Boos v. Ewing
Boos v. Ewing
Opinion of the Court
The complainant presents for our consideration a question of very considerable importance, if not one entirely new in this Court. As a mortgagee, he has no claim prior to the liens of the judgments, upon which this land has been sold. This results from the provisions of the act relating to the recording of mortgages, under the construction it has repeatedly received by this Court. See Stansell v. Roberts, 13 Ohio Rep. 148.
Aware of this difficulty, his learned counsel • have rested his case upon the broad, equitable doctrine, that the property of one man ought not to be taken from him in satisfaction of another’s debt, without just compensation. This case is therefore
In Mackreth v. Symmons, 15 Vesey, 350, nearly all the English cases are reviewed by Lord Eldon. In 4 Wheat, and 1 Mason, the doctrine is examined at length by the Supreme Court of the United States. In Fish v. Howland, 1 Paige Ch. 20, both the English and American cases are examined by the Chancellor of New York. In the latter case the learned Chancellor expresses the opinion that the safer rule “ is to consider the lien as waived whenever any security is taken on the land, or otherwise, for the whole or any part of the purchase money, unless there is an express agreement that the equitable lien on the land shall be retained,” and in the same opinion he recognizes the principle first stated in Bondv. Kent, 2 Vernon, 281, and sanctioned by Chief Justice Marshall, in Brown v. Gilman, “ that where by agreement there is an express lien upon the estate for a part of the consideration of the conveyance, it excludes the idea of an implied lien for the residue. The principle deducible from Mackreth v. Symmons, is clearly “ that a mortgage taken upon the estate is not of itself a waiver of the lien, but that when so taken as to evince the intention that the estate was always relied on as a security for the purchase money, the lien subsists, and if necessary, may be pursued. With this
There is no reason for this application of the doctrine of merger in equity. A merger does not extinguish a claim ; its equity still subsists and is united with the higher security ; and whenever it becomes necessary to resort to it for the purpose of justice between man and man, a majority of the Court think there is no violation of principle nor any direct conflict with authority, in permitting it to be done in a Court of equity.
The quotation from Paige, taken in the sense which we suppose it might have been intended, is not very objectionable, and would not be an authority for rejecting this lien, for here the avowed object in taking the mortgage was to preserve the lien upon the estate itself. If, however, as counsel contend, the Chancellor’s intention was to hold that the taking of a mortgage to secure the purchase money, no other security being relied on than the property sold, is either a merger, waiver or substitution, or other destruction of the lien, we think it is not right to follow him, and that Sir Wm. Grant, Lord Redesdale, and Lord Eldon, are safer guides.
But aside from all authority, what is there in the effort to secure an absolute binding lien upon the property itself, the
A mortgage taken as this was is not a substitution. That term implies a contract by which the parties agreed to take -other property, or other security, and discharge the lien upon the land, leaving the vended estate in -the hands of the purchaser unincumbered, subject to alienation. Nor is,it a waiver.
By waiver is meant an act done showing impliedly or expressly that the party agreed to rely on some security other than the estate for the purchase money, or without any security to rely upon the personal responsibility of the vendee alone.
Again, as this land has been sold, it is urged there can be no relief, because if the vendor’s lien exists at all it is a lien
In answer to this it is only necessary to look at the general equity of the parties and the state óf the facts. The land it is true has been levied upon and sold upon the execution, yet the sale is not confirmed nor the money paid into the hands of the judgment creditors. It is yet in the custody of the Court, where it is held for the use of the one having the better claim. The vendee,. creditors and purchaser are in Court. None of them have any desire that the sale should be set aside. They, together with complainant, wish it confirmed. Why should the Court refuse then to do what equity requires, and secure to complainant the benefit of his lien in this form, and to the creditors the surplus ? Certainly he came not too late to preserve his equitable rights, because he came before confirmation and in time to prevent it if necessary; in time also to prevent the bidder at sheriff sale from placing himself in the condition of purchaser without notice. Before a confirmation he might interfere, after that it would perhaps have been- too late.
