Lavin v. Lynch

Fellows, J. (after stating the facts). That the vendor of real estate who takes no security for the payment of the purchase price has an equitable lien for such purchase money upon the lands so sold has long been the established rule. Carroll v. Van Rensselaer, Har. Ch. 225; Michigan State Bank v. Hastings, 1 Doug. 225, 258; Appeal of Palmer, 1 Doug. 422; Hiscock v. Norton, 42 Mich. 320; Dunton v. Outhouse, 64 Mich. 419; Curtis v. Clarke, 113 Mich. 458; Kulling v. Kulling, 124 Mich. 56; Lyon v. Clark, 132 Mich. 521; Shaw v. Tabor, 146 Mich. 544; 39 Cyc. p. 1787. In the case of Michigan State Bank v. Hastings, supra, it was said by this court: “Such liens exist independently of any express agreement, and courts of equity enforce them, on the principle that a person, having gotten the estate of another, ought not in conscience, as between them,_ to be allowed to keep it, and not pay the consideration money.” And in Cyc., supra, it is said: “A vendor’s implied lien, as distinguished from a lien expressly reserved, or from the security which the vendor has while he holds the legal title under an unexecuted contract to convey, is the equitable right, which by implication is accorded to one who has conveyed the title to land without reserving a lien thereupon, and has taken no security for the purchase-money other than the personal obligation of the purchaser, to subject the land in equity to the payment of the purchase-price, when the rights of others are not injured and it is equitable so to do. * * * “The principle on which a vendor’s lien is generally regarded as resting is one of natural justice, that one who gets possession of the estate of another ought not in conscience be allowed to keep it without paying the consideration, although other grounds, such as the presumed intention of the parties, or the existence of a trust between them, have been assigned.” This lien attaches notwithstanding the fact that the [146] sale did not convey a title in fee, or a legal title, but only an equitable right or interest. Ortmann v. Plummer, 52 Mich. 76; Warren v. Fenn, 28 Barb. (N. Y.) 333; Bledsoe v. Games, 30 Mo. 448; Loomis v. Railroad Co., 17 Fed. 301; Curtis v. Buckley, 14 Kan. 449; Board v. Wilson, 34 W. Va. 609 (12 S. E. 778). In the case of Ortmann v. Plummer, supra, Mr. Justice Campbell said: “The right of a vendor to a lien does not seem to be confined to the sale of a legal title or title in fee. The leading case of Mackreth v. Symmons, 15 Ves. 329 (1 Leading Cases in Equity, 194, and notes) was one relating to what was treated as an equitable title. .The doctrine has been applied to copy-holds, and appears to be received as to all recognized title. See Adams’ Eq. (7th Ed.) p. 128, and notes; Winter v. Lord Anson, 3 Russ. 488. The lien on an equitable title may no doubt be more uncertain, by reason of the danger that bona fide purchasers from the legal holder may intervene and destroy it. But subject to that risk (which is not confined to equitable estates) it may be upheld. In the present case the legal title is still in the railway company, having knowledge of the equities, and defendants are not bona 'fide purchasers. We see no difficulty in the nature of the title:” The case of Robinson v. Woodson, 33 Ark. 307, is not unlike the instant case upon principle. In that case the vendor executed a deed reserving a lien on the land for the purchase money. Afterwards he executed another deed containing "no reservation but acknowledging payment of the purchase price,, although it had not in fact been paid. It was held that he had a vendor’s lien which was enforceable in a court of equity. When this plaintiff and her assignors, on the 20th day of April, 1910, executed to Jeremiah Lynch their respective quitclaim deeds of the premises, thereby conveying to him their respective interests therein un [147] der the will of Patrick Lynch, deceased, taking his unsecured promise to pay the purchase price therefor, they each held, by virtue of such transaction, a vendor’s lien for the payment of such purchase price. Was such lien assignable? While the courts are not in harmony on this question we think it must be answered in the affirmative. Curtis v. Clarke, supra; Dryden v. Frost, 8 L. J. Ch. (N. S.) 235; Buford v. McCormick, 57 Ala. 428; Felton v. Smith, 84 Ind. 485; State Bank of Iowa Falls v. Brown, 142 Iowa, 190 (119 N. W. 81); Dickason v. Fisher, 137 Mo. 342 (37 S. W. 1114); Armstrong v. Farr, 11 Ont. App. 186; Board v. Wilson, supra. The transfer of a note which is secured by mortgage carries with it in equity an assignment of the mortgage, the security for its payment. John Schweyer & Co. v. Mellon, 196 Mich. 590. So here we think an assignment of the liability for the purchase money carried with it, in equity, an assignment of the vendor’s lien which was security for. its payment. Such vendor’s lien is in the nature of an equitable mortgage (Clark v. Stilson, 36 Mich. 482; Balow v. Insurance Co., 77 Mich. 540), and has priority over assignees in bankruptcy, or a general assignee for the benefit of creditors (Lyon v. Clark, supra). This being its character, it may be enforced as against the land even though the statute of limitations had run against the personal liability of the vendee. Stringer v. Gamble, 155 Mich. 295 (30 L. R. A. [N. S.] 815). The very nature of the right precludes its enforcement at law. An equitable proceeding is necessary to establish and enforce it. The authorities, already cited and the nature of the right demonstrate this. We have considered all the grounds set up in defendant’s motion to dismiss. None of them are tenable. The bill sets forth a cause of action for equitable relief. The decree of the court below must be reversed and [148] the demurrer overruled. Defendant will have the usual time to answer. Plaintiff will recover costs of this court. Bird, Moore, Steere, Brooke, Stone, and Kuhn, JJ., concurred with Fellows, J.