Pierson v. David

Weight, C.'J. This is an application to enforce what is technically termed a vendor’s lien. Under our law, where so much strictness is required, with regard to placing on the appropriate records evidences of liens and incum-brances, it would seem that in the absence of fraud, courts should be careful in the recognition of this lien. And yet, there'is much of good conscience, equity, and natural justice, in providing that the vendor shall not be regarded as. having lost all dominion over his property, until he is paid ■the agreed price. This lien or trust, though formerly objected to, as being in contravention of the policy of the statute of frauds, and for other reasons, is now firmly established. Its necessity is, indeed, too apparent — the beneficial conséquences too clear — and its equitable existence toa well sustained — to need now either authority or reason ta prove its origin or design. — 28 — The first question to which we shall direct our attention then, is, did the complainant, at the time of making the contract referred to in. his petition, own such an estate, and sell such an interest, as that he can enforce his lien as a vendor thereof, against the lands, when purchased from the general government ? The courts of this state have, by an uniform course of decisions, given a strength, and certain degree of legal dignity to these “claims,” “improvements,” or “pre-emption titles,” that it is difficult, if not improper, to disregard them. As early "as the year 1840, it was held by the territorial Supreme Court, that such improvements were the subject of contract, and afforded a good consideration, as the foundation for collecting the contract price. And, in the same case, it was further held, that the act of Congress of Mareh 3d, 1809, did not prohibit the sale of improvements on the public lands, in such manner as to render all such contracts illegal. Hill v. Smith and others, Morris, 70. The same doctrine, was substantially recognized afterward, in the cases of Freeman v. Holliday, Ib. 80; Stannard et al. v. McCarty, Ib. 124; Zickafose v. Hulick, Ib. 175; Wilson v. Webster, Ib. 312; and other cases that might be cited. This doctrine is fully sustained by the courts of other states, where these “claims” have existed. Indeed, the legislation of our own, as well as all the-western states, has constantly recognized such “claims” and “improvements,” and, by various provisions, protected and guarded the rights of the occupants. Nor can it be said, that the liberal legislation of Congress has militated against the current of such state legislation and decisions. Our courts have, however, gone still further in recognizing these claims. In the case of Marshall and Whitesides v. Bush, Morris, 275 (afterwards approved in the Supreme Court of the United States, see 6 Howard, 284), it was held, that where A. has a pre-emption right to a lot of land belonging to the United States, sells the same to B., and takes a mortgage to secure the payment of the consideration money ; if B. afterwards purchased the same lands from the United States at public auction, and thus prevents A. from — 29 — obtaining tbe title, so as to fulfill bis engagement, be, B.-, cannot set up bis title from tbe United States, in bar to tbe foreclosure of tbe mortgage. Tbe same doctrine is recognized in tbe case of Warburton and others v. Mattox and others, Ib. 367; and is even stronger, as it does not appear in tbat case, tbat tbe settler ever bad a pre-emption right. Tbe existence of these equitable, as well as legal rights, is also fully shown in tbe cases of McCoy v. Hughes, 1 G. Greene, 370; Doolittle v. Bridgman, Ib. 265; Ellis v. Mosier, 2 Ib. 246 ; Doyle et al. v. Knapp, 3 Scammon, 337 ; Bush v. Marshall and another, 6 Howard, 284; O'Farrell v. Davis, decided at tbe last term of this court. But notwithstanding tbe principle recognized in these cases, it is claimed tbat none of them go to tbe extent of recognizing tbe right of tbe vendor of a claim, or pre-emption right, in tbe absence of an express mortgage, to a lien on tbe land, subsequent to tbe obtaining of tbe patent. This vendor’s lien, it must be borne in mind, however, is an equitable mortgage, and does not contemplate any writing to evidence it. A trust estate is created by tbe contract, whereby tbe purchaser becomes tbe trustee, and tbe vendor tbe cestui gue trust.. Tbe payment is a part of tbe contract, and upon this, and tbe ground of good conscience, this equitable trust rests. This equitable lien, it is admitted, follows tbe property sold into tbe bands of tbe heirs, and even future vendees with notice. Tbe authorities and text books speak of it, as applied to both freehold and copyhold estates, and even as applied to such “preemption” rights, as is set up in this bill. See 2 Sug-den on Yendors, 57, and authorities hereafter cited. To our minds, we are free to say, it appears anomalous tbat tbe vendor of such a claim can follow tbe lands after tbe vendee has procured tbe government title, and enforce bis lien. And but for tbe strong tendency of tbe cases above cited in our own state, and a decision made by tbe Supreme Court of tbe United States, which is entirely conclusive on this subject, we should not so bold. We allude to tbe case of Thredgill, Admr. of Goodlove v. Pintard, 12 Howard, 24. — 30 — Tbat case is, in many respects, similar to the one at bar, so far as shown by the petition. It appears that under the act of April 12th, 1814, one Jane Mathews claimed a right of pre-emption to certain tracts of land lying south of the Arkansas River. She assigned her right to one Tunstal, who entered and paid for the land, Juty 24th, 1834, and obtained a patent certificate. This purchase was, however, in 1838, annulled by the commissioner of the general land office, for the reason that the Indian title to the lands had not been extinguished when the settlement was made. This Indian title, it appears, was extinguished subsequent to settlement. Tunstal sold to Pintard, who took possession, •made