Scheerer v. Agee

106 Ala. 139

• Court: Supreme Court of Alabama
• Decided: November 15, 1894
• Status: Published

Opinion

McOLELLAN, J.

— When the inquiry is whether the vendor of land intended to waive his lien for the purchase money, the purposes of the sale and conveyance may be quite material; and the averment in a bill to declaro and enforce a lien of a purpose to be subserved by the sale which is inconsistent with the retention or existence of the lien is not mere innocuous garrulity on the part of the pleader, but subjects the bill to demurrer for showing that the lien it seeks to enforce does hot exist. The present bill shows that the complainant owned three-tenths of a one-fifth' interest in a certain tract of land; that one LeBron owned seven-tenths of one-fifth interest in said land, and that R. H. McClellan and Charles Scheerer owned the remaining four-fifths interests in said land. Complainant and LeBron borrowed $8,500 from said McClellan, executed their notes for the amount and a mortgage on said one-fifth interest to secure the same, and divided the loan between them according to their interest, respectively, in the land; complainant receiving $1,050 and LeBron $2,450. It is further averred in the bill, “That subsequent to the execution of said note and mortgage to McClellan, complainant executed a deed of his interest in said tract of land to said LeBron for a consideration of $3,600, recited in said deed to have been paid, but complainant avers that no consideration in fact passed from said LeBron to complainant, then or since, and that said sum of $3,600 is still due and unpaid. Complainant avers that said deed was executed upon the express understanding and credit was extended to said LeBron for the purpose of facilitating a sale by LeBron of the entire property to the Cloverdale Land and Development Company at an agx*eed price of $60,000, and that said LeBron, after discharging coxnplainant’s pro rata liability on the note to McClellan out of the money received by him on account of the pux-chase price of complainant’s interest in the property, was to pay over the balance to complainant.” It further appeax*s that LeBron conveyed the interest he thus acquired fi’om Agee together with his own seven-tenths of one-fifth interest to Scheerer, that Scheerer and McClellan then conveyed the whole of the tract to Pickering, and the latter in turn conveyed to said Cloverdale Land and Development Co. We do not think there can be any doubt on these facts, as averred in the bill, that complainant’s purpose in executing the deed to LeBron, and the understanding on all haixds, was to vest a perfect title to his interest, along with the other interests in the land held by LeBron and McClellan and Scheerer, in the Cloverdale Company free from a vendor’s lion, nor that this purpose and this understanding were fully accomplished and carried out through any of the several conveyances ending with Pickering’s deed to the company. The case presented by the bill is in principle the same in respect of :a vendor’s lien as that of Hubbard v. Buck, 98 Ala. 440. Wm. J. Buck and John E. Buck owned a tract of land as tenants in common, as did Agee and LeBron here. William formed a partnership with McMahon agreeing to contribute to the joint capital the tract of land. Knowing this and with the purpose of enabling William to fulfill this agreement, John conveyed his interest to William. The deed recited payment of the consideration, but in fact it was not paid. William then conveyed the land to the partnership of which he was a member. Afterwards John filed his bill against William to- declare and enforce a vendor’s lien. But the relief was denied upon the ground that John had waived his lien; this court, by Coleman, J., saying : “If McMahon agreed to put in eight thousand dollars in cash, and William J. Buck four thousand acres of land at two dollars per acre, as an equivalent contibution, and John E. Buck conveyed this land to William J. Buck ‘to enable him to keep good his promise to his partner McMahon, and that he might make the deed to McMahon & Buck, as a part of his contribution to the firm, ’ such a purpose is utterly inconsistent with a reservation of a vendor’s lien upon the land;” and it was, therefore, held that the sale by John to William Buck was made in sole reliance upon the individual credit of the latter. Here the sale was made to LeBron on credit, payments tobe made out of a particular fund and in a particular way, with the purpose and'understanding that LeBron should unite with McClellan and. 'Scheerer m vesting title to all interests in the tract in the Cloverdale Land and Development Company for a gross consideration of $60,000. As in the case of Hubbard v. Buck, the title was passed by Agee into LeBron, not to be held by the latter to his own use, but for the ulterior purpose of enabling him to combine the one-fifth interest, thereby in its entirety vested in him, with the four-fifths interest held by McClellan and Scheerer, and unite with them in a conveyance of the whole tract to the Cloverdale Land and Development Company ; and this purpose and understanding was in substance and effect executed and carried out. The .existence of these facts disclosed by the bill, this purpose and understanding, are wholly and ‘ ‘ utterly .inconsistent with a reservation of a vendor’s lien upon'the land.”

