Maroney v. Boyle — 57 N.Y. St. Rep. 604

Majority

p. 604

John Maroney et al., App’lts, v. Margaret Boyle et al., Impleaded, etc., Resp’ts.^[1]

(Court of Appeals,

Filed February 27, 1894.)

Headnote

1. Lien—Equitable^-Unpaid pubchase money. '

Grantor does not waive his lien for unpaid purchase money by simply taking the individual note, bond or covenant of the grantee, unless he expressly and consciously relinquishes it.

3. Same.

A subsequent grantee, with notice, does not acquire a better position than his grantor had.

But such lien does not prevail against a grantee in good faith, without notice of the lien and for a valuable consideration parted with before such notice.

4. Same.

A purchaser on execution, who has paid the purchase price and received the sheriff’s certificate of sale, is entitled to protection against an outstanding and unknown lien for purchase money in favor of a former grantor.

5. Same.

His rights are not affected by the fact that the purchase price paid by him was small. ¡

Appeal from judgment of the general term of the supreme court in the fifth judicial department, entered upon an order made January 22, 1892, which affirmed a judgment in favor of defendants entered upon a decision of the court on trial at special term dismissing the complaint.

This action was brought to enforce the equitable lien of the plaintiffs for the purchase money of land conveyed by them to the defendant Margaret Boyle.

p. 605

The facts found at the special term are substantially as follows: That on the 20th day of August, 1887, the plaintiffs were the owners of the land described in the complaint, and on that day for a valuable consideration they sold and conveyed the land to the defendant Margaret Boyle, who then paid to them $500 of the purchase' money, and gave to the plaintiff John Maroney her individual promissory note to secure the payment of the sum of $2,000, the balance of the purchase money; that at the same time the plaintiffs waived whatever equitable lien they had upon the land for purchase money; that Margaret Boyle was financially solvent and the estate of Peter Boyle, deceased, the husband of Margaret Boyle, was also solvent, and the plaintiffs in making the deed and accepting the note relied upon the individual responsibility of Margaret Boyle; that immediately after the delivery of the deed and noté Margaret Boyle entered into possession of the land, and on or about the 18th day of September, 1887, she, for the consideration of $2,000, executed to the defendant Edward D. Boyle a deed conveying the land to him; that immediately thereafter Edward entered into the possession of the land, and has ever since remained in the possession thereof ; that in the months of March and April, 1888, he paid to the plaintiffs $500 in money to apply both on the purchase money of the land due from him to Margaret Boyle, and upon the purchase money thereof due to her from the plaintiffs, and about the same time he fully paid to her, out of his distributive share of his father’s estate, the balance of the purchase money; that in purchasing the land and paying for the same Edward relied upon the belief and fact that the plaintiffs had waived their equitable lien thereon for purchase money; that at the time of his purchase Edward was financially solvent, but about the month of October, 1888, he became insolvent; that by reason of indorsing the notes of Edward his mother also became insolvent and unable to pay the -note held by John Maroney ; that during the months of October, November and December, 1888, and January and February, 1889, ten judgments were recovered against Edward D. Boyle and docketed in the office of the clerk of the county of Cattaraugus, and became liens upon his real property situated in Cattaraugus, county, which judgments amounted in all to upwards of $3,000 ; that about the months of April and May, 1889, and before the commencement of this action, the defendant Frank W. Davis purchased the several judgments from the plaintiffs in and owners thereof, and paid to them the full amounts thereof in money, and received from them written assignments thereof, whereby he became and is still owner of the same, except judgments so recovered by one Barry, by the First National Bank of Salamanca and by two other persons; that Barry refused to sell his judgment to Davis and caused an execution thereon to be issued to the sheriff by virtue of which, after due notice of sale, he, on the 20th day of April, 1889, sold the land at public auction to Davis for the sum of $86.12, and thereupon executed to him his written certificate of sale in the form required by law, and Davis immediately paid the purchase price; that Davis never had any

