Magruder v. Peter

11 G. & J. 217

• Court: Court of Appeals of Maryland
• Decided: December 15, 1840
• Status: Published

Opinion

Stephen, J.,

delivered, the opinion of this court.

The hill of complaint in this case, was filed on the equity side . of Montgomery county court by the complainant, as the surviving executor of the will of David Peter, deceased, against the appellants, to compel payment of the balance of the purchase money, of a tract of land sold by the executors of said Peter to a certain George Magruder, under a power supposed by them to be derived from the will of said Peter.

The clause of the will under which the executors acted, is in the following words: “I wish all my debts to be as speedily paid as possible, for wdiich purpose, I desire that the tract of land on which Dulin lives, together with all personal property thereon, may be sold, and applied to that purpose; and in aid of that, as soon as sales can be effected, so much of my city property as may be necessary to effect that object.” He then appointed his wife Sarah Peter, executrix, and George Peter and Leonard H. Johns the executors of said will. The testator died in 1812; and in the following year the executors advertised the land for sale; at which sale, a certain George Magruder became the purchaser for the sum of $20,687.90, it being at the rale of $10.50 per acre; one-third of the purchase money, which was by the terms of sale to be paid on the 1st of January .1814, was paid by the purchaser; and for the other two thirds, be gave his two several promissory notes, payable, one on the 1st of January 1815, and the other on the 1st of January 1816. The first endorsed by Patrick Magruder, and the second endorsed by Lloyd Magruder, when possession of the land was delivered to him, as the purchaser thereof. In July 1820, and before the payment of either of the above notes, George Magruder petitioned in the District of Columbia for the benefit of the insolvent laws; Geo. B. Magruder, one of the defendants, was appointed in the same year, his trustee, to whom he conveyed all his property,includingtheland purchased by the insolvent, his principal, from the executors of the said David Peter. This land was afterwards sold at public sale by the trustee of George Magruder, and purchased by John A. Carter, one of the defendants, for the sum of $1,980, to whom it was conveyed by the said trustee, and who resists the sale of the said land, for the payment of the balance of the purchase money due to the estate of the said David Peter, deceased, upon several grounds, the validity of which it is necessary for this court now to examine, and decide upon.

The defendant contends in the first place, that it was without warrant or authority, that the sale was made by the executors of David Peter, and that the making of such sale being the exercise of a power not delegated to them by the will, no title passed to the purchaser at such sale.

He also contends, that he was a purchaser for valuable consideration, without notice of the complainant’s lien or claim, for the balance of the purchase money, and that the same might have been obtained by due diligence, and taking the necessary steps for that purpose, from George Magruder, the principal, or his sureties, Patrick and Lloyd Magruder.

He further relies upon the staleness of the demand, and the omission of the surviving executors to notify him of his lien.

He pleads limitations as a bar to any claim upon the notes for the purchase money; and limitations by adverse possession of twenty years, and lapse of time, during which the executors suffered their claim to lie dormant, and omitted to prosecute for the same, either against the defendant, or those under whom he claims, they being in possession.

The objection raised to the power of the executors to sell, and which is relied upon as matter of defence in this case, is an important one; and has received all the attention and consideration, which it has been in our power t,o bestow upon it.

The same question it appears, has also engaged the attention of the Supreme Court of the United States, and has been judicially decided by them in favour of the right or power to sell.

We do not however agree in opinion with that learned court, that this court in the case reported m 4 Gill & John. 323, have expressed any decided opinion upon this question. In that case the Court of Appeals, say it is said in Sugd. on Pow. 167, where a testator directs his estate to be sold, without declaring by whom the sale shall be made, if the fund be distributable by the executor, either for the payment of debts or legacies, he will take a power of sale by implication. In Maryland a different course has been generally pursued, founded perhaps on an act of Assembly, passed in 1785, ch. 72, by the 4th section of wririch it is enacted, “if any person hath “ died or shall die, leaving real or personal estate to be sold “for the payment of debts, or other purposes, and shall not “by will or other instrument of writing, appoint a person or “persons, to sell or convey the said property, &c.,upon every “such case, the Chancellor shall have full power and authority “upon application or petition, from any person or persons inter- “ ested in the sale of such property, to appoint such trustee or “trustees, for the purpose of selling and conveying such property, and applying the money arising from the sale, tothepur- “ pose intended, as the Chancellor shall in his discretion think “proper.”

