1. Where a party agrees to sell land to another and as
consideration therefor the vendee gives his promissory notes
payable at a future date named, and the vendor gives his bond
conditioned that on the payment of the notes, he will convey the
premises in fee to the vendee, but makes no deed, the legal estate
remains, until the payment of the purchase money, in the vendor,
and he has, by the law of those states where such liens are
recognized, a "vendor's lien." The vendee has an equitable title
only -- one indeed which he can sell or devise, but one which if
the purchase money is unpaid, he cannot sell so as to exclude the
vendor's right to have payment of it. Any purchaser from the vendee
who assumes to pay the notes takes the same title that the vendee
had -- that is to say, an equitable title, the land being still
charged with the payment of the purchase money.
2. A discharge of such purchaser from the vendee under the
Bankrupt Act, will relieve such purchaser from paying the notes,
but it will not give
Page 90 U. S. 120
him a legal title in fee to the lands. That title, subject to
the equity of the vendee or of the purchaser from him, remains in
the vendor.
3. A statute of limitations barring suits for the recovery of
real estate after a certain lapse of time does not apply to a case
like that above described. The vendee or the purchaser from him
stands in the relation of a trustee to the vendor for the unpaid
purchase money, or, as the matter is looked upon in some states,
stands in that of a mortgagee, against whom the statute does not
run.
4. If the notes are not paid, the vendor may apply by bill in
equity against the vendee and the purchaser from him, tendering a
good deed, and ask that they pay the purchase money at short date
or be foreclosed from setting up any right to the land, and that it
be sold and the proceeds applied to paying the purchase money.
5. Where confessedly the title of a party claiming land as owner
and who has agreed to sell is denied by the vendee and a dispute
has taken place about title, so that a tender of a deed would be a
useless ceremony, costs on a bill filed to enforce the payment of
the purchase money must abide the result of the suit.
6. If the purchaser from the vendee be dead, leaving a widow his
executrix, and heirs-at-law to whom with her his real estate has
descended, they ought to be made parties defendant to any bill to
foreclose.
The case was thus:
A statute of limitation in Arkansas, passed January 4th, 1851,
[
Footnote 1] enacts that no
suit at law or in equity for the recovery of real estate shall be
brought after the lapse of seven years from the time when the cause
of action accrued.
This statute being in force, Lewis, in November, 1853, agreed to
sell to Hawkins certain real estate; Hawkins, for the consideration
money giving to Lewis his two promissory notes, each for the sum of
$500, payable one on the 1st of February, 1855, and the other on
the 1st of February, 1856, and Lewis at the same time giving to
Hawkins his bond in the penal sum of $2000, binding him, Lewis,
upon the payment of the two notes to Hawkins, to convey in fee
simple the premises so sold.
It did not appear that this bond authorized Hawkins to take
possession of the property sold, or that he did so.
Page 90 U. S. 121
In October, 1855, Hawkins sold and conveyed the land to one
Hamiter, Hamiter, as a part of the consideration, assuming the
payment of the notes which Hawkins had given to Lewis. Hamiter went
into possession of the premises and occupied them with his family
until May, 1866, when he died, leaving a widow and nine children
his heirs-at-law, and whom, with the widow, he made his devisees,
the widow being made his executrix. The widow and her family had
occupied the premises ever since Hamiter's, the husband's,
death.
Nothing having been paid by anyone upon the two notes, Lewis
sued Hawkins, and on the 11th of August, 1860, recovered a judgment
against him for $1,201. The judgment remaining also wholly unpaid,
Lewis filed, in August, 1871, a bill against Hawkins and the widow
and executrix of Hamiter (his children and heirs-at-law not,
however, being made parties) to enforce the payment of the notes
and interest against the land.
The bill alleged that the complainant had always been and still
was willing to perform the agreement on his part, and offered to
execute and bring into court, to be delivered to the defendants, or
either of them lawfully entitled thereto, a deed conveying the land
in fee simple in accordance with the condition of the title bond on
being paid the purchase money due, with the interest. And alleged
further that the complainant, since the second note fell due, had
duly tendered to Hawkins a deed of conveyance and demanded the
payment of the amount due for the purchase money thereof, but that
Hawkins refused to accept the deed and to pay the purchase
money.