Moreover, another essential •'.element of such lien, or fact necessary to its existence, '.is wanting on the case made by the bill. “To maintain a bill to enforce [a] vendor’s lien, there must be a débt due to the complainant, contracted in the purchased the land, still unpaid, and which the purchaser, either at the time, or at some pi'ior date, was liable to pay as .a primary debtor, without condition.” — Thomason v. Cooper, 57 Ala. 560, 564; Kelly et al. v. Karsner, 81 Ala. 500, 504. The purchaser here, i. e., the grantee, is LeBron. The bill shows that he was never under obligation .primarily and without condition to pay Agee' anything, whatever for the land. He did not take a conveyance of; the land to his own use, but as a mere conduit for ’the passing of the title into the company. It was known beforehand what price the company would give for the whole tract, and it was contemplated that LeBron should receive for Agee three-tenths of one-fifth of the purchase money, being $3,600, the consideration recited in Agee’s deed to LeBron, and it was stipulated that LeBron should out of this sum pay a certain indebtedness of Agee and deliver the balance to him. And this was the full extent of LeBron’s obligation : to convey the land to the company, to receive the purchase money from the company for Agee, and to pay it out for and to Agee. When it is said the sale was to him on credit, the facts demonstrate that by this is intended that the conveyance to him was on the faith and confidence and credit that he would convey to the company at the price of $3,600, which, indirectly and substantially, he did, and would collect and receive that amount from the company, which, it appears, he has not done. But whatever he has done or failed to do in the premises, it is most clear that he at no time undertook to pay, or to account to Agee for, the $3,600, except out of and with the money he should receive from the company. And if he had retained the land and a bill had been filed against him to enforce a vendor’s lien, there is no question but that, while Agee might have been entitled to the land as upon a trust resulting from the fact that the trust upon which the grant was made had failed, he could not have had a decree against LeBron personally. The trust not having failed, but having been executed by the transmission of title into the Oloverdale Company, the proceeds of the sale belonged to Agee, and only upon their receipt by LeBron would he have been under obligation to pay the same in part for and in other part to Agee — a liability entirely ulterior to the conveyance by Agee to LeBron. Upon this ground also, therefore, — that the bill shows there was no primary indebtedness from LeBron to the complainant — we base our conclusion that the complainant reserved no vendor’s lien upon the land in question.

But it by no means follows that Agee is without equitable rights and remedies in the premises. Had LeBron received the recited consideration of $3,600, directly or indirectly, from the Oloverdale Company, he would have held it in trust for Agee, and the latter might either have' sued him at law in an equitable action for money had and received, or proceeded in chancery against any property into which LeBron had converted it. So, on elementary equitable principles, if LeBron had received tangible property intend of money in payment for the land, clearly the trust for Agee would have attached to this property. Clearly also, if LeBron had received neither money nor property in payment, but instead had sold and conveyed to the company, on a credit, as indeed, so far as anything appears in the bill is concerned, he might have done, and taken collateral security, such as bonds or other choses in action, for the payment of the purchase money, such collaterals would have been held by him in trust for, and in equity would have belonged to, Agee. And, of course, whatever trust in favor of, or equitable ownership in, Agee would have attached to such collaterals in the hands of LeBron, would equally attach to them in the hands of any person to whom they came with notice of Agee’s equity. It appears that Scheerer with full knowledge of the equities of Agee, finally sold the whole tract of land including Agee’s interest to the Oloverdale Co. on credit, and took as collateral security for the payment of the purchase price, bonds of said company secured by a mortgage on all the property of the company including this land. Those bonds, in the hands of Scheerer or anybody else taking them with notice of Agee’s rights, or so mapy of them, or so much in amount of them, as bear the relation to the whole number or amount received by Scheerer or such other person, as Agee’s claim bears to the whole amount intended to be secured to Scheerer by them, in equity belong to Agee ; and he is entitled to stand in the place of any such holder of them in the division of the proceeds to arise from the foreclosure of the mortgage securing them.