We shall certainly look here in vain, for any thing like the expression or intimation of an opinion, that the doctrine quoted from Sngden was untenable, or unsustainable upon principle. It amounts to nothing more than a declaration or statement, that in this State a different practice in such cases had been generally pursued, which probably had its origin in the provisions of the act of 1785, ch. 72. It cannot therefore we think be properly considered as a decision of the question involved in this case, wdiich must be decided upon principle and authority, uncontrolled by any thing which fell from the court in that opinion. If then, no binding judicial decision of the question has ever been made by thehribunals of this State, or if the act of Assembly has never been judicially construed to cover and extend to such a case, it becomes necessary to ascertain what is the doctrine of the English law upon such a subject, as settled and established by the courts of justice in that country, and to be governed in our decision of the question, conformably to such rules and principles as we shall find to be there established.

In Sugd. on Pow. 72, it is said, “it sometimes happens, that a testator directs his estates to be sold for certain purposes, without declaring by whom the sale shall be made. In the absence of such a declaration, if the fund be distributable by the executor, he will have the power by implication.” In the same page of the same book, an eld case referred to in 16 Eliz. where a man devised his lands, “to his wife for life, and because he was in doubt, whether he should have issue or not, he further willed by his will, that if he should not have any issue by his wife, that then, after the death of his wife, the lands should be sold, and the money thereof coming, distributed to three of his blood, and made his wife and another his executors, and died. The executors proved the will. The other executors died, and the wife sold the lands; and it was the opinion of Wray and Southgate, justices, that the sale was good, although it be not expressed in the will, by whom the land should be sold, for the monies coming of the sale, are to be distributed by his executors to persons certain as legatees, and it appertains to executors to pay the legacies, and therefore they shall sell, &c., as if a man willeth that his lands shall be sold, and that the monies'coming thereof, shall be disposed of for the payment of his debts, now the executors shall sell the lands, for to them it belongs to pay debts; also they hold that the lands should be sold, in the life of the wife, otherwise they could never be sold, and also the surviving executor shall sell the lands because the authority doth survive.”

Such appears to have been the well settled doctrine of the ancient law of that country, from whence we have derived most of the principles of our jurisprudence, and the modern decisions and elementary writers, recognise the continuance of its existence down to the present period. The same principle has been sanctioned and established, not only by the Supreme Court of the United States, but by the decisions of several of our sister States. See 2 John. Ch. Rep. 252, where Chancellor Kent says, in a case where the real estate was directed to be sold, but ‘no person was named in the will to make the sale. “The object of the power to sell, was to raise money for the legacies, which it is of course the duty of the executor to discharge.”

We are therefore of opinion in this case, that the executors of Peter, whose duty it was to.pay the debts of the testator, with the proceeds of sale, had the right to make the sale, and competent power to pass the legal title under the will to the purchaser, upon payment of the purchase money. See 7 John. C. Rep. 48, where Chancellor Kent says, it is a well founded principle, that where a person takes by execution of a power, he takes under the authority of the power, equally as if the power, and the instrument executing the power, had been incorporated in one instrument. The title rests upon the act creating the power, and takes effect, as if created by the original deed. Assuming the principle then to be correct, that a power to sell in this case, was given to the executors by implication, it is clear, that the trust imposed upon them to apply the proceeds to the payment of the testator’s debts, would continue the power in the surviving executor. In the case of Osgood vs. Franklin, reported in 2 John’s. C. Rep., Chancellor Kent holds the doctrine to be, that where a trust is imposed upon executors, the execution of which depends upon the sale, the power will survive to the surviving executor. In that case he refers to a case reported in Sir Wm. Jones, 352, and Cro. Car. 382, where lands were devised to the wife for life, and then to be sold by the executors for payment of debts and legacies, or as one of the reports of the case says, to be divided among the nephew's, one of the executors died, and it was held, on a case sent from Chancery for the opinion of the judges at law, that the survivor could sell, though the executors had an authority and no interest. It is also a matter worthy of consideration, that by affirming the power of executors to sell, in such cases, the titles of purchasers might be protected in many instances, which a contrary construction would totally annihilate: because in many cases, sales may have been made by executors, without the aid of Chancery, under the belief of a power derived from the will, which would be totally void, and inoperative, if it should be decided, that it was an assumption of power unwarranted by law, and that an application to Chancery for the appointment of a trustee was necessary; on the contrary, purchasers from trustees appointed by Chancery in such cases, would have nothing,to fear; because the exercise of such a power would be within the general jurisdiction of that court, and therefore the titles of purchasers under such a sanction, could not be impeached. Upon the principle, that a sale made under the authority of a judgment of a court of competent jurisdiction is good and valid, it is well settled that a sale made by a sheriff by force of a fi. fa. shall stand, although the judgment should be afterwards reversed; for, say the books, the sheriff who made the sale had lawful authority to sell; Manning’s case, 8 Coke, 746. The purchaser under the decree in this case, would acquire a good and sufficient title from the trustee, upon the payment of the purchase money, and taking a deed of conveyance from him.