improvements, and resided thereon. Pintard sold in 1835 to one Rhodes, for eight thousand dollars, payable in one and two years. Rhodes sold to Goodlove, and in that purchase, “ Goodlove agreed to pay Pintard the amount of his claim, so soon as a regular title to the premises should be obtained.” Goodlove, in 1839, proved a pre-emption in his own name, paid in his money, and obtained a patent. On his contract with Rhodes, he had, prior to this, paid Pin-tard s,ome nineteen hundred dollars-; but having obtained the title in his own name, he refused to pay any further, on the ground that Pintard’s claim was void. Pintard thereupon brought suit to collect the amount due him on his sale to Rhodes, with a prayer that the land might be sold to discharge the balance due to him. The Circuit Court for the •district of Arkansas, decreed in favor of Pintard, and that the land should stand charged with the payment of the money so found due. And this decree the Supreme Court •affirmed. In all essential particulars, this case is in point. Pierson, in his petition, alleges that he had a pre-emption right, which he sold to Wilson, for a price to be paid when the land was entered. The evidence of this contract was in writing, and recorded. Besides this notice to Wilson’s ven-dees, he avers that they had full notice; and as in the case above cited, Goodlove had promised to pay Pintard (the vendor) the amount of his claim against the land; so this petition avers, that David and Cameron promised to pay the — 31 — amount due petitioner from Wilson. lie also avers, that these vendees of Wilson, by virtue of the pre-emption right so acquired from petitioner, did enter said land and obtain a patent. And indeed, throughout, the parallel is quite perfect. We see no distinction in the two cases. The principle is announced by the highest judicial tribunal of the land, and we feel justified in following it. It is upon a question novel in its character to our-minds, and one upon which but little light can be gathered from direct authorities. Justice McLean enters into no argument to show the reason of the rule; and, therefore, it was doubtless regarded as strictly analogous to the uniform decisions with regard to vendors’ liens. Pierson, in this case, then had an- interest in these premises, which was the subject of transfer, and when sold, he had a right to his lien on the land for the money. See, as to the character of this pre-emption right or estate, Bush v. Marshall and another, 6 Howard, 284. This view disposes substantially of many of the points made by this demurrer, but we will now proceed to examine them more in detail. It is claimed, that petitioner could only have had a pre-emption right to one tract of land, and he does not aver which that was. If the lands were contiguous, or part of one entire claim, what was there to prevent his pre-empting both pieces as one claim? But ,he avers that defendants, upon the strength of his pre-emption right, were allowed and enabled to pre-empt this land. If so (and the demurrer admits it), then they are estopped from saying that his title was bad, for that reason, in the absence of fraud. O'Farrell v. Davis, above cited. The third and fourth causes are disposed of by the doctrine laid down in the case above referred to, in 12 Howard. It is there held, that such sale’s are not illegal, and that Pierson did not forfeit his claim to be compensated for his pre-emption right. The fifth cause, we do not think well taken. The plaintiff claims against defendants, who have a common interest in the subject matter of the bill, and while David purchased at one time, and David and Cameron at another, and though their titles might be distinct, still it is proper to make them all — 32 — parties. Story’s Equity Pleadings, §§ 284, 285. And especially is tbis true, where tbe charge of fraud is the same and applies to all. § 285 a; also, § 271. The parties are all interested in the subject matter. David owns one par.cel individually, and the other jointly with the other defendants; they all derive their title from a common source; David, and the testator of the other defendants, axe charged with combination and fraud; and according to the rules of equity practice, it is not improper that they should all be joined. The question arising on the statute of limitations, will next be examined. ’ And here the appellant claims, that this de-fence cannotbe set up by demurrer, but must be pleaded. The decision of this case does not necessarily involve this question, but as it is urged, we will dispose of it. We think the rule is now well established, that where upon the case stated in the bill, the complainant, by reason of lapse of time, and laches on his part, is not entitled to relief, the defendant may demur. The rule was formerly otherwise, and was so laid down by Lord Thurlow, in the case of Deloraine v. Browne, 3 Bro. Ch.Rep. 646. And this rule was followed for some time afterwards. If this defence was founded alone on the presumption of payment, arising from lapse of time, then, a the demurrer admits the bill, and thereby admits the debt to be still due, it would seem correct to raise it alone by plea. But a court of equity requires parties to be diligent in the assertion of their claims, as well as. good faith; and if either is wanting, it will withhold its aid. And upon this basis, Lord Redesdale, in the case of Hovenden v. Annesly, 2 Sch. & Lefr. 638, says : “ If the case of the plaintiff as stated in the bill, will not entitle him to a decree, the judgment of the court may be required, whether the defendant ought to be compelled to answer the bill.” And the Supreme Court of the United States, in the case of Weaxwell v. Kennedy et al., 8 Howard, 310, held, that this is the true rule, and that it applies with equal force to a case barred by lapse of time, as to one barred by the statute of limitation. See also, Piatt v. Vattier, 9 Pet. 416; Bowman et al. v. Walter et al., 1 Howard, — 33 — 189; Smith v. Cavil, 3 Brown’s Ch. 362; 1 Story’s Eq. Pleadings, §§ 751, 