3 F. 612 | U.S. Cir. Ct. | 1880
Lead Opinion
This cause has been submitted upon the ploadings and proofs. The facts aro as follows: The complainants, being the owners of the real estate described in the bill, contracted to sell the same to B. "W. Lee and Alfred Douglass. Lee gave notes for the purchase money, and complainants, retaining title in themselves, gave a bond conditioned for a conveyance upon payment of the notes.
The purchase-money notes are still held unpaid by complainants, who bring this suit to enforce their vendor’s lien. The purchasers, B. W. Lee and Alfred Douglass, sold the land to the defendant Thomas Douglass, making to him a deed, under which he entered into possession and had held the same for a period of about 18 years prior to the commencement of this suit. There is a plea of the statute of limitations.
1. The supremo court of this state have decided that there is no statutory bar to a suit in equity to foreclose a vendor’s lien for the purchase money of real estate where the vendor has not parted with the legal title. Hall v. Denckla, 28 Ark. 510. Whether, therefore, a federal court of equity in this state should, by analogy, adopt as the period of limitation the length of time required to bar an action at law for the purchase money, or an action of ejectment for the land, or whether the payment of the purchase money and satisfaction of the lien will only he presumed after the lapse of 20 years, is a question of equity law to be determined by a resort to the recognized authorities and sources of information on equity jurisprudence.
In the determination of such a question of equity law the federal and state courts appeal to the same sources of infor. mation, and the decisions of either are not binding on the other. Johnston v. Roe, 10 Cent. Law Jour. 328, [S. C. 1 Fed. Rep. 692,] and cases cited.
2. The defendant Thomas Douglass was not an innocent purchaser without notice, because his grantors had only an equity in the land. He was bound to take notice of the fact that the legal title was in complainants, and held as security for the unpaid purchase money. The protection extended by a court of equity to a Iona fide purchaser belongs only to the
3. When a purchaser goes into possession under a contract of purchase, equity makes the vendor a trustee to the vendee for the conveyance of the title; the. vendee is a trustee for the payment of the purchase money and the performance of the terms of the purchase. 10 Pet. 225; Lewis v. Hawkins, 23 Wall. 119. Such a trust, however, must be enforced within a reasonable time. What that reasonable time is may be somewhat unsettled, and may vary according to circumstances ; but it is settled, so far as the federal courts are concerned, that it is not less than 20 years. Boone v. Childs, 10 Pet. 177, 223-224; Lewis v. Hawkins, supra. The statute of limitations did not run against complainants during the war of the rebellion. Brown v. Hiatts, 15 Wall. 178. As the time of the defendant’s occupancy has been less than 20 years, exclusive of the period of war, the defence of the statute of limitations is not good, and there must be a decree for complainants. ■
Rehearing
ON REHEARING.
Upon motion of counsel for respondents, in the foregoing case, a reargument was ordered, and the case has been reconsidered. It is insisted that it has become a rule of property in Arkansas that suits in chancery, to enforce a lien upon real estate created by sale under title bond, must' be commenced within the same period limited by law for bringing ejectment, in analogy to the statute of limitations. This suggestion is answered by the case of Lewis v. Hawkins, 23 Wall. 119, which went up from Arkansas. In that case the supreme court say: “In many of the cases it is held that the lien of the vendor, under the circumstances of this case, is substantially a mortgage. It is well settled that the possession of the mortgagor is not adverse to the mortgagee. In the case last cited it is said that to apply the statute of limitations ‘ would be like making the lapse of
In Harris v. King, (16 Ark. 122,) the supreme court of Arkansas recognized the doctrine announced in these decisions. I do not feel at liberty to depart from that doctrine, and I do not think it can be maintained that a different rule has been, by other and later decisions, so firmly established in Arkansas as to constitute a settled .rule, respecting property in that state, which the federal courts are bound to follow. The doctrine that the purchaser who enters into possession without obtaining a conveyance of the legal title, and without paying the purchase money, who holds only under a bond for a deed, to be executed when the purchase price is paid, is a mere licensee, and a trustee for his vendor, having no adverse relation to him, is so well grounded in reason, and so thor
It is said that the lien of the vendor in such a case is substantially a mortgage, and that a suit to foreclose a mortgage must be brought within the period fixed for commencing an action of ejectment to recover possession of the land. But this position is directly in conflict with the ruling of the supreme court of the United States in Lewis v. Hawkins, supra, where it is held that “the possession of the mortgagor is not adverse to that of the mortgagee," and 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;” aud where it is said that the lien of a mortgage “will be presumed to have been satisfied after the lapse of 20 years from maturity of the debt,” unless the laches be explained, and the presumption repelled. It seems to me that this decision establishes the rule by which I must be governed as a matter of authority. It also commends itself tojmy mind as eminently just and reasonable.