State Bank v. Sanders

Wood, J., (after stating the facts). The finding of the chancellor that at the time of the bringing of this suit appellee was the owner and in the actual possession of the land in question was not clearly against the preponderance of the evidence. The preponderance of the evidence tends to prove that Frazer entered into a contract with Sharpe in December, 1910, by which he sold the land at that time to Sharpe for a consideration of $900; that Sharpe at that time paid $200 of the purchase money and agreed to execute his note for the balance when the deed to him was executed, and that Frazer should have the option either to reserve a vendor’s lien in the deed or take a mortgage on other land, and that in pursuance of this contract Sharpe entered into the immediate possession of the land and made substantial improvements thereon. This evidence establishes the relation of vendor and vendee between Frazer and Sharpe. The contract of sale was fully consummated in December, 1910, and from that time on, according to the.doctrine announced by this court, Frazer, the vendor, became a constructive trustee for the vendee, Sharpe. In Stubbs v. Pitts, 84 Ark. 160, this court, through Judge Riddick, quoted the following from Lord Hatherly, in Shaw v. Foster, L. R. 5, H. L. 321; Lysaght v. Edwards, L. R. 2, Ch. Div. 499-506. ‘ ‘ That moment that a contract for the sale and purchase of land is entered into, and the relation of vendor and vendee is constituted, the vendor becomes a constructive trustee for the purchaser.” And, continuing, Judge Riddick says: “This is founded on the principle that equity treats that as done that ought to be done. By the terms of the contract, the purchase price ought to be paid to the vendor, and the land ought to be conveyed to the vendee; equity, therefore, regards this as done. The consequences of this doctrine, says Professor Pomeroy, are carried out. As the vendee holds the equitable estate, ‘he may convey or encumber it, may devise it by will; on his death, intestate, it descends to his heirs, and not to his administrators. In this country his wife is entitled to dower in it; a specific performance is after his death enforced by his heirs; in short, all the incidents of a real ownership belong to it.’ 1 Pom. Eq. § 368. In commenting further on this doctrine, the learned author says that it is a mistake to suppose that this doctrine does not apply until the purchase price is paid. It applies at once, so soon as :a valid contract of sale is made, though, until the purchase money is paid, it is a lien on the equitable estate of the vendee, and by the enforcement of this lien in a court of equity the equitable estate of the vendee may he sold or cut off.” And in Strauss v. White, 66 Ark. 167-170, we held, quoting from other cases, that “when the owner sells land, takes the notes of the vendee for the purchase money, and executes to him a bond for title, the effect of the contract is to create a mortgage in favor of the vendor upon the land to secure the purchase money, subject to all the essential incidents of a mortgage, as effectually as if the vendor had conveyed the land by an absolute deed to the vendee, and taken a mortgage back to secure the purchase money.” In one of those cases, Hardy v. Heard, 15 Ark. 188, it is said: “The vendee, in analogy to the mortgagor, is the owner of an equity of redemption, and that this is the real and beneficial estate, which is descendable by inheritance, devisable by will, and alienable by deed, precisely •as if it were an .absolute estate of inheritance at law, subject, of course, to the rights of the vendor.” The fact that the vendor in those cases executed his bond for title to the vendee can make no difference in principle. Here the contract of sale was entered into and completed and taken out of the statute of frauds by the vendee paying part of the purchase price and entering into the possession of the property. His rights then, as vendee, by these acts, became as completely established under the agreement as if the vendor had executed to him a bond for title. In the recent case of Barrett v. Durbin, 106 Ark. 336, Durbin, by oral agreement, contracted to sell land to Bell. Bell paid part of the purchase money and went into possession. After this Durbin executed a deed conveying the land to Myers, who claimed to be an innocent purchaser. "We held that Durbin had no interest in the land that he could convey to Myers; that Durbin had sold all the interest that he had in the land to Bell, notwithstanding there was no deed or written contract. The principles announced in those cases are controlling here., and show that appellant, by its judgment, obtained after Frazer sold the land to Sharpe, acquired no lien on the lands in controversy. A judgment lien, in the language of learned counsel for appellant, “only attaches to an estate in land — not a lien on land. An estate in land is the right to the possession and enjoyment of it. A lien on land is the right to have it sold or otherwise applied in satisfaction of a debt. ’ ’ Here, under the facts, the only interest Frazer had in connection with the land which he had sold to Sharpe was to have the land sold to satisfy his vendor’s lien in oase Sharpe failed to pay the purchase money. But this lien in favor of Frazer, as the vendor, did not give appellant the right to subject the land to sale in satisfaction of its judgment against Frazer. This lien being a mere security for the payment of Frazer’s debt, it was not vend-able under execution issued on appellant’s judgment. The uncontradicted evidence shows that Sharpe carried out his contract of purchase with Frazer. He, therefore, had the right to have the title to the land quieted in himself and the appellee succeeded to all the rights that Sharpe had under his purchase. The decree is, therefore, correct, and it is affirmed.