Servis v. Beatty

Smith, C. J"., delivered the opinion of the court. This was a bill filed in the Superior Court of Chancery by the complainant, David L. Servís, to enforce the vendor’s lien for the payment of the purchase-money of land sold by his intestate. The facts charged in the bill, are substantially as follows: — In — 77 — January, 1837, Josiab Stone sold to William Beatty, one of tbe appellees, a tract of land; Beatty gaye bis notes, to secure tbe purchase-money, payable, respectively, on tbe first of January, 1838, 1839 and 1840, and took from Stone a title bond, conditioned to make a deed in fee simple for tbe land, upon the full payment of tbe notes. Stone died within a few months after tbe sale; and Richard Gr. Davis, was appointed administrator of bis estate. In tbe autumn of 1837, in execution of a collusive understanding between .Davis and Beatty, tbe latter filed a petition in tbe Court of Probates of Jefferson county, in which be alleged that be bad fully paid off and satisfied tbe notes given by him to the intestate, to secure tbe purchase-money of the land; and praying that Davis, tbe administrator, might be decreed to convey tbe land to him in conformity with tbe terms of tbe title bond. Davis, voluntarily, appeared in court, waived citation, and confessed tbe allegations of tbe petition, whereupon a decree was rendered requiring tbe administrators to make a deed for tbe land to Beatty, which was accordingly done. No part of tbe purchase-money was paid, either at the time when tbe decree was made or when tbe deed was executed. In fact, Davis never bad possession of either of tbe notes given by Beatty to secure tbe price of tbe land. Davis’s letters were revoked, and the appellant, Servís, was appointed administrator of Stone’s estate. After tbe revocation of D.avis’s letters, and previous to tbe grant of administration to Servís, H. W. Simpson, was appointed tbe administrator, and, as such, on the 7th of November, 1840, received a deed from Francis Stone and wife, for tbe land, from whom tbe intestate, previous to the sale to Beatty, bad purchased tbe same. Within a short time after tbe deed to Beatty from Davis was executed, Beatty sold tbe land to tbe appellee, Killingsworth, and on tbe 2nd of May, 1838, conveyed it by deed with covenants of gener.al warranty, to him. Tbe sale was made on a credit; and Killingsworth gave to Beatty two notes, each for $7,000, payable respectively on tbe 1st of January, 1839 and 1840. Killingsworth, when be accepted tbe deed from Beatty, had full knowledge of tbe terms of tbe sale by tbe intestate to Beatty; be knew the fraudulent character of the circumstances under — 78 — which the deed from Stone’s administrator to Beatty was obtained; he knew that the purchase-money was not paid, and that the land was subject to a lien in favor of the intestate’s representative. Beatty was insolvent, and the whole amount due by him as the purchase-money with the exception of about $1,800, remains unpaid. No relief is sought as to Beatty; and no allegation is made that the purchase-money agreed to be paid by Killingsworth was still due and unpaid. The prayer is that the unpaid purchase-money be declared a lien upon the land; and that it be ordered to be sold in satisfaction thereof. The suit was resisted on two grounds ; first, that Killingsworth was a bona fide purchaser for a valuable consideration, without notice of the alleged fraud or of the existence of the lien; and second, that the claim set up by the bill was, after the commencement of the suit, compromised and settled, and the bill agreed to be dismisssed. This latter defence was presented by a cross-bill filed by the appellees, to which Thomas Freeland and John Murdock, with the complainant below, were made parties. Upon the final hearing the bill was dismissed; and an appeal • is prosecuted by ■ these parties. When this cause was submitted on a former occasion, the decree was made to turn, exclusively, upon the question raised by the cross-bill and the answers thereto. And in the determination of that question, the deposition of Servís, taken as a defendant to the cross-bill was disregarded. We are now satisfied, that, under the circumstances, the objection, for irregularity in taking the deposition, which if made at the proper time and in the mode prescribed,'would have prevailed, must be considered as having been waived by the party now objecting. And if the objection be based exclusively on the ground of the incompetency of Servís as a witness, by reason of his position as the original complainant in the bill, it is clear that the same objection applies to the deposition of Beatty, who was one of the complainants in the cross-bill. For though the facts alleged in the cross-bill were designed to be used in aid of a defence set Up in the answer to the original bill, a discovery was prayed in — 79 — tbe cross-bill in reference to those very matters. It would be a violation of a plain principle of evidence to allow a party to be examined as a witness to sustain the allegations of his own bill; more especially where a discovery -was prayed in reference to the identical facts to which it is proposed to examine him as a witness. A defendant may be examined as a witness by the complainant; and where a defendant is not interested in the matter to which it is proposed to examine him, he may be examined as a witness by a co-defendant; but the rule is explicit that a co-complainant cannot be examined as a witness for the other complainant; nor can he be examined as a witness by the defendant. 