This brings me to the consideration of another point which has been suggested. That is, that the complainant is too soon in Court. True, this objection is not very directly put forward, yet it is proper that it should be noticed. If I understand the meaning by which it is sustained, it is in this wise: complain-: ant’s claim is not due, and until due he has no right-in Court, and cannot know that any necessity for a resort to this fund will ever arise. Besides he has the personal security of Martin for the money due, so that in effect, this proceeding is for Martin’s benefit. ■
As to the first of these objections, for they should be considered as two, and disposed of separately, it is admitted the purchase money is not due, and that when due, it may be paid without a resort to this land, or the fund which it has'produced. But is that any reason why complainant should lie still and see his securities swept away, by being placed in the hands of one who may vest the title in a purchaser without notice? He ei
Then as to the personal security of Martin, does the objection amount to any thing ? The land was sold to both, and both Martin and Ewing by the showing of the bill, are liable for the purchase money. This in no wise affected the vendor’s lien. It existed in no less force than it would if the sale had been made to a single person, and even if the retention and preservation of the lien by Boos, should in the end result to the benefit of Martin, that fact furnishes no reason why Boos shall be forced to part with it. It is not for this Court, but for the party himself, to elect when and under what circumstances he will yield up a security for the payment of his debt which he lawfully possesses.
Decree for Complainant.
N. B. A motion for rehearing was made and overruled.
Dissenting Opinion
dissenting. As it seems to me, that by the decision of this case, novel principles are introduced into the law, relative to the lien.of a vendor of real estate upon the estate itself, for the purchase money, I deem it necessary and . proper to state the reasons which have induced me to dissent from the opinion expressed by a majority of the Court.
I am not about to controvert the principle, that in equity, a vendor under certain circumstances, has a lien upon land sold for the purchase money. This principle has been recognized by this Court, and so far as it has been thus recognized, I am willing to sustain it. But I am free to say, that if the question was now for the first time presented for consideration, I should be opposed to the recognition of fhe principle. I should be opposed to it, because I believe it to be inconsistent with the general policy of our laws. It is a secret lien, and as such,
Another reason why, if the question were an 'original one, I should be unwilling to recognize or sustain this implied lien, grows out of the fact, that it is a subject with which nine tenths, if not ninety-nine hundredths of our people are unacquainted. They understand what is meant by a mortgage, and what is meant by a judgment lien, but of this vendor’s lien they know nothing. Chancellor Walworth in the case of Fish v. Howland et al., 1 Paige C. R. 20, well says, “ it is probable that not one person in a hundred, who conveys or purchases real estate, is aware of the existence of such a principle of equity.”
But, although if the question were an original one, I should be unwilling to recognize and inforce the principle in our jurisprudence, still in accordance with former decisions, I am willing to inforce it to the extent to which it has been heretofore recognized and acted upon. The extent to which this Court has heretofore gone is, to establish the principle that a vendor has a lien upon the land sold for his purchase money, provided he takes no other security for its payment than the personal
It is now to be considered whether the complainant, in the case before the Court, is entitled to the relief sought upon principles heretofore recognized in this “ Court, or in any of the Courts of the United States or of England.
The simple facts of the case are these : The complainant, Boos, on the 27th of April, 1844, sold and conveyed to John D. Martin and Samuel Ewing, as tenants in common, for the consideration of twelve hundred dollars, a parcel of land in the neighborhood of Lancaster, Fairfield county. Of the consideration money one half was paid in hand, and a credit of six years was given for the other six hundred, which will fall due on the 27th of April, 1850. To secure this last payment a mortgage was executed on'the 4th of April, 1845, and recorded on the 21st of July of the same year. Certain of the defendants recovered judgments against Ewing, at the May term of the Court of Common Pleas of Fairfield county, 1845, executions upon which were issued and levied upon his share of, or interest in the aforesaid land. In May, 1847, Ewing’s interest in the land was sold, and the money brought into Court, whereupon this bill was filed by the complainant, seeking to appropriate to his use, so much of the money so made as will amount to one half the balance which will fall due to him, from Ewing and Martin, in April, 1850, on the ground that he as vendor has a lien upon the land, and that he is now entitled to the money, the land having been sold. It is stated in the bill that complainant when he conveyed, relied upon his lien as vendor, and that he did not intend to relinquish this lien by taking the
Now here is a case in which it is manifest that the vendor did not trust to the personal security of the vendee, for the whole or any part of the purchase money, or if he originally trusted to such personal security, he ceased to trust to it when he took the mortgage on the fourth of April, 1845. From that time he relied upon the collateral security furnished by the mortgage, and his implied lien as vendor was extinguished. At least such has been the law as heretofore understood in this State, and in the other States of the Union. And I venture to say, that a case cannot be found in the English books to the contrary. The simple question presented in this aspect of the case is this, where the vendor takes a mortgage upon the premises sold, to secure the purchase money, is the equitable implied lien extinguished, or has the vendor a double lien, that is to say, a lien as vendor, and a lien by the mortgage ? A majority of the Court say that the implied lien is not extinguished by the express lien of the mortgage, but that the two liens continue to exist together. To my mind it is clear, that the implied lien is merged in the express lien, and that the two are inconsistent the one with the other, and cannot exist together, and such I understand to be the uniform current of authorities.