484, 503. In section 484, it is expressly laid down, that where the bill states a case within the statute of limitations, the objection may be taken as a defence by demurrer ; and that if the plaintiff be within any exception of 'the statute, it is his duty to state it in his bill. The question then remains, does this bill show affirmatively that this complainant, for this reason, is not entitled to relief? We do not propose, at this time, to examine how far courts of equity are governed by statute of limitations, especially as applied to trust estates, nor whether, in this case, there is such a continuing, direct and technical trust, as distinguished from those cases in which there is a legal as well as an equitable remedy, as will take it out of the statute. The question as to how far courts of chancery act in obedience to this statute, will be found open to much controversy; and as it is not necessary to decide it now in this case, we pass it until it shall be presented. The objection, in order to be made by demurrer, must appear affirmatively, as already shown. Story’s Eq. PI. section 484, and authorities there cited. This bill does not show, however, that six years had elapsed from the time of the maturing of the demand to the bringing of the suit. It is averred, that Wilson was to pay the money when he entered the land, and that Cameron and 'David promised to pay this sum, about the time of their purchase and subsequently. These averments are admitted by the demurrer. It is not shown but that this land was entered, and these promises made, within one year or one day before the filing of the bill. The want of this definitiveness, may make the pleading subject to the charge of uncertainty, but for the purposes of this question, that can make no difference. All the authorities will show, that it is only where the true time is raised by the bill, that a demurrer will reach the objection. The bar does not appear affirmatively, and the demurrer for this cause, is overruled. One question only remains, and that is, should the complainant aver that the purchase money cannot be made from Wilson? We think not. We are aware that much — 34 — conflict will be found in the authorities, as to the necessity of averring and showing the insolvency of the vendee, before this equitable lien against the land can be enforced. Our Code, we think, however, removes all doubt on this subject. Sections 2094 and 2095 provide that the vendor of real estate, when all or any part of the purchase money remains unpaid, when due, may file his bill requiring the purchaser to perform his contract, or to foreclose and sell his interest in the property; and that the vendee in such cases,, for the purpose of the foreclosure, shall be treated as a mortgagor. of the purchased property, and his rights may be foreclosed in a similar manner. Then section 2086 of the same chapter provides: “If separate suits are brought on the bond or note, and on the mortgage (speaking of express mortgages) given to secure it, the plaintiff must elect which to prosecute.” The.design of these sections was, as we regard it, to place the vendor and vendee in the same position, so far as related to the remedy, as the mortgagor and mortgagee, in cases of express mortgages. The necessity of notice to a subsequent purchaser, of course, is not changed, nor the liabilities of parties under their contracts; but as, under the laws, the mortgagee could proceed at once against the mortgaged premises, without exhausting or resorting to the personal property of the mortgagor, or averring his insolvency, so the vendee is to be treated as having in effect given a mortgage, become a mortgagor, and his rights are to be foreclosed in the same manner. And we see no reason why the rule should be changed, where the rights of subsequent purchasers of the same property, with notice, intervene. Especially where, as in this case, they are charged with having had full notice, and to have combined with the original vendee to cheat and defraud the vendor out of the purchase money. They virtually take the property, having notice, subject to the same rights to foreclose, as if they had ' been original vendees or mortgagors. If any other rule was to prevail, then the whole object and equity of the vendor’s lien might be defeated by a transfer by the vendee to — 35 — a third person, be it ever so fraudulent, or tbe notice ever so clearly shown. "We think the court below erred in sustaining this demurrer. The cause will be remanded, with leave to the defendants to plead or answer over. Decree reversed. Upon the reversal of the decree of the District Court, the appellant filed a motion for a final decree in this court, on the ground that in all chancery capses, where once the appellate court obtains jurisdiction, it must finally dispose of the cause, and cannot re-invest the District Court with jurisdiction. Weight, 0. J. The motion is overruled ; First. Because by sections 1555, 1556, 1557 and 1989 of the Code, appeals are contemplated from intermediate orders in all cases, and proceedings on the trial in chief in the District Court are not necessarily delayed. Second. Eor aught we know, the respondent did answer in the court below, and the cause may be there at issue, after the disposal of the demurrer. The demurrer and answer may be filed at the same time, and only part of the record need be brought here. Code, sections 1788,1739 and 1976. So that, as to the cause in chief, the District Court has not been divested of its jurisdiction, and therefore this court does not have to re-invest it therewith. Third. No law or authority is shown to sustain this motion, and, in the absence of express provisions, we should be unwilling to deprive a party of a further hearing in such cases. Fourth. The order here made is in accordance with the practice of this court. De Louis v. Meek, 2 G. Greene, 55; Austin & Spicer v. Carpenter, 2 Ib. 132 ; Franklin Fire Ins. Co. v. J. L. McClure et al.; Gilliss v. Mathews, decided June term, 1854. Motion overruled.