1 Smith, Ch. Pr. 342; Gresley, Eq. Ev. 243. The depositions of Servis and Beatty must both- be .excluded, or received; and in either event the same result would follow. The deposition of Servis, completely neutralizes the evidence of Beatty; and the answers to the cross-bill flatly deny every material allegation contained in it. Under these circumstances it is manifest that the defence set up in the cross-bill, is unsustained by the evidence. The questions presented by the record are: First, whether, the • vendor’s lien attached to the land in the hands of Beatty, and Second, whether, if in fact a lien was reserved, Killingsworth, the sub-vendee, is. entitled to p'rotection as a bona fide purchaser, for a valuable consideration, without notice. But before we proceed to examine these questions, it is necessary that we should understand the true position of the parties, in respect to the title. As shown by the bill, and contended by the counsel for the appellants, the intestate, Stone, was not possessed of the legal title when he sold the land to Beatty, nor at the time of his death. He had but an equity in the land, holding the bond of his vendor for title, upon payment of the purchase-money. The deed made by Francis Stone, the intestate’s vendor, to the administrator of the latter, if it could at all be held to vest the legal title in his heirs, was not executed until a period subsequent to the conveyance from Beatty to Killingsworth. Hence, if the jurisdiction of the Court of Probates, to order the administrator to convey the land to Beatty, and the consequent validity of the deed, made in — 80 — execution of the decree, were conceded, the deed of the administrator passed, simply,- the equitable interest held by the intestate. Beatty could convey no greater interest, or better title than he, himself, possessed. It is clear, therefore, that Killingsworth would not stand in the attitude of a vendee, holding the legal title to the land, against which the vendor’s lien is sought to be enforced. The same, manifestly, would be the result, if it were held that the decree, for want of jurisdiction in the Court of Probates, was utterly void, and the deed made in execution of it, a perfect nullity, which was the ground assumed in the argument for the appellants. Neither Beatty or Killingsworth was ever the owner of the legal title. On this state of the case, the question is, whether the vendor’s lien attached, while the land was in the possession of Beatty. The lien of a vendor of land is not founded on matter of record, nor upon express contract. It is merely implied from the presumed intentions of the parties. It is purely a creature of equity; and is indifferently treated as a natural equity, or a trust. Gilman v. Brown, 4 Wheat. 272; 7 Ib. 46. But whether it be regarded as a natural equity, or a trust, its very nature implies the existence, in the vendor, of a title, either legal or equitable, to the land on which it attaches. A lien is a qualified right, which one, in a given case, may exercise over the property of another. 6 East, 20. From its essential character, it is incapable of constituting title or property. Where the title is retained by the seller, though bond be given conditioned to convey the land on payment of the purchase-money, it is evident no lien in his favor can exist. ' It would be absurd to say that a party has reserved a lien in respect to that of which he has never divested himself of the ownership, or conveyed the title. When a party who has contracted for the sale of land, gives bond to make title when the purchase-money is paid, on a failure of the purchaser to comply with the terms of the contract, he may, under certain conditions, be entitled to consider the contract at an end ; and where possession was delivered, bring ejectment to recover the land; or he may proceed in equity to rescind the contract. He might, perhaps, also, where there-has been part performance on the part of the purchaser, on — 81 — a showing of his insolvency, be permitted to treat the transaction as a quasi mortgage, and file a bill to foreclose against him. But in the various ways in which he might elect to pursue his remedy, he would proceed on the ground that he was the actual owner of the legal title, and not as asserting a lien against the party holding it. The equitable lien of a vendor of land is based'upon the presumed intention of the parties. “ The rule,” says Judge Story, “ is manifestly founded on a supposed conformity with the intentions of the parties, upon which the law raises an implied contract; and therefore it is not inflexible, but ceases to act, when the circumstances of the case do not justify such conclusion.” Under this rule it is held, that where one sells and conveys land without taking security for the purchase-money, from the vendee, the law presumes it to be the intention of the parties that the land shall stand charged with the vendor’s lien, and upon that presumption raises an implied contract to that effect between them. But where,, for any reason, such, for instance, as the taking security by the vendor, no such presumption arises, — the law ceases to act, and no> implied contract is raised. According to this view of the subject, it is perfectly clear that the lien of a vendor did not attach to the land in the hands of' Beatty. It follows, hence, necessarily, that if a lien existed, in reference to Killingsworth, it must have arisen from circumstances independent of, and disconnected with the original sale by the intestate. If no lien attached when the sale was made, there is no pretence for insisting that a lien was created by the mere fact that Killingsworth bought the