p. 606

notice until after he had purchased the judgments and received the sheriff’s certificate of sale and had fully paid for the same, that the plaintiffs ever had any lien upon or interest in the land since they conveyed the same to Margaret Boyle; that the First ¡National Bank of Salamanca caused executions upon its two judgments to be duly issued to the sheriff, who, by virtue thereof, and pursuant to due notice of sale, did, on the 27th day of May, 1889, sell the land to the defendant Charles I. Baker, at public auction, for the sum of $950, which Baker then paid to him, and thereupon the sheriff executed and delivered to him his certificate of sale thereof in the form required by law; that Baker never had any notice until after he had purchased the land, paid the $950 and received the certificate, that the plaintiffs, or either of them, ever had any lien upon or interest in the land; that at the time the plaintiffs sold and conveyed the land to Margaret Boyle, and received her note, they believed and relied upon the then supposed fact that the note was, in effect, the note of Margaret Boyle, in her capacity of administratrix of the estate of Peter Boyle, effectual to bind that estate for its payment, and not her individual obligation.

And the court dismissed the complaint as to the defendants Margaret Boyle, Baker and Davis, who alone appear to have defended the action, and ordered judgment to that effect. The plaintiffs appealed to the general term and then to this court.

G. S. Carey for app’lt; K D. Northrup for resp’t.

When Edward D.. Boyle took his deed he had notice of the plaintiffs’ claim for unpaid purchase money, and, therefore, he did not acquire a better position than his grantor had. We think there can be no doubt that, as against him and his grantor, the plaintiffs had and retained their equitable lien. They took the promissory note of their grantee for the balance of the purchase money. It was not taken as payment, but simply as evidence of the amount due and the time and mode of payment. It has been many times held that the grantor-does not waive his equitable lien for the purchase money by simply taking the individual note, bond or covenant of the grantee. He may rely in taking such an individual obligation upon the solvency and financial ability of the grantee, and he may not know that he has any lien upon the land, or actually rely upon any lien, and he may not have in contemplation the enforcement of the lien at any time, and yet, unless in. such a case he expressly and consciously waives his lien, he retains it. If, however, he takes any security for the purchase money, as a mortgage upon the same or other property, or the note or other obligation of a third party, he will be held to have waived his purchase-money lien, unless he has in some way expressly retained it. 2 Story’s Eq. Jur. §§ 1217, et seq.; 4 Kent’s Com. 152; 3 Pomeroy’s Eq. Jur. §§ 1249, et seq.; Mackreth v. Symmons, 15 Ves. 329 ; Bailey v. Greenleaf, 7 Wheat 46 ; Garson v. Green, 1 John. Ch. 308; Chapman v. Brown, 6 id. 398 ; Shirley v. Sugar Refinery, 2 Ed. Ch. 505 ; Hulett v. Whipple,

p. 607

58 Barb., 224 ; Hallock v. Smith, 3 id. 267 ; Vail v. Foster, 4 N. Y. 312 ; Seymour v. McKinstry, 106 id. 230; 8 St. Rep. 580 .

We find in this record no evidence whatever sufficient in law tó show a waiver of their lien by the plaintiffs. It is quite true that they relied upon the personal responsibility of their grantee. That is always so when the grantor takes the mere personal obligation of the grantee for the purchase-money of land sold, and yet it has never been held that 'the personal obligation of the grantee thus taken deprives the grantor of his lien.

The counsel for the respondents makes much of the fact that the note was signed by Mrs. Boyle, attaching to her name “administratrix to the estate of Peter Boyle, deceased.” The deed ran to her by the same description, and she deeded to her son by the same description. She, nevertheless, whatever may have been supposed at the time, took the deed in her own right, and the note was her personal obligation, and all the plaintiffs got, or intended to get, was the obligation of the real grantee.

We, therefore, think the learned trial judge erred in his finding of fact that the plaintiffs had, either as to Margaret Boyle or her son, waived their lien for the purchase-money by anything which took place at the time of their conveyance of the land. But this error was harmless, as the defendant Davis purchased the land under such circumstances that he has protection against the lien. He purchased the land at the sheriff’s' sale without any notice of the plaintiffs’ lien, and he paid to the sheriff the amount of his bid in money. He took the sheriff’s certificate of sale, and since the trial of this action he has received the sheriff’s deed, as we are now informed by the production thereof upon the argument here. We will, however, ignore the deed, and treat the case as if Davis held only the certificate.