To obviate any misapprehension which may arise from the principles contained in this opinion, we wish it to be distinctly understood, that we do not mean to say, that we deem the act of 1785, ch. 72, unnecessary and inoperative; because there may be cases where the jurisdiction of a Court of Chancery, might be properly invoked under that act, as in the case of a will directing the sale of real or personal estate, for the payment of debts or other purposes, and where no trustee was appointed to make the said sale, and no executor was appointed, to whom the power could be considered as given by implication. In such a case, and perhaps in many others, the aid of a court of equity might be necessary, to execute the provisions of the will, by appointing a trustee to make the sale.. But in the case now before this court, we think that a resort to that jurisdiction was not necessary, as the executor named in the will had the power by implication»

We do not think, that the length of possession of the defendant Carter, and those under whom he claims, can be available as a defence against the complainant’s claim in this case; such possession cannot be considered adversary, because the principle is well established, that the vendee, and those claiming under him with notice, are to be considered as trustees, for the whole or any part of the purchase money, which may remain unpaid. 1 John. C. Rep. 308.

To obviate the objection of the defendant Carter, as to a want of power in the executors to sell and transfer the title, other reasons might be assigned, such as the exercise of acts of ownership, acquiescence, and long possession; but it is deemed unnecessary to say more upon that part of his defence.

That he was a purchaser of the land in question for a valuable consideration, and without notice of the complainant’s lien, is another ground of defence assumed by him, to show that it cannot be sold to pay the balance of the purchase money. The general rule of Chancery is, that whatever is sufficient to put the party upon enquiry, is good notice in equity. See Fonblanque’s Equity, 447, and the cases there referred to in the note. See also Sug. on Vend. 542, where he says, “what is sufficient to put a purchaser upon an enquiry is good notice; that is, where a man has sufficient information to lead him to a fact, he shall be deemed conusant of it. Therefore, if a man knows that the legal estate is in a third person, at the time he purchases, he is bound to take notice, what the trust is. Were there not strong and pregnant circumstances in this case, sufficient to put the defendant Carter, upon such an enquiry as would have led to a knowledge of the complainant’s lien, and which ought to charge him with a knowledge of its existence? He purchased from the trustee of the insolvent debtor, who purchased from Peter’s executors. The land mentioned in the bond of conveyance to Magruder, the purchaser, from the executors, is the same land purchased by him from the trustee of Magruder, and he, in his insolvent schedule, returns the land, by a name somewhat variant, though sufficient to put him on enquiry, as subject to a lien of about, $16,000, and in his list of debts, he returns himself a debtor to Peter’s executors, in the sum of $14,000: no legal title had been obtained by the purchaser or his trustee, for the land purchased, which the bond of conveyance shews, was not to be made, until the whole purchase money was paid; Carter, the defendant, admits, that before he purchased, he had read the decision of the Court of Appeals, reported in 4 Gill & John. of Magruder against Peter's devisees, in which it appeared, that the whole of the purchase money had not been paid; the knowledge of this fact, also, at the time of his purchase, was sufficient to have put him on enquiry; and to charge him with notice; that the purchase money then remained unpaid. Having therefore in legal construction sufficient notice to destroy the effect of his plea of a purchase without notice, we shall forbear to express any opinion upon the inadequacy of the price, for which the purchase was made, and how far the same would operate to effect his plea, as a purchaser for valuable consideration; the purchase having been made at public auction, and no proof of fraud appearing to effect the purchase. The notice of the lien being sufficient, with which he was chargeable in equity, we think the complainant was under no obligation to give him any additional information upon that subject.

