Ghiselin & Worthington v. Fergusson

delivered the opinion' of the court. . The court has considered the arguments of the counsel in this case, and examined the record carefully. The case appears to be this, — W. G. D. Worthington, the trustee for selling the real estate of Alexander Conlee, deceased, sold that part of it called Brookfield to James Alistan for g5,100, and took the bond of the purchaser for the payment of the purchase money, with Bobert Fergusson his security; and it was understood that the land was not to be conveyed .•until the purchase money was paid. James Alistan soon after sold Brookfield to Doctor Beverdy Ghiselin for the sum he had contracted to pay the trustee for it; and to accommodate Alistan, Ghiselin, with a full knowledge that th<* trustee had not been satisfied, went on to pay James Alistan the sum he engaged to pay for the land, and received from him an assignment of his claim against Alexander Cantee's estate, which at first was supposed to be greatly more than sufficient to discharge all the purchases James Alistan had made of the trustee. When Ghtsclin made-the last payment to .James Alistan, whose circumstances were on the decline, he took from him a bond with security to indemnify him in the payment. Upon the final settlement of the affairs of Alexander Conlee, his estate proved insolvent, and the creditors being put to a dividend, the sum to be received by Doctor Ghiselin on James Alistaos assignment, was not adequate to the payment of the purchase money due the trustee, who withheld the conveyance from Ghiselin, to whom he was ordered by the chancellor to convey. Brookfield on the whole purchase fnoney being paid, and sued Bobert Fergusson, as security of James Alistan in the bond passed as aforesaid. A judgment wás obtained against Bobert Fergusson for a balance of the purchase money, which he brought into chancery, and claimed to have the amount paid by Doctor Ghiselin, who had purchased of James Alistan with notice. The chancellor decreed that the balance, (the sum of g448 2,2,} should be brought into court by Ghiselin, by a limited time, or that the tract called Brookfield, or as much as was -necessary, should be sold to raise this sum, and the interest; and whether the-chancellor was correct in this adjudication is the question for this court now to decide.

The vendor of a real estate, without deed, has unquestionably an equitable lien on the land sold, for the payment of the purchase money, into whatever hands it may pass, *525with notice that the contract of sale has not been complied with by the vendee; and the purchaser of an equitable estate with notice, is liable to the same equity, stands in place of and is bound to do, that which the person he represents would be bound to do. 2 Ves. Jun. 439. In the case under consideration Worthington, the trustee, has an equitable lien on Biookfield which is in the possession of Doctor Ghiselin by purchase of Alistan, and Ghiselin who represents Alistan is liable to the same equity, and is bound to do, at least as far as the vendor is concerned, whatever Alistan would have been bound to do if he had not sold to Ghiselin. But it is contended that Robert Fergusson is not to be considered in the place of Worthington, the trustee, to obtain redress of Doctor Ghiselin; and it is asserted that no authority can be produced.to support the position, that a person claiming under a vendee shall have the benefit of an equitable lien on the lands, in the hands of a purchaser from the vendee, although such purchaser be a purchaser with notice. Supposing that no express authority can be found to maintain this position, the inquiry may be made, is not Fergusson’s case within the reason of those cases that have been cited on the argument and acknowledged to be the law? If Doctor Ghiselin stands in the place of Alistan, and is liable to the same equity, he is bound to do whatever Alistan would have been bound to do, if he had retained the tract called Brookfield. As far as the trustee is concerned, Brookfield is incontrovertibly so bound; and it is not perceived that any additional hardship would be imposed on him, by subjecting him to payment of the claims of Fergusson, who by his payment to the trustee has placed himself in his situation. Doctor Ghiselin purchased with a full knowledge that the purchase money on Brookfield would be exacted of him by the trustee, and it was his folly to part from it to Alistan, and his indiscretion ought not to prejudice others.

It seems to the court it would be a correct position to state, that a man cannot sell more than he has, and that when Alistan sold to Doctor Ghiselin, with notice, he could not place him in a more eligible situation than he occupied himself. Besides it would be strange if Alistan, by any act of his, could place his own security in a worse situation than he would have been-in if the act had not been done.