The examination of many authorities shows that the vend- or’s lien is not now a favorite with courts of equity, and that it has many times been enforced with reluctance and misgivings. Equity judges have found it difficult to find any justifiable basis for it to rest on, and they have differed as to the grounds and reasons for its introduction into the equity'jurisprudence of England and of this country. It has been repudiated in some of the states by the courts, and in others, it has been abrogated by legislative enactments. It is against the general policy of our law, which looks with disfavor upon secret interests in real estate, and requires generally that titles to real estate shall be created by some writings which shall be spread upon the public records for the protection of those who might trust to titles apparently sound but afflicted with secret infirmities. It generally gives way to a legal interest or to a superiqr quality, and as it is a matter of purely equitable cognizance it should never be enforced when it would be inequitable to do so. Hence, it is never allowed to prevail against one who takes an incumbrance upon the land, or an interest therein, or a conveyance thereof, in good faith without notice of the lien and for a valuable consideration parted with before such notice.

How, what is the status of Davis holding the sheriff’s certifi

p. 608

•cate of sale? Why should he not be protected? Such a purchaser, after he obtains the sheriff's deed, is in the same position as he would have been if the deed had been executed by the judgment debtor at the time the judgment was docketed. In Hetzel v. Barber, 69 N. Y., 1 , we said: “ A sheriff’s deed, given in pursuance of a judgment and a sale upon execution, is treated a= if given by the judgment debtor himself. It conveys precisely what he could have conveyed when the judgment was docketed. The sheriff, by authority of law, takes his property and conveys it to satisfy his debt, and the transfer is the same as if the sheriff had in fact acted as the authorized attorney of the debtor. The grantee in such cases holds not under the sheriff, but under the •debtor, and the deed, when recorded, is protected by and has the benefit of the recording act. See also Freeman on Judgments, § 366, 366a. Therefore, if Davis had taken the sheriff’s deed before the trial of this action, he would have had the same protection against the plaintiff’s lien as he would have had if he had in good faith and for money taken a deed from Mrs. Boyle or her son. But the mere fact that he did not then have the deed can make no difference. The sheriff’s certificate must be regarded the same as if at the time of docketing the judgment the debtor had ■executed a contract of sale embodying the same terms, and had -received the full purchase price. The debtor would in that event have held the legal title of the land as trustee for the purchaser. The title of the purchaser would have been contingent and conditional on account of the right of redemption existing in the debtor and his creditors. But, nevertheless, he would have become the purchaser of just such a right and interest as he bargained for and paid for to obtain, and he would have had protection against any outstanding secret and unknown ^ien for the purchase price. We think it is, therefore, clear that by his purchase of the land at the sheriff’s sale, and full paym'ent of the purchase price, Davis obtained protection against the plaintiff’s lien.

We cannot hold that, as matter of law, there was anything to give Davis constructive notice of plaintiff’s lien. The form of the deeds to Mrs. Boyle and her son, and the fact that the deed to the son was not recorded, are qf no significance upon the question of notice. They do not suggest the non-payment of the purchase price to the plaintiffs, or the existence of their lien. The rights of Davis are not affected by the small amount of the purchase price. There was one judgment anterior to that undér which he purchased, and he held several junior judgments, and the whole situation must be taken into account in considering the price paid. It is a significant fact that the interest he purchased was not considered sufficiently valuable to induce any one to redeem from him. Even if he made a good bargain he was entitled to the benefit of it.

The equities of the plaintiffs are not enlarged because Davis made the purchase, expecting thereby in some way to benefit or protect the family of Peter Boyle, deceased. His position and .rights would be the same if he only held the land as security.

To the suggestion made by the learned counsel for the plain

p. 609

tiffs that they could in some way be subrogated to the rights of Davis by payment to him of the amount paid by him, or have the right by the judgment in this action to redeem from him, or that he should be turned over to other property of the judgment debtor for his reimbursement, the plain answer is that the complaint was ■not framed for such relief, the action was not tried with the view to such relief, and there are no findings or exceptions which present the matter for our consideration.

The defendant Baker appears to have the same defense to the action which Davis has. But we have paid no attention to him •as his answer to the complaint does not appear in the record ; he was not made a respondent upon this appeal and no one appeared for him upon the argument before us.

Our conclusion, therefore, is that the judgment should be affirmed, with costs.'

All concur.

Judgment affirmed.

Cases cited

Bayley v. Greenleaf 7 Wheat 46 SCOTUS 1822-02-18 p. 606
Vail v. Foster 4 N. Y. 312 N.Y. p. 607