We do not think, that it can be contended with any semblance of propriety, that the lien for the purchase money has Nbeen waived in this case, by the taking of promissory notes, with endorsers, as security for their payment. Prima facie, the purchase money is a lien on the land sold, and it lies on the vendee to shew the contrary. 1 John. C. Rep. 308, Chancellor Kent, in that case says, it is a well settled rule (for which he refers to several authorities,) “that the vendor has a lien on the estate for the purchase money, while the estate is in the hands of the vendee, and when there is no contract, that the lien by implication was not intended to be reserved.” So far from there being any evidence of an intention to relinguish the lien, in this case, the proof is very strong and clear to the contrary. The legal title was not transferred to the purchaser; and by the express terms of the contract, as proved by the bond of conveyance, no deed was to be executed by the vendors to the vendee, until the full and complete payment of the whole purchase money.” This reservation of the legal title until the full payment of the whole purchase money, is a clear and conclusive manifestation of the vendor’s intention, not to abandon their lien for the purchase money, and to take as a substitute therefor, the promissory note of the purchaser, with* endorsers. This position is we think too self-evident, upon principle, to require the aid of authorities to support it.

As the evidence in the record shews the inability of both principle and sureties to pay the debt, at and from the period the second payment became due in January 1815, a resort to law could not in any event be available; moreover, if compulsory measures had been adopted against sureties for the attainment of that object, it would have availed nothing to the defendant, Carter, as a purchaser with notice, because the sureties, upon paying the balance of the purchase money, would have had a right by substitution to the benefit of the vendor’s lien, for the purpose of re-imbursement and indemnity. See the case of Ghiselin vs. Fergusson, 4 Harr. & John. 522, where the rights of the sureties paying the debt of the principal, in such a case are fully recognised.

As to the plea of limitations, and the lapse of time upon which the defendant Carter, relies, we think they are unavailable to him as a defence against the complainant’s claim, under the circumstances of this case. Although the plea of limitations would bar a recovery on the note, yet the loss of the remedy on this note, it is clear, would not bar the complainant’s remedy in equity, upon the ground of his equitable lien. In the case of a mortgage, the law seems to be so understood. See 1 Powell on mortgage, 393, where it is said, “if the collateral security had been a note of hand, instead of a bond, the statute of limitations would run against the note, and leave that mortgage as it was.”

As to the lapse of time which intervened between the period when the debt became due, and the. filing of the complainant’s bill, we are of opinion, that the presumption of payment, which might have arisen from that circumstance, when unexplained, is sufficiently rebutted by the insolvency, or embarrassed condition of tbe purchaser and his sureties; and the efforts which were made to recover it, being sufficiently apparent from the proof in the case, that one of the objects, if not the primary one, of the ejectment suit, was to subject the land by a sale to the payment of the balance of the purchase money. In the law compendium, page 361, it is said, “lapse of time is permitted in equity to defeat an acknowledged right on the ground, only, of its affording evidence of a presumption that such right has been abandoned; it therefore never prevails, when such presumption is out-weighed by opposite facts, or circumstances,” for which principle the author refers to the case of Wilson vs. Carrington, 4 Munf. 332.

But for as much as it appears to this court, that the assignees of the bond of conveyance, the two daughters of George Magruder, and Patrick Magruder, and Lloyd Magruder, also assignees of the said bond, by reason of their eventual responsibility, if the fund should prove insufficient, are material and necessary parties to this suit, we are of opinion, that the cause should be remanded to Montgomery county court, sitting as a court of equity, in order that they, or their legal representatives, if they be dead, may be made parties to the same. As to the creditors of the said George Magruder, mentioned in the said assignment, their interests, are, we think, sufficiently protected, by the trustee of the said George, who is already a party to this suit. This cause is remanded accordingly, in order that the proper parties may be made to the same; the appellees are to pay the costs of the appeal.

CAUSE REMANDED TO MAKE PARTIES WITH COSTS

TO THE APPELLANTS.