land with notice of the non-payment of the purchase-money. But if, as argued by the counsel for the appellees, and strenuously denied by the other side, that when a party having sold land, gives bond to make title on the payment of the purchase-money,, and dies without having made the conveyance, the Court of Probate, on proof of the payment of the purchase-money, has jurisdiction to order the legal representative to make a deed for the land to the purchaser, we have no doubt, under the facts disclosed, that Beatty took the land subject to the vendor’s lien. — 82 — For on tbe assumption of jurisdiction in tbe court, tbe deed made in execution of the decree, which was doubtless procured by fraud, was not absolutely void, but voidable at the instance of the parties to be affected by it. It vested, de facto, the legal title in Beatty. Hence the parties interested at their election, were entitled to treat it as a valid conveyance, and to insist that the vendor’s lien attached to the land in Beatty’s name, if the circumstances justified the claim. It, therefore, becomes necessary to determine the question of jurisdiction. The authority of the Court of Probates in certain specified cases, and under prescribed conditions, to order the executor or administrator to make a deed for the land, is conferred expressly by the statute of the 26th Nov. 1821, enacted under the first Constitution of this State; the 7th sec. 4th art. of which declares that the legislature should have power to establish in each county within this State, a court of probate for the granting letters testamentary and. of administration, for orphans’ business, for county police,' and for the trial of slaves. All laws in force within this State, at the adoption of the revised Constitution, not repugnant to its provisions, were expressly continued in force by the convention. The inquiry then is, whether this act, so far as -it conferred the specific jurisdiction in question, is not in conflict with the revised Constitution, and therefore annulled by it. In support of the affirmative of this proposition, it is insisted that the authority to decree a specific performance of a contract is, by the Constitution, confided exclusively to the Court of Chancery; and that by the act itself, the heirs-at-law are not required to be made parties to the proceeding, and hence, against the provisions of the bill of rights, may be deprived of their property without due course of law. The Constitution, in creating the several courts, has defined, in very general terms, the jurisdiction confided to each. It declares that a superior Court of Chancery shall be established, with full jurisdiction in all matters of equity. But it has not attempted to define what shall be matters of equity jurisdiction. So in regard to the Court of Probates, it declared that they shall have jurisdiction in all matters testamentary and of administration, in orphans’ — 83 — business, and the allotment of dower, in cases of idiocy and lunacy, and of persons non compos mentis; without laying down any rule by which the legislature and the courts are to be guided in ascertaining what subjects pertain to any one of these branches of jurisdiction. As the jurisdictions of the several courts are derived by express grant from the Constitution, they must, of necessity, be separate and distinct, and in a certain sense exclusive. When the object, in a given ease, is to ascertain if a court — the Court of Chancery for instance, as, in general terms, its authority has been extended to all matters of equity — has jurisdiction, recourse must be had elsewhere — to acts of our own legislature, declaratory of the powers and jurisdiction of the court; to other systems in which the principles of equity jurisprudence are applied, and the subjects of equity jurisdiction defined. And if, upon such reference, the subject is found to be one of equity cognizance, it may be safely concluded that the court has jurisdiction. But we apprehend it would be going very far to assert that because the Court of Chancery was thus ascertained to have the jurisdiction, that such jurisdiction would, necessarily, be exclusive. If such were the doctrine, it is manifest that all concurrent jurisdiction between the courts would be put an end to, and very serious and injurious consequences would ensue. Doubtless the jurisdiction confided to each of the several courts, in the main, is exclusive, and it is the manifest policy, as well as our duty, to confine them within their appropriate spheres. But it never was, in our opinion, the intention of the framers of the Constitution to deny to the Court of Chancery jurisdiction over a given subject, for the reason that a court of law, according to settled rule, could take cognizance of the same. Nor to oust the jurisdiction of a court of law because the Court of Chancery, upon the well settled doctrines of equity, might entertain jurisdiction over the same subject. The lines which mark the boundaries between the powers of the courts of law and equity, are frequently so indistinct that, sometimes, the most difficult question in a case to decide, is the question as to which of the courts cognizance of the ease belongs. A court of law may have undoubted jurisdiction of a given case, but if the legal remedy be embarrassed or supposed to be inadequate, equity — 84 — will assume jurisdiction. And when the subject-matter of contest is held by a single individual, in opposition to a number of persons who contest his right, and who hold separate and distinct interests, depending upon a common source, a court of equity will assume