Franklin v. Walker

Mr. Justice Carter delivered the opinion of the court: The question here is, whether appellant’s amended bill, the substance of which is set out in the statement of the case, states a cause of action, or not. The facts constituting the alleged fraud and conspiracy, by means of which appellant was induced to convey the lots in question to appellee Walker and to receive therefor the worthless notes of Walker and Bernhard, are fully set out and with much detail, and we are of the opinion it was error to sustain the demurrer. The equitable rights of the respective parties can be worked out and protected by the .decree, if it be found, on the hearing, that appellant’s equities are superior to the equities of some and inferior to those of others of the defendants. Even if it should be found that appellant is not entitled to have his deed to Walker set aside, the bill is broad enough, if sustained by the evidence, to establish a vendor’s lien in his favor for the unpaid purchase money. If, as alleged in the bill, appellant was induced to accept the notes of Walker, with Bernhard as surety, by their fraud and deceit practiced upon him, whereby the reasonable belief was induced in his mind that both principal and surety were fully solvent and amply able to pay said notes, when in fact they were both insolvent and without any substantial means wherewith to make payment, it could not be contended that as to Walker, or his alleged co-conspirators, appellant waived his vendor’s lien. Fraud vitiates all -contracts, and a waiver of a vendor’s lien by taking other security is no waiver when so induced. In equity, an unpaid vendor who has not waived it will be entitled to a lien, and no waiver obtained by fraud will be effectual to destroy the lien. McDole v. Purdy, 23 Iowa, 277; Gnash v. George, 58 id. 492; Brown v. Byam, 65 id. 374; Bradley v. Bosley, 1 Barb. Ch. 125; Tobey v. McAllister, 9 Wis. 463; Madden v. Barnes, 45 id. 135; Skinner v. Purnell, 52 Mo. 96; Thomas v. Bridges, 73 id. 530; Fouch v. Wilson, 60 Ind. 64; Nysewander v. Lowman, 124 id. 584. The contention of appellees that appellant should have offered to bring into court and surrender and cancel certain notes of Beshel, alleged by them in their argument to be still unmatured and unpaid, before he could enforce a forfeiture of his contract with Beshel, is without merit. The bill alleges that appellant made the deed to Walker at Besliel’s request and with his consent, the same to be treated as a consummation of his contract with appellant. It will therefore be presumed that, as between appellant and Beshel, everything was done at that time that ought to- have been done, including, of course, the surrender to Beshel, or satisfaction, of his obligations, and the Beshel contract would be out of the case altogether were it not alleged that Beshel was a party to the conspiracy. The decree will be reversed and the cause remanded, with directions to overrule the demurrer and to rule the defendants to answer the amended bill. Beversed and remanded.