Chancellor Kent, in speaking of this lien of a vendor, says, “■in several cases it is held, that taking a bond from the vendee for the purchase money, or the unpaid part of it, affected the vendor’s equity, as being evidence it was waived, but the weight of authority, and' the better opinion is, that taking a bond, note or covenant, from the vendee for the payment of the money, is not of itself an act of waiver of the lien, for such instruments, are only the ordinary evidence of the debt. But
From an examination of the text of Story’s Equity, it might be supposed that the Commentator differed in opinion from Chancellor Kent, but I apprehend that he should not be so understood. For in the case of Gilman v. Brown, 1 Mason’s Rep. 212, he says “ there is a strong if not decisive current of authority, to lead us to the conclusion, that merely taking the bond, note or covenant of the vendee for the purchase money will not repel the lien ; for it may be taken to countervail the receipt of the payment usually inserted in the conveyance. But where a distinct and independent security is taken, either of other property, or of the responsibility of a third person, it certainly admits of a very different conclusion. There the rule may properly apply, that expressum facit, cessare taciturn; and where the party has carved out his own security, the law will not create another in aid of it.” And again, “ in a careful examination of all the authorities, I do not find a single case in which it has been held, if the vendor take a personal, collateral security, binding others as well as the vendee, as for instance a bond or a note with a surety or indorser, or a collateral security by way of pledge or mortgage, that under such circumstances a lien exists upon the land itself.”
In the case of Cole v. Scott, 2 Washington’s Rep. 141, the President of the Court of Appeals of Virginia, says, “ the doctrine that the vendor of land not taking a security, nor making
In the case of Brown v. Gilman, et. al. 4th Wheaton’s R. 455, the Supreme Court of the United States held that “the equitable lien'of the vendor of land, for unpaid purchase money, is waived by any act of the parties showing that the lien is not intended to be retained, as by taking separate securities for the purchase money.”
This Court in the case of Mayham v. Coombs, et. al., 14 Ohio R. 428, held that the vendor’s lien is lost, when the vendor takes real or personal security for the payment of the purchase money. In that case the real security was a mortgage on the premises sold.
Such are some of the American cases, and they are all decided upon the principle that when any other security is taken for' the payment of the purchase money than the personal security of the vendee, the vendor’s lien is extinguished. Nor do I understand so far as I have been able to examine, that a different principle is settled by the Courts in England. True, in the case of Mackreth v. Symmons, 15 Vesey, 329, 342, Lord Eldon seems to consider, that whether taking a distinct security will have the effect to extinguish the implied lien, depends altogether upon the circumstances of each case, and that no rule can be laid down universally ; and that therefore it is impossible for any purchaser to know, without the judgment of a Court, in what cases a lien would, and in what cases it would not, exist. His language is, “ if on the other hand, a rule has prevailed, as it seems to be, that it is to depend, not upon the circumstance of taking a security, but upon the nature of the security, as amounting to evidence, as it is sometimes called, or to declaration plain, to manifest intention, the expression used upon
It is believed, however, notwithstanding what is said by Lord Elden, as before quoted, that it may even in England, in some cases at least, be known when the vendor’s lien is extinguished, without resort to a Court. In 2 Sugden 60, it is said, “ If the vendor take a distinct and independent security for the purchase money, his lien on the estate is gone, such a security is evidence that he did not trust to the estate as a pledge for his money.” And again upon the same page, “ and the same rule must prevail, it has been said, where a vendor accepts a mortgage of another estate, for the purchase money, the obvious intention of burthening one estate being, that the other shall remain free and unincumbered; so even where the vendor takes a mortgage of the estate sold for only part of the purchase money; because, by taking a mortgage for part, he clearly evinces his election, that the estate should be charged with that part only.” And again on page 61. “A bond and a mortgage of part of the estate, have been held to exclude the lien over the rest of the estate. But it seems that taking a covenant, bond or note, for the purchase money, will not affect the vendor’s lien.” And in one case it was held, where the receipt of the purchase money was indorsed on the deed, and a bond given for its payment, that the vendor’s lien was extin
I am not aware, however, that upon the points so far red to, there is any difference of opinion between the majority of the Court and myself. For I understand it to be admitted, that if a vendor takes independent personal security, if he take real security upon a different estate, if he take as security a part of the estate sold, the equitable lien is extinguished. But if he take a mortgage upon the entire estate sold, then it is said the equitable lien continues, because he thereby shows that it is his intention to rely upon the estate for the purchase money. True, he manifests his intention to rely upon the estate for the purchase money; but at the same time he manifests his intention, not to rely upon his secret implied lien. On the contrary he takes an express lien — one that is open and notorious — and to me it would seem strange, if this should fail him, that he can ever resort to the implied lien, which I must think was merged in that which is express. But upon this point we are not without authority.