The prayer of the bill was that the equity of redemption of the
defendants, and of all persons claiming through them or either of
them, might be barred and foreclosed and that the defendants be
compelled to pay to the complainant the amount due to him for the
land with interest, the complainant being ready and willing to
execute and deliver to the defendant Hawkins, or his assigns, a
deed for the land in fee simple with warranty of title, and that in
case the
Page 90 U. S. 122
said defendants would not pay the said purchase money by a short
day to be named, the premises might be sold and the proceeds
applied to the payment of the decree to be rendered for the
purchase money.
Both defendants answered.
The answer of Hawkins denied that any tender of a deed as
alleged in the bill had been made to him, and he set up as a
defense his discharge in bankruptcy.
Mrs. Hamiter, the widow, relied upon the already-mentioned
statute of limitations of Arkansas, which bars suits at law and in
equity for real estate after the lapse of seven years from the time
the cause of action accrued.
The depositions of both Lewis and Hawkins were taken. The former
stated that the tender alleged in the bill had been made, the
latter that no such tender had ever been made.
The court below dismissed the bill for want of equity, and from
that, its decree, Lewis, the complainant, brought the case
here.
Page 90 U. S. 125
MR. JUSTICE SWAYNE delivered the opinion of the Court.
Upon the execution of the notes and the title bond between Lewis
and Hawkins, Lewis held the legal title as trustee for Hawkins, and
Hawkins was a trustee for Lewis as to the purchase money. Hawkins
was
cestui que trust as to the former and Lewis as to the
latter. [
Footnote 2] The seller
under such circumstances has a vendor's lien, which is certainly
not impaired by withholding the conveyance. The equitable estate of
the vendee is alienable, descendible, and devisable in like manner
as real estate held by a legal title. The securities for the
purchase money are personalty, and in the event of the death of the
vendor, go to his personal representative. [
Footnote 3] It does not appear that the title bond
authorized Hawkins to take possession, or that he did so. If there
were no such authority, and he entered into possession, he held as
a licensee or tenant at will. [
Footnote 4] The vendee cannot in such cases dispute the
title of his vendor any more than the lessee can dispute that of
his lessor. [
Footnote 5] Any
other person coming into possession under the vendee, either with
his consent or as an intruder, is bound by a like estoppel.
[
Footnote 6] Hamiter, having
bought and assumed the payment of the purchase money stipulated to
be paid by Hawkins, took the property subject to the same
liabilities, legal and equitable, to which it was subject in the
hands of Hawkins. [
Footnote
7]
The discharge in bankruptcy released Hawkins from personal
liability for his debt, but the statute of limitations cannot avail
to protect the land from the vendor's lien upon it,
Page 90 U. S. 126
for the purchase money which Hawkins agreed to pay, and which
Hamiter, when he bought the land, assumed and agreed to pay for
him.
We have already shown that as between Lewis and Hawkins there
was a trust which embraced the purchase money and fastened itself
upon the land. The debt did not affect his assignee personally,
but, as we have shown also, it continued to bind the land in all
respects as if the transfer had not been made. The trust was an
express one. Its terms and purposes were evinced by the title bond,
and the promissory notes to which that instrument referred.
"As between trustee and
cestui que trust, in the case
of an express trust, the statute of limitation has no application,
and no length of time is a bar. Accounts have been decreed against
trustees extending over periods of thirty, forty, and even fifty
years. The relations and privity between trustee and
cestui que
trust are such that the possession of one is the possession of
the other, and there can be no adverse possession during the
continuance of the relation. . . . A
cestui que trust
cannot set up the statute against his co-
cestui que trust,
nor against his trustee. These rules apply in all cases of express
trusts. [
Footnote 8]"
"As between trustees and
cestui que trust, an express
trust, constituted by the Act of the parties themselves, will not
be barred by any length of time, for in such cases there is no
adverse possession, the possession of the trustee being the
possession of the
cestui que trust. [
Footnote 9]"
The same principle applies where the
cestui que trust
is in possession. He is regarded as a tenant at will to the
trustee.
"Therefore, until this tenancy is determined, there can be no
adverse possession between the parties. [
Footnote 10] The relation, once established, is
presumed to continue unless a distinct denial or acts or a
possession inconsistent with it are clearly shown. [
Footnote 11] "
Page 90 U. S. 127
In many of the cases it is held that the lien of the vendor
under the circumstances of this case is substantially a mortgage.