jurisdiction, though his title be legal, and the remedy at law perfect, as to each of the persons who claim in opposition thereto. In those instances, and numerous other cases which may be put, if the jurisdiction of the courts in the unqualified sense of the term be exclusive, it is clear that the right to apply the remedy belongs to one, in entire exclusion of the others. In all such cases, what rule is to govern in determining in which court the jurisdiction attaches ? In regard to those subjects which are recognized by the prevailing systems of jurisprudence to pertain exclusively, either to the courts of law or to the courts of equity, no difficulty would be encountered. But the least reflection must convince, that no satisfactory rule can be laid down, by which it is to be determined whether the jurisdiction has been exclusively appropriated to the Court of Chancery or to the courts of law, in reference to those matters over which those courts possessed concurrent jurisdiction at the date of the adoption of the Constitution. The impracticability of laying down such a rule, seems, of necessity, to compel the adoption of the plain, manifest, and natural construction. The Constitution, in the fourth article, vests the judicial power in the several courts therein provided for, and, in very general terms, prescribes the jurisdiction of each; hence, referring to the legislature and to the courts themselves the duty of determining the specific subjects embraced by their respective jurisdictions. What those subjects were, it is evident could only be ascertained by consulting the systems of jurisprudence existing elsewhere. Those systems were present to the mind of the convention when it undertook to provide for the organization of the courts, and to prescribe the powers which they should respectively exercise. Where, therefore, jurisdiction was given to the Court of Chancery in matters of equity, all subjects were embraced, which, by the standards- referred to, were held to be. matters of equity cognizance. And so with reference to all the courts created by the — 85 — Constitution. This conclusion is undeniable; and the result is a necessary one, that where, under the systems of jurisprudence prevalent when the Constitution was adopted, the jurisdictions of the courts of law and equity were either exclusive or concurrent, the jurisdiction of the several courts created by the Constitution, was vested in the same way; that is, the jurisdiction was either concurrent or exclusive, as it was recognized to exist under those systems; subject, however, to modifications, expressly provided, and to restrictions implied from our own peculiar system. It is conceded that the power to decree the specific performance of a contract, is an authority which necessarily pertains to a court of equity. And it is assumed that the decisions of this court, in Blanton v. King and in Carmichael v. Browder, has settled the doctrine that the jurisdiction of the Court of Chancery, as to all matters confided to it, is exclusive. Hence, it is insisted that the right claimed in virtue of the statute for the Court of Probates, is denied by the Constitution. In the cases above referred to, the pretension was, that the Court of Chancery possessed concurrent jurisdiction in all matters confided to the Court of Probates. This was denied, and the rule settled that, in cases in which the subjects involved are, in their nature, strictly matters testamentary or of administration, and where the court is competent to give relief, the Court of Probate possesses original and exclusive jurisdiction. It is true, that the language employed in those cases may seem to justify the opinion that the jurisdictions conferred upon the respective courts was not only separate and distinct, but, in the unqualified meaning of the term, exclusive. But if such was the opinion then entertained, and if, in point of fact, it was intended to announce the doctrine in the broad terms in which it is contended for, it is sufficient to say, that it has since been frequently disregarded, and never in a single case recognized and acted on. The extent of the powers vested in the Chancery Court is, therefore, no test of the extent of jurisdiction in the Court of Probates ; because the Court of Chancery possesses jurisdiction, gene — 86 — rally, to decree the specific performance of contracts relating to land, it does not follow that the Court of Probates is not rested with the same authority in respect to the cases provided for in the-Act. To determine the jurisdiction of any of the courts, we must look to the Constitution, the common source of the jurisdiction of all; and we there find, that the Court of Probates is clothed with full authority over matters testamentary and of administration. The question, hence, arises, whether the power claimed for that court in virtue of the act, is jurisdiction in relation to matters testamentary or of administration. The difficulty is admitted of determining what subjects are comprehended by the terms “ matters testamentary or matters of administration.” The Constitution has prescribed no rule. And as it is competent for the legislature to prescribe the powers, or rights, and the duties of executors and administrators, it is manifest that the import of these terms may be more or less comprehensive, according to the prevailing system. The undivided lands of a decedent descend to his heirs; and hence are not, generally, a matter of administration. But under the conditions prescribed in the statute, they become as much a matter of administration as the personalty of the intestate. Whenever