The case of Fish v. Howland et al, 1 Paige C. R. 20, is a case in point. The facts of the case, so far as they bear upon the one now before this Court, are as follows: On the 10thof February, 1813, one Samuel Howland, then about 86 years of age, conveyed his farm to the defendant, David Howland, his grandson, with whom he expected to reside the remainder of his life; and took back a life lease, at a nominal rent. In 1816, David Howland conveyed to his brother Pontus, one half of said farm; and in 1825, Pontus conveyed his interest to one of the defendants to the bill. The Chancellor refuses to sustain the prayer of the bill, and in pronouncing his opinion against the lien, went into an elaborate review of the authorities, both English and American, after which he remarks as follows:
“ It appears, from this review of the English cases, that the question as to what shall be considered a waiver of the implied lien upon the land conveyed, for the unpaid purchase money, is still unsettled in that country. But I am gratified to find that
Again, the Chancellor says:
“ Lord Eldon seems to think that the question of lien or no lien, depends altogether upon the intention of the parties, and that each case must be determined upon that principle, and upon its own peculiar circumstances. If the actual intention of the parties was to govern the decisions of the Court, the lien would seldom be maintained, for it is propable that not one person in a'hundred, who conveys or purchases real estate, is aware of the existence of such a principle of equity. A much safer rule, I apprehend, is to sustain the implied lien, whenever the vendor has taken the mere personal security of the purchaser only; and to consider any bond, note, or covenant given by the vendee alone, as intended only to countervail the receipt of the purchase money contained in the deed, or to show the time and manner in which the payment is to be made, unless there is an express agreement between the parties to waive the equitable lien; and on'the other hand, to consider the lien as waived, when any security is taken on the land or otherwise, for the whole or any part of the purchase money, unless there is an express agreement that the equitable lien shall be retained. This constitutes a safe rule, easily understood, and which I consider established by a weight of authority in this country which is not easily shaken. And, I believe, no English case previous to the revolution, will be found in opposition to these principles.” This ease of Farnell v. Hulis, is the one in which it was ruled by the English Chancellor that where the consideration was indorsed as received, and a bond.given to secure the payment, the vendor’s lien was extinguished.
“Applying this rule,” says the Chancellor, “ to the case now
The case of Little and Telford v. Brown, 2 Leigh’s Rep. 353, which was decided in the Court of appeals of Virginia, arose upon the following state of facts: by deed of bargain and sale; dated March, 1819, Brown sold and conveyed to Wilsons, four lots of land, and the Wilsons executed a deed of trust, on the 30th of the same month, conveying the same 'lots; in trust, to secure the payment of the purchase money to Brown, in instalments, stipulating that the said Wilsons should take the rents and profits, arising from the same to their order; and in another deed of trust, dated 19th October, 1819, the Wilsons, in order to secure a debt to Little and Telford, conveyed the same lots, and the'rents and profits, to a trustee, upon trust that he should sell the same to satisfy the debt. The controversy, in a great measure,’ was as to. the rents and profits.
The Court say “ The deed of trust to secure the debt to Brown expressly stipulated that the Wilsons should enjoy the rents and profits, until-the 25th February, 182~, and Brown could not have acquired the possession, nor consequently received the rents and profits, until that day, either by an action at law or by a bill in equity ; and the deed of trust to secure the debt to Little and Telford expressly conveyed the rents and profits arising from the 9th of October, 1821. That is, the Wilsons conveyed by the last deed, the very right which they had reserved by the first. The circumstance that the first deed of trust was for the purchase money of the property, has no effect upon the question as to the rents: For, 1. The implied lien for the purchase money, which would have existed if the deed of trust had not been given, was utterly destroyed by the execution of that deed, and whatever effect that implied lien • might have had upon the question, it is superseded by the deed.”