[
Footnote 12] It is well
settled that the possession of the mortgagor is not adverse to that
of the mortgagee. In the case last cited, it is said that to apply
the statute of limitations "would be like making the lapse of time
the origin of title in the tenant against his landlord." That the
remedy upon the bond, note, or simple contract for the purchase
money is barred in cases like this in no wise affects the right to
proceed in equity against the land. As in respect to mortgages, the
lien will be presumed to have been satisfied after the lapse of
twenty years from the maturity of the debt, but in both cases,
laches may be explained and the presumption repelled. [
Footnote 13] The principles upon
which this opinion proceeds are distinctly recognized in
Harris
v. King. [
Footnote 14]
That case alone would be decisive of the case before us. The
considerations which apply where the vendor in such cases resorts
to an action of ejectment were examined by this Court in
Burnett v. Caldwell. [
Footnote 15]
The bill avers the tender of a deed by the complainant to
Hawkins before the bill was filed. The answer of Hawkins denies the
allegation. The testimony of Lewis sustains the bill; that of
Hawkins the answer. The averment is not established. Except as to
the costs, the point is of no significance. If the tender of a deed
had been properly made, and there had been no unjustifiable
resistance to the taking of the decree by the complainant, to which
he is entitled, he would have been required to pay all the costs.
There being a contest, and it appearing that a tender would have
been without effect, the costs must abide the result of the
litigation. [
Footnote
16]
There is manifest error in the decree, but the bill is defective
in not making the heirs-at-law of Hamiter parties,
Page 90 U. S. 128
unless there is some statutory provision of the state of
Arkansas which obviates this objection.
If necessary, the bill can be amended in the court below.
Decree reversed and the cause remanded with directions to
proceed in conformity with this opinion.
[
Footnote 1]
Gould's Digest, chapter 106, § 2.
[
Footnote 2]
1 Story's Equity § 789; 2
id. § 1212; 1
Sugden on Vendors and Purchasers 175;
Swartwout v. Burr, 1
Barbour 499;
Champion v. Brown, 6 Johnson's Chancery
402.
[
Footnote 3]
2 Story's Equity § 1212.
[
Footnote 4]
Suffern v. Townsend, 9 Johnson 35;
Dolittle v.
Eddy, 7 Barbour 75.
[
Footnote 5]
Whiteside v. Jackson, 1 Wendell 422;
Hamilton v.
Taylor, 1 Littell's Select Cases 444.
[
Footnote 6]
Jackson v. Walker, 7 Cowan 637.
[
Footnote 7]
1 Story's Equity § 789; 1 Sugden on Vendors and Purchasers
(Perkins's ed.) 175;
Champion v. Brown, 6 Johnson's
Chancery 402;
Muldrow's Executors v. Muldrow's Heirs, 2
Dana 387; 2 Harris & Johnson 64;
Shipman v. Cook, 1
Green's Chancery 254.
[
Footnote 8]
Perry on Trusts § 863.
[
Footnote 9]
Hill on Trustees 264*.
[
Footnote 10]
Id., 266*.
[
Footnote 11]
Whiting v. Whiting, 4 Gray 236;
Creigh's Heirs v.
Henson, 10 Grattan 231;
Spickerneln v. Hotham, Kay
669;
Garard v. Tuck, 65 English Common Law 249;
Same
Case, 8 Manning, Granger & Scott 231;
Decouche v.
Savetier, 3 Johnson's Chancery Reports 190;
Anstice v.
Brown, 6 Paige 448;
Kane v. Bloodgood, 7 Johnson's
Chancery 90.
[
Footnote 12]
Lingan v. Henderson, 1 Bland's Chancery 236;
Moreton v. Harrison, id., 491;
Relfe v. Relfe, 34
Ala. 504.
[
Footnote 13]
Moreton v. Harrison, supra.
[
Footnote 14]
16 Ark. 122.
[
Footnote 15]
76 U. S. 9 Wall.
290.
[
Footnote 16]
Keisselbrack v. Livingston, 4 Johnson's Chancery 144;
Hanson v. Lake, 2 Younge & Collier 328.