The present bill, being filed by a stranger to the pending suit of Townsend. & Brown against the Cloverdale Land and Development Co. and McClellan and Scheerer, and setting up matters not involved in that case, nor necessary to the relief there sought, is not a supplemental, but an original bill, having something of the nature of a supplemental bill, perhaps, in that it seeks in one phase to fasten a.charge.,upon the subject matter there involved, and in another aspect seeks to give a particular direction to a part of the fund which would have cometo the hands of the court in that case had the decree granted all the relief prayed therein. Agee being, on the facts' averred in his bill, the equitable owner pro tanto of the bonds held by Scheerer to secure payment of the price the company.was to pay for the land, and Townsend & Brown having filed their bill against the company and Scheerer et al. to foreclose the mortgage securing these bonds, whereby, had this relief been insisted on and granted a decree would .have passed, under which Scheerer would have received the amount of these bonds which belonged to Agee, the latter’s equity to have such proceeds decreed to be paid to himself, in the contingency in contemplation when he filed his bill, can not, we think, be doubted.- But that relief, as appears by the amendment to Agee’s bill, was forestalled by the collusive and fraudulent agreement between Townsend & Brown and McClellan and Scheerer in pursuance of which the demand for foreclosure of the mortgage securing said bonds made in the bill of Townsend & Brown was protermitted, and a decree taken only for the sale of the company’s property, subject to said mortgage, the ulterior purpose of these parties being, as is alleged, to shuffle the bonds held by Scheerer but belonging equitably to Agee .into Townsend & Brown by such indirection as would enable them to claim protection against Agee’s equity as bona fide purchasers for value without notice. This amendment of the bill 'is not, in our opinion, a departure from Agee’s original bill. Both the bill, as originally filed, and this amendment to it present the claim of the complainant in two aspects. In the former as in the latter Agee asserts his right to the proceeds of bonds held by Scheerer; and this right he has on the facts al- ■ legod. This is one aspect. In the other, both the original and amended bills assert a vendor’s lien on the land formerly belonging to Agee but now owned by the Clover-dale Co. And this claim is, on the facts disclosed in the bill, original and amended, ill-founded. Eliminating this latter claim, and the bill 'throughout seeks to subject the bonds held by Scheerer to the complainant’s equities. In the original bill this is sought to be done through a decree giving direction to the proceeds of such bonds coming to Scheerer through the foreclosure then prayed in the suit of Townsend & Brown, and supposed to be imminent. In the amendment this is sought to be done through a decree of foreclosure in this suit, and the parties necessary to foreclosure are brought in. The gravamen of the original bill, and of the amended bill is the same — the equitable ownership of Agee in certain bonds held by Scheerer and his consequent right to the proceeds thereof. Facts occurring subsequent to the filing of the original bill — and which constitute’ matter supplemental to this bill in a much more accurate sense than the matter of the original bill was supplemental to the bill of Townsend & Brown — rendered it impracticable for the relief prayed to be granted on the averments of that bill. The amendment brings in these facts and the parties necessary to-relief upon them, and prays for the same relief, the subjection of bonds held by Scheerer to the satisfaction of Agee’s claim, by a foreclosure ’ at the suit of the latter as equitable owner of the bonds in question. The amendment did not work an entire change of parties, nor bring forward a new cause of action : it only showed the necessity for the foreclosure under this bill, which was about to be decreed but, because of this bill in its original form, was not decreed through collusion and fraud in the Townsend & Brown suit, and with reference to which relief was originally prayed.

But the bill as amended, considered solely with reference to the aspect in which the complainant’s rights are based upon his equitable ownership of bonds secured by the mortgage, is demurrable in that it does not show that bondholders had at the time it was filed, or even at the time it was amended, the right to foreclose said mortgage. For aught that appears by the bill the law day of the mortgage has not elapsed, and it has not been brought to maturity earlier than the law day by the happening of any event given that effect by stipulations of the instrument, as the non-payment of interest, for instance. The assignments of demurrer addressed to this point should have been sustained. This may be an amendable defect for all we know or can learn from the record before us; and hence we can not say that the court erred in overruling the motion to dismiss for want of equity.

The demurrers which went to the bill in that aspect in which it asserted or claimed as upon a vendor’s lien should also have been sustained.

The decree overruling the assignments of demurrer referred to above is reversed A decree will be here entered sustaining said assignments, allowing complainant thirty days to amend his bill in the city court, and remanding the cause.

Reversed and remanded.