Now I feel all due respect for the Courts both of common law and Chancery of England, but I cannot consent that the mere dictum of an English Chancellor shall be held of higher authority than the solemn decisions of our own American Courts.
Although the question of the most practical importance in this case is, whether by taking security upon the estate sold a vendor relinquishes his equitable lien, and which question is
Again, from any thing which appears in the bill, both Ewing and Martin are abundantly able to pay the balance of purchase money which will fall due in 1850. There is no intimation -that either of them are insolvent, or are likely to become insolvent, nor is it pretended but that the money due is well secured by the mortgage. To me it seems to be a question worthy of consideration, whether under such circumstances a vendor can resort to his lien upon the land. Whether he should not, in the first place, exhaust the personal property of the vendee before he resorts to this lien. Upon
The land in controversy was sold by the complainant, Boos, to Ewing and Martin, as tenants in common. One half the purchase money was paid by the purchasers jointly, and their joint notes given for the balance, with no other security than the personal security of the vendees. Under these circumstances the vendor had an implied lien upon the land for the purchase money. But this was not a lien upon one half the land, for one half the purchase money still due, but a lien upon the whole land for the entire purchase money. Subsequently in April, 1845, the purchasers executed to the vendor a mortgage upon the same premises to secure the payment of the remaining purchase money. To this mortgage there were two parties, the mortgagors and the mortgagee. The instrument itself was a joint instrument of the mortgagors, and it covered the entire
Now suppose he should elect to sue upon his note, would he commence a suit against one of the makers for one half of the note, and another suit against the other for the other half? Or could he commence a suit against both the makers for one half the note, leaving the other half unpaid ? No one will hesitate to say, that such a course of proceeding could not be sustained. The contract being an entire one, could not thus be divided. And if two suits could be sustained in this manner upon the same note, double that number might be.
Suppose the vendor should elect to proceed upon his mortgage, could he file his bill against one of the mortgagors to enforce the payment of one half the money due, and a like bill against the other mortgagor to enforce payment of the other half? Or could he file his bill against the two mortgagors, to compel the payment of one half only of the purchase money, by the sale of one half the land, the balance of the purchase money remaining still due ? It seems to me every person must answer these questions in the negative. And yet this is precisely the case before the Court, except that the object is to enforce the equitable, not the legal mortgage. The effort made is not to enforce the vendor’s lien or equitable mortgage, to secure the payment of the entire debt, but of one half the debt. It is
If I am wrong in supposing that the proceedings in this case are not in harmony with ordinary legal, or equitable proceedings ; if it be sound doctrine that a payee of a promissory note, made by two individuals, may treat that note as if one half was due from one of those individuals, and the other half from the other, and may bring separate suits accordingly; if a mortgage executed to secure the payment of such a note, may in like manner be enforced, then there is another difficulty in the way. In a note so executed, admitting each one of the makers to be a principal for one half the amount of the note, and no more, yet he must be held to stand in the light of a security for the other half. This, I presume, will not be contradicted. Apply this principle to the case now under consideration, and what is the consequence ? The complainant, Boos, sold the land to Ewing and Martin, received one half the purchase money, and the joint note of the purchasers for the residue. If this note is divisible, and it seems to me that it must be so considered, in order to sustain the present proceedings, then each one of the makers is principal for his half of the note, and security for his co-maker for the other half. Ewing is principal debtor for three hundred dollars, and security for Martin for the other three hundred ; and so, Martin is principal debtor for three hundred dollars, and security for Ewing for the other three hundred. It seems to me that we necessarily get into this dilemma, by attempting to afford the relief prayed for; and if so, it follows that Boos took collateral personal security for the purchase money of the land sold, and in such case it is admitted on all hands, that the equitable lien is extinguished.
I have now stated some of the reasons which induce me to dissent from the opinion of a majority of the Court, in this case. I object to that decision, because I believe it to be inconsistent with the law upon the subject of vendor’s liens, as heretofore construed and acted upon in this and every other
Reference
- Full Case Name
- Jacob Boos v. Samuel Ewing, John D. Martin and others
- Cited By
- 25 cases
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- Published