondents. The judgment in favor of Key gave him no estate in the land, but simply a lien on it for the payment of the debt, and such lien, being a general one, could not affect or impair in any way the equitable lien of the vendor for the unpaid purchase-money. Hampson vs. Edelen, 2 H. & J., 64; Repp et al. vs. Repp et al., 12 G. & J., 341. I do not, therefore, think that the defendant, Yalentine Bryan, can protect himself under his purchase at the sheriff’s sale upon the execution of Key’s judgment. But although I am of opinion that the complainant is entitled to relief, the case is not now in a condition for a final decree. The bill claims that the annuity stipulated to be paid by Hobbs is in arrear and unpaid, but there is nothing in the record to show how much is in arrear, nor is there any satisfactory evidence of the value of the privileges mentioned in the contract. These privileges are not claimed by the bill in the specific.prayer for relief, but the contract by which they were secured to the complainant, is filed as an exhibit, and proved by the evidence, and there being no exception to the sufficiency of the averments of the bill, I am of opinion that under the general prayer, relief may be afforded in respect of them. I shall, therefore, send the case to the Auditor, with directions to take an account of the amount due for the purchase-money and the annuity, being the interest thereon, and also the value of the privileges specified in the agreement, to the end'that such a decree may be hereafter passed, as the justice of the case requires.