the legal representative of a decedent is charged with a duty in reference to his real estate, the real estate, of necessity, becomes a matter of administration. And the title which is requisite to the discharge of that duty, vests in the representative, by operation of law. Where the owner of land gives bond to make title on the payment of the purchase-money, he has elected to convert his land into money — his realty into personalty; and when the money is paid, the beneficial interest becomes completely vested in the purchaser. Nothing but the mere legal title remains in the vendor, which would not be available, in law or in equity, either to him or his heir. Brown v. Weart, 7 How. 181; Morey v. Torrey, 7 S. & M. 22; Harman v. James, 7 Ib. 111. The case, we apprehend, would not be in the slightest degree altered, where the money was paid to his administrator instead of the vendor. In the latter case the heir could get up no claim to the purchase-money, and the mere naked legal title, if in such case it could be regarded as a — 87 — descendible estate, would be unavailing against the beneficial title of the purchaser. In the former, the heir would be entitled to the proceeds of the land, which his ancester had determined to convert into money. At all events, he would not be entitled to claim both the land and the money; and the receipt of the latter by the administrator, would effectually preclude him from using the naked legal title for any beneficial purpose whatever. In such cases, the law having vested the Court of Probates with jurisdiction to compel the administrator to make the title, it must be considered that he was vested with the title requisite to enable him, under the sanction of the court, to execute the contract of his intestate. The casé is not materially different from those in which the administrator is required and authorized to sell and convey the real estate of the decedent to pay the debts. We think, therefore, that the authority, claimed for the Court of Probates, in such cases, to compel the administrator to make the title, may be considered jurisdiction in a matter of administration, and hence was conferred under the sanction of the Constitution. This seems to have been the ground upon which the legislature proceeded in 1821. The validity of the Act of that date was never, as far as we are informed, brought in question. And when the revised Constitution was adopted, the presumption exists that the convention, in assigning the jurisdiction to the Court of Probates, intended to extend it to those subjects which were, according to the popular and legislative acceptation of the terms, matters testamentary and of administration. The remaining question to be considered is, whether the vendor’s lien passed with the land into the hands of Killingsworth, who stands in the attitude of a sub-vendee, and claims to be a bona fide purchaser for a full and valuable consideration without notice of the claim to a lien upon the land. A question is made upon the sufficiency of the averments in the answer, to entitle Killingsworth to protection as a bona fide purchaser, for a valuable consideration, without notice. The answer contains no averment that the purchase-money was all paid before notice of the vendor’s equitable lien. If Killingsworth had chosen to make this defence by plea, instead of answering the lien, accord — 88 — ing to some of tbe adjudged cases, the defect would have been fatal. (Eq. L. C., vol. 2, p. 83; cases cited.) But having chosen to answer, it is well settled that the defence will be good, if substantiated by proof. Upon the question whether, to entitle a purchaser to protection, the consideration of the purchase must all be paid or not, the authorities are not agreed. The rule held in Pennsylvania that payment of part of the purchase-money before notice, although not sufficient to invest the vendee with the character of a bona fide purchaser, as it regards the estate purchased, gives him the right to invoke the aid of the equitable principle, that he who would claim equity, must do equity, and requires reimbursement from the owner, as the condition of giving way to his title, seems better to accord with the principles of justice and reason. Youst v. Martin, 3 S. & R. 428; 10 Watts, 13. In the case of Wood v. Mann, 1 Sum. 505, the same doctrine is recognized. And in Frost v. Beekman, 1 John. Ch. 288, it was held that part payment of the purchase-money, before notice, would entitle the purchaser to the land itself, subject to a lien in favor of the antecedent equity'defeated by the purchase. The answer contains an explicit and direct denial of all knowledge of the fraudulent transactions alleged to have occurred between the administrator and Beatty; and of all knowledge and even a suspicion that the purchase-money was not fully paid when Killingsworth made the purchase. The answer avers further that Killingsworth plaid before notice of the claim to the lien upon the land, a sum in part payment of the purchase-money, which the evidence shows, that at the time of taking the depositions was equal to the value of the land. And further, the bill contains no allegation that Killingsworth had not paid every cent of the purchase-money. Upon the whole, therefore, we think, the defence made by the answer, if sustained by the proofs, entitled him to protection. We deem it unnecessary to go into a minute examination of the evidence. It is sufficient to state that upon a careful examination of it, it was clearly insufficient to sustain the allegations of the bill. And, hence, that the decree of the chancellor should be affirmed.