. It has been admitted by the counsel for the appellants, that, if Brookfield had remained undisposed of in the hands of Alistan, and Fergusson had been compelled to pay the purchase money to the trustee, Fergusson would have a lien on the property to reimburse him the sum he had paid as security for Alistan. But it has been contended, the moment Alistan parted with his equitable interest to Ghi-selin, that this lien ceased, and Fergusson was without a remedy. If this doctrine is correct, Ghiselin might retain the possession of the land without paying one cent of the purchase money, (unless that payment had been enforced by Alistan,) and Fergusson, the security of Alistan, be *526compelled to pay the whole sum to the trustee, without in-But again, suppose Ghiselin, with a knowledge t'le transaction, and that' the purchase money had not been paid to the trustee, had thought proper to pay the w|10]e purchase money §5,100, to Alistan-, that Mistan had fraudulently applied it to his own purposes, and did not pay it over to the trustee, 'and'the trustee, by a suit on the bond, compelled Fergusson to pay the money to him, Ghise-lin would then remain the undisturbed possessor of the land, Mistan would retain the' §5100 paid to him by Ghiselin, and Fergusson, the innocent security, have to sustain the whole loss. Thus by the fraud of Mistan, and the indiscretion or connivance of Ghiselin, Fergusson would lose the benefit of that lien or' security on the land given to him by law, as an inducement to enter into the bond, ánd Mistan retain the §5100 as the fruits of his fraud and Injustice. A case too glaring to be countenanced by a ■court of equity.

It is admitted too, that for many purposes the security paying the debt of his principal shall be considered to stand in the place of the creditor, and if he.can be so placed for any one purpose to answer the ends of justice, the court cannot understand why he may not be so considered for every purpose where the same ends are in view. Robert Fergusson is entitled to ah assignment of the bond of his-pid ncipal at the hands of Worthington, the trustee, that he may pursue his remedy against Alistan and his estate. If the equitable estate in Brookfield yet remained in Mi-stan, and his heirs, and it was about to be sold for the payment of debts,it is conceded that Robert Fergusson would so far represent Worthington, the trustee, as to have a decided preference over all the other creditors of Mistan. ‘ Why then should he not represent him in the case before us to obtain a reimbursement óf Doctor Ghiselin for the money he has paid the trustee? It appears to the court to-be equitable and just that he should j and we do therefore entirely concur in the judgment of the chancellor, and are of opinion that his decree in this case be affirmed.

I am satisfied, on considering all the circumstances attendant on this case, that Robert Fergusson the security for James Alistan, who purchased of Wor-thington, has no lien on the land called Brookfield purchased by Doctor Ghiselin. In general the lien is confined to the vendor and vendee, and those claiming under them, and cannot be extended in equity to a third person. James Mistan, the first purchaser of Brookfield from the trustee, could not obtain a conveyance from the trustee until the whole purchase money was paid, nor could Doctor Ghise-lin, his assignee. Doctor Ghiselin, on complying with bis contract with James Alistan, (and it is admitted he has paid the whole purchase money.) had a right to call on James Alistan, and his security, Robert Fergusson, to pay the trustee pursuant to their engagement. James Alistan *527lias transferred all his interest in Brookfield to Doctor Ghiselin, and has no lien on it. James Mistan, and his security, were bound to pay the trustee, and have done so. The security, by paying part of the money to the trustee, cannot stand ia the shoes or place of the trustee, nor could he acquire any lien on Brookfield by making such payment. The right of the security cannot be preferable to that of his principal. James Mlstun and his security entered into the bond to the trustee to secure the payment of the purchase money, and prior to the assignment made by James Mistan to Doctor Ghiselin, who knew there was sufficient security given to the trustee for payment of the purchase money before he took the assignment. Robert Fengusson, the security of Jumes Mistan, never had any interest in Brook-field, whereby a lien on it coukl be created. By becoming security he made himself responsible for the purchase mo- ■ ney, and for what he paid he has a claim on James Mistan, and his estate, for indemnification, but no lien on Brook-field.

f am of opinion, that the decree of the chancellor ought to be reversed, and a decree passed directing the trustee to execute a deed of conveyance to Doctor Ghiselin for Brookfield.

DECREE AFFIRMED.