Swain v. Cato

Texas Supreme Court
Swain v. Cato, 34 Tex. 395 (Tex. 1871)
Walker

Swain v. Cato

Opinion of the Court

Walker, J.

This suit was brought in the district court by Cato against Swain, on a promissory note for $461 43. This note was due one day after date, and recites that it is given for real estate, and that a vendor’s Men is retained.

It appears, however, from the pleadings and the evidence, that the note recites a falsehood on its face, and.that it was only in part given for real estate, and in part for goods and money.

*398The vendor’s lien is a secret lien and one which stands solely upon the grounds of equity and good conscience. It need not be recorded, to give it the force and efficacy of a mortgage.. Now, is it to be allowed that parties may evade the registration laws, and attach this secret equitable lien to all manner of uses never intended by the expounders of the law of equity, and calculated to mislead third parties, and enabling the contracting parties to practice fraud upon innocent purchasers ? We think not. We are clearly of opinion that such a rule as would allow parties to make and enforce such contracts would be against public policy.

If liens could be created in this way, by simply writing (and that falsely) that a note was given for real estate, when indeed -it was given for money or dry goods, all law upon the subject of mortgages might be set at nought, and all the benefit the public derive from requiring them to be recorded would be lost.

It is true that as between the parties themselves it might seem right and just that such contracts should be enforced; but the parties who engage in this sort of contract (which is against public policy) are in pari delicto, and equity should not step in to relieve them.

But in this case we will only follow the doctrine of Wasson v. Davis, decided at the present term, and refer again to the case of Growning v. Behn, 10 B. Monroe, 383. If the party setting up the vendor’s lien can show precisely what amount of the consideration of the note was for the purchase of the land, he can have a decree pro tanto and no more.

The judgment of the district court is. reversed and the cause remanded.

Beversed and remanded.

Reference

Full Case Name
Wilson Swain v. L. W. Cato
Cited By
9 cases
Status
Published
Syllabus
1. The vendor’s lions being a secret and purely equitable lien, net required by law to be recorded, parties cannot be- allowed to evade the registration laws by falsely reciting in a promissory note that it was given for the pur ■ chase of land, and thereby apply this lien to purposes never contemplated in equityjnrisprnder.ee, and calculated to mislead third persons and operate as a fraud upon innocent pursbasers. Such fictitious liens are contrary to public policy; and as the parties fabricating them are in \\pari delicto, they will not be enforced even as between the parties themselves. 2. When a note was given in part for land and in part for other considerations, the vendor’s lien may be enforced lor so much of it as was for land, provided the party claiming the lien can show precisely how